false000152652000015265202022-05-022022-05-02

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 2, 2022

 

TRIPADVISOR, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware	001-35362	80-0743202
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
400 1st Avenue Needham, MA 02494
(Address of Principal Executive Offices) (Zip Code)

(781) 800-5000

Registrant’s Telephone Number, Including Area Code

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		TRIP		Nasdaq

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

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Item 2.02.	Results of Operations and Financial Condition.

On May 4, 2022, Tripadvisor, Inc. issued a press release announcing its preliminary financial results for the quarter ended March 31, 2022. Tripadvisor, Inc. also posted a letter to shareholders from Stephen Kaufer, President and Chief Executive Officer, and Ernst Teunissen, Chief Financial Officer, on the “Investor Relations” section of its website at http://ir.tripadvisor.com/events-and-presentations. The full text of this press release and letter are furnished as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K.

Pursuant to General Instruction B.2. to Form 8-K, the information set forth in Items 2.02 and Exhibit 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 5.02.	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c) On May 4, 2022, the Company announced that Matthew Goldberg will join the Company as President and Chief Executive Officer on or before July 1, 2022 (the “Effective Date”). A copy of this press release is furnished as Exhibit 99.3 to this report.

 

Matt Goldberg, age 51, is an executive with large scale global consumer internet and B2B skill sets. Mr. Goldberg is currently the founding director of Dataphilanthropy, a role he commenced following his role at The Trade Desk, a global technology company, where he served as Executive Vice President, North America and Global Operations from February 2020 through March 2021. Before joining The Trade Desk, Mr. Goldberg served as Global Head of M&A and Strategic Alliances for News Corp from December 2016 to December 2019 and Senior Vice President, Global Market Development and Head of Corporate Development for Qurate, formerly known as QVC, from October 2013 through November 2016. Prior to that, Mr. Goldberg was CEO of Lonely Planet, a travel guide publisher, for nearly five years. Mr. Goldberg currently serves on the Board of Directors of Blue Ocean Acquisition Corp., a blank check company traded on The Nasdaq Stock Market, as well as several private companies, and is active in philanthropy and non-profit leadership. Mr. Goldberg holds a Master of Business Administration degree from the Stanford University Graduate School of Business, a Master of Arts from University of Melbourne and a Bachelor of Arts degree from Cornell University.

 

In connection with his appointment, on May 2, 2022, the Company entered into an employment letter agreement (the “Letter Agreement”) with Mr. Goldberg. The Letter Agreement provides that during the term of his employment:

 

	•		Mr. Goldberg will be paid an annual base salary of $800,000, which base salary will increase to $900,000 effective January 1, 2023.
	•		Mr. Goldberg will receive a signing bonus of $500,000, such amount to be repaid in full should Mr. Goldberg terminate his employment with the Company of his own volition other than for Good Reason or should the Company terminate his employment for Cause (as such terms are defined in the Letter Agreement) prior to completing 12 months of employment.
	•		For a period of no less than twelve months commencing on the Effective Date, the Company will pay Mr. Goldberg $10,000 per month to maintain a residence within 20 miles of the Company’s Needham office.
	•		Mr. Goldberg will receive a one-time equity award pursuant to the Company’s 2018 Stock and Annual Incentive Plan, as amended (“Stock Plan”), of performance based restricted stock units (“PSUs”) with a grant date value of $3,500,000, such PSUs to vest on the third anniversary of the Effective Date (the “Vesting Date”), with 25% vesting if the Reference Price (as defined below) is equal to or greater than $35.00 but less than $45.00, 50% of the PSUs if the Reference Price is equal to or greater than $45.00 but less than $55.00 and 100% of the PSUs if the reference price is equal to or greater than $55.00, subject to Mr. Goldberg remaining employed with the Company through the Vesting Date, subject to the termination provisions summarized below. Reference Price means a volume weighted average price of a share as reported on Bloomberg (or equivalent wire service) over a thirty (30) trading day period between the first anniversary of the Effective Date and the Vesting Date, such Reference Prices to be binary with no interpolation.

 

 

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	•		Mr. Goldberg will receive an award of restricted stock units (“RSUs”) and stock options pursuant to the Stock Plan, such awards representing annual awards for 2022 and 2023. The RSUs will have an award value of $4,762,500 and the stock options will have an award value of $4,762,500, and will each vest 25% on the first anniversary of the Effective Date, and 6.25% on the first day of each of the next 12 quarters, such that both awards are fully vested on the fourth anniversary of the Start Date, in each case, subject to Mr. Goldberg remaining employed with the Company through the applicable vesting date, subject further to the termination provisions summarized below.
	•		Mr. Goldberg will be eligible for an annual bonus, subject to achievement of individual and corporate objectives to be established and to approval of the Company’s Compensation Committee, with a target of 100% of base salary and a minimum of $800,000 guaranteed for 2022, although the bonus related to partial year 2022, shall be payable on a pro rata basis.

 

	•		Beginning in 2024, Mr. Goldberg will be eligible for annual equity grants pursuant to the Company’s Stock Plan, with an annual target award value of $6,350,000 in a combination of RSUs, stock options and/or other forms of equity award, subject to achievement of individual and corporate objectives and other terms and conditions, including with respect to vesting, approved by the Company’s Compensation Committee.
	•		Mr. Goldberg will participate in the Tripadvisor, Inc. Executive Severance Plan (the “Severance Plan”) and, as such, eligible to receive severance benefits pursuant to the Severance Plan under certain circumstances, including involuntary termination of employment by the Company without Cause, and in connection with a Change in Control, and the involuntary termination of his employment by the Company without Cause or resignation by him for Good Reason, as each of those terms is used in the Severance Plan. In addition to the benefits that he would otherwise be entitled to under the Severance Plan, Mr. Goldberg will be entitled to the following rights and benefits:   • in the case of the termination of his employment due to his death, payment of his 2022 annual bonus and the full acceleration of any outstanding and unvested equity awards, with the Reference Price for the PSUs being deemed to be achieved at 100%;   • in the case of the termination of his employment without Cause or for Good Reason (as such terms are defined in the Letter Agreement), not in connection with a Change in Control (as such term is defined in the Severance Plan), (A) the Company will consider in good faith the payment of an annual bonus on a pro rata basis for the year in which the termination of employment occurs, and (B) all equity awards that are outstanding and unvested at the time of such termination but which would but for termination of employment have vested during the 18 month following such termination shall vest as of the date of such termination (including on a pro-rata basis for cliff vesting), subject to the achievement of any performance conditions attached to such equity awards (including the PSUs); and   • in the case of death or a termination of employment without Cause or for Good Reason (as such terms are defined in the Letter Agreement), any vested stock options (including pursuant to any acceleration provisions) shall remain exercisable through the date that is 18 months following the date of any termination of employment.   In the event of a change to the Severance Plan, Mr. Goldberg will remain entitled to no less than the severance benefits set forth in the Severance Plan as of the date of the Letter Agreement. In addition to these severance benefits, the Stock Plan provides for accelerated vesting of equity awards in the event of certain terminations in connection with a change in control as described in the Company’s proxy statement for its 2022 annual meeting of stockholders.

 

Mr. Goldberg has agreed to be restricted from competing with the Company or any of its subsidiaries or affiliates, or soliciting their employees, consultants, independent contractors, customers, suppliers or business partners, among others, from the Effective Date through 12 months after the termination of employment.

 

Since January 1, 2021, Mr. Goldberg has not been a participant in any transaction, or any currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $120,000. There are no family relationships between Mr. Goldberg and any other director or executive officer of the Company.

 

The foregoing description of the Letter Agreement is summary in nature and is qualified in its entirety by the text of the Letter Agreement, which is attached hereto as Exhibit 10.1 and which is incorporated herein by reference.

 

 

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(e) On May 3, 2022, the Company entered into a Consulting Services Agreement with Stephen Kaufer, Co-Founder, President and Chief Executive Officer of the Company, in order to facilitate an orderly transition to Matt Goldberg, the successor President and Chief Executive Officer. Mr. Kaufer will step down from his role as President and Chief Executive Officer of the Company concurrently with Mr. Goldberg joining the Company in such role. The term of the Consulting Services Agreement shall commence on July 2, 2022 and continue until July 1, 2024. Pursuant to such agreement, Mr. Kaufer will continue to provide strategic advisory and consulting services to Mr. Goldberg, or other senior executives of the Company or members of the Tripadvisor Board of Directors. Mr. Kaufer also agreed to continue to comply with certain restrictive covenants regarding nondisclosure, developments and non-competition. In consideration for such agreements and the provision of the services described in the Consulting Services Agreement, the Company agreed that (i) certain unvested equity awards granted to Mr. Kaufer, that would otherwise be forfeited, shall continue to vest during the term of the Consulting Services Agreement in their normal course in accordance with the terms of the award documents, and (ii) all vested stock options shall expire either 90 days from the termination of the Consulting Services Agreement or upon the original expiration date, whichever is earlier.

The foregoing description of the Consulting Services Agreement is summary in nature and is qualified in its entirety by the full text of the Consulting Services Agreement, which is attached hereto as Exhibit 10.2 and which is incorporated by reference herein.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
Number		Description
10.1		Employment Letter Agreement dated May 2, 2022 between Tripadvisor LLC and Matt Goldberg.
10.2		Consulting Services Agreement dated May 3, 2022 between Tripadvisor LLC and Stephen Kaufer.
99.1		Press Release of Tripadvisor, Inc. dated May 4, 2022 regarding earnings.
99.2		Q1 2022 Letter to Shareholders dated May 4, 2022.
99.3		Press Release of Tripadvisor, Inc. dated May 4, 2022 regarding new CEO.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		TRIPADVISOR, INC.
Date: May 4, 2022		By:	/S/ ERNST TEUNISSEN
			Ernst Teunissen
			Chief Financial Officer

 

 

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Exhibit 10.1

May 2, 2022

Employment Letter Agreement

DELIVERED TO
Matthew Goldberg

Dear Matt,

Tripadvisor LLC, a Delaware limited liability company (the “Company”), is pleased to extend you this offer of employment as President and Chief Executive Officer of Tripadvisor, Inc, a Delaware corporation (“Tripadvisor”) and its subsidiaries, which includes the Company, subject to the terms and conditions of employment described in this employment letter agreement (this “Letter Agreement”). This offer is contingent on your satisfactory completion of our standard background check, and on your being legally authorized to work in the United States, as required under federal law. This offer may be accepted by countersigning where indicated at the end of this Letter Agreement.

We and you mutually agree to a start date no later than July 1, 2022 (your first date of employment with the Company, the “Start Date”). You will be appointed to the Board of Directors of Tripadvisor (the “Board”) as of the Start Date. You will report to directly to the Board, and your principal place of employment shall be the Company’s Needham, Massachusetts office.

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You will also be eligible for an annual target bonus opportunity of 100% of your Base Salary (“Target Bonus”), subject to the achievement of individual and Company objectives, as determined by the Compensation Committee in its discretion. These objectives are set by the Compensation Committee in consultation with you as part of its management authority and are subject to change at from year to year. For 2022 only, the amount of your annual bonus is guaranteed to be no less than your full Target Bonus for 2022 (which is $800,000) pro-rated based on the number of days from the Start Date through December 31, 2022, inclusive, over 365 (the “2022 Bonus”). Starting in 2023, the determination of whether the bonus is awarded and in what amount is at the discretion of the Compensation Committee. Eligibility to receive an annual bonus payment is contingent upon your employment by the Company at the time of the Company’s payout of such annual bonus, subject to paragraph 11. Further eligibility requirements not in conflict with this Letter Agreement may be governed by plans and policies concerning the payment of incentive compensation as may be in effect from time to time. Your Target Bonus shall be reviewed at least annually, beginning in 2024, by the Compensation Committee and may be increased but not decreased. All bonus payments are less applicable taxes and withholdings.

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The PSUs will vest on the third anniversary of the Start Date (“PSU Vesting Date”), with respect to 25% of the PSUs if the Reference Price is equal to or greater than $35.00 but less than $45.00, 50% of the PSUs if the Reference Price is equal to or greater than $45.00 but less than $55.00 and 100% of the PSUs if the Reference Price is equal to or greater than $55.00, subject to your remaining employed through the PSU Vesting Date except as otherwise provided in paragraph 11. For the purposes of the PSUs, “Reference Price” means a volume weighed average price of a Share as reported on Bloomberg (or equivalent wire service) over a thirty (30) trading-day period (“30-day VWAP”) between the first anniversary of the Start Date and the PSU Vesting Date. For purposes of clarity, the Reference Prices are binary with no interpolation. Upon the occurrence of a Change in Control (as defined below), the Reference Price performance condition shall be deemed met at 100%.

This is a one-time grant of PSUs under the Tripadvisor, Inc. 2018 Stock and Annual Incentive Plan (the “2018 Plan”). You will receive additional information, including how you can access an electronic copy of the 2018 Plan and equity award agreement for the PSUs. In the event of any conflict or ambiguity between this Letter Agreement and the 2018 Plan or your equity award agreement, this Letter Agreement will govern.

In consideration of your acceptance of the attached Non-Disclosure, Developments and Non-Competition Agreement, Tripadvisor will grant you on the Start Date an award of RSUs with respect to Shares and an award of options to purchase Shares (the “Options,” and together with the RSUs, the “2022 Equity Grant”). These awards represent your

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Annual Grant for 2022 (on a prorated basis) and your Annual Grant for 2023. You will not be eligible to receive any additional equity grants until 2024. The number of RSUs granted will be determined based on the award value of $4,762,500 divided by the closing price of a Share on the date of grant (the Start Date), rounded down to the nearest whole number. The number of Options granted will be determined by dividing the award value of $4,762,500 by the Black-Scholes value of an Option (as determined by the Company, in its discretion, using the closing price of a Share on the date of grant (the Start Date)), rounded down to the nearest whole number. The Option will have an exercise price per Share equal to the closing price of a Share on the date of grant (the Start Date).

The RSU and Option awards will each vest 25% on the first anniversary of the Start Date, and 6.25% on the first day of each of the next 12 quarters, such that both awards are fully vested on the fourth anniversary of the Start Date, in each case subject to you remaining employed through the applicable vesting date except as otherwise provided in paragraph 11. For the avoidance of doubt, the 2022 Equity Grant will have no additional vesting conditions, related to performance or otherwise.

The 2022 Equity Grant is a one-time grant of RSUs and stock options under the 2018 Plan and the granting of the 2022 Equity Grant in no way can be interpreted as the Company’s commitment to additional awards. You will receive additional information, including how you can access an electronic copy of the 2018 Plan and equity award agreements for each of the RSUs and the Options. In the event of any conflict or ambiguity between this Letter Agreement and the 2018 Plan or your equity award agreements, this Letter Agreement will govern. Tripadvisor reserves the right to change the terms of the 2018 Plan at its sole discretion from time to time.

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By the same token, the Company expects you to abide by and honor the terms of any agreements you may have with your present or prior employers. By signing below, you confirm that you are not subject to any employment or consulting agreements (including without limitation a non-competition, customer non-solicitation, confidentiality or other similar provision) that would prevent you from fulfilling, or otherwise affect the performance of your job duties for the Company.

Also, just as the Company regards the protection of our confidential information as a matter of great importance, we also respect that you may have an obligation to your present and prior employers to safeguard the confidential information of those companies. The Company respects these obligations and expects you to honor them as well. To that end, we expect that you have not taken any documents or other confidential information from your employer. Further, we want to make it perfectly clear you should not bring with you to the Company or use in the performance of your duties for our Company, any proprietary business or technical information, materials or documents of a former employer, or otherwise disclose or use any former employer’s confidential information.

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The determination as to which of the alternative provisions of Section 13 shall apply to you shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the date of termination, if applicable, or at such earlier time as is reasonably requested by the Company or you. For purposes of determining which of the alternative provisions of Section 13 shall apply, you shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of your residence on the date of termination, net of the maximum reduction in Federal income taxes that could be obtained from deduction of such state and local taxes. Any determination by the Accounting Firm shall be binding upon the Company and you.

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Exception as to California Employees. As to employees who primarily reside and work in California and have any dispute involving any claim or controversy arising in California, this paragraph shall apply (and not the preceding paragraph), and any such dispute shall be resolved in a court or other appropriate forum with competent jurisdiction located in California, and such dispute shall be construed in accordance with the laws of The State of California.

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Please indicate your acceptance of this offer and the terms and conditions thereof by signing both this Letter Agreement and Exhibit A.

Sincerely,

Tripadvisor LLC

 

By: /s/ Seth J. Kalvert
Name: Seth J. Kalvert
Title: Chief Legal Officer

 

I hereby acknowledge that I have had a full and adequate opportunity to read, understand and discuss the terms and conditions contained in this Letter Agreement prior to signing hereunder.

Accepted and agreed by:

 

/s/ Matt Goldberg
Matthew Goldberg

May 2, 2022
Date

 

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Exhibit 10.2

 

CONSULTING SERVICES AGREEMENT

 

This Consulting Services Agreement (this “Agreement”), dated as of May 3, 2022 (the “Effective Date”), is made between Tripadvisor LLC, a Delaware limited liability company with an address of 400 First Avenue, Needham, MA 02494 (the “Company”), and Stephen Kaufer (“Co-Founder”).

 

WHEREAS, Co-Founder is currently employed by Tripadvisor, Inc., a Delaware corporation (“Tripadvisor”), and its subsidiaries (including the Company), as its President and Chief Executive Officer, pursuant to that certain Employment Agreement between Co-Founder and the Company, dated March 31, 2014, as amended effective November 28, 2017, and its Standard Terms and Conditions (collectively referred to as the “Employment Agreement”);

 

WHEREAS, Co-Founder intends to retire from the Company effective July 1, 2022 (“the Termination Date”);

 

WHEREAS, in order to facilitate an orderly transition to a successor President and Chief Executive Officer of the Company (the “Executive”), the Company desires to engage Co-Founder as an independent contractor after the Termination Date to perform certain strategic advisory and consulting services (as described in Section 1.1 hereof, the “Services”); and

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and undertakings herein contained, the parties hereto agree as follows:

 

ARTICLE ONE

CONSULTING SERVICES

 

 

 

ARTICLE TWO

COVENANTS AND WARRANTIES

 

 

 

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ARTICLE THREE

COMPENSATION

 

 

 

ARTICLE FOUR

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INDEPENDENT CONTRACTOR

 

 

 

 

ARTICLE FIVE

TERM AND TERMINATION

 

 

 

 

ARTICLE SIX

Nondisclosure, Developments and Non-Competition

6.1 Co-Founder acknowledges that during the Term, he will have access to and will be entrusted with confidential information and trade secrets relating to the business of the Company. As a result, to protect the Company’s substantial investment of time and money in the creation and maintenance of its confidential information and goodwill with its customers, clients, and collaborators, this Agreement is contingent upon Co-Founder’s signing the Company's Non-Disclosure, Developments and Non-Competition Agreement contained in Exhibit B hereto (the “NDA

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Agreement”) and his continued willingness to abide by its terms. Co-Founder acknowledges and agrees that the promises contained in the NDA Agreement are in addition to any covenants relating to the same or similar conduct in the Employment Agreement.

 

ARTICLE SEVEN

MISCELLANEOUS

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed and delivered this Agreement as of the dates below.

 

TRIPADVISOR LLC       By:   /s/ Seth J. Kalvert Name: Seth J. Kalvert Title: Chief Legal Officer Date: May 3, 2022	CO-FOUNDER        /s/ Stephen Kaufer Stephen Kaufer Date: May 3, 2022

 

 

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EXHIBIT A

 

EQUITY AWARDS

Grant Date	Grant Type	QTY - Granted	QTY – Unvested as of the Effective Date
11/28/2017	RSU	478,224	239,112
2/23/2021	RSU	13,094	13,094
12/31/2021	RSU	106,382	106,382
11/28/2017	NQ	780,000	390,000
12/31/2021	NQ	110,026	110,026
12/31/2021	NQ	115,200	115,200

 

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EXHIBIT B

 

Nondisclosure, Developments and Non-Competition Agreement

 

 

THIS NONDISCLOSURE, DEVELOPMENTS AND NON-COMPETITION AGREEMENT, effective as of the date first written below, (this "Agreement"), is between Tripadvisor LLC, a Delaware limited liability company and Stephen Kaufer (hereinafter called the "Signatory") and is made for the express benefit and protection of the Company, and any parent, subsidiary, division, unit or affiliate thereof that Signatory provides services to or that Signatory receives Confidential Information from or about (collectively the “Company Group”).

 

WHEREAS, the Signatory is about to become a consultant to the Company pursuant to a Consulting Services Agreement; and

 

WHEREAS, it is a condition precedent to the commencement of the Signatory's association with the Company as a consultant that the Signatory shall enter into this Agreement with the Company.

 

NOW, THEREFORE, in consideration of the foregoing premises, the parties hereby mutually agree as follows:

 

1. Confidential Information.

 

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2. Inventions; Assignment.

 

(a) For purposes of this Agreement, the term “Inventions” shall mean all inventions, improvements, developments, ideas, processes, prototypes, plans, drawings, designs, models, formulations, specifications, methods, techniques, shop-practices, discoveries, innovations, creations, technologies, formulas, algorithms, data, computer databases, reports, laboratory notebooks, papers, writings, photographs, source and object codes, software programs, other works of authorship, and know-how (including all records pertaining to any of the foregoing), whether or not reduced to writing and whether or not patented or patentable or registered or registrable under patent, copyright, trademark or similar statute. For purposes of this Agreement, the term "Assigned Inventions" shall mean (i) any and all Inventions that are made, conceived, invented, discovered, originated, authored, created, learned or reduced to practice by the Signatory, either alone or together with others, in the course of performing the Services to the Company during the Term (regardless of whether or not such Inventions were made, conceived, invented, discovered, originated, authored, created, learned or reduced to practice by the Signatory at the Company Group's facilities or during regular business hours or utilizing resources of the Company Group) or (ii) any and all Inventions that arise out of or are based upon any Confidential Information. For purposes of this Agreement, the term "Proprietary Rights" shall mean (x) any and all rights under or in connection with any patents, patent applications, copyrights, copyright applications, trademarks, trademark applications, service marks, service mark applications, trade names, trade name applications, mask works, trade secrets and/or other intellectual property rights with respect to Assigned Inventions and (y) the goodwill associated with any and all of the rights referred to in the foregoing clause (x).

 

(b) The Signatory hereby agrees to hold any and all Assigned Inventions and Proprietary Rights in trust for the sole right and benefit of the Company, and the Signatory hereby assigns to the Company all of the Company's right, title and interest in and to any and all Assigned Inventions and Proprietary Rights. The Signatory agrees to give the Company prompt written notice of any Assigned Invention or Proprietary Right and agrees to execute such instruments of transfer, assignment, conveyance or confirmation and such other documents as the Company may request to evidence, confirm or perfect the assignment of all of the Signatory's right, title and interest in and to any Assigned Invention or Proprietary Right pursuant to the foregoing provisions of this Section 2(b). The Signatory hereby waives and quitclaims to the Company any and all claims of any nature whatsoever that the

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Signatory may now or hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

 

(c) The Signatory hereby acknowledges and agrees that those Assigned Inventions that are original works of authorship protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act.

 

(d) At the request of the Company, the Signatory will assist the Company in every proper way (including, without limitation, by executing patent applications) to obtain and enforce in any country in the world Proprietary Rights relating to any or all Assigned Inventions. The Signatory's obligation under this Section 2(d) shall continue after the conclusion of the Term.

 

(e) By this Agreement, the Signatory hereby irrevocably constitutes and appoints the Company as its attorney-in-fact for the purpose of executing, in the Signatory's name and on its behalf, (i) such instruments or other documents as may be necessary to evidence, confirm or perfect any assignment pursuant to the provisions of this Section 2 or (ii) such applications, certificates, instruments or documents as may be necessary to obtain or enforce any Proprietary Rights in any country of the world. This power of attorney is coupled with an interest on the part of the Company and is irrevocable.

 

 

 

 

3. Non-Competition. In consideration of the good and valuable consideration provided in the Consulting Services Agreement, the receipt and sufficiency of which are hereby acknowledged by Signatory, Signatory hereby agrees and covenants that from the period commencing on July 2, 2022 and continuing until July 1, 2024 (the "Restricted Period"), Signatory shall not, directly or indirectly, engage in, assist or become associated with a Competitive Activity. For purposes of this Section 3: (i) a "Competitive Activity" means any business or other endeavor in any jurisdiction of a kind being conducted by the Company or any of its subsidiaries or affiliates during the Term of the Consulting Services Agreement (or demonstrably anticipated by the Company or its subsidiaries or affiliates), in

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any jurisdiction; and (ii) Signatory shall be considered to have become "associated with a Competitive Activity" if Signatory becomes directly or indirectly involved as an owner, principal, employee, officer, director, independent contractor, representative, stockholder, financial backer, agent, partner, advisor, lender, or in any other individual or representative capacity with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. Notwithstanding the foregoing, (i) Signatory may make and retain investments during the Restricted Period, for investment purposes only, in less than 5% of the outstanding capital stock of any publicly-traded corporation engaged in a Competitive Activity if stock of such corporation is either listed on a national stock exchange or on the NASDAQ National Market System if Signatory is not otherwise affiliated with such corporation; (ii) Signatory may serve as an employee or partner (or otherwise invest or hold an ownership interest) in an investment firm that has an ownership interest in a partnership, corporation or other organization that is engaged in a Competitive Activity, provided that such ownership interest does not constitute greater than 20% of such investment firm's total assets under management and Signatory is not directly involved with the provision of direction or management of such entity engaged in the Competitive Activity, including the investment decisions thereof; and (iii) Signatory may serve as an employee of or partner (or otherwise hold an ownership interest) in a consultancy or investment bank engaged in providing advisory services to entities engaged in Competitive Activities; provided that Signatory is not directly involved in the provision of the advisory services to such entities engaged in the Competitive Activity.

 

4. Non-Solicitation of Employees. Signatory recognizes that he will possess Confidential Information about employees, officers, directors, agents, consultants and independent contractors of the Company and its subsidiaries or affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with suppliers to and customers of the Company and its subsidiaries or affiliates. Signatory recognizes that the information he will possess about these employees, officers, directors, agents, consultants and independent contractors is not generally known, is of substantial value to the Company and its subsidiaries or affiliates in developing their respective businesses and in securing and retaining customers and will be acquired by Signatory because of Signatory's business position with the Company. Signatory agrees (i) that, during the Restricted Period, Signatory will not, directly or indirectly, hire or solicit or recruit the employment or services of (i.e., whether as an employee, officer, director, agent, consultant or independent contractor), or encourage to change such person's relationship with the Company or any of its subsidiaries or affiliates, any employee, officer, director, agent, consultant or independent contractor of the Company or any of its subsidiaries or affiliates, provided, however, that a general solicitation of the public for employment (and any hiring pursuant thereto) shall not constitute a solicitation hereunder so long as such general solicitation is not designed to target, or does not have the effect of targeting, any employee, officer, director, agent, consultant or independent contractor of the Company or any of its subsidiaries or affiliates, provided, further, that the hiring, solicitation or engagement (i.e., on a non-exclusive basis) of third-party professional advisors (e.g., law firms, accountancies) shall not constitute recruitment hereunder and (ii) that Signatory will not convey any Confidential Information or trade secrets about any employees, officers, directors, agents, consultants and independent contractors of the Company or any of its subsidiaries or affiliates to any other person except within the scope of Signatory's duties hereunder.

 

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5. Non-Solicitation of Customers, Suppliers, Partners. During the Restricted Period, Signatory shall not, without the prior written consent of the Company, directly or indirectly, solicit, attempt to do business with, or do business with any customers of, suppliers (including providers of travel inventory) to, business partners of or business affiliates of the Company or any of its subsidiaries or affiliates (collectively, "Trade Relationships") on behalf of any entity engaged in a Competitive Activity, or encourage (regardless of who initiates the contact) any Trade Relationship to use the services of any competitor of the Company or its subsidiaries or affiliates, or encourage any Trade Relationship to change its relationship with the Company or its subsidiaries or affiliates.

 

6. Unique Nature of Agreement; Specific Enforcement. The Company and the Signatory agree and acknowledge that the rights and obligations set forth in this Agreement are of a unique and special nature and that the Company (and, as applicable, the Signatory) is, therefore, without an adequate legal remedy in the event of a violation of any of the covenants set forth in this Agreement. The Company and the Signatory agree, therefore, that, in addition to all other rights and remedies, at law or in equity or otherwise, that may be available to the Company or the Signatory, each of the covenants made by under this Agreement shall be enforceable by injunction, specific performance or other equitable relief, without any requirement that any person have to post a bond in securing such relief. The parties hereby agree, in connection with any action or proceeding to enforce any provisions of this Agreement, to waive any claim or defense that there is an adequate remedy at law.

 

7. Consideration; Time to Review. Signatory acknowledges and agrees that the vesting of Equity Grants, as described in Article Three of the Consulting Services Agreement constitutes mutually-agreed upon and fair and reasonable consideration for the covenants contained this Agreement, including Sections 3 through 5. Signatory has been advised to consult with a lawyer regarding this Agreement and has been provided at least ten (10) business days before the commencement of the Consulting Services Agreement.

 

8. Miscellaneous.

 

8.1. Entire Agreement. This Agreement represents the entire agreement of the parties with respect to the arrangements contemplated hereby. No prior agreement, whether written or oral, shall be construed to change, amend, alter, repeal or invalidate this Agreement. This Agreement may be amended only by a written instrument executed in one or more counterparts by the parties.

 

8.2. Waiver. No consent to or waiver of any breach or default in the performance of any obligations hereunder shall be deemed or construed to be a consent to or waiver of any other breach or default in the performance of any of the same or any other obligations hereunder. Failure on the part of either party to complain of any act or failure to act of the other party or to declare the other party in default, irrespective of the duration of such failure, shall not constitute a waiver of rights hereunder and no waiver hereunder shall be effective unless it is in writing, executed by the party waiving the breach or default hereunder.

 

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8.3. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement may be assigned by the Company for no additional consideration and without Signatory’s consent to any Affiliate of the Company and to a successor of its business to which this Agreement relates (whether by purchase or otherwise). "Affiliate of the Company" means any person which, directly or indirectly, controls or is controlled by or is under common control with the Company and, for the purposes of this definition, "control" (including the terms "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of another whether through the ownership of voting securities or holding of office in another, by contract or otherwise. The Signatory may not assign or transfer any or all of his, her or its rights or obligations under this Agreement.

 

8.4. Jurisdiction and Venue; Waiver of Jury Trial. In case of any dispute hereunder, the parties mutually agree to submit to the exclusive jurisdiction and venue of the Superior Court of Massachusetts sitting in Suffolk County and will comply with all requirements necessary to give such court jurisdiction over the parties and the controversy. Either the civil session or the Business Litigation Session shall have jurisdiction to hear the dispute. EACH PARTY WAIVES ANY RIGHT TO A JURY TRIAL, WHERE PERMITTED BY LAW.

 

8.5. Severability. All headings and subdivisions of this Agreement are for reference only and shall not affect its interpretation. In the event that any provision of this Agreement should be held unenforceable by a court of competent jurisdiction, such court is hereby authorized to amend such provision so as to be enforceable to the fullest extent permitted by law, and all remaining provisions shall continue in full force without being impaired or invalidated in any way.

 

8.6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts, excluding choice of law rules thereof.

 

8.7. Communications With Governmental Entities. Nothing in this Agreement, including but not limited to Sections 1 and 2, prohibits Signatory from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Signatory does not need the prior authorization of the Company to make any such reports or disclosures and Signatory is not required to notify the company that he has made such reports or disclosures.

 

Further, notwithstanding anything in this Agreement to the contrary, Signatory shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any trade secret of the Company if the disclosure is (a) made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the

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employee files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

 

THE SIGNATORY HAS HAD SUFFICIENT TIME TO READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS. The parties enter into this Agreement voluntarily and will not claim it was entered into under coercion or duress, or without full knowledge of its terms.

 

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed and delivered this Agreement as an instrument under seal as of the date first written below.

 

ACKNOWLEDGED AND AGREED AS OF THE EFFECTIVE DATE:

 

Signatory

Sign:

Date:

ACCEPTED:

Tripadvisor LLC

 

Sign:

Title: ________________________

Date:

 

 

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EXHIBIT C

GENERAL RELEASE AND WAIVER OF CLAIMS

 

For good and valuable consideration, as specifically set out in the Consulting Services Agreement, Stephen Kaufer (“Executive”) for himself, and for his heirs, executors, estates, agents, representatives, attorneys, insurers, successors and assigns (collectively, the “Releasors”), hereby voluntarily releases and forever discharges Tripadvisor LLC, a Delaware limited liability company (“Company”), its parent company, Tripadvisor, Inc., a Delaware corporation, and each of their subsidiaries (direct and indirect), affiliates, related companies, divisions, and predecessor and successor companies, and each of its and their present, former and future shareholders, officers, directors, managers, employees, agents, representatives, attorneys, insurers and assigns (collectively, the “Releasees”) from all actions, causes of action, suits, debts, sums of money, accounts, covenants, contracts, agreements, promises, damages, judgments, demands and claims which you ever had, or now have, for, upon or by reason of any matter or cause whatsoever, whether known or unknown, in law or equity, whether statutory or common law, whether federal, state, local or otherwise, including but not limited to claims arising out of or in any way related to any claims arising or relating to Executive’s employment by the Company, the termination thereof, any contract of employment, or any related matters including but not limited to claims, if any, arising under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act, the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Americans with Disabilities Act of 1990, as amended, the Family and Medical Leave Act of 1993, the Immigration Reform and Control Act of 1986, the Employee Retirement Income Security Act (“ERISA”) of 1974, Massachusetts General Laws Chapter 151B, the state anti-discrimination laws, the Massachusetts Equal Rights Act (M.G.L. Chapter 93, Section 102), the Massachusetts Civil Rights Act (M.G.L. Chapter 12, Sections 11H & 11I), the Massachusetts Payment of Wages law (M.G.L. Chapter 149, Sections 148 and 150), any whistleblower claims under state or federal law and any other claims under federal or state common law or any other applicable federal, state or local law, statute, regulation or ordinance.

 

Notwithstanding the foregoing, nothing in the General Release and Waiver of Claims (“Release”) shall preclude Executive from filing a charge of discrimination with the United States Equal Employment Opportunity Commission (“EEOC”) or equivalent state agency or participating in or cooperating with an investigation by the EEOC or equivalent state agency, but Executive agrees that he will not be entitled to any monetary or other relief from the EEOC, state agency or from any Court as a result of litigation brought on the basis of or in connection with such charge, investigation or proceeding.

 

Further, nothing in this Release prohibits Executive from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Executive does not need the prior authorization of the Company to make any such reports or disclosures and Executive is not required to notify the Company that he has made such reports or disclosures.

 

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By signing below, Executive represents that:

 

(a) The Company has advised Executive to consult with an attorney of his choosing concerning the rights waived in this Release;

(b) Executive has carefully read this document and that Executive is fully aware of the Release’s contents and legal effect, including the waiver of any legal claims under the Age Discrimination in Employment Act;

(c) Executive is voluntarily signing the Release;

(d) Executive understands that he is receiving benefits that Executive would not otherwise be entitled to if he did not sign the Release;

(e) Executive acknowledges that the Company has provided him information in accordance with the Older Workers Benefit Protection Act and that he has carefully considered that information; and

 

If the terms of this Release are acceptable, please sign and return it either electronically via DocuSign or hard copy to the Chief People Officer, Tripadvisor LLC, 400 1st Avenue, Needham, MA 02494 after the Executive’s Termination Date, but no later than July 6, 2022. Executive may not sign this Release prior to his Termination Date.

 

 

Signed this 3rd day of May, 2022.

Stephen Kaufer
 

 

 

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Exhibit 99.1

 

Tripadvisor Reports First Quarter 2022 Financial Results

 

NEEDHAM, MA, May 4, 2022 — Tripadvisor, Inc. (Nasdaq: TRIP) today announced financial results for the first quarter ended March 31, 2022.

 

“We are very pleased with our Q1 2022 results. After an Omicron-impacted January, our business picked up strongly in February and March, resulting in exceeding our own expectations for the quarter,” said Chief Executive Officer Steve Kaufer. “We are optimistic about the remainder of 2022 and the increasing demand for travel, and are excited to help provide great advice and guidance to our community of travelers as they venture out again into the world.”

 

Chief Financial Officer Ernst Teunissen continued, “We executed a strong first quarter. At our last update, we provided an outlook that incorporated some uncertainty related to Omicron. However, as the quarter progressed, we saw positive signs across our HM&P and E&D segments, and in particular in our E&D segment, which exceeded 2019 levels. We are pleased not only with the positive travel trends, but that travelers are finding value in our offerings. We see great opportunity in these categories in the future, and believe that our investments to capture more market share are delivering strong top line growth.”

First Quarter 2022 Summary

		Three months ended March 31,
(In millions, except percentages and per share amounts)		2022				2021				% Change
Total Revenue		$	262			$	123				113	%
Hotels, Media & Platform		$	160			$	88				82	%
Experiences & Dining		$	92			$	28				229	%
Other		$	10			$	7				43	%
GAAP Net Income (Loss)		$	(34	)		$	(80	)			(58	)%
Total Adjusted EBITDA (1)		$	27			$	(26	)		n.m.
Hotels, Media & Platform		$	46			$	(3	)		n.m.
Experiences & Dining		$	(22	)		$	(24	)			(8	)%
Other		$	3			$	1				200	%
Non-GAAP Net Income (Loss) (1)		$	(13	)		$	(53	)			(75	)%
Diluted Earnings (Loss) per Share:
GAAP		$	(0.24	)		$	(0.59	)			(59	)%
Non-GAAP (1)		$	(0.09	)		$	(0.39	)			(77	)%
Cash flow provided by (used in) operating activities		$	86			$	(19	)		n.m.
Free cash flow (1)		$	72			$	(29	)		n.m.

n.m. = not meaningful

 

 

 

1

 

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Monthly unique users – During the first quarter of 2022, average monthly unique users on Tripadvisor-branded websites, a leading indicator of consumer travel demand, increased 27% year-over-year and was approximately 71% of the comparable period in 2019 (pre-COVID-19 timeframe), as compared to approximately 55% of the comparable period in 2019 in Q1 2021.

 

Revenue – Q1 2022 total revenue of $262 million increased 113% year-over-year and was 70% of the comparable period in 2019 (pre-COVID-19 timeframe), as compared to 33% of the comparable period in 2019 in Q1 2021. Improvement during the first quarter of 2022 was primarily driven by the consumer travel demand’s improving recovery from the COVID-19 pandemic, as vaccinations progress and related government restrictions continue to be lifted.

 

Cost performance – Total operating expenses were $282 million for the first quarter, an increase of 36% year-over-year, primarily driven by the following:

 

Profitability – Q1 2022 consolidated net loss of $34 million improved from a net loss of $80 million in Q1 2021. Q1 2022 Adjusted EBITDA of $27 million improved from an Adjusted EBITDA loss of $26 million in Q1 2021.

 

Cash & Liquidity – As of March 31, 2022, the Company had $781 million of cash and cash equivalents, an increase of $58 million from December 31, 2021.

First Quarter 2022 Revenue by Source

		Three months ended March 31,
(In millions, except percentages )		2022				2021				% Change
Hotels, Media & Platform
Tripadvisor-branded hotels		$	136			$	74				84	%
Tripadvisor-branded display and platform			24				14				71	%
Experiences & Dining			92				28				229	%
Other			10				7				43	%
Total Revenue		$	262			$	123				113	%

 

2

 

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Conference Call

Tripadvisor posted prepared remarks and supplemental financial information on the Investor Relations section of Tripadvisor’s website at http://ir.tripadvisor.com. Tripadvisor will host a conference call tomorrow, May 5, 2022, at 8:30 a.m., Eastern Time, to discuss the Company’s first quarter 2022 operating results, as well as forward-looking information about Tripadvisor’s business. Domestic callers may access the earnings conference call by dialing (877) 224-9081 (International callers, dial (224) 357-2223). Investors and other interested parties may also go to the Investor Relations section of Tripadvisor’s website at http://ir.tripadvisor.com for a live webcast of the conference call. Please access the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the conference call will be available on Tripadvisor’s website noted above or by phone (dial (855) 859-2056 and enter the passcode 1211908) until May 12, 2022 and the webcast will be accessible at http://ir.tripadvisor.com/events-and-presentations for at least twelve months following the conference call.

 

About Tripadvisor

Tripadvisor, the world's largest travel guidance platform*, helps hundreds of millions of people each month** become better travelers, from planning to booking to taking a trip. Travelers across the globe use the Tripadvisor site and app to discover where to stay, what to do and where to eat based on guidance from those who have been there before. With more than 1 billion reviews and opinions of nearly 8 million businesses, travelers turn to Tripadvisor to find deals on accommodations, book experiences, reserve tables at delicious restaurants and discover great places nearby. As a travel guidance company available in 43 markets and 22 languages, Tripadvisor makes planning easy no matter the trip type.

The subsidiaries of Tripadvisor, Inc. (Nasdaq:TRIP), own and operate a portfolio of travel media brands and businesses, operating under various websites and apps, including the following websites: www.bokun.io, www.cruisecritic.com, www.flipkey.com, www.thefork.com, www.helloreco.com, www.holidaylettings.co.uk, www.housetrip.com, www.jetsetter.com, www.niumba.com,www.seatguru.com, www.singleplatform.com, www.vacationhomerentals.com, and www.viator.com.

* Source: SimilarWeb, unique users de-duplicated monthly, March 2022

** Source: Tripadvisor internal log files

 

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Tripadvisor, Inc.

SELECTED FINANCIAL INFORMATION

Unaudited Condensed Consolidated Statements of Operations

(in millions, except per share amounts)

		Three Months Ended
		March 31, 2022				March 31, 2021
Revenue		$	262			$	123
Costs and expenses:
Cost of revenue			22				12
Selling and marketing (1)			141				73
Technology and content (1)			54				55
General and administrative (1)			40				38
Depreciation and amortization			25				29
Total costs and expenses			282				207
Operating income (loss)			(20	)			(84	)
Other income (expense):
Interest expense			(12	)			(11	)
Interest income and other, net			(1	)			(1	)
Total other income (expense), net			(13	)			(12	)
Income (loss) before income taxes			(33	)			(96	)
(Provision) benefit for income taxes			(1	)			16
Net income (loss)		$	(34	)		$	(80	)
Earnings (loss) per share attributable to common stockholders:
Basic		$	(0.24	)		$	(0.59	)
Diluted		$	(0.24	)		$	(0.59	)
Weighted average common shares outstanding:
Basic			139				136
Diluted			139				136
(1) Includes stock-based compensation expense as follows:
Selling and marketing		$	3			$	4
Technology and content		$	9			$	12
General and administrative		$	10			$	13

 

4

 

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Tripadvisor, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in millions, except number of shares and per share amounts)

		March 31,				December 31,
		2022				2021
ASSETS
Current assets:
Cash and cash equivalents		$	781			$	723
Accounts receivable and contract assets, net of allowance for credit losses of $29 and $28, respectively			180				142
Income taxes receivable			49				49
Prepaid expenses and other current assets			33				26
Total current assets			1,043				940
Property and equipment, net of accumulated depreciation of $481 and $460, respectively			209				215
Operating lease right-of-use assets			39				42
Intangible assets, net of accumulated amortization of $204 and $202, respectively			62				65
Goodwill			839				843
Non-marketable investments			36				36
Deferred income taxes, net			54				54
Other long-term assets, net of allowance for credit losses of $10 and $10, respectively			90				94
TOTAL ASSETS		$	2,372			$	2,289
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	12			$	27
Deferred merchant payables			197				113
Deferred revenue			59				36
Accrued expenses and other current liabilities			199				181
Total current liabilities			467				357
Long-term debt			834				833
Finance lease obligation, net of current portion			63				65
Operating lease liabilities, net of current portion			25				29
Deferred income taxes, net			1				1
Other long-term liabilities			215				215
Total Liabilities			1,605				1,500
Stockholders’ equity:
Preferred stock, $0.001 par value			—				—
Authorized shares: 100,000,000
Shares issued and outstanding: 0 and 0
Common stock, $0.001 par value			—				—
Authorized shares: 1,600,000,000
Shares issued: 145,636,700 and 144,656,649, respectively
Shares outstanding: 126,792,086 and 125,812,035, respectively
Class B common stock, $0.001 par value			—				—
Authorized shares: 400,000,000
Shares issued and outstanding: 12,799,999 and 12,799,999, respectively
Additional paid-in capital			1,342				1,326
Retained earnings			207				241
Accumulated other comprehensive income (loss)			(60	)			(56	)
Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively			(722	)			(722	)
Total Stockholders’ Equity			767				789
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,372			$	2,289

 

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Tripadvisor, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in millions)

		Three Months Ended
		March 31, 2022				March 31, 2021
Operating activities:
Net income (loss)		$	(34	)		$	(80	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			25				29
Stock-based compensation expense			22				29
Deferred income tax expense (benefit)			—				(22	)
Provision for expected credit losses			1				2
Other, net			3				4
Changes in operating assets and liabilities, net			69				19
Net cash provided by (used in) operating activities			86				(19	)
Investing activities:
Capital expenditures, including capitalized website development			(14	)			(10	)
Net cash provided by (used in) investing activities			(14	)			(10	)
Financing activities:
Proceeds from issuance of 2026 Senior Notes, net of financing costs			—				340
Purchase of capped calls in connection with 2026 Senior Notes			—				(35	)
Proceeds from exercise of stock options			—				7
Payment of withholding taxes on net share settlements of equity awards			(8	)			(23	)
Payments of finance lease obligation and other financing activities, net			(2	)			(2	)
Net cash provided by (used in) financing activities			(10	)			287
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(4	)			(2	)
Net increase (decrease) in cash, cash equivalents and restricted cash			58				256
Cash, cash equivalents and restricted cash at beginning of period			723				418
Cash, cash equivalents and restricted cash at end of period		$	781			$	674

 

6

 

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Tripadvisor, Inc.

Unaudited Segment Information

(in millions, except percentages)

		Three Months Ended								% Change
		March 31, 2022				March 31, 2021				2022 vs. 2021
Revenue:
Hotels, Media & Platform		$	160			$	88				82	%
Experiences & Dining			92				28				229	%
Other			10				7				43	%
Total revenue		$	262			$	123				113	%
Adjusted EBITDA:
Hotels, Media & Platform		$	46			$	(3	)		n.m.
Experiences & Dining			(22	)			(24	)			(8	)%
Other			3				1				200	%
Total Adjusted EBITDA (1)		$	27			$	(26	)		n.m.
Adjusted EBITDA Margin:
Hotels, Media & Platform			29	%			(3	)%
Experiences & Dining			(24	)%			(86	)%
Other			30	%			14	%
Total Adjusted EBITDA Margin (1)			10	%			(21	)%
Net Income (Loss) (2)		$	(34	)		$	(80	)
Net Income (Loss) Margin			(13	)%			(65	)%

n.m. = not meaningful

 

 

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Non-GAAP Financial Measures

To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP in our press release and related conference call, we also report certain non-GAAP financial measures. A “non-GAAP financial measure” refers to a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in such company’s financial statements. We may use the following non-GAAP measures: Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, free cash flow, non-GAAP revenue before effects of foreign exchange, and Adjusted EBITDA before effects of foreign exchange, as well as other measures.

 

The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP and should not be considered measures of Tripadvisor’s liquidity. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of certain items, as defined in our non-GAAP definitions below, which are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, even where similarly titled, limiting their usefulness for comparison purposes and therefore should not be used to compare Tripadvisor’s performance to that of other companies. We endeavor to compensate for the limitation of the non-GAAP financial measures presented by also providing the most directly comparable GAAP measures and descriptions of the reconciling items and adjustments to derive the non-GAAP financial measures.

 

We believe these non-GAAP financial measures provide investors and analysts with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key measures used by management to operate and analyze our business over different periods of time.

 

We define our non-GAAP financial measures as below:

 

Tripadvisor defines “Adjusted EBITDA” as Net Income (Loss) plus: (1) provision (benefit) for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (4) stock-based compensation and other stock-settled obligations; (5) goodwill, long-lived assets and intangible asset impairments; (6) legal reserves and settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income. These items are excluded from our Adjusted EBITDA measure because these items are noncash in nature, or because the amount is not driven by core operating results and renders comparisons with prior periods less meaningful. The Company believes that excluding these amounts better enables management and investors to compare financial results between periods as these costs may vary independent of business performance.

 

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

 

Adjusted EBITDA and Adjusted EBITDA margin are key operating performance measures used by our management and board of directors to understand and evaluate the financial performance of our business as a whole and our individual business segments, and on which internal budgets and forecasts are based and approved. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons and better enables management and investors to compare financial results between periods as these costs may vary independent of core business performance. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors and allows for another useful comparison of our performance with our historical results from prior periods.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results reported in accordance with GAAP. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.

Some of these limitations are:

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Tripadvisor defines “non-GAAP net income (loss)” as GAAP net income (loss) excluding, net of their related tax effects (which excludes the impact of significant one-time changes resulting from tax legislation or significant legislation that impacts tax, such as the CARES Act): (1) stock-based compensation expense and other stock-settled obligations; (2) amortization of intangible assets; (3) goodwill, intangible asset, and other long-lived asset impairments; (4) legal reserves and settlements; (5) restructuring and other related reorganization costs; and (6) certain gains, losses, and other non-recurring income or expenses that we do not believe are indicative of our ongoing operating results. We believe non-GAAP net income (loss) is an operating performance measure which provides investors and analysts with useful supplemental information about the financial performance of our business, as it incorporates our unaudited condensed consolidated statement of operations, taking into account depreciation, which management believes is an ongoing cost of doing business, but excluding the impact of certain expenses, infrequently occurring items and items not directly tied to the ongoing core operations of our businesses, and also enables comparison of financial results between periods where certain items may vary independent of business performance.

 

Tripadvisor defines “non-GAAP net income (loss) per diluted share”, or non-GAAP diluted EPS, as non-GAAP net income (loss) divided by GAAP diluted shares. We believe non-GAAP diluted EPS is useful to investors because it represents, on a per share basis, our unaudited condensed consolidated statement of operations, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other items which are not allocated to the operating businesses such as interest expense, interest income, income taxes and foreign exchange gains or losses, but excluding the effects of certain expenses not directly tied to the ongoing core operations of our businesses. Tripadvisor calculates non-GAAP diluted EPS using weighted average diluted shares determined under GAAP.

 

Non-GAAP net income (loss) and non-GAAP diluted EPS have some of the same limitations as Adjusted EBITDA. In addition, non-GAAP net income (loss) does not include all items that affect our GAAP net income (loss) and GAAP diluted EPS for the period. Therefore, we think it is important to evaluate these measures along with our unaudited condensed consolidated statements of operations.

 

Tripadvisor defines “free cash flow” as net cash provided by operating activities less capital expenditures, which are purchases of property and equipment, including capitalization of website development costs. We believe this financial measure can provide useful supplemental information to help investors better understand underlying trends in our business, as it represents the operating cash flow that our operating businesses generate, less capital expenditures but before taking into account other cash movements that are not directly tied to the ongoing core operations of our businesses, such as financing activities, foreign exchange or certain investing activities. Free cash flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent the residual cash flow for discretionary expenditures. Therefore, it is important to evaluate free cash flow along with the unaudited condensed consolidated statements of cash flows.

 

Tripadvisor calculates our foreign exchange effect of revenue, or “non-GAAP revenue before effects of foreign exchange” on a constant currency basis by excluding the estimated effects of foreign currency exchange on revenue by translating actual revenue for the current year three months ended using the prior period foreign currency exchange rates. We believe this is a useful measure that facilitates management's internal comparison to our historical performance because it excludes the effects of foreign currency volatility that is not indicative of our ongoing core operating results.

 

Tripadvisor calculates our foreign exchange effect of Adjusted EBITDA, or “Adjusted EBITDA before effects of foreign exchange,” on a constant currency basis, by excluding the estimated effects of foreign currency exchange by translating all amounts included in Adjusted EBITDA for the current year three months ended using the prior period foreign currency exchange rates. We believe this is a

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useful measure that facilitates management's internal comparison to our historical performance because it excludes the effects of foreign currency volatility that is not indicative of our ongoing core operating results.

 

Pursuant to the requirements of Regulation G, we present reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure below.

 

 

 

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Tripadvisor, Inc.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in millions, except per share amounts and percentages)

(Unaudited)

		Three Months Ended
		March 31, 2022				December 31, 2021				March 31, 2021				March 31, 2020
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (Non-GAAP):
GAAP Net Income (Loss)		$	(34	)		$	(29	)		$	(80	)		$	(16	)
Add: Provision (benefit) for income taxes			1				(18	)			(16	)			(11	)
Add: Other (income) expense, net			13				19				12				—
Add: Depreciation and amortization			25				26				29				32
Add: Restructuring and other related reorganization costs			—				—				—				9
Add: Stock-based compensation expense			22				31				29				26
Adjusted EBITDA (Non-GAAP)		$	27			$	29			$	(26	)		$	40
Revenue (GAAP)		$	262							$	123
Net Income (loss) margin (GAAP)			(13	)%							(65	)%
Adjusted EBITDA margin (Non-GAAP) (1)			10	%							(21	)%
Reconciliation from GAAP Net Income (Loss) and GAAP Net Income (Loss) per diluted share to Non-GAAP net income (loss) and Non-GAAP net income (loss) per diluted share:
GAAP Net Income (Loss)		$	(34	)						$	(80	)
Add: Stock-based compensation expense			22								29
Add: Amortization of intangible assets			3								6
Add: (Gain)/Loss on investment			(1	)							(1	)
Subtract: Income tax effect of Non-GAAP adjustments (2)			3								7
Non-GAAP net income (loss)		$	(13	)						$	(53	)
GAAP diluted shares			139								136
GAAP Net Income (loss) per diluted share		$	(0.24	)						$	(0.59	)
Non-GAAP net income (loss) per diluted share (3)		$	(0.09	)						$	(0.39	)
Reconciliation of GAAP cash flows from operating activities to Free Cash Flow (Non-GAAP):
Net cash provided by (used in) operating activities (GAAP)		$	86							$	(19	)
Subtract: Capital expenditures			14								10
Free cash flow (Non-GAAP)		$	72							$	(29	)

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Safe Harbor Statement

Statements in this press release regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including, without limitation, statements relating to Tripadvisor’s future financial performance on both a GAAP and non-GAAP basis, and Tripadvisor’s prospects as a comprehensive destination for hotels, experiences, and restaurants, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements by our executive officers with respect to growth objectives, strategic investments, and statements regarding management’s plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors detailed in Tripadvisor’s filings with the SEC. As a result of such risks, uncertainties and factors, Tripadvisor’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. Tripadvisor is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts

Investors

ir@tripadvisor.com

Media

uspr@tripadvisor.com

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	Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2022

 

Letter to

Shareholders

 

 

 

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	Q1 2022	Q1 2021	Q4 2021
Revenue	$262M	$123M	$241M
Net Income / (Loss)	$(34)M	$(80)M	$(29)M
Adjusted EBITDA (1)	$27M	$(26)M	$29M

 

 

 

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Letter to Shareholders

 

We are very pleased with our performance in Q1 2022, which exceeded our expectations, and start the year well-positioned to capture demand as leisure travel continues to recover and as we continue to strengthen our offerings across segments. Relative to our outlook in mid-February, we exceeded our expectations for Q1 2022, driven by strong performance in our Experiences and Dining segment supported by steady recovery in our hotels and display and platform revenue streams.

 

Our focus on unlocking value from our experiences and dining businesses is delivering results. Our performance in this segment reflects a strong recovery, but also an opportunity to gain share in under-penetrated categories in the overall travel industry. We are excited about the different opportunities for growth and investment across the markets in which we operate in these businesses.

 

We continue to make progress across all our product offerings. In our hotel auction, volumes reflect returning demand for travel, and auction dynamics demonstrate our travel partner ecosystem capturing demand. In our other core Tripadvisor offerings, which include our B2B hotel offerings, display and platform, rentals, flights, and cruise categories, our Q1 2022 results and the trends throughout the quarter reflect a strong start to the year.

 

First Quarter 2022 Consolidated Financial Results

 

First quarter revenue improved year over year to $262 million, growing 113%, reaching 70% of 2019 levels, despite a drag from Omicron in January. We exited the quarter with the month of March at 81% of 2019 levels, and expect to see further improvement to just over 90% in the month of April. Our revenue recovery in our combined HM&P and E&D segments reached 75% of 2019 levels for the quarter, and exited the quarter at 88% of 2019 levels in the month of March, also showing further improvements in April.

 

 

 

Trends over the last year have shown clear momentum, with the exception of impacts from Omicron in Q4 2021 and Q1 2022. Geographically for most of the last 12-months, we’ve seen a faster return in the U.S. across key operating metrics such as unique users and hotel shoppers, as well as strong growth in hotel auction and experiences revenue. Over the last few months, we have been pleased to see key European markets return to levels in traffic and shopper metrics not seen since pre-Omicron and pre-Delta last fall.

 

Total company performance was propelled by Experiences & Dining, which exceeded 2019 levels in Q1 2022, and grew 229% year over year, reaching 115% of 2019 levels. HM&P revenue grew 82% year over year to $160 million, reaching 63% of 2019 levels. Finally, Other revenue increased to $10 million in Q1 2022, growing 43% year over year.

 

Intra-quarter, consolidated revenue as a percent of 2019’s comparable periods ranged widely. January revenue as a percent of 2019 was impacted by the Omicron variant, and was well below the quarter’s average. We saw a pick up in momentum in February and March, which well exceeded the quarterly average. For the month of March, consolidated revenue as a percent of 2019 reached its peak level so far in the recovery, at 81% of 2019 levels.

 

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Monthly unique users across our Tripadvisor brands in Q1 2022 were approximately 71% of 2019 levels for the quarter. Similar to revenue, we saw a slow start in January, and made gains in February and March.

 

Net loss for Q1 2022 was $34 million, compared to a net loss of $80 million in the same period a year ago.

 

 

 

Consolidated adjusted EBITDA in Q1 2022 was $27 million, or 10% of revenue as compared to an adjusted EBITDA loss of $26 million in Q1 2021.

 

 

 

The improvement in net loss and consolidated adjusted EBITDA was driven primarily by an increase in revenue, which more than offset the increase in marketing expense and higher fixed and discretionary costs in Q1 2022 when compared to Q1 2021.

 

We ended the quarter with $781 million in cash and cash equivalents.

 

 

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Hotel, Media & Platform (HM&P) Segment

Included in this segment is revenue from our Tripadvisor branded hotels as well as our display and platform revenue.

 

In Q1 2022, HM&P segment revenue was $160 million, reflecting year over year growth of 82%, reaching 63% of 2019 levels. As travel returned, we continued to see improvements in this segment, particularly after the effect of Omicron waned post-January.

 

 

Within HM&P, the month of January saw a significant impact from Omicron. As a percent of 2019, January was well below the quarterly average. However, for the month of March, we saw a strong uptick and our HM&P revenue reached 76% of 2019 levels, which we had not seen since pre-Omicron, and which we expect will reflect further strengthening in the month of April to above 80% of 2019 levels, significantly above our Q1 2022 level.

 

 

 

Adjusted EBITDA for the HM&P segment in Q1 2022 was $46 million, or 29% of segment revenue. Compared to the same period a year ago, HM&P adjusted EBITDA benefited from significant improvements in revenue, which offset the increases in traffic spend year over year.

 

 

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Tripadvisor Branded Hotels

In our branded hotels revenue stream, which includes our hotel auction and B2B subscription offerings grew 84% year over year, reaching $136 million, or 63% of 2019 levels. Within branded hotels revenue, we saw a sequential step down in Q1 hotel auction revenue as a percent of 2019 levels, driven by the January impact of Omicron. However, hotel auction revenue exited the quarter for the month of March at 76% of 2019 levels, more in-line with levels we saw last summer and early fall, before the Delta and Omicron variants surfaced. In particular, hotel auction revenue in the U.S. and our largest European markets reflected steep improvements throughout the quarter. The U.S. has outpaced Europe in its recovery, but we are pleased with what we are seeing in these key European markets.

 

In our hotel auction, the return of travel continues to provide opportunities to lean into marketing spend, and capture demand while still driving healthy returns. We continue to be able to leverage high CPCs by driving paid traffic growth at good returns. CPC trends have remained robust over the last few quarters, driven by continued strength in the U.S. We also saw improving trends in Europe and Rest of World during the quarter.

 

In our hotel B2B revenue stream, we saw a sequential pick-up in revenue as a percent of 2019 levels. As we noted in our last update, our hotel B2B offering lagged the overall business throughout 2021. We started the year well positioned, and we continue to ramp up resources in sales and support as partner spend in our B2B offerings returns.

 

Display & Platform

Turning to Display & Platform, we are seeing year over year improvements driven by the continued recovery. In Q1 2022 revenue was $24 million, reflecting year over year growth of 71%, reaching 63% of 2019 levels. We continue to see areas of opportunity with both endemic and non-endemic advertising partners leveraging Tripadvisor’s trusted brand and global site reach.

 

 

Experiences & Dining (E&D) Segment

Included in this segment is revenue from our Experiences offering, which includes revenue generated from the booking of tours, attractions and activities, as well as our Dining offering, which includes revenue generated by marketing to restaurants and diners, primarily restaurant seating fees via our online reservation system, and to a lesser extent, subscription-based marketing and analytical tools, and sponsored advertising.

 

In Q1 2022 revenue in our E&D segment was $92 million, reflecting year over year growth of 229%, reaching 115% of 2019 levels. Since the second half of 2021, we have seen marked improvements and, for the first time since the beginning of the pandemic, E&D revenue exceeded 2019 levels this quarter. This segment has been our strongest performer in the recovery to 2019 levels.

 

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Within the quarter, January revenue as a percent of 2019 was well above the rest of the business, and we were pleased to see continued improvement in February and March, with March reaching 120% of 2019 levels. In April we saw momentum continue in E&D, and expect revenue above 130% of 2019 levels for the month. Experiences continues to outpace Dining in its revenue performance relative to 2019 levels.

 

E&D Adjusted EBITDA loss was $22 million in Q1 2022, in-line with levels in Q1 2019. Q1 2022 segment adjusted EBITDA reflects the investment we are making in marketing across E&D, notably Viator and the dynamic between traffic spend, which drives bookings and revenue.

 

 

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Year over year revenue has increased in E&D, and as a percent of revenue, our fixed and discretionary costs have come down significantly. Online traffic costs as a percent of revenue have increased as we sought to capture demand driven by returning travelers and diners. We believe that we are making the right tradeoffs between revenue growth and margin expansion as we seek to build our competitive advantages and scale.

 

In the E&D segment, we expect continued investment in driving top-line growth in 2022, and expect segment adjusted EBITDA margin to return close to, but not quite back at, 2019 levels in 2022.

 

We also continue to look at opportunities to unlock value in Viator and TheFork, as we discussed in the previous two quarters.

 

Experiences

In Q1 2022, our Experiences offering reached $56 million in revenue, which reflects significant year over year improvement. Revenue was 127% of 2019 levels for the quarter, a significant improvement from 27% in Q1 2021. Relative to other categories within the Tripadvisor portfolio, Experiences has recovered the fastest. We are also very pleased with the performance we are seeing across geographies.

 

 

 

Looking at our operating metrics, in Q1 2022 the number of bookings (pre-cancellations) was 130% of 2019 booking levels for Experiences. Experiences gross bookings value, or GBV, as a percent of 2019, has improved over the last four quarters. GBV is reported at the time of booking and is gross of cancellations, whereas revenue is recorded at time of travel, and is net of cancellations. During the pandemic, cancellation rates increased across

 

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Experiences, but as 2021 progressed, had improved significantly. The conversion from bookings to revenue in any given period is also influenced by timing between the booking and the time of travel.

 

 

 

Total Experiences GBV in 2019, pre-pandemic, was approximately $1.5 billion, and full year 2021 GBV had recovered to 76% of 2019 levels, driven by a strong back half of 2021—we exited 2021 in Q4 at 113% of 2019 levels. GBV made directly through the Viator point of sale grew the fastest, moving from approximately 50% of the Experiences GBV in 2019 to 67% of total Experiences GBV in 2021.

 

In Q1 2022 the total Experiences GBV was over $450 million, or 144% of 2019 levels. A year ago, GBV was 34% of 2019 levels, and since then, each successive quarter has shown improvement to Q1 2022 levels. In April, we saw a continuation of positive GBV trends.

 

While 2021 was buoyed by U.S. domestic experiences bookings, Europe as a destination appears to be recovering robustly, with North America and Europe as a destination roughly at par in terms of booking levels in April. Particularly encouraging is that we had higher levels of GBV from U.S. travelers booking an experience in Europe in April 2022 than in April 2019.

 

Similarly encouraging is our continued success in improving repeat rates, with the 2021 cohort of newly acquired bookers to date on the Viator point-of-sale showing better retention and repeat than those of both the 2018 and 2019 cohorts over a similar period after acquisition.

 

Viator

Experiences revenue consists of the transactions from the Viator point of sale, the Tripadvisor point of sale, and other third party sales. As the merchant of record for Tripadvisor experiences, on a standalone basis, Viator would recognize the revenue that is generated from the Tripadvisor point of sale, and would be charged an affiliate marketing fee by Tripadvisor.

 

Sales and marketing is the largest component of Viator costs. These costs grew from 66% in 2019 to 73% of total costs (which do not consider stock-based compensation, depreciation and amortization costs), in 2021 as we focused on the recovery and investing in growth. Cost of revenue, which was 13% of the total costs in 2019, decreased to 9% of total costs by 2021. Tech and content and G&A combined went from approximately 22% of the Viator cost base in 2019 to 18% by 2021.

 

 

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Were Viator presented on a standalone basis, its P&L would have reflected adjusted EBITDA losses historically. Through 2020 and 2021, as we hit the pandemic trough and as recovery began, these losses as a percent of revenue increased.

 

Our pick-up in absolute investment dollars has been primarily in sales and marketing. We continue to invest in marketing channels and initiatives such as customer support improvements, payments flexibility, app capabilities, and supplier marketing programs—potential drivers of long-term market position, while delaying near-term margin expansion. We continue to see a large and growing opportunity in the experiences category within the online travel industry.

 

Dining

In Q1 2022, revenue from Dining grew 125% year over year to $36 million and reached just under 2019 levels. The performance in this offering has also outpaced the consolidated recovery, despite periodic impacts from Covid-related restrictions in Europe, where the majority of this revenue is derived. In particular, the progress made throughout 2021 was impacted in Q4 when Omicron-related restrictions were once again rolled out. However, we expect to see continuing improvement in Dining. For example, for the month of April, Dining revenue is expected to be approximately 110% of 2019 levels.

 

 

 

Dining revenue is derived from our branded offering, TheFork, as well as Tripadvisor’s own B2B and B2C restaurant offerings. TheFork is the largest contributor to the Dining category, though it does not act as the primary fulfiller to all of the Tripadvisor-driven restaurants offerings, unlike the Viator and Tripadvisor Experiences relationship.

 

TheFork

Revenue at TheFork is primarily earned through per-seated diner charges paid by restaurants. In 2019, we had over 20 million bookings and almost 60 million diners. Since the start of the pandemic, the trend has been positive, though more sensitive to periods of heightened restrictions. On a full year basis, in 2021, these metrics had recovered to approximately 70% of 2019 levels, though much improved in 2H reaching approximately 90% of 2019 levels. In Q1 2022, both the number of bookings and seated diners were over 100% of levels for the same period in 2019.

 

Pre-pandemic in 2019, sales and marketing was the largest component of total costs (which do not consider stock-based compensation, depreciation and amortization costs) at TheFork. These costs decreased from 64% of total costs in 2019 to 59% of total costs in 2021. Tech and content and G&A remained relatively stable at approximately 29%-30% of the cost base. The remainder of the costs were in cost of sales.

 

 

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Were TheFork presented on a standalone basis, its P&L would reflect adjusted EBITDA losses historically, as the Tripadvisor restaurants offering is accretive overall to the E&D segment. Through 2020 and 2021, losses increased significantly as a percent of revenue due to the loss of revenue throughout the pandemic.

 

We expect in 2022, losses will continue as revenue continues its recovery, and importantly, as we invest in the many opportunities we see in this category and geographically. TheFork continues to build relationships with restaurants, and bring diners to its platform, particularly via TheFork phone app. To support these efforts for both restaurants and diners, the team will continue to rebuild its sales teams and roll out capabilities provided by offers such as payments and gift cards this year. We see potential to maintain strong top line growth as we continue to take share as a leader in European markets.

 

 

Other Businesses

Other revenue is derived from adjacent offerings, including rentals, flights and cars, and cruise.

 

Revenue for Q1 2022 in Other was $10 million, reflecting year over year growth of 43%. Other revenue reached 24% of 2019 levels in the quarter. The performance is a result of a few factors, including the significant impact of the pandemic in some of these offerings, such as cruises, and the de-emphasis in marketing across others, such as our rentals and flights offerings. Q1 2019 also included approximately $15 million in revenue from our China assets and SmarterTravel business, both of which are no longer part of Tripadvisor.

 

 

 

 

 

 

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Adjusted EBITDA was $3 million in Q1 2022. We like the contribution of these highly profitable offerings, which we expect to continue to use to fund our growth investment across E&D and HM&P.

 

 

 

Outlook

(As a reminder, we endeavor to be as accurate as possible with our forward-looking commentary; however, a number of factors outside of our control can limit our visibility into future financial performance and can cause our results to vary materially from our current expectations.)

 

We are very pleased with our Q1 performance, despite Omicron’s impact early in the quarter. We still expect our 2022 revenue performance to track with the overall recovery in the travel market, which appears to be gaining momentum. However, with unknown geopolitical ripple effects and new variant strains, we also do not believe we have quite reached a state of consistent and stable travel trends.

 

Net-net though, we are more confident in the velocity of the return and see that travelers are excited about taking trips again. We’ve increased our annual revenue expectations based on the first quarter’s Experiences and hotel auction performance and we expect continued improvements in leisure travel’s return in the 2H of 2022. We still expect that 2H consolidated revenue will cross-over 2019 levels, though given 1H performance, and drag from our “Other” offerings, we currently do not expect to reach 2019 levels for the full year.

 

Our momentum also translates into unlocking opportunities to accelerate top line growth in categories such as E&D. Based on progress to date, we expect to reinvest part of our revenue outperformance against our internal plan, and are therefore only modestly revising our 2022 forecast for consolidated adjusted EBITDA relative to our outlook in February. From a margin perspective:

 

 

 

For Q2 2022, we expect:

 

 

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Despite some starts and stops over the last two years, the overarching trends in travel are positive and moving in the right direction. We are optimistic about the industry in general, as well as our areas of strategic growth and investment that will drive the business for years to come. We look forward to continuing to update you in the coming months.

 

 

***

 

 

Earnings Webcast

 

Tripadvisor management will host a conference call to discuss results as well as forward-looking information at 8:30 a.m. ET on May 5, 2022. The link to the live webcast, as well as the audio replay, will be made available on Tripadvisor’s Investor Relations website at http://ir.tripadvisor.com.

 

A replay of the conference call will be available on the same website. A telephonic replay will be available for two weeks following the call at (855) 859-2056; passcode 1211908.

 

Investor relations contact

ir@tripadvisor.com

Media contact

uspr@tripadvisor.com

 

 

Forward-Looking Statements

 

These prepared remarks contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The following words, when used, are intended to identify forward-looking statements: “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “target,” “should,” “will,” and similar expressions which do not relate solely to historical matters. We caution investors that any forward-looking statements in these prepared remarks, or which management may make orally or in writing from time to time, are based on management’s beliefs and on assumptions made by, and information currently available to, management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements are more fully described in Part I. Item 1A. "Risk Factors" of our Annual Report on Form 10-K. Moreover, we operate in a rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We caution you that, while forward-looking statements reflect our good faith beliefs when we make them, they are not guarantees of future performance and are impacted by actual events when they occur after we make such statements. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events or otherwise.

 

Investors should also refer to our quarterly reports on Form 10-Q for future periods and current reports on Form 8-K as we file them with the SEC and to other materials we may furnish to the public from time to time through current reports on Form 8-K or otherwise, for a discussion of risks and uncertainties that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements.

 

Use of Non-GAAP Financial Measures

 

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These prepared remarks may include references to non-GAAP measures, such as consolidated adjusted EBITDA (including forecasted consolidated adjusted EBITDA), consolidated adjusted EBITDA margin, free cash flow, and constant currency measurements, such as, non-GAAP revenue before effects of foreign exchange, and adjusted EBITDA before effects of foreign exchange, which are considered non-GAAP financial measures as they are not prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures are not prepared under a comprehensive set of accounting rules and, therefore, should only be reviewed alongside results reported under GAAP.

 

We encourage investors to review our earnings press release as it contains important information about our financial results, including tabular reconciliations to the most directly comparable GAAP financial measure, definitions, limitations and other related information about these non-GAAP financial measures. We have not reconciled consolidated adjusted EBITDA guidance to projected consolidated GAAP net income (loss) because we do not provide guidance on GAAP net income (loss) or the reconciling items between adjusted EBITDA and GAAP net income (loss), as a result of the uncertainty regarding, and the potential variability of, certain of these items. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

 

The earnings press release in addition to other supplemental financial information is available on the Investor Relations section of our website at http://ir.tripadvisor.com/. The earnings press release is also included as Exhibit 99.1 to our Current Report on Form 8-K as furnished to the SEC on May 4, 2022, which is available on the Investor Relations section of our website at http://ir.tripadvisor.com/ and the SEC’s website at www.sec.gov.

 

Key Business Metrics & Definitions

 

We review a number of metrics, including, but not limited to, average monthly unique users, hotel shoppers, gross booking value for experiences, seated diners, dining bookings and other metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. While these numbers are based on what we believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in measuring usage and user engagement across our large user base around the world. For example, a single user may have multiple member accounts or browse the internet on multiple browsers or devices, some users may restrict our ability to accurately identify them across visits, and we are not always able to capture user information on all of our platforms. As such, the calculations of our unique users may not accurately reflect the actual number of people or organizations using our platform. Our metrics are also affected by applications that automatically contact our servers for regular updates with no discernible user action involved, and this activity can cause our system to count the users associated with such applications as active users on the day or days such contact occurs. As such, the calculation of some of the metrics presented may be affected as a result of this activity. We regularly review our process and may adjust how we calculate our internal metrics to improve their accuracy.

 

Variable expense primarily includes costs related to revenue generation, as well as traffic generation costs.

 

Fixed & discretionary expense primarily includes all other expenses such as compensation costs (including outsourced services), broadcast advertising, G&A and other discretionary costs, not including depreciation, amortization, restructuring and other related reorganization costs, stock-based compensation, interest expense, or income taxes.

 

 

	14

 

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Exhibit 99.3

 

Tripadvisor Appoints Matt Goldberg to Chief Executive Officer

Announces Chief Executive Officer appointment, effective July 1, 2022

 

NEEDHAM, MA, May 4, 2022 — Tripadvisor, Inc. (NASDAQ: TRIP) today announced that Matt Goldberg has been named its Chief Executive Officer, succeeding co-founder and long-time CEO, Stephen Kaufer.

“We are excited to announce the appointment of Matt Goldberg to the role of CEO,” said Greg Maffei, Chairman of the Board at Tripadvisor. “Matt has proven leadership and experience in strategy and operations for more than 20 years across a number of leading media, advertising, and consumer-facing companies. We welcome him to the team and look forward to his expertise as he leads Tripadvisor in the next phase of its journey.”

“I could not be more enthusiastic about joining Tripadvisor, a company I have long admired, whose leadership and teams have built an amazing, globally recognized consumer brand with a unique spot in travel and digital media,” said Matt Goldberg, incoming CEO. “I’m incredibly excited to return to the travel sector to innovate within the industry and leverage the platform’s reach and community trust. I see a long runway ahead and many opportunities to create value for our travelers and partners.”

“After a comprehensive search, I believe that the Board has found a strong leader in Matt for our iconic brand.” said Steve Kaufer, CEO and co-founder, Tripadvisor. “Our employees, partners and travelers will be well served by Matt who is a strategist with experience in the travel, digital, media and retail industries. I look forward to supporting his success and watching him guide this business into an exciting future.”

Over his career, Goldberg has served in various leadership roles in the digital content, media and entertainment, and travel industries, and in both B2B and direct-to-consumer models at companies such as News Corp, Liberty Interactive Corp, Lonely Planet, and Dow Jones. Most recently, he served as Executive Vice President, North America and Global Operations at The Trade Desk. Goldberg is also Founding Director of Dataphilanthropy, a non-profit focused on building programs to apply data to better address and understand economic disparity. He holds a B.A. in English from Cornell University, an M.A. in International Relations from the University of Melbourne, and an M.B.A from Stanford University. Goldberg’s anticipated start date is July 1, 2022 and he will be based at the company’s Needham, MA headquarters.

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Steve Kaufer co-founded Tripadvisor in 2000 and last year announced his intention to leave his role as CEO.

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About Tripadvisor

Tripadvisor, the world's largest travel guidance platform*, helps hundreds of millions of people each month** become better travelers, from planning to booking to taking a trip. Travelers across the globe use the Tripadvisor site and app to discover where to stay, what to do and where to eat based on guidance from those who have been there before. With more than 1 billion reviews and opinions of nearly 8 million businesses, travelers turn to Tripadvisor to find deals on accommodations, book experiences, reserve tables at delicious restaurants and discover great places nearby. As a travel guidance company available in 43 markets and 22 languages, Tripadvisor makes planning easy no matter the trip type.

 

The subsidiaries of Tripadvisor, Inc. (Nasdaq:TRIP), own and operate a portfolio of travel media brands and businesses, operating under various websites and apps, including the following websites: www.bokun.io, www.cruisecritic.com, www.flipkey.com, www.thefork.com, www.helloreco.com, www.holidaylettings.co.uk, www.housetrip.com, www.jetsetter.com, www.niumba.com,www.seatguru.com, www.singleplatform.com, www.vacationhomerentals.com, and www.viator.com.

* Source: SimilarWeb, unique users de-duplicated monthly, March 2022

** Source: Tripadvisor internal log files

 

Contacts

Investors

ir@tripadvisor.com

 

Media

uspr@tripadvisor.com

 

 

TRIP-G

 

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