Travelzoo Reports Second Quarter 2025 Results

, /PRNewswire/ -- Travelzoo® (NASDAQ: TZOO): Revenue of $23.9 million, up 13% year-over-year Consolidated operating profit of $2.1 million Non-GAAP consolidated operating profit of $2.4 million Cash flow from operations of $1.3 million Earnings per share (EPS) of $0.12 Travelzoo, the club for travel enthusiasts, today announced financial results for the second quarter ended June 30, 2025. Consolidated revenue was $23.9 million, up 13% from $21.1 million year-over-year. In constant currencies, revenue was $23.5 million, up 12% year-over-year. Travelzoo's reported revenue consists of advertising and commerce revenues, derived from and generated in connection with purchases made by Travelzoo members, and membership fees. In Q2, Travelzoo invested significantly in acquiring more Club Members when we saw that we can achieve a payback and positive return on investment (ROI) within the quarter. Marketing costs were expensed immediately. Membership fees revenue is recognized ratably over the subscription period of 12 months. The effect is a sizable reduction in EPS. We refer to our investor presentation. Net income attributable to Travelzoo was $1.4 million for Q2 2025, or $0.12 per share, compared with $0.23 per share in the prior-year period. Non-GAAP operating profit was $2.4 million. Non-GAAP operating profit excludes amortization of intangibles ($16,000), stock option expenses ($339,000), and severance-related expenses ($6,000). 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 and add new benefits, such as our popular complementary airport lounge access worldwide in case of a delayed flight," 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 14% year-over-year to $16.1 million. Operating profit for Q2 2025 was $2.8 million, or 17% of revenue, compared to operating profit of $3.7 million or 26% of revenue in the prior-year period. Travelzoo Europe Europe business segment revenue increased 7% year-over-year to $6.4 million. Operating loss for Q2 2025 was $883,000, or 14% of revenue, compared to operating profit of $512,000, or 9% of revenue in the prior-year period. The reported operating loss occurred because we acquired more Club Members. Jack's Flight Club Jack's Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. Revenue increased 33% year-over-year to $1.4 million. The number of premium subscribers increased 15% year-over-year. Jack's Flight Club's revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Operating profit for Q2 2025 was $156,000, compared to an operating loss of $34,000 in the prior-year period. New Initiatives New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $19,000. Operating loss for Q2 2025 was $31,000. In 2020, Travelzoo entered into royalty-bearing licensing agreements with local licensees for the exclusive use of Travelzoo's brand, business model, and members in Australia, Japan, New Zealand, and Singapore. Under these arrangements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by us as the licensor. Licensing revenue from the licensee in Australia was $10,000 for Q2 2025. Licensing revenue from the licensee in Japan was $7,000 for in Q2 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 Q2 2025 are $740,000. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its tax liability for Q2 2025. Balance Sheet Deferred revenue increased and is expected to continue to increase as membership fees revenue is recognized ratably over the subscription period. As of June 30, 2025, cash, cash equivalents and restricted cash were $11.2 million. Cash flow from operations was $1.3 million. Share Repurchase Program During Q2 2025, the Company repurchased 172,088 shares of its outstanding common stock. Looking Ahead For Q3 2025, we expect year-over-year revenue growth to continue. We expect revenue growth to accelerate as a trend in subsequent quarters, as membership fees revenue is recognized ratably over the subscription period of 12 months, as we acquire new members, and as more Legacy Members become Club Members. Over time, we expect profitability to substantially increase as recurring membership fees revenue will be recognized. In the short-term, fluctuations in reported net income are possible. 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. 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: 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 second 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] Travelzoo Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Revenues $ 23,906 $ 21,141 $ 47,046 $ 43,126 Cost of revenues 5,163 2,520 9,335 5,160 Gross profit 18,743 18,621 37,711 37,966 Operating expenses: Sales and marketing 11,483 9,386 21,708 17,984 Product development 698 603 1,332 1,169 General and administrative 4,502 4,621 8,807 9,211 Total operating expenses 16,683 14,610 31,847 28,364 Operating income 2,060 4,011 5,864 9,602 Other income, net 162 176 790 315 Income from operations before income taxes 2,222 4,187 6,654 9,917 Income tax expense 740 1,267 1,912 2,772 Net income 1,482 2,920 4,742 7,145 Net income (loss) attributable to non-controlling interest 80 (7) 172 (18) Net income attributable to Travelzoo $ 1,402 $ 2,927 $ 4,570 $ 7,163 Net income per share—basic $ 0.13 $ 0.23 $ 0.39 $ 0.54 Net income per share—diluted $ 0.12 $ 0.23 $ 0.38 $ 0.54 Shares used in per share calculation—basic 11,139 12,895 11,617 13,191 Shares used in per share calculation—diluted 11,505 12,976 12,088 13,300 Travelzoo Condensed Consolidated Balance Sheets (Unaudited) (In thousands) June 30,2025 December 31,2024 Assets Current assets: Cash and cash equivalents $ 10,441 $ 17,064 Accounts receivable, net 11,500 12,825 Prepaid income taxes 503 736 Income taxes receivable 324 — Prepaid expenses and other 1,392 1,148 Total current assets 24,160 31,773 Deposits and other 304 374 Deferred tax assets 3,591 3,380 Restricted cash 757 675 Operating lease right-of-use assets 5,204 5,655 Property and equipment, net 320 423 Intangible assets, net 1,455 1,498 Goodwill 10,944 10,944 Total assets $ 46,735 $ 54,722 Liabilities and Equity Current liabilities: Accounts payable $ 6,130 $ 6,162 Merchant payables 12,419 16,294 Accrued expenses and other 5,596 3,404 Deferred revenue 8,459 6,545 Income tax payable — 1,619 Operating lease liabilities 2,564 2,472 Total current liabilities 35,168 36,496 Long-term tax liability reserve 8,792 7,851 Long-term operating lease liabilities 4,856 5,646 Other long-term liabilities — 376 Total liabilities 48,816 50,369 Common stock 111 118 Tax indemnification (9,537) (9,537) Additional paid-in capital — — Retained earnings 7,934 14,284 Accumulated other comprehensive loss (5,576) (5,327) Total Travelzoo stockholders' equity (deficit) (7,068) (462) Non-controlling interest 4,987 4,815 Total stockholder's equity (deficit) (2,081) 4,353 Total liabilities and stockholder's equity $ 46,735 $ 54,722 Travelzoo Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Cash flows from operating activities: Net income $ 1,482 $ 2,920 $ 4,742 $ 7,145 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 106 175 182 558 Stock-based compensation 339 688 709 783 Deferred income tax 1 (12) 5 (27) Net foreign currency effects (188) (14) (295) (11) Provision of loss (net recoveries) on accounts receivable and refund reserve (83) 26 123 (7) Changes in operating assets and liabilities: Accounts receivable 1,309 (150) 1,743 (385) Prepaid income taxes 301 (390) 238 (327) Prepaid expenses, deposits and other 277 (49) (144) 533 Accounts payable (36) (294) (180) 714 Merchant payables (2,790) (1,101) (4,441) (3,779) Accrued expenses and other 975 765 1,842 526 Deferred revenue 478 (38) 1,720 1,173 Income tax payable (1,058) 224 (2,007) 278 Other liabilities 187 556 345 753 Net cash provided by operating activities 1,300 3,306 4,582 7,927 Cash flows from investing activities: Purchases of property and equipment (14) (48) (34) (83) Net cash used in investing activities (14) (48) (34) (83) Cash flows from financing activities: Repurchase of common stock (2,500) (6,550) (11,418) (10,422) Exercise of stock options and taxes paid for net share settlement of equity awards (104) (257) (104) (257) Net cash used in financing activities (2,604) (6,807) (11,522) (10,679) Effect of exchange rate on cash, cash equivalents and restricted cash 289 (73) 432 (311) Net increase in cash, cash equivalents and restricted cash (1,029) (3,622) (6,542) (3,146) Cash, cash equivalents and restricted cash at beginning of period 12,227 16,865 17,740 16,389 Cash, cash equivalents and restricted cash at end of period $ 11,198 $ 13,243 $ 11,198 $ 13,243 Travelzoo Segment Information from Continuing Operations (Unaudited) (In thousands) Three months ended June 30, 2025 TravelzooNorth America TravelzooEurope Jack'sFlight Club NewInitiatives Consolidated Revenues from unaffiliated customers $ 15,737 $ 6,740 $ 1,410 $ 19 $ 23,906 Intersegment revenues 395 (355) (40) — — Total net revenues 16,132 6,385 1,370 19 23,906 Sales and marketing expenses 6,453 4,427 603 — 11,483 Other expenses 6,861 2,841 611 50 10,363 Operating profit (loss) 2,818 (883) 156 (31) 2,060 Other income, net 162 Income from operations before income taxes 2,222 Three months ended June 30, 2024 TravelzooNorth America TravelzooEurope Jack'sFlight Club NewInitiatives Consolidated Revenues from unaffiliated customers $ 14,015 $ 6,004 $ 1,099 $ 23 $ 21,141 Intersegment revenues 119 (53) (66) — — Total net revenues 14,134 5,951 1,033 23 21,141 Sales and marketing expenses 5,444 3,330 477 135 9,386 Other expenses 4,973 2,109 590 72 7,744 Operating profit (loss) 3,717 512 (34) (184) 4,011 Other income, net 176 Income from operations before income taxes 4,187 Six months ended June 30, 2025 TravelzooNorth America TravelzooEurope Jack'sFlight Club NewInitiatives Consolidated Revenues from unaffiliated customers $ 30,567 $ 13,710 $ 2,733 $ 36 $ 47,046 Intersegment revenues 693 (613) (80) — — Total net revenues 31,260 13,097 2,653 36 47,046 Sales and marketing expenses 12,153 8,329 1,226 — 21,708 Other expenses 12,695 5,423 1,259 97 19,474 Operating profit (loss) 6,412 (655) 168 (61) 5,864 Other income, net 790 Income from operations before income taxes 6,654 Six months ended June 30, 2024 TravelzooNorth America TravelzooEurope Jack'sFlight Club NewInitiatives Consolidated Revenues from unaffiliated customers $ 28,288 $ 12,584 $ 2,199 $ 55 $ 43,126 Intersegment revenues 74 29 (103) — — Total net revenues 28,362 12,613 2,096 55 43,126 Sales and marketing expenses 10,551 6,391 882 135 17,959 Other expenses 9,657 4,328 1,347 234 15,566 Operating profit (loss) 8,155 1,894 (133) (314) 9,602 Other income, net 315 Income from operations before income taxes 9,917 Travelzoo Reconciliation of GAAP to Non-GAAP Information (Unaudited) (In thousands, except per share amounts) Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 GAAP operating expense $ 16,683 $ 14,610 $ 31,847 $ 28,364 Non-GAAP adjustments: Amortization of intangibles (A) 16 88 42 405 Stock option expenses (B) 339 688 709 783 Severance-related expenses (C) 6 30 227 30 Non-GAAP operating expense 16,322 13,804 30,869 27,146 GAAP operating income 2,060 4,011 5,864 9,602 Non-GAAP adjustments (A through C) 361 806 978 1,218 Non-GAAP operating income 2,421 4,817 6,842 10,820 SOURCE Travelzoo WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Travelzoo Reports Second Quarter 2025 Results

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