TripAdvisor Q3 Earnings Call Highlights

Key Points

• Third-quarter performance weakened: Revenue fell 11% to $436 million, while Experiences revenue declined 3% amid softer travel demand, SEO headwinds and higher marketing costs.
• TripAdvisor is restructuring and refocusing: The company plans to cut 425 Hotels and Other roles, targeting more than $55 million in annualized segment savings, and prioritize Viator for consumer-facing investment. It also sold TheFork for about $685 million and expects to use part of the proceeds to reduce debt.
• Near-term outlook remains soft: TripAdvisor expects fourth-quarter revenue to decline in the low teens and adjusted EBITDA margin in the low to mid-single digits. CEO Matt Goldberg will remain through mid-February as the board searches for a successor; the CFO also plans to depart at year-end.

TripAdvisor NASDAQ: TRIP reported an 11% drop in third-quarter revenue and outlined plans to cut costs, reduce debt and concentrate investment on its Viator experiences marketplace as the company prepares for changes in its top leadership.

Revenue fell to $436 million, while adjusted EBITDA was $71 million, or 16% of revenue, Chief Financial Officer Mike Noonan said on the Nov. 5 earnings call. Bookings growth in the Experiences segment slowed as travel demand weakened on key routes, search traffic remained under pressure and the company shifted marketing spending into newer channels.

President and CEO Matt Goldberg said he will remain in his role through mid-February while the board works with an executive search firm to find a successor. Noonan plans to leave at year-end for another opportunity. Kristen Dalton, the company’s head of strategy and operations and a former vice president of financial planning and analysis, will become interim CFO on Jan. 1, 2027.

Experiences growth slows

Experiences booked rose 2% in the quarter, with bookings on Viator up 4%, third-party points of sale growing in the mid-teens and the TripAdvisor platform declining in the low teens. Gross booking value was flat, and Experiences revenue fell 3%.

Noonan said demand on the U.S.-to-Europe travel corridor weakened further from the prior quarter. U.S. domestic bookings growth also decelerated during the period, while weather disruptions and higher cancellation rates weighed on revenue. He estimated that search engine optimization, or SEO, headwinds reduced segment bookings and gross booking value growth by approximately 3 percentage points.

Experiences adjusted EBITDA was $38 million, or 13% of segment revenue, down 440 basis points as a proportion of revenue from a year earlier. Higher marketing spending as a percentage of revenue contributed to the decline.

Goldberg said an earlier decision to combine Experiences teams across TripAdvisor and Viator had not delivered the expected efficiencies. The company now plans to focus its primary consumer-facing investment on Viator, including conversion, repeat bookings and app adoption, while using TripAdvisor as a discovery and lead-generation platform.

Asked whether the shift would diminish the role of third-party partnerships, Goldberg said those channels remained important and were growing faster than average. Noonan identified Airbnb as one of the company’s newer partners.

Restructuring and asset sale

Revenue in the Hotels and Other segment fell 23% to $152 million. Hotel revenue declined 23% to $110 million, primarily because of lower volume, while media and advertising revenue also dropped 23%, to $28 million. Segment adjusted EBITDA was $33 million.

TripAdvisor announced a global restructuring that Noonan said would reduce 425 employee and contractor roles dedicated to Hotels and Other, including approximately 150 roles moving to Experiences. The company expects more than $55 million in annualized gross savings in Hotels and Other and approximately $40 million in annualized savings across the group.

Noonan said the company expects little benefit from the restructuring this year and estimates a fourth-quarter charge of $15 million to $20 million. The savings figures exclude potential reductions in third-party vendor costs.

The company also recorded a roughly $369 million goodwill impairment charge after determining that the fair value of Hotels and Other was below its carrying value.

TripAdvisor closed the sale of restaurant-booking business TheFork on Nov. 1, receiving approximately $685 million in net proceeds. Noonan said the company expects to use a portion of the proceeds to reduce debt, with the amount to be determined over the following several weeks. The company had approximately $834 million in total debt at Sept. 30.

Share repurchases remain unavailable in the open market while a portfolio review continues, Noonan said. He added that buybacks remain among the company’s capital allocation priorities.

Fourth-quarter outlook

Noonan said October bookings growth weakened modestly from the third-quarter exit rate, reflecting continued softness on long-haul routes and the effects of marketing diversification. Protests in Europe also began weighing on demand late in the month, he said.

For the fourth quarter, the company expects group revenue to decline in the low teens, with a modest acceleration in Experiences declines and Hotels and Other revenue flat compared with the third quarter. It expects Experiences bookings to remain roughly flat year over year.

TripAdvisor forecasts a group adjusted EBITDA margin in the low to mid-single digits, including approximately break-even adjusted EBITDA in Experiences as it continues investing in paid marketing channels. Noonan said it was too early to provide specific guidance for 2027.

Goldberg said artificial intelligence referrals remain a small but growing source of traffic. He estimated they account for less than 1% of overall traffic, but said conversion from those referrals was close to five times the average for Viator and about twice the average for TripAdvisor.

About TripAdvisor (NASDAQ:TRIP)

Tripadvisor, Inc NASDAQ: TRIP operates a global travel guidance and experiences platform. Its flagship Tripadvisor brand provides user-generated reviews, ratings, photos and travel information covering hotels, restaurants, attractions and destinations, helping travelers research and plan trips.

The company also operates Viator, an online marketplace for tours, activities and other travel experiences, and TheFork, a digital restaurant reservation platform serving diners and restaurants.

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