TripAdvisor Reports Third Quarter 2020 Financial Results

Tripadvisor Reports Third Quarter 2021 Financial Results

NEEDHAM, MA, November 8, 2021 - Tripadvisor, Inc. (NASDAQ: TRIP) today announced financial results for the third quarter ended September 30, 2021.

"We are pleased to see a continued pick-up in consumer travel demand as borders open and vaccinations are more widely administered," said Chief Executive Officer Steve Kaufer. "We are seeing this benefit in our results-revenue increased to $303 million, reflecting sequential growth of 29% and year over year growth of 101%, with strong performance from all segments. In addition to macro tailwinds, we believe that our customer experience, expansive reach, product offerings, and position in the market will drive sustained growth and strong customer loyalty. We are very excited about the progress we are making in our key initiatives with a focus on the long-term, even as we remain cautiously optimistic about near-term travel trends."

Chief Financial Officer Ernst Teunissen added, "We drove continued improvements in our revenue, net income, and adjusted EBITDA. During the third quarter, as a result of our commitment to maintaining a more disciplined cost base, we achieved positive net income, while adjusted EBITDA increased to $72 million expanding our margin to 24%. In addition to the impact increasing consumer travel had on our financial profile, we are equally as pleased to see the continued efforts our teams have made to deliver on key initiatives designed to drive future growth."

Third Quarter 2021 Summary

		Three months ended September 30,
(In millions, except percentages and per share amounts)	2021				2020		% Change
Total Revenue	$		303		$	151		101%
Hotels, Media & Platform	$		172		$	80		115%
Experiences & Dining	$		114		$	53		115%
Other	$		17		$	18		(6)%
GAAP Net Income (Loss)	$		1		$	(48)	n.m.
Total Adjusted EBITDA (1)	$		72		$	15		380%
Hotels, Media & Platform	$		51		$	4		1175%
Experiences & Dining	$		10		$	1		900%
Other	$		11		$	10		10%
Non-GAAP Net Income (Loss) (1)	$		23		$	(23)		n.m.
Diluted Earnings (Loss) per Share:
GAAP	$		0.01		$	(0.36)	n.m.
Non-GAAP(1)	$		0.16		$	(0.17)		n.m.
Cash flow used in operating activities	$		(64)		$	(31)		106%
Free cash flow (1)	$		(79)	$	(42)	88%

n.m. = not meaningful

1. "Total Adjusted EBITDA", "Total Adjusted EBITDA margin", "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.

1

Monthly unique users - During the third quarter of 2021, average monthly unique users on Tripadvisor-branded websites increased to approximately 76% of 2019's comparable period, in comparison to approximately 70% and 55% of 2019's comparable periods during the second and first quarters of 2021, respectively. This was driven by vaccine progress, various government restrictions being gradually lifted, albeit unevenly, and consumer travel demand's improving recovery.

Revenue - Q3 2021 total revenue of $303 million increased 101% year-over-year and was approximately 71% of the comparable period in 2019 (pre-COVID-19 timeframe), which showed improvement versus Q2 2021.

Cost performance - Total operating expenses were $287 million, up 46% year-over-year, increasing in all categories and primarily driven by the following:

• Cost of revenue was $23 million, up 77% year-over-year, primarily due to increased direct costs from credit card payment and other revenue-related transaction costs in correlation with the increase in revenue.
• Selling and marketing costs were $148 million, up 111% year-over-year, due to an increase in our SEM and other online traffic acquisition spend generally across all our segments and businesses in response to increasing consumer travel demand as travel and leisure activity restrictions ease and the travel sector recovers.
• Technology and content costs were $52 million, up 13% year-over-year.
• General and administrative costs were $37 million, up 6% year-over-year.

Profitability - Q3 2021 consolidated net income of $1 million, improved from the net losses in Q2 2021 and Q3 2020, primarily driven by an increase in revenue. This was partially offset by an increase in selling and marketing expenses in response to increasing consumer travel demand as travel and leisure activity restrictions eased during the quarter. Q3 2021 adjusted EBITDA of $72 million, was higher than Q2 2021 and Q3 2020, primarily driven by the factors noted above.

Cash & Liquidity - As of September 30, 2021, the Company had $682 million of cash and cash equivalents, an increase of $264 million from December 31, 2020.

Third Quarter 2021 Revenue by Source

		Three months ended September 30,
(In millions, except percentages)		2021				2020	% Change
Hotels, Media & Platform
Tripadvisor-branded hotels	$	143	$	67	113%
Tripadvisor-branded display and platform		29				13	123%
Experiences & Dining		114				53	115%
Other		17				18	(6)%
Total Revenue	$	303	$	151	101%

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, November 9, 2021, at 8:30 a.m., Eastern Time, to discuss the Company's third quarter 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 [phone]). 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 9957637) until November 16, 2021 and the webcast will be accessible at http://ir.tripadvisor.com/events-and-presentationsfor at least twelve months following the conference call.

2

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 988 million 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, September 2021
• Source: Tripadvisor internal log files

3

Tripadvisor, Inc.

SELECTED FINANCIAL INFORMATION

Unaudited Condensed Consolidated Statements of Operations

(in millions, except per share amounts)

		Three Months Ended					Nine Months Ended
	September 30,		September 30,	September 30,		September 30,
	2021			2020					2021		2020
Revenue	$		303			$	151			$	661			$	488
Costs and expenses:
Cost of revenue (1)			23				13				54				42
Selling and marketing (1)			148				70				343				249
Technology and content (1)			52				46				161				166
General and administrative (1)			37				35				121				129
Depreciation and amortization			27				30				85				94
Impairment of goodwill			-				3				-				3
Restructuring and other related reorganization costs			-			-		-			42
Total costs and expenses			287				197				764				725
Operating income (loss)			16				(46)			(103)			(237)
Other income (expense):
Interest expense			(12)			(13)			(34)			(22)
Interest income			-				1				1				3
Other income (expense), net			(1)			-		(2)			(9)
Total other income (expense), net			(13)				(12)				(35)				(28)
Income (loss) before income taxes			3				(58)			(138)			(265)
(Provision) benefit for income taxes			(2)			10				19				48
Net income (loss)	$		1			$	(48)		$	(119)	$	(217)
Earnings (loss) per share attributable to common stockholders:
Basic	$		0.01			$	(0.36)			$	(0.87)			$	(1.61)
Diluted	$		0.01		$	(0.36)		$	(0.87)	$	(1.61)
Weighted average common shares outstanding:
Basic			138				134				137				135
Diluted			144				134				137				135
(1) Includes stock-based compensation expense as follows:
Cost of revenue	$		-			$	-			$	1			$	1
Selling and marketing	$		4		$	4			$	13		$	12
Technology and content	$		12			$	12			$	35			$	32
General and administrative	$		13		$	12			$	40		$	35

4

Tripadvisor, Inc.

Unaudited Condensed Consolidated Balance Sheets

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

			September 30,			December 31,
			2021				2020
ASSETS
Current assets:
Cash and cash equivalents		$	682			$	418
Accounts receivable and contract assets, net of allowance for credit losses of $32 and $33, respectively			198				83
Income taxes receivable			52				50
Prepaid expenses and other current assets			28				22
Total current assets			960				573
Property and equipment, net of accumulated depreciation of $441 and $386, respectively			220				240
Operating lease right-of-use assets			43				54
Intangible assets, net of accumulated amortization of $215 and $206, respectively			69				86
Goodwill			846				862
Non-marketable investments			38				40
Deferred income taxes, net			37				10
Other long-term assets, net of allowance for credit losses of $5 and $5, respectively			99				104
TOTAL ASSETS		$	2,312			$	1,969
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	22			$	18
Deferred merchant payables			123				36
Deferred revenue			39				28
Accrued expenses and other current liabilities			179				160
Total current liabilities			363				242
Long-term debt			832				491
Finance lease obligation, net of current portion			66				71
Operating lease liabilities, net of current portion			33				46
Deferred income taxes, net			2				10
Other long-term liabilities			222				223
Total Liabilities			1,518				1,083
Stockholders' equity:
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: 144,177,649 and 140,775,221, respectively
Shares outstanding: 125,333,035 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			1,297				1,253
Retained earnings			270				389
Accumulated other comprehensive income (loss)			(51)			(34)
Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively			(722)				(722)
Total Stockholders' Equity			794				886
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,312			$	1,969

5