Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trivago NV (TRVG, Financial) reported solid brand revenue growth in developed Europe and the rest of the world segments, maintaining a positive trajectory.
- The company demonstrated agility by adjusting brand investments in the Americas, contributing to a better than expected adjusted EBITDA.
- Trivago NV (TRVG) is well-positioned for growth in Q4 2024 and aims for sustainable growth in 2025, with confidence in achieving double-digit growth in the medium term.
- The company has expanded its AI-powered hotel highlights from 120,000 to 250,000 hotels, enhancing user experience and personalization.
- Trivago NV (TRVG) has secured a partnership with Jurgen Klopp for a new marketing campaign, leveraging AI to localize content across various languages.
Negative Points
- The Americas segment faced temporary unfavorable market conditions, impacting revenue and prompting a tactical reduction in brand marketing investments.
- Google ad format changes continue to be a headwind, causing volatility and traffic volume losses, although stabilization has been observed recently.
- Total revenue for Q3 2024 was EUR146.1 million, representing a 7% decline compared to the same period in 2023.
- The company reported a net loss of EUR15.4 million for the third quarter, driven by a EUR30 million impairment charge.
- Advertising spend decreased by 12% in the Americas and 15% in developed Europe, reflecting challenges in performance marketing channels.
Q & A Highlights
Q: Can you provide insights on the return to positive growth in Q4, particularly in the Americas and Europe?
A: Robin Harries, CFO, stated that they are seeing positive growth in Q4, with the Americas back to positive and improvements in developed Europe, although still slightly negative. Non-Google performance marketing is positive, with Japan and Yahoo being strong markets, alongside investments in social channels.
Q: What caused the temporary unfavorable market conditions in the Americas during Q3, and have these conditions improved?
A: Robin Harries explained that Q3 saw softer demand and viewership shifts due to major sports and political events, leading to reduced advertising effectiveness. Johannes Thomas, CEO, added that these shifts impacted TV advertising, prompting a tactical reduction in spend to improve adjusted EBITDA.
Q: With Jurgen Klopp as the brand ambassador, will marketing investments increase in Q4 and into 2025?
A: Johannes Thomas confirmed plans for a similar impactful campaign as this year, leveraging AI to localize the campaign across different markets. The strategy aims to increase efficiency and effectiveness of TV spots, potentially enhancing campaign outcomes.
Q: What is driving increased booking conversion across all geographies, and what are the expectations for 2025 growth?
A: Johannes Thomas highlighted continuous product improvements and brand marketing as key drivers of conversion rate increases. For 2025, Robin Harries expects revenue growth closer to 10%, driven by branded revenue growth and better performance marketing comparisons.
Q: How is Trivago expanding hotel coverage, and are there improvements in performance marketing as Google ad format changes are lapped?
A: Johannes Thomas clarified that the expansion to 250,000 hotels is a content initiative using AI to highlight unique hotel features. He noted that Google ad formats have stabilized, and Trivago is opportunistically expanding participation in these formats.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
