trivago N.V. American Depositary Shares 2026 Q2 Earnings Call

Good morning. Thank you for joining our Q2 2026 earnings call. This quarter marked three years since Jasmine, Andrej, and I returned to trivago with the ambition to turn around the company. At that time, trivago was not at a good place. We had come out of the pandemic weaker than other players in our space. Our product was no longer competitive, and our brand had suffered from years of underinvestment. We refocused the company on its core proposition, saving travelers time and money, and on bringing trivago back to the top of travelers' minds. That work keeps paying off. In Q2, we delivered our sixth consecutive quarter of double-digit year-over-year total revenue growth, exceeding our expectation on both top and bottom line. Total revenue grew 21% year-over-year, and we achieved a positive adjusted EBITDA, marking our first positive second quarter since 2023.

To put this in context, the first half of the year is our investment period, while the second half is where we expect to earn the majority of our profits. Reaching profitability already in Q2, while substantially cutting our first half adjusted EBITDA loss shows how much our earnings profile has strengthened as we head into our strongest season. We achieved this and our continued growth despite foreign exchange headwinds and geopolitical pressures weighing on our rest of the world segment. Let me share a few strategic highlights of the quarter. Brand traffic referral revenue growth once again substantially outpaced our total referral revenue growth, demonstrating that we are growing through the channels that are strategically and financially most attractive to us. Our product converts significantly better with conversion rate up 64% since Q2 2023, improving our unit economics.

Building on our member strategy and growing member base, CRM-related channels now give us new ways to engage travelers with no dedicated marketing investment required. Referral revenue from CRM channels has more than doubled compared to last year, exceeding our internal expectation in pace and relevance. trivago Book & Go continues to scale in our marketplace, tripling compared to the previous year, and we are pleased to have onboarded Expedia as a supply partner on this part of our platform. These strong operational and strategic developments give us the confidence to raise our full year guidance. For 2026, we now expect total revenue growth in the mid-teens % range and adjusted EBITDA of around EUR 30 million. We are also narrowing our path to a target adjusted EBITDA margin of 10% by 2028. Our long-term strategy is playing out.

In 2025, our theme was turning the tide, reflecting our commitment to making our turnaround a reality. This year under the theme Optimized Momentum, Pushing Frontiers, we are building on that foundation. We aim to strike the right balance between growth and marketing discipline while continuing to innovate at the leading edge of our field. I'm proud of how our teams drive this momentum, leveraging the best of AI in our product, in our marketing, and in how we work, making us more impactful as an organization. We are confident that this, alongside our brand and product flywheels, can continue to drive growth and profitability. With that, let me walk you through the progress we made against each of our three strategic priorities this quarter. These priorities have been in place since 2023, and that consistency is deliberate.

We set a clear strategy, and we have executed against it quarter after quarter. For additional detail illustrations, please also refer to our investor presentation on ir.trivago.com. Our first strategic priority is to drive growth through brand marketing. Our brand engine continues to compound branded traffic referral revenue growth once again substantially outpaced our total referral revenue growth, meaning our growth is coming disproportionately from the channel that matters most to us long-term. We see branded traffic as more lasting. Travelers return to us directly rather than through paid channels, and this is where compounding effects of our brand investments show up. Through this, we also aim to further diversify our channel mix and improve the resilience of our business. We remain disciplined in how we deploy performance marketing investment. We continuously optimize our paid channels for their marginal contribution and adjust our attribution investment strategy accordingly.

In recent months, we have further leveled up how we measure and think about these investments, sharpening our incrementality and elasticity testing. Referral revenue from SEO traffic sources is only accounting for a low single-digit share of our referral revenue. One topic we haven't touched on much before is how our growth funnel is compounding. Our brand investments bring a growing base of travelers to trivago. Our member initiatives turn a meaningful share of them into signed-up profiled members, and every single sign-up gives us a direct line to travelers throughout their planning and booking journey. From there, our CRM activities, such as email and push notifications, let us reach them through channels we own at no dedicated marketing costs. CRM is still rather small in terms of revenue, but it is becoming a relevant profit contributor, with revenue more than doubling compared to last year.

Together, this funnel drives higher retention and revenue at structurally better margins, a meaningful building block on our path to greater profitability. Our second strategic priority is to enhance our core hotel search experience so travelers can book with confidence, saving time and money. Our product teams have maintained a high testing velocity, improving the user journey, lifting conversion, and strengthening our unit economics. Since Q2 2023, our product conversion rate has increased by 64%, demonstrating how much better our product experience and marketing mix have become. This also makes trivago a more attractive channel for our partners, who we believe gain access to more incremental and higher-intent travelers. This quarter, we enhanced the hotel search experience even further to better align with what we know travelers actually expect. Less friction and more reason to trust what they see.

We aligned our desktop and mobile experience more closely, surfaced more relevant listings on every screen, and simplified the path from search to booking. This is the foundation on which our entire product roadmap is built on. Hotel Highlights and Review Summaries are now a core part of how travelers compare hotels on trivago. We have continuously advanced both further. A new per-paragraph format with key elements highlighted and paired with the most relevant images make our AI-generated Review Summaries easier to scan and more visually appealing. We have also improved the quality and ranking of our Hotel Highlights for more than 500,000 hotels. They are now context-aware, giving travelers a more personalized experience based on what they are looking for. These are just a few examples of how we aim to help people search and decide with more confidence on trivago.

Our member proposition continues to strengthen, and our member base keeps growing. We are turning more and more anonymous visitors into profiled members who have a better reason to return, and our three-month retention rate of new members demonstrates this progress. It's up 24% since Q1 2023. Before intercompany eliminations, logged-in members generate more than 30% of referral revenue. The more we know our users, the more we can do for them and the more we can engage with them. trivago Book & Go continues to scale rapidly, and its share of bookings on our platform has roughly tripled compared to last year, making it one of the top players in our marketplace. In the recent months, we onboarded several new advertisers to Book & Go, including Expedia as a supply partner.

Most importantly, we integrated Book & Go more natively into our platform to achieve a more seamless user experience and higher downstream conversion. Building on the technology we gained through the Holisto acquisition last year, we continue to bring teams and technologies closer together to maximize the value we create for our users and partners. Our third strategic priority is to help our partners realize their full potential on our platform. Our partner mix has become structurally more resilient. Before intercompany eliminations, the share of referral revenue from all others advertisers has grown from 20% in Q2 2023 to 35% in Q2 2026, reflecting a broader and more diverse base of advertisers succeeding on our platform. Our transaction-based CPA model has been a key driver of this shift, exceeding our expectation in both adoption and performance.

By shifting complexity of bid optimization and risk exposure away from our partners, we believe we are helping advertisers compete more effectively, which strengthens the long-term health of our marketplace. Beyond our three strategic priorities, I want to share the strong progress we are making on AI adoption at trivago. Last time, I described our ambition for our roughly 600 core talents to operate with the impact of 6,000. That ambition is showing up in our internal AI adoption numbers. Our latest internal AI survey found 93% of our talents now use AI daily, up from 63% a year ago, and 86% say it makes a real, measurable difference in their output. On average, our talents are saving 55 minutes a day, up from 36 minutes last year. Our investment reflects the same trend.

In the first seven months of 2026, we spent more than five times as much on AI tooling and tokens for our teams as we did across all of 2025. We believe our size also puts us in a sweet spot, and recent research from RAM supports this. Looking at more than 21,000 U.S. companies, the economists found that AI adoption peaks at companies around our size with a technical talent composition similar to ours. We see a real advantage in this. We are big enough to build cutting-edge infrastructure and small enough to keep a culture built on curiosity and speed. Saving time and becoming more efficient is great, but we believe the real leverage lies elsewhere. Each of us is becoming dramatically more capable, making better decisions, building products, and scaling reliable systems faster.