TripAdvisor, Inc 10-Q for FY2020 Q1

About this 10-Q

Headline figures

TripAdvisor, Inc. (TRIP)

10-Q 2020-05-08 For: 2020-03-31

Added on April 12, 2026

TripAdvisor, Inc filed this 10-Q on May 8, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $278M; down 26.1% from $376M a year earlier
Net loss: $16M; compared with net income of $26M a year earlier
Diluted EPS: -$0.12; compared with $0.18 a year earlier

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Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock	TRIP	Nasdaq

Class		Outstanding Shares at May 1, 2020
Common Stock, $0.001 par value per share		121,391,809 shares
Class B common stock, $0.001 par value per share		12,799,999 shares

		Page
Part I—Financial Information
Item 1. Unaudited Condensed Financial Statements
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019		3
Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2020 and 2019		4
Unaudited Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019		5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2020 and 2019		6
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019		8
Notes to Unaudited Condensed Consolidated Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3. Quantitative and Qualitative Disclosures about Market Risk		43
Item 4. Controls and Procedures		43
Part II—Other Information
Item 1. Legal Proceedings		44
Item 1A. Risk Factors		44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		65
Item 3. Defaults Upon Senior Securities		66
Item 4. Mine Safety Disclosures		66
Item 5. Other Information		66
Item 6. Exhibits		68
Signatures		69

	Three months ended March 31,
	2020			2019
Revenue (Note 3)	$	278		$	376

Costs and expenses:
Cost of revenue (1)		19			21
Selling and marketing (2)		129			178
Technology and content (2)		73			73
General and administrative (2)		52			42
Depreciation		25			23
Amortization of intangible assets		7			8
Total costs and expenses:		305			345
Operating income (loss)		(27	)		31
Other income (expense):
Interest expense		(2	)		(2	)
Interest income		1			4
Other income (expense), net		1			―
Total other income (expense), net		―			2
Income (loss) before income taxes		(27	)		33
(Provision) benefit for income taxes (Note 9)		11			(7	)
Net income (loss)	$	(16	)	$	26

Earnings (loss) per share attributable to common stockholders (Note 4):
Basic	$	(0.12	)	$	0.19
Diluted	$	(0.12	)	$	0.18
Weighted average common shares outstanding (Note 4):
Basic		136			138
Diluted		136			141

(1) Excludes amortization as follows:
Amortization of acquired technology included in amortization of intangible assets	$	1		$	2
Amortization of website development costs included in depreciation		17			16
	$	18		$	18

(2) Includes stock-based compensation expense as follows (Note 5):
Selling and marketing	$	4		$	5
Technology and content	$	11		$	12
General and administrative	$	11		$	10

	Three months ended
	March 31,
	2020			2019
Net income (loss)	$	(16	)	$	26
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax (1)		(17	)		(2	)
Total other comprehensive loss, net of tax		(17	)		(2	)
Comprehensive income (loss)	$	(33	)	$	24

	March 31,			December 31,
		2020			2019
ASSETS
Current assets:
Cash and cash equivalents (Note 6)	$	798		$	319
Accounts receivable and contract assets, net of allowance for doubtful accounts of $25 and $25, respectively (Note 2, Note 3)		159			183
Income taxes receivable		26			4
Prepaid expenses and other current assets		29			27
Total current assets		1,012			533
Property and equipment, net of accumulated depreciation of $338 and $319, respectively		268			270
Operating lease right-of-use assets		67			74
Intangible assets, net of accumulated amortization of $176 and $173, respectively		101			110
Goodwill (Note 7)		826			840
Deferred income taxes, net		7			7
Non-marketable investments (Note 6)		54			55
Other long-term assets		92			95
TOTAL ASSETS	$	2,427		$	1,984

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	34		$	11
Deferred merchant payables		71			159
Deferred revenue (Note 3)		60			62
Accrued expenses and other current liabilities (Note 10)		146			203
Total current liabilities		311			435
Long-term debt (Note 8)		700			―
Deferred income taxes, net		16			8
Other long-term liabilities		373			380
Total Liabilities		1,400			823

Commitments and contingencies (Note 11)
Stockholders’ equity: (Note 12)
Preferred stock, $0.001 par value		―			―
Authorized shares: 100,000,000
Shares issued and outstanding: 0 and 0
Common stock, $0.001 par value		―			―
Authorized shares: 1,600,000,000
Shares issued: 140,109,681 and 138,698,307, respectively
Shares outstanding: 121,285,697 and 124,581,773, respectively
Class B common stock, $0.001 par value		―			―
Authorized shares: 400,000,000
Shares issued and outstanding: 12,799,999 and 12,799,999, respectively
Additional paid-in capital		1,167			1,150
Retained earnings		662			681
Accumulated other comprehensive income (loss)		(80	)		(63	)
Treasury stock-common stock, at cost, 18,823,984 and 14,116,534 shares, respectively		(722	)		(607	)
Total Stockholders’ Equity		1,027			1,161
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,427		$	1,984

	Three months ended March 31, 2020
															Accumulated
					Class B				Additional						other
	Common stock				common stock				paid-in			Retained			comprehensive			Treasury Stock
	Shares		Amount		Shares		Amount		capital			earnings			income (loss)			Shares			Amount			Total
Balance as of December 31, 2019		138,698,307	$	—		12,799,999	$	—	$	1,150		$	681		$	(63	)		(14,116,534	)	$	(607	)	$	1,161
Net income (loss)													(16	)											(16	)
Cumulative effect adjustment from adoption of new accounting guidance (Note 2)													(3	)											(3	)
Other comprehensive loss																(17	)								(17	)
Issuance of common stock related to exercises of options and vesting of RSUs		1,411,374		―						―															―
Repurchase of common stock (Note 12)																			(4,707,450	)		(115	)		(115	)
Withholding taxes on net share settlements of equity awards										(14	)														(14	)
Stock-based compensation										31															31
Balance as of March 31, 2020		140,109,681	$	—		12,799,999	$	—	$	1,167		$	662		$	(80	)		(18,823,984	)	$	(722	)	$	1,027

	Three months ended March 31, 2019
														Accumulated
					Class B				Additional					other
	Common stock				common stock				paid-in			Retained		comprehensive			Treasury Stock
	Shares		Amount		Shares		Amount		capital			earnings		income (loss)			Shares			Amount			Total
Balance as of December 31, 2018		137,158,010	$	—		12,799,999	$	—	$	1,037		$	1,043	$	(62	)		(12,056,688	)	$	(547	)	$	1,471
Net income (loss)													26											26
Cumulative effect adjustment from adoption of new accounting guidance													3											3
Other comprehensive loss															(2	)								(2	)
Issuance of common stock related to exercises of options and vesting of RSUs		1,098,620		―						―														―
Withholding taxes on net share settlements of equity awards										(23	)													(23	)
Stock-based compensation										32														32
Balance as of March 31, 2019		138,256,630	$	—		12,799,999	$	—	$	1,046		$	1,072	$	(64	)		(12,056,688	)	$	(547	)	$	1,507

	March 31, 2020		December 31, 2019
Accounts receivable		154		176
Contract assets		5		7
Total	$	159	$	183

				Weighted		Weighted
				Average		Average
				Exercise		Remaining		Aggregate
	Options			Price Per		Contractual		Intrinsic
	Outstanding			Share		Life		Value
	(in thousands)					(in years)		(in millions)
Options outstanding at December 31, 2019		6,017		$	50.27
Granted		1,046			25.73
Exercised		(1	)		18.05
Cancelled or expired		(120	)		45.35
Options outstanding at March 31, 2020		6,942		$	46.67		6.1	$	-
Exercisable as of March 31, 2020		3,808		$	55.99		4.1	$	-
Vested and expected to vest after March 31, 2020 (1)		6,942		$	46.67		6.1	$	-

				Weighted
				Average
				Grant-		Aggregate
	RSUs			Date Fair		Intrinsic
	Outstanding			Value Per Share		Value
	(in thousands)					(in millions)
Unvested RSUs outstanding as of December 31, 2019		8,469		$	45.42
Granted		4,439			25.71
Vested and released (1)		(1,956	)		48.71
Cancelled		(538	)		39.16
Unvested RSUs outstanding as of March 31, 2020		10,414		$	36.34	$	181

	Stock
	Options		RSUs/MSUs
Unrecognized compensation expense	$	36	$	311
Weighted average period remaining (in years)		2.8		2.9

	Amortized Cost		Fair Value (1)		Cash and Cash Equivalents
Level 1:
Money market funds		57		57		57
Level 2:
Term deposits		450		450		450
Total	$	507	$	507	$	507

	Hotels, Media & Platform		Experiences & Dining			Other (2)			Total
	(in millions)
Balance as of December 31, 2019	$	405	$	333		$	102		$	840
Other adjustments (1)		-		(11	)		(3	)		(14	)
Balance as of March 31, 2020	$	405	$	322		$	99		$	826

	Three months ended
	March 31,
	2020			2019
Risk free interest rate		1.18	%		2.47	%
Expected term (in years)		5.30			5.19
Expected volatility		42.64	%		42.51	%
Expected dividend yield	— %			— %
Weighted-average grant date fair value	$	10.18		$	22.32

	Three months ended March 31, 2020
	Hotels, Media & Platform (1)		Experiences & Dining			Other (2)		Corporate and Unallocated			Total
	(in millions)
Revenue	$	169	$	83		$	26	$	-		$	278
Adjusted EBITDA	53			(19	)		6		-			40
Depreciation									(25	)		(25	)
Amortization of intangible assets									(7	)		(7	)
Stock-based compensation									(26	)		(26	)
Restructuring and other related reorganization costs									(9	)		(9	)
Operating income (loss)												(27	)
Other income (expense), net												-
Income (loss) before income taxes												(27	)
(Provision) benefit for income taxes												11
Net income (loss)												(16	)

	Three months ended March 31,						% Change
	2020			2019			2020 vs. 2019
Revenue	$	278		$	376			(26	)%

Costs and expenses:
Cost of revenue		19			21			(10	)%
Selling and marketing		129			178			(28	)%
Technology and content		73			73			0	%
General and administrative		52			42			24	%
Depreciation		25			23			9	%
Amortization of intangible assets		7			8			(13	)%
Total costs and expenses:		305			345			(12	)%
Operating income (loss)		(27	)		31		n.m.
Other income (expense):
Interest expense		(2	)		(2	)		0	%
Interest income		1			4			(75	)%
Other income (expense), net		1			―			n.m.
Total other income (expense), net		―			2			(100	)%
Income before income taxes		(27	)		33		n.m.
(Provision) benefit for income taxes		11			(7	)	n.m.
Net income (loss)	$	(16	)	$	26		n.m.

Other Financial Data:
Adjusted EBITDA (1)	$	40		$	89			(55	)%

n.m. = not meaningful (1) See “Adjusted EBITDA” discussion below for more information.

Period	Total Number of Shares Purchased		Average Price Paid per Share (1)			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or approximate U.S. dollar value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 to January 31		1,264,653	$	28.72			1,264,653	$	153,251,195
February 1 to February 29		1,039,733	$	23.79			1,039,733	$	128,496,261
March 1 to March 31		2,403,064	$		22.22		2,403,064	$	75,042,077
Total		4,707,450					4,707,450

Tripadvisor, Inc.
By:		/s/ Ernst Teunissen
		Ernst Teunissen
		Chief Financial Officer

By:		/s/ Geoffrey Gouvalaris
		Geoffrey Gouvalaris
		Chief Accounting Officer