Travelzoo Inc., a global Internet media company, today announced financial results for the second quarter ended June 30, 2011, with revenue of $37.6 million, an increase of 34% year-over-year. Operating profit was $7.6 million, up 29% year-over-year. Net income was $4.9 million, with diluted net income per share (EPS) of $0.30, up from $0.20 in the prior-year period.
“We achieved record revenues and our fastest growth rate in 4 years. We accelerated our investment in future growth, adding 27 new Local Deals markets, 800,000 new subscribers and we grew our headcount faster than in any prior quarter,” said Chris Loughlin, CEO of Travelzoo. “We also ran a television advertising test, which negatively impacted earnings per share by approximately $0.07. We are pleased with our accelerated growth rate and confident that our investments will fuel future growth.”
North America business segment revenue grew 25% year-over-year to $27.7 million. Operating profit was $6.5 million, or 24% of revenue, down from $6.7 million, or 30% of revenue, in the prior-year period.
Europe business segment revenue grew 67% year-over-year to $10.0 million. In local currency terms, revenue grew 53% year-over-year. Operating profit was $1.1 million, compared to an operating loss of $808,000 in the prior-year period.
Travelzoo had a total unduplicated number of newsletter subscribers in North America and Europe of 20.7 million as of June 30, 2011, up 13% from June 30, 2010, and up 4% from March 31, 2011. In North America, total unduplicated number of subscribers was 15.3 million as of June 30, 2011, up 9% from June 30, 2010 and up 3% from March 31, 2011. In Europe, total unduplicated number of subscribers was 5.5 million as of June 30, 2011, up 29% from June 30, 2010 and up 7% from March 31, 2011.
During the second quarter, Travelzoo used $11.2 million of cash for operating activities. Accounts receivable decreased by $473,000 quarter-over-quarter and increased by $2.4 million over the prior-year period to $15.9 million. Accounts payable increased by $2.1 million quarter-over-quarter and increased by $9.3 million over the prior-year period to $15.7 million. Capital expenditures were $356,000, down from $699,000 in the prior quarter and up from $355,000 in the prior-year period. Travelzoo exited the second quarter with $40.1 million in cash and cash equivalents.