• Revenue for the second quarter increased to $246.9 million, up 7% quarter-over-quarter and up 25% yearover-year.
• Net income for the second quarter increased 8% quarter-over-quarter and increased 26% year-over-year to $67.0 million, or $0.46 per diluted share. Non-GAAP net income for the second quarter increased 4% quarter-over-quarter and 28% year-over-year to $75.7 million, or $0.52 per diluted share.
• Adjusted EBITDA for the second quarter increased 3% quarter-over-quarter and 16% year-over-year to $112.8 million, or 46% of revenue.
• Cash flow from operations for the second quarter increased 45% year-over-year to $89.6 million, or 36% of revenue; free cash flow for the second quarter increased 35% year-over-year to $75.3 million, or 30% of revenue.
• TripAdvisor repurchased 675,000 common shares for an aggregate purchase price of $42.4 million.
• More than one billion travelers visited TripAdvisor’s website during the first half of the year.
“There was a lot for TripAdvisor fans to be excited about during the second quarter,” said Steve Kaufer, President and CEO of TripAdvisor. “Our strong financial performance was driven by continued traffic growth. We also kicked off our first-ever offline ad campaign to enhance brand awareness. Perhaps most notably, we bid ‘adieu’ to pop-ups and rolled out our new hotel metasearch display, which makes it easier for travelers to find a great hotel as they plan their perfect trip.”
Discussion of Second Quarter 2013 Results
Revenue for the second quarter of 2013 was $246.9 million, an increase of $49.8 million, or 25%, compared to the second quarter of 2012.
• Click-based advertising – Revenue from click-based advertising totaled $182.8 million for the second quarter of 2013, an increase of 21% compared to the second quarter of 2012. Click-based advertising revenue represented 74% of total revenue in the second quarter of 2013, compared to 77% in the second quarter of 2012.
• Display-based advertising – Revenue from display-based advertising totaled $31.4 million for the second quarter of 2013, an increase of 18% compared to the second quarter of 2012. Display-based advertising revenue represented 13% of total revenue in the second quarter of 2013 and 2012, respectively.
• Subscription, transaction and other – Revenue from subscription, transaction and other totaled $32.7 million for the second quarter of 2013, an increase of 68% compared to the second quarter of 2012.
Subscription, transaction and other revenue represented 13% of total revenue in the second quarter of 2013, compared to 10% in the second quarter of 2012.
For the second quarter of 2013, revenue from North America totaled $133.6 million, representing 54% of total revenue. Revenue from the Europe, Middle East and Africa region totaled $73.4 million, representing 30% of total revenue for the second quarter of 2013. For the Asia-Pacific region, revenue totaled $30.0 million, representing 12% of total revenue for the second quarter of 2013. Revenue from the Latin America region totaled $9.9 million, representing 4% of total revenue for the second quarter of 2013. International revenue was 49% of total revenue during the quarter, which was slightly lower than the first quarter of 2013 due to the staggered rollout of hotel metasearch throughout the quarter, and consistent with the second quarter of 2012. Click-based advertising revenue by geography is based on the geographic location of our websites.
Related-party revenue from Expedia totaled $54.3 million for the second quarter of 2013, a decrease of $1.4 million, or 3%, compared to the second quarter of 2012.
GAAP net income for the second quarter of 2013 was $67.0 million, or $0.46 per diluted share, compared to GAAP net income of $53.0 million, or $0.37 per diluted share, for the second quarter of 2012.
Non-GAAP net income for the second quarter of 2013 was $75.7 million, or $0.52 per diluted share, compared to non-GAAP net income of $58.9 million, or $0.41 per diluted share, for the second quarter of 2012.
Adjusted EBITDA for the second quarter of 2013 was $112.8 million, and Adjusted EBITDA margin was 46%, compared to Adjusted EBITDA of $96.9 million and Adjusted EBITDA margin of 49% for the second quarter of 2012.
Cash flow from operating activities for the second quarter of 2013 was $89.6 million, an increase of $27.9million, or 45%, compared to the second quarter of 2012.
As of June 30, 2013, cash and cash equivalents and short and long-term marketable securities were $616.0 million, up $137.7 million since June 30, 2012 and up $30.2 million since December 31, 2012.
During the second quarter of 2013, the Company repurchased 675,000 common shares for an aggregate purchase price of $42.4 million.
As of June 30, 2013, TripAdvisor had 1,799 employees, up from 1,444 employees at June 30, 2012 and 1,632 at March 31, 2013.
In the Company’s earnings release and the related conference call or webcast, the Company may use or discuss non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and free cash flow, which are non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission. Please refer to the section below entitled “Use of non-GAAP Financial Measures” for definitions of
these non-GAAP financial measures and the financial schedules attached to this press release for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
Other Second Quarter 2013 and Recent Business Highlights
• TripAdvisor’s travel community averaged more than 220 million monthly unique visitors for the quarter ended June 30, 2013, according to Google Analytics. At approximately 11% of the world’s monthly unique visitors in online travel, according to comScore, TripAdvisor remains the largest travel website in the world.
• TripAdvisor user-generated content grew at a rate of more than 70 contributions per minute covering more than 725,000 hotels and accommodations, 1.3 million restaurants and 300,000 attractions in more
than 130,000 destinations throughout the world. TripAdvisor syndicates its content to nearly 700 travelrelated partners and TripAdvisor widgets can be found on more than 93,000 sites around the globe.
• TripAdvisor averaged nearly 38 million monthly Facebook visitors to its website and Facebook app during the quarter, and remains the #1 travel app on Facebook, according to AppData. In addition, TripAdvisor grew marketable members more than 80% year-over-year to 53 million, according to company logs.
• TripAdvisor launched hotel metasearch functionality in early June, providing users with inline room pricing and availability.
• TripAdvisor kicked-off its first television ad campaign in the United States, testing ads in Boston, MA, Raleigh, NC, Seattle, WA, Portland, OR, Columbus, OH, and Houston, TX.
• Downloads of TripAdvisor, City Guides and SeatGuru mobile apps doubled year-over-year. Including downloads of Jetsetter and GateGuru, TripAdvisor reached 50 million cumulative downloads and average unique monthly visitors via smartphone and tablet devices grew over 200% year-over-year to approximately 79 million for the quarter ended June 30, 2013, according to company logs.
• In addition to its previously announced Jetsetter, CruiseWise, and Niumba acquisitions, TripAdvisor acquired GateGuru, the leading mobile resource for flight and airport information around the world, complimenting TripAdvisor’s existing Flights product and SeatGuru brand in the air travel ecosystem.
• TripAdvisor introduced Review Express, a free marketing tool that makes it easy for property owners to invite guests to write a review on TripAdvisor.
