EX-99.1 2 ex-99109x30x20248xk.htm EX-99.1 Document

Exhibit 99.1
travellogo11062017a13.jpg
Travelzoo
590 Madison Avenue
35th Floor
New York, NY 10022

Investor Relations:
ir@travelzoo.com

FOR IMMEDIATE RELEASE

Travelzoo Reports Third Quarter 2024 Results

NEW YORK, October 23, 2024 — Travelzoo® (NASDAQ: TZOO):

•Revenue of $20.1 million, down 2% year-over-year
•Consolidated operating profit of $4.0 million
•Non-GAAP consolidated operating profit of $4.9 million
•Cash flow from operations of $5.3 million
•Earnings per share (EPS) of $0.26

Travelzoo, the club for travel enthusiasts, today announced financial results for the third quarter ended September 30, 2024. Consolidated revenue was $20.1 million, down 2% year-over-year. In constant currencies, revenue was $20.0 million. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, and membership fees.

Net income attributable to Travelzoo was $3.2 million for Q3 2024, or $0.26 per share, compared with $0.16 in the prior-year period. Net income attributable to Travelzoo from continuing operations was $3.2 million for Q3 2024, or $0.26 per share, compared with $0.16 in the prior-year period.

Non-GAAP operating profit was $4.9 million. Non-GAAP operating profit excludes amortization of intangibles ($95,000), stock option expenses ($0.5 million) and severance-related expenses ($0.3 million). Please refer to “Non-GAAP Financial Measures” and the tabular reconciliation below.

“We will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more Club Offers for members,” said Holger Bartel, Travelzoo's Global
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CEO. “Travelzoo members are affluent, active, and open to new experiences. We inspire members to travel to places they never imagined they could. Travelzoo is the must-have membership for those who love to travel as much as we do."

Cash Position
As of September 30, 2024, consolidated cash, cash equivalents and restricted cash were $12.1 million. Net cash provided by operations was $5.3 million.

Travelzoo North America
North America business segment revenue decreased 4% year-over-year to $12.8 million. Operating profit for Q3 2024 was $3.2 million, or 25% of revenue, compared to operating profit of $3.0 million in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 1% year-over-year to $6.1 million. In constant currencies, Europe business segment revenue was $5.9 million. Operating profit for Q3 2024 was $1.0 million, or 17% of revenue, compared to operating profit of $267,000 in the prior-year period.

Jack’s Flight Club
Jack’s Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. Revenue from unaffiliated customers increased 11% year-over-year to $1.2 million. The number of premium subscribers increased 14% year-over-year. Jack’s Flight Club’s revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Non-GAAP operating profit for Q3 2024 was $85,000. Non-GAAP operating profit excludes amortization of intangibles ($58,000) related to the acquisition of Travelzoo’s ownership interest in Jack’s Flight Club in 2020.

New Initiatives
New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $33,000. Operating loss for Q3 2024 was $160,000.

In June 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Japan for the exclusive use of Travelzoo’s brand, business model, and members in Japan. In August of 2020, Travelzoo entered into a royalty-bearing licensing agreement with a local licensee in Australia for the exclusive use of Travelzoo’s brand, business models, and members in Australia, New Zealand, and Singapore. Under these arrangements, Travelzoo’s existing members in Australia, Japan, New
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Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Travelzoo recorded $7,000 in licensing revenue from the licensee in Japan in Q3 2024. Travelzoo recorded $10,000 in licensing revenue from the licensee in Australia, New Zealand, and Singapore in Q3 2024. Licensing revenue is expected to increase going forward.

Members and Subscribers
As of September 30, 2024, we had 30.1 million members and subscribers worldwide. In North America, Travelzoo had 15.8 million unduplicated members as of September 30, 2024. In Europe, Travelzoo had 9.1 million unduplicated members as of September 30, 2024. Jack’s Flight Club had 2.1 million subscribers, including premium subscribers, as of September 30, 2024. Comparisons to prior periods are no longer meaningful due to strategic developments of the Travelzoo membership and Jack’s Flight Club premium subscriber acquisition. For Travelzoo, the average activity of members is increasing. For Jack’s Flight Club, the premium subscribers are increasing.

Discontinued Operations
In March 2020, Travelzoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Consequently, the Asia Pacific business has been classified as discontinued operations.

Income Taxes
A provision of $1.1 million for income taxes was recorded for Q3 2024, compared to an income tax expense of $1.0 million in the prior-year period. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its actual tax liability for Q3 2024.

Share Repurchase Program
During Q3 2024, the Company repurchased 552,679 shares of its outstanding common stock.

Looking Ahead
For Q4 2024, we expect growth in revenue year-over-year, albeit at a smaller pace than in 2023. However, there could be unexpected fluctuations. We also expect for Q4 2024 higher profitability year-over-year and quarter-over-quarter. For 2025, we expect substantial growth in revenue as a result of additional revenue from membership fees.

In December 2023, we announced the introduction of a membership fee for Travelzoo beginning January 1, 2024. We recognize membership fee revenue ratably over the subscription period. Legacy Travelzoo members as of December 31, 2023, which represent more than 95% of members, are
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exempt from the fee during 2024. Therefore, we do not anticipate membership fee revenue from these members before 2025.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Travelzoo’s calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today’s earnings conference call, excludes the following items: amortization of intangibles, stock option expenses and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Conference Call
Travelzoo will host a conference call to discuss third quarter 2024 results today at 11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to
•download the management presentation (PDF format) to be discussed in the conference call
•access the webcast


About Travelzoo
We, Travelzoo®, are the club for travel enthusiasts. Our 30 million members receive exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give Travelzoo members access to irresistible deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.
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Travelzoo
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 Three months endedNine months ended
 September 30,September 30,
 2024202320242023
Revenues$20,098 $20,599 $63,224 $63,328 
Cost of revenues2,548 2,665 7,708 8,236 
Gross profit17,550 17,934 55,516 55,092 
Operating expenses:
Sales and marketing8,247 9,840 26,231 29,278 
Product development 594 525 1,763 1,533 
General and administrative4,664 4,460 13,875 13,188 
Total operating expenses13,505 14,825 41,869 43,999 
Operating income 4,045 3,109 13,647 11,093 
Other income, net359 314 674 1,143 
Income from continuing operations before income taxes4,404 3,423 14,321 12,236 
Income tax expense 1,148 1,018 3,920 3,487 
Income from continuing operations3,256 2,405 10,401 8,749 
Loss from discontinued operations, net of tax— (5)— (5)
Net income 3,256 2,400 10,401 8,744 
Net income attributable to non-controlling interest72 52 54 97 
Net income attributable to Travelzoo$3,184 $2,348 $10,347 $8,647 
Net income attributable to Travelzoo—continuing operations$3,184 $2,353 $10,347 $8,652 
Net loss attributable to Travelzoo—discontinued operations$— $(5)$— $(5)
Income per share—basic
Continuing operations$0.26 $0.16 $0.81 $0.57 
Discontinued operations$— $— $— $— 
Net income per share—basic$0.26 $0.16 $0.81 $0.57 
Income per share—diluted
Continuing operations$0.26 $0.16 $0.79 $0.57 
Discontinued operations$— $— $— $— 
Net income per share—diluted$0.26 $0.16 $0.79 $0.56 
Shares used in per share calculation from continuing operations—basic12,176 14,769 12,851 15,242 
Shares used in per share calculation from discontinued operations—basic12,176 14,769 12,851 15,242 
Shares used in per share calculation from continuing operations—diluted12,386 14,821 13,035 15,307 
Shares used in per share calculation from discontinued operations—diluted12,386 14,821 13,035 15,307 
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Travelzoo
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
September 30,
2024		December 31,
2023
Assets
Current assets:
Cash and cash equivalents$11,429 $15,713 
Accounts receivable, net13,167 12,965 
Prepaid income taxes1,132 629 
Prepaid expenses and other1,619 1,461 
Total current assets27,347 30,768 
Deposits and other230 1,115 
Deferred tax assets3,193 3,196 
Restricted cash675 675 
Operating lease right-of-use assets6,080 6,015 
Property and equipment, net470 578 
Intangible assets, net1,591 2,091 
Goodwill10,944 10,944 
Total assets$50,530 $55,382 
Liabilities and Equity
Current liabilities:
Accounts payable$4,984 $4,546 
Merchant payables17,321 20,622 
Accrued expenses and other 4,124 3,658 
Deferred revenue3,854 2,044 
Income tax payable1,450 766 
Operating lease liabilities2,624 2,530 
Liabilities from discontinued operations24 24 
Total current liabilities34,381 34,190 
Long-term tax liabilities7,028 4,681 
Long-term operating lease liabilities6,225 6,717 
Other long-term liabilities376 911 
Total liabilities48,010 46,499 
Common stock119 136 
Tax indemnification(9,537)(9,537)
Note receivable and account receivable from shareholder(1,929)(1,753)
Additional paid-in capital— 439 
Retained earnings 14,195 19,508 
Accumulated other comprehensive loss(5,079)(4,607)
Total Travelzoo stockholders’ equity (deficit)(2,231)4,186 
Non-controlling interest4,751 4,697 
Total stockholder's equity2,520 8,883 
Total liabilities and Equity$50,530 $55,382 
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Travelzoo
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 Three months endedNine months ended
 September 30,September 30,
 2024202320242023
Cash flows from operating activities:
Net income $3,256 $2,400 $10,401 $8,744 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization179 472 737 1,417 
Stock-based compensation457 359 1,240 1,187 
Deferred income tax(12)(73)(39)(111)
Loss on long-lived assets— — — 10 
Net foreign currency effects(154)86 (165)53 
Provision of loss (net recoveries) on accounts receivable and refund reserves128 (115)121 (944)
Changes in operating assets and liabilities:
Accounts receivable127 (571)(258)3,317 
Prepaid income taxes(134)111 (461)1,128 
Prepaid expenses, deposits and other (69)(253)464 2,232 
Accounts payable(284)689 430 (1,704)
Merchant payables431 (153)(3,348)(8,757)
Accrued expenses and other463 197 2,162 574 
Income tax payable315 59 593 293 
Other liabilities628 435 1,381 1,854 
Net cash provided by operating activities5,331 3,643 13,258 9,293 
Cash flows from investing activities:
Proceeds from repayment of note receivable— — — 113 
Purchases of property and equipment(46)(60)(129)(217)
Net cash used in investing activities(46)(60)(129)(104)
Cash flows from financing activities:
Repurchase of common stock(6,183)(6,896)(16,605)(11,766)
Exercise of stock options and taxes paid for net share settlement of equity awards(335)— (592)(299)
Net cash used in financing activities(6,518)(6,896)(17,197)(12,065)
Effect of exchange rate on cash, cash equivalents and restricted cash96 (302)(215)80 
Net decrease in cash, cash equivalents and restricted cash(1,137)(3,615)(4,283)(2,796)
Cash, cash equivalents and restricted cash at beginning of period13,243 20,197 16,389 19,378 
Cash, cash equivalents and restricted cash at end of period$12,106 $16,582 $12,106 $16,582 
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Travelzoo
Segment Information from Continuing Operations
(Unaudited)
(In thousands)
Three months ended September 30, 2024Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$12,846 $6,021 $1,198 $33 $20,098 
Intersegment revenues (24)34 (10)— — 
Total net revenues12,822 6,055 1,188 33 20,098 
Operating profit (loss)$3,150 $1,028 $27 $(160)$4,045 
Three months ended September 30, 2023Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$13,094 $6,397 $1,080 $28 $20,599 
Intersegment revenues314 (414)100 — — 
Total net revenues13,408 5,983 1,180 28 20,599 
Operating profit (loss)$3,015 $267 $144 $(317)$3,109 

Nine months ended September 30, 2024Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$41,134 $18,605 $3,397 $88 $63,224 
Intersegment revenues50 63 (113)— — 
Total net revenues41,184 18,668 3,284 88 63,224 
Operating profit (loss)$11,305 $2,922 $(106)$(474)$13,647 
Nine months ended September 30, 2023Travelzoo North
America		Travelzoo EuropeJack's Flight ClubNew InitiativesConsolidated
Revenues from unaffiliated customers$41,303 $18,937 $3,039 $49 $63,328 
Intersegment revenues996 (1,180)184 — — 
Total net revenues42,299 17,757 3,223 49 63,328 
Operating profit (loss)$11,284 $485 $196 $(872)$11,093 




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Travelzoo
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
(In thousands, except per share amounts)

 Three months endedNine months ended
 September 30,September 30,
 2024202320242023
GAAP operating expense$13,505 $14,825 $41,869 $43,999 
Non-GAAP adjustments:
Amortization of intangibles (A)95 384 500 1,171 
Stock option expenses (B)456 359 1,239 1,186 
Severance-related expenses (C)330 — 360 95 
Non-GAAP operating expense12,624 14,082 39,770 41,547 
GAAP operating profit4,045 3,109 13,647 11,093 
Non-GAAP adjustments (A through C)881 743 2,099 2,452 
Non-GAAP operating profit4,926 3,852 15,746 13,545 

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