10-Q
12-31Q1false00015265200001526520us-gaap:AccruedLiabilitiesMember2024-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001526520trip:StockoptionsAndRsusMembertrip:PerformanceBasedAndMarketBasedAwardsMember2023-01-012023-03-310001526520trip:TheForkMemberus-gaap:OperatingSegmentsMembertrip:ThirdPartyMember2023-01-012023-03-310001526520us-gaap:TreasuryStockCommonMember2022-12-310001526520us-gaap:RestrictedStockUnitsRSUMember2023-12-310001526520us-gaap:TreasuryStockCommonMember2023-03-3100015265202024-01-0100015265202023-01-012023-03-310001526520us-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001526520us-gaap:RetainedEarningsMember2023-12-310001526520us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001526520us-gaap:LetterOfCreditMembertrip:TwentyFifteenCreditFacilityMember2024-03-310001526520us-gaap:AdditionalPaidInCapitalMember2023-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:MediaAndPlatformMember2024-01-012024-03-310001526520us-gaap:CommonClassBMember2024-03-310001526520trip:MarketBasedRestrictedStockUnitsMember2023-12-310001526520us-gaap:CorporateNonSegmentMemberus-gaap:IntersegmentEliminationMember2024-01-012024-03-310001526520trip:ViatorMember2024-01-012024-03-310001526520trip:PerformanceBasedRestrictedStockUnitsMember2024-03-310001526520us-gaap:IntersegmentEliminationMember2024-01-012024-03-310001526520us-gaap:CommonClassBMember2023-03-310001526520trip:ThirdPartyMember2024-01-012024-03-310001526520us-gaap:FairValueInputsLevel3Member2024-03-310001526520trip:SevenPercentTwoThousandTwentyFiveSeniorNotesMemberus-gaap:LongTermDebtMember2023-12-310001526520trip:ChelseaInvestmentHoldingCompanyPTELtdMember2024-03-310001526520us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001526520trip:ChelseaInvestmentHoldingCompanyPTELtdMember2023-01-012023-03-3100015265202024-03-310001526520us-gaap:IntersegmentEliminationMember2023-01-012023-03-310001526520trip:ChelseaInvestmentHoldingCompanyPTELtdMember2024-01-012024-03-310001526520us-gaap:InternalRevenueServiceIRSMembertrip:MutualAgreementProcedureConsiderationMember2024-01-012024-03-310001526520us-gaap:OperatingSegmentsMembertrip:TheForkMembertrip:ThirdPartyMember2024-01-012024-03-310001526520trip:LTRIPMemberus-gaap:CommonClassBMember2024-03-310001526520trip:LTRIPMember2023-01-012023-03-310001526520us-gaap:CommonClassBMember2024-05-0200015265202023-09-072023-09-070001526520trip:ChelseaInvestmentHoldingCompanyPTELtdMembertrip:NonMarketableInvestmentsMember2024-03-310001526520us-gaap:AdditionalPaidInCapitalMember2023-12-310001526520us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001526520us-gaap:CommonStockMember2023-12-310001526520us-gaap:TreasuryStockCommonMember2024-03-310001526520us-gaap:OperatingSegmentsMembertrip:TheForkMember2023-01-012023-03-310001526520trip:TheForkMember2023-12-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMemberus-gaap:IntersegmentEliminationMember2024-01-012024-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:TripAdvisorExperiencesAndDiningMember2023-01-012023-03-310001526520us-gaap:TreasuryStockCommonMember2023-12-310001526520us-gaap:RevolvingCreditFacilityMembertrip:TwentyFifteenCreditFacilityMember2024-01-012024-03-310001526520us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2024-03-310001526520srt:MaximumMembertrip:TaxYears2014Through2016Membersrt:ScenarioForecastMember2024-04-012024-06-300001526520us-gaap:RetainedEarningsMember2024-03-310001526520us-gaap:AdditionalPaidInCapitalMember2022-12-3100015265202023-12-310001526520us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001526520trip:TwoThousandAndTwentyFiveSeniorNotesMember2023-12-310001526520trip:ZeroPointTwoFivePercentConvertibleTwoThousandTwentySixSeniorNotesMemberus-gaap:LongTermDebtMember2024-03-310001526520us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001526520us-gaap:RevolvingCreditFacilityMembertrip:TwentyFifteenCreditFacilityMember2024-03-310001526520trip:TwoThousandAndTwentyFiveSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001526520trip:LTRIPMember2024-01-012024-03-310001526520us-gaap:OperatingSegmentsMembertrip:BrandTripadvisorOtherMember2023-01-012023-03-310001526520trip:TwoThousandAndTwentyFiveSeniorNotesMember2024-01-012024-03-310001526520trip:BorrowingsOnSameDayNoticeMembertrip:TwentyFifteenCreditFacilityMember2023-12-310001526520us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001526520us-gaap:LongTermDebtMember2023-12-310001526520trip:TwoThousandAndTwentyFiveSeniorNotesMember2023-01-012023-12-310001526520us-gaap:RevolvingCreditFacilityMembersrt:MinimumMembertrip:TwentyFifteenCreditFacilityMember2024-01-012024-03-310001526520us-gaap:AdditionalPaidInCapitalMember2024-03-310001526520us-gaap:CommonStockMember2023-01-012023-03-310001526520us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001526520trip:ThirdPartyMember2023-01-012023-03-310001526520us-gaap:CorporateNonSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-012023-03-310001526520trip:PerformanceBasedRestrictedStockUnitsMember2024-01-012024-03-310001526520trip:StockoptionsAndRsusMembertrip:PerformanceBasedAndMarketBasedAwardsMember2024-01-012024-03-3100015265202023-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:MediaAndPlatformMember2023-01-012023-03-310001526520us-gaap:IntersegmentEliminationMember2023-01-012023-03-310001526520us-gaap:RestrictedStockUnitsRSUMember2024-03-310001526520country:CN2024-01-012024-03-3100015265202023-09-070001526520us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001526520us-gaap:CustomerConcentrationRiskMembertrip:ExpediaAndBookingMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001526520trip:MarketBasedRestrictedStockUnitsMember2024-03-310001526520us-gaap:RetainedEarningsMember2022-12-310001526520us-gaap:OperatingSegmentsMembertrip:BrandTripadvisorOtherMember2024-01-012024-03-310001526520trip:TwoThousandAndTwentySixSeniorNotesMember2023-03-310001526520us-gaap:CommonClassBMember2022-12-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMemberus-gaap:IntersegmentEliminationMember2023-01-012023-03-310001526520us-gaap:EmployeeStockOptionMember2024-03-310001526520us-gaap:CommonStockMember2023-03-310001526520us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001526520trip:TaxYears2014Through2016Membersrt:ScenarioForecastMembersrt:MinimumMember2024-04-012024-06-300001526520us-gaap:CommonStockMember2022-12-3100015265202023-01-012023-12-310001526520us-gaap:CommonStockMember2024-01-012024-03-310001526520trip:OtherLongTermReceivableMember2024-01-012024-03-310001526520us-gaap:OperatingSegmentsMemberus-gaap:IntersegmentEliminationMembertrip:ViatorMember2024-01-012024-03-310001526520us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2023-12-3100015265202022-12-310001526520trip:ViatorMember2023-01-012023-03-310001526520trip:TheForkMember2024-01-012024-03-310001526520trip:RestructuringAndOtherRelatedReorganizationCostsMember2024-01-012024-03-310001526520trip:TwoThousandAndTwentySixSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001526520us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001526520trip:TechnologyAndContentMember2024-01-012024-03-310001526520us-gaap:CorporateNonSegmentMembertrip:ThirdPartyMember2024-01-012024-03-310001526520us-gaap:CommonStockMember2024-03-310001526520trip:TaxYears2012Through2016Membersrt:MinimumMember2024-01-012024-03-310001526520trip:OtherLongTermReceivableMember2023-12-310001526520trip:SevenPercentTwoThousandTwentyFiveSeniorNotesMemberus-gaap:LongTermDebtMember2024-03-310001526520trip:TwoThousandAndTwentySixSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001526520trip:TaxYears2012Through2016Membersrt:MaximumMember2024-01-012024-03-310001526520trip:CommonStockUnclassifiedMember2024-05-020001526520us-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001526520us-gaap:OperatingSegmentsMembertrip:ViatorMember2023-01-012023-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:ThirdPartyMember2024-01-012024-03-310001526520us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001526520us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001526520trip:BrandTripadvisorMember2024-01-012024-03-310001526520us-gaap:EmployeeSeveranceMember2023-01-012023-12-310001526520us-gaap:RevolvingCreditFacilityMembersrt:MaximumMembertrip:TwentyFifteenCreditFacilityMember2024-01-012024-03-310001526520us-gaap:FairValueInputsLevel3Member2023-12-310001526520trip:TwoThousandAndTwentySixSeniorNotesMember2024-01-012024-03-310001526520us-gaap:LetterOfCreditMembertrip:TwentyFifteenCreditFacilityMember2023-12-310001526520us-gaap:CustomerConcentrationRiskMembertrip:BookingMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001526520us-gaap:CommonClassBMember2023-12-310001526520trip:PerformanceBasedAndMarketBasedRestrictedStockUnitsMember2024-01-012024-03-310001526520us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001526520trip:RestructuringAndOtherRelatedReorganizationCostsMember2024-03-310001526520trip:TechnologyAndContentMember2023-01-012023-03-310001526520us-gaap:CashMember2024-03-310001526520trip:BorrowingsOnSameDayNoticeMembertrip:TwentyFifteenCreditFacilityMember2024-03-3100015265202024-01-012024-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:TripAdvisorBrandedHotelsMember2024-01-012024-03-310001526520us-gaap:OperatingSegmentsMembertrip:TheForkMemberus-gaap:IntersegmentEliminationMember2024-01-012024-03-310001526520us-gaap:InternalRevenueServiceIRSMembertrip:MutualAgreementProcedureConsiderationMember2023-01-012023-03-310001526520us-gaap:IntersegmentEliminationMember2024-01-012024-03-310001526520srt:MaximumMembertrip:TwoThousandAndTwentySixSeniorNotesMembertrip:StockoptionsAndRsusMember2023-01-012023-03-310001526520us-gaap:OperatingSegmentsMembertrip:ThirdPartyMembertrip:ViatorMember2023-01-012023-03-310001526520trip:ZeroPointTwoFivePercentConvertibleTwoThousandTwentySixSeniorNotesMemberus-gaap:LongTermDebtMember2023-12-310001526520us-gaap:CorporateNonSegmentMembertrip:ThirdPartyMember2023-01-012023-03-310001526520us-gaap:LongTermDebtMember2024-03-310001526520us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001526520us-gaap:RetainedEarningsMember2023-01-012023-03-310001526520trip:TwoThousandAndTwentyFiveSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001526520us-gaap:OperatingSegmentsMembertrip:ViatorMember2024-01-012024-03-310001526520us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2024-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:ThirdPartyMember2023-01-012023-03-310001526520us-gaap:EmployeeStockOptionMember2023-12-310001526520us-gaap:OperatingSegmentsMemberus-gaap:IntersegmentEliminationMembertrip:ViatorMember2023-01-012023-03-310001526520us-gaap:CashMember2023-12-310001526520trip:TwoThousandAndTwentySixSeniorNotesMember2024-03-310001526520us-gaap:RetainedEarningsMember2024-01-012024-03-310001526520us-gaap:OperatingSegmentsMembertrip:ThirdPartyMembertrip:ViatorMember2024-01-012024-03-310001526520trip:LTRIPMember2024-03-310001526520trip:LTRIPMemberus-gaap:CommonClassBMember2024-01-012024-03-310001526520us-gaap:OperatingSegmentsMembertrip:TheForkMember2024-01-012024-03-310001526520us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001526520trip:TheForkMember2023-01-012023-03-310001526520us-gaap:RetainedEarningsMember2023-03-310001526520trip:OtherLongTermReceivableMember2024-03-310001526520us-gaap:RevolvingCreditFacilityMembertrip:TwentyFifteenCreditFacilityMember2023-12-310001526520trip:TheForkMemberus-gaap:OperatingSegmentsMemberus-gaap:IntersegmentEliminationMember2023-01-012023-03-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:TripAdvisorExperiencesAndDiningMember2024-01-012024-03-310001526520trip:RestructuringAndOtherRelatedReorganizationCostsMember2023-12-310001526520trip:BrandTripadvisorMemberus-gaap:OperatingSegmentsMembertrip:TripAdvisorBrandedHotelsMember2023-01-012023-03-310001526520trip:TwoThousandAndTwentyFiveSeniorNotesMember2024-03-310001526520trip:TwoThousandAndTwentySixSeniorNotesMembersrt:MaximumMembertrip:StockoptionsAndRsusMember2024-01-012024-03-310001526520trip:PerformanceBasedRestrictedStockUnitsMember2023-12-310001526520us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-12-310001526520trip:BrandTripadvisorMember2023-01-012023-03-310001526520us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001526520trip:ChelseaInvestmentHoldingCompanyPTELtdMembertrip:NonMarketableInvestmentsMember2023-12-3100015265202023-01-010001526520trip:MarketBasedRestrictedStockUnitsMember2024-01-012024-03-31trip:Countryxbrli:puretrip:Languagetrip:Subsidiarytrip:VotePerShareiso4217:USDxbrli:sharestrip:Segmentxbrli:sharestrip:Votetrip:Restaurantiso4217:USDtrip:Days

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, 2024

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 May 2, 2024

Common Stock, $0.001 par value per share

126,479,828 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, 2024

Table of Contents

Page

Part I—Financial Information

Item 1. Unaudited Condensed Consolidated Financial Statements

Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023

3

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023

4

Unaudited Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023

5

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023

6

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

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

23

Item 3. Quantitative and Qualitative Disclosures about Market Risk

36

Item 4. Controls and Procedures

37

Part II—Other Information

Item 1. Legal Proceedings

37

Item 1A. Risk Factors

38

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

38

Item 3. Defaults Upon Senior Securities

38

Item 4. Mine Safety Disclosures

38

Item 5. Other Information

38

Item 6. Exhibits

39

Signatures

40

 

 

 

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,

 

 

 

2024

 

 

2023

 

Revenue (Note 3)

 

$

395

 

 

$

371

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

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

 

 

35

 

 

 

29

 

Selling and marketing (1)

 

 

221

 

 

 

219

 

Technology and content (1)

 

 

76

 

 

 

68

 

General and administrative (1)

 

 

56

 

 

 

48

 

Depreciation and amortization

 

 

22

 

 

 

21

 

Total costs and expenses

 

 

410

 

 

 

385

 

Operating income (loss)

 

 

(15

)

 

 

(14

)

Other income (expense):

 

 

 

 

 

 

Interest expense

 

 

(11

)

 

 

(11

)

Interest income

 

 

13

 

 

 

11

 

Other income (expense), net

 

 

(3

)

 

 

(1

)

Total other income (expense), net

 

 

(1

)

 

 

(1

)

Income (loss) before income taxes

 

 

(16

)

 

 

(15

)

(Provision) benefit for income taxes (Note 8)

 

 

(43

)

 

 

(58

)

Net income (loss)

 

$

(59

)

 

$

(73

)

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Basic

 

$

(0.43

)

 

$

(0.52

)

Diluted

 

$

(0.43

)

 

$

(0.52

)

Weighted average common shares outstanding (Note 12):

 

 

 

 

 

 

Basic

 

 

138

 

 

 

141

 

Diluted

 

 

138

 

 

 

141

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Selling and marketing

 

$

6

 

 

$

4

 

Technology and content

 

$

12

 

 

$

10

 

General and administrative

 

$

10

 

 

$

9

 

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,

 

 

 

2024

 

 

2023

 

Net income (loss)

 

$

(59

)

 

$

(73

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax (1)

 

 

(10

)

 

 

4

 

Reclassification adjustments included in net income (loss), net of tax (1)

 

 

3

 

 

 

 

Total other comprehensive income (loss), net of tax

 

 

(7

)

 

 

4

 

Comprehensive income (loss)

 

$

(66

)

 

$

(69

)

 

(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,
2024

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents (Note 4)

 

$

1,171

 

 

$

1,067

 

Accounts receivable, net (allowance for expected credit losses of $23 and $21, respectively) (Note 4)

 

 

248

 

 

 

192

 

Income taxes receivable (Note 8)

 

 

44

 

 

 

 

Prepaid expenses and other current assets

 

 

48

 

 

 

38

 

Total current assets

 

 

1,511

 

 

 

1,297

 

Property and equipment, net of accumulated depreciation of $563 and $551, respectively

 

 

189

 

 

 

191

 

Operating lease right-of-use assets

 

 

21

 

 

 

15

 

Intangible assets, net of accumulated amortization of $202 and $208, respectively

 

 

40

 

 

 

43

 

Goodwill

 

 

822

 

 

 

829

 

Non-marketable investments (Note 4)

 

 

32

 

 

 

32

 

Deferred income taxes, net

 

 

78

 

 

 

86

 

Other long-term assets, net of allowance for credit losses of $10 and $10, respectively (Note 4)

 

 

45

 

 

 

44

 

TOTAL ASSETS

 

$

2,738

 

 

$

2,537

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

60

 

 

$

28

 

Deferred merchant payables

 

 

353

 

 

 

237

 

Deferred revenue (Note 3)

 

 

82

 

 

 

49

 

Income taxes payable (Note 8)

 

 

161

 

 

 

6

 

Accrued expenses and other current liabilities (Note 5)

 

 

236

 

 

 

252

 

Total current liabilities

 

 

892

 

 

 

572

 

Long-term debt (Note 6)

 

 

840

 

 

 

839

 

Finance lease obligation, net of current portion

 

 

49

 

 

 

51

 

Operating lease liabilities, net of current portion

 

 

14

 

 

 

6

 

Deferred income taxes, net

 

 

1

 

 

 

1

 

Other long-term liabilities (Note 7)

 

 

117

 

 

 

197

 

Total Liabilities

 

 

1,913

 

 

 

1,666

 

 

 

 

 

 

 

 

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: 151,237,501 and 149,775,361, respectively

 

 

 

 

 

 

Shares outstanding: 126,343,634 and 124,881,494, 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

 

 

1,513

 

 

 

1,493

 

Retained earnings

 

 

212

 

 

 

271

 

Accumulated other comprehensive income (loss)

 

 

(78

)

 

 

(71

)

Treasury stock-common stock, at cost, 24,893,867 and 24,893,867 shares, respectively

 

 

(822

)

 

 

(822

)

Total Stockholders’ Equity

 

 

825

 

 

 

871

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

2,738

 

 

$

2,537

 

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, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2023

 

 

149,775,361

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,493

 

 

$

271

 

 

$

(71

)

 

 

(24,893,867

)

 

$

(822

)

 

$

871

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(59

)

 

 

 

 

 

 

 

 

 

 

 

(59

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

(7

)

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

 

 

1,462,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes on net share settlements of equity awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

Balance as of March 31, 2024

 

 

151,237,501

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,513

 

 

$

212

 

 

$

(78

)

 

 

(24,893,867

)

 

$

(822

)

 

$

825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2022

 

 

146,891,538

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,404

 

 

$

261

 

 

$

(82

)

 

 

(18,844,614

)

 

$

(722

)

 

$

861

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(73

)

 

 

 

 

 

 

 

 

 

 

 

(73

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

4

 

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

 

 

1,199,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes on net share settlements of equity awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

Balance as of March 31, 2023

 

 

148,090,833

 

 

$

 

 

 

12,799,999

 

 

$

 

 

$

1,420

 

 

$

188

 

 

$

(78

)

 

 

(18,844,614

)

 

$

(722

)

 

$

808

 

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,

 

 

 

2024

 

 

2023

 

Operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

(59

)

 

$

(73

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

22

 

 

 

21

 

Stock-based compensation expense (Note 10)

 

 

28

 

 

 

23

 

Deferred income tax expense (benefit)

 

 

8

 

 

 

8

 

Other, net

 

 

6

 

 

 

(1

)

Changes in operating assets and liabilities, net:

 

 

 

 

 

 

Accounts receivable, prepaid expenses and other assets

 

 

(69

)

 

 

(9

)

Accounts payable, accrued expenses and other liabilities

 

 

19

 

 

 

(26

)

Deferred merchant payables

 

 

120

 

 

 

107

 

Income tax receivables/payables, net

 

 

31

 

 

 

48

 

Deferred revenue

 

 

33

 

 

 

37

 

Net cash provided by (used in) operating activities

 

 

139

 

 

 

135

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Capital expenditures, including capitalized website development

 

 

(16

)

 

 

(16

)

Net cash provided by (used in) investing activities

 

 

(16

)

 

 

(16

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Payment of withholding taxes on net share settlements of equity awards

 

 

(10

)

 

 

(9

)

Payments of finance lease obligation

 

 

(2

)

 

 

(2

)

Net cash provided by (used in) financing activities

 

 

(12

)

 

 

(11

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(7

)

 

 

3

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

104

 

 

 

111

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

1,067

 

 

 

1,021

 

Cash, cash equivalents and restricted cash at end of period

 

$

1,171

 

 

$

1,132

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid (received) during the period for income taxes, net of refunds

 

$

3

 

 

$

3

 

Cash paid during the period for interest

 

$

18

 

 

$

18

 

 

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

 

7


 

NOTE 1: BASIS OF PRESENTATION

We refer to Tripadvisor, Inc. and our wholly-owned subsidiaries as “Tripadvisor,” “Tripadvisor Group,” “the Company,” “us,” “we,” and “our” in these notes to the unaudited condensed consolidated financial statements.

Description of Business

The Tripadvisor Group operates as a family of brands with a purpose of connecting people to experiences worth sharing. The Company's vision is to be the world’s most trusted source for travel and experiences. The Company operates across three reportable segments: Brand Tripadvisor, Viator, and TheFork. We leverage our brands, technology platforms, and capabilities to connect our large, global audience with partners by offering rich content, travel guidance products and services, and two-sided marketplaces for experiences, accommodations, restaurants, and other travel categories.

Brand Tripadvisor’s purpose is to empower everyone to be a better traveler by serving as the world’s most trusted and essential travel guidance platform. Brand Tripadvisor offers travelers and experience seekers an online global platform for travelers to discover, generate, and share authentic user-generated content (“UGC”) in the form of ratings and reviews for destinations, points-of-interest (“POIs”), experiences, accommodations, restaurants, and cruises in over 40 countries and in more than 20 languages across the world. As of December 31, 2023, Brand Tripadvisor offers more than 1 billion user-generated ratings and reviews on over 8 million experiences, accommodations, restaurants, airlines, and cruises.

Viator enables travelers to discover and book iconic, unique and memorable experiences from operators around the globe. Viator's online marketplace is comprehensive, connecting travelers to bookable tours, activities and attractions—consisting of over 350,000 experiences from more than 55,000 operators as of December 31, 2023.

TheFork provides an online marketplace that enables diners to discover and book online reservations at approximately 55,000 restaurants in 11 countries, as of December 31, 2023, across the U.K. and western and central Europe.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include Tripadvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has variable interests in affiliated entities in China in order to comply with Chinese laws and regulations, which restrict foreign investment in internet content provision businesses. Although we do not own the capital stock of these Chinese affiliates, we consolidate their results as we are the primary beneficiary of the cash losses or profits of these variable interest affiliates and have the power to direct the activity of these affiliates. Our variable interest entities’ financial results were not material for all periods presented. Investments in entities in which we do not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. We prepared the unaudited condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, we condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation, none of which were material to the presentation of the accompanying unaudited condensed consolidated financial statements. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023, previously filed with the SEC (the "2023 Annual Report"). The unaudited condensed consolidated balance sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including notes required by GAAP.

As of March 31, 2024, Liberty Tripadvisor Holdings, Inc. (“LTRIP”) beneficially owned approximately 16.4 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute approximately 13% of the outstanding shares of common stock and 100% of the outstanding shares of Class B common stock. Assuming the conversion of all LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own approximately 21% of the outstanding common stock. Because each share of Class B common stock is entitled to ten votes per share and each share of common stock is entitled to one vote per share, LTRIP may be deemed to beneficially own equity securities representing approximately 57% of our voting power. We had no related party transactions with LTRIP during each of the three months ended March 31, 2024 and 2023.

8


 

Risks and Uncertainties

Our business was negatively impacted by the risks and uncertainties related to the COVID-19 pandemic and our business would be adversely and materially affected upon a resurgence of COVID-19 or the emergence of any new pandemic or other health crisis that results in reinstated travel bans and/or other government restrictions and mandates. Following the lifting of restrictions in connection with the COVID-19 pandemic, travel demand increased. In addition, the U.S. and other countries have seen significant increased inflation and decreases in discretionary spending patterns by consumers. If macroeconomic conditions deteriorate, consumer demand and spending may decline, we may not be able to pass on increased costs to our customers and our inability or failure to navigate the macroeconomic environment could harm our business, results of operations and financial condition.

Additionally, natural disasters, public health-related events, political instability, geopolitical conflicts, including the evolving events in the Middle East, acts of terrorism, fluctuations in currency values, and changes in global economic conditions are examples of other events that could have a negative impact on the travel industry, and as a result, our financial results in the future.

Accounting Estimates

We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements is accounting for income taxes. Refer to “Note 8: Income Taxes” for information regarding our significant income tax estimates.

Seasonality

Consumer travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partner advertising investments, and therefore our revenue and operating profits, have also historically followed a seasonal pattern. Our financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, including traveler accommodation stays, and travel experiences taken, compared to the first and fourth quarters, which represent seasonal low points. In addition, during the first half of the year, experience bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative. Other factors may also impact typical seasonal fluctuations, such as significant shifts in our business mix, adverse economic conditions, public health-related events, as well as other factors.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes to our accounting policies since December 31, 2023, as described under “Note 2: Significant Accounting Policies”, in the notes to consolidated financial statements in Item 8 of our 2023 Annual Report.

New Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance requiring entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid. The new accounting guidance requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. This guidance is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

In November 2023, the FASB issued new accounting guidance which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This guidance is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted, including adoption in any interim period.

We are currently considering our timing of adoption and are in the process of evaluating the impact of adopting these newly issued accounting rules on our consolidated financial statements and related disclosures.

9


 

NOTE 3: REVENUE RECOGNITION

 

There have been no material changes to our principal revenue streams, revenue recognition policies, performance obligations, description of and timing of services, or customer payment terms since December 31, 2023, as described under “Note 2: Significant Accounting Policies”, in the notes to consolidated financial statements in Item 8 of our 2023 Annual Report. There was no significant revenue recognized in the three months ended March 31, 2024 and 2023 related to performance obligations satisfied in prior periods. We have applied a practical expedient and do not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year. The Company expects to complete its performance obligations within one year from the initial transaction date. The value related to our remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved.

Disaggregation of Revenue

We disaggregate revenue from contracts with customers into major products/revenue sources. We have determined that disaggregating revenue into these categories achieves the disclosure objective under GAAP, which is to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in “Note 13: Segment Information”, our business consists of three reportable segments – (1) Brand Tripadvisor; (2) Viator; and (3) TheFork. A reconciliation of disaggregated revenue to segment revenue is also included below:

 

 

Three months ended March 31,

 

 

 

2024

 

 

2023

 

Major products/revenue sources (1):

 

(in millions)

 

Brand Tripadvisor

 

 

 

 

 

 

   Tripadvisor-branded hotels

 

$

159

 

 

$

168

 

   Media and advertising

 

 

33

 

 

 

30

 

   Tripadvisor experiences and dining (2)

 

 

36

 

 

 

33

 

   Other

 

 

12

 

 

 

13

 

Total Brand Tripadvisor

 

 

240

 

 

 

244

 

 

 

 

 

 

 

 

Viator

 

 

141

 

 

 

115

 

TheFork

 

 

41

 

 

 

35

 

Intersegment eliminations (2)

 

 

(27

)

 

 

(23

)

  Total Revenue

 

$

395

 

 

$

371

 

 

(1)
Our revenue is recognized primarily at a point in time for all reportable segments.
(2)
Tripadvisor experiences and dining revenue within the Brand Tripadvisor segment is shown gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis. See “Note 13: Segment Information” for a discussion of intersegment revenue for all periods presented.

Deferred Revenue

Contract liabilities generally include payments received in advance of performance under the contract and are realized as revenue as the performance obligation to the customer is satisfied, which we present as deferred revenue on our consolidated balance sheet, including amounts that are refundable. As of January 1, 2024 and 2023, we had $49 million and $44 million, respectively, recorded as deferred revenue on our unaudited condensed consolidated balance sheets, of which $28 million was recognized in revenue and $2 million was refunded due to cancellations by travelers, during each of the three months ended March 31, 2024 and 2023. The difference between the opening and closing balances of our deferred revenue primarily results from the timing differences between when we receive customer payments and the time in which we satisfy our performance obligations.

NOTE 4: FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels:

Level 1—Valuations are based on quoted market prices for identical assets and liabilities in active markets.

Level 2—Valuations are based on observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations are based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

10


 

Cash, Cash Equivalents and Marketable Securities

As of March 31, 2024 and December 31, 2023, we had approximately $1.2 billion and $1.1 billion of cash and cash equivalents, respectively, which consisted of available on demand bank deposits and money market funds, with maturities of 90 days or less at the date of purchase, in each case, with major global financial institutions. We had no outstanding investments classified as either short-term or long-term marketable securities as of March 31, 2024 or December 31, 2023, and there were no purchases or sales of any marketable securities during and for the three months ended March 31, 2024 and 2023.

The following table shows our cash and cash equivalents that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy, as well as their classification on our unaudited condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023:

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

Amortized Cost

 

 

Fair Value (1)

 

 

Cash and Cash Equivalents

 

 

Amortized Cost

 

 

Fair Value (1)

 

 

Cash and Cash Equivalents

 

 

 

(in millions)

 

Cash

 

$

820

 

 

$

820

 

 

$

820

 

 

$

685

 

 

$

685

 

 

$

685

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

 

351

 

 

 

351

 

 

 

351

 

 

 

382

 

 

 

382

 

 

 

382

 

Total

 

$

1,171

 

 

$

1,171

 

 

$

1,171

 

 

$

1,067

 

 

$

1,067

 

 

$

1,067

 

(1)
We did not have any unrealized gains and losses related to our cash equivalents.

We generally classify cash equivalents and marketable securities, if any, within Level 1 and Level 2 as we value these financial instruments using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we use to measure the fair value of money market funds is derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 investments are considered “Level 2” valuations because they are obtained from independent pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our independent pricing services against fair values obtained from another independent source.

Derivative Financial Instruments

We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows for the Euro versus the U.S. Dollar. For the three months ended March 31, 2024 and 2023, our forward contracts were not designated as hedges and generally had maturities of less than 90 days. Our outstanding or unsettled forward contracts are carried at fair value on our unaudited condensed consolidated balance sheets as of both March 31, 2024 and December 31, 2023. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets. We recognize any gain or loss resulting from the change in fair value of our foreign currency forward contracts in other income (expense), net on our unaudited condensed consolidated statement of operations, which was not material during each of the three months ended March 31, 2024 and 2023.

The following table shows the notional principal amounts of our outstanding derivative instruments for the periods presented:

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(in millions)

 

 Foreign currency exchange-forward contracts (1)(2)

 

$

37

 

 

$

9

 

(1)
Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less.
(2)
The fair value of our outstanding derivatives as of March 31, 2024 and December 31, 2023, respectively, was not material. The notional amount of a forward contract is the contracted amount of foreign currency to be exchanged and is not recorded on the unaudited condensed consolidated balance sheets.

Counterparties to our outstanding forward contracts consist of major global financial institutions. We monitor our positions and the credit ratings of the counterparties involved and, by policy limits, the amount of credit exposure to any one party. We do not use derivatives for trading or speculative purposes. We did not enter into any cash flow, fair value or net investment hedges as of March 31, 2024 and December 31, 2023.

Other Financial Assets and Liabilities

As of March 31, 2024 and December 31, 2023, financial instruments not measured at fair value on a recurring basis, including accounts payable, accrued expenses and other current liabilities, and deferred merchant payables, were carried at cost on our unaudited

11


 

condensed consolidated balance sheets, which approximates their fair values because of the short-term nature of these items. Accounts receivable, including contract assets, as described below, as well as certain other financial assets, are measured at amortized cost and are carried at cost less an allowance for expected credit losses on our unaudited condensed consolidated balance sheets to present the net amount expected to be collected.

Accounts Receivable, net

The following table provides information about the opening and closing balances of accounts receivable, including contract assets, net of allowance for expected credit losses, from contracts with customers as of the dates presented:

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(in millions)

 

Accounts receivable

 

 

223

 

 

 

177

 

Contract assets

 

 

25

 

 

 

15

 

  Total

 

$

248

 

 

$

192

 

Accounts receivable are recognized when the right to consideration becomes unconditional, and are recorded net of an allowance for expected credit losses. We record accounts receivable at the invoiced amount. Our customer invoices are generally due from customers 30 days from the time of invoicing. Contract assets are rights to consideration in exchange for services that we have transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. The difference between the opening and closing balances of our contract assets primarily results from the timing difference between when we satisfy our performance obligations and the time when the principal completes the service in the transaction. There were no significant changes in contract assets during the periods ended March 31, 2024 and December 31, 2023 related to business combinations, impairments, cumulative catch-ups or other material adjustments.

Fair Value of Long-Term Debt

The following table shows the aggregate principal and fair value amount of the 2025 Senior Notes and 2026 Senior Notes as of the dates presented, which are classified as long-term debt on our unaudited condensed consolidated balance sheets and are considered Level 2 fair value measurements. Refer to “Note 6: Debt” for additional information on the 2025 Senior Notes and 2026 Senior Notes.

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(in millions)

 

 2025 Senior Notes

 

 

 

 

 

 

   Aggregate principal amount

 

$

500

 

 

$

500

 

   Carrying value amount (1)

 

 

497

 

 

 

497

 

   Fair value amount (2)

 

 

502

 

 

 

502

 

 

 

 

 

 

 

 

 2026 Senior Notes

 

 

 

 

 

 

   Aggregate principal amount

 

$

345

 

 

$

345

 

   Carrying value amount (3)

 

 

343

 

 

 

342

 

   Fair value amount (2)

 

 

323

 

 

 

304

 

(1)
Net of $3 million of unamortized debt issuance costs as of both March 31, 2024 and December 31, 2023.
(2)
We estimate the fair value of the 2025 Senior Notes and 2026 Senior Notes based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source.
(3)
Net of $2 million and $3 million of unamortized debt issuance costs as of March 31, 2024 and December 31, 2023, respectively.

The Company did not have any assets or liabilities measured at fair value on a recurring basis using Level 3 unobservable inputs as of March 31, 2024 and December 31, 2023.

12


 

Risks and Concentrations

Our business is subject to certain financial risks and concentrations, including concentration related to dependence on our relationships with our customers. For the year ended December 31, 2023, our two most significant travel partners, Expedia Group, Inc. (and its subsidiaries) and Booking Holdings, Inc. (and its subsidiaries), each accounted for 10% or more of our consolidated revenue and together accounted for approximately 25% of our consolidated revenue, with nearly all of this revenue concentrated in our Brand Tripadvisor segment.

Financial instruments, which potentially subject us to concentration of credit risk, generally consist, at any point in time, of cash and cash equivalents, corporate debt securities, forward contracts, capped calls, and accounts receivable. We maintain cash balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits in the U.S. and similar government programs outside the U.S. Our cash and cash equivalents are generally composed of available on demand bank deposits or term deposits with several major global financial institutions, as well as money market funds, primarily denominated in U.S. dollars, and to a lesser extent Euros, British pounds, and Australian dollars. We may invest in highly-rated corporate debt securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. Our credit risk related to corporate debt securities is also mitigated by the relatively short maturity period required by our investment policy. Forward contracts and capped calls are transacted with major international financial institutions with high credit standings. Forward contracts, which, to date, have typically had maturities of less than 90 days, also mitigate risk. Our overall credit risk related to accounts receivable is mitigated by the relatively short collection period.

Assets Measured at Fair Value on a Non-recurring Basis

Non-Marketable Investments

Equity Securities Accounted for under the Equity Method

The Company owns a 40% equity investment in Chelsea Investment Holding Company PTE Ltd, which is majority owned by Ctrip Investment Holding Ltd, a majority-owned subsidiary of Trip.com Group Limited. The Company accounts for this minority investment under the equity method, given it has the ability to exercise significant influence, but not control, over the investee. The carrying value of this minority investment was $30 million as of both March 31, 2024 and December 31, 2023, and is included in non-marketable investments on our unaudited condensed consolidated balance sheets. During the three months ended March 31, 2024, our share of the investee’s net loss in other income (expenses), net within the unaudited condensed consolidated statement of operations was not material, while we recognized a $1 million net loss during the three months ended March 31, 2023. The Company evaluates this investment for impairment when factors indicate that a decline in the value of its investment has occurred and the carrying amount of its investment may not be recoverable. An impairment loss, based on the excess of the carrying value over the estimated fair value of the investment based on Level 3 inputs, is recognized in earnings when an impairment is deemed to be other than temporary. During both the three months ended March 31, 2024 and 2023, we did not record any impairment loss on this equity investment.

The Company maintains various commercial agreements with Chelsea Investment Holding Company PTE Ltd. and/or its subsidiaries. Transactions under these agreements are considered related-party transactions, and were not material during each of the three months ended March 31, 2024 and 2023.

Other Long-Term Assets

The Company holds collateralized notes (the “Notes Receivable”) issued by a privately held company with a total principal amount of $20 million. The Company has classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50% due in eight years and remaining 50% due in 10 years from issuance date of June 2020, or the date on which there is a change of control, whichever is earlier. As of both March 31, 2024 and December 31, 2023, the carrying value of the Notes Receivable was $9 million, net of accumulated allowance for credit losses, and is classified in other long-term assets, net on our unaudited condensed consolidated balance sheets at amortized cost. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether the Notes Receivable are impaired and monitor for changes to our allowance for credit losses.

Other non-financial assets, such as property and equipment, goodwill, intangible assets, and operating lease right-of-use assets are adjusted to fair value when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements, if necessary, are based predominately on Level 3 inputs.

13


 

NOTE 5: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following as of the dates presented:

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(in millions)

 

Accrued salary, bonus, and other employee-related benefits

 

$

50

 

 

$

70

 

Accrued marketing costs

 

 

73

 

 

 

67

 

Interest payable (1)

 

 

8

 

 

 

17

 

Finance lease liability - current portion

 

 

6

 

 

 

6

 

Operating lease liabilities - current portion

 

 

8

 

 

 

10

 

Restructuring and other related reorganization costs (2)

 

 

8

 

 

 

13

 

Non-income taxes payable (3)

 

 

17

 

 

 

16

 

Accrued legal contingencies (4)

 

 

10

 

 

 

 

Other

 

 

56

 

 

 

53

 

Total

 

$

236

 

 

$

252

 

(1)
Amount relates primarily to unpaid interest accrued on the 2025 Senior Notes. Refer to “Note 6: Debt” for further information.
(2)
During the third quarter of 2023, the Company approved and subsequently initiated a set of actions across its businesses in order to reduce its cost structure, improve operational efficiencies, and realign its workforce with its strategic initiatives. These actions taken by the Company resulted in reduced global headcount. As a result, the Company incurred estimated pre-tax restructuring and other related reorganization costs of $22 million during the year ended December 31, 2023, consisting primarily of employee severance and related benefits. We expect the majority of remaining unpaid costs as of March 31, 2024 to be disbursed during 2024.

 

The following table summarizes our restructuring and other related reorganization costs for the three months ended March 31, 2024:

 

 

 

Carrying Value

 

 

 

(in millions)

 

Accrued liability as of December 31, 2023

 

$

13

 

Charges

 

 

1

 

Payments

 

 

(6

)

Accrued liability as of March 31, 2024

 

$

8

 

(3)
Amount relates primarily to digital service taxes.
(4)
Refer to “Note 9: Commitments and Contingencies” for further information.

 

NOTE 6: DEBT

The Company’s outstanding debt consisted of the following as of the dates presented:

March 31, 2024

 

Outstanding Principal Amount

 

 

Unamortized Debt Issuance Costs

 

 

Carrying Value

 

(in millions)

 

Long-Term Debt:

 

 

 

 

 

 

 

 

 

7% 2025 Senior Notes due 2025

 

$

500

 

 

$

(3

)

 

$

497

 

0.25% Convertible 2026 Senior Notes due 2026

 

 

345

 

 

 

(2

)

 

 

343

 

Total Long-Term Debt

 

$

845

 

 

$

(5

)

 

$

840

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

Outstanding Principal Amount

 

 

Unamortized Debt Issuance Costs

 

 

Carrying Value

 

(in millions)

 

Long-Term Debt:

 

 

 

 

 

 

 

 

 

7% 2025 Senior Notes due 2025

 

$

500

 

 

$

(3

)

 

$

497

 

0.25% Convertible 2026 Senior Notes due 2026

 

 

345

 

 

 

(3

)

 

 

342

 

Total Long-Term Debt

 

$

845

 

 

$

(6

)

 

$

839

 

Credit Facility

We are party to a credit agreement with a group of lenders initially entered into in June 2015 and, most recently, amended and restated in June 2023, which, among other things, provides for a $500 million secured revolving credit facility (the “Credit Facility”). The Credit Facility has a maturity date of June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date

14


 

in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $200 million or more, then the maturity date will be such business day).

As of March 31, 2024 and December 31, 2023, we had no outstanding borrowings under the Credit Facility. The Credit Facility also includes $15 million of borrowing capacity available for letters of credit and $40 million for swing-line borrowings on same-day notice. As of March 31, 2024 and December 31, 2023, we had issued $3 million and $4 million, respectively, of undrawn standby letters of credit under the Credit Facility. For the three months ended March 31, 2024 and 2023, total interest expense and commitment fees on our Credit Facility was not material. The Credit Agreement, among other things, requires us to maintain a maximum total net leverage ratio of 4.5 to 1.0 and contains certain customary affirmative and negative covenants and events of default, including a change of control.

2025 Senior Notes

As of March 31, 2024 and December 31, 2023, unpaid interest on the 2025 Senior Notes of $7 million and $16 million, respectively, was included in accrued expenses and other current liabilities on our unaudited condensed consolidated balance sheets, and $