TripAdvisor CEO: Positive Q4 Results Cap Strong 2018

NEEDHAM, MA—TripAdvisor Inc. revealed that revenue in the fourth quarter was up 8%, while its full year revenue increased 4%, according to financial results for the fourth quarter and full year ended December 31, 2018.

“Our solid Q4 capped a very strong 2018,” said TripAdvisor CEO Steve Kaufer. “We reinvigorated hotel segment profitability, reinforced our leading positions in experiences and restaurants and laid important groundwork for future growth. We are pleased with our progress and will continue to balance growth and margin to deliver maximum shareholder value.”

CFO Ernst Teunissen added, “We are very pleased with our strong Q4 and full year 2018 results. We expect double-digit consolidated adjusted EBITDA growth in 2019, with differentiated revenue and profit focus by segment.”

Fourth Quarter and Full Year 2018 Financial Summary

Q4 total revenue accelerated to 8% growth, or $346 million. Full year total revenue grew 4% to approximately $1.62 billion.

We estimate that changes in foreign currency had a 1% negative impact on total revenue growth in Q4 and a 1% positive impact on total revenue growth in the full year of 2018.

Q4 GAAP Net Income grew to $7 million and full year GAAP Net Income grew to $113 million. This increase year-over-year was primarily due to $73 million in additional tax expense related to the impact of the 2017 Tax Act in the fourth quarter of 2017 that did not reoccur in 2018, partially offset by expenses of $5 million attributed to a legal settlement in the fourth quarter of 2018.

Q4 Non-GAAP Net Income grew 375% to $38 million. Full year Non-GAAP Net Income grew 67% to $240 million.

Q4 total adjusted EBITDA grew 38% to $87 million, and Q4 total adjusted EBITDA margin improved to 25%, a 500 basis point increase compared to Q4 2017. Full year Total Adjusted EBITDA grew 27% to $422 million, and full year total adjusted EBITDA margin improved to 26%, increasing 500 basis points year-over-year. We estimate that changes in foreign currency negatively impacted Total Adjusted EBITDA growth by 3% in Q4 and positively impacted Total Adjusted EBITDA growth by 1% in full year 2018.

Q4 Hotel Revenue was $240 million, a 2% decrease year-over-year. Q4 Hotel Adjusted EBITDA grew 25% to $79 million, and hotel adjusted EBITDA margin improved to 33%, a 700 basis point increase compared to Q4 2017.

Full year Hotel Revenue was approximately $1.16 billion, a 3% decrease year-over-year. Hotel adjusted EBITDA grew 24% to $356 million, and hotel adjusted EBITDA margin improved to 31%, a 700 basis point increase compared to 2017.

Average monthly unique visitors on TripAdvisor-branded websites and applications grew 2% in Q4 2018 and grew to 490 million* during the 2018 peak summer travel season. Average monthly unique hotel shoppers declined 11% and 4% in Q4 2018 and in the full year of 2018, respectively period-over-period.

TripAdvisor-branded click-based and transaction revenue grew 1% in Q4 2018 and declined 4% in the full year of 2018, while revenue per hotel shopper grew 14% in Q4 2018 and declined 2% in full year of 2018 year-over-year.

Q4 non-hotel revenue grew 38% to $106 million and Non-Hotel Adjusted EBITDA grew to $8 million. Full year non-hotel revenue grew 27% to $458 million and non-hotel adjusted EBITDA grew 47% to $66 million.

Cash and cash equivalents and short-term marketable securities was $670 million and there was no outstanding debt as of Dec. 31, 2018.

Cash flow from Operating activities for the year ended Dec. 31, 2018, was $405 million, an increase of $167 million, or 70%, year-over-year. Full year free cash flow grew 98% to $344 million.

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