Segment and Geographic Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment and Geographic Information

NOTE 19: SEGMENT AND GEOGRAPHIC INFORMATION

In the second quarter of 2022, we revised our segment reporting structure. We now measure our business within three operating segments, which are also our reportable segments: (1) Tripadvisor Core; (2) Viator; and (3) TheFork. Our Tripadvisor Core segment includes the following revenue sources: (1) Tripadvisor-branded hotels – consisting of hotel meta revenue, primarily click-based advertising revenue, and hotel B2B revenue, which includes primarily subscription-based advertising and hotel sponsored placements revenue; (2) Tripadvisor-branded display and platform revenue – consisting primarily of display-based advertising revenue; (3) Tripadvisor experiences and dining revenue – consisting of intercompany (intersegment) revenue related to affiliate marketing commissions earned primarily from experience bookings, and to a lesser extent, restaurant reservation bookings on Tripadvisor-branded websites and mobile apps, fulfilled by Viator and TheFork segments, respectively, which are eliminated on a consolidated basis, in addition to external revenue generated from Tripadvisor restaurant service offerings; and (4) Other revenue – consisting of cruises, alternative accommodation rentals, flights, and rental cars revenue. The nature of the services provided and related revenue recognition policies are summarized by reportable segment in “Note 3: Revenue Recognition.” All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-K. These reclassifications had no effect on our consolidated financial statements in any period. Our segment profit measure (Adjusted EBITDA), including its definition, and other information provided to our CODM remain consistent with prior periods, except for certain segment expense allocations, which are described below.

Our operating segments are determined based on how our CODM manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. Adjusted EBITDA is our segment profit measure and a key measure used by our CODM and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved. We define Adjusted EBITDA as net income (loss) plus: (1) (provision) benefit for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (4) stock-based compensation and other stock-settled obligations; (5) goodwill, long-lived asset, and intangible asset impairments; (6) legal reserves and settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income.

Direct costs are included in the applicable operating segments, including certain corporate general and administrative personnel costs, which have been allocated to each segment. We base these allocations on time-spent analyses, headcount, and other allocation methods we believe are reasonable. We do not allocate certain shared expenses to our reportable segments, such as certain information system costs, technical infrastructure costs, and other costs supporting the Tripadvisor platform and operations, that we do not believe are a material driver of

individual segment performance, which is consistent with the financial information viewed by our CODM. We include these expenses in our Tripadvisor Core segment. Our allocation methodology is periodically evaluated and may change.

The following tables present our reportable segment information for the years ended December 31, 2022, 2021 and 2020 and includes a reconciliation of Adjusted EBITDA to Net income (loss). We record depreciation and amortization, stock-based compensation and other stock-settled obligations, goodwill, long-lived asset and intangible asset impairments, legal reserves and settlements, restructuring and other related reorganization costs, and other non-recurring expenses and income, net, which are excluded from segment operating performance, in Corporate and Eliminations. In addition, we do not report total assets, capital expenditures and related depreciation expense by segment as our CODM does not use this information to evaluate operating segment performance. Accordingly, we do not regularly provide such information by segment to our CODM.

Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Tripadvisor Core segment to both our Viator and TheFork segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within Corporate and Eliminations in the table below.

	Year ended December 31, 2022
	Tripadvisor Core (1)		Viator (2)			TheFork (3)			Corporate & Eliminations			Total
	(in millions)
External revenue	$	873	$	493		$	126		$	—		$	1,492
Intersegment revenue		93		—			—			(93	)		—
Total Revenue	$	966	$	493		$	126		$	(93	)	$	1,492
Adjusted EBITDA		345		(11	)		(39	)		—			295
Depreciation and amortization										(97	)		(97	)
Stock-based compensation										(88	)		(88	)
Legal reserves and settlements										(1	)		(1	)
Non-recurring expenses (income) (4)										(8	)		(8	)
Operating income (loss)													101
Other income (expense), net													(34	)
Income (loss) before income taxes													67
(Provision) benefit for income taxes													(47	)
Net income (loss)													20

	Year ended December 31, 2021
	Tripadvisor Core (1)		Viator (2)			TheFork (3)			Corporate & Eliminations			Total
	(in millions)
External revenue	$	633	$	184		$	85		$	—		$	902
Intersegment revenue		32		—			—			(32	)		—
Total Revenue	$	665	$	184		$	85		$	(32	)	$	902
Adjusted EBITDA		177		(31	)		(46	)		—			100
Depreciation and amortization										(111	)		(111	)
Stock-based compensation										(120	)		(120	)
Operating income (loss)													(131	)
Other income (expense), net													(54	)
Income (loss) before income taxes													(185	)
(Provision) benefit for income taxes													37
Net income (loss)													(148	)

	Year ended December 31, 2020
	Tripadvisor Core (1)		Viator (2)			TheFork (3)			Corporate & Eliminations			Total
	(in millions)
External revenue	$	463	$	55		$	86		$	—		$	604
Intersegment revenue		20		—			—			(20	)		—
Total Revenue	$	483	$	55		$	86		$	(20	)	$	604
Adjusted EBITDA		64		(72	)		(43	)		—			(51	)
Depreciation and amortization										(125	)		(125	)
Stock-based compensation										(109	)		(109	)
Restructuring and other related reorganization costs										(41	)		(41	)
Impairment of goodwill										(3	)		(3	)
Operating income (loss)													(329	)
Other income (expense), net													(40	)
Income (loss) before income taxes													(369	)
(Provision) benefit for income taxes													80
Net income (loss)													(289	)

(1)Corporate general and administrative personnel costs of $5 million, $6 million and $4 million for the years ended December 31, 2022, 2021 and 2020, respectively, were allocated to the Viator and TheFork segments.

(2)Includes allocated corporate general and administrative personnel costs from our Tripadvisor Core segment of $2 million, $3 million and $2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

(3)Includes allocated corporate general and administrative personnel costs from our Tripadvisor Core segment of $3 million, $3 million and $2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

(4)The Company incurred a loss of approximately $8 million during the fourth quarter of 2022, as the result of external fraud. This loss was recorded to general and administrative expenses on the consolidated statement of operations for December 31, 2022. The Company considers such costs to be non-recurring in nature. To the extent the Company recovers any losses in future periods related to this incident, the Company plans to reduce Adjusted EBITDA by the recovery amount in that same period.

Product and Geographic Information

Our revenue sources within our Tripadvisor Core segment, including Tripadvisor-branded hotels revenue, Tripadvisor-branded display and platform revenue, Tripadvisor experiences and dining revenue, and Other revenue; which along with the Viator and TheFork revenue sources, comprise our products. Refer to “Note 3: Revenue Recognition” for our revenue by product.

The Company measures its geographic revenue information based on the physical location of the Tripadvisor subsidiary which generates the revenue, which is consistent with our measurement of long-lived physical assets, or property and equipment, net. As such, this geographic classification does not necessarily align with where the consumer resides, where the consumer is physically located while using the Company's services, or the location of the travel service provider, experience operator or restaurant.

The Company’s revenue based on geographic location consists of the following for the periods presented:

	Year ended December 31,
	2022		2021		2020
	(in millions)
Revenue
United States	$	905	$	526	$	302
United Kingdom		402		259		169
All other countries		185		117		133
Total revenue	$	1,492	$	902	$	604

The Company’s property and equipment, net for the United States and all other countries based on the geographic location of the assets consists of the following for the periods presented:

	December 31,
	2022		2021
	(in millions)
Property and equipment, net
United States	$	156	$	178
All other countries		38		37
Total	$	194	$	215

Customer Concentrations

Refer to “Note 2: Significant Accounting Policies” under the section entitled “Certain Risks and Concentrations” for information regarding our major customer concentrations.