Travelzoo Reports Fourth Quarter 2024 Results
NEW YORK, Feb. 25, 2025 /PRNewswire/ -- Travelzoo® (NASDAQ: TZOO):
- Revenue of $20.7 million, down 2% year-over-year
- Consolidated operating profit of $4.9 million, up 8% year-over-year
- Non-GAAP consolidated operating profit of $5.3 million
- Cash flow from operations of $7.7 million
- Earnings per share (EPS) of $0.26
Travelzoo, the club for travel enthusiasts, today announced financial results for the fourth quarter ended December 31, 2024. Consolidated revenue was $20.7 million, down 2% year-over-year. In constant currencies, revenue was $20.6 million. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, and membership fees.
Net income attributable to Travelzoo was $3.2 million for Q4 2024, or $0.26 per share, compared with $0.27 in the prior-year period. Net income attributable to Travelzoo from continuing operations was $3.2 million for Q4 2024, or $0.26 per share, compared with $0.24 in the prior-year period.
Non-GAAP operating profit was $5.3 million. Non-GAAP operating profit excludes amortization of intangibles ($93,000), stock option expenses ($0.4 million). 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," 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."
Cash Position
As of December 31, 2024, consolidated cash, cash equivalents and restricted cash were $17.7 million. Net cash provided by operations was $7.7 million.
Travelzoo North America
North America business segment revenue increased 1% year-over-year to $13.9 million. Operating profit for Q4 2024 was $4.6 million, or 33% of revenue, compared to operating profit of $4.0 million in the prior-year period.
Travelzoo Europe
Europe business segment revenue decreased 13% year-over-year to $5.4 million, caused primarily by fluctuations in Germany. In constant currencies, Europe business segment revenue was $5.3 million. Operating profit for Q4 2024 was $159,000, or 3% of revenue, compared to operating profit of $832,000 in the prior-year period.
Jack's Flight Club
Jack's Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. As the number of premium subscribers continues to grow, revenue increased 19% year-over-year to $1.3 million. Jack's Flight Club's revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Non-GAAP operating profit for Q4 2024 was $208,000. Non-GAAP operating profit excludes amortization of intangibles ($58,000) related to the acquisition of Travelzoo's ownership interest in Jack's Flight Club in 2020.
New Initiatives
New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $19,000. Operating loss for Q4 2024 was $36,000.
In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo's brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo's brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Travelzoo recorded $7,000 in licensing revenue from the licensee in Japan in Q4 2024. Travelzoo recorded $12,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q4 2024. Licensing revenue is expected to increase in the future.
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.
Discontinued Operations
In March 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations.
Income Taxes
A provision of $1.5 million for income taxes was recorded for Q4 2024, compared to an income tax expense of $1.6 million in the prior-year period. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its actual tax liability for 2024.
Share Repurchase Program
During Q4 2024, the Company repurchased 135,792 shares of its outstanding common stock.
Looking Ahead
For Q1 2025, we expect revenue to increase at a higher pace. The pro rata portion of membership fee revenue will already add 5% incremental growth this quarter. This percentage is expected to increase over subsequent quarters, as membership fee revenue is recognized ratably over the subscription period, we acquire new members, and more Legacy Members become Club Members. For the whole year, we expect substantially higher revenue growth. Over time, we expect profitability to further increase as recurring membership fee revenue will be recognized.
In 2024, we introduced a membership fee for Travelzoo. Legacy Members, who joined before 2024, were exempt from the fee during 2024. Legacy Members represent more than 95% of Travelzoo's reach. In 2025, Legacy Members continue to receive certain travel offers. But Club Offers and new benefits are only available to Club Members. We generally see Legacy Members being excited to become Club Members.
Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo's 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 fourth quarter 2024 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.
Travelzoo | ||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Three months ended | Twelve months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
Revenues | $ 20,678 | $ 21,149 | $ 83,902 | $ 84,477 | ||||||||||
Cost of revenues | 2,761 | 2,698 | 10,469 | 10,934 | ||||||||||
Gross profit | 17,917 | 18,451 | 73,433 | 73,543 | ||||||||||
Operating expenses: | ||||||||||||||
Sales and marketing | 8,256 | 8,496 | 34,466 | 37,774 | ||||||||||
Product development | 644 | 580 | 2,407 | 2,113 | ||||||||||
General and administrative | 4,183 | 4,896 | 18,058 | 18,084 | ||||||||||
Total operating expenses | 13,083 | 13,972 | 54,931 | 57,971 | ||||||||||
Operating income | 4,834 | 4,479 | 18,502 | 15,572 | ||||||||||
Other income (expense), net | (86) | 398 | 588 | 1,541 | ||||||||||
Income from continuing operations before income taxes | 4,748 | 4,877 | 19,090 | 17,113 | ||||||||||
Income tax expense | 1,484 | 1,618 | 5,404 | 5,105 | ||||||||||
Income from continuing operations | 3,264 | 3,259 | 13,686 | 12,008 | ||||||||||
Income from discontinued operations, net of tax | — | 465 | — | 460 | ||||||||||
Net income | 3,264 | 3,724 | 13,686 | 12,468 | ||||||||||
Net income attributable to non-controlling interest | 64 | 5 | 118 | 102 | ||||||||||
Net income attributable to Travelzoo | $ 3,200 | $ 3,719 | $ 13,568 | $ 12,366 | ||||||||||
Net income attributable to Travelzoo—continuing operations | $ 3,200 | $ 3,254 | $ 13,568 | $ 11,906 | ||||||||||
Net income attributable to Travelzoo—discontinued operations | $ — | $ 465 | $ — | $ 460 | ||||||||||
Income per share—basic | ||||||||||||||
Continuing operations | $ 0.27 | $ 0.24 | $ 1.08 | $ 0.80 | ||||||||||
Discontinued operations | $ — | $ 0.03 | $ — | $ 0.03 | ||||||||||
Net income per share—basic | $ 0.27 | $ 0.27 | $ 1.08 | $ 0.83 | ||||||||||
Income per share—diluted | ||||||||||||||
Continuing operations | $ 0.26 | $ 0.24 | $ 1.06 | $ 0.80 | ||||||||||
Discontinued operations | $ — | $ 0.03 | $ — | $ 0.03 | ||||||||||
Net income per share—diluted | $ 0.26 | $ 0.27 | $ 1.06 | $ 0.83 | ||||||||||
Shares used in per share calculation from continuing operations—basic | 11,831 | 13,873 | 12,594 | 14,897 | ||||||||||
Shares used in per share calculation from discontinued operations—basic | 11,831 | 13,873 | 12,594 | 14,897 | ||||||||||
Shares used in per share calculation from continuing operations—diluted | 12,358 | 13,946 | 12,852 | 14,964 | ||||||||||
Shares used in per share calculation from discontinued operations—diluted | 12,358 | 13,946 | 12,852 | 14,964 | ||||||||||
Travelzoo | ||||||
Condensed Consolidated Balance Sheets | ||||||
(Unaudited) | ||||||
(In thousands) | ||||||
December 31, | December 31, | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 17,064 | $ 15,713 | ||||
Accounts receivable, net | 12,825 | 12,965 | ||||
Prepaid income taxes | 736 | 629 | ||||
Prepaid expenses and other | 1,148 | 1,461 | ||||
Total current assets | 31,773 | 30,768 | ||||
Deposits and other | 374 | 1,115 | ||||
Deferred tax assets | 3,380 | 3,196 | ||||
Restricted cash | 675 | 675 | ||||
Operating lease right-of-use assets | 5,655 | 6,015 | ||||
Property and equipment, net | 423 | 578 | ||||
Intangible assets, net | 1,498 | 2,091 | ||||
Goodwill | 10,944 | 10,944 | ||||
Total assets | $ 54,722 | $ 55,382 | ||||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ 6,134 | $ 4,546 | ||||
Merchant payables | 16,294 | 20,622 | ||||
Accrued expenses and other | 3,404 | 3,658 | ||||
Deferred revenue | 6,545 | 2,044 | ||||
Income tax payable | 1,619 | 766 | ||||
Operating lease liabilities | 2,472 | 2,530 | ||||
Liabilities from discontinued operations | 28 | 24 | ||||
Total current liabilities | 36,496 | 34,190 | ||||
Long-term tax liabilities | 7,851 | 4,681 | ||||
Long-term operating lease liabilities | 5,646 | 6,717 | ||||
Other long-term liabilities | 376 | 911 | ||||
Total liabilities | 50,369 | 46,499 | ||||
Common stock | 118 | 136 | ||||
Tax indemnification | (9,537) | (9,537) | ||||
Note receivable from shareholder | — | (1,753) | ||||
Additional paid-in capital | — | 439 | ||||
Retained earnings | 14,284 | 19,508 | ||||
Accumulated other comprehensive loss | (5,327) | (4,607) | ||||
Total Travelzoo stockholders' equity (deficit) | (462) | 4,186 | ||||
Non-controlling interest | 4,815 | 4,697 | ||||
Total stockholder's equity | 4,353 | 8,883 | ||||
Total liabilities and equity | $ 54,722 | $ 55,382 | ||||
Travelzoo | ||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
Three months ended | Twelve months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ 3,264 | $ 3,724 | $ 13,686 | $ 12,468 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 170 | 476 | 907 | 1,893 | ||||||||||
Stock-based compensation | 405 | 381 | 1,645 | 1,568 | ||||||||||
Deferred income tax | (476) | 159 | (515) | 48 | ||||||||||
Loss on long-lived assets | — | — | — | 10 | ||||||||||
Net foreign currency effects | 132 | (115) | (33) | (62) | ||||||||||
Provision of loss (net recoveries) on accounts receivable and refund reserves | (81) | (72) | 40 | (1,016) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | 113 | (2,231) | (145) | 1,086 | ||||||||||
Prepaid income taxes | 354 | 61 | (107) | 1,189 | ||||||||||
Prepaid expenses, deposits and other | 319 | 1,603 | 950 | 3,835 | ||||||||||
Accounts payable | 1,286 | 1,181 | 1,716 | (523) | ||||||||||
Merchant payables | (709) | (3,338) | (4,057) | (12,095) | ||||||||||
Accrued expenses and other | (661) | (665) | (289) | (685) | ||||||||||
Deferred revenue | 2,767 | (785) | 4,557 | (191) | ||||||||||
Income tax payable | 264 | 456 | 857 | 749 | ||||||||||
Other liabilities | 507 | 547 | 1,888 | 2,401 | ||||||||||
Net cash provided by operating activities | 7,654 | 1,382 | 21,100 | 10,675 | ||||||||||
Cash flows from investing activities: | ||||||||||||||
Proceeds from note receivable | — | 103 | — | 216 | ||||||||||
Purchases of property and equipment | (48) | (38) | (177) | (255) | ||||||||||
Net cash used in investing activities | (48) | 65 | (177) | (39) | ||||||||||
Cash flows from financing activities: | ||||||||||||||
Repurchase of common stock | (2,324) | (5,015) | (18,929) | (16,781) | ||||||||||
Proceeds from note receivable and account receivable from shareholder | 1,920 | 3,000 | 1,753 | 3,000 | ||||||||||
Exercise of stock options and taxes paid for net share settlement of equity awards | (1,195) | (70) | (1,787) | (369) | ||||||||||
Net cash used in financing activities | (1,599) | (2,085) | (18,963) | (14,150) | ||||||||||
Effect of exchange rate on cash, cash equivalents and restricted cash | (390) | 445 | (605) | 525 | ||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 5,617 | (193) | 1,355 | (2,989) | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 12,106 | 16,582 | 16,389 | 19,378 | ||||||||||
Cash, cash equivalents and restricted cash at end of period | $ 17,723 | $ 16,389 | $ 17,744 | $ 16,389 | ||||||||||
Travelzoo | ||||||||||||||||||
Segment Information from Continuing Operations | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
Three months ended December 31, 2024 | Travelzoo North America | Travelzoo Europe | Jack's Flight Club | New Initiatives | Consolidated | |||||||||||||
Revenues from unaffiliated customers | $ 13,834 | $ 5,508 | $ 1,317 | $ 19 | $ 20,678 | |||||||||||||
Intersegment revenues | 74 | (68) | (6) | — | — | |||||||||||||
Total net revenues | 13,908 | 5,440 | 1,311 | 19 | 20,678 | |||||||||||||
Sales and marketing expenses | 4,641 | 3,110 | 505 | — | 8,256 | |||||||||||||
Other expenses | 4,689 | 2,171 | 656 | 55 | 7,571 | |||||||||||||
Operating profit (loss) | $ 4,578 | $ 159 | $ 150 | $ (36) | 4,851 | |||||||||||||
Other loss, net | (86) | |||||||||||||||||
Income from continuing operations before income taxes | $ 4,765 | |||||||||||||||||
Three months ended December 31, 2023 | Travelzoo North America | Travelzoo Europe | Jack's Flight Club | New Initiatives | Consolidated | |||||||||||||
Revenues from unaffiliated customers | $ 13,534 | $ 6,354 | $ 1,106 | $ 155 | $ 21,149 | |||||||||||||
Intersegment revenues | 247 | (90) | (157) | — | — | |||||||||||||
Total net revenues | 13,781 | 6,264 | 949 | 155 | 21,149 | |||||||||||||
Sales and marketing expenses | 4,899 | 3,111 | 423 | 63 | 8,496 | |||||||||||||
Other expenses | 4,912 | 2,321 | 745 | 196 | 8,174 | |||||||||||||
Operating profit (loss) | $ 3,970 | $ 832 | $ (219) | $ (104) | 4,479 | |||||||||||||
Other income, net | 398 | |||||||||||||||||
Income from continuing operations before income taxes | $ 4,877 | |||||||||||||||||
Twelve months ended December 31, 2024 | Travelzoo North America | Travelzoo Europe | Jack's Flight Club | New Initiatives | Consolidated | |||||||||||||
Revenues from unaffiliated customers | $ 54,968 | $ 24,113 | $ 4,714 | $ 107 | $ 83,902 | |||||||||||||
Intersegment revenues | 124 | (42) | (82) | — | — | |||||||||||||
Total net revenues | 55,092 | 24,071 | 4,632 | 107 | 83,902 | |||||||||||||
Sales and marketing expenses | 19,748 | 12,539 | 1,898 | 280 | 34,465 | |||||||||||||
Other expenses | 19,461 | 8,451 | 2,690 | 337 | 30,939 | |||||||||||||
Operating profit (loss) | $ 15,883 | $ 3,081 | $ 44 | $ (510) | 18,498 | |||||||||||||
Other income, net | 588 | |||||||||||||||||
Income from continuing operations before income taxes | $ 19,086 | |||||||||||||||||
Twelve months ended December 31, 2023 | Travelzoo North America | Travelzoo Europe | Jack's Flight Club | New Initiatives | Consolidated | |||||||||||||
Revenues from unaffiliated customers | $ 54,837 | $ 25,291 | $ 4,145 | $ 204 | $ 84,477 | |||||||||||||
Intersegment revenues | 1,243 | (1,270) | 27 | — | — | |||||||||||||
Total net revenues | 56,080 | 24,021 | 4,172 | 204 | 84,477 | |||||||||||||
Sales and marketing expenses | 22,029 | 13,636 | 1,788 | 321 | 37,774 | |||||||||||||
Other expenses | 18,797 | 9,068 | 2,407 | 859 | 31,131 | |||||||||||||
Operating profit (loss) | $ 15,254 | $ 1,317 | $ (23) | $ (976) | 15,572 | |||||||||||||
Other income, net | 1,541 | |||||||||||||||||
Income from continuing operations before income taxes | $ 17,113 | |||||||||||||||||
Travelzoo | ||||||||||||||
Reconciliation of GAAP to Non-GAAP Information | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Three months ended | Twelve months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
GAAP operating expense | $ 13,083 | $ 13,972 | $ 54,931 | $ 57,971 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||
Amortization of intangibles (A) | 93 | 389 | 593 | 1,560 | ||||||||||
Stock option expenses (B) | 405 | 380 | 1,644 | 1,566 | ||||||||||
Severance-related expenses (C) | — | — | 360 | 56 | ||||||||||
Non-GAAP operating expense | 12,585 | 13,203 | 52,334 | 54,789 | ||||||||||
GAAP operating profit | 4,834 | 4,479 | 18,502 | 15,572 | ||||||||||
Non-GAAP adjustments (A through C) | 498 | 769 | 2,597 | 3,182 | ||||||||||
Non-GAAP operating profit | 5,332 | 5,248 | 21,099 | 18,754 | ||||||||||
Investor Relations:
ir@travelzoo.com
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SOURCE Travelzoo
