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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 September 30, 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 November 1, 2022
Common Stock, $0.001 par value per share		127,786,062 shares
Class B common stock, $0.001 par value per share		12,799,999 shares

Tripadvisor, Inc.

Form 10-Q

For the Quarter Ended September 30, 2022

Table of Contents


		Page
Part I—Financial Information
Item 1. Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021		3
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021		4
Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021		5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021		6
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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		31
Item 3. Quantitative and Qualitative Disclosures about Market Risk		49
Item 4. Controls and Procedures		50
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		51
Item 3. Defaults Upon Senior Securities		51
Item 4. Mine Safety Disclosures		51
Item 5. Other Information		51
Item 6. Exhibits		52
Signatures		53

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						Nine months ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue (Note 3)	$	459			303		$	1,138		$	661

Costs and expenses:
Cost of revenue (1) (exclusive of depreciation and amortization as shown separately below)		32			23			85			54
Selling and marketing (1)		234			148			591			343
Technology and content (1)		55			52			162			161
General and administrative (1)		45			37			114			121
Depreciation and amortization		23			27			73			85
Total costs and expenses		389			287			1,025			764
Operating income (loss)		70			16			113			(103	)
Other income (expense):
Interest expense		(11	)		(12	)		(33	)		(34	)
Interest income		4			—			7			1
Other income (expense), net		(1	)		(1	)		(4	)		(2	)
Total other income (expense), net		(8	)		(13	)		(30	)		(35	)
Income (loss) before income taxes		62			3			83			(138	)
(Provision) benefit for income taxes (Note 9)		(37	)		(2	)		(61	)		19
Net income (loss)	$	25		$	1		$	22		$	(119	)

Earnings (loss) per share attributable to common stockholders (Note 13):
Basic	$	0.18		$	0.01		$	0.16		$	(0.87	)
Diluted	$	0.17		$	0.01		$	0.15		$	(0.87	)
Weighted average common shares outstanding (Note 13):
Basic		140			138			140			137
Diluted		146			144			144			137

(1) Includes stock-based compensation expense as follows (Note 11):
Cost of revenue	$	—		$	—		$	1		$	1
Selling and marketing	$	3		$	4		$	9		$	13
Technology and content	$	9		$	12		$	27		$	35
General and administrative	$	10		$	13		$	28		$	40

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						Nine months ended
	September 30,						September 30,
	2022			2021			2022			2021
Net income (loss)	$	25		$	1		$	22		$	(119	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax (1)		(24	)		(10	)		(52	)		(19	)
Reclassification adjustments included in net income (loss), net of tax		—			2			—			2
Total other comprehensive income (loss), net of tax		(24	)		(8	)		(52	)		(17	)
Comprehensive income (loss)	$	1		$	(7	)	$	(30	)	$	(136	)

(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)


	September 30,			December 31,
	2022			2021
ASSETS
Current assets:
Cash and cash equivalents (Note 4)	$	1,066		$	723
Accounts receivable and contract assets, net of allowance for credit losses of $28 and $28, respectively (Note 3)		205			142
Income taxes receivable (Note 9)		—			49
Prepaid expenses and other current assets		38			26
Total current assets		1,309			940
Property and equipment, net of accumulated depreciation of $512 and $460, respectively		195			215
Operating lease right-of-use assets		28			42
Intangible assets, net of accumulated amortization of $197 and $202, respectively		55			65
Goodwill (Note 5)		803			843
Non-marketable investments (Note 4)		34			36
Deferred income taxes, net		51			54
Other long-term assets, net of allowance for credit losses of $10 and $10, respectively		90			94
TOTAL ASSETS	$	2,565		$	2,289

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	67		$	27
Deferred merchant payables		240			113
Deferred revenue (Note 3)		51			36
Accrued expenses and other current liabilities (Note 6)		215			181
Total current liabilities		573			357
Long-term debt (Note 7)		836			833
Finance lease obligation, net of current portion		60			65
Operating lease liabilities, net of current portion		16			29
Deferred income taxes, net		1			1
Other long-term liabilities (Note 8)		266			215
Total Liabilities		1,752			1,500

Commitments and contingencies (Note 10)
Stockholders’ equity: (Note 12)
Preferred stock, $0.001 par value		—			—
Authorized shares: 100,000,000
Shares issued and outstanding: 0 and 0, respectively
Common stock, $0.001 par value		—			—
Authorized shares: 1,600,000,000
Shares issued: 146,591,387 and 144,656,649, respectively
Shares outstanding: 127,746,773 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		1,380			1,326
Retained earnings		263			241
Accumulated other comprehensive income (loss)		(108	)		(56	)
Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively		(722	)		(722	)
Total Stockholders’ Equity		813			789
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,565		$	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 September 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 June 30, 2022		145,847,721	$	—		12,799,999	$	—	$	1,364		$	238	$	(84	)		(18,844,614	)	$	(722	)	$	796
Net income (loss)													25											25
Other comprehensive income (loss), net of tax															(24	)								(24	)
Issuance of common stock related to exercises of options and vesting of RSUs		743,666		—						—														—
Withholding taxes on net share settlements of equity awards										(9	)													(9	)
Stock-based compensation										25