Travelzoo Reports First Quarter 2025 Results

, /PRNewswire/ -- Travelzoo® (NASDAQ: TZOO): Revenue of $23.1 million, up 5% year-over-year Consolidated operating profit of $3.7 million Non-GAAP consolidated operating profit of $4.4 million Cash flow from operations of $3.3 million Earnings per share (EPS) of $0.25 Travelzoo, the club for travel enthusiasts, today announced financial results for the first quarter ended March 31, 2025. Consolidated revenue was $23.1 million, up 5% from $22.0 million year-over-year. In constant currencies, revenue was $23.3 million, up 6% year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, and membership fees. Net income attributable to Travelzoo was $3.0 million for Q1 2025, or $0.25 per share, compared with $0.31 in the prior-year period. Non-GAAP operating profit was $4.4 million. Non-GAAP operating profit excludes amortization of intangibles ($26,000), stock option expenses ($369,000), and severance-related expenses ($222,000). Please refer to "Non-GAAP Financial Measures" and the tabular reconciliation below. "We will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more Club Offers for Club Members," said Holger Bartel, Travelzoo's Global CEO. "Travelzoo members are affluent, active, and open to new experiences. We inspire travel enthusiasts to travel to places they never imagined they could. Travelzoo is the must-have membership for those who love to travel as much as we do." Travelzoo North America North America business segment revenue increased 6% year-over-year to $15.1 million. Operating profit for Q1 2025 was $3.6 million, or 24% of revenue, compared to operating profit of $4.4 million in the prior-year period. Travelzoo Europe Europe business segment revenue increased 1% year-over-year to $6.7 million. Operating profit for Q1 2025 was $0.2 million, or 3% of revenue, compared to operating profit of $1.4 million in the prior-year period. Jack's Flight Club Jack's Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. Revenue from unaffiliated customers increased 20% year-over-year to $1.3 million. The number of premium subscribers increased 13% year-over-year. Jack's Flight Club's revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Marketing investments of $0.6 million were fully expensed in Q1 2025. Operating loss for Q1 2025 was $48,000, compared to an operating loss of $99,000 in the prior-year period. New Initiatives New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $17,000. Operating loss for Q1 2025 was $30,000. In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo's brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo's brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Travelzoo recorded $7,000 in licensing revenue from the licensee in Japan in Q1 2025. Travelzoo recorded $10,000 in licensing revenue from the licensee in Australia in Q1 2025. Licensing revenue is expected to increase going forward. Reach Travelzoo reaches 30 million travelers. This includes Jack's Flight Club. Comparisons to prior periods are no longer meaningful due to strategic developments of the Travelzoo membership. Income Taxes The reported income tax provision and reserves for Q1 2025 are $1.1 million. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its tax liability for Q1 2025. Cash Position As of March 31, 2025, cash, cash equivalents and restricted cash were $12.2 million. Cash flow from operations was $3.3 million. Share Repurchase Program During Q1 2025, the Company repurchased 590,839 shares of its outstanding common stock. Looking Ahead For Q2 2025, we expect year-over-year revenue growth to double. We expect revenue growth to accelerate as a trend in subsequent quarters, as membership fees revenue is recognized ratably over the subscription period, as we acquire new members, and as more Legacy Members become Club Members. Over time, we expect profitability to increase as recurring membership fees revenue will be recognized. In the short-term, fluctuations in reported net income are possible because we might see attractive opportunities to increase marketing. We expense marketing costs immediately. In 2024, we introduced a membership fee for Travelzoo. Legacy Members, who joined prior to 2024, continue to receive certain travel offers. However, Club Offers and new benefits are only available to Club Members, who pay the membership fee. Therefore, we are seeing many Legacy Members become Club Members over time—in addition to new members who join. Non-GAAP Financial Measures Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo's calculation of non-GAAP operating income, also called "non-GAAP operating profit" in this press release and today's earnings conference call, excludes the following items: impairment of intangible and goodwill, amortization of intangibles, stock option expenses and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies. Conference Call Travelzoo will host a conference call to discuss first quarter 2025 results today at 11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to download the management presentation (PDF format) to be discussed in the conference call access the webcast. About Travelzoo We, Travelzoo®, are the club for travel enthusiasts. We reach 30 million travelers. Club Members receive Club Offers personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with thousands of top travel suppliers—our long-standing relationships give us access to irresistible deals. Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words "expect", "predict", "project", "anticipate", "believe", "estimate", "intend", "plan", "seek" and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release. Investor Relations:[email protected] TravelzooCondensed Consolidated Statements of Operations(Unaudited)(In thousands, except per share amounts) Three months ended March 31, 2025 2024 Revenues $ 23,140 $ 21,985 Cost of revenues 4,172 2,640 Gross profit 18,968 19,345 Operating expenses: Sales and marketing 10,225 8,598 Product development 634 566 General and administrative 4,365 4,590 Total operating expenses 15,224 13,754 Operating income 3,744 5,591 Other income, net 418 139 Income from operations before income taxes 4,162 5,730 Income tax expense 1,125 1,505 Net income 3,037 4,225 Net income (loss) attributable to non-controlling interest 4 (11) Net income attributable to Travelzoo $ 3,033 $ 4,236 Net income per share—basic $ 0.26 $ 0.31 Net income per share—diluted $ 0.25 $ 0.31 Shares used in per share calculation—basic 11,670 13,489 Shares used in per share calculation—diluted 12,249 13,625 TravelzooCondensed Consolidated Balance Sheets(Unaudited)(In thousands) March 31,2025 December 31,2024 Assets Current assets: Cash and cash equivalents $ 11,473 $ 17,064 Accounts receivable, net 12,387 12,825 Prepaid income taxes 818 736 Prepaid expenses and other 1,665 1,148 Total current assets 26,343 31,773 Deposits and other 385 374 Deferred tax assets 3,430 3,380 Restricted cash 753 675 Operating lease right-of-use assets 5,605 5,655 Property and equipment, net 400 423 Intangible assets, net 1,471 1,498 Goodwill 10,944 10,944 Total assets $ 49,331 $ 54,722 Liabilities and Equity Current liabilities: Accounts payable $ 6,054 $ 6,162 Merchant payables 14,833 16,294 Accrued expenses and other 4,464 3,404 Deferred revenue 7,838 6,545 Income tax payable 684 1,619 Operating lease liabilities 2,690 2,472 Total current liabilities 36,563 36,496 Long-term tax liabilities and reserve 8,508 7,851 Long-term operating lease liabilities 5,251 5,646 Other long-term liabilities 376 376 Total liabilities 50,698 50,369 Common stock 112 118 Tax indemnification (9,537) (9,537) Additional paid-in capital — — Retained earnings 8,731 14,284 Accumulated other comprehensive loss (5,492) (5,327) Total Travelzoo stockholders' equity (deficit) (6,186) (462) Non-controlling interest 4,819 4,815 Total stockholder's equity (deficit) (1,367) 4,353 Total liabilities and equity $ 49,331 $ 54,722 TravelzooCondensed Consolidated Statements of Cash Flows(Unaudited)(In thousands) Three months ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 3,037 $ 4,225 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 76 383 Stock-based compensation 369 95 Deferred income tax — (15) Net foreign currency effects (205) 3 Provision of loss (net recoveries) on accounts receivable and refund reserve 206 (33) Changes in operating assets and liabilities: Accounts receivable 434 (235) Prepaid income taxes (82) 63 Prepaid expenses, deposits and other (525) 582 Accounts payable (46) 1,008 Merchant payables (1,651) (2,678) Accrued expenses and other 867 (239) Deferred revenue 1,241 1,211 Income tax payable (974) 54 Other liabilities 534 197 Net cash provided by operating activities 3,281 4,621 Cash flows from investing activities: Purchases of property and equipment (21) (35) Net cash used in investing activities (21) (35) Cash flows from financing activities: Repurchase of common stock (8,918) (3,872) Net cash used in financing activities (8,918) (3,872) Effect of exchange rate on cash, cash equivalents and restricted cash 144 (238) Net increase in cash, cash equivalents and restricted cash (5,514) 476 Cash, cash equivalents and restricted cash at beginning of period 17,740 16,389 Cash, cash equivalents and restricted cash at end of period $ 12,226 $ 16,865 TravelzooSegment Information from Continuing Operations(Unaudited)(In thousands) Three months ended March 31, 2025 Travelzoo North America Travelzoo Europe Jack's Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 14,830 $ 6,970 $ 1,323 $ 17 $ 23,140 Intersegment revenues 298 (258) (40) — — Total net revenues 15,128 6,712 1,283 17 23,140 Sales and marketing expenses 5,700 3,902 623 — 10,225 Other expenses 5,833 2,582 708 47 9,170 Operating profit (loss) 3,594 228 (48) (30) 3,744 Other income, net 418 Income from operations before income taxes 4,162 Three months ended March 31, 2024 Travelzoo North America Travelzoo Europe Jack's Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 14,273 $ 6,580 $ 1,100 $ 32 $ 21,985 Intersegment revenues (45) 82 (37) — — Total net revenues 14,228 6,662 1,063 32 21,985 Sales and marketing expenses 5,107 3,061 405 8,573 Other expenses 4,683 2,219 757 162 7,821 Operating profit (loss) 4,438 1,382 (99) (130) 5,591 Other income, net 139 Income from operations before income taxes 5,730 TravelzooReconciliation of GAAP to Non-GAAP Information(Unaudited)(In thousands, except per share amounts) Three months ended March 31, 2025 2024 GAAP operating expense $ 15,224 $ 13,754 Non-GAAP adjustments: Amortization of intangibles (A) 26 317 Stock option expenses (B) 369 95 Severance-related expenses (C) 222 — Non-GAAP operating expense 14,607 13,342 GAAP operating income 3,744 5,591 Non-GAAP adjustments (A through C) 617 412 Non-GAAP operating income 4,361 6,003 SOURCE Travelzoo WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Travelzoo Reports First Quarter 2025 Results

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