Key Takeaways
Trivago NV raised its full-year profit forecast after reporting a 15% increase in first-quarter revenue, driven by strong performance in its Americas and European markets.
"The strength of our first quarter performance and the momentum we are carrying into the rest of the year gives us the confidence to raise our profitability guidance," Chief Executive Officer Johannes Thomas said in a statement.
Total revenue for the quarter ended March 31 rose to €142.9 million from €124.1 million a year earlier. The company reported a net loss of €7.3 million, a 6% improvement from the €7.8 million loss in the same period last year. Consensus estimates for revenue and earnings were not disclosed.
The company now expects full-year Adjusted EBITDA of around €25 million, an increase from its previous forecast of at least €20 million. In a sign of confidence, trivago also announced a share buyback program of up to €20 million, set to begin at the end of May.
The growth was primarily fueled by a 17% rise in Referral Revenue in the Americas and a 14% increase in Developed Europe. These gains offset a 12% decline in the Rest of World segment, which faced foreign exchange headwinds and geopolitical pressures.
The company's Return on Advertising Spend (ROAS), a key metric of marketing efficiency, improved by 2.9 percentage points to 121%, reflecting what the company called "compounding effects" of its brand strategy. Total advertising spend increased 10% to €115.4 million.
Trivago's reliance on its largest partners continued to decrease. Revenue from brands affiliated with Expedia Group accounted for 26% of referral revenue, down from 35% a year ago. Booking Holdings' share was 39%, a slight decrease from 40%.
The positive results and upgraded forecast suggest management is confident that its brand investments will continue to drive profitable growth through the upcoming summer travel season. Investors will watch for the execution of the share buyback program and second-quarter results to see if the momentum can be sustained.
This article is for informational purposes only and does not constitute investment advice.
