• Total Revenue: EUR94.8 million in Q4 2024, a 3% increase year-over-year.
• Referral Revenue: Increased by 5% in Q4 2024.
• Adjusted EBITDA: EUR11.1 million in Q4 2024.
• Net Income: EUR5.1 million in Q4 2024.
• Cash Position: Over EUR130 million with no long-term debt as of Q4 2024.
• Operational Expenses: Decreased by EUR0.3 million to EUR87 million in Q4 2024.
• Advertising Spend: Increased by 18% in the Americas and 3% in Rest of World; decreased by 15% in Developed Europe.
• Revenue Growth by Region: 15% increase in Rest of World, 8% increase in the Americas, and 2% decline in Developed Europe.

• Warning! GuruFocus has detected 4 Warning Signs with TRVG.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• trivago NV (NASDAQ:TRVG) achieved a 5% growth in Referral Revenue and delivered EUR11.1 million in adjusted EBITDA in Q4 2024, exceeding expectations.
• The company reported strong double-digit top-line growth across all segments at the start of the new quarter.
• trivago NV (NASDAQ:TRVG) has launched brand marketing campaigns in over 23 key travel markets, with promising early results from their AI-powered marketing campaign.
• The company has built a competitive AI infrastructure, with 70% of employees reporting productivity gains from AI tools.
• trivago NV (NASDAQ:TRVG) is well-positioned in a market estimated to be over EUR1.5 trillion, with significant margin and growth potential, especially in the Hotel segment.

Negative Points

• trivago NV (NASDAQ:TRVG) has not yet returned to pre-COVID revenue levels, partly due to conservative brand marketing investments during the pandemic.
• The company faces challenges in performance marketing channels, primarily due to changes in Google advertising formats, resulting in traffic volume losses.
• Developed Europe showed a 2% decline in referral revenues, although it was an improvement from the previous quarter.
• Monetization was softer this quarter compared to the prior year, with negative trends in the rest of the world and persistent challenges in Developed Europe.
• Despite positive branded revenue growth, the company continues to face volatility in performance marketing channels.

Q & A Highlights

Q: What needs to happen for Trivago to accelerate growth into double digits from current levels, and will the brand campaign expand into new markets? A: Robin Harries, CFO, explained that Trivago is already seeing strong double-digit growth in January and plans to scale brand investments further. The company sees opportunities to expand brand marketing into new markets beyond the current 23, as well as increase spending in existing markets. Growth will be driven by brand investments and product improvements, including better retention and conversion rates.

Q: Why is Trivago expecting high single-digit growth for the year despite strong January results? A: Robin Harries noted that January's performance exceeded expectations, with strong growth across all segments and channels. However, the full-year outlook remains cautious due to easier Q1 comparisons and more challenging conditions expected later in the year. The company anticipates Q1 to be strong, with Q3 also expected to perform well due to higher investments.

Q: Will Trivago continue to prioritize growth over profitability, and what are the early results of the AI Smart Search? A: Robin Harries stated that growth is prioritized over profitability, with investments focused on brand marketing to achieve higher revenue levels. Johannes Thomas, CEO, highlighted the AI Smart Search as a new way of searching hotels, allowing users to input specific queries. While still in early stages, the feature is gradually being integrated into search suggestions, with expectations for gradual user adoption.

Q: How does Trivago's differentiated member proposition differ from traditional loyalty programs? A: Johannes Thomas explained that Trivago aims to differentiate from other search engines by offering exclusive deals to logged-in users. The focus is on providing better prices and personalized notifications, rather than a traditional loyalty program. This approach targets price-conscious travelers and encourages them to start their journey on Trivago.

Q: Can you share any metrics related to branded channel performance, such as repeat customers or organic traffic mix? A: Robin Harries mentioned that while specific KPIs are not disclosed, Trivago evaluates brand campaign success through direct response, brand awareness, and other quality measures. Conversion rates, particularly among branded users, serve as a proxy for retention, indicating positive trends in user engagement and product performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.