TripAdvisor, Inc. 2026 Q2 Earnings Call

Please go ahead, Angela. Thank you, Felicia.

Good morning and welcome to TripAdvisor's second quarter 2026 financial results call. Joining me today are Matt Goldberg, President and CEO, and Mike Noonan, CFO. Earlier this morning, we filed and made available our earnings release. In that release, you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measure discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today, August 6th, 2026. TripAdvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements. With that, I'll turn the call over to Matt.

Thanks, Angela, and good morning, everyone. In Q2, group revenue and adjusted EBITDA were in line with expectations, which we delivered against a fluctuating macro backdrop. Overall performance reflected the underlying strength of our experiences business and our continued focus on simplifying our legacy offerings. During the quarter, we announced our proposed agreement to sell TheFork for $700 million. The transaction unlocks the value we've created at TheFork and is another step in focusing the company on experiences. Net proceeds from the transaction will provide us additional flexibility for our capital allocation choices. We believe American Express will be a natural long-term home for TheFork and an important ongoing strategic partner for TripAdvisor. The transaction continues to progress. We signed the definitive agreement on August 2nd and expect to close before year-end.

Beyond the sale of TheFork, our portfolio review continues as we explore additional opportunities across the business to catalyze shareholder value. We're focused on enhancing the value of our assets and reshaping the company to deliver on our strategic priorities. Specifically, strengthening our leadership and experiences and simplifying our hotels and other offerings to optimize for profitability. This work is predicated on allocating our resources to the largest opportunities for sustainable growth and profitability, where we have the competitive position to be a global market leader. With that, let's turn to our operating performance, starting with our experiences segment. Across the large majority of our marketplace, bookings growth trended as expected. Performance on our largest owned and operated point of sale, Viator, grew 10% for the quarter, while sustained SEO headwinds in the TripAdvisor point of sale pressured overall segment growth.

Bookings for the segment grew 5% overall in the quarter. Our marketplace flywheel continues to support our experiences strategy. We're making progress against each stage. First, generating higher quality demand. Second, converting that demand more effectively through our storefronts. Third, building stronger, more productive supply. Let's take each in turn. First, demand. We've continued to broaden the ways we reach, acquire, and re-engage customers. As travelers increasingly discover experiences across social and other mid-funnel channels, we're finding attractive new opportunities to diversify beyond paid search. The results are giving us the confidence to scale those investments with encouraging evidence that they can drive both incremental demand and attractive customer acquisition economics. At the same time, search remains a core channel in the experiences category, given the high intent nature of its leads.

We continue to test, learn, and optimize across this quickly changing landscape, leveraging our proprietary data and bidding expertise to maximize efficiency. This is driving healthy double-digit growth in our paid channels. Outside of our marketing channels, we're also making good progress with rewards and incentives. What began as a series of targeted experiments is increasingly becoming a scalable lever for acquisition, conversion, and repeat engagement across the customer journey. While certain incentives may bring near-term pressure on take rate, the benefit to overall bookings uplift and return engagement drive favorable returns. Second, our storefronts. As travelers reach us, our product work continues to simplify the path to booking, delivering compounding conversion gains. Central to our product strategy is helping travelers make booking decisions more easily and with greater confidence.

This quarter, continued improvements to personalization, how we surface and present reviews, and more specific availability details, are making it easier for travelers to quickly find the right experience and complete a booking. Together, these investments continue to strengthen the booking experience, lift conversion, and support our overall items growth, reinforcing our confidence in our product roadmap and our ability to drive sustainable items growth over time. Finally, our supply. Building the world's best experiences catalog isn't just about adding more products, it's about adding the right products, and we're focused on actively expanding supply where we see the greatest opportunity to serve unmet traveler demand. This strategy is paying off. We're seeing it in the performance of the supply we're onboarding in secondary and tertiary destinations. The inventory we target strategically is getting better traction, securing the all-important first booking significantly faster, and earning more per product than average.

These products are also driving new customer acquisition by attracting a majority of their bookings from first-time customers. This, in turn, supports our category expansion, with many new customers booking in categories where we've been less penetrated, such as ticketed attractions and events. The key enabler of that strategy is making it easier for operators to bring high-quality experiences onto the platform. Continued investments in supplier onboarding and connectivity are reducing listing friction, helping operators get experiences live faster with richer, higher-quality content. Our supply is one of our strongest advantages and will continue building on our momentum. The benefits of our supply and product work extend beyond our owned marketplaces. They also strengthen our value proposition to partners, enabling us to power more experiences storefronts across the travel industry and beyond.

The attractiveness of our offerings support the healthy growth in our third-party points of sale as we continue to add new distribution partnerships. Now, turning to hotels and other. This segment remains highly profitable, but is well understood to be challenged by structural changes in our primary SEO channel. Our stated objective remains the same, to simplify the business and drive alignment between revenue trends and costs. Year-to-date, we've reduced fixed costs by approximately 16% and will continue to evaluate further opportunities to streamline the business. Strategically, the profitability in this segment allows us to reinvest across our highest priorities and will continue to be disciplined about shifting resources and investment to areas of proven growth, particularly in experiences. Alongside the work we've discussed today, we're also preparing for the changes reshaping how people discover, plan, and experience travel. Experimentation is central to that effort.

We've made it a core part of how we operate across the business, and we're seeing the results. Our experimentation velocity is increasing and contributing more incremental revenue year-on-year, which we expect to drive compounding impact over time. At the same time, we're ensuring our marketplace is available wherever travelers increasingly discover and plan experiences. Most recently, Viator became the first travel experiences partner for Google Gemini, adding to our growing list of partnerships across the leading AI platforms. We're also seeing encouraging early signs that our longstanding strengths in SEO, together with our trusted high-quality content, are translating well into AI-powered travel discovery. While AI-driven traffic remains small today, TripAdvisor and Viator are already among the most visible travel brands in Google's AI overviews. As we continue working with the leading AI platforms, we'll keep learning, adapting, and evolving to serve changing traveler behavior.

Finally, we're utilizing AI to help us build our products and operate more effectively. This includes scaling our early pilots to improve engineering productivity, automate supply acquisition and customer service workflows, and help optimize marketing performance. We're also using AI tools to power our fraud detection for reviews, moderate and curate our content, and enable our workforce through productivity tools. We're encouraged by the breadth and impact of practical applications we're seeing in many ways across the company. Before I pass over to Mike, I'd like to leave you with this. While the operating environment remains uncertain, our conviction has never been clearer. We believe experiences is the largest long-term growth opportunity in travel, and every decision we're making, from where we invest to how we operate, is focused on extending our leadership in that category.

As Mike will cover in more detail, we're committed to investing behind this opportunity with a long-term lens on growth and margin expansion. With that, I'll turn the call over to Mike.

Thanks, Matt, and good morning. I will start with a review of our financial performance and then provide more information on July trends and our outlook for Q3. As a reminder, all growth rates are relative to the comparable period in 2025, unless noted otherwise. Before I cover performance. As we noted in our release this morning, any reference to consolidated results include only the experiences and hotels and other segments presented as continuing operations. TheFork, given the proposed sale announcement on June 15th, is considered held for sale under accounting guidelines and is shown as discontinued operations in our P&L statement and cash flows and balance sheet. This morning's release, our Form 10-Q, and our commentary on our group revenue and adjusted EBITDA now include only our continuing operations or experiences and hotels and other, and also include a recast for quarterly and annual periods.