Trivago today announced financial results for the fourth quarter and full year of 2019 ended December 31, 2019.
Total revenue decreased by €11.3 million, or by 7%, during the fourth quarter of 2019, compared to the same period in 2018. Total revenue decreased by €76.2 million, or by 8%, during the twelve months ended December 31, 2019, compared to the same period in 2018.
Net income decreased by €7.8 million to €3.1 million in the fourth quarter of 2019 and increased by €38.7 million to €17.2 million in the twelve months ended December 31, 2019, compared to the same periods in 2018.
Adjusted EBITDA decreased by €9.2 million to €18.4 million in the fourth quarter of 2019 mostly due to a provision recognized as a result of the recent judgment in Australia. In the twelve months ended December 31, 2019, Adjusted EBITDA increased by €55.4 million to €70.0 million compared to the same periods in 2018.
• Referral Revenue in Americas increased by 4% in the fourth quarter of 2019, while it declined by 11% and 13% in Developed Europe and Rest of World ("RoW"), respectively, compared to the same period in 2018.
Referral Revenue in the twelve months ended December 31, 2019, decreased to €305.1 million, €347.1 million and €171.5 million, or by 3%, 8% and 16%, in Americas, Developed Europe and RoW, respectively, compared to the same period in 2018.
• Consolidated Revenue per Qualified Referral ("RPQR") increased by 6% and by 17% in the fourth quarter of 2019 and in full year 2019, respectively, compared to the same periods in 2018.
• For the full year 2019, Consolidated Return on Advertising Spend ("ROAS") increased to 133.6% compared to 122.8% in 2018.
In the fourth quarter of 2019, total Qualified Referrals decreased by 12%. In the twelve months ended December 31, 2019, Qualified Referrals decreased by 22%
As of December 31, 2019, Trivago offered access to more than 4.5 million hotels and other types of accommodation in over 190 countries, including over 3.3 million units of alternative accommodation, such as vacation rentals and apartments.
In the fourth quarter of 2019, our revenue share from mobile websites and apps continued to exceed 60%.
Total cash, cash equivalents and restricted cash were €220.5 million as of December 31, 2019, of which €218.2 million were included in current assets and €2.3 million of long-term restricted cash were included in other long-term assets in the balance sheet primarily relating to the new campus building, compared to total cash, cash equivalents and restricted cash of €164.3 million as of December 31, 2018.
Other revenue decreased by 11% to €3.9 million in the fourth quarter of 2019, compared to €4.4 million in the same period in 2018, mainly driven by a decrease in subscription revenue. In the twelve months ended December 31, 2019, other revenue remained stable at €15.0 million, compared to the same period in 2018.
Selling and marketing expense was 69% of total revenue in the fourth quarter of 2019, compared to 71% in the same period in 2018. In the fourth quarter of 2019, selling and marketing expenses decreased by €10.6 million, or by 9%, period-over-period to €107.1 million, of which €95.7 million, or 89%, was Advertising Spend.
In the twelve months ended December 31, 2019, selling and marketing expenses decreased by €141.4 million, or by 18%, period-over-period to €664.2 million, of which €616.7 million, or 93%, was Advertising Spend.
Axel Hefer, CEO, said, “I am excited to see how trivago is adapting to a rapidly changing market, and I am confident we are on the right track. In 2020, we are focusing on building the most transparent and usable meta-search product in the market and integrating apartments and restricted rates into the platform. We have accelerated our pace of innovation jointly with our key partners and plan to use that momentum in 2020 to substantially improve our product.”
Matthias Tillmann, CFO, said, “We are pleased to see our sixth-consecutive quarter of profitability and our Adjusted EBITDA grow significantly from €14.6 million in 2018 to €70.0 million in 2019. In the first half of 2020, we are planning to significantly invest into testing new concepts and approaches and we will leverage the derived insights in the second half of 2020 and beyond.”
Looking at 2020, the company do not expect the industry dynamics to change significantly. Google is likely to continue to try to increase its share of total industry profit while large OTAs are likely to continue optimizing their advertising spend and other expenses. However, it believe the positive impact on our business resulting from new entrants, such as Trip.com and Airbnb, will continue but will have a small financial impact on us in 2020.
For 2020, it anticipate a recalibration of our marketing mix, improvement of our profitability in performance marketing channels and a reduction in advertiser concentration through the introduction of alternative revenue streams.
To do so, it will conduct a series of large-scale tests in the first half of 2020, allowing us to fine-tune our strategy and move full steam ahead in the second half of the year. These tests may lead to a double-digit revenue decline in Developed Europe for the first and second quarter of 2020. In addition, it believe that the Wuhan coronavirus outbreak will have a negative impact on our business volumes, in particular on our ROW segment.
As it is very difficult to forecast the future development of the coronavirus outbreak, the results of our tests and even more so to predict the impact of these test results on our advertising spend in the second half or 2020, it will not provide any specific guidance at this time. However, it believe that our Adjusted EBITDA will be positive in the first half of the year, and it continue to aspire to increase our full year Adjusted EBITDA year on year.
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