Trivago announced financial results for the fourth quarter of 2018 ended December 31, 2018.
As of December 31, 2018, Trivago offered access to more than 3.0 million hotels and other types of accommodation including over 1.5 million units of alternative accommodation, such as vacation rentals and private apartments, in over 190 countries.
Financial Highlights
• In the fourth quarter of 2018, Trivago continued on the path of optimizing and recalibrating Advertising Spend and improving the quality of the traffic referred to its advertisers, leading to the second consecutive quarter of double-digit net income.
• Continued focus on profitability resulted in improvements in Return on Advertising Spend ("ROAS") in the fourth quarter of 2018. The reduction in Advertising Spend also resulted in a decline in Referral Revenue and Qualified Referrals as compared to the same period in 2017.
• Consolidated ROAS significantly improved to 162.6% in the fourth quarter of 2018 and to 123.0% in the twelve months ended December 31, 2018, respectively, compared to 118.4% and 115.3% in the same periods in 2017.
• Total Revenue decreased to €166.8 million in the fourth quarter of 2018, compared to €181.5 million in the same period in 2017, representing a decline of 8% period-over-period. Total Revenue decreased to €914.8 million in the twelve months ended December 31, 2018 compared to €1,035.4 million for the same period in 2017, representing a 12% decline year-over-year.
• The number of Qualified Referrals decreased to 112.6 million in the fourth quarter of 2018, or by 19%, compared to 139.3 million in the fourth quarter of 2017. The number of Qualified Referrals decreased to 668.3 million in the twelve months ended December 31, 2018, compared to 727.1 million for the same period in 2017, or by 8% year-over-year.
• Net income in the fourth quarter of 2018 was €11.7 million, compared to a net loss of €9.6 million in the fourth quarter of 2017. Net loss in the twelve months ended December 31, 2018 was €20.8 million, compared to net loss of €13.0 million for the same period in 2017.
• Adjusted EBITDA was €28.6 million in the fourth quarter of 2018, compared to an Adjusted EBITDA loss of €8.7 million in the fourth quarter of 2017. For the twelve months ended December 31, 2018, Adjusted EBITDA was €15.6 million, compared to Adjusted EBITDA of €6.7 million for the same period in 2017.
Trivago expect Adjusted EBITDA for 2019 to be between €50 million and €75 million, and Trivago expect total revenue to decrease in the first half of 2019 and increase in the second half of 2019 compared to same periods in 2018.
Operational Highlights
- Trivago continued to steadily increase the supply of alternative accommodations on the platform as Trivago hit a new milestone of over 1.5 million units of alternative accommodation available as of December 31, 2018. Following year-end, Trivago announced a new integration with RedAwning, which has added 80,000 vacation rentals, condominiums, apart-hotels and townhomes to Trivago's platform.
- Trivago continued to implement measures aimed at optimizing platforms and product, with the intention of increasing user retention and booking conversion, while reducing the number of click-outs required to ultimately make a booking. Trivago believes these relatively small, incremental changes to product have resulted, when considered together, in improvements to product and platforms that continue to positively impact advertisers' CPC bids on marketplace.
- Revenue share from mobile websites and apps continued to exceed 60%.
Rolf Schrömgens, CEO and Founder: "The measures Trivago put in place in the second quarter of 2018 are having a clear positive impact on business. The company's marketplace dynamics remain stable and Trivago are confident that Trivago are on a good track to succeed in 2019. Trivago remain committed to reshaping the way travelers search for and compare hotels, and I am particularly pleased that the levels of alternative accommodation on platform continue to grow at pace. In 2019, Trivago are focused on continuing this positive momentum by integrating more alternative accommodation providers and accelerating the pace of product testing and innovation.”
Referral Revenue in the fourth quarter of 2018 decreased to €53.9 million and €67.2 million, or by 18% and 4% in Americas and Developed Europe, respectively, while Referral Revenue was flat at €41.3 million in RoW, as compared to the same period in 2017.
Other Revenue slightly increased by 2% to €4.4 million in the fourth quarter and remained stable at €15.0 million in the twelve months ended December 31, 2018 compared to the same period in 2017 due to the deconsolidation of myhotelshop in December 2017, that was partly offset by the increase in subscription revenue and other royalties.
Total Cash, cash equivalents and restricted cash were €164.3 million as of December 31, 2018.
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