Good afternoon, and welcome to TripAdvisor's Third Quarter 2015 Earnings Conference Call. As a reminder, today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Will Lyons, TripAdvisor's Senior Director of Investor Relations. Please go ahead.

Thanks, Blair. Good afternoon, everyone, and welcome to TripAdvisor's third quarter 2015 earnings conference call. Joining me today are Steve Kaufer, CEO, and Julie Bradley, CFO. After the market closed today, we distributed our Q3 earnings release on our Investor Relations website, located at ir.tripadvisor.com. In the release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call. Also, on our Investor Relations website, you'll find supplemental financial information, which includes certain non-GAAP financial measures discussed on this call as well as other performance matrices. Before we begin, I'd like to remind you that estimates and other forward-looking statements included in this call represent the Company's views as of today, November 5, 2015. TripAdvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today's earnings release and TripAdvisor's filings with the SEC for information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements. Finally, unless otherwise stated, all comparisons on this call will be against our results for the comparable period of 2014. And now, I'll turn the call over to Steve.

Thank you, Will, and welcome, everyone for joining on the call. I'm going to update you on our progress on how we are developing the best products for users, expanding our strong global platform to more partners and building a bigger and better business over the long-term. Our Q3 results clearly show the major impact currency headwinds are having on business. Total revenue grew 17% and adjusted EBITDA grew 9% or 25% and 26% growth respectively in constant currency. As I'll describe in more detail later in my remarks, the results and business outlook also highlight that we are moving quickly in pursuit of our long-term goals to make TripAdvisor a great place to discover and book the things that make a trip memorable. First we'll talk about how TripAdvisor's consumers value proposition continues to strengthen in content, community and mobile. In content with 290 million reviews and opinions on 5.3 million businesses around the world TripAdvisor products are indispensable travel planning tools. Member growth has accelerated this year and most members are contributing content at a record pace of 190 per minute, the fastest growth in our history. This puts us on track to add another 100 million reviews and opinions over the next 12 months making our travel planning products and tools fresher, richer and better for every user demand, every device in every geography. Our global travel community also continues to grow its essence by unique monthly visitor growth of 23% and hotel shopper growth of 16%. Travelers can find information on more than 3.6 million restaurants and attractions, so it's no surprise that unique visitors to these pages continues to grow quickly. We attribute much of this growth engagement to mobile with TripAdvisor's helpful reviews, tips, photos and guides are the perfect travel content. Mobile usage…

Thank you Steve and good afternoon everyone. Results were very healthy despite significant year-over-year currency headwinds. This quarter, total revenue grew 17%. Q3 adjusted EBITDA grew 9%. In constant currency, Q3 total revenue and EBITDA growth would have been 25% and 26% respectively. Our core hotel segment posted 8% revenue growth, or 15% in constant currency, an EBITDA margin held stable at 36%. Digging in, Q3 click-based revenue grew 6% or 14% in constant currency driven by 16% hotel shopper growth and offset by continued pricing pressure which includes impacts from currency translation, lower CPC pricing and product changes we've made such as the decision to accelerate our instant booking rollout in U.S. and U.K. our two largest markets. Revenue for our hotel shopper growth reflects these headwinds as it decelerated to negative 10%. Normalizing for this significant year-over-year currency translation headwinds revenue per hotel shopper growth would have been better though still slightly negative for the quarter due to a lower CPC pricing and the accelerated instant book rollout. As a housekeeping item, note that during the third quarter we improved our counting methodology for unique users and hotel shoppers and have provided the [recasted] figures back through 2014 in the supplemental financial information tables which are available on our IR site. Our display-based business performed very well as revenue growth reaccelerated to 20%. These strong results were driven by 22% growth in ad impression sold and with a strength in the U.S. and EMEA markets with hotel, destination marketing organizations and OTA customers in particular. Our display team continues to innovate this product offering delivering great value to clients. As the currency environment stabilizes, we expect that more clients will be a position to leverage our scale in a robust data management platform in their global addition campaigns.…

[Operator Instructions]. The first question comes from the line Lloyd Walmsley from Deutsche Bank. Your line is open.

Thanks. So Steve you mentioned, I think part of the reason for the accelerated international rollout of instant book was kind of meaningful improvements you are making. I think in conversion or monetization, but maybe just the product. But can you give us kind of a sense for how fast the arc is in terms of improvement of conversion and what you need to get fix to get the revenue per user of instant book up, can you kind of map that arc versus the pace of their rollout in the new market. And kind of when you think this might be accretive or if or when you think this might be accretive to revenue per hotel shopper? And then second question, if I can. When you're talking about pausing the TV ad campaign that we invest impart in other brand advertising, should we assume kind of similar levels of overall marketing spend just shifted to other forms like, is it outdoor, can you kind of give us some color on the plan there? That would be great. Thanks.

Thanks Lloyd, excellent questions. So the arc of version improvement, I would say, has been fairly steady since we launched over a year ago, month-in, month-out, sometimes week-in, week-out, we're just making a constant improvement. I know heads up coming up is kind of a step change because we are adding a Priceline, super excited about this deal with the Priceline Group because they offer a great brand, global inventory, tremendous content kind of which -- I talked about this several times in the past, very rich win description and a lot of information that our travelers are telling us they want to see on our site before they hit the book button, and at times they have to leave our site even when they have gone into the instant booking flow because we haven't been able to provide everything that the customer is looking for. booking.com or Expedia for that matter have tremendous content and been able to provide that information that's why the conversion rates on their sites are as good as they are. This deal allows us to bring in that rich information into our instant booking flow and so we don't know the impact on the conversion rate and we'll know shortly as we roll it out, but that's really going to be a big difference maker in terms of the slow and steady improvement that we've made, up come potential step change when we launch with Priceline Group. Having said that, we faced a choice last year in booking for this past year in looking at the international rollout because it's been a challenge for us to figure out how to get the content that we need in all the languages and support all the currency types, all of a sudden that challenge is addressed…

Your next question comes from the line Mark Mahaney from RBC Capital Markets. Your line is open.

Yeah, I wanted to follow-up a little bit more on the TV campaign and the thought behind kind of putting that on pause. You said a pretty long-term orientation in your thinking, So can you spend a little bit more time, has there been any shortfalls in the ROI that you expected to see in a TV campaign and therefore you want to do a revamp of it or is it just a matter of making sure resources are correctly allocated to the IB accelerated rollout? Thank you.

I have been pleased with what we have seen on TV. I considerate a pause for 2016, redirection into some other channels that I know we will look at because the IB rollout or the success in plugging the leak doesn't actually require more traffic to come in to our site, we already have 350 million users in our [sequence] with all of that traffic and we still think half of which being hotel traffic that's such a great opportunity to plug the leak, and if we can do that and if we can monetize those hotel shoppers to the degree that any other OTA monetizes the hotel shoppers, that's a really big win for us. And while TV was meant to help that, we feel we actually already have the traveler on our site and by doing other things on our site we can also affect that plug the leak. So we have an entire global world to look at and so, an extremely global TV educational campaign is hundreds of millions of dollars, but we already have the traffic that's live and with the Priceline Group and our ability to rollout instant book globally we want to sort of concentrate our fire power on delivering that plain compare book message in plugging that leak after travelers already on our site.

Okay, thank you, Steve.

Thanks.

Your next question comes from the line of Eric Sheridan from UBS. Your line is open.

Thanks for taking the questions, maybe just two. One, Steve you mentioned with Priceline coming onboard did that allow you to accelerate your plans. Maybe just give us a little bit of color on what you'll see from Priceline that allows you to accelerate those plans? Is it the depth of inventory? Is it the brand name that Priceline Group makes the table the consumers will recognize more, and I wanted to understand a little bit more color about that? And then as you faced some of the headwinds as you push faster into IB how should we be thinking about the incremental leverage or deleverage in the business, you gave us a little bit of color around Q4, but how should we be thinking about that as you move through the transition? Thanks.

Sure. Excellent questions, Eric. We do think about those questions and sounds quite a bit of course. The reason Priceline enables us to accelerate our instant book rollout globally is because of the rich content that they have on 400,000 plus properties all around the globe, and by that I mean they are able to successfully take bookings on 400,000 plus properties in multiple, multiple, different language, processing payments for multiple different credit card by multiple different banks, all of those things because they are such a strong for mobile hotel reservation player, like Expedia, so I'm not saying that there is difference there. I'm simply saying, they already have the ability for someone that lives in France or in Japan. They come to their site to see the inventory that the traveler wants to stay in, see all the room descriptions in the local language, make the bookings using the local credit cards and we didn't have any of that for that customer in Japan for instance on TripAdvisor today. So if were to rollout TripAdvisor today, I would be showing an instant book experience in English to that Japanese traveler. I would be showing a room description for a Marriott property in English for that, for Marriott it might be a bad example because we might have Japanese content, but an independent hotel or brand, alright, we would be showing content in the wrong language to make a highly converting experience. Priceline gives us all of that oneself and it's highly strong [curetted] content, payments and breadth of inventory. That allows us to push faster in IB. We hope for an improved conversion rate. Travelers on our site going through that funnel because the experience is better. And so when we will know shortly enough whether or not that yields higher net revenue all the way to being accretive for us as we rollout instant book. I'm not sure of being plus or minus slightly accretive or slightly negative is going to influence the timing of the rollout for my earlier comments. We know this is the right thing to do for the traveler. We know this is the right thing to do for long-term direction of TripAdvisor. We're own stated. We're willing to take some short-term hits along the way, if it gets us toward where we want to be, and we have 18 months of history where we have improved our promotion quarter-after-quarter, quarter-after-quarter, so that we're confident, hey, we're always going be making progress and we may not always be as fast, we may not always be instantly, but we'll get there, and that's what gives us confidence to do a quick rollout even if it's not sort of instantly accretive. I hope that helped.

Your next question comes from the line of Ken Sena from Evercore. Your line is open.

Maybe if you can just go into that little bit more on the improved county methodology in terms of the hotel shopper growth. And it looks as early [IBs] also might have been restated and then? And then last quarter you had mentioned weakness in Europe, but didn't seem that you mentioned on this call, so were recoveries in there or was it soft just as attributed to other factors? Thank you.

Sure. The counting on hotel shoppers, boy, if you can understand the challenge that us and every other West companies goes through to figure out who when visiting the site is the really user versus a robotic type. And we do kind of our best job and we're always looking at the algorithms. And from time to time, we find that there is something that we missed. And in this particular case, we revamped the algorithm to cut out some of the traffic that we didn't think at the end of the day was real. So we're always trying to present you the most active metrics that we have. We recast them to see the year-on-year over the past period, obviously, had no impact on revenue. Of course creeping out we're filtering out traffic that wasn't real. So it's a housekeeping footnote, because you'll see the stuff would change. I personally didn't pay any attention to it when I learned about it. In terms of the last quarter setting some weakness in Europe, I think we had a thesis that as the time based upon some of the evidence in front of us on sort of cross-border traffic and weakness in dollar, when we look at the macro issues in our past Q3, we're really pointing at instant book, we accelerate a rollout, right, long-term decisions, short-term, the smaller amount of pain that will certainly ruining the cake. And then we're looking at as we go forward, I mean, there is some pricing headwind that we see in our [stains and meta] business, and it's meta business, it's an auction, we don't set the price, our clients bid up, bid down, there is more consolidation in the global fit. There is ton of different trends not to mention currency going on and at the end of the day we believe our leads are just to qualify, so we think if there is a bit of a pricing hit, it's not something that we can influence. What we can influence and really what we're focused on is making IB as successful as it can be going forward. And that's why to double down, we're even more excited about the Priceline deal and it's our ability to roll it out even quicker.

Thank you and just maybe a follow-up. On the hotel shopper growth in terms of the restatement, you did pull out some traffic. But is there anything we should infer from the slower shopper growth that you'd want to highlight?

I don't think so. As I said in more than a few calls, we're at a big scale issue now, so we touch an awful lot of travelers at some point. When I look at the business, I don't really look at dramatically improving hotel shoppers as much -- and those are measured on monthly unique. So I look more on how do we improve the revenue per shopper, how are we -- both closing the monetization gap as well as giving our shoppers more of what they are looking for. And I think will be a much stronger factor in our revenue growth in the coming months. Hotel shopper, we certainly expect to continue to grow, but at 16% or not terribly disappoint about that.

Your next question comes from the line of Robert Peck from SunTrust. Your line is open.

Yeah, just two quick questions, please. First one is on the Priceline deal, the economics, I know you can't tell us the exact economics behind it, but directionally, can you give us a feel for if that's profitable to the Company and maybe the magnitude versus other deals on IB? And then Steve and Julie, we talked about 2015 EBITDA growth expectations. How should we think about 2016 for investors? Is there a range of growth we can be thinking about as we come out of this period of investment? Thanks so much.

Sure. I'll take the first one. On the economics of the Priceline deal, it was certainly a long time coming, we believe it's a really good deal for Priceline, it's really good deal for TripAdvisor, the economics or such that I am telling everyone, we're going full force rolling this thing out. We don't disclose the specifics, but you can judge by my actions of accelerating our rollout, that is something I think is going to work for the Company economically. And hey, Priceline is a really big company, they are not a short-term vision company either, so they are doing some things, well, you should ask them, but I would believe they are doing something that is in their best long-term interest as well.

I'll take the 2016, as this time of the year, we are always in a process of putting to data our plans and evaluating, messaging, and expectation setting for the following year. Ernst will be here next week and I will dilate into that exercise, and we are sure we'll be inviting you on the February call. We have given a couple of nuggets on 2016. One, we're pulling down, we're pausing TV, but we do expect to reinvest that into other channels. Q4, we're seeing it'd be a full year of instant booking headwinds which as the team is working actively to optimize and make that accretive. There would be expectation that that would continue into 2016. In addition to the monetization headwinds, there is a slight shift in a way revenue is recognized. So with the majority of our click-based revenue today, we recognize revenue on click immediately. As instant book become a more meaningful amount of revenue, we'll be experiencing a shift because when with instant book for the majority of our large partners including the Priceline Group, we will be recognizing revenue on stay. So there will be some seasonality and a shift in revenue as that becomes a more meaningful number. So that's something else to take into consideration and evaluating 2016. We're in the process of doing that ourselves. Looking at booking windows and consumer behavior, we'll an estimate into our 2016 plan.

Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.

Great, thanks for taking my questions. As Priceline starts to rollout the instant booking participation, is there a difference on how it's going to participate? TripAdvisor in the U.S. versus internationally, will booking.com be more motivated in the U.S. and obviously more instant booking weighted internationally? And then can you just briefly touch on what marketing in channels have been driving the most efficiency?

Sure. Thanks for the question. So we'll know whether were any changes in the display or the participation in meta by Priceline Group, one fetch, once everything is actually rolled out, I'm not under any impression that being in instant book would change anyone's participation in meta whether we're on Priceline Group. They have always expressed to us as every client has. That's like as many transactions through our platform as possible. So I certainly would encourage you to ask the Priceline Group themselves, but my interpretation would be they are eager for all the traffic that they can get in better, just like they have. The normal years passed, they have been a phenomenal partner for us over many, many years. And they are excited about the new transactions we'll be delivering through the instant book path. So it's kind of additive, and I think that's how the discussions have always been based, that it's additive to their thinking of how to maximize their participation in the TripAdvisor channel. To the second part of the question, which marking channel is the most efficient, we tend to look for as many marketing channels as we can find that deliver sort of quality traffic. And for the most part we operate them on a breakeven basis. We view it as acquiring trial. And I'm talking about sort of ROI generating online channels, be it the search or targeting or CPM or any of the other methods of acquiring traffic. Other marketing channels that we'll be working on offline, for many of them it's nearly impossible to in that [product] measure. We do a quite bit amount of TR. We do fair amount of content licensing. We do a fair amount of engaging in various markets by leveraging our B2B or B2C community. None those have a direct ROI, but we spend few dollars in them and I think that's one of the reasons why if you are ever travelling, you're likely to see something branded TripAdvisor along the way and a TripAdvisor rated. And we level that, we don't even try to measure the marketing efficiency of those.

Your next question comes from the line of Chris Merwin from Barclays. Your line is open.

Great thank you. I just had a couple of quick one. So in terms of the mechanics around instant book, my understanding is that currently your partners take a fixed commission, I guess kind of certain share of page, just based on that commission. Over time, can you talk about the potential for instant book to being involved into an auction process? Similar they have meta works today, and I know you can't talk about alliance in any deals of the terms but how long my debt shape to for an auction, that should be become reality? And then just secondly, I think maybe you want reasons why your partners get comfortable with instant book and correct me if me I'm wrong, because they get to see other brand and any ethical booking process I assume because they can let it start to repeat customer economics over time, obviously that booking is still being made through Trip, so what can you tell us so far about which part you might be occurring the benefit than it's repeat economics over time? Thanks.

Certainly, so as part of the signup process for an independent hotel on the website, there is two commission rates, 12% and 15%, and here often the hotel sort of guarantee share of either 25% or 50% sort of share of their, we call it, eligible impression of the post visiting the page basically. It's part of our sort of sales pitch that if you signup, this is what we promise you, it will be a lot more of in that depending on a lot of different factors. And so going forward that independent who has signed up even at a 15% commission, TripAdvisor has, once the booking.com deal is live or even today with our current OTA partners, we make a choice at run time that that is beyond their share guarantee, do I wish to show and get a room as an OTA for that hotel or the hotel itself or [indiscernible] as an OTA for the hotel, so for any particular property, I might already have three or more participants in instant book. We make the decision based on who to show once the share guarantee has been met, we make the decision based upon what we think is going to be the best answer for the consumer that's usually going to be the best answer for TripAdvisor. What I mean is we have to evaluate how good the content is, the quality of the room description because the consumer wants to see that in order to hit the book button. We also care a lot about the price, and so whoever has a cheaper price is also going to have a higher conversion rate on our side, and then finally the commission does come into play. You can imagine an extreme of somebody offering to pay…

Your next question comes from the line Tom White from Macquarie. Your line is open.

Great, thanks for taking my question. Maybe another one on the TV marketing pause? I guess I just want to make sure I can understand or sort of reconcile, Steve, your comments about the benefits of educating consumers about instant booking and the ability to book on the site. I guess, is what you're saying that just sort of the share presence of more instant booking visibility. Thanks to the Priceline deal and some of these other deals. That that's enough you think to educate consumers or I mean have you done studies or so what gives you confidence to throw that will be enough to kind of change travelers booking habits that have been probably pretty well entrenched sort of the way they book over the past 10 to 15 years? Thanks.

So I wouldn't claim yet that I have an answer as to how we can quickly change consumers' mindsets. I look back and say, TripAdvisor hasn't really had an awareness issue in most of our markets. TV does a great job growing awareness, so we see how it worked for so many other companies, but the companies have tended to be at a different awareness stage, at different growth stage and so we went forward with TV knowing that it wasn't to move our awareness numbers, but to educate folks on that one could now book on TripAdvisor. We did the surveys on the TV and certainly the book message stood out, but it was harder to see the behavior change on TripAdvisor. We saw more traffic. We made more money, but it was softer to draw the conclusion that it got people to actually complete a transaction to book on TripAdvisor. So it would be in my mind no harm whatsoever and configuring a TV campaign that has the same message or I'd like to be creative but the same we're different creative, something wrong with that couldn't possibly hurt, but in the judgment call of is that where we want to push on our branding and marketing for next year, we made the judgment call, because we have to make this one in advance, so if there is no, we're going to pause. I used the word pause carefully because I'm not saying we wouldn't change our mind, we wouldn't do something else in 2017 or maybe the late 2016, but the notion is that's not -- it's a big dollar, it's not what we're going to spend those dollars on in '16. When we look at it from -- wow, you have a 100 plus million travelers on the site in a month, 150 million, 175 million, surely that's a big enough sample size to work on the educational message, and recently we've been doing quite a bit on that. So if you go to the site, many of our devices not all, you will see a much stronger, you can book on TripAdvisor, and buying with the experience of [indiscernible] buzzer button, hundreds of thousands of property is plus the global rollout, plus the message of other brand communications that are different/cheaper than TV, you think that there is as I started with a judgment call, there something kind of wrong with the TV, but we think we can achieve our goals better in terms of training booked by spending our time and some of our dollars.

Okay. Thanks for the color. And I just wanted to say thank you to Julie and good luck on your next chapter.

Great. Thank you very much.

Your next question comes from the line of Heath Terry from Goldman Sachs. Your line is open.

Great, thank you. On the topic of the hotel shopper data restatement, is it fair to say, based on your comments Steve that this is largely a restatement around buy related traffic and not any sort of change to the way that you're [indiscernible] existing users? And then also if you could us a sense with the numbers changing sort of what the underlying numbers look like? What percentage of your traffic still is hotel shopper and how much did that change? Was the buyer traffic overly related to hotel shoppers versus everything else?

Sure. Yes, to the best of my knowledge, these restatements that I looked, out for hotel shoppers was entirely bought or fix user related. I do not believe it changed at all whether it was a hotel bought or a restaurant bought, they are all hitting us all the times. So I look at the percentage of visitors to TripAdvisor and I still put it at roughly half somewhere in the hotel half somewhere looking at hotels. It's a rough approximation. It is different by device, but I'm trying to give some color on the average and there was no change in any nothing else under the covers there.

Your next question comes from the line Douglas Anmuth from JP Morgan.

Hi this is Bailey in for Douglas. I'm going back to Priceline real fast, other than price what types of change and does it have Priceline on IB and what was the impact or reaction being then on the other hotel or OTAs that are considering.

So Priceline has been a great partner, we've been talking to them and every other OTA for quite some time to any instant book, many of them have Priceline and Expedia were the two noble ones that had decline and I think Priceline -- again feel free to ask them, but in ongoing discussions, each made some compromises and we found a common ground that allows them to get what they are looking for out of the relationship which is a branded experience and make sure customers know that Priceline is powering the booking. We are perfectly happy with that. They get growing transactions from our platform and we of course get the instant book rolling out globally. We get the improved content from our display and hopefully the improve conversion that comes with it. We can continue to show other OTAs and other suppliers in our store. You look forward to the remaining hotel brands joining in instant book. We look forward to having more instant book options across the board. We continue to signup independent hotels at a decent pace. We're building our own content management system as I mentioned to make sure those properties are represented on our site with excellent content and strong pricing. And it's like what we've done with meta. We're building out really strong marketplace globally for lots of different folks, hotels or the intermediaries to be able to power the bookings, so folks that choose to book on TripAdvisor. I take the opportunity to talk about instant booking and meta and I will always referred to it as bookings and meta. We love our instant book strategy. You heard me talk about it over and over, but I don't want anyone to think that meta is going away. Our messaging of plan…

Alright. With that I think we are stood out of time. So let me say, thank you very much. We are moving fast. We are making great progress on these long-term goals, and I understand really fortunate to have a great team on the job. So to all of our employees throughout the entire TripAdvisor family thank you again and again for your terrific work, for your hard work. It's showing results. I'm really proud and I look forward to updating everyone again on the next quarter. Thank you.