TripAdvisor Reports Third Quarter 2013 Financial Results
TripAdvisor, Inc., the world's largest travel site, announced financial results for the third quarter ended September 30, 2013.
NEWTON, MA, October 23, 2013 -- TripAdvisor, Inc. (NASDAQ: TRIP), the world's largest travel site*, today announced financial results for the third quarter ended September 30, 2013.
• Average monthly unique visitors to TripAdvisor sites were a record 260 million in Q3, up nearly 60% year-over-year.
• Revenue for the third quarter increased to $255.1 million, up 3% quarter-over-quarter and up 20% year-over-year.
• Net income for the third quarter decreased 6% year-over-year to $55.9 million, or $0.38 per diluted share. Non-GAAP net income for the third quarter decreased 1% year-over-year to $65.3 million, or $0.45 per diluted share.
• Adjusted EBITDA for the third quarter decreased 2% year-over-year to $104.4 million, or 41% of revenue.
• Cash flow from operations for the third quarter increased 90% year-over-year to $145.0 million, or 57% of revenue; free cash flow for the third quarter increased 87% year-over-year to $129.3 million, or 51% of revenue.
• TripAdvisor repurchased 1.4 million common shares for an aggregate purchase price of $100.0 million.
“We continued to strengthen our leadership position in the travel planning funnel during the third quarter,” said Steve Kaufer, President and CEO of TripAdvisor. “Total traffic to TripAdvisor, member count and our valuable user-generated content continue to grow rapidly off a large, global base, driving powerful network effects and making the site better for every user. We continue improving the experience on TripAdvisor for users and partners alike through Hotel Price Comparison, mobile product enhancements and the recent launch of our new TripConnect platform – all of which will help us match more travelers with great businesses.”
Discussion of Third Quarter 2013 Results
Revenue for the third quarter of 2013 was $255.1 million, an increase of $42.4 million, or 20%, compared to the third quarter of 2012.
• Click-based advertising – Revenue from click-based advertising totaled $189.3 million for the third quarter of 2013, an increase of 13% compared to the third quarter of 2012. Click-based advertising revenue represented 74% of total revenue in the third quarter of 2013, compared to 79% in the third quarter of 2012.
• Display-based advertising – Revenue from display-based advertising totaled $30.5 million for the third quarter of 2013, an increase of 29% compared to the third quarter of 2012. Display-based advertising revenue represented 12% of total revenue in the third quarter of 2013, compared to 11% in the third quarter 2012.
• Subscription, transaction and other – Revenue from subscription, transaction and other totaled $35.3 million for the third quarter of 2013, an increase of 68% compared to the third quarter of 2012. Subscription, transaction and other revenue represented 14% of total revenue in the third quarter of 2013, compared to 10% in the third quarter of 2012.
For the third quarter of 2013, revenue from North America grew 16% year-over-year to $129.6 million, representing 51% of total revenue. Revenue from the Europe, Middle East and Africa region grew 19% year-over-year to $82.7 million, representing 32% of total revenue for the third quarter of 2013. Revenue from the
Asia-Pacific region grew 45% year-over-year to $33.0 million, representing 13% of total revenue for the third quarter of 2013. Revenue from the Latin America region grew 12% year-over-year to $9.8 million, representing 4% of total revenue for the third quarter of 2013. International revenue was 53% of total revenue during the quarter, up from 50% in the third quarter of 2012. Click-based advertising revenue by geography is based on the geographic location of our websites.
Related-party revenue from Expedia totaled $56.2 million for the third quarter of 2013, a decrease of $0.7 million, or 1%, compared to the third quarter of 2012.
GAAP net income for the third quarter of 2013 was $55.9 million, or $0.38 per diluted share, compared to GAAP net income of $59.4 million, or $0.41 per diluted share, for the third quarter of 2012.
Non-GAAP net income for the third quarter of 2013 was $65.3 million, or $0.45 per diluted share, compared to non-GAAP net income of $65.8 million, or $0.46 per diluted share, for the third quarter of 2012.
Adjusted EBITDA for the third quarter of 2013 was $104.4 million, and Adjusted EBITDA margin was 41%, compared to Adjusted EBITDA of $107.1 million and Adjusted EBITDA margin of 50% for the third quarter of 2012.
Cash flow from operating activities for the third quarter of 2013 was $145.0 million, an increase of $68.6 million, or 90%, compared to the third quarter of 2012. This increase was due to cash generated from higher working capital movements primarily driven by increased cash flows from lower tax payments primarily due to timing.
As of September 30, 2013, cash and cash equivalents and short and long-term marketable securities were $595.9 million, up $47.5 million since September 30, 2012 and up $10.2 million since December 31, 2012. This amount does not include $40.4 million from the sale of marketable securities that settled after quarter-end and is recorded on the “Receivable – sale of marketable securities” line on the consolidated balance sheet at September 30, 2013.
During the third quarter of 2013, TripAdvisor repurchased 1.4 million shares of common stock for an aggregate purchase price of $100.0 million.
As of September 30, 2013, TripAdvisor had 1,939 employees, up from 1,483 employees at September 30, 2012 and 1,799 at June 30, 2013.
In the company’s earnings release and the related conference call or webcast, TripAdvisor may use or discuss non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and free cash flow, which are non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission. Please refer to the section below entitled “Use of Non-GAAP Financial Measures” for definitions of these non-GAAP financial measures and the financial schedules attached to this press release for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
Third Quarter and Other Recent Business Highlights
• TripAdvisor’s travel community averaged more than 260 million monthly unique visitors for the quarter ended September 30, 2013, according to Google Analytics. At approximately 13% of the world’s monthly unique visitors in online travel, according to comScore, TripAdvisor remains the largest travel website in the world.
• TripAdvisor user-generated content grew at a rate of more than 80 contributions per minute covering more than 758,000 hotels and accommodations, nearly 1.7 million restaurants and 335,000 attractions in more than 134,000 destinations throughout the world. TripAdvisor syndicates its content to over 800 travel-related partners and TripAdvisor widgets can be found on more than 100,000 sites around the globe. TripAdvisor also launched points of sale in Venezuela, Peru, Chile, and Columbia, bringing its total points of sale to 34.
• TripAdvisor averaged more than 39 million monthly Facebook visitors to its website and Facebook app during the quarter, and remains the #1 travel app on Facebook, according to AppData. In addition, TripAdvisor grew marketable members to 57 million, according to company log files.
• TripAdvisor released new native apps on iOS and Android and also rolled out a major iPad app refresh. Downloads of TripAdvisor’s apps – including TripAdvisor, City Guides, SeatGuru, Jetsetter and GateGuru – reached 69 million and average unique monthly visitors via smartphone and tablet devices grew over 175% year-over-year to approximately 108 million for the quarter ended September 30, 2013, according to company logs.
• TripAdvisor appointed Marc Charron as the new President of TripAdvisor for Business and launched TripConnect, a platform that enables independent hoteliers to purchase leads from TripAdvisor. This product release included a new-and-improved Review Express, a free marketing tool that makes it easy for property owners to invite guests to write a review on TripAdvisor.
• TripAdvisor expanded its TV ad campaign to the entire United States and began testing its campaign in select international markets.
• TripAdvisor acquired Oyster, a hotel review website featuring professional reviews and photos covering 150 cities, bringing the number of TripAdvisor managed and operated travel media brands to 21.
• TripAdvisor launched its first-ever major onsite affinity partnership with American Express in multiple key markets as well as an innovative digital travel magazine created in partnership with Axel Springer, a leading integrated multimedia company in Europe.
• TripAdvisor added two new independent Board members, Dipchand Nishar, Senior Vice President of Products and User Experience for LinkedIn, and Spencer Rascoff, Chief Executive Officer and a director of Zillow, Inc.