Skift hold

Tripadvisor managers are doing their job trying to grow the business in case no strategic deals happen. But there will have to be one eventually.

Denis Schaal

Tripadvisor did not repurchase any shares in the third quarter as it considers “various potential strategic alternatives.”

That’s according to CFO Mike Noonan, who told analysts on Tripadvisor’s third-quarter conference call that the company ended September with $11 billion in cash and cash equivalents. cash flow.

The company would not provide any details on what those strategic alternatives might be, but they could generally include a sale to a private equity firm or strategic buyer, selling off brands or spinning them off.

In February, Tripadvisor’s majority shareholder, Liberty Tripadvisor, announced that it had received a merger proposal, and Tripadvisor has formed a committee of independent directors to evaluate strategic alternatives. However, in May the special committee stated that there was no viable transaction with a third party, which would be in the best interest of shareholders.

Meanwhile, Tripadvisor did not end its share repurchase program even though it did not trigger any share repurchases in the third quarter.

“There are a variety of reasons at any given time that we may be limited in our ability (to repurchase shares),” CEO Matt Goldberg said. “And one of those reasons is the continued consideration of a variety of alternatives.” But we really can’t go into more detail than we’ve said.

Tripadvisor saw its net profit increase 44% to $39 million in the third quarter. Revenue remained stable at $532 million. Its three segments – Brand Tripadvisor, Viator and TheFork – were profitable on an adjusted EBITDA basis.

Bullish on experiences

Executives said they are confident that experiences will grow faster than the online travel industry as a whole, as many experiences move online and the category gains recognition.

One analyst asked why Tripadvisor estimated in an investor presentation that the online experiences market would grow about 17 percent, while Viator’s bookings are growing at about half that rate.

One reason, according to Noonan, is that one of Viator’s largest distribution points is its sister brand Tripadvisor, and “they really manage profitability.” They are growing at lower rates than Viator.

Goldberg added that growth rates for the online travel industry are around 10%. “And so if you look at that, online is going to grow faster than the offline market and OTAs are going to grow faster than the online market as a whole. And we think we’re really well positioned with the assets that we’ve brought to the table.

He said the 17% CAGR for experiences includes Asia Pacific, which is currently not a target market of Viator.

Tripadvisor’s TheFork restaurant reservation platform, Europe’s largest, had its best financial quarter ever, according to Goldberg.

“Revenue accelerated sequentially to $49 million, representing 17% year-over-year growth,” Goldberg said. “Adjusted EBITDA for the quarter was $5 million, or 10% of revenue, a significant improvement over last year.”