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10-Q

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

☐ 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.

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

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.

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.

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.

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.

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