TripAdvisor Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: TripAdvisor delivered Q2 revenue of $529 M (+7% YoY, +5% in constant currency) and adjusted EBITDA of $107 M (20% margin), surpassing expectations.
  • Positive Sentiment: Experiences verticals Viator and The Fork now account for nearly 60% of group revenue, growing at an 18% CAGR over the past 12 months and turning a loss into over $75 M in adjusted EBITDA.
  • Positive Sentiment: In Q2, Viator bookings grew 15% and its adjusted EBITDA tripled to $32 M (12% margin), while The Fork revenue rose 28% with a 900 bps margin improvement to 16%.
  • Negative Sentiment: Brand TripAdvisor revenue fell 3% in Q2, driven by a 13% decline in media and advertising amid free-traffic headwinds, although app engagement and ARPU are increasing.
  • Neutral Sentiment: The company reaffirmed Q3 revenue growth guidance of 4–6% and full-year growth of 5–7%, with adjusted EBITDA margins of 19–21% in Q3 and 16–18% for the year.
AI Generated. May Contain Errors.
Earnings Conference Call
TripAdvisor Q2 2025
00:00 / 00:00

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Operator

Thank you for standing by. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to TripAdvisor's Second Quarter twenty twenty five Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Angela White, VP of IR. You may begin.

Angela White
Angela White
VP of IR at TripAdvisor

Thank you, Janice. Good afternoon, and welcome to TripAdvisor's second quarter twenty twenty five financial results call. Joining me today are Matt Goldberg, President and CEO and Mike Noonan, CFO. Earlier this afternoon, we filed and made available our earnings release. In that release, you'll find reconciliations of non GAAP financial measures to the most comparable GAAP measure discussed on this call.

Angela White
Angela White
VP of IR at TripAdvisor

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, 08/07/2025. 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
Matt Goldberg
President, CEO & Director at TripAdvisor

Thanks, Angela, and good afternoon, everyone. We're pleased with our Q2 performance. Group revenue grew 7% or 5% in constant currency to $529,000,000 at the upper end of our range. Adjusted EBITDA of $107,000,000 or 20% of revenue exceeded our expectations. In a few minutes, Mike will provide more details on our financial performance and our view of the back half of the year.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

But first, I want to provide some context about where we're heading. We've made progress to transform TripAdvisor Group as evidenced in the shift in our portfolio mix. Our revenue composition has changed meaningfully and is now majority driven by our growth marketplaces at Viator and The Fork. Over the last twelve months, they represented nearly 60% of our revenue, growing at an 18% CAGR and contributed more than 75,000,000 of adjusted EBITDA versus two years ago for the comparable time period when they represented less than half of our revenue and adjusted EBITDA loss of 61,000,000 At the same time, at brand TripAdvisor, we reinforced our core assets, even as we navigate long standing headwinds to our legacy revenue streams. TripAdvisor's trusted brand, content, proprietary data and insights continue to be valuable assets for the group as we address the ongoing needs of travelers in a dynamic and evolving travel ecosystem.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

As we look ahead, we see an opportunity to build on our momentum by sharpening our focus on experiences, the fastest growing category in travel. Exploring cultural attractions, local tours and outdoor experiences has become the most important part of the trip. We believe this is a long term durable consumer trend, but the category is still fragmented and has low awareness. And as a group, we're better positioned than anyone to win in experiences given our highly trusted consumer brands, differentiated product offerings powered by proprietary data and deep and unique supply with AI embedded at our core. We operate not one, but two trusted brands in the category with TripAdvisor serving broad multi category demand and Viator focusing squarely on the experiences vertical.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

To capture even more of the market, we see an opportunity to shift away from optimizing for individual brand strategies and operate with an eye towards deeper coordination. This enables us to leverage our group wide assets across our marketing channels, customer traffic, supply relationships, product, data, and technology to drive both growth and efficiency. We've started to see examples of how this aligned approach delivers real business results. This quarter, we began testing marketing optimization across TripAdvisor and Viator. As part of this effort, we've been exploring ways we can vary our investment by geography and channel, taking advantage of the relative strength of each brand market by market to drive the greatest impact across the group.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

While still early, these tests have yielded performance gains over our historical brand centered approach that we're confident can scale. Similarly, as we begin to ramp up our testing velocity, insights from Viator's high performing booking funnel are improving the user experience and conversion on the TripAdvisor point of sale. TripAdvisor's global audience data and demand signals are helping us target high intent audiences that drive conversion at Viator. And we're leveraging TripAdvisor's global audience data to better identify where and how to grow Viator's supply footprint. We expect experiments like these to translate into market leading efficiencies at scale.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

As we compound our wins, align our brand and marketing approach and coordinate our R and D and supply investments, we unlock more value at the group level. Our combined offering to travelers is unique, inspiration, planning, booking and reengagement, enhancing monetization and creating value for our partners. Over time, we expect this to drive additional operating leverage and strategic advantage. As we focus on growing our leadership position and experiences, we'll also benefit from our group wide adoption of AI. This technology is redefining how travelers explore, plan, and book their journeys, offering more intelligent and personalized experiences.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

We're not only successfully integrating AI into our products, we're actively shaping how AI will define the future of travel. From personalized recommendations to enhanced customer support and productivity across our teams, AI is enabling us to build better experiences faster. We're already bringing this vision to life across our business. For Brand TripAdvisor, AI is powering more intelligent search and discovery and helping travelers navigate our vast amount of content more easily. At Viator, we're rolling out the use of AI to refine the relevance of search results, improving booking initiation and conversion.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

At The Fork, we're testing conversational AI to help diners quickly find the right restaurant match and expand our partner base. These enhancements are making our platform smarter, stickier, and better tuned to the needs of our users. Our trusted brands, proprietary data and scale also make us a critical partner in the emerging AI search ecosystem from chat GPT to perplexity to traditional search engines evolving their offerings. We recognize that the way consumers will discover and access online sites in the future is changing, and we're positioning ourselves to serve them more effectively. Our longstanding expertise in SEO and content optimization gives us a head start as the lines blur between traditional and AI search.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

And we've been rapidly adapting our products and marketing to drive more direct traffic engagement and mobile app use. Internally, AI is a catalyst for operational efficiency. We're deploying foundational AI tooling across the enterprise to streamline workflows and increase automation. From content moderation to customer service, we're seeing early productivity gains that we intend to scale. Let me now shift to a few reflections on the most recent quarter.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

First in Experiences, we solidified our market position in North America and believe we're well positioned to drive growth and profit globally. In Q2, Experiences booked grew 15% and Viator's adjusted EBITDA more than tripled, Strong signals that we're delivering value to our customers, suppliers and partners. On the customer side, Viator's marketing and product flywheel is taking hold. We're targeting high intent travelers, delivering an improved user experience for them and converting them to bookers. We continue to make tangible gains that remove friction to the shopping experience and drive more travelers to stay, try and buy.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

This includes more personalized landing pages, sort and availability that are resulting in meaningful improvements in bounce rates, booking initiation rates and conversion. Our R and D efforts are also yielding more direct use on the Viator point of sale, bookings from direct traffic, including the app, are outpacing other marketing sources. Turning to supply, we continue to lead the category in our breadth, depth and quality of available experiences. We're widening our moat, expanding supply across categories and markets through a variety of operator focused initiatives, such as optimized lead generation, targeted sales and marketing campaigns. As we onboard new attractions and operators on our platform, we're delivering higher bookings in the first month, a signal that our demand driven supply acquisition approach is working.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Now shifting to our European dining offering. The Fork delivered a strong quarter, demonstrating both operational discipline and continued momentum. Revenue grew 28% or 22% in constant currency to $54,000,000 with healthy performance across both B2C and B2B channels. Adjusted EBITDA margin more than doubled year over year, reflecting the leverage in the model as we continue to drive growth while managing fixed costs. On the diner side, our marketing investments are focused on optimizing the balance between new diner acquisition and repeat engagement.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

The Forks mix of performance marketing, brand and loyalty programs are working together effectively. Bookings on the Fork network grew in the low teens, while total bookings grew 9%. App adoption continues to deepen. Nearly 80% of our bookings now come through the app and from repeat diners, a reflection of both product stickiness and cohort quality. On the restaurant side, we continue to expand our offering and drive growth in B2B SaaS and other revenue streams.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

B2B revenue more than doubled year over year, driven by a growing portion of our restaurant base adopting our premium ERB subscription tier. Total subscription revenue continues to increase as a share of overall mix, a testament to the value provided by our product and service offering. We also continue to make progress in partnerships, recently launching exclusive dining experiences with Mastercard across Europe. The partnership provides Mastercard holders and the Fork diners exclusive priority access to tables at top tier restaurants and unique curated dining experiences, such as behind the scenes kitchen or seller tours led by renowned chefs. The progress we've made in partnerships is a testament to our brand and offering in European dining.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Finally, at Brand TripAdvisor, our travel planning and guidance platform, Q2 revenue was $242,000,000 and adjusted EBITDA was $66,000,000 or 27 percent of revenue. As we've transitioned this business over the last two years, we've invested prudently to deliver a steady cadence of product improvements to engage our highest valued travelers. These are the customers who come to us directly, log in as members, download our app, increasingly book with us and leave high quality reviews. We see opportunities ahead to narrow our focus to the areas of this strategy that allow us to fully leverage TripAdvisor as a powerful cross category demand and discovery platform. While we continue to see pressure on our legacy revenue, we've made visible progress in our engagement strategy, driving more members directly into our app, which is the fastest growing part of our audience.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

We like the economics of these app members. While still a small portion of our total volume, as they scale, they'll reduce our reliance on paid channels and their average revenue per user or ARPU continues to grow by double digits year over year. To deliver more value for our app users, we've also recently rolled out improvements to hotel shopping and our free membership in The US. Designed to be the most flexible rewards program in the travel industry, TripAdvisor rewards recognizes and rewards travelers for planning, contributing, and booking on TripAdvisor. The more travelers interact with the app, the more benefit they receive.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Trip cash accumulates while planning, booking, and offering guidance to other travelers, rewarding their role in the community as well as their bookings across both hotels and experiences. As we close, I wanna reiterate why I believe TripAdvisor Group is exceptionally well positioned to win in the evolving travel landscape. We have unique assets that bring together an unmatched combination of content and data, supply depth, and global reach across key categories at different points of the travel journey. Our brands are rooted in trust, relevance, and authenticity, and millions of travelers rely on us to discover, plan, and book their trips. As the world continues to adopt AI, we're leveraging its full potential to drive our product development, strengthen our position in the ecosystem and power our business.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Together, these pillars, unique platform assets, brand trust and AI embedded in everything we do form the foundation of why we believe TripAdvisor Group is extremely well placed to achieve our vision to be the most trusted source for travel and experiences. With that, I'll turn the call over to Mike.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Thanks, Matt, and good afternoon. I'll start with a review of our financial performance, and later, we'll provide our outlook for Q3 and the full year. As a reminder, all growth rates are relative to the comparable period in 2024, unless noted otherwise. Consolidated revenue in Q2 was in line with expectations at $529,000,000 growth of 7% or 5% in constant currency. Consolidated adjusted EBITDA of $107,000,000 or 20% of revenue exceeded expectations, primarily due to more favorable marketing efficiencies at At Viator, the number of experience booked grew 15% in line with expectations for the quarter.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

We saw stable volume growth sequentially in our largest origin market, North America, and accelerating growth in Europe, reflecting healthy demand. We continue to observe strong volume growth in our third party points of sale that is outpacing overall segment growth, healthy growth at the Visor point of sale that was relatively in line with overall segment growth, and improvements in growth sequentially at the TripAdvisor point of sale. Gross booking value or GBV grew 13% or 10% on a constant currency basis to approximately $1,300,000,000 VYATRO revenue grew 11% to $270,000,000 or approximately 9% on a constant currency basis. The difference between the growth in the number of experiences booked and the constant currency revenue growth was primarily due to higher mix of third party merchant bookings relative to the 2024. Merchant bookings generally have a lower average booking value, which impacts GBV growth relative to volume growth and also have a lower implied take rate, which impacts revenue growth relative to GBV growth.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

As a reminder, the bookings that come through third party merchant channels are immediately profitable and are largely sourced from regions outside of our core markets, which enable us to reach incremental travelers as we continue to scale. As Matt noted, we see meaningful opportunity to deepen our operational coordination between our Viator and TripAdvisor brands in the experiences category. This extends across product, supply and marketing investments as we focus on accelerating our growth, profitability and competitive positioning with both brands in a way that will sustainably differentiate us in this category in the medium to long term. Viator adjusted EBITDA of $32,000,000 or 12% of revenue represented a margin improvement of nearly 800 basis points. Leverage was driven by more efficient marketing spend and continued strong repeat bookings growth on the Viator point of sale.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

App bookings remained strong and outpaced other channels, resulting in continued share gain in the segment's total booking mix. These trends continue to reinforce our confidence in the long term margin opportunity for this business at scale. At BrandTripAdvisor, Q2 revenue was $242,000,000 a decline of 3%. Branded Hotels revenue of $152,000,000 reflected growth of 1% and a significant step up sequentially. Pricing during the quarter was healthy and remained consistent in July, which reflects ongoing product optimizations that are driving higher value clicks to our partners.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Volume in paid channels was also healthy, in part due to an easy comparable period, while we continue to witness headwinds in free channels consistent with recent trends. Media and advertising revenue declined 13% to $36,000,000 Declines were driven by overall traffic volume headwinds and advertising market dynamics both on and off platform. Experiences and dining revenue was $45,000,000 a decline of 7%. Experiences performance improved sequentially throughout the quarter driven primarily by conversion rate improvements. We expect to see performance continue to improve in the second half of the year as we remain focused on optimization opportunities that we discussed earlier.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Although we expect to drive growth increasingly through paid channels, this revenue line will remain profitable as we continue to test, learn and iterate our positioning of our collective assets in this category. Brand TripAdvisor adjusted EBITDA was $66,000,000 representing 20% of revenue. The deleverage is primarily driven by higher marketing expense as percent of revenue as we saw greater mix of paid channels in our hotel and experience offerings, which only was partially offset by lower personnel costs. At The Fork, Q2 revenue was $54,000,000 or 2820% growth and 22 growth in constant currency. In our B2C offering, total bookings volume grew 9% overall and 13% in The Fork's branded channel.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Strong performance in our B2B subscription revenue continues to be driven by greater adoption of our higher priced premium plans. Our partnership with Vodafone that began ramping in the second half of last year is also contributing to the strong revenue performance in the quarter. In the second half of this year, we expect our Mastercard partnership will begin to ramp, which is another example of furthering revenue diversification within the fork. Adjusted EBITDA at the Fork was $9,000,000 or 16% of revenue, representing a margin improvement of nearly 900 basis points. Lower personnel costs was the most meaningful driver of leverage in the quarter.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Turning to consolidated expenses for the quarter. Cost of revenue was 8% of revenue, which was consistent with last year. Marketing costs were 41% of revenue, also consistent with last year. Leverage at Viator was offset by deleverage at Brand TripAdvisor due to the free paid mix shift and a modest increase in marketing investment. Personnel costs as a percent of revenue decreased by approximately 300 basis points to 28% of revenue, including share based compensation of approximately $29,000,000 Absent share based compensation, personnel costs were lower by over 100 basis points.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Technology costs were 5% of revenue consistent with last year. G and A as a percent of revenue was lower by approximately 200 basis points, primarily due to a favorable update on a potential settlement of a regulatory matter within our vacation rentals business. Now turning to cash and liquidity. Q2 operating cash flow was $2.00 $2,000,000 and free cash flow was $177,000,000 The year over year increase in operating cash and free cash flow was primarily related to last year's Q2 outflow of approximately $140,000,000 associated with the twenty fourteen to twenty sixteen IRS transfer pricing settlement we previously disclosed and finalized last year. As we mentioned on our last call, in April, we closed the Liberty TripAdvisor merger.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

In addition to the approximately $330,000,000 paid for the redemption of the Liberty TripAdvisor exchangeable debenture settled in Q1, in Q2, we paid approximately $80,000,000 in cash for payment to the LTRIP preferred and common equity holders and for other expenses associated with the transaction. The total cash outlay related to the transaction was $411,000,000 Also during the quarter, we repurchased 2,800,000.0 shares at an average purchase price of $14.22 per share for a total amount of $40,000,000 We will continue to pursue a structured approach to our repurchases. We expect to continue to utilize a portion of our future cash flow to repurchase shares as we see attractive prices in the market and a stable macro environment. We believe that our current cash profile and net leverage levels reflect a strong capital structure with appropriate cash for operating needs. Total cash and cash equivalents was approximately $1,200,000,000 Our cash balance includes approximately $350,000,000 in Term Loan B proceeds raised in the first quarter, which we plan to use to pay down our outstanding convertible notes before their April 2026 maturity.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Excluding deferred merchant payables of $473,000,000 and the $350,000,000 term loan, our remaining cash balance is approximately $390,000,000 Turning to our outlook for Q3 and the full year. As I discussed earlier, we are accelerating the operational coordination in our experiences offerings across Viator and Brand TripAdvisor. While these brands serve very different travelers and at very different moments in the traveler journey, we are thinking much more holistically about how we leverage product, supply and market investments across both brands to better optimize growth, profitability and market share in our core as well as new markets. As a result, we will continue to make investment decisions that we believe will benefit our combined experience revenue growth. While certain decisions in paid channels may result in a shift of profit between Viator and Brand TripAdvisor, we expect any decisions in the second half of this year to be neutral on a consolidated adjusted EBITDA basis.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

This approach is reflected in our Q3 and full year guidance. For Q3, we expect consolidated revenue growth of 4% to 6% and adjusted EBITDA margin of between 1921%. This implies the following for each brand. At Viator, we expect 16% to 18% growth in the number of experiences booked and total segment revenue growth in the high single digits. Our expectations for revenue growth relative to the growth in bookings is mainly impacted by a higher mix of third party merchant bookings, as well as lower bookings growth we witnessed in June, which impacts our recognized revenue in Q3.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Bookings growth in July has improved relative to June and we expect to see revenue growth reaccelerate in Q4. In Q3, we expect adjusted EBITDA margin of approximately 14% to 16%. At Brand TripAdvisor, we expect revenue declines of approximately 3% to 4%, mostly reflective of the ongoing free traffic headwinds impacting our channel mix that I mentioned earlier. We expect adjusted EBITDA margins of approximately 22% to 24%. At The Fork, we expect revenue growth of approximately 25% to 27%, which includes approximately eight percentage points of currency benefit at current rates.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

We expect adjusted EBITDA margin to improve sequentially to the high teens. For the full year, we're maintaining our consolidated full year guidance provided last quarter, which is 5% to 7% revenue growth and 16% to 18% adjusted EBITDA margin. The revenue range assumes the impact of traffic headwinds at Brand TripAdvisor remains stable. This outlook does not change with the investment decisions we're making in Experiences, which may impact each individual segment, but not the consolidated results. With that, I'd like to turn the call back over to the operator to begin Q and A.

Operator

Your first question comes from the line of Richard Clarke of Bernstein. Please go ahead.

Richard Clarke
Managing Director at Bernstein

Hi. Thanks for taking my question. I guess just firstly, your comments around some of that free traffic headwinds on Brand TripAdvisor and whether this would change your view that 2026 can be the year of stabilization for Brand TripAdvisor given those headwinds. And then if I can offer a follow-up as well, just any comments on your two new shareholders' levels of engagement, anything you've sort of received from them or your openness to engage in discussions with those two new shareholders?

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Hey, Richard, it's Mike. I'll take the first one. I'll let Matt take the second. Yeah, I think as we sit here today, and as we've talked this year about returning TripAdvisor to growth and reflecting the headwinds in the free traffics. I'd say, certainly as we sit here today, some of the free traffic headwinds has persisted.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

I don't think we are necessarily It's too early to call 2026, because we are excited about continuing the work we're doing, particularly in the experience of side as we just reviewed. And that's the work we're underway now. So I think we are acknowledging maybe things are a bit different than we sat at the beginning of the year, but look forward to doing the work and thinking about how we improve operational efficiencies as we look to our planning, which we're in the middle of right now.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Yes, Richard, I'll take that second question. Thanks for asking. As you can appreciate, we can't go into too much detail about who we talk to or what they say to us when it comes to specific shareholders. We value constructive engagement with all of our shareholders and appreciate their feedback. We always listen and of course, we're totally focused on creating shareholder value and achieving our vision and driving these strategies.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

So that's about all I can say for now other what was reported.

Richard Clarke
Managing Director at Bernstein

Thank you.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Thanks, Richard.

Operator

Your next question comes from the line of Nafisa Gupta of Bank of America Securities. Please go ahead.

Nafeesa Gupta
Nafeesa Gupta
VP - Equity Research Analyst at Bank of America

Hi. Thank you. Two questions from me. Could you provide any color on what is your mix between three p, white or origin and triple origin, for experiences? And my second question is that in your outlook, you mentioned you expect revenue growth to to reaccelerate in four q for Viator, but it does have tough comps.

Nafeesa Gupta
Nafeesa Gupta
VP - Equity Research Analyst at Bank of America

So what gives the confidence on that reacceleration? Thank you.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Yeah. Hey, it's Mike. I'll take both. I just want to clarify, the first question was color on the 3P mix, origin mix. Is that correct?

Angela White
Angela White
VP of IR at TripAdvisor

Yes.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

3P is a diverse channel. It has certainly merchants, which are the OTAs. It has travel agents as well. The growth in the 3P channel, as we've said, is being driven by our OTA merchant partners. Listen, this is an important channel for us, as we've said many times.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

They are scaling fast and they are immediately profitable for us, and they are incremental. And so we do look at incrementality very closely. We see a lot of them are coming outside of our core North America market, which gives us confidence and an incrementality. So for us, these are additive to revenue growth. They're also highly accretive to our profitability and are allowing us to continue to invest within experiences, which we have been doing this year, and so an important part of that equation.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Then As you think about that, I would just add a reminder that the significant majority of our revenue is coming from the Viator point of sale first, followed by TripAdvisor and followed by third party non TripAdvisor. So just as a reminder.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Yes. Thanks, Matt.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

The next question was just about revenue growth in Q4.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Yes. So revenue growth in Q4, I think when we look at our bookings, which has remained very healthy and volumes have remained very healthy, we see good bookings that are extending in past Q3 into Q4. Understanding it is a tougher comp, but we like where the booking window are and where the bookings are coming in and health of our new bookings. So we feel pretty confident about that as we turn to Q4.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

And I would just add, of course, I spent a fair amount of time to talk about the opportunity we have between the two brands to drive meaningful uplift revenue working together across marketing, product, supply, data, leveraging AI. And we saw some good early test results in Q2 and we see an opportunity to extend that into the back half and really get some momentum in some of those other areas beyond just the marketing efficiencies that I mentioned. So excited about how that's going to drive our performance as well.

Nafeesa Gupta
Nafeesa Gupta
VP - Equity Research Analyst at Bank of America

Thank you.

Operator

Your next question is coming from the line of Vince Cipoll of Cleveland Research Company. Please go ahead.

Vince Ciepiel
Senior Research Analyst, Partner - Lodging, OTA's, Cruise, and Luxury at Cleveland Research Company

Hi, thanks for taking my question. I was curious if you could talk a little bit more on the changes with the app recently. Maybe remind us kind of what percent of brand TripAdvisor traffic comes from the app and how the approach to monetization is changing there. And if there's a thought to roll this out to other geographies and maybe the timeline associated with that.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

And are you speaking specifically about the TripAdvisor app right now? Is that what you want me to cover, Vince?

Vince Ciepiel
Senior Research Analyst, Partner - Lodging, OTA's, Cruise, and Luxury at Cleveland Research Company

Yes, please.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Great. Yeah. So we're really excited about the work that we're doing in the TripAdvisor app. Obviously, it's helpful that we can get customers there to be direct with us, engage with us, plan with us, contribute. And while we don't break out the actual percentage as a function of the total, we are seeing growth there really strong.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

And so app users and members using the app are both growing. What we've done with the app, and we did this last quarter, we actually made meaningful improvements. It was a relaunch that really focused on being the world's best travel companion. So a kind of app companion that has data and truly understands who's coming that offers smart, personalized recommendations that are more relevant and in context where you can kind of plan and book effortlessly. We've reimagined how the map, can be a lens onto what's around you for things you might wanna do and change as maybe the weather changes or your plans change.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

And we think we can deliver significant value both planning ahead of the trip and throughout the trip. And so that also would bring back users to then guide others. And now we're adding a rewards program in the app, which just launched as our free membership that I talked about earlier. And of course, rolling out in app hotel bookings where we're actually seeing some good activity and driving good response and conversion. And so together, these things we think will be meaningful.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

As you said, we're in The US, but we think we'll roll that out further over time. And I think between navigation, onboarding flow, the way we're conceiving of the home screen to be highly contextualized, And then of course, being AI native, that the AI review summaries come to the surface, that there's an AI trip builder that's integrated in the onboarding workflow. And of course, our AI travel assistant coming into the app for a more intuitive experience. All of this, we think can work together to have a meaningful impact. And we've seen some good early indicators.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

We've also supported it with a modest marketing campaign around planning in the app, which was successful and has driven some downloads and some engagement at a really good ROAS. And we expect that this is gonna have an opportunity to grow over time. And again, as it scales, reduces our dependence on paid media and drives a really good ARPU of those users who are using our trip planning and our app. So we're enthusiastic about it. I think you'll see us doing more with it over time.

Vince Ciepiel
Senior Research Analyst, Partner - Lodging, OTA's, Cruise, and Luxury at Cleveland Research Company

Great. Thanks. That's really helpful there. And then I know the full year revenue growth guidance was reaffirmed, up five to seven. Just curious in the last ninety days, any change to maybe how brand trip versus Viator contributes to the full year company revenue guidance?

Vince Ciepiel
Senior Research Analyst, Partner - Lodging, OTA's, Cruise, and Luxury at Cleveland Research Company

I think at one point, brand trip was expected to be down low singles for the year and Viator grow low to mid teens. Curious if that's still the case or if there's been any shift in either there.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

Yeah, Vince, I'll take that. I would say for our full guide this year that we provided at the beginning of the year, a couple of things. One, as you would expect, we provide that guide with some degree of prudence. I'd say our first half of the year, we saw pretty good performance. We did not raise guide in our last call largely due to the macro that was upon us at the time.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

I think as we sit here today, there's definitely puts and takes around the back half of the year. But just mentioned, we have at TripAdvisor a bit more probably free traffic pressure than we had at the beginning of the year. Listen, I would say at Viator, we're still seeing very strong bookings growth. The flow through to revenue is a little less in terms of that mix because of the third party, as well as some of the cancel rate trends we've been seeing this year. But with that being said, still very strong performance.

Michael Noonan
Michael Noonan
CFO at TripAdvisor

So these factors are incorporated in our reaffirmation. And as we sit here today, feel good about that range. Great, thank you.

Operator

Thank you. I will now turn the call back over to Matt Goldberg, CEO, for closing remarks. Please go ahead.

Matt Goldberg
Matt Goldberg
President, CEO & Director at TripAdvisor

Thank you all for joining us on today's call. We're looking forward to the back half of the year. And I just want to say we're really pleased with the work our teams are doing to position us for the future. And I just want to thank them for their tireless efforts to drive our momentum. Look forward to the next update. Thank you.

Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Executives
    • Angela White
      Angela White
      VP of IR
    • Matt Goldberg
      Matt Goldberg
      President, CEO & Director
    • Michael Noonan
      Michael Noonan
      CFO
Analysts
    • Richard Clarke
      Managing Director at Bernstein
    • Nafeesa Gupta
      VP - Equity Research Analyst at Bank of America
    • Vince Ciepiel
      Senior Research Analyst, Partner - Lodging, OTA's, Cruise, and Luxury at Cleveland Research Company
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