Travelzoo · NASDAQ:TZOO
Travelzoo — Q1 2025 Earnings Presentation
20 slides from Travelzoo's earnings presentation, Apr 29, 2025
Slide 1: First Quarter 2025 Performance
First Quarter 2025 Performance April 29, 2025
Slide 2: Important Notice to Investors
Important Notice to Investors Please read this management presentation together with the Company’s press release issued earlier today announcing the Company’s first quarter 2025 financial results and in conjunction with the Company’s recent Annual Report and Quarterly Reports as filed with the Secur
Slide 3: Part 1: First Quarter 2025 Performance; Part 2: Management Focus; Part 3: Travelzoo META
Part 1: First Quarter 2025 Performance Part 2: Management Focus Part 3: Travelzoo META 3 | First Quarter 2025 Performance
Slide 4: Revenue up 5% year-over-year, highest quarterly revenue since the pandemic
Revenue increased by 5% year-over-year, reaching highest quarterly revenue since the pandemic. Operating profit decreased, as we invested more in member growth. Revenue Operating Profit $ millions $ millions 23.1 22.0 5.6 3.7 Q1 2024 Q1 2025 Q1 2024 Q1 2025 4 | First Quarter 2025 Performance
Slide 5: Strongest revenue growth from North America and Jack's Flight Club
Strongest revenue growth came from North America and Jack’s Flight Club. North America Segment Europe Segment Jack’s Flight Club Segment Revenue $ millions Q1 2024 14.2 6.7 1.1 Q1 2025 15.1 6.7 1.3 Operating Profit $ millions Q1 2024 4.4 1.4 (0.1) Q1 2025 3.3 0.5 0.0 5 | First Quarter 2025 Performan
Slide 6: Membership fees begin to drive significant and incremental revenue growth
Membership fees begin to drive significant and incremental revenue growth. It will further accelerate. Global Revenues $ millions Advertising Membership Fees Other Q4 2023 19.4 1.2 0.0 Q1 2024 20.9 1.1 0.0 Q2 2024 20.0 1.2 0.0 Q3 2024 18.7 1.4 0.0 Q4 2024 19.1 1.6 0.0 Q1 2025 20.7 2.4 0.0 Includes a
Slide 7: Membership fee revenue recognized ratably over the subscription period
We recognize revenue from membership fees ratably over the subscription period. Member acquisition costs, however, are fully recorded as expenses immediately. Revenue Recognition $ Example: New member joins on March 15, 2025, paying a membership fee of $40 per annum Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q
Slide 8: Member growth creates short-term negative impact on operating income
As we grow members, the differing recording of expenses and revenues creates a short-term negative impact on operating income. After a few quarters, the impact turns positive. ILLUSTRATIVE ONLY New Members Incremental Member Impact on OI Added Membership Fee Acquisition Revenue Expense First Quarter
Slide 9: GAAP operating margin lower as we invest more
Our GAAP operating margin is lower, simply because we have started to invest more. Our goal is to accelerate growth in members. Operating Margin 2017 2018 2019 2020 2021 2022 2023 2024 Q1 2025 22% 18% 16% 11% 9% 7% 4% (2%) (26%) 9 | First Quarter 2025 Performance
Slide 10: Investments in member growth occur in all key markets
The investments in member growth occur in all key markets. In Europe, this overshadows a great financial improvement in Germany where we saw strong revenue growth year-over-year. North America Operating Margin Europe Operating Margin Q1 2023 31% 8% Q2 2023 27% (4%) Q3 2023 22% 4% Q4 2023 29% 13% Q1
Slide 11: Total non-GAAP operating profit was $4.3 million or 19% of revenue
Total non-GAAP operating profit was $4.3 million or 19% of revenue. Non-GAAP Operating Profit* GAAP Operating Profit $ millions Adjustments Non-GAAP Operating Profit* 6.0 5.6 0.4 4.3 3.7 0.6 Q1 2024 Q1 2025 * GAAP operating profit + amortization of intangibles + stock option expenses + severance-rel
Slide 12: Items excluded in the calculation of non-GAAP operating profit
Items excluded in the calculation of non-GAAP operating profit: $ millions Q1 2024 Q1 2025 Adjustments 0.4 0.6 Amortization of intangibles 0.3 — Stock option expense 0.1 0.4 Severance-related expenses — 0.2 12 | First Quarter 2025 Performance
Slide 13: Cash flow from operations $3.3 million; shares repurchased; cash decreased
Cash flow from operations was $3.3 million. We repurchased 590,839 shares. Cash decreased to $12.2 million. Cash Balance at End of Quarter* $ millions 17.7 16.9 12.2 Q1 2024 Q4 2024 Q1 2025 * Includes cash, cash equivalents and restricted cash 13 | First Quarter 2025 Performance
Slide 14: Fixed costs low, but higher member growth investments increase expenses
We continue to keep our fixed costs relatively low. But higher invest- ments in member growth are increasing total expenses. We expect these investments to accelerate revenue growth in coming quarters. Revenue Operating Expenses and Cost of Revenues $ millions $ millions 23.1 19.4 22.0 20.7 16.4 0.6
Slide 15: Travelzoo is loved by affluent, active travel enthusiasts
Travelzoo is loved by travel enthusiasts who are affluent, active and open to new experiences. Travelzoo Reaches 30 Million Travelers Travelzoo U.S. Member Survey* October 2024 53% 56% 59% ages 45+ female have the budget 47% ages 18-44** 44% male** to treat themselves and purchase non- essentials 96
Slide 16: Part 2: Management Focus
Part 1: First Quarter 2025 Performance Part 2: Management Focus Part 3: Travelzoo META 16 | First Quarter 2025 Performance
Slide 17: Management focus
Management focus • Grow the number of (paying) members and accelerate revenue growth by converting Legacy Members and adding new Club Members • Add new benefits to the paid membership • Retain, and grow, our profitable advertising business from the popular Top 20® product • Accelerate revenue growth
Slide 18: Part 3: Travelzoo META
Part 1: First Quarter 2025 Performance Part 2: Management Focus Part 3: Travelzoo META 18 | First Quarter 2025 Performance
Slide 19: 19 | First Quarter 2025 Performance
19 | First Quarter 2025 Performance
Slide 20: Have a good day!
NASDAQ: TZOO HAVE A GOOD DAY! For questions, please contact Travelzoo Investor Relations: ir@travelzoo.com