Tripadvisor : TRIP 1Q2026 Prepared Remarks

About this update from Tripadvisor, Inc.

Angela Opening Remarks: Good morning, and welcome to Tripadvisor's first quarter 2026 financial results call. Joining me today are Matt Goldberg, President & CEO, and Mike Noonan, CFO . Earlier this morning we filed and made available our earnings release. In that release you will find reconciliations of non GAAP financial measures to the most comparable GAAP financial measures discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward looking statements that represent management's views as of today, May 7, 2026. Tripadvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release, as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward looking statements. With that, I'll turn the call over to Matt. Matt Goldberg, CEO Thank you, Angela, and good morning everyone. We're pleased with our Q1 performance, with Group revenue in-line with expectations and adjusted EBITDA ahead of expectations. We delivered this result despite the challenging macro backdrop that intensified late in the quarter, which Mike will take us through in detail shortly. As a reminder, last year we made an important strategic shift: we reoriented Tripadvisor Group around our objective to build the world's largest Experiences marketplace. The Experiences category represents the largest growth opportunity in travel. It's highly fragmented, still early to come online, and supported by durable tailwinds for growth. It's a market where scale matters - and our scale advantage is reinforced by our high-intent travelers, trusted brands, industry-leading supply, and long-established category authority. Along with our shift to Experiences, we also set out to: Unlock the power of our data so Tripadvisor remains at the center of travel discovery, planning and booking as the journey evolves with AI; And to simplify our portfolio of legacy offerings to optimize for profitability as we prioritize other growth opportunities. Today, I'll walk through the progress we're making across our strategy - beginning with Experiences . Through the first two months of the quarter, our Experiences segment delivered particularly encouraging momentum, with GBV growth accelerating from 16% in the prior quarter to 19% in January and February. Viator, our largest point of sale, was even stronger, with bookings and GBV growing more than 20% in January and February. In late February, that momentum was interrupted by geopolitical events in the Middle East, along with acute disruption in two key leisure markets, Mexico and Hawaii. Together, these factors drove a sharp decline in booking volumes and a spike in cancellations, which has since improved. The strength we saw in Experiences in January and February reflects both healthy underlying demand in the category, as well as early evidence of the strategic changes we put in place last year. We're seeing that progress emerge across the full Experiences marketplace. Tighter coordination across demand , our storefronts , and supply is strengthening the flywheel and driving tangible results. On the demand side, we've unified the Viator and Tripadvisor marketing teams to drive alignment and long-term efficiencies across both headcount and partner spend. We're becoming more efficient and precise in how we allocate our marketing investment across channels. We're operating our two brands together in our Experiences paid search portfolio and improving spend efficiency without compromising overall performance. We're also leveraging our intelligence across channels through improved testing and modelling, giving us better visibility into where investment can work harder across the broader marketing mix. This, in turn, helps us move dollars into higher-return channels such as paid social and affiliates. And, finally, we're driving incremental growth in direct and owned channels such as CRM and the app through product improvements, pricing capabilities, and rewards. As traffic lands in our storefronts , our product work is simplifying the path to booking, which drives incremental volume and compounding conversion gains. As an example, on the Tripadvisor point of sale we've seen more than 20% growth in conversion over the last two quarters. Our velocity of experimentation is improving the overall product experience to help customers make more confident booking decisions through better review and product availability merchandising, as well as an AI-enabled pre-booking chat on the Viator app. And we're providing more flexible payment options to establish a stronger global payments foundation, which we expect to drive further conversion gains as we lay the groundwork for international growth. Underpinning these efforts is our supply , a long-standing advantage that drives our conversion rates. We're focused on building the right inventory in the right places as quickly as possible by expanding into geographies and categories where we see unmet demand. And it's making an impact: where we've added strategic supply, over half the bookings came from new customers, a strong leading indicator that it's driving incremental demand. We're also simplifying our onboarding process for these valuable new operators, leveraging AI-assisted sign-up to speed the process, which has more than doubled sign-up conversion. Together, this work is creating a stronger and more coordinated Experiences flywheel. Our execution is delivering key metrics to improve our performance: better marketing efficiency, increasing experimentation velocity, higher conversion rates, stronger supply productivity, and growing customer loyalty. All of these help improve our unit economics, as evidenced by direct channel bookings growth in Q1 that was well above our segment average. Moving beyond Experiences, to our other marketplace - theFork , where the business outperformed against both top-line growth and profitability. Revenue grew 23%, or 11% in constant currency, with a healthy 8% adjusted EBITDA margin. We continue to diversify our revenue mix, with B2B and partnerships revenue outpacing growth in the B2C marketplace. Our restaurant base continues to skew premium, as premium restaurant share grew approximately 500 basis points over last year, and nearly half of newly acquired restaurants are entering at premium tiers. We're continuing to drive an innovation agenda at TheFork that lays the foundation for the future. With 80% of diners now coming through the app, we continue to focus on improving the diner experience. Our AI assistant, Ask TheFork, is making restaurant discovery more intuitive through full-content search across menus, photos, and reviews. While still scaling, this feature is showing encouraging signals, improving recommendation relevance, engagement, and conversion versus traditional search. And with TheFork Social, we are reshaping discovery from anonymous ratings, to trusted community recommendations. This feature is already showing markedly higher conversion, now accounting for roughly 10% of users and 15% of bookings. We're also using AI to drive productivity across the business, with approximately 40% of B2C customer support queries now handled through AI. Together, this execution points to a business that is well positioned for durable long-term growth and expanding profitability. We're pleased with the performance we're seeing in our marketplace businesses, and we expect AI-driven productivity gains across our product and engineering organizations to further accelerate that progress. AI is now a critical part of our infrastructure, increasing the speed at which teams can build, test, and deploy. As AI-enabled workflows become embedded across our R&D organization, we're seeing execution gains, including a 5-7x increase in average engineering output in one of our recent AI-native pilots. And AI is increasingly embedded in our operational work, from improved booking experiences and simpler supplier onboarding to increasing automation across customer support. Beyond productivity, we're also executing to ensure Tripadvisor remains central to travel as the consumer journey increasingly shifts into AI-led discovery and planning. This plays to one of Tripadvisor Group's greatest strengths: our data. With a billion reviews, photos, points of interest and diversified contributions across geographies and categories, it's not just vast. It's also trusted, structured, and constantly refreshed. It reflects how travelers explore, compare, and book across millions of businesses, with much of that intelligence tied directly to Experiences pricing and real-time availability. Our data assets enable us to work directly with the world's largest horizontal AI platforms. Those partners include OpenAI, Perplexity, Microsoft, Amazon, and most recently Anthropic, where we launched Tripadvisor and Viator apps within Claude. Each partnership gives us valuable early learnings about how these users engage and convert, with an opportunity to scale the value of the relationship further. What we're seeing so far is encouraging. While the total volume from AI sources is still small, the conversion is already among the highest of any channel in our portfolio. Beyond partnerships, we're using our data advantage to rapidly iterate on our own AI-native experience. With the high volume of visitors who seek us for trusted advice, we have a scaled test bed that allows us to learn from multiple entry points across diverse use cases. We're testing, learning, and expanding in a considered manner, servicing half of our web traffic in English-speaking markets. As we innovate with AI to help travelers solve problems in real time by comparing options, validating preferences, and making better booking decisions, we're putting the judgment of real travelers front and center. Wherever AI-led travel discovery ultimately lands, we believe the data layer that provides trust, relevance, and confidence to transact will define the winners, and we expect to be firmly among them. The final component of our strategic shift is to simplify our Hotels & Other business as we focus on growth opportunities elsewhere. This remains a profitable part of the portfolio, but one we recognize is structurally challenged. As we continue our transition from a subscale metasearch player to the leading Experiences marketplace, we're managing this business accordingly - reducing fixed cost, prioritizing the areas where we can drive attractive returns, and pursuing partnerships in categories where we aren't positioned to be the global leader. We began to see the initial financial benefit of that approach in Q1, with total fixed costs down approximately 14% and personnel costs down 18% year over year. We expect that run-rate benefit to continue as we move through 2026. The focus is straightforward: align our cost base with our revenue profile and optimize Hotels & Other for contribution profit, while leveraging our trusted brand, reach, and data for Experiences and AI. Before I pass to Mike, I want to step back and re-connect our strategy to what you're now beginning to see in our results. We've made three deliberate choices: first, to put Experiences at the center of the company; second, to position Tripadvisor Group for an AI-driven shift in travel; and third, to simplify the legacy business and manage it for profitability. As we've started to execute on this path, we are making visible progress in each of these areas. We accelerated our Experiences growth ahead of the March disruptions. We're leveraging AI to speed our execution, improve our products, and add partnerships with every major LLM platform. And we've made progress simplifying our legacy business to create the focus, capacity and room to invest in our Experiences future. In short, we're becoming an Experiences-first company built for sustainable growth and profitability. Last quarter, we noted that we were formally exploring alternatives for TheFork and we continue to make good progress. While we have no definitive announcement at this time, the work has reinforced our view that this is a highly attractive asset whose value may not be fully reflected within the current portfolio, and we expect to provide an update in the near term. We continue to review our portfolio and explore all options to deliver the simplicity, focus, and scale that we believe will catalyze meaningful shareholder value ahead. We had a strong start to 2026. Despite the external disruptions, we remain confident in travel's resilience and the long-term growth profile of the areas we are prioritizing. With that, I'll turn it over to Mike - Mike Noonan, CFO Thanks Matt and good morning. I'll start with a review of our financial performance, and then provide more information on what we saw in April and our outlook for Q2 and the full year. As a reminder, all growth rates are relative to the comparable period in 2025, unless noted otherwise. Q1 consolidated revenue was $382 million, a decline of 4% and in-line with expectations. Consolidated adjusted EBITDA was $22 million, or 6% of revenue, slightly above our expectations. We're pleased with this performance, considering the macro volatility that started in late February. Experiences began the first quarter with strong momentum, progressing through late February when growth slowed significantly and cancellation rates spiked with the onset of several macroeconomic events. In Mexico and Hawaii, two of our larger destination markets, civil unrest and severe flooding caused a surge in booking cancellations and a deceleration in forward bookings growth for those destinations. In March, we also saw the conflict in the Middle East begin to weigh on performance. While our direct exposure to the region is limited, the conflict influenced other key travel corridors, such as European international and U.S.-to-Europe routes, leading to heightened cancellations and tepid demand. Taken together, these events most acutely impacted revenue growth in March given revenue is impacted by both cancellations and demand softness, whereas, GBV and bookings volume are gross of cancellations but are impacted by demand. For the quarter, the number of experiences booked grew 11%, finishing just shy of our low-teens expectation. We estimate approximately 3 points of growth headwind to these macro events. Before the disruptions, January and February showed strong momentum, with the segment growing bookings 15% and Viator-our largest point of sale-accelerated to approximately 20% growth during that same period. However, following the onset of these macro events, demand softened, leading to total segment bookings growth of mid-single digits in March. In key destinations like Hawaii and Mexico, growth in experiences booked shifted from well over 20% in January and February, to a double-digit growth deceleration in March. Other regions, including the U.S., also experienced a step-down, particularly among international travelers. While U.S. domestic and U.S.-to-Caribbean routes also slowed from January and February, they still achieved healthy mid-teens growth in March . Gross booking value or (GBV) grew 13% to approximately $1.2 billion. We estimate changes in currency were a tailwind to growth of approximately 5%. GBV growth was in-line with our bookings volume pattern, which was impacted by decelerating demand. GBV growth was strong in January and February, at 19% and an acceleration from 16% growth in Q4. On the Viator point of sale, which accounts for the majority of the segment's total GBV, growth was even faster, exceeding 20% in the first two months of the quarter. However, segment GBV growth slowed to mid single-digits in March as a result of the softer demand environment. Experiences revenue grew 8% and 4% in constant currency, slightly below our expectations due to an estimated 4 point growth headwind from heightened cancellations and softer demand. Revenue growth in January and February was strong at approximately 15%, before moderating to approximately flat in March. Adjusted EBITDA for the Experiences segment was a loss of $19 million, or -11% of revenue, which was in line with our expectations and reflects typical seasonality. Deleverage was driven by increased investment in marketing, which offset lower personnel costs. Importantly, marketing costs as a percent of GBV were flat year-over-year. Our coordinated marketing strategy across Viator and Tripadvisor is yielding strong results, particularly in high-intent paid channels. GBV growth in the paid channels for the combined points of sale peaked at 24% in January and February before the onset of these macro events. Over the longer term, we expect to realize marketing leverage through improved ROIs in paid channels, as well as through loyalty programs, product enhancements, and a greater volume of direct bookings as repeat cohorts continue to scale. Repeat customer growth remains healthy, and we continue to observe lower acquisition costs for traveler cohorts beyond their first booking. Additionally, we are steadily increasing the share of bookings from direct channels, such as our app, which is demonstrating significantly higher growth compared to other channels. Turning to TheFork, Q1 revenue was $57 million, representing 23% growth, or 11% in constant currency. Total B2C channel bookings grew by 6%. While revenue mix continues to be weighted towards B2C monetization, we are encouraged by the ongoing progress of our B2B strategy and the value restaurants find in our premium software, where B2B revenue grew over 50%, which includes currency tailwinds of approximately 12 points. Adjusted EBITDA at TheFork in Q1 was $5 million, or approximately 8% of revenue, reflecting margin expansion of over 15 percentage points. The leverage was driven by lower marketing and fixed costs as well as the phasing of certain other marketing costs from Q1 into Q2. Turning now to our Hotels & Other segment. Q1 revenue was $158 million, a 20% decline. Better than expected performance was driven by strong pricing in paid channels within our hotel meta offering. While pricing growth was strong, it was offset by sustained volume headwinds. Media and advertising revenue reached $28 million, a 9% decline, representing a sequential improvement due to growth in off-platform revenue. Adjusted EBITDA in Hotels & Other was $37 million, or 23% of revenue. Margin compression was primarily driven by lower revenue and the ongoing shift in free/paid channel mix. Fixed costs declined by approximately 14% but increased as a percentage of revenue. We expect the cost reductions announced in Q4 2025 to more fully benefit personnel expenses in the second half of 2026. Turning to consolidated expenses : Cost of revenue in Q1 was 9% of revenue, an increase of approximately 190 basis points. This was primarily driven by the growing mix of experiences-related transaction costs within consolidated revenue, along with a higher mix of off-platform media advertising costs in Hotels & Other. Marketing costs were 46% of revenue, an increase of approximately 330 basis points. This was driven by growth in Experiences marketing spend, which more than offset declines in both TheFork and Hotels & Other. Personnel costs were 34% of revenue, lower by approximately 220 basis points. Lower personnel costs in H&O more than offset growth in personnel costs in Experiences and TheFork. Absent share-based compensation, personnel costs were approximately 28% of revenue, lower by approximately 60 basis points. Lower year share-based compensation expense was primarily due to forfeitures related to our cost savings program announced in Q4 2025. Technology costs in Q1 were 7% of revenue, an increase of approximately 80 basis points, primarily driven by higher licensing fees and data center costs. G&A costs were approximately 4% of revenue, lower by 60 basis points. This figure includes the recovery of costs associated with an external fraud incident from late 2022 and expenses related to shareholder activism, both of which were excluded from our adjusted EBITDA results. Now, turning to cash and liquidity . In Q1, operating cash flow was $118 million and free cash flow was $101 million. The increase in operating cash flow and free cash flow was due to changes in working capital related to timing of receivables and vendor payments, which more than offset lower net income. Total cash and cash equivalents at March 31, 2026 were approximately $1.1 billion. Subsequent to quarter end, on April 1, we repaid our convertible notes, which reduced both cash and short-term debt by approximately $345 million. Excluding our deferred merchant payables of approximately $406 million, our excess cash balance after repayment of the notes was approximately $369 million and our total debt was approximately $838 million. During the quarter, we had no share repurchase activity. While the program remains active, we were unable to purchase shares in the public market due to our ongoing portfolio review. We will continue to evaluate opportunities for share repurchases, balancing our capital requirements, market conditions, and other relevant factors. Turning now to our outlook for 2026 and Q2. In the month of April, cancellation rates improved after spiking in March, while bookings demand began to recover as we exited the month. We expect bookings and GBV to continue to recover throughout the quarter, reaching normalized levels as we exit Q2. Due to book-to-travel timing in Q2, we expect revenue growth to lag bookings and GBV growth. While we are encouraged by the early signs of recovery in April, macro uncertainty remains a key consideration for the rest of the year. Our current outlook assumes that the leisure travel environment continues to normalize through the peak summer season; however, our outlook does not incorporate any further deteriorating macroeconomic conditions or geopolitical disruptions. Given the discretionary nature of travel, we will continue to monitor the macro environment as we manage the business moving forward. As a result, our Q2 outlook anticipates consolidated revenue down by mid-single digits. On a segment basis: We expect Experiences bookings growth of approximately 5% to 8% and revenue growth of approximately 2% to 5%. Macro headwinds and resulting impact of cancellations will most meaningfully impact Q2 revenue growth given the compounding effect of higher cancellations and lower demand. We expect growth to reaccelerate in the second half of the year. We expect revenue growth at TheFork of approximately 10%-13%, which includes approximately 400 basis points of currency benefit based on recent exchange rates. In Hotels & Other , we expect declines of approximately 21% to 24%, after which we expect to lap easier comparisons in the second half of the year. We expect Q2 consolidated adjusted EBITDA margin of approximately 15% to 17%. In Experiences , we expect margins of approximately 12% to 14%, approximately flat with last year. At TheFork , we expect margins of approximately 11% to 13%, lower versus last year due to the aforementioned timing shift of marketing spend from Q1 to Q2. First half adjusted EBITDA margin is expected to be higher than last year by approximately 500 basis points. In Hotels & Other , we expect margins of approximately 22% to 24%, lower versus last year. Lower fixed costs are more than offset by hotels free/paid channel mix skewing more toward paid channels and increased media costs due to higher mix of off-platform revenue. For the full year, we've adjusted our outlook based on the impact these macro events are expected to have on the first-half of the year but have left the second half of the year unchanged given the level of uncertainty that still exists today. However, updating for the impact these macro events have on the first half alone would result in approximately flat consolidated revenue growth and approximately flat adjusted EBITDA margin for the full year. It's still early in the quarter, and the macro environment remains dynamic, but we continue to see strong traction in our Experiences business, and our belief in the size of this opportunity remains unchanged. We remain focused on extending our category leadership and accelerating revenue growth while expanding profitability. We will monitor developing trends and provide an update on our next call. With that, I'd like to turn the call back to the operator for Q&A. ****************************************************************************************** After Operator Q&A when call is passed back to Matt Thanks for joining us this morning. Before closing out, I want to briefly welcome our newest Board members, Andy Cates and Dhiren Fonseca, who joined the Board late in the first quarter. Andy and Dhiren each bring energy, experience and insights from both inside and out of the travel sector that no doubt will be valuable ahead. We are excited to execute through this peak travel season to capture demand and deliver on our strategy, and we look forward to our next update. -

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