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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 June 30, 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 July 29, 2022

Common Stock, $0.001 par value per share

 

127,043,956 shares

Class B common stock, $0.001 par value per share

 

12,799,999 shares

 

 


 

Tripadvisor, Inc.

Form 10-Q

For the Quarter Ended June 30, 2022

Table of Contents

 

 

 

Page

Part I—Financial Information

 

 

 

Item 1. Unaudited Condensed Financial Statements

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021

 

3

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2022 and 2021

 

4

Unaudited Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021

 

5

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021

 

6

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

 

8

Notes to Unaudited Condensed Consolidated Financial Statements

 

9

 

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

 

30

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

48

Item 4. Controls and Procedures

 

49

 

Part II—Other Information

 

 

 

Item 1. Legal Proceedings

 

50

Item 1A. Risk Factors

 

50

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

 

50

Item 3. Defaults Upon Senior Securities

 

50

Item 4. Mine Safety Disclosures

 

50

Item 5. Other Information

 

51

Item 6. Exhibits

 

51

Signatures

 

52

 

 

 

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 June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue (Note 3)

 

$

417

 

 

$

235

 

 

$

679

 

 

$

358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (1) (exclusive of depreciation and amortization as shown separately below)

 

 

31

 

 

 

19

 

 

 

53

 

 

 

31

 

Selling and marketing (1)

 

 

217

 

 

 

123

 

 

 

357

 

 

 

196

 

Technology and content (1)

 

 

53

 

 

 

54

 

 

 

107

 

 

 

109

 

General and administrative (1)

 

 

28

 

 

 

46

 

 

 

68

 

 

 

84

 

Depreciation and amortization

 

 

25

 

 

 

28

 

 

 

50

 

 

 

57

 

Total costs and expenses

 

 

354

 

 

 

270

 

 

 

635

 

 

 

477

 

Operating income (loss)

 

 

63

 

 

 

(35

)

 

 

44

 

 

 

(119

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(11

)

 

 

(11

)

 

 

(23

)

 

 

(22

)

Interest income and other, net

 

 

1

 

 

 

 

 

 

 

 

 

 

Total other income (expense), net

 

 

(10

)

 

 

(11

)

 

 

(23

)

 

 

(22

)

Income (loss) before income taxes

 

 

53

 

 

 

(46

)

 

 

21

 

 

 

(141

)

(Provision) benefit for income taxes (Note 8)

 

 

(22

)

 

 

6

 

 

 

(24

)

 

 

21

 

Net income (loss)

 

$

31

 

 

$

(40

)

 

$

(3

)

 

$

(120

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share attributable to common stockholders (Note 12):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.22

 

 

$

(0.29

)

 

$

(0.02

)

 

$

(0.88

)

Diluted

 

$

0.21

 

 

$

(0.29

)

 

$

(0.02

)

 

$

(0.88

)

Weighted average common shares outstanding (Note 12):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

140

 

 

 

137

 

 

 

139

 

 

 

136

 

Diluted

 

 

145

 

 

 

137

 

 

 

139

 

 

 

136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows (Note 10):

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

 

 

$

 

 

$

1

 

 

$

1

 

Selling and marketing

 

$

3

 

 

$

4

 

 

$

6

 

 

$

8

 

Technology and content

 

$

9

 

 

$

13

 

 

$

18

 

 

$

24

 

General and administrative

 

$

9

 

 

$

15

 

 

$

18

 

 

$

28

 

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

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

31

 

 

$

(40

)

 

$

(3

)

 

$

(120

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax (1)

 

 

(24

)

 

 

3

 

 

 

(28

)

 

 

(9

)

Total other comprehensive income (loss), net of tax

 

 

(24

)

 

 

3

 

 

 

(28

)

 

 

(9

)

Comprehensive income (loss)

 

$

7

 

 

$

(37

)

 

$

(31

)

 

$

(129

)

 

(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)

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents (Note 4)

 

$

1,045

 

 

$

723

 

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

 

 

246

 

 

 

142

 

Income taxes receivable (Note 8)

 

 

12

 

 

 

49

 

Prepaid expenses and other current assets

 

 

34

 

 

 

26

 

Total current assets

 

 

1,337

 

 

 

940

 

Property and equipment, net of accumulated depreciation of $497 and $460, respectively

 

 

201

 

 

 

215

 

Operating lease right-of-use assets

 

 

33

 

 

 

42

 

Intangible assets, net of accumulated amortization of $200 and $202, respectively

 

 

58

 

 

 

65

 

Goodwill (Note 5)

 

 

820

 

 

 

843

 

Non-marketable investments (Note 4)

 

 

35

 

 

 

36

 

Deferred income taxes, net

 

 

40

 

 

 

54

 

Other long-term assets, net of allowance for credit losses of $10 and $10, respectively

 

 

88

 

 

 

94

 

TOTAL ASSETS

 

$

2,612

 

 

$

2,289

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

50

 

 

$

27

 

Deferred merchant payables

 

 

323

 

 

 

113

 

Deferred revenue (Note 3)

 

 

70

 

 

 

36

 

Accrued expenses and other current liabilities (Note 6)

 

 

213

 

 

 

181

 

Total current liabilities

 

 

656

 

 

 

357

 

Long-term debt (Note 7)

 

 

835

 

 

 

833

 

Finance lease obligation, net of current portion

 

 

61

 

 

 

65

 

Operating lease liabilities, net of current portion

 

 

20

 

 

 

29

 

Deferred income taxes, net

 

 

1

 

 

 

1

 

Other long-term liabilities

 

 

243

 

 

 

215

 

Total Liabilities

 

 

1,816

 

 

 

1,500

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity: (Note 11)

 

 

 

 

 

 

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: 145,847,721 and 144,656,649, respectively

 

 

 

 

 

 

Shares outstanding: 127,003,107 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

 

 

1,364

 

 

 

1,326

 

Retained earnings

 

 

238

 

 

 

241

 

Accumulated other comprehensive income (loss)

 

 

(84

)

 

 

(56

)

Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively

 

 

(722

)

 

 

(722

)

Total Stockholders’ Equity

 

 

796

 

 

 

789

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

2,612

 

 

$

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 June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

common stock

 

 

capital

 

 

earnings

 

 

income (loss)

 

 

Treasury Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Total

 

Balance as of March 31, 2022

 

 

145,636,700

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,342

 

 

$

207

 

 

$

(60

)

 

 

(18,844,614

)

 

$

(722

)

 

$

767

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

31

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24

)

 

 

 

 

 

 

 

 

(24

)

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

 

 

211,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes on net share settlements of equity awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

Balance as of June 30, 2022

 

 

145,847,721

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,364

 

 

$

238

 

 

$

(84

)

 

 

(18,844,614

)

 

$

(722

)

 

$

796

 

 

 

 

Six months ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

common stock

 

 

capital

 

 

earnings

 

 

income (loss)

 

 

Treasury Stock

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Total

 

Balance as of December 31, 2021

 

 

144,656,649

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,326

 

 

$

241