trivago N.V. (TRVG) Q4 2025 Earnings Call Transcript

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Overview

Trivago reported strong financial performance with a 19% revenue growth and positive net income despite FX headwinds. The company is focusing on brand marketing, product enhancements, and integrating Holisto, which shows potential for increased market share. The Q&A section revealed management's strategic focus on total revenue growth and disciplined marketing. Although some guidance details were vague, the overall sentiment is positive due to strong financial results, optimistic growth expectations, and strategic investments, which should positively impact the stock price.

Key Financial Performance

Total Revenue (Q4 2025) EUR 120 million, representing a 27% increase compared to the same period in 2024. Growth driven by strong year-over-year double-digit Referral revenue growth in Americas (20%), Rest of the World (16%), and Developed Europe (15%), despite FX-related headwinds of approximately 5% globally.

Total Revenue (Full Year 2025) 19% year-over-year growth, driven by increased branded channel traffic and ongoing brand marketing investments.

Net Income (Full Year 2025) EUR 11.2 million, despite FX-related headwinds.

Adjusted EBITDA (Full Year 2025) EUR 15.8 million, despite FX-related headwinds.

Net Income (Q4 2025) EUR 14.5 million, driven by strong revenue growth and better-than-expected profitability.

Adjusted EBITDA (Q4 2025) EUR 11.3 million, better-than-expected, despite increased operational expenses.

Operational Expenses (Q4 2025) EUR 113 million, increased by EUR 26 million due to higher brand marketing investments and acquisition-related expenses.

Advertising Spend (Q4 2025) Increased by EUR 9.8 million (43%) in Americas, EUR 4.3 million (31%) in Rest of World, and EUR 3.8 million (18%) in Developed Europe, driven by increased brand marketing investments.

ROAS (Q4 2025) Global ROAS decreased from 162.9% in 2024 to 147.9% in 2025. ROAS in Americas decreased from 159.6% to 137.5%, Rest of World from 148.3% to 131%, and Developed Europe from 176% to 173.8%.

Cash and Cash Equivalents (End of 2025) EUR 130.9 million, with no long-term debt, highlighting a strong financial position.

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Operating Highlights

AI-powered features: Introduced AI highlights, AI review summaries, and AI-driven natural language search, including AI Smart Search launched in Q4 2024. These features enhance hotel search and user experience.

Member proposition: Revenue from logged-in members increased to over 25% of Referral revenue, a 93% increase compared to Q4 2023.

trivago Book & Go: Referral revenue through this funnel increased by 137% in Q4 2025 compared to Q4 2023.

Brand marketing expansion: Ran campaigns in 30 countries, including LatAm markets, and expanded into new brand marketing channels. Focused on optimizing existing markets in 2026.

Market opportunity: Positioned within a $1.6 trillion travel market, with hotels representing $500 billion. Tailored value proposition to meet traveler needs for competitive prices and value for money.

Revenue growth: Achieved 19% year-over-year total revenue growth in 2025 and 27% growth in Q4 2025.

Profitability: Delivered EUR 15.8 million in adjusted EBITDA for 2025 and EUR 11.3 million in Q4 2025.

Cost management: Maintained cost discipline and stable headcount by leveraging AI, despite increased operational expenses.

Brand marketing strategy: Shifted focus from entering new markets to optimizing existing ones. Reduced pace of brand marketing spend growth while leveraging compounding effects of past investments.

AI adoption: Integrated AI across operations to enhance productivity and marketing impact, aiming to operate efficiently with a lean workforce.

Partner empowerment: Expanded transaction-based CPA model to over 140 partners, with 25% of Referral revenue processed under this model. Focused on delivering exclusive deals to members.

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Risk or Challenges

FX-related headwinds: The company faced material foreign exchange-related headwinds in 2025, which could continue to impact revenue and profitability.

Scaling brand marketing investments: Increased brand marketing investments led to higher operational expenses and reduced return on advertising spend (ROAS) across all core segments, which could challenge profitability if not managed effectively.

Dependency on search engines: Despite diversification efforts, the company remains dependent on search engines for traffic, which poses a risk if search engine algorithms or costs change unfavorably.

Tough comparables in Q1 and Q2 2026: The company anticipates challenges in achieving growth due to strong performance in the comparable periods of 2025.

Operational cost increases: Operational expenses increased significantly, driven by higher selling and marketing costs, which could pressure margins if revenue growth slows.

Economic uncertainties: Potential economic uncertainties in key markets could impact consumer travel behavior and spending, affecting revenue.

Adoption of AI and workforce efficiency: While AI adoption is expected to improve efficiency, there is a risk of over-reliance on technology, which could lead to operational disruptions if not managed properly.

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Guidance & Outlook

2026 Strategic Theme: Optimizing momentum, pushing frontiers, striking the right balance between growth and marketing discipline while continuing to innovate.

Brand Marketing Investments: Continued increase in brand marketing spend, primarily in focused markets, with a slower growth rate compared to previous years. Shift from entering new markets to optimizing existing ones.

AI and Product Innovation: Focus on AI-powered features, high-velocity testing, and improving hotel search and price conversion experience. Expansion of AI Smart Search and deeper integration of trivago Book & Go.

Partner Empowerment: Enhancing tools for partners, focusing on exclusive deals for members, and expanding the transaction-based CPA model.

Operational Efficiency: Leveraging AI to amplify productivity and maintain a stable headcount while achieving more.

Revenue Growth: Double-digit total revenue growth expected for 2026, with at least EUR 20 million in adjusted EBITDA.

Profitability: Higher profitability anticipated in Q1 2026 compared to previous years, leveraging compounding effects of past brand marketing investments.

Brand Marketing Efficiency: Gradual increase in profitability through scaled brand marketing investments and compounding effects.

AI Integration: Continued investment in AI to enhance user experience and operational efficiency.

Market Position: Positioned within a $1.6 trillion travel market, with hotels representing $500 billion of the opportunity.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:How should we think about the growth in Referral revenues for 2026, considering the Holisto acquisition? Should Referral revenue also grow in double digits?

A:Management clarified that they will only provide guidance on total revenue moving forward, as Referral revenue alone does not provide a meaningful picture due to intercompany eliminations and the impact of trivago DEALS. They expect double-digit top-line growth overall.

Q:Do you still expect to get back to pre-COVID levels of over EUR 800 million in Referral revenue and an EBITDA margin of around 6%?

A:Management stated that their aspiration is to get as close as possible to 2019 levels, but it is not a hard goal. They aim to focus on disciplined marketing and branded traffic revenue growth, targeting around 10% adjusted EBITDA share in the next few years. The decision to expand into new markets or focus on profitability will be made later.

Q:Can you elaborate on the brand advertising channel and the opportunity to scale it?

A:Management explained that they have leaned into Latin American markets and other key markets where opportunities arose. They have diversified into new channels like streaming, podcasts, and social media, reducing dependency on linear TV and performance marketing channels. They aim to continue disciplined investments in brand marketing.

Q:How would you characterize the health of global travel currently, and are you expecting any impact from major sporting events like the Winter Olympics or World Cup?

A:Management noted positive ADRs in Rest of World and Americas, with slightly negative ADRs in Developed Europe. Length of stay and ABV were up in most regions. They do not expect significant impacts from major sporting events, as these tend to encourage travel rather than reduce it.

Q:Where do you expect the most benefits from newer products like Book & Go and CPA model? Can these products drive further diversification in your advertiser base?

A:Management highlighted that CPA has a bigger impact on making partners competitive, while Book & Go has shown significant growth (137% in Q4 2025 compared to Q4 2023). These products are expected to drive up conversions and support overall growth.

Q:What is the update on Holisto and its potential to provide white-label booking engine services for small and medium-sized OTAs and hotel chains?

A:Management clarified that their focus is on using Book & Go to facilitate bookings on trivago's platform rather than powering full tech stacks for other OTAs. The goal is to drive conversion and improve marketing effectiveness, with no plans to develop a separate business line.

Q:Does the shift in brand marketing strategy mean you will rely more on other traffic channels?

A:Management stated that they have diversified brand marketing channels, reducing dependency on linear TV and performance marketing. They have been disciplined in performance marketing and focused on branded traffic, which provides better stickiness and lifetime value.

Q:Review of Unclear Management Responses

A:Management avoided providing specific guidance on Referral revenue growth and pre-COVID revenue levels, instead focusing on total revenue and general aspirations. They also did not provide detailed data on the impact of major sporting events or specific plans for Holisto's white-label services, using vague language and general statements instead.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

TRVG Transcript

trivago N.V. (TRVG) Q4 2025 Earnings Call Transcript

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The earnings call indicates strong financial health with no long-term debt and significant cash reserves. Trivago's focus on AI enhancements, user retention, and marketing efficiency suggests positive future growth. Holisto's contribution and optimistic revenue and EBITDA guidance for 2026 further support a positive outlook. While management was vague on some specifics, the overall sentiment from the Q&A was constructive, with analysts showing interest in AI-driven improvements and market expansion strategies. The absence of negative catalysts, like margin declines or guidance cuts, reinforces a positive stock price reaction.

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The earnings call presented mixed signals. On the positive side, Trivago's revenue grew by 17%, and they raised their full-year revenue growth guidance. However, the company reported a net loss and negative adjusted EBITDA, with increased operational expenses. The Q&A revealed some concerns about currency headwinds and reliance on brand marketing. Despite optimistic guidance, the lack of clear answers regarding FX impacts and ongoing losses suggest a cautious outlook, leading to a neutral sentiment.

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The earnings call reveals mixed signals: strong revenue growth and raised guidance indicate positive momentum, but ongoing net losses, increased operational expenses, and negative adjusted EBITDA in the first half of the year highlight financial challenges. The lack of shareholder return initiatives and cautious management responses further temper optimism. The Q&A section shows positive regional growth and brand investment impact, but uncertainties in marketing efficiency and AI technology remain. The neutral sentiment reflects these balanced factors, suggesting limited short-term stock price movement.

TRVG Report

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