Good day, and thank you for standing by. Welcome to Tripadvisor Fourth Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Angela White, VP of IR. Please go ahead.

Thank you, Michelle. Good morning, everyone, and welcome to Tripadvisor's fourth quarter and full year 2024 financial results call. Joining me today are Matt Goldberg, President and CEO; and Mike Noonan, CFO. Earlier this morning, 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 financial measures discussed on this call. 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, February 20, 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.

Thanks, Angela, and good morning, everyone. Across Tripadvisor Group, we finished 2024 strong, with results that exceeded our expectations on both the top and bottom-line for the fourth quarter and the full year. In Q4, consolidated revenue grew 5% to $411 million, a result of the healthy improvement in growth sequentially across all segments. Adjusted EBITDA was $73 million or 18% of revenue. For the full year, revenue reached $1.8 billion and adjusted EBITDA was $339 million. In 2024, we delivered meaningful progress against our strategic priorities and strengthened our revenue and EBITDA mix. Importantly, for the first time, all three segments positively contributed to Group profit. And now more than half of our revenue is coming from our growth marketplaces at Viator and TheFork, which together delivered $52 million of incremental adjusted EBITDA versus the prior year. The experiences category is increasingly becoming the strategic and financial center of gravity of the Group as we continue to position our unique assets to extend our leadership in this large and fast-growing market. Viator's segment results reflect our ability to grow market share by leveraging our scale, with GBV reaching nearly $4.2 billion in 2024. On the demand side, we continued on our journey to deliver profitable above-market growth with revenue reaching 14% for the year in growth and accelerated to 16% in Q4. Direct booking volume on the Viator point-of-sale grew nearly 30% for the full year, which speaks to the consistent improvements we're making on unit economics as we continue to scale. We put more attention on driving marketing efficiency while investing in critical areas of the consumer-facing product to increase conversion and loyalty. We continue to focus on our mobile app, which was Viator's fastest-growing channel with booking volume up more than 80% for the full year. On…

Thanks, Matt, and good morning. I'll start with a brief update on our new segment disclosures and revised P&L presentation, then I'll review the quarter and full year, and later, we'll provide our outlook for 2025 and Q1. As a reminder, all growth rates are relative to the comparable period of 2023, unless noted otherwise. First, as part of our earnings release this morning, we provided a table that includes additional segment-level details, reflecting our adoption of the new segment expense disclosure guideline. As part of this update, we'll use the opportunity to align our consolidated financials to the same line items, which we believe provides greater transparency between our segment and consolidated results. Now, turning to the results for the fourth quarter. Consolidated revenue was $411 million or 5% growth and at the high end of our expectations. Consolidated adjusted EBITDA was $73 million or 18% of revenue and was higher than our expectations due to performance at both Brand Tripadvisor and Viator. At Viator, revenue grew 16% to $186 million, which represented 6 points of sequential growth. The number of experiences booked grew 20%, and gross bookings value, or GBV, grew 17% to approximately $840 million, reflecting healthy travel demand in the quarter, driven by the Viator point-of-sale, which grew faster than total segment experiences booked and GBV. As a reminder, total segment growth is a function of relative size, of different growth and profit priorities across each point of sale. Our teams continue to leverage the strength of our brands to optimize our experiences offering globally, which we believe is an important differentiator in the category. On the Viator point-of-sale, repeat bookings growth once again outpaced new bookings growth, supporting the ongoing progression of Viator brand's unit economics as these bookings come at lower acquisition costs. Viator…

Thank you. [Operator Instructions] And our first question comes from the line of Stephen Ju with UBS. Your line is open. Please go ahead.

Hey great. Thank you. So Matt, it looks like you saw some acceleration in the Viator experiences available, growth from about 350,000 to 400,000 during the course of year. I think that works out to about 4% supply growth. And your gross bookings in the fourth quarter grew about 17%. So can we talk about what might be happening behind the scenes between what might be things that you're doing from a product perspective to hopefully improve conversion rates versus what might be easier comparisons? Thank you.

Yes. So there's a lot going on at Viator that's driving growth. Obviously, we are starting to really think about how we work between Viator and Tripadvisor experiences together to attack the opportunity holistically. Now Viator is very focused on leaning into product. And so when they think about getting marketing efficiencies, it's both in the way that we're going to diversify our channel mix and the way the product is going to begin to really deliver that experience that will drive repeat and more direct traffic. So they're focused on seamless product matching and making sure the travelers find the right experiences. That will get them to come back. They're focused on expanding and organizing that catalog as we grow, and that improves sort and recommendation and improves the ability to match supply and demand in as many, geographies as possible. They're delivering an intuitive UX. All of that gets people to engage, book more efficiently and then return. And to enhance that, we're focused on improving our app. Now the app is direct traffic and highly repeating. And the app is all about UX improvements, search, making sure that we go after shared booking details and logistics. And as you said, we're continuing to enhance the supply catalog. And that's both in primary markets, but it's also going to secondary and tertiary markets, starting to think about what other geographies we really want to serve. And of course, we're improving our operating experience and making it easier for operators to onboard to efficiently participate, to get the data they need to drive their bookings as efficiently as possible. And finally, they are, like all of our teams, focused on leveraging AI in all of the innovation, across search, sorting and other product details. So we're pretty excited about the experiences category. We think we can continue in the long-term to progress this at a strong and healthy double-digit CAGR for long period to come as we expand margins on our path to OTA-like margins down the road.

Thank you. Our next question comes from the line of Naved Khan with B. Riley Securities. Your line is open. Please go ahead.

Great. Thank you very much. I just had maybe a bigger picture question around the category. So Airbnb has been talking about launch of experiences this year, and wanted to get your thoughts on what does that mean for category growth and maybe for Viator, as you have a new entrant, kind of, creating more awareness and what does it mean for you and how are you thinking about that? The other question I have is just around maybe some clarification on Viator margins for 2025. Mike, did you provide some kind of guidance on how much expansion we can expect this year? And what will be the driver for that?

Thanks, Naved, good to hear from you. I'll take the first question about the category and then I think Mike will follow-up with the margin question. Yes, we agree with Airbnb that this is a very big opportunity and we see massive size and growth ahead. We think the interest and the experiences category just speaks to the overall size of the opportunity, but also customer traveler relevance, and it does, as you suggested, build category awareness, which we think we can benefit from. We also really like our positioning to continue lead in the experiences category. We think that focused OTAs have an advantage, especially in this highly fragmented marketplace. We think we're advantaged with the largest scale supply. We've talked about the 400,000 experiences across 65,000 operators. That is not easy to build. Once you have it, you can really leverage it. You can leverage it in the way that you deliver it and match that supply with demand. We also think that, as a Group, we have a unique position because we've got Tripadvisor and it's still the largest traveler audience available anywhere. We know that travelers searching for experiences is the largest portion of our traffic and the fastest-growing on Tripadvisor. And we match that with the Viator focus as an OTA, our third-party B2B business, which is growing rapidly, the red tech that we have to use, and we really think that we can take a comprehensive approach to this category like nobody else. Mike?

Hi, Naved. On the EBITDA guide for full year for Viator, so just to be clear, we've not guided on margins. We were guiding more on a dollar amount, nearly doubled. So I think you can assume that there clearly is margin expansion within that comment. Obviously, margin wouldn't necessarily mean that would nearly double as well. But I think very focused on that dollar amount, particularly with FX headwinds which we anticipated to see this year. So that's how we're trying to frame that for folks.

And I just want to remind everybody, we're really early in the experiences opportunity. And there's so many different ways to grow, right? The tailwinds that we see in general. But also, as importantly, we think our OTA is in early stages, we're just capturing a very small percentage and there's opportunities geographically, there's opportunities in categories that we're not currently reaching. So we are very excited about the prospects for ongoing growth in the top and bottom-line.

Got it. And maybe just to understand better the impact of FX, so -- in Viator. So is it mostly US tourist kind of going overseas that you get the travel bookings for and that's how you get affected by FX there? Or how should I understand US versus non-US – in the business?

Yes, Naved, that's right. It's mainly with our euro-denominated business. We have a lot of out-of-the-US travelers that travel to Europe. It's our largest kind of corridor -- travel corridor, so to speak. And so where we may collect in dollars, we remit to operators in euros, and that's what creates the headwind there. And that's, again, not entirely, but it's our biggest order of business, and that's driving approximately 2 points of headwinds.

Understood. Thank you, guys.

Thank you. Our next question comes from the line of Richard Clarke with Bernstein. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking my question. Maybe just firstly, you talked in the opening remarks about growing your members at mid-double digits. And I think a bit later on, you talked about having redeemable rewards for members. So maybe you could just talk about your membership position? How many members do you have today? What percentage of your revenue it is? And who's funding those rewards? Is this a Tripadvisor investment? Or is this something that's coming from your suppliers?

Thanks, Richard. Appreciate the question. We're really excited about membership. As we mentioned, we have grown membership in the mid-single digit for the year. It's been accelerating quarter-by-quarter. We definitely finished the year in that double-digit growth segment of opportunity. We've talked about membership in the past and said that we had over 130 million members. So when we're talking about growth in membership, we're talking about growth on that base. Membership is something where it's really all about bringing together the reason you would come to the platform and engage, both to contribute and to benefit from those contributions. So our experimentation in the product is actually quite important there. We are obviously investing in that space and leveraging AI to drive membership and personalization. And of course, we are adding bookings. We've been booking in experiences and added hotel bookings, which we talked about last quarter. And we're really excited about what the hotel booking offer can do because the cross-category booking opportunity in our app has proven to be self-reinforcing and drive growth. The rewards are -- rewards where we take the full price and then return it. We are funding those rewards. And they're proving to be something that creates repeat and stickiness. So we're excited to continue to lean into rewards and expand it across the categories. And so this membership, which we will formally launch with more features and functionality this year, should differentiate it for our most valuable travelers and we'll have product improvements, including a wallet, integrated across categories and linking to the web. We'll have these rewards and promotions and, of course, new content contribution formats to reengage our community. So, membership is something that we think is critical to our engagement strategy, and we are seeing good growth there.

Thanks, Matt. Just a follow-up. You said in your prepared remarks that once the ownership position is resolved, Tripadvisor will enter a new phase. Just what has been held back by the ownership position? What changes the other side in terms of what you can do running the business? What will do better?

Yes. Thanks for asking the question. Without controlled ownership, our capital structure is much cleaner. It's simplified. We think it removes an overhang and gives us more flexibility for how we pursue our vision and our strategy. We are solving for a single class of shareholders. We no longer will have any limitations from controlled shareholder that might have their own views of what level of investments we want to make and what that means for their shareholding. And we see many avenues to create shareholder value ahead, and we think there's a lot of different ways to drive that value in the future. And we'll continue to operate the business as we always have, to maximize value for shareholders, and we'll always be open-minded about the best way to do that. We see opportunities for organic investments, we see opportunities for M&A. And certainly, we think we'll continue to be as efficient as we can in all of our capital allocation decisions.

Thank you.

Thank you. Our next question comes from the line of Trevor Young with Barclays. Your line is open. Please go ahead.

Great. Thanks. Just back to Viator and experiences, the updated TAM figures they are suggesting you expect the category to persist in kind of low double-digit growth territory through 2026 and, obviously, a greater shift to online, so maybe online piece growing 12% to 15%. If I heard your 2025 guide correctly, high-teens growth implies some share gains there, but obviously, a focus on EBITDA dollars doubling as well. Why not manage that EBITDA dollar growth to a lower level and accelerate your growth there if this really is kind of one of the most attractive areas of online travel? And then second question, on the AI side, I think you partnered with Perplexity and it looks like possibly OpenAI with Operator as well. Can you just expand on those partnerships a bit in terms of what you give, what you get in return, anything around deal economics, duration of those arrangements and whether you would intend to do more of these partnerships? Thank you.

Hey, Trevor, it's Mike. I'll take the first part and Matt will take the second part. Yes. So it's a great question. We think about trade-offs in growth and profitability. I would say we are making decisions or attempting to make decisions on maximizing growth, right? And that means what does that ROI look like on those -- and the customer acquisition, particularly the pay channels. And we think we're making an efficient decision around that, and that has certain payoffs and LTV associated with that acquisition. So we feel like that spend is efficient. I think some of the margin progression you're seeing is inherent in the model, meaning exactly what we've been talking about, which is drive new user acquisition and get them to repeat. And when we get them to repeat, they come back to us cheaper. So I think we're pretty happy with where we are on the efficiency scale of our acquisition dollars. And the margin -- I think the modest margin progression you're seeing is as much about the model and repeat dynamics than more about our leaving growth on the table per se. So I think we're pretty happy with the trade-off as we speak. And as we go into, as we've talked about for our 2025 priorities at Viator, we're very excited about the product -- the product investment, which have unfold a whole other way to leverage our marketing expense outside of acquisitions, right? So that's really focusing on conversion, bringing best supply, sorting in the right way, all the things that Matt talked about in his prepared remarks. So we are pretty excited about the continued progression of growth and profitability that really are outside of the market growth. Matt?

Yes. Thanks for the question. We are so excited about the prospects for AI. And I don't want to be Pollyannish about this, like any new technology with the speed of adoption like AI, it's going to impact every industry and every company in the world. And it definitely has the potential to propel an industry. And we've also seen areas of disruption. I think it's early, but we clearly see an opportunity for AI to be a tailwind both for travel and for us in the way that we innovate. We think that those companies that are most curious about the potential for AI to best serve customers who have the assets that match up well are going to have opportunities to innovate and grow. And we believe, clearly that we're one of those companies for travel for many reasons. We've been aligning the team, making investments in our data, putting AI at the heart of our product innovation and driving productivity across all our areas. And yes, exploring partnerships with the top players in the industry. We have advantages. We have a well-recognized and hugely trusted brand. We have the highest-quality content asset and a really strong POI database to leverage to create new opportunities. And we, of course, have our own proprietary first-party data that only we will use. And so we're going to do a lot on our own platforms and we're also going to look at partnerships, because we think we have a strong position in the ecosystem to go after AI-first traffic and search customers, incremental sources of demand and leverage our relationships with trust with our suppliers. Now, when you look at perplexity, which you asked about, we're forging this partnership to leverage all of those assets to really think about the AI-first…

Great. Thank you both for all that.

Thank you. And our next question is going to come from the line of Doug Anmuth with JPMorgan. Your line is open. Please go ahead.

Great. This is Dae for Doug. Thanks for taking my questions. I have two. The first one, you talked about formally launching membership later this year. Could you talk about how that's different than the Tripadvisor Plus offering that you had in the past? And what you expect to include in the membership offering? And then secondly, on Brand Tripadvisor returning to positive growth in 2026, could you talk about what needs to happen in 2025 for this to happen? And does that return to growth assumption include a new monetization model?

Yes. Thank you for that. So we've talked a bit about membership. And let's be clear, what we're talking about here is our free membership offer at Tripadvisor, which is giving those who come in, in a logged-in format, more value and more reasons to engage with us. It's very much about the way that we are evolving our products and content to serve them in a logged-in environment. It is about how we are bringing together cross-category booking that will be rewarded. And it's about giving them more ways to get value out of our platform across all our categories. And we feel like adding marketing about that and making people aware of the benefits of that membership is going to continue to drive growth. And we've obviously already seen over the last year really good, strong growth in our membership program. Mike, do you want to hit the second question?

Yes. Yes. So as I always said, like kind of what do we see as the key drivers for 2026 EBITDA margin growth at Brand Tripadvisor. It's really, really a couple of things. And some of them are related to investments. Some of them are that you move through investment phases. So one is obviously stabilizing hotel meta And I think we continue to work on product, work with our partners to create a great offering there. And that that is first part of piece. Second is getting our hotel commerce beginning to scale, and that is what Matt talked about our booking capabilities, hotel capabilities. So getting some modest scale in that will be contributing to margin. Second, getting experience of growth back at TripAdvisor, it's a very, very important platform for us. And we spent, as we said in our prepared remarks, we have been spending a lot of time on how to optimize that that point of sale, surface. It's a very different traffic than Viator. It's a massive, massive funnel. It's global, and we've been spending a lot of time of optimizing growth there. We have a kind of a tough comp in the first half of the year in experiences growth, but we get past that in the second half of the year this year. And then next year, we're looking to -- in 2026, we'll be looking to -- for that to be a solid contributor to that EBITDA story Third, it's really -- or fourth is getting half, and through some of the investments, we have been ongoing through data, AI, these are a lot of investments we've had in the last two years that fund all the investments and the things that Matt was talking about in terms of the app, in terms of membership, obviously, as part of that experiences, so getting to that. And then lastly, just really comps on a lot of these legacy offerings. We've been saying pretty consistently the last many quarters that we have, we have focused over the last few years. We have de-prioritized some of the -- a lot of the legacy business we've had, whether it's car rentals. We just talked about changing our business model in vacation rentals. These create not insignificant EBITDA headwinds. And so we will be lapping and getting past those in 2026. So I think we are excited about what we're doing this year. We're excited about how it sets us up for that progression in 2026.

Got it. Thank you.

Thank you. And our next question is going to come from the line of James Lee with Mizuho Securities USA. Your line is open. Please go ahead.

Great. Thanks for taking my questions. First one is more, big picture, Matt, I was thinking then maybe you could talk about the long-term view on hotel meta search. It's clearly a highly debated topic given all the challenges seen over the last couple of years. So how do you think the industry would navigate? And can you talk about maybe the further transformation needed for Tripadvisor? And second question is about Viator. You guys previously talking about wanting to elaborate, to expand your B2B strategy specifically. Does it make sense to expand kind of beyond OTA, for example, maybe credit card companies redeem points. Thanks.

Hi, James, look, in the long term, we think that meta continues to be a relevant product. And we've said in the past that as long as we are delivering high-quality traffic to our partners and giving them a good investment opportunity, they're going to continue to come. And we've obviously had variability in that line. But I do believe that we've done a lot of good work to stabilize revenue from hotel shoppers across both meta and hotel booking in the app. In meta, we've done product work that has driven price advantage. Why? Because we're figuring out how to deliver higher-quality leads to our partners, and they are willing to pay more for that. And so I think you will continue to see us lean into that and identify ways that meta and booking in the app work together, which we also think can drive really good unit economics and average revenue per user. So we're enthusiastic about it. We think in the long term, it is a player. But we've also said it's not our future growth driver. So as we stabilize the revenue from hotel shoppers, as we accelerate our growth at Tripadvisor experiences, as we scale the impact of our product improvements that are driving engagement and unit economics, we think that, together, that's the profile. We are not trying to return to some kind of a paid -- consumer-paid subscription or anything like that. This is a very thoughtful integrated strategy that we are seeing is working. And so we're enthusiastic about. Now on Viator, you're right, we have a B2B business that we haven't broken out in the past, but it is growing. And I think I said in my prepared remarks, it grew at twice the rate of segment as a whole. And we think that we can grow B2B very quickly. We think it's one of our unique advantages. And it's really interesting because we think it's incremental, we think it's additive, it's profitable. We think we give tremendous value to our partners. And our supply advantage, which we continue to accelerate, is a key part of bringing people to the table, have a conversation with us, that would be different from anybody else in the world to offer this opportunity. And we think we can continue to enhance our current relationships, add new partners. And yes, there are many categories, thanks for mentioning some of them. I tend not to put the new categories to focus out publicly because that's how we're going to grow and I don't necessarily want to signal that to anybody else. But you're absolutely right. There are many, many industries and categories that we have to go to, and geographies, and many of them would be customers that would be hard to reach and acquire and retain on our own. So we're very excited about our third-party B2B business.

Thank you.

Thank you. And I would like to hand the conference back over to Matt Goldberg for closing remarks.

Thank you all for joining us on this morning's call. As I think you can see, we're really excited about what 2025 represents for us. In many ways, it's an inflection point in setting the Group up with renewed momentum and strategic flexibility and plans across every part of this business that I know and we're all excited about. I couldn't be more proud of the work we do every day. We're more optimistic about the next phase of growth at TripAdvisor Group. We look forward to seeing you at the next update. Thanks everyone.

This concludes today conference. Thank you for participating. You may now disconnect.