Affiliate Marketing

Tripadvisor : Updated Segment Reporting Memo 155.9 KB

Tripadvisor Segment Reporting Update Memo

August 4, 2022

As referenced in prior shareholder letters, we have been evaluating changes to our segment information. This quarter, Q2 2022, we are disclosing our financial information under a new segment structure. To ensure that you have a basis for comparison, attached are segment financials, which have been recast by quarter in the new segment structure, starting in Q1 2019.

New reporting

We now report under three reportable segments, Tripadvisor Core, Viator, and TheFork, and we will include a corporate & eliminations category. A summary of the changes are as follows:

Tripadvisor Core

  • This segment includes the legacy HM&P segment and the legacy Other (cruises, rentals, flights, and cars). This segment also includes Tripadvisor point-of-sale (“POS”) experiences and Tripadvisor dining and restaurant services, which combined equal our Tripadvisor Experiences and Dining revenue stream.
  • We are providing the following revenue lines by product for this reportable segment:
    • Tripadvisor branded hotels (formerly legacy Tripadvisor branded hotels revenue stream)
    • Display & Platform (formerly legacy Display & Platform revenue stream)
    • Tripadvisor Experiences and Dining (as discussed above)
    • Other (formerly legacy Other revenue)
  • Included in the expenses for this segment are directly-attributable Cost of Revenue, Sales and Marketing (S&M), Technology and Content (T&C), General & Administrative (G&A) expenses, and allocations for certain corporate G&A personnel costs.

Viator

  • The Viator segment captures all revenue generated by the Viator stand-alone business, including revenue generated on the Tripadvisor POS (as Viator fulfills the bookings for Tripadvisor, as it does for all affiliate relationships).
  • For bookings generated from the Tripadvisor POS channel, Viator pays Tripadvisor Core an affiliate marketing fee. This affiliate marketing fee is borne by Viator as a segment expense, and recognized in the Tripadvisor Core segment, in Tripadvisor Experiences and Dining revenue. These intersegment transactions are eliminated on a consolidated basis.

Segment Reporting Memo

August 4, 2022

Page 2

  • Included in the expenses for this segment are directly-attributable Cost of Revenue, Sales and Marketing (S&M), Technology and Content (T&C), General & Administrative (G&A) expenses, and allocations for certain corporate G&A personnel costs.

TheFork

  • TheFork segment captures all revenue generated by stand-alone TheFork business, including a small amount of consumer bookings generated by the Tripadvisor POS for TheFork.
  • For bookings generated on the Tripadvisor POS, TheFork pays Tripadvisor Core an affiliate marketing fee for these bookings. This affiliate marketing fee is borne by TheFork as a segment expense, and recognized as revenue in the Tripadvisor Core segment, in Tripadvisor Experiences and Dining revenue (similar to Viator). These intersegment transactions are eliminated on a consolidated basis.
  • Included in the expenses for this segment are directly-attributable Cost of Revenue, Sales and Marketing (S&M), Technology and Content (T&C), General & Administrative (G&A) expenses, and allocations for certain corporate G&A personnel costs.

Eliminations

  • We eliminate the revenue double count for segment reporting for the affiliate marketing fee paid to Tripadvisor Core, as well as the equal expense for Viator and TheFork. The elimination is on revenue, not on EBITDA (revenue elimination equals cost elimination).

Other Considerations

  • This new segment structure has no effect on our consolidated financial statements in any period.
  • This results in no change to our legacy segment profit measure (adjusted EBITDA) used by our CODM or its definition.

Contact: ir@tripadvisor.com

Segment Reporting Update – August 4, 2022

The tables below describe the revenue and expense components of updated segments and the relationship to previous segments, and the following page provides updated segment financials recast for certain prior periods.

TRIPADVISOR CORE SEGMENT

Relationship to Previous Segment

Description

Revenue

Tripadvisor Branded Hotels

Formerly included in legacy HM&P segment

Former legacy Tripadvisor branded hotels revenue line

Tripadvisor Display & Platform

Formerly included in legacy HM&P segment

Former legacy Display & Platform revenue line

Tripadvisor Experiences & Dining

Formerly included in legacy E&D segment revenue

Tripadvisor restaurant services revenue

Revenue earned from affiliate marketing fees for bookings provided to Viator and TheFork

Other

Other revenue

Includes all revenue from legacy Other line (cruises, rentals, flights, and cars)

Expenses

Tripadvisor segment expenses

Expenses formerly included in legacy HM&P segment

Expenses formerly included in legacy Other

Certain expenses formerly included in legacy E&D segment

>> Direct costs and people costs incurred in support of the Tripadvisor Experiences & Dining revenue lines

VIATOR SEGMENT

Relationship to Previous Segment

Description

Revenue

Viator Revenue

All Experiences revenue, formerly included in the legacy E&D segment

Expenses

Viator segment expenses

Certain expenses formerly included in the legacy E&D segment

>> All expenses related to Viator, inclusive of affiliate marketing fee to Tripadvisor for bookings generated on

Tripadvisor and fulfilled by Viator, and allocation of certain corporate costs

Note: the affiliate marketing fee paid to Tripadvisor is equal to revenue recognized by Tripadvisor

Experiences in the Tripadvisor segment

THEFORK SEGMENT

Relationship to Previous Segment

Description

Revenue

TheFork Revenue

Revenue related to TheFork point of sale, formerly included in legacy

E&D segment

Expenses

TheFork segment expenses

Certain expenses formerly included in the legacy E&D segment

>> All expenses related to TheFork, inclusive of affiliate marketing fee to Tripadvisor for bookings generated on

Tripadvisor and fulfilled by TheFork, and allocation of certain corporate costs

Note: the affiliate marketing fee paid to Tripadvisor is equal to revenue recognized by Tripadvisor (B2C)

Dining in the Tripadvisor segment

Intersegment Eliminations (1)

Relationship to Previous Segment

Description

Revenue

Tripadvisor Experiences & Dining

Formerly included in the legacy E&D segment as intra-segment

>> Elimination of revenue recognized by Tripadvisor from affiliate marketing fees received from Viator and

Revenue

eliminations

TheFork

Expenses

Certain expenses formerly included in the legacy E&D segment as intra-

>> Expense elimination from Viator and TheFork, equal to affiliate marketing fees received by Tripadvisor

segment eliminations

(1) Revenue and expense earned and charged between segments are eliminated upon consolidation. Eliminations result in net neutral impact to adjusted EBITDA.

Segment Reporting Update – August 4, 2022 all figures in $M

Q1 2019

Q2 2019

Q3 2019

Q4 2019

FY19

Q1 2020

Q2 2020

Q3 2020

Q4 2020

FY20

Q1 2021

Q2 2021

Q3 2021

Q4 2021

FY21

Q1 2022

Q2 2022

Tripadvisor Core Segment Revenue

317

327

323

256

1,223

223

53

114

94

483

107

184

212

162

665

191

274

as % of 2019

70%

16%

35%

37%

39%

34%

56%

66%

63%

54%

60%

84%

Tripadvisor Branded Hotels

216

211

197

155

779

137

31

67

57

292

74

131

143

103

451

135

188

as % of 2019

63%

15%

34%

37%

37%

34%

62%

73%

66%

58%

63%

89%

Display & Platform

38

43

41

39

161

32

7

13

17

69

14

26

29

29

98

26

37

as % of 2019

84%

16%

32%

44%

43%

37%

60%

71%

74%

61%

68%

86%

Tripadvisor Experiences & Dining (1)

21

30

36

30

117

28

8

16

14

65

12

16

23

20

70

20

35

as % of 2019

133%

27%

44%

47%

56%

57%

53%

64%

67%

60%

95%

117%

Other

42

43

49

32

166

26

7

18

6

57

7

11

17

10

46

10

14

as % of 2019

62%

16%

37%

19%

34%

17%

26%

35%

31%

28%

24%

33%

Tripadvisor Core Segment Adj. EBITDA

118

131

129

98

476

73

(35)

27

(3)

64

7

49

73

49

177

55

116

Adj. EBITDA Margin

37%

40%

40%

38%

39%

33%

-66%

24%

-3%

13%

7%

27%

34%

30%

27%

29%

42%

Viator Segment

44

85

97

61

288

36

1

9

8

55

12

40

73

59

184

56

136

as % of 2019

82%

1%

9%

13%

19%

27%

47%

75%

97%

64%

127%

160%

Viator Segment Adj. EBITDA

(23)

(2)

1

(4)

(28)

(24)

(18)

(13)

(16)

(72)

(14)

(13)

1

(6)

(31)

(20)

0

Adj. EBITDA Margin

-52%

-2%

1%

-7%

-10%

-67%

-1800%

-144%

-200%

-131%

-117%

-33%

1%

-10%

-17%

-36%

0%

TheFork Segment

28

31

34

35

127

31

6

32

17

86

7

18

30

30

85

26

32

as % of 2019

111%

19%

94%

49%

68%

25%

58%

88%

86%

67%

93%

103%

TheFork Segment Adj. EBITDA

(6)

(1)

(1)

(2)

(10)

(9)

(21)

1

(14)

(43)

(19)

(11)

(2)

(14)

(46)

(8)

(7)

Adj. EBITDA Margin

-21%

-3%

-3%

-6%

-8%

-29%

-350%

3%

-82%

-50%

-271%

-61%

-7%

-47%

-54%

-31%

-22%

Intersegment Revenue Eliminations (1)

(13)

(21)

(26)

(17)

(78)

(12)

(1)

(4)

(3)

(20)

(3)

(7)

(12)

(10)

(32)

(11)

(25)

Consolidated Revenue

376

422

428

335

1,560

278

59

151

116

604

123

235

303

241

902

262

417

as % of 2019

74%

14%

35%

35%

39%

33%

56%

71%

72%

58%

70%

99%

Consolidated Adj. EBITDA (2)

89

128

129

92

438

40

(74)

15

(33)

(51)

(26)

25

72

29

100

27

109

Adj. EBITDA Margin (3)

24%

30%

30%

27%

28%

14%

-125%

10%

-28%

-8%

-21%

11%

24%

12%

11%

10%

26%

GAAP Net Income (Loss) (4)

26

34

50

15

126

(16)

(153)

(48)

(73)

(289)

(80)

(40)

1

(29)

(148)

(34)

31

GAAP Net Income (Loss) Margin

7%

8%

12%

4%

8%

-6%

-259%

-32%

-63%

-48%

-65%

-17%

0%

-12%

-16%

-13%

7%

(1) Tripadvisor experiences and dining revenue within the Tripadvisor Core segment shown in this table are gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis. Eliminations result in net neutral impact to adjusted EBITDA.

(2)

Consolidated Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of this measure to the most directly comparable GAAP measure, please refer to the reconciliations available on the investor relations section of our website at http://ir.tripadvisor.com.

(3)

Tripadvisor defines “Consolidated Adjusted EBITDA margin” as Consolidated Adjusted EBITDA divided by revenue.

(4)

This amount reflects our consolidated GAAP net income (loss) for the periods presented. Tripadvisor does not calculate or report net income (loss) by segment.

Note: Due to rounding, figures may not sum to total.

Disclaimer

TripAdvisor Inc. published this content on 04 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2022 21:36:05 UTC.

Publicnow 2022

All news about TRIPADVISOR, INC.

Analyst Recommendations on TRIPADVISOR, INC.

Sales 2022 1 404 M

Net income 2022 17,0 M

Net Debt 2022 65,0 M

P/E ratio 2022 192x
Yield 2022
Capitalization 2 816 M
2 816 M
EV / Sales 2022 2,05x
EV / Sales 2023 1,55x
Nbr of Employees 2 760
Free-Float 64,2%


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Income Statement Evolution

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Mean consensus HOLD
Number of Analysts 19
Last Close Price 20,17 $
Average target price 28,06 $
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