TRIP 3Q YOUTUBE

In preparation for TRIP's FQ3 2013 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.

3Q

  • "This summer so far it's been bumpier than I had forecast. So our traffic is holding but not as strong as we had expected given the comp over the Olympics of last year. Pricing, as I said, has actually been down a little bit, and that wasn't what we expected. And we have told everyone, 'hey, the big meta headwind for us is in Q3, because our biggest points of sale are a 100%' and that remains absolutely true. But I don't generally provide updates in the quarter, but if I have to update this quarter it's like I am not seeing a lot of positive stuff."
  • "The third quarter...is going to take the hardest hit, because this is three months of being in the transition even though we're making iterative improvement, but compared to last quarter there was only one full month." 

2013 GUIDANCE

  • "For full year 2013, we are reiterating our click-based revenue growth guidance of high-teens to low-20s."
  • "As it relates to display, based on our strong first half results, we now expect mid-to-high teens growth for the full year with Q4 being our strongest quarter for this product."
  • "For subscription, transaction and other business lines, we believe continued sales productivity in Business Listings, Vacation Rentals traction a nice contribution from our recent acquisition will now yield high 50s growth for the full year. Remember, that traction of our Vacation Rentals free-to-list product and flash sales will contribute similar seasonality to click-based revenue, where Q3 is seasonally strong and Q4 is seasonally weak."
  • "We are reiterating our total revenue growth expectations of low 20s for the full year."
  • "On the expense side, our investment and hiring plans remain unchanged giving our growth initiative and large market opportunities ahead of us. From a forecasting standpoint, we have considered our strong results in the first half of the year offset by our ongoing meta transition, offline ad spend, and our recent acquisition. Net, net, we are reiterating our expectations of mid-single digit EBITDA growth for the full year of 2013, which assumes negative Q3 and Q4 year-over-year EBITDA growth due to the timing of our offline ad spend."
  • "We're on that path to revenue neutrality, which means the increase in CPCs will equal the decrease in clicks that we're sending off to our partners and we believe that will occur at the end of this year." 

HOTEL SHOPPERS  

  • "Hotel shoppers continued to grow rapidly throughout the globe with notable continued strength in core U.S. and European markets. Some of our newer markets aren't growing at quite the rate that they were last year. Sort of the UK in particular, for the first couple of weeks in July haven't been as robust a growth as we had seen in the course of Q2."
  • "If you look at the top of funnel opportunity, which we call hotel shoppers, so hotel shoppers are travelers coming to the site, looking at a hotel geo page or a hotel detail page, not the restaurants, not the attractions. So those are the ones that we say are top of funnel, because they have a chance of monetizing for us. We don't currently monetize restaurants and attractions." 

CLICK-BASED SEGMENT - MONETIZATION RATES

  • "On smartphone, our hotel shopper growth continues at a triple-digit rate, but monetization remains at less than 20% of desktop.  Desktop and tablet are pretty much on parity (volume/price mix)."

CHINA PROPERTIES

  • "We have two properties, two companies in China, daodao.com and...Kuxun. This is an area that we have been investing in for several years. We run these...at a loss. But they're meaningful assets. We kind of look at it more as an option on the future because the Chinese market is important. And we want to be there when they're looking to travel outbound. As that market continues to develop, we believe we're building a very strong asset there."  

SHARE REPURCHASE

  • "We authorized a $250 million share repurchase plan and we did that about a year after we spun out of Expedia once we had built up those cash balances because we can only use U.S. cash to repurchase shares. The primary reason for the share repurchase is to offset employee equity dilution, so that's what we've been doing over the last several quarters."

GOOGLE COMPETITION

  • "When I ask, hey who is the competition that kind of worries me the most in the two-year to five-year timeframe, Google still tops the list mostly at this point from a mind share perspective. When I talk to travelers, hey you're thinking about going on vacation, where do you start? The answer more often than I'd like to hear is Google. And so as Google learns how to build the travel product and I'd still say they're learning, they've launched a bunch of stuff, but it's in progress. Google can do a lot. They've shown a lot of appetite to invest heavily in this area."

TRIPADVISOR CONNECT

  • "We have received very positive initial feedback from our announcement, and we expect that many of the largest companies that provide Internet booking engines to independent hotels will be working with us soon. Later this year, we intend to launch the second part of the TripAdvisor Connect platform, namely, a self-service bidding interface that will allow hoteliers to bid directly for our traffic."

BUSINESS LISTINGS/VACATION RENTALS

  • "In our fast-growing subscription, transaction and other line, we've seen a nice uptick in Business Listings sales productivity as we add more fully-trained sales reps in more parts of the world."
  • "In our Vacation Rental business, early results from free-to-list remain positive as overall listings are up, as well as mailable users, traffic and inquiries. On the consumer side, we've increased the percentage of our listings that are online-bookable properties from zero last year to over 20% this year, and we shortened the booking flow to improve conversion. We've integrated the majority of FlipKey and Holiday Lettings properties onto the main TripAdvisor site and we're working on integrating Niumba's inventory to give vacation renters more choice in Spain."

TV SPEND

  • "So again, we only spent a couple of million dollars so far, but we have no reason at this point to be pulling back on our expectations to spend kind of the full budgeted amount going forward." 
  • "Direct marketing costs increased slightly versus last quarter, as we started testing our new TV campaigns in six U.S. markets in an effort to promote TripAdvisor brand awareness and diversify traffic. We expect to increase TV spend materially in the second half of the year, as we broaden our testing domestically and internationally."

TAX RATE

  • "Our Q2 GAAP effective tax rate was 26%, which is consistent with our ongoing mid-to-high 20s expectation for the year."