10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35362

 

TRIPADVISOR, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

80-0743202

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

400 1st Avenue

Needham, MA 02494

(Address of principal executive office) (Zip Code)

Registrant’s telephone number, including area code:

(781) 800-5000

 

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock

TRIP

Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

 

Class

 

Outstanding Shares at April 28, 2022

Common Stock, $0.001 par value per share

 

126,819,417 shares

Class B common stock, $0.001 par value per share

 

12,799,999 shares

 

 


 

Tripadvisor, Inc.

Form 10-Q

For the Quarter Ended March 31, 2022

Table of Contents

 

 

 

Page

Part I—Financial Information

 

 

 

Item 1. Unaudited Condensed Financial Statements

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021

 

3

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2022 and 2021

 

4

Unaudited Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021

 

5

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021

 

6

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021

 

7

Notes to Unaudited Condensed Consolidated Financial Statements

 

8

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

41

Item 4. Controls and Procedures

 

41

 

Part II—Other Information

 

 

 

Item 1. Legal Proceedings

 

42

Item 1A. Risk Factors

 

42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

42

Item 3. Defaults Upon Senior Securities

 

42

Item 4. Mine Safety Disclosures

 

43

Item 5. Other Information

 

43

Item 6. Exhibits

 

43

Signatures

 

44

 

 

 

2


 

PART I – FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

 

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

 

 

 

Three months ended March 31,

 

 

 

2022

 

 

2021

 

Revenue (Note 3)

 

$

262

 

 

$

123

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization as shown separately below)

 

 

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 (Note 7)

 

 

(1

)

 

 

16

 

Net income (loss)

 

$

(34

)

 

$

(80

)

 

 

 

 

 

 

 

Earnings (loss) per share attributable to common stockholders (Note 11):

 

 

 

 

 

 

Basic

 

$

(0.24

)

 

$

(0.59

)

Diluted

 

$

(0.24

)

 

$

(0.59

)

Weighted average common shares outstanding (Note 11):

 

 

 

 

 

 

Basic

 

 

139

 

 

 

136

 

Diluted

 

 

139

 

 

 

136

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows (Note 9):

 

 

 

 

 

 

Selling and marketing

 

$

3

 

 

$

4

 

Technology and content

 

$

9

 

 

$

12

 

General and administrative

 

$

10

 

 

$

13

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


 

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Net income (loss)

 

$

(34

)

 

$

(80

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax (1)

 

 

(4

)

 

 

(12

)

Total other comprehensive income (loss), net of tax

 

 

(4

)

 

 

(12

)

Comprehensive income (loss)

 

$

(38

)

 

$

(92

)

 

(1) Deferred income tax liabilities related to these amounts are not material.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


 

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 (Note 4)

 

$

781

 

 

$

723

 

Accounts receivable and contract assets, net of allowance for credit losses of $29 and $28, respectively (Note 3)

 

 

180

 

 

 

142

 

Income taxes receivable (Note 7)

 

 

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 (Note 4)

 

 

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 (Note 3)

 

 

59

 

 

 

36

 

Accrued expenses and other current liabilities (Note 5)

 

 

199

 

 

 

181

 

Total current liabilities

 

 

467

 

 

 

357

 

Long-term debt (Note 6)

 

 

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

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders’ equity: (Note 10)

 

 

 

 

 

 

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

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


 

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions, except number of shares)

 

 

Three months ended March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

common stock

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

Treasury Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

earnings

 

 

income (loss)

 

 

Shares

 

 

Amount

 

 

Total

 

Balance as of December 31, 2021

 

 

144,656,649

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,326

 

 

$

241

 

 

$

(56

)

 

 

(18,844,614

)

 

$

(722

)

 

$

789

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34

)

 

 

 

 

 

 

 

 

 

 

 

(34

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

 

 

 

(4

)

Issuance of common stock related to exercises of options and vesting of RSUs

 

 

980,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes on net share settlements of equity awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

Balance as of March 31, 2022

 

 

145,636,700

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,342

 

 

$

207

 

 

$

(60

)

 

 

(18,844,614

)

 

$

(722

)

 

$

767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

common stock

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

Treasury Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

earnings

 

 

income (loss)

 

 

Shares

 

 

Amount

 

 

Total

 

Balance as of December 31, 2020

 

 

140,775,221

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,253

 

 

$

389

 

 

$

(34

)

 

 

(18,844,614

)

 

$

(722

)

 

$

886

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(80

)

 

 

 

 

 

 

 

 

 

 

 

(80

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

 

 

 

(12

)

Issuance of common stock related to exercises of options and vesting of RSUs

 

 

2,139,630

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Purchase of capped calls, net of tax of $9 million (Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26

)

Withholding taxes on net share settlements of equity awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33

 

Balance as of March 31, 2021

 

 

142,914,851

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,244

 

 

$

309

 

 

$

(46

)

 

 

(18,844,614

)

 

$

(722

)

 

$

785

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6


 

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

 

 

 

Three months ended March 31,

 

 

 

2022

 

 

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 (Note 9)

 

 

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:

 

 

 

 

 

 

Accounts receivable and contract assets, prepaid expenses and other assets

 

 

(45

)

 

 

(21

)

Accounts payable, accrued expenses and other liabilities

 

 

3

 

 

 

(11

)

Deferred merchant payables

 

 

86

 

 

 

36

 

Income tax receivables/payables, net

 

 

1

 

 

 

6

 

Deferred revenue

 

 

24

 

 

 

9

 

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 (Note 6)

 

 

 

 

 

340

 

Purchase of capped calls in connection with 2026 Senior Notes (Note 6)

 

 

 

 

 

(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