Tripadvisor officials are currently exploring strategic alternatives as they continue to grow the company. In the third quarter, the company did not repurchase any shares, as they consider potential strategic options. Chief Financial Officer Mike Noonan shared that Tripadvisor finished September with $11 billion in cash and cash equivalents, leaving them well-positioned for potential transactions. While the company did not provide specifics on the strategic alternatives being considered, possibilities could include a sale to a private equity company, selling brands, or spinning them off. Tripadvisor’s controlling shareholder, Liberty Tripadvisor, had received a merger proposal in February, leading to the formation of a special committee to evaluate potential transactions. However, in May, it was determined that no viable transaction with a third party would benefit shareholders.
Despite not repurchasing any shares in the third quarter, Tripadvisor has not terminated its share repurchase program, signaling a potential for future buybacks. CEO Matt Goldberg explained that there are various reasons why the company might be limited in its ability to repurchase shares at any given time, one being the consideration of various strategic alternatives. Tripadvisor saw net income widen by 44% to $39 million in the third quarter, with revenue remaining flat at $532 million. All three segments of the company, including Brand Tripadvisor, Viator, and TheFork, were profitable on an adjusted EBITDA basis, highlighting the company’s overall financial stability.
Officials at Tripadvisor expressed confidence in the growth potential of experiences, expecting them to outpace the online travel industry as a whole. The company estimates that the online experiences market will grow at a compound annual growth rate of around 17%, although Viator’s bookings are currently growing at a slightly slower pace. Noonan explained that Viator’s growth is impacted by one of its largest distribution outlets, the Tripadvisor brand, which focuses on profitability. Goldberg noted that the online travel industry’s growth rates are around 10%, positioning Tripadvisor well with the assets they have acquired. TheFork, Tripadvisor’s dining reservations platform, experienced its best financial quarter ever, with revenue accelerating to $49 million, representing 17% year-over-year growth. Adjusted EBITDA for TheFork in the quarter was $5 million, marking a significant improvement from the previous year.
In conclusion, Tripadvisor is actively exploring potential strategic alternatives while maintaining its financial stability and growth across its various segments. Despite not repurchasing shares in the third quarter, the company retains the option for future buybacks as they evaluate their strategic options. Officials remain bullish on the growth potential of experiences, believing that they will outpace the overall online travel industry. TheFork, Tripadvisor’s dining reservations platform, achieved record financial performance in the third quarter, further highlighting the company’s strength in various segments. As Tripadvisor moves forward, it will be important to monitor how they navigate potential strategic transactions and continue to capitalize on growth opportunities within the online travel industry.
