UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35362

TRIPADVISOR, INC.

(Exact name of registrant as specified in its charter)

Delaware	80-0743202
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

400 1st Avenue

Needham, MA 02494

(Address of principal executive office) (Zip Code)

Registrant’s telephone number, including area code:

(781) 800-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock	TRIP	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Class	Outstanding Shares at July 29, 2022
Common Stock, $0.001 par value per share	127,043,956 shares
Class B common stock, $0.001 par value per share	12,799,999 shares

Tripadvisor, Inc.

Form 10-Q

For the Quarter Ended June 30, 2022

Table of Contents

	Page
Part I—Financial Information
Item 1. Unaudited Condensed Financial Statements
Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021	3
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2022 and 2021	4
Unaudited Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021	5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	6
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	8
Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3. Quantitative and Qualitative Disclosures about Market Risk	48
Item 4. Controls and Procedures	49
Part II—Other Information
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	51
Item 6. Exhibits	51
Signatures	52

2

PART I – FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Revenue (Note 3)	$	417		$	235		$	679		$	358
Costs and expenses:
Cost of revenue (1) (exclusive of depreciation and amortization as shown separately below)		31			19			53			31
Selling and marketing (1)		217			123			357			196
Technology and content (1)		53			54			107			109
General and administrative (1)		28			46			68			84
Depreciation and amortization		25			28			50			57
Total costs and expenses		354			270			635			477
Operating income (loss)		63			(35	)		44			(119	)
Other income (expense):
Interest expense		(11	)		(11	)		(23	)		(22	)
Interest income and other, net		1			—			—			—
Total other income (expense), net		(10	)		(11	)		(23	)		(22	)
Income (loss) before income taxes		53			(46	)		21			(141	)
(Provision) benefit for income taxes (Note 8)		(22	)		6			(24	)		21
Net income (loss)	$	31		$	(40	)	$	(3	)	$	(120	)
Earnings (loss) per share attributable to common stockholders (Note 12):
Basic	$	0.22		$	(0.29	)	$	(0.02	)	$	(0.88	)
Diluted	$	0.21		$	(0.29	)	$	(0.02	)	$	(0.88	)
Weighted average common shares outstanding (Note 12):
Basic		140			137			139			136
Diluted		145			137			139			136
(1) Includes stock-based compensation expense as follows (Note 10):
Cost of revenue	$	—		$	—		$	1		$	1
Selling and marketing	$	3		$	4		$	6		$	8
Technology and content	$	9		$	13		$	18		$	24
General and administrative	$	9		$	15		$	18		$	28

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

	Three months ended						Six months ended
	June 30,						June 30,
	2022			2021			2022			2021
Net income (loss)	$	31		$	(40	)	$	(3	)	$	(120	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax (1)		(24	)		3			(28	)		(9	)
Total other comprehensive income (loss), net of tax		(24	)		3			(28	)		(9	)
Comprehensive income (loss)	$	7		$	(37	)	$	(31	)	$	(129	)

(1) Deferred income tax liabilities related to these amounts are not material.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

	June 30,			December 31,
	2022			2021
ASSETS
Current assets:
Cash and cash equivalents (Note 4)	$	1,045		$	723
Accounts receivable and contract assets, net of allowance for credit losses of $29 and $28, respectively (Note 3)		246			142
Income taxes receivable (Note 8)		12			49
Prepaid expenses and other current assets		34			26
Total current assets		1,337			940
Property and equipment, net of accumulated depreciation of $497 and $460, respectively		201			215
Operating lease right-of-use assets		33			42
Intangible assets, net of accumulated amortization of $200 and $202, respectively		58			65
Goodwill (Note 5)		820			843
Non-marketable investments (Note 4)		35			36
Deferred income taxes, net		40			54
Other long-term assets, net of allowance for credit losses of $10 and $10, respectively		88			94
TOTAL ASSETS	$	2,612		$	2,289
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	50		$	27
Deferred merchant payables		323			113
Deferred revenue (Note 3)		70			36
Accrued expenses and other current liabilities (Note 6)		213			181
Total current liabilities		656			357
Long-term debt (Note 7)		835			833
Finance lease obligation, net of current portion		61			65
Operating lease liabilities, net of current portion		20			29
Deferred income taxes, net		1			1
Other long-term liabilities		243			215
Total Liabilities		1,816			1,500
Commitments and contingencies (Note 9)
Stockholders’ equity: (Note 11)
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: 145,847,721 and 144,656,649, respectively
Shares outstanding: 127,003,107 and 125,812,035, 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		1,364			1,326
Retained earnings		238			241
Accumulated other comprehensive income (loss)		(84	)		(56	)
Treasury stock-common stock, at cost, 18,844,614 and 18,844,614 shares, respectively		(722	)		(722	)
Total Stockholders’ Equity		796			789
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,612		$	2,289

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

TRIPADVISOR, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions, except number of shares)

	Three months ended June 30, 2022
														Accumulated
									Additional					other
					Class B				paid-in			Retained		comprehensive
	Common stock				common stock				capital			earnings		income (loss)			Treasury Stock
	Shares		Amount		Shares		Amount										Shares			Amount			Total
Balance as of March 31, 2022		145,636,700	$	—		12,799,999	$	—	$	1,342		$	207	$	(60	)		(18,844,614	)	$	(722	)	$	767
Net income (loss)													31											31
Other comprehensive income (loss), net of tax															(24	)								(24	)
Issuance of common stock related to exercises of options and vesting of RSUs		211,021		—						—														—
Withholding taxes on net share settlements of equity awards										(1	)													(1	)
Stock-based compensation										23														23
Balance as of June 30, 2022		145,847,721	$	—		12,799,999	$	—	$	1,364		$	238	$	(84	)		(18,844,614	)	$	(722	)	$	796

	Six months ended June 30, 2022
													Accumulated
									Additional				other
					Class B				paid-in		Retained		comprehensive
	Common stock				common stock				capital		earnings		income (loss)			Treasury Stock
	Shares		Amount		Shares		Amount									Shares			Amount			Total
Balance as of December 31, 2021		144,656,649	$	—		12,799,999	$	—	$	1,326	$	241	$	(56	)		(18,844,614	)	$	(722	)	$	789
Net income (loss)