Exhibit 99.2
trivago N.V.
Unaudited Condensed Consolidated Interim Financial Statements as of September 30, 2023
1
trivago N.V.
Condensed consolidated statements of operations (€ thousands, except per share amounts, unaudited)
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Revenue | € | 105,201 | € | 122,747 | € | 251,324 | € | 294,224 | |||
Revenue from related party | 52,661 | 60,955 | 142,010 | 135,891 | |||||||
Total revenue | 157,862 | 183,702 | 393,334 | 430,115 | |||||||
Costs and expenses: | |||||||||||
Cost of revenue, including related party, excluding | 3,080 | 3,236 | 9,223 | 9,199 | |||||||
amortization (1) | |||||||||||
Selling and marketing, including related party (1)(2)(3) | 121,684 | 128,799 | 281,914 | 280,491 | |||||||
Technology and content, including related party (1)(2)(3) | 12,011 | 13,453 | 36,877 | 42,500 | |||||||
General and administrative, including related party (1)(2)(3) | 9,251 | 11,121 | 30,090 | 51,202 | |||||||
Amortization of intangible assets (2) | 34 | 34 | 101 | 102 | |||||||
Impairment of intangible assets and goodwill | 196,127 | 100,465 | 196,127 | 184,642 | |||||||
Operating loss | (184,325) | (73,406) | (160,998) | (138,021) | |||||||
Other income/(expense) | |||||||||||
Interest expense | (3) | (11) | (7) | (46) | |||||||
Interest income | 1,837 | 86 | 4,126 | 215 | |||||||
Other, net | (123) | 329 | (337) | 684 | |||||||
Total other income, net | 1,711 | 404 | 3,782 | 853 | |||||||
Loss before income taxes | (182,614) | (73,002) | (157,216) | (137,168) | |||||||
Expense/(benefit) for income taxes | (35) | (6,124) | 9,581 | 158 | |||||||
Loss before equity method investment | (182,579) | (66,878) | (166,797) | (137,326) | |||||||
Loss from equity method investment | (55) | (259) | (173) | (313) | |||||||
Net loss | € | (182,634) | € | (67,137) | € | (166,970) | € | (137,639) | |||
Earnings per share available to common stockholders: | |||||||||||
Basic | € | (0.53) | € | (0.19) | € | (0.49) | € | (0.38) | |||
Diluted | (0.53) | (0.19) | (0.49) | (0.38) | |||||||
Shares used in computing earnings per share: | |||||||||||
Basic | 343,806 | 360,609 | 343,919 | 359,964 | |||||||
Diluted | 343,806 | 360,609 | 343,919 | 359,964 |
2
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
(1) Includes share-based compensation as follows: | |||||||||||
Cost of revenue | € | 37 | € | 48 | € | 108 | € | 150 | |||
Selling and marketing | 135 | 161 | 327 | 592 | |||||||
Technology and content | 541 | 687 | 1,327 | 2,314 | |||||||
General and administrative | 2,380 | 4,044 | 6,469 | 8,682 | |||||||
(2) Includes amortization as follows: | |||||||||||
Amortization of internal use software costs included in | € | - | € | - | € | - | € | 8 | |||
selling and marketing | |||||||||||
Amortization of internal use software and website | 789 | 1,042 | 2,280 | 3,204 | |||||||
development costs included in technology and content | |||||||||||
Amortization of internal use software costs included in | - | 1 | - | 104 | |||||||
general and administrative | |||||||||||
Amortization of acquired technology included in | 34 | 34 | 101 | 102 | |||||||
amortization of intangible assets | |||||||||||
(3) Includes related party expense as follows: | |||||||||||
Selling and marketing | € | 20 | € | 7 | € | 68 | € | 93 | |||
Technology and content | 397 | 51 | 1,211 | 112 | |||||||
General and administrative | - | - | 24 | 1 |
See accompanying notes
3
trivago N.V.
Condensed consolidated statements of comprehensive income/(loss)
(€ thousands, unaudited)
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Net loss | € (182,634) | € | (67,137) | € (166,970) | € (137,639) | |||
Other comprehensive income: | ||||||||
Currency translation adjustments | 4 | 24 | 7 | 52 | ||||
Total other comprehensive income | 4 | 24 | 7 | 52 | ||||
Comprehensive income/(loss) | € (182,630) | € | (67,113) | € (166,963) | € (137,587) | |||
See accompanying notes
4
trivago N.V.
Condensed consolidated balance sheets
(€ thousands, except share and per share data, unaudited)
As of | As of | ||||
September 30, | |||||
ASSETS | December 31, 2022 | ||||
2023 | |||||
Current assets: | |||||
Cash and cash equivalents | € | 298,957 | € | 248,584 | |
Restricted cash | 342 | 342 | |||
Accounts receivable, net of allowance for credit losses of €1,236 and €418 | 36,501 | 25,679 | |||
at September 30, 2023 and December 31, 2022, respectively | |||||
Accounts receivable, related party | 31,162 | 24,432 | |||
Short-term investments | - | 45,000 | |||
Tax receivable | 2,551 | 498 | |||
Prepaid expenses and other current assets | 10,788 | 8,669 | |||
Total current assets | 380,301 | 353,204 | |||
Property and equipment, net | 10,287 | 13,075 | |||
Operating lease right-of-use assets | 42,862 | 45,028 | |||
Investments and other assets | 9,673 | 8,409 | |||
Intangible assets, net | 75,649 | 89,949 | |||
Goodwill | - | 181,927 | |||
TOTAL ASSETS | € | 518,772 | € | 691,592 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | € | 26,874 | € | 19,941 | |
Income taxes payable | 3,926 | 12,325 | |||
Deferred revenue | 1,273 | 1,689 | |||
Payroll liabilities | 2,505 | 2,454 | |||
Accrued expenses and other current liabilities | 10,028 | 8,675 | |||
Operating lease liability | 2,282 | 4,538 | |||
Dividend payable | 57,914 | - | |||
Dividend payable, related party | 126,467 | - | |||
Total current liabilities | 231,269 | 49,622 | |||
Operating lease liability | 39,016 | 40,729 | |||
Deferred income taxes | 25,421 | 30,050 | |||
Other long-term liabilities | 8,882 | 9,455 | |||
Stockholders' equity: | |||||
Class A common stock, €0.06 par value - 700,000,000 shares authorized, | |||||
Shares issued: 108,750,543 and 124,305,225, respectively | 6,525 | 7,458 | |||
Shares outstanding: 108,750,543 and 104,305,225, respectively | |||||
Class B common stock, €0.60 par value - 320,000,000 shares authorized, | 142,486 | 142,486 | |||
237,476,895 and 237,476,895 shares issued and outstanding, respectively | |||||
Treasury stock at cost - Class A shares, nil and 20,000,000 shares, | - | (19,960) | |||
respectively | |||||
Reserves | 683,131 | 863,987 | |||
Contribution from Parent | 122,307 | 122,307 | |||
Accumulated other comprehensive income | 61 | 54 | |||
Accumulated deficit | (740,326) | (554,596) | |||
Total stockholders' equity | 214,184 | 561,736 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | € | 518,772 | € | 691,592 | |
See accompanying notes
5
trivago N.V.
Condensed consolidated statements of changes in equity
(€ thousands, unaudited)
Class A | Class B | Treasury | Retained | Accumulated | Contribution | Total | |||||||||
stock - Class | earnings | other | |||||||||||||
Three months ended September 30, 2023 | common | common | A common | Reserves | (accumulated | comprehensive | from | stockholders' | |||||||
stock | stock | stock | deficit) | income/(loss) | Parent | equity | |||||||||
Balance at July 1, 2023 | € | 7,672 | € | 142,486 | € | (19,960) € | 865,554 | € | (538,932) | € | 57 | € | 122,307 | € | 579,184 |
Net loss | (182,634) | (182,634) | |||||||||||||
Other comprehensive income (net of tax) | 4 | 4 | |||||||||||||
Share-based compensation expense | 3,093 | 3,093 | |||||||||||||
Issuance of common stock related to exercise | 53 | (9) | 44 | ||||||||||||
of options and vesting of RSUs | |||||||||||||||
Withholding taxes on net share settlements of | (1,126) | (1,126) | |||||||||||||
equity awards |
Treasury stock retirement
Dividend payables
Balance at September 30, 2023
Nine months ended September 30, 2023
Balance at January 1, 2023 Net loss
Other comprehensive income (net of tax) Share-based compensation expense
Issuance of common stock related to exercise of options and vesting of RSUs
Withholding taxes on net share settlements of equity awards
(1,200) | 19,960 | (18,760) | - | |||||||||||||||||||
(184,381) | (184,381) | |||||||||||||||||||||
€ | 6,525 | € | 142,486 | € | - | € | 683,131 | € | (740,326) | € | 61 | € | 122,307 | € | 214,184 | |||||||
Class A | Class B | Treasury | Retained | Accumulated | Contribution | Total | ||||||||||||||||
stock - Class | earnings | other | ||||||||||||||||||||
common | common | A common | Reserves | (accumulated | comprehensive | from | stockholders' | |||||||||||||||
stock | stock | stock | deficit) | income/(loss) | Parent | equity | ||||||||||||||||
€ | 7,458 | € | 142,486 | € | (19,960) | € | 863,987 | € | (554,596) | € | 54 | € | 122,307 | € | 561,736 | |||||||
(166,970) | (166,970) | |||||||||||||||||||||
7 | 7 | |||||||||||||||||||||
8,231 | 8,231 | |||||||||||||||||||||
267 | (42) | 225 | ||||||||||||||||||||
(4,664) | (4,664) |
Treasury stock retirement | (1,200) | 19,960 | (18,760) | - | |||||||||||||||||||
Dividend payables | (184,381) | (184,381) | |||||||||||||||||||||
Balance at September 30, 2023 | € | 6,525 € | 142,486 € | - | € | 683,131 € | (740,326) | € | 61 € | 122,307 € | 214,184 | ||||||||||||
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Three months ended September 30, 2022
Balance at July 1, 2022 Net loss
Other comprehensive income (net of tax) Share-based compensation expense
Issuance of common stock related to exercise of options and vesting of RSUs
Repurchase of common stock
Balance at September 30, 2022
Nine months ended September 30, 2022
Balance at January 1, 2022 Net loss
Other comprehensive income (net of tax) Share-based compensation expense Conversion of Class B shares
Issuance of common stock related to exercise of options and vesting of RSUs
Repurchase of common stock
Balance at September 30, 2022
See accompanying notes
Class A | Class B | Treasury | Retained | Accumulated | Contribution | Total | ||||||||||||||||
stock - Class | earnings | other | ||||||||||||||||||||
common | common | A common | Reserves | (accumulated | comprehensive | from | stockholders' | |||||||||||||||
stock | stock | stock | deficit) | income/(loss) | Parent | equity | ||||||||||||||||
€ | 7,362 | € | 142,486 | € | (23) | € | 855,817 | € | (497,880) | € | 64 | € | 122,307 | € | 630,133 | |||||||
(67,137) | (67,137) | |||||||||||||||||||||
24 | 24 | |||||||||||||||||||||
4,940 | 4,940 | |||||||||||||||||||||
66 | (24) | 42 | ||||||||||||||||||||
(276) | (276) | |||||||||||||||||||||
€ | 7,428 | € | 142,486 | € | (299) | € | 860,733 | € | (565,017) | € | 88 | € | 122,307 | € | 567,726 | |||||||
Class A | Class B | Treasury | Retained | Accumulated | Contribution | Total | ||||||||||||||||
stock - Class | earnings | other | ||||||||||||||||||||
common | common | A common | Reserves | (accumulated | comprehensive | from | stockholders' | |||||||||||||||
stock | stock | stock | deficit) | income/(loss) | Parent | equity | ||||||||||||||||
€ | 5,802 | € | 157,178 | € | - | € | 835,839 | € | (427,378) | € | 36 | € | 122,307 | € | 693,784 | |||||||
(137,639) | (137,639) | |||||||||||||||||||||
52 | 52 | |||||||||||||||||||||
11,738 | 11,738 | |||||||||||||||||||||
1,469 | (14,692) | 13,223 | - | |||||||||||||||||||
157 | (67) | 90 | ||||||||||||||||||||
(299) | (299) | |||||||||||||||||||||
€ | 7,428 | € | 142,486 | € | (299) | € | 860,733 | € | (565,017) | € | 88 | € | 122,307 | € | 567,726 | |||||||
7
trivago N.V.
Condensed consolidated statements of cash flows (€ thousands, unaudited)
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Operating activities: | |||||||||||
Net loss | € | (182,634) | € | (67,137) | € | (166,970) | € | (137,639) | |||
Adjustments to reconcile net loss to net cash provided by: | |||||||||||
Depreciation (property and equipment and internal-use software and website | 1,093 | 1,464 | 3,306 | 4,783 | |||||||
development) | |||||||||||
Amortization of intangible assets | 34 | 34 | 101 | 102 | |||||||
Goodwill and intangible assets impairment loss | 196,127 | 100,465 | 196,127 | 184,642 | |||||||
Impairment of long-lived assets including internal-use software and website development | - | - | - | 893 | |||||||
Share-based compensation | 3,093 | 4,940 | 8,231 | 11,738 | |||||||
Deferred income taxes | (4,580) | (15,419) | (4,629) | (18,988) | |||||||
Foreign exchange (gains)/losses, net | 124 | (326) | 487 | (1,023) | |||||||
Expected credit losses, net | 92 | 66 | 924 | 89 | |||||||
(Gain)/loss on disposal of fixed assets | (3) | 8 | (17) | (2) | |||||||
Loss from equity method investment | 55 | 259 | 173 | 313 | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, including related party | (2,068) | (1,903) | (18,550) | (36,416) | |||||||
Prepaid expenses and other assets | 3,094 | 3,428 | (3,759) | (421) | |||||||
Accounts payable | (6,046) | (10,150) | 6,543 | 15,342 | |||||||
Payroll liabilities | (2,723) | (92) | (176) | 350 | |||||||
Accrued expenses and other liabilities | (262) | 1,192 | 1,475 | 317 | |||||||
Deferred revenue | (50) | 210 | (416) | (196) | |||||||
Taxes payable/receivable, net | (673) | 10,301 | (10,470) | 8,368 | |||||||
Net cash provided by operating activities | 4,673 | 27,340 | 12,380 | 32,252 | |||||||
Investing activities: | |||||||||||
Purchase of investments | - | - | - | (50,000) | |||||||
Proceeds from sales and maturities of investments | 25,000 | - | 45,000 | - | |||||||
Capital expenditures, including internal-use software and website development | (921) | (1,126) | (2,617) | (3,332) | |||||||
Investment in equity-method investees | - | - | - | (5,951) | |||||||
Proceeds from sale of fixed assets | 3 | 3 | 26 | 13 | |||||||
Net cash provided by/(used in) investing activities | 24,082 | (1,123) | 42,409 | (59,270) | |||||||
Financing activities: | |||||||||||
Proceeds from exercise of option awards | 44 | 42 | 225 | 90 | |||||||
Payment of withholding taxes on net share settlements of equity awards | (2,561) | - | (4,363) | - | |||||||
Repayment of other non-current liabilities | (10) | (13) | (36) | (99) | |||||||
Purchases of treasury stock | - | (299) | - | (299) | |||||||
Net cash used in financing activities | (2,527) | (270) | (4,174) | (308) | |||||||
Effect of exchange rate changes on cash | 67 | 988 | (242) | 2,419 | |||||||
Net increase in cash, cash equivalents and restricted cash | 26,295 | 26,935 | 50,373 | (24,907) | |||||||
Cash, cash equivalents and restricted cash at beginning of the period | 273,004 | 204,877 | 248,926 | 256,719 | |||||||
Cash, cash equivalents and restricted cash at end of the period | € | 299,299 | € | 231,812 | € | 299,299 | € | 231,812 | |||
Supplemental cash flow information: | |||||||||||
Cash paid for interest | € | 3 | € | 11 | € | 7 | € | 46 | |||
Cash received for interest | 1,485 | 18 | 3,489 | 127 | |||||||
Cash paid for taxes, net of (refunds) | 5,943 | (1,020) | 25,164 | 4,545 | |||||||
Non-cash investing and financing activities: | |||||||||||
Withholding taxes on net share settlements of equity awards-related liability | 227 | - | 227 | - |
See accompanying notes
8
trivago N.V.
Notes to the condensed consolidated financial statements (unaudited)
Note 1: Organization and basis of presentation
Description of business
trivago N.V., ("trivago" the "Company," "us," "we" and "our") and its subsidiaries offer online meta-search for hotel and accommodation through online travel agencies ("OTAs"), hotel chains and independent hotels. Our search-driven marketplace, delivered on websites and apps, provides users with a tailored search experience via our proprietary matching algorithms. We generally employ a 'cost-per-click' (or "CPC") pricing structure, allowing advertisers to control their own return on investment and the volume of lead traffic we generate for them. Beginning in 2020, we began to offer a 'cost-per-acquisition' (or "CPA") pricing structure, whereby an advertiser pays us a percentage of the booking revenues that ultimately result from a referral.
During 2013, the Expedia Group, Inc. (formerly Expedia, Inc., the "Parent" or "Expedia Group") completed the purchase of a controlling interest in the Company. As of September 30, 2023, Expedia Group's ownership interest and voting interest in trivago N.V. is 60.4% and 84.2%, respectively.
Basis of presentation
We have prepared the accompanying interim unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year.
Certain information and note disclosures normally included in the audited annual consolidated financial statements have been condensed or omitted in accordance with SEC rules. The condensed consolidated balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements as of that date but does not contain all of the footnote disclosures from the annual financial statements. As such, these interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 20-F for the year ended December 31, 2022, previously filed with the Securities and Exchange Commission ("SEC").
Seasonality
We experience seasonal fluctuations in the demand for our services as a result of seasonal patterns in travel. For example, searches and consequently our revenue, are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. Our revenue typically decreases in the fourth quarter. We generally expect to experience higher return on Advertising Spend in the first and fourth quarter of the year as we typically expect to advertise less in the periods outside of high travel seasons. Seasonal fluctuations affecting our revenue also affect the timing of our cash flows. We typically invoice once per month, with customary payment terms. Therefore, our cash flow varies seasonally with a slight delay to our revenue, and is significantly affected by the timing of our advertising spending. Changes in the relative revenue share of our offerings in countries and areas where seasonal travel patterns vary from those described above may influence the typical trend of our seasonal patterns in the future.
Accounting estimates
We use estimates and assumptions in the preparation of our interim unaudited condensed consolidated financial statements in accordance with GAAP. Preparation of the interim unaudited condensed consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets
9
and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses during the periods reported. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our interim unaudited condensed consolidated financial statements include: leases, recoverability of goodwill and indefinite-lived intangible assets, income taxes, and share-based compensation.
Note 2: Significant accounting policies
The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements in our Annual Report on Form 20-F for the year ended December 31, 2022, except as updated below.
Treasury stock
The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders' equity.
Treasury stock is included in authorized and issued shares but is not considered outstanding for share count purposes, therefore is excluded from average common shares outstanding for basic and diluted earnings per share.
Treasury stock is held for the purpose of reissuance under share-based compensation plans or capital reduction (retirement). When treasury stock is reissued any gains are included as part of additional paid- in capital. Losses upon reissuance reduce additional paid-in capital to the extent that previous net gains from the same class of stock have been recognized and any losses above that are recognized as part of retained earnings (accumulated deficit). We use the first-in-first-out purchase cost to determine the cost of the treasury stock that is reissued. If treasury stock is retired, any cost in excess of par value will be recorded to retained earnings (accumulated deficit).
Adoption of new accounting pronouncements
Measurement of Credit Losses on Financial Instruments. As of January 1, 2023, we have prospectively adopted ASU 2022-02which expands certain disclosure requirements for public business entities to include the current-periodgross write-offsby year of origination for financing receivables and net investment in leases. Past due trade receivables written off that originate from prior periods are typically not material. The adoption of this new guidance did not have a material impact to our unaudited condensed consolidated financial statements.
Certain risks and concentration of credit risk
Our business is subject to certain risks and concentrations including dependence on relationships with our advertisers, dependence on third-party technology providers, and exposure to risks associated with online commerce security. Our concentration of credit risk relates to depositors holding our cash and customers with significant accounts receivable balances.
Our customer base includes primarily OTAs, hotel chains and independent hotels. We perform ongoing credit evaluations of our customers and maintain allowances for potential credit losses. We generally do not require collateral or other security from our customers.
Expedia Group, our controlling shareholder, and its affiliates represent 33% and 36% of total revenues for the three and nine months ended September 30, 2023, respectively, compared to 33% and 32%, respectively, in the same periods in 2022. Expedia Group and its affiliates represents 46% and 49% of total accounts receivable as of September 30, 2023 and December 31, 2022, respectively.
Booking Holdings and its affiliates represent 46% and 43% of total revenues for the three and nine months ended September 30, 2023, respectively, compared to 50% and 49%, respectively, in the same periods in 2022. Booking Holdings and its affiliates represent 30% of total accounts receivable as of September 30, 2023 and December 31, 2022.
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trivago NV published this content on 01 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2023 20:44:52 UTC.