trivago N.V. · NASDAQ:TRVG
trivago — Q2 2017 Earnings Presentation
42 slides from trivago's earnings presentation, Aug 4, 2017
Slide 1: Earnings Call Q2 2017
Earnings Call Q2 2017 4 August 2017
Slide 2: Disclaimer
Disclaimer The following applies to the information following this page, which is the information of trivago N.V. and its subsidiaries. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in an
Slide 3: Agenda
Agenda Company overview Special topic: Advertiser Relations Financial performance Guidance 2017 Appendix: Financial statements 3
Slide 4: Agenda
Agenda Company overview Special topic: Advertiser Relations Financial performance Guidance 2017 Appendix: Financial statements 4
Slide 5: H1 2017 – Strong financial performance
H1 2017 – Strong financial performance Total Revenue (€mm) Adj. EBITDA1 (€mm) Referral Revenue by segment +67% +125% +67% +39% Source: unaudited US GAAP financials 5 1. Adj. EBITDA is only adjusted for share-based compensation. A reconciliation to reported results is included in the Appendix
Slide 6: Milestones
trivago has developed rapidly whilst raising only €1.4mm prior to our IPO trivago Total Revenue (€mm) +53% +59% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Milestones Second First TV financing campaign Listed on NASDAQ Expedia acquires a 63% as TRVG round DE and ES stake in trivago throug
Slide 7: $415bn Large Market
The online hotel market is vast and growing quickly as consumers continue to transition online Market Potential 6% CAGR⁶ $415bn Large Market Global Hotel Bookings 1 $62bn Based on 15% global Take- rate5 of Hotel Industry Bookings 33% Low Online Penetration2 9% CAGR⁶ $21bn Take-rate on 10.8% High Onl
Slide 8: trivago value proposition
trivago value proposition Choice Availability Price 2 Booking sites 1.8mm1 hotels Hotel chains Individual hotels Find the ideal hotel Find online availability from a Book at the lowest rate for the trip variety of advertisers 1. Approximate figure is as of June 30, 2017 2. Booking sites include glob
Slide 9: The trivago system
The trivago system 1 2 Marketing Hotel Search Advertiser Relations >740mm >230 3 Hotel chains SEM bids >180 >500 Booking sites new TV spots tested 1 Global CPC Product Marketplace >1.8mm Hotels 40.5mm app downloads to date >11,000 Individual Hotels Enablers Technology Talent Finance/Legal 1. Approxi
Slide 10: We are at the top of the funnel with our strong consumer brand
We are at the top of the funnel for the hotel vertical with our strong consumer brand Referral Revenue FY 2016 by Aided brand awareness¹ Traffic Type SEO2 DEA2 Branded SEM 2 >75% 50 – 75% 25 – 50% Below 25% Present Not Present Search interest³ Source: TNS Omnibus, Research Now, Google Trends, Intern
Slide 11: We continuously increased the number of advertisers
We continuously increased the number of advertisers and are now also building business with individual hotels 2005 – 2009 2010 – 2013 2014 – Present >39 Booking sites >180 Booking sites >19 Booking sites >230 Hotel chains >10 Hotel chains >30 Hotel chains >11,000 Individual hotels 11
Slide 12: Advertisers bid and pay for each click a user makes on an offer price
Advertisers bid and pay for each click a user makes on an offer price Advertisers Room Price CPC Bid1 $163 Booking sites $1.20 $163 $1.10 Hotel $0.90 chains $174 $0.90 $177 Vertical exposure Horizontal exposure Individual hotels • Advertisers bid on our CPC-based1 bidding marketplace for a specific
Slide 13: We address the critical user needs with a global unified product
We address the critical user needs with a global unified product Mobile Desktop Transparent Pricing www.trivago.com Search details Best deal Price comparison Rich content Ratings and reviews 13
Slide 14: Agenda
Agenda Company overview Special topic: Advertiser Relations Financial performance Guidance 2017 Appendix: Financial statements 14
Slide 15: The trivago system
The trivago system Marketing Hotel Search Advertiser Relations (Demand) (Supply) Get travelers on board Collect content and rates from advertisers Marketplace Enablers Technology Talent Finance/Legal 15
Slide 16: Full market transparency for all bookable online rates
We aim to provide travellers with full market transparency for all bookable online rates Booking sites Hotel chains Individual hotels 16
Slide 17: Advertiser Relations empowers advertisers through tailored marketing tools
Advertiser Relations empowers advertisers through tailored marketing tools, profound expertize and technology targeted to their needs Our goal Better content, increased inventory and more competition in our auctions 180+ 230+ 11,000+ Our advertisers Booking Sites Hotel Chains Individual Hotels Our p
Slide 18: Stronger coverage of hotel offering and more choice for our users
This results in stronger coverage of hotel offering and more choice for our users Increasing number of booking sites More than 1.8 million 180+ hotels listed on our platform +86% 06/2016 06/2017 Increasing number of hotel chains 230+ 06/2016 06/2017 06/2016 06/2017 18
Slide 19: Increasing the number of rates connected to our platform
Increasing the number of rates connected to our platform improves marketplace efficiency Average number of rates per hotel Rates inventory (in millions) maintaining a stable number of rates per hotel while continuously increasing the number of rates connected to our platform onboarding a variety of
Slide 20: Continuous roll-out of our tools for advertisers
The continuous roll-out of our tools for advertisers helps them take advantage of our marketplace Express Booking Automated Bidding Improves user experience to help increase conversion Improves bidding and operational efficiency 20% Number of advertisers increase in conversion rate “trivago Express
Slide 21: Hoteliers are embracing opportunities with trivago
Hoteliers are embracing opportunities with trivago to gain more visibility and to drive direct bookings Basic • A free basic version of our marketing platform that enables • A paid premium version of our marketing platform that hoteliers to manage their hotel profile and to upload content provides h
Slide 22: We optimize the search experience by increasing our inventory
We optimize the search experience by increasing our inventory and empowering advertisers to actively participate in the marketplace Better search experience: We increased our hotel inventory by 86%1, which improves market transparency for our users Increased competition: 180+ booking sites and 230+
Slide 23: Agenda
Agenda Company overview Special topic: Advertiser relations Financial performance Guidance 2017 Appendix: Financial statements 23
Slide 24: Continuation of strong YoY growth
Continuation of strong YoY growth Total Revenue (€mm) Adj. EBITDA1 (€mm) Net Income (€mm) +67% +125% +67% +39% Source: unaudited US GAAP financials 24 1. Adj. EBITDA is only adjusted for share-based compensation. A reconciliation to reported results is included in the Appendix
Slide 25: Improving profitability versus previous half year
Improving profitability versus previous half year Referral Revenue (% of Advertising Expense) Adjusted EBITDA1 (% of Total Revenue) Source: unaudited US GAAP financials 25 1. Adj. EBITDA is only adjusted for share-based compensation. A reconciliation to reported results is included in the Appendix
Slide 26: KPI overview – Global
KPI overview – Global Highlights Qualified Referrals • Strong growth in Qualified Referrals across all regions led by (mm) Rest of World YoY YoY +59% +60% RPQR (€) • Higher RPQR mainly driven by the introduction of the relevance assessment 1 YoY YoY • In the final weeks of June 2017, RPQR normalized
Slide 27: KPI overview – Developed Europe
KPI overview – Developed Europe Highlights Qualified Referrals • Strong QR growth across all markets, mainly driven by an (mm) increase in advertising spend YoY YoY +34% +36% RPQR (€) • Higher RPQR mainly driven by the introduction of the relevance assessment 1 YoY YoY • In the final weeks of June 2
Slide 28: KPI overview – Americas
KPI overview – Americas Highlights Qualified Referrals • Continuation of strong growth across the region (mm) YoY YoY +58% +61% RPQR (€) • Higher RPQR mainly driven by the introduction of the relevance assessment 1 YoY YoY • In the final weeks of June 2017, RPQR normalized as most of +7% +7% our adv
Slide 29: KPI overview – Rest of World
KPI overview – Rest of World Highlights Qualified Referrals • Strong growth driven by scaling Japan, India and Russia (mm) YoY YoY +114% +113% RPQR (€) • Higher RPQR mainly driven by the introduction of the relevance assessment 1 YoY YoY • In the final weeks of June 2017, RPQR normalized as most of
Slide 30: Agenda
Agenda Company overview Special topic: Advertiser relations Financial performance Guidance 2017 Appendix: Financial statements 30
Slide 31: Guidance for 2017
Guidance for 2017 Total Revenue expected to Adjusted EBITDA1 grow around 50% margin expected to slightly increase vs. 2016 1. Adjusted EBITDA is only adjusted for share-based compensation 31
Slide 32: Q&A
O&A
Slide 33: Agenda
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 33
Slide 34: Consolidated Financials H1 2017, trivago N.V.
Consolidated Financials H1 2017, trivago N.V. (in €k) H1 2017 H1 2016 Abs Δ vs. H1'16 Δ vs. H1'16 Referral revenue 559,327 335,084 224,243 66.9% Comments Other revenue 6,652 3,256 3,396 104.3% Total revenue 565,980 338,340 227,640 67.3% • Overview of P&L under US GAAP Cost of revenue (2,509) (2,097)
Slide 35: Consolidated Financial Information H1 2017, trivago N.V.
Consolidated Financial Information H1 2017, trivago N.V. (in €k) Referral revenue H1 2017 559,327 H1 2016 335,084 Abs Δ vs. H1'16 224,243 Δ vs. H1'16 66.9% Comments Other revenue 6,652 3,256 3,396 104.3% 1 Total revenue 565,980 338,340 227,640 67.3% Cost of revenue excl. SBC (2,457) (1,386) (1,071)
Slide 36: Reconciliation of non-GAAP Financial Measures H1 2017
Reconciliation of non-GAAP Financial Measures H1 2017, trivago N.V. (in €m) H1 2017 H1 2016 Abs Δ vs. H1'16 Δ vs. H1'16 Net income (loss) 4.3 (50.0) 54.2 108.6% Provision (benefit) for income taxes 5.0 0.4 4.7 n.m. Income (loss) before income tax 9.3 (49.6) 58.9 118.7% Add/(Deduct): Net interest and
Slide 37: Consolidated Financials Q2 2017, trivago N.V.
Consolidated Financials Q2 2017, trivago N.V. (in €k) Q2 2017 Q2 2016 Abs Δ vs. Q1'16 Δ vs. Q1'16 Referral revenue 295,035 177,098 117,937 66.6% Comments Other revenue 3,300 1,891 1,409 74.5% Total revenue 298,336 178,989 119,346 66.7% • Overview of P&L under US GAAP Cost of revenue (1,411) (1,382)
Slide 38: Consolidated Financial Information Q2 2017, trivago N.V.
Consolidated Financial Information Q2 2017, trivago N.V. (in €k) Referral revenue Q2 2017 295,035 Q2 2016 177,098 Abs Δ vs. Q2'16 117,937 Δ vs. Q2'16 66.6% Comments Other revenue 3,300 1,891 1,409 74.5% 1 Total revenue 298,336 178,989 119,347 66.7% Cost of revenue excl. SBC (1,372) (675) (697) 103.3
Slide 39: Reconciliation of non-GAAP Financial Measures Q2 2017
Reconciliation of non-GAAP Financial Measures Q2 2017, trivago N.V. (in €m) Q2 2017 Q2 2016 Abs Δ vs. Q2'16 Δ vs. Q2'16 Net income (loss) (3.4) (49.9) 46.5 93.2% Provision (benefit) for income taxes 0.3 (0.0) 0.3 n.m. Income (loss) before income tax (3.1) (49.9) 46.8 93.9% Add/(Deduct): Net interest
Slide 40: Consolidated Statement of Cash Flows H1 2017
Consolidated Statement of Cash Flows H1 2017, trivago N.V. (in €k) H1 2017 H1 2016 Net lncome (loss) 4,273 (49,976) Comments Adjustments to reconcile net income to net cash used: Depreciation 3,130 2,069 1) These amortization costs relate predominantly to intangible assets Amortization of intangible
Slide 41: Consolidated Statement of Cash Flows Q2 2017
Consolidated Statement of Cash Flows Q2 2017, trivago N.V. (in €k) Q2 2017 Q2 2016 Net lncome (loss) (3,385) (49,868) Comments Adjustments to reconcile net income to net cash used: Depreciation 1,655 1,118 1) These amortization costs relate predominantly to intangible assets Amortization of intangib
Slide 42: Consolidated Balance Sheet H1 2017, trivago N.V.
Consolidated Balance Sheet H1 2017, trivago N.V. (in €k) Jun 30, 2017 Dec 31, 2016 Cash and cash equivalent 214,839 227,298 1 Comments Restricted cash 2,357 884 Accounts receivable 77,546 36,658 1) Fluctuations in cash balances resulted from fluctuations in working Accounts receivable, related party