TripAdvisor : Reports Fourth Quarter 2020 Financial Results

Tripadvisor Reports Fourth Quarter and Full Year 2021 Financial Results

NEEDHAM, MA, February 16, 2022 - Tripadvisor, Inc. (Nasdaq: TRIP) today announced financial results for the fourth quarter and full year ended December 31, 2021.

"The progress we made between the first quarter of the year and the last quarter of the year was remarkable," said Chief Executive Officer Steve Kaufer. "Despite unexpected periods of virus resurgence, the teams continued to execute to our operating plan, and innovate with sights set on the future. Now with over a billion reviews from our customers-driven by their enthusiasm for travel and willingness to share their experiences with the Tripadvisor family-we are more focused than ever on continuing to create value for those on their travel journey."

Chief Financial Officer Ernst Teunissen continued, "Coming out of 2021, we expect significant improvement in the travel market in 2022 due to the expected easing of the pandemic and the significant pent-up demand for travel, especially in the second half of the year. In particular, we expect our Experiences and Dining segment to buoy our overall revenue performance."

Fourth Quarter and Full Year 2021 Summary

		Three Months Ended
		December 31,					Year Ended December 31,
(In millions, except percentages and per share
amounts)		2021			2020		% Change			2021			2020		% Change
Total Revenue	$	241		$	116		108%		$	902		$	604		49%
Hotels, Media & Platform	$	133		$	74		80%		$	549		$	361		52%
Experiences & Dining	$	98		$	36		172%		$	307		$	186		65%
Other	$	10		$	6		67%		$	46		$	57		(19)%
GAAP Net Income (Loss)	$	(29)	$	(73)	(60)%		$	(148)	$	(289)	(49)%
Total Adjusted EBITDA (1)	$	29		$	(33)	n.m.	$	100		$	(51)	n.m.
Hotels, Media & Platform	$	30		$	(12)		n.m.			$	111		$	13		754%
Experiences & Dining	$	(10)	$	(22)	(55)%		$	(36)	$	(79)	(54)%
Other	$	9		$	1		800%		$	25		$	15		67%
Non-GAAP Net Income (Loss) (1)	$	(1)	$	(55)		(98)%		$	(41)		$	(167)		(75)%
Diluted Earnings (Loss) per Share:
GAAP	$	(0.21)	$	(0.54)	(61)%		$	(1.08)	$	(2.14)	(50)%
Non-GAAP(1)	$	(0.01)		$	(0.41)		(98)%		$	(0.30)		$	(1.24)		(76)%
Cash flow provided by (used in)
operating activities	$	65		$	(15	)	n.m.			$	108		$	(194	)	n.m.
Free cash flow (1)	$	51		$	(24)	n.m.	$	54		$	(249)	n.m.

n.m. = not meaningful

1. "Total Adjusted EBITDA", "Non-GAAP Net Income (Loss)", "Non-GAAP Diluted Earnings (Loss) per Share", and "Free cash flow" are non- GAAP measures as defined by the U.S. Securities and Exchange Commission (the "SEC"). Please refer to "Non-GAAP Financial Measures" below for definitions and explanations of these non-GAAP financial measures, as well as tabular reconciliations to the most directly comparable GAAP financial measures.

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Monthly unique users - During the fourth quarter of 2021, average monthly unique users on Tripadvisor-branded websites, a leading indicator of consumer travel demand, were approximately 73% of 2019's comparable period despite impact late in the quarter from the Omicron variant, in comparison to approximately 55%, 70% and 76% of 2019's comparable periods during the first, second an d third quarters of 2021, respectively. Improvement during 2021 was driven by vaccine progress, various government restrictions being gradually lifted, albeit unevenly, and consumer travel demand's improving recovery.

Revenue - Q4 2021 total revenue of $241 million increased 108% year-over-year and was approximately 72% of the comparable period in 2019 (pre-COVID-19 timeframe), as compared to 71% of the comparable period in 2019 in Q3 2021. For the full year 2021, revenue increased 49% year-over-year to $902 million.

Cost performance - Total operating expenses were $269 million for the fourth quarter, an increase of 29% year-over-year, and approximately $1.0 billion for full year 2021, an increase of 11% year-over-year, primarily driven by the following:

• Cost of revenue was $20 million for the fourth quarter, an increase of 54% year-over-year, and $74 million for the full year 2021, an increase of 35% year-over-year, primarily due to increased direct costs from credit card payment and other revenue-related transaction costs in our Experiences and Dining segment in correlation with the increase in revenue.
• Selling and marketing costs were $126 million for the fourth quarter, an increase of 91% year-over-year, and $469 million for the full year 2021, an increase of 48% year-over-year, primarily due to an increase in our SEM and other online traffic acquisition spend in our Hotels, Media & Platform and Experiences & Dining segments in response to increasing consumer travel demand as travel and leisure activity restrictions ease and the travel sector recovers.
• Technology and content costs were $51 million for the fourth quarter, a decrease of 7% year-over-year, and $212 million for the full year 2021, a decrease of 4% year-over-year.
• General and administrative costs were $46 million for the fourth quarter, an increase of 5% year-over-year, and $167 million for the full year 2021, a decrease of 3% year-over-year.

Profitability - Q4 2021 and full year 2021 consolidated net losses of $29 million and $148 million, respectively, improved from net losses in Q4 2020 and full year 2020, primarily driven by an increase in revenue, restructuring costs incurred of $41 million in the full year 2020, which did not reoccur during the full year 2021, and decreased personnel and overhead costs across our business as a result of a reduction in headcount driven by cost-reduction measures across our business implemented during 2020 in response to COVID-

19. In addition, during Q4 2021, we recorded a $15 million income tax benefit related to the partial release of a valuation allowance on our U.K. subsidiary's interest carryforward deferred tax asset. This was partially offset, primarily by an increase in selling and marketing expenses in response to increasing consumer travel demand as travel and leisure activity restrictions eased during these periods and the travel sector recovers. Q4 2021 and full year 2021 Adjusted EBITDA of $29 million and $100 million, respectively, improved from the Adjusted EBITDA losses in Q4 2020 and full year 2020, primarily driven by an increase in revenue and cost- reduction measures implemented in 2020 in response to COVID-19, partially offset by an increase in selling and marketing expenses, all of which are discussed above.

Cash & Liquidity - As of December 31, 2021, the Company had $723 million of cash and cash equivalents, an increase of $305 million from December 31, 2020, driven primarily by the issuance of our 2026 Senior Notes during the year.

Fourth Quarter and Full Year 2021 Revenue by Source

	Three Months Ended December
		31,							Year Ended December 31,
(In millions, except percentages)		2021				2020		% Change		2021				2020		% Change
Revenue by Source:
Hotels, Media & Platform
Tripadvisor-branded hotels	$	105			$	57		84%		$	452			$	292		55%
Tripadvisor-branded display and
platform		28				17	65%			97				69	41%
Experiences & Dining		98				36		172%			307				186		65%
Other		10				6	67%			46				57	(19)%
Total Revenue	$	241			$	116		108%		$	902			$	604		49%

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Conference Call

Tripadvisor posted prepared remarks and supplemental financial information on the Investor Relations section of Tripadvisor's website at http://ir.tripadvisor.com. Tripadvisor will host a conference call tomorrow, February 17, 2022, at 8:30 a.m., Eastern Time, to discuss the Company's fourth quarter and full year 2021 operating results, as well as forward-looking information about Tripadvisor's business. Domestic callers may access the earnings conference call by dialing [phone] (International callers, dial

1. 357-2223).Investors and other interested parties may also go to the Investor Relations section of Tripadvisor's website at http://ir.tripadvisor.comfor a live webcast of the conference call. Please access the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the conference call will be available on Tripadvisor's website noted above or by phone (dial [phone] and enter the passcode 6648519) until February 24, 2022 and the webcast will be accessible at http://ir.tripadvisor.com/events-and-presentationsfor at least twelve months following the conference call.

About Tripadvisor

Tripadvisor, the world's largest travel guidance platform*, helps hundreds of millions of people each month** become better travelers, from planning to booking to taking a trip. Travelers across the globe use the Tripadvisor site and app to discover where to stay, what to do and where to eat based on guidance from those who have been there before. With more than 1 billion reviews and opinions of nearly 8 million businesses, travelers turn to Tripadvisor to find deals on accommodations, book experiences, reserve tables at delicious restaurants and discover great places nearby. As a travel guidance company available in 43 markets and 22 languages, Tripadvisor makes planning easy no matter the trip type.

The subsidiaries of Tripadvisor, Inc. (Nasdaq:TRIP), own and operate a portfolio of travel media brands and businesses, operating under various websites and apps, including the following websites: www.bokun.io, www.cruisecritic.com, www.flipkey.com, www.thefork.com, www.helloreco.com, www.holidaylettings.co.uk, www.housetrip.com, www.jetsetter.com, www.niumba.com,www.seatguru.com, www.singleplatform.com, www.vacationhomerentals.com, and www.viator.com.

• Source: SimilarWeb, unique users de-duplicated monthly, January 2022
• Source: Tripadvisor internal log files

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Tripadvisor, Inc.

SELECTED FINANCIAL INFORMATION

Unaudited Condensed Consolidated Statements of Operations

(in millions, except per share amounts)

			Three months ended			Year Ended
			December 31,			December 31,		December 31,			December 31,
			2021					2020			2021				2020
Revenue		$	241				$	116		$	902			$	604
Costs and expenses:
Cost of revenue (1)		20					13			74				55
Selling and marketing (1)			126					66			469				316
Technology and content (1)		51					55			212				220
General and administrative (1)			46					44			167				173
Depreciation and amortization		26					31			111				125
Impairment of goodwill			-					-			-				3
Restructuring and other related reorganization costs		-			(1)		-			41
Total costs and expenses			269					208			1,033				933
Operating income (loss)		(28)			(92)		(131)			(329)
Other income (expense):
Interest expense		(11)			(14)		(45)			(35)
Interest income			-					-			1				3
Other income (expense), net		(8)			2			(10)			(8)
Total other income (expense), net			(19)					(12)			(54)				(40)
Income (loss) before income taxes		(47)			(104)		(185)			(369)
(Provision) benefit for income taxes			18					31			37				80
Net income (loss)	$	(29)	$	(73)	$	(148)	$	(289)
Earnings (loss) per share attributable to common
stockholders:
Basic		$	(0.21)				$	(0.54)		$	(1.08)			$	(2.14)
Diluted	$	(0.21)	$	(0.54)	$	(1.08)	$	(2.14)
Weighted average common shares outstanding:
Basic		138					135			137				135
Diluted			138					135			137				135
(1) Includes stock-based compensation expense as follows:
Cost of revenue		$	-				$	-		$	1			$	1
Selling and marketing	$	3			$	4		$	16		$	16
Technology and content		$	11				$	12		$	46			$	44
General and administrative	$	17			$	13		$	57		$	48

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Tripadvisor, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in millions, except number of shares and per share amounts)

			December 31,			December 31,
			2021				2020
ASSETS
Current assets:
Cash and cash equivalents		$	723			$	418
Accounts receivable and contract assets, net of allowance for credit losses of $28 and $33,			142				83
respectively
Income taxes receivable			49				50
Prepaid expenses and other current assets			26				22
Total current assets			940				573
Property and equipment, net of accumulated depreciation of $460 and $386, respectively			215				240
Operating lease right-of-use assets			42				54
Intangible assets, net of accumulated amortization of $202 and $206, respectively			65				86
Goodwill			843				862
Non-marketable investments			36				40
Deferred income taxes, net			54				10
Other long-term assets, net of allowance for credit losses of $10 and $5, respectively			94				104
TOTAL ASSETS		$	2,289			$	1,969
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	27		$	18
Deferred merchant payables			113				36
Deferred revenue			36				28
Accrued expenses and other current liabilities			181				160
Total current liabilities			357				242
Long-term debt			833				491
Finance lease obligation, net of current portion			65				71
Operating lease liabilities, net of current portion			29				46
Deferred income taxes, net			1				10
Other long-term liabilities			215				223
Total Liabilities			1,500				1,083
Stockholders' equity:
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: 144,656,649 and 140,775,221, respectively
Shares outstanding: 125,812,035 and 121,930,607, 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			1,326				1,253
Retained earnings			241				389
Accumulated other comprehensive income (loss)			(56)				(34)
Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively			(722)			(722)
Total Stockholders' Equity			789				886
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,289		$	1,969

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