Tripadvisor Stock

Good day, and thank you for standing by. Welcome to the Tripadvisor Second Quarter 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Angela White, Investor Relations Vice President. Please go ahead, Angela.

Thank you, Felicia. Good morning, and welcome to Tripadvisor's Second Quarter 2026 Financial Results Call. Joining me today are Matt Goldberg, President and CEO; and Mike Noonan, CFO.

Earlier this morning, we filed and made available our earnings release. In that release, you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today, August 6, 2026. Tripadvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements.

With that, I'll turn the call over to Matt.

Thanks, Angela, and good morning, everyone. In Q2, group revenue and adjusted EBITDA were in line with expectations, which we delivered against the fluctuating macro backdrop. Overall performance reflected the underlying strength of our experiences business and our continued focus on simplifying our legacy offerings. During the quarter, we announced our proposed agreement to sell TheFork for $700 million. The transaction unlocks the value we've created at TheFork and is another step in focusing the company on experiences.

Net proceeds from the transaction will provide us additional flexibility for our capital allocation choices. We believe American Express will be a natural long-term home for TheFork and an important ongoing strategic partner for TripAdvisor. The transaction continues to progress. We signed a definitive agreement on August 2 and expect to close before year-end. Beyond the sale of TheFork, our portfolio review continues as we explore additional opportunities across the business to catalyze shareholder value. We're focused on enhancing the value of our assets and reshaping the company to deliver on our strategic priorities specifically strengthening our leadership in experiences and simplifying our hotels and other offerings to optimize for profitability.

This work is predicated on allocating our resources to the largest opportunities for sustainable growth and profitability, where we have the competitive position to be a global market leader. With that, let's turn to our operating performance, starting with our experiences segment. Across the large majority of our marketplace, bookings growth trended as expected. Performance on our largest owned and operated point of sale, Viator, grew 10% for the quarter, while sustained SEO headwinds in the Tripadvisor point of sale pressured overall segment growth.

Bookings for the segment grew 5% overall in the quarter. Our marketplace flywheel continues to support our experiences strategy, and we're making progress against each stage. First, generating higher-quality demand; second, converting that demand more effectively through our storefronts, and third, building stronger, more productive supply. Let's take each in turn. First, demand. We continue to broaden the ways we reach, acquire and reengage customers. As travelers increasingly discover experiences across social and other mid-funnel channels, we're finding attractive new opportunities to diversify beyond paid search.

The results are giving us the confidence to scale those investments with encouraging evidence that they can drive both incremental demand and attractive customer acquisition economics. At the same time, search remains a core channel in the experiences category, given the high-intent nature of its leads. We continue to test, learn and optimize across this quickly changing landscape, leveraging our proprietary data and bidding expertise to maximize efficiency. This is driving healthy double-digit growth in our paid channels. Outside of our marketing channels, we're also making good progress with rewards and incentives. What began as a series of targeted experiments is increasingly becoming a scalable lever for acquisition, conversion and repeat engagement across the customer journey. While certain incentives may bring near-term pressure on take rate, the benefit to overall bookings uplift and return engagement drive favorable returns.

Second, our storefronts. As travelers reach us, our product work continues to simplify the path to booking, delivering compounding conversion gains. Central to our product strategy is helping travelers make booking decisions more easily and with greater confidence. This quarter, continued improvements to personalization, how we surface and present reviews and more specific availability details are making it easier for travelers to quickly find the right experience and complete a booking. Together, these investments continue to strengthen the booking experience, lift conversion and support our overall items growth, reinforcing our confidence in our product road map and our ability to drive sustainable items growth over time.

Finally, our supply. Building the world's best experiences catalog isn't just about adding more products, it's about adding the right products and we're focused on actively expanding supply where we see the greatest opportunity to serve unmet traveler demand. This strategy is paying off. We're seeing it in the performance of the supply we're onboarding in secondary and tertiary destinations. The inventory we target strategically is getting better traction, securing the all-important first booking significantly faster and earning more per product than average.

These products are also driving new customer acquisition by attracting a majority of their bookings from first-time customers. This, in turn, supports our category expansion with many new customers booking in categories where we've been less penetrated, such as ticketed attractions and events. And the key enabler of that strategy is making it easier for operators to bring high-quality experiences on to the platform. Continued investments in supplier onboarding and connectivity are reducing listing friction, helping operators get experiences live faster with richer, higher-quality content. Our supply is one of our strongest advantages and we'll continue building on our momentum. The benefits of our supply and product work extend beyond our owned marketplaces. They also strengthen our value proposition to partners, enabling us to power more experiences storefronts across the travel industry and beyond. The attractiveness of our offering supports the healthy growth in our third-party points of sale as we continue to add new distribution partnerships.

Now turning to Hotels & Other. This segment remains highly profitable, but is well understood to be challenged by structural changes in our primary SEO channel. Our stated objective remains the same, to simplify the business and drive alignment between revenue trends and costs. Year-to-date, we reduced fixed costs by approximately 16%, and we'll continue to evaluate further opportunities to streamline the business. Strategically, the profitability in this segment allows us to reinvest across our highest priorities, and we'll continue to be disciplined about shifting resources and investment to areas of proven growth, particularly in experiences. Alongside the work we've discussed today, we're also preparing for the changes reshaping how people discover, plan and experience travel.

Experimentation is central to that effort. We've made it a core part of how we operate across the business, and we're seeing the results. Our experimentation velocity is increasing and contributing more incremental revenue year-on-year, which we expect to drive compounding impact over time. At the same time, we're ensuring our marketplace is available wherever travelers increasingly discover and plan experiences. Most recently, Viator became the first travel experiences partner for Google Gemini, adding to our growing list of partnerships across the leading AI platforms. We're also seeing encouraging early signs that our long-standing strengths in SEO, together with our trusted high-quality content are translating well into AI-powered travel discovery.

While AI-driven traffic remains small today, TripAdvisor and Viator are already among the most visible travel brands in Google's AI overviews. As we continue working with the leading AI platforms, we'll keep learning, adapting and evolving to serve changing traveler behavior. Finally, we're utilizing AI to help us build our products and operate more effectively. This includes scaling our early pilots to improve engineering productivity, automate supply acquisition and customer service workflows and help optimize marketing performance. We're also using AI tools to power our fraud detection for reviews, moderate and curate our content and enable our workforce through productivity tools. We're encouraged by the breadth and impact of practical applications we're seeing in many ways across the company.

Before I pass over to Mike, I'd like to leave you with this. While the operating environment remains uncertain, our conviction has never been clearer. We believe experiences is the largest long-term growth opportunity in travel and every decision we're making from where we invest to how we operate is focused on extending our leadership in that category. As Mike will cover in more detail, we're committed to investing behind this opportunity with a long-term lens on growth and margin expansion.

With that, I'll turn the call over to Mike.

Thanks, Matt, and good morning. I'll start with a review of our financial performance and then provide more information on July trends and our outlook for Q3. As a reminder, all growth rates are relative to the comparable period in 2025, unless noted otherwise. Before I cover performance, and as we noted in our release this morning, any reference to consolidated results include only the Experiences and Hotels & Other segments presented as continuing operations. TheFork, given the proposed sale announcement on June 15, is considered held for sale under accounting guidelines and is shown as discontinued operations in our P&L statement of cash and cash flows and balance sheet.

This morning's release, our Form 10-Q and our commentary on our group revenue and adjusted EBITDA now include only our continuing operations for Experiences and Hotels & Other and also include a recast for quarterly and annual periods. These continuing operations incorporate approximately $4 million in annual cost, roughly $1 million per quarter that were previously allocated to TheFork. These expenses primarily pertain to corporate personnel and insurance. We anticipate recovering the majority of these costs in 2027 through a transition services agreement. Now on to the results for the quarter.

Continuing operations revenue and adjusted EBITDA was $442 million and $76 million, respectively, while revenue and adjusted EBITDA from TheFork classified in discontinued operations was $61 million and $11 million, respectively. Relative to our expectations, which includes TheFork, revenue was in line and adjusted EBITDA was above expectations. Turning now to Experiences. We witnessed an uneven recovery in the quarter with improvement in bookings growth from April to May, but then stepped back modestly in June. Domestic U.S. bookings improved throughout the quarter from April lows with Hawaii destination bookings bouncing back to levels we saw early in the year.

However, U.S. to Europe bookings softened through the quarter and remained at levels well below what we saw at the beginning of the year. We attribute this in part to persistent macro-related factors, including the continued geopolitical uncertainty and extreme heat conditions in May and June. The number of experiences booked grew 5% in Q2, in line with expectations. Our largest owned and operated point of sale, Viator, delivered 10% growth for the quarter. In our Tripadvisor point of sale, persistent SEO headwinds continue to outweigh performance in other channels. We estimate the impact of the SEO pressure accounted for approximately 5 percentage points of growth headwind to this segment. This drag to growth continues to moderate as SEO becomes a smaller share of overall bookings mix.

Gross booking value, or GBV, grew 3% to approximately $1.4 billion. We estimate changes in currency were a tailwind to growth of approximately 1%. SEO pressure accounted for approximately 5 percentage points of headwind to GBV growth. Testing around discounting and a higher mix of lower-priced items on our owned and operated points of sale drove lower average booking value, or ABV, year-over-year, resulting in a lower GBV growth rate relative to the bookings growth rate. Experiences revenue grew 3% or approximately 2% on a constant currency basis. Revenue growth was pressured relative to bookings and GBV growth by an increase in cancellation rates, primarily driven by adverse weather and travel conditions in both the U.S. and Europe throughout May and June.

Adjusted EBITDA for the experiences segment was $31 million or 11% of revenue, down 290 basis points. Deleverage was driven by the free/paid channel mix shift across Viator and Tripadvisor points of sale. Lower personnel and other costs partially offset the increased marketing as a percent of revenue. We remain confident in our ability to capture a larger share of the global experiences market. Our product, marketing and supply infrastructure provide the foundation required to scale beyond our mature markets. These capabilities also power our high-growth B2B2C or third-party partner offerings, which reach travelers in noncore geographies and categories still migrating from offline to online booking adoption.

Investments in our B2B2C offering, which include improved integration, enhanced account management and greater co-marketing capabilities are yielding significant benefits. We are seeing robust GBV growth from this channel comprising hundreds of merchant partners, thousands of travel agents and other distribution partners. While macro factors have impacted our top line performance this year, we remain confident in the trajectory for durable growth and long-term margin expansion. Our flywheel investments are yielding measurable improvements in direct bookings and unit economics, particularly with our high-intent channels. And our B2B2C offering continues to scale with a favorable margin profile that directly supports overall segment profitability.

Turning now to Hotels & Other segment. Q2 revenue was $163 million, a 21% decline and in line with expectations. Strong pricing growth in hotels was more than offset by sustained hotel shopper volume headwinds. Media and advertising revenue declined 12% to $31 million, driven by on-site traffic-related headwinds, which offset growth in off-platform revenue. Adjusted EBITDA in Hotels & Other was $46 million or 28% of revenue, down approximately 100 basis points. Adjusted EBITDA was higher than our expectations, primarily due to lower-than-anticipated personnel and other fixed costs. Adjusted EBITDA margin deleverage was driven by an ongoing shift in prepaid channel mix and higher technology costs, which more than offset lower personnel costs.

Turning briefly to TheFork, which as noted, is no longer a reportable segment and classified as discontinued operations given the proposed sale announcement. Q2 revenue was $61 million, representing 13% growth or 10% in constant currency. Adjusted EBITDA was $11 million or approximately 19% of revenue. Turning to consolidated expenses from continuing operations. Cost of revenue in Q2 was 7% of revenue, lower by approximately 70 basis points. This was primarily driven by a benefit of approximately $2 million related to indirect tax refund. Marketing costs were 49% of revenue, an increase of approximately 500 basis points. This was driven by ongoing pressure from free/paid channel mix, including the aforementioned SEO headwinds impacting Tripadvisor experiences and the H&O segment. Personnel costs were 22% of revenue, lower by approximately 400 basis points, primarily due to lower costs in Hotels & Other and lower share-based compensation or SBC expense.

Lower SBC expense was primarily due to forfeitures related to our cost savings program announced in Q4 of 2025 and lower annual grant values beginning in 2026. Absent SBC, personnel costs were approximately 19% of revenue, lower by approximately 200 basis points. Technology costs in Q2 were 5% of revenue, a modest increase of approximately 40 basis points, primarily driven by lower revenue. Technology costs on an absolute dollar basis were largely flat. G&A costs were approximately 3% of revenue, higher by 130 basis points, primarily due to a difficult comparison of lower G&A expense in Q2 of 2025, resulting from a onetime true-up.

Now turning to cash and liquidity. In Q2, operating cash flow was $141 million and free cash flow was $130 million. Total cash and cash equivalents at June 30 were approximately $843 million, reflecting the paydown of our convertible notes on April 1, which reduced both cash and total debt by approximately $345 million. In addition, $52 million of cash is included in discontinued operations due to the pending sale of TheFork. Excluding deferred merchant payables of $484 million, our excess cash balance was approximately $359 million, and our total debt was approximately $836 million.

Regarding share repurchases, our program remains active with $110 million remaining, but we did not repurchase shares in the public market due to our ongoing portfolio review, which included the sale of TheFork. We remain committed to our share repurchase program, and we will continue to evaluate opportunities for capital return while balancing our capital structure requirements, market conditions and other relevant factors. As we plan for the closing of TheFork transaction, we anticipate approximately $680 million of net proceeds. The sale proceeds will provide us flexibility in our capital allocation choices, prioritizing debt reduction and/or share repurchases.

Turning now to July trends and our outlook for Q3. July performance remained uneven, reflecting a mix of factors. Unusual weather in the U.S. and Europe dampened bookings growth and increased cancellations throughout the month. We continue to see weakening overall demand in the U.S. to Europe travel corridor, our largest corridor, and pressure in average booking values, driven primarily from a higher mix of lower-priced experiences. The year-over-year shift in geographic mix impacted take rates pressuring revenue. The combination of these factors will impact the Q3 experiences performance. We expect growth in experiences booked to improve slightly from Q2 despite these headwinds, though GBV growth will face pressure from the aforementioned lower average booking values and currency movement.

Higher cancellations and take rate dynamics will further pressure revenue growth relative to GBV growth. Our guidance assumes stability in recent trends. Starting with our Experiences segment for Q3, we expect a flat to modest improvement from Q2 in Experiences booked to approximately 5% to 7% growth. For revenue, we expect declines of 2% at the low end and growth of 1% at the high end, which includes approximately 1 percentage point of currency headwind. We expect Experiences adjusted EBITDA margin of 14% to 17%, which reflects expected revenue pressure this quarter as well as continued free/paid mix shift primarily on the Tripadvisor point of sale.

In our Hotels & Other segment for Q3, we expect revenue declines of approximately 20% to 23%. We expect adjusted EBITDA margin of approximately 22% to 25%. Segment expectations result in expectation for Q3 continuing operations revenue declines of 7% to 10% and adjusted EBITDA margin of 17% to 20%. Given the current operating environment, we have adopted a more prudent outlook for the second half of 2026. We expect modest improvement in revenue growth across both segments in Q4, assuming one-off travel disruptions do not recur.

Further acceleration remains dependent on a more normalized macro backdrop. We also anticipate a typical seasonal step down in adjusted EBITDA margin as we move from Q3 to Q4. Despite the mixed environment, we remain focused on capturing the long-term opportunity experiences, fueling durable growth through disciplined investment and margin expansion.

With that, I'd like to turn the call back over to the operator for Q&A.

[Operator Instructions] First question comes from the line of Richard Clarke of Bernstein.

I guess I'll start with one. You're obviously calling out a lot of sort of macro and corridor pressures. But as we've seen your nearest rivals in your 2 segments GetYourGuide saying they did 34% gross booking guide in H1 in North America and Trivago is growing its revenues about 21% in hotels.

I appreciate probably a bit of a different profit focus, but now you've got $700 million or $680 million coming in from TheFork. Are there investments you can make in the business that mean you can kind of match some of that peer revenue performance? Or is there anything structural holding back what they're doing compared to what you're reporting?

Yes. Thanks, Richard. It's Mike. I'll take the first part of that or Matt can add on. Listen, I take the question, and thanks for the question. I think just a few points on that -- on the relative growth rate. When you think about North America, I think there's a vastly different size comparison. We are a scale significantly higher than our next largest competitor in North America. We do say that our Viator, our most scaled and mature channel has been growing in the mid-teens.

And when you look at the mix impact, we certainly have seen some headwinds coming from the Tripadvisor point of sale. And we're pretty pleased when we look at the overall demand profile and which largely comes through the paid channels and particularly in Viator that we've been maintaining share. So I think there's a bit of just the comparison around the scale point I want to make there. As we think about these investments, and I think you've heard from us pretty consistently where the investments need to be, which is in the flywheel and the demand store supply, and we're investing across all 3 of those. And we are continuing to keep a very long-term focus there.

In demand, you've heard us talk a little bit about this quarter, diversifying some of our marketing mix, really moving into other channels away from SEO, and we're starting to accelerate that. We're excited about some of the early regards in that result. In the store, right, which is all about conversion, how we get our teams working faster and faster around conversion, app, all these things we continue to devote to. And you're seeing these investments in the P&L today through our personnel and through technology costs.

And then finally, in supply, which we've been pretty consistent in the past couple of quarters about how we talk about our supply advantage, which we do firmly believe that we have today, but how do we improve that? And it's not just the number of supply, but how we bring highest quality supply in that contributes to the first 2 points of the flywheel, which are conversion, and we're matching that demand with the supply. So we -- in some ways, we are very aware there's a lot of macro things happening. We're probably a little more unique in the environment relative to some of our very large-scale competitors in the travel sector, which have large scale and geographic diversity. But we remain very committed for long-term investments around those 3 areas. But Matt.

Yes. No, I think you handled it well. We do see meaningful opportunity ahead. I think sometimes these averages belie what's going on underneath and some of the strength that is there that we see. But certainly, there's an opportunity to go to new source markets internationally and drive category diversification because where we play are not the largest or the highest growing source geos or categories, and we have a real opportunity to go after that. We intend to.

But there's a lot of good things happening underneath. We're seeing really good growth from retained and reactivated users. We're seeing improving repeat rates. We're seeing our booker cohorts coming through lower-cost channels. We're seeing some of the items booked in key areas looking really good, conversion improving. So we see a lot of opportunity to lean into, and we will invest prudently behind all of that.

The next question comes from the line of Naved Khan of B. Riley.

Just a couple of questions from me. Maybe just on Viator first. Just talk about what kind of retention rate and repeat rates you're seeing from the Viator cohorts that you have acquired. If I look at the sort of the marketing spend as a percent of revenue, it was up significantly. Is that a part of the mix between 3P versus Viator point of sale? Or is there something else going on?

And then also maybe touch on the price sensitivity, which you may or may not be seeing from the consumer. Other OTAs have talked about how consumer is resilient. And I'm wondering if any sort of price considerations are showing up in your bookings for Viator?

Naved, it's Mike. I'll try to hit those. So I think you hit -- you kind of answered it in your last part on question around marketing mix as a percent of revenue. I think we look at marketing as a percent of GBV. And I think year-over-year, that did increase about 1 point from like 11.3% to 12.4%. So it's a little bit more consistent than looking at on a revenue basis. But even there, some of that very modest deleverage is just due to the prepaid mix and particularly SEO on Tripadvisor.

Importantly, when we think about marketing efficiency, which I think is part of your question, when we look at our SEM costs versus the GBV we drive from SEM, that has remained flat year-over-year. And we really have had a very consistent approach as to thinking about our ROAS targets on both channels. So that has remained pretty consistent. And there really has been no deterioration on the cohorts we see. We continue to see repeat rates that have been pretty consistent. And as we've said, as those cohorts build, those repeat cohorts carry a very different margin profile and are a key part of our thesis around long-term margin expansion, which have not changed.

And in terms of the price sensitivity, we did call that out. We have seen average booking value under -- to come down under pressure a bit. are really across geos, products. And so we see a higher mix of this lower-priced items or bookings come into the mix, which we do believe is a bit of a macro signal because it has started around the time at the end of Q1, we saw a little bit happening and then into Q2 more fulsomely.

And again, it's baked into our Q3 guidance, which we'll see if that's proved to be conservative or not, but we do believe that is a key input and is macro -- reflective of macro.

The next question comes from the line of Lloyd Walmsley of Mizuho.

Can you give us an update on where your exposure is today to SEO at this point, maybe by segment or point of sale, so we get a sense of the, I guess, the forward risk? And then separately, on the AI side, can you just give us an update on your sort of your native AI product and sort of where you are there, what engagement looks like? And then the opportunity maybe to work with AI labs, either for more licensing revenue or more closely on a product? Anything you could say or update us on that would be great.

Great. Lloyd, I'll hit the first one, Matt can hit the second. So we called out a little bit more explicitly in our prepared remarks on SE exposure for Experiences. And we did say that from a segment perspective, there's about 5 points of headwind on the units growth, experiences book growth, right? So around 5 to 10 -- going from reported 5% would be up to around 9% or 10%. That is almost entirely driven by TripAdvisor. There is some very small SE exposure in Viator, but really, really a very modest and as we said, we will continue to think that would work its way down. We expect that to be less pressure as we move next year.

For H&O, it is different. Our hotels business, which was really built on the back of SEO, we continue to work through that. We continue to think about our customer experience, how we get a great customer experience and how we give a very high intent click and that's very valuable to our advertisers, which we have been focused on and is the driving force around a lot of our product work. We do think, over time, we will work through that, but it is -- continues to be a channel that has still some size, although it has diminished greatly over the last several years.

Yes, Lloyd, I'll take your second question. Thanks for that. As you can imagine, we are very active on the AI front. And when we think about AI, we think about really having meaningful impact on our business in 3 ways. First, we want to really accelerate our experiences marketplace flywheel.

And that's an internal opportunity, and we're going at it across product and R&D, driving experiment velocity across marketing to drive efficiency in our customer acquisition, supply, the way that we target and onboard customer service, the way that we use AI to really offset costs and be far more effective there and then engineering to step change our productivity levels. And so there's a lot going on there. Of course, we also think about our native AI offerings. And that centers on really 2 moments for the travel journey. It's the planning phase and sort of when you're in destination.

On the planning side, we're really refining how we tailor travel guidance to personalized answers based on what we know about travelers, and we're working with leading LLM models and leveraging our data. And that continues. We've got millions of people who are using that product. It's a really nice platform for experimentation. I think with all of these products, what you want to do is experiment and learn, drive that velocity and then scale the things that work. And we continue to work on that.

These are not things that you will see showing up immediately in the P&L, but there are areas where we are getting stronger and stronger about what we've learned and how we're going to take that forward. On the in-destination piece, we actually had an MVP go live recently, and we're really working with mobile first. Obviously, it's critically important that we get more people into our mobile app and engage there. And we want to help people quickly find the things that are nearby bookable and aligned with the plan. So we're out there testing.

Again, we've got great volumes to be testing. We're driving rapid experimentation. We're iterating fast based on those insights. and really thinking about how that will shift the product. But again, these are early efforts. We will experiment and learn. We feel good about them. And then finally, the question you asked about how we want to work with the AI labs and thought leaders. I think there is a lot we can be doing. We've been as active as maybe anyone signing deals with OpenAI and Perplexity, Microsoft, Amazon, Anthropic. Obviously, there are a few we can't talk about. We recently announced that we're the first to work with Google Gemini.

And so we're partnering to integrate our experiences inventory. That's an area we're very excited about. We think learning there will put us in a good position to serve travelers wherever they may lead. We're also focused on AEO and really making sure our visibility is incredibly high. We get really nice high-intent traffic that's growing very rapidly, but it's still pretty small, and it's dwarfed by where search has been historically. And so these deals are contributing value. They're growing. We look for a balance of licensing revenue, traffic. There are ways that we can think about experimenting around product. We have nothing to announce today, but there's a lot of active conversations. And we think we're incredibly well positioned with our data content brand to really work with the AI leaders out there.

So again, it's a good setup. It's a very dynamic space. We're doing a lot internally. We're doing a lot natively, and we're doing a lot with partners. And I think you'll see that continue to be something that we talk about over time.

The next question comes from the line of Nafeesa Gupta of Bank of America Securities.

So there are multiple factors which are weighing on third quarter experiences revenue and bookings, weather-related cancellations, Europe, U.S. demand, lower booking values, which one among these would you say is the largest issue that you're seeing? And is it -- do you see it as temporary? Or is it more structural is what I'd like to understand in these revenue headwinds?

Nafeesa, it's Mike. I'll take that. Yes. So listen, July, as we said in the prepared remarks, was a bit uneven. It was a little bit of continuation we saw in June. All of these things we do believe firmly that they're transitory and that they are not structural. When we look at particularly in cancel rates is one of the biggest impact.

Listen, our business, as we said, is largely a North American booker origin business. A very large corridor for us is U.S. to Europe. And we can all look at the news headlines and see really the unfortunate the weather and events are happening there. And it's not unsurprising that you may see higher cancellation rates, particularly in the areas that we are so strong, which is guided tours and activities, a lot of them in outdoors. And so we understand that. So when we look at that, we view that very much as transitory and not structural.

I think overall, the overall demand environment, again, is weighed on, particularly around all the macro factors we've said. Again, for us, though, you got to look at it. We have a lot of mix in our business. We continue to see the Viator point of sale growing nicely, as we said. But even then, we believe that point of sale can grow much faster behind the investments we talked about earlier. And that point of sale has been growing in the mid-teens this year.

So listen, this -- our business, just where it is today, we feel so strongly about the opportunity. As Matt said, it's the highest growth category in travel. It's a long-term growth opportunity. We're working through some macro events. We're not going to stop the investments that we think will produce durable long-term growth ahead of the category. And we're looking forward to getting past some of these macro events into more normalized travel behavior.

And the second one, could you also talk more about continued portfolio review and any other strategic opportunities that you are exploring?

I don't know that I heard the question, but you're asking about the portfolio review. And look, we continue to look at every part of the portfolio and determine where do we want to invest -- where do we want to pull back and maybe optimize and where might we want to divest. And so we want to catalyze shareholder value ahead. I would say there's never been an option off the table.

We want to look at any option that is in the interest of shareholders. And our work is intended to reshape this company to focus more directly on experiences and simplify the portfolio because we understand that the complexity has been something that has not been rewarded. And so we're allocating our resources to enhance the value of the portfolio regardless of our -- where we land on the portfolio review and our strategic priorities are designed to create value on their own because we're focused on creating the strongest experiences company as possible and to simplify our organization to do it most effectively.

[Operator Instructions] The next question comes from the line of Doug Anmuth of JPMorgan.

This is Dae Lee on for Doug. Following up on your comments about macro headwinds being transitory. I mean I guess, broadly looking at the challenges that are -- that you're facing right now, is there -- do you guys have any line of sight on when those challenges or headwinds might normalize?

And is there a way to think about like as those challenges normalize or your growth initiatives kick into higher gear, like when we can expect to see revenue start to reaccelerate and the margins also beginning to expand again?

Yes, I'll take that. Listen, I think we -- you would expect us to be prudent in our guide as we think about Q3 and the rest of the year because it's very hard to understand when they do abate, but they will over time as they always have in travel. Listen, when you go back to where we were -- started the year, and we had very high overall segment kind of mid-teens, high and Viator in the high 20s in some categories to growth rates. This is where we are going to get back to, right?

And it can really accelerate from there, we believe, because, again, we don't see anything different in our business other than fighting through some of these things. So weather impacts, lower-priced people trading down to lower-priced tours and attractions as the macro abates or people feel better about the discretionary income they may have in their pocket to spend on higher pricing. Those things will come back and it will alleviate the pressure certainly on a revenue GBV and revenue basis. So our overall ambition has not changed.

And as Matt talked about in an earlier question, beyond this and expanding into different geos, expanding in different products and different product mix, are all really exciting for us, and we believe can take us into a different revenue help escalate or accelerate from there. So I think we feel pretty good about the long term.

And let me just speak to the macro because we all are seeing the same thing. So I'm not going to repeat that. But we also know travel is going to find a way to travel, and we see travel intent durable for the fall. It's led by the U.S., which seems a bit stronger in terms of intent than perhaps last year. Domestic is picking up some at the expense of international, so we'll have to watch that. We do see it across categories. But those who are thinking about economic uncertainties, actually, they indicate they're placing more value on experiences in a pretty good way.

So when they plan their travel, when they plan their budget, they're going to go do that. Now some of the mix we talked about with price, and it could be that they elect lower-priced experiences, but we'll be there to soak up that demand for sure because what we know is that experiences continues to play an increasingly durable role. And that 80% of travelers say they would cut any other part of travel than experiences, and it's influencing destination choice and travel planning, particularly among younger customers and Americans, and we think we're really well positioned to go take advantage of that. So I do think some of the uneven environment is going to pass. And we can't predict timing of that, but we can put our business in a position to be there as it does.

So we like the resilience we're seeing, and we're certainly keeping an eye on trends as we look forward.

I am showing no further questions at this time. So this does conclude the question-and-answer session. I will now turn the call back over to Matt Goldberg for closing remarks.

Thanks, and thanks for joining us this morning. Before closing out, I just want to briefly welcome our newest Board members, Carl Sparks and Laura Bisesto, who joined the Board following our June shareholder meeting. Carl and Laura each bring operational and strategic perspectives that will provide insight for our strategic priorities ahead.

I also want to congratulate Jeremy Philips on his appointment to Chair. His role as our Lead Independent Director has provided invaluable leadership during key transition periods, and I know we're going to benefit from his continued guidance.

And finally, and most importantly, I want to thank all of our employees for the things they do every day to achieve our ambition. We look forward to providing further updates next quarter. Thank you all.

Goodbye.

This concludes today's conference call. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Tripadvisor's First Quarter 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Angela White, VP of IR. Please go ahead.

Thank you, Fares. Good morning, everyone, and welcome to Tripadvisor's First Quarter 2026 Financial Results Call. Joining me today are Matt Goldberg, President and CEO; and Mike Noonan, CFO.

Earlier this morning, we filed and made available our earnings release. In that release, you'll find reconciliations of the non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today, May 7, 2026. Tripadvisor disclaims any obligation to update these statements to reflect future events or circumstances.

Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements.

With that, I'll turn the call over to Matt.

Thank you, Angela, and good morning, everyone. We're pleased with our Q1 performance, with group revenue in line with expectations and adjusted EBITDA ahead of expectations. We delivered this result despite the challenging macro backdrop that intensified late in the quarter, which Mike will take us through in detail shortly. .

As a reminder, last year, we made an important strategic shift. We reoriented Tripadvisor group around our objective to build the world's largest experiences marketplace. The experiences category represents the largest growth opportunity in travel. It's highly fragmented, still early to come online and supported by durable tailwinds for growth. It's a market where scale matters, and our scale advantage is reinforced by our high-intent travelers, trusted brands, industry-leading supply and long-established category authority. Along with our shift to experiences, we also set out to unlock the power of our data. So Tripadvisor remains at the center of travel discovery, planning and booking as the journey evolves with AI and to simplify our portfolio of legacy offerings to optimize for profitability as we prioritize other growth opportunities.

Today, I'll walk through the progress we're making across our strategy, beginning with experiences. Through the first 2 months of the quarter, our Experiences segment delivered particularly encouraging momentum with GBV growth accelerating from 16% in the prior quarter to 19% in January and February.

Viator, our largest point of sale was even stronger with bookings and GBV growing more than 20% in January and February. In late February, that momentum was interrupted by geopolitical events in the Middle East along with acute disruption in 2 key leisure markets, Mexico and Hawaii. Together, these factors drove a sharp decline in booking volumes and a spike in cancellations, which has since improved.

Despite we saw experiences in January and February reflects both healthy underlying demand in the category as well as early evidence of the strategic changes we put in place last year. We're seeing that progress emerge across the full experiences marketplace, tighter coordination across demand, our storefront and supply is strengthening the flywheel and driving tangible results.

On the demand side, we've unified the Viator and Tripadvisor marketing teams to drive alignment and long-term efficiencies across both headcount and partner spend. We're becoming more efficient and precise in how we allocate our marketing investment across channels.

We're operating our 2 brands together in our paid search portfolio and improving spend efficiency without compromising overall performance. We're also leveraging our intelligence across channels through improved testing and modeling giving us better visibility into where investment can work even harder across the broader marketing mix. This, in turn, helps us move more dollars into higher-return channels such as paid social and affiliates.

And finally, we're driving incremental growth in direct and owned channels such as CRM and the app through product improvements, pricing capabilities and rewards. As traffic lands in our store fronts, our product work is simplifying the path to bookings, which drives incremental volume and compounding conversion gains. As an example, on the Tripadvisor point of sale, we've seen more than 20% growth in conversion over the last 2 quarters.

Our velocity of experimentation is improving the overall product experience to help customers make more confident booking decisions. Through better review and product availability merchandising as well as an AI-enabled prebooking chat on the Viator app. And we're providing more flexible payment options to establish a stronger global payments foundation which we expect to drive further conversion gains as we lay the groundwork for international growth.

Underpinning these efforts is our supply, a long-standing advantage that drives our conversion rates. We're focused on building the right inventory in the right places as quickly as possible by expanding into geographies and categories where we see unmet demand, and it's making an impact. where we've added strategic supply over fast the bookings came from new customers, a strong leading indicator that is attracting incremental demand. We're also simplifying our onboarding process for these valuable new operators, leveraging AI-assisted sign-up to speed the process, which has more than doubled sign-up conversion.

Together, this work is creating a stronger and more coordinated experience flywheel. Our execution is delivering key metrics to improve our performance, better marketing efficiency, increasing experimentation velocity, higher conversion rates, stronger supply productivity and growing customer loyalty.

All of these help improve our unit economics as evidenced by direct channel bookings growth in Q1 that was well above our segment average.

Moving beyond experiences to our other marketplace, the fork where the business outperformed against both top line growth and profitability. Revenue grew 23% or 11% in constant currency, with a healthy 8% EBITDA margin. We continue to diversify our revenue mix with B2B and partnerships revenue outpacing growth in the B2C marketplace. Our restaurant base continues to skew premium as premium restaurant share grew approximately 500 basis points over last year, and nearly half of newly acquired restaurants are entering at premium tiers. We're continuing to drive an innovation agenda at the fork that lays the foundation for the future.

With 80% of diners now coming through the app, we continue to focus on improving the diner experience. Our AI assistant as the work is making restaurant discovery more intuitive through full content search across menus, photos and reviews. While still scaling, this feature is showing encouraging signals, improving recommendation relevance, engagement and conversion versus traditional search. And with the Fork Social, we're reshaping discovery from anonymous ratings to trusted community recommendations. This feature is already showing markedly higher conversion now accounting for roughly 10% of users and 15% of bookings.

We're also using AI to drive productivity across the business. with approximately 40% of B2C customer support queries now handled through AI. Together is execution points to a business that's well positioned for durable long-term growth and expanded profitability. We're pleased with the performance we're seeing in our marketplace businesses, and we expect AI-driven productivity gains across our product and engineering organizations to further accelerate that progress.

AI is now a critical part of our infrastructure, increasing the speed at which teams can build, test and deploy. As AI-enabled workflows become embedded across our R&D organization, we're seeing execution gains including a 5 to 7x increase in average engineering output in one of our recent AI-native pilots.

And AI is increasingly embedded in our operational work, from improved booking experiences and simpler supply onboarding to increasing automation across customer support. Beyond productivity, we're also executing to ensure Tripadvisor remains central to travel as the consumer journey increasingly shift into AI-led discovery and planning. This plays to one of Tripadvisor Group's greatest strength, our data with 1 billion reviews, photos, points of interest and diversified contributions across geographies and categories. It's not just that. It's also trusted, structured and constantly refreshed. It reflects how travelers explore, compare and book across millions of businesses with much of that intelligence tied directly to experiences pricing and real-time availability.

Our data assets enable us to work directly with the world's largest horizontal AI platforms. These partners include OpenAI, perplexity, Microsoft, Amazon and most recently, Anthropic, where we launched Tripadvisor and Viator apps within Quad. Each of these partnerships gives us valuable early learnings about how these users engage and convert with an opportunity to scale the value of the relationship further. What we're seeing so far is encouraging. While the total volume from AI sources is still small, the conversion is already among the highest of any channel in our portfolio.

Beyond partnerships, we're using our data advantage to rapidly iterate on our own AI native experience. With the high volume of visitors who seek us for trusted advice, we have a scaled test bed that allows us to learn for multiple entry points across diverse use cases. We're testing, learning and expanding in a considered manner, serving half of our web traffic in English-speaking markets. As we innovate with AI to help travelers solve problems in real time by comparing options, validating preferences and making better booking decisions, we're putting the judgment of real travelers front and center.

Wherever AI-led travel discovery ultimately lands. We believe the data layer that provides trust, relevance and confidence to transact will define the winners and we expect to be firmly among. The final component of our strategic shift is to simplify our hotels and others business as we focus on growth opportunities elsewhere. This remains a profitable part of the portfolio, but one we recognize is structurally challenging. As we continue our transition from a subscale metasearch player to the leading experiences marketplace, we're managing this business accordingly, reducing fixed costs, prioritizing areas where we can drive attractive returns and pursuing partnerships in categories where we aren't positioned to be the global leader.

We began to see the initial financial benefit of that approach in Q1, with total fixed costs down approximately 14% and personnel costs down 18% year-over-year. We expect that run rate benefit to continue as we move through 2026. The focus is straightforward, align our cost base with our revenue profile and optimize hotels and other for contribution profit while leveraging our trusted brand, reach and data for experiences and AI.

Before I pass to Mike, I want to step back and reconnect our strategy to what you're now beginning to see in our results. We've made 3 deliberate choices. First, to put experiences at the center of the company. Second, to position Tripadvisor Group for an AI-driven shift in travel. And third, to simplify the legacy business and manage it for profitability. As we've started to execute on this path, we're making visible progress in each of these areas.

We accelerated our experiences growth ahead of the market disruption. We're leveraging AI to speed our execution, improve our products and add partnerships with every major platform LM platform. And we've made progress simplifying our legacy business to create the focus, capacity and room to invest in our experiences future. In short, we're becoming an experience first company built for sustainable growth and profitability. Last quarter, we noted that we were formally exploring alternatives for the pork, and we continue to make good progress. While we have no definitive announcement at this time, the work has reinforced our view that this is a highly attractive asset whose value may not be fully reflected within the current portfolio, and we expect to provide an update in the near term.

We continue to review our portfolio and explore all options to deliver the simplicity, focus and scale that we believe will catalyze meaningful shareholder value ahead. So we had a strong start to 2026. Despite the external disruptions, we remain confident in travel's resilience and the long-term growth profile of the areas we're prioritizing. With that, I'll turn it over to Mike.

Thanks, Matt, and good morning. I'll start with a review of our financial performance and then provide more information than what we saw in April and our outlook for Q2 and the full year. As a reminder, all growth rates are relative to the comparable period in 2025 unless noted otherwise. Q1 consolidated revenue was $382 million, a decline of 4% and in line with expectations.

Consolidated adjusted EBITDA was $22 million or 6% of revenue, slightly above our expectations. We're pleased with this performance considering the macro volatility that started in late February. Experiences began the first quarter with strong momentum, progressing through late February when growth slowed significantly in cancellation rates spiked with the onset of several macroeconomic events.

In Mexico and Hawaii, 2 of our larger destination markets, civil unrest and severe flooding caused a surge in booking cancellations and a deceleration in forward bookings growth for those destinations. In March, we also saw the conflict in the Middle East begin to weigh on performance. While a direct exposure to the region is limited, the complex influence other key travel corridors, such as European International and U.S. Europe routes, leading to heightened cancellations and tepid demand.

Taken together, these events most acutely impacted revenue growth in March given revenue is impacted by both cancellations and demand softness, whereas GBV and bookings volume are gross of cancellations that are impacted by demand.

For the quarter, the number of experienced book grew 11%, finishing just shy of our low teens expectation. We estimate approximately 3 points of growth headwinds to these macro events. Before the disruptions, January and February showed strong momentum with the segment growing bookings 15% and Viator our largest point of sale accelerated to approximately 20% growth during that same period. However, following the onset of these macro events, demand softened leading to total segment bookings growth of mid-single digits in March.

In key destinations like Hawaii in Mexico, growth in experiences book shift from well over 20% in January and February to a double-digit growth deceleration in March. Other regions, including the U.S., also experienced a step down, particularly among international travelers. While U.S. domestic and U.S. to Caribbean routes also slowed from January and February, they still achieved healthy mid-teens growth in March. Gross booking value or GBV grew 13% and to approximately $1.2 billion. We estimate changes in currency were a tailwind to growth of approximately 5%.

GBV growth was in line with our bookings volume pattern, which was impacted by decelerating demand. GBV growth was strong in January and February at 19% and an acceleration from 16% growth in Q4. On the Viator point of sale, which accounts for the majority of the segment's total GB a growth was even faster, exceeding 20% in the first 2 months of the quarter. However, segment GBV growth also slowed to mid-single digits in March as a result of the softer demand environment. Experiences revenue grew 8% and 4% in constant currency, slightly below our expectations due to an estimated 4-point growth headwind from heightened cancellations and softer demand.

Revenue growth in January and February was strong at approximately 15% before moderating to approximately flat in March. EBITDA for the Experience segment was a loss of $19 million or negative 11% of revenue which was in line with our expectations and reflects typical seasonality. Deleverage was driven by increased investment in marketing, which offset lower personnel costs. Importantly, marketing cost as a percent of GBV were flat year-over-year.

Our coordinated marketing strategy across Vitera TripAdvisor is yielding strong results, particularly in high intent paid channels. GBV growth in the paid channels for the combined points of sale peaked at 24% in January and February before the onset of these macro events. Over the long term, we expect to realize marketing leverage through improved ROIs in paid channels as well as through loyalty programs, product enhancements and a greater volume of direct bookings as repeat cohorts continue to scale.

Repeat customer growth remains healthy, and we continue to observe lower acquisition costs for traveler cohorts beyond their first booking. Additionally, we are steadily increasing the share of bookings from direct channels, such as our app which demonstrated significantly higher growth compared to other channels.

Turning to the Fork. Q1 revenue was $57 million, representing 23% growth or 11% in constant currency. Total B2C channel bookings grew 6%. While revenue mix continues to be weighted towards B2C monetization, we are encouraged by the ongoing progress of our B2B strategy and the value restaurants find in our premium software, where B2B revenue grew over 50%, which includes currency tailwinds of approximately 12 points.

Adjusted EBITDA for Fork in Q1 was $5 million or approximately 8% of revenue, reflecting margin expansion of over 15 percentage points. The leverage was driven by lower marketing and fixed costs as well as the phasing of certain other marketing costs from Q1 into Q2.

Turning now to our Hotels & Other segment. Q1 revenue was $158 million, a 20% decline. Better-than-expected performance was driven by strong pricing in paid channels with our -- within our hotel meta offering. While pricing growth was strong, it was offset by sustained volume headwinds. Media and Advertising revenue reached $28 million, a 9% decline represents a sequential improvement due to growth in off-platform revenue.

Adjusted EBITDA in Hotels and Others was $37 million or 23% of revenue. Margin compression was primarily driven by lower revenue and the ongoing shift in prepaid channel mix. Fixed costs declined by approximately 14%, but increased as a percent of the revenue. We expect the cost reductions announced in Q4 2025 to more fully benefit personnel expenses in the second half of '26.

Turning to consolidated expenses. Cost of revenue in Q1 was 9% of revenue, an increase of approximately 190 basis points. This was primarily driven by the growing mix of Expenses related transaction costs within consolidated revenue, along with a higher mix of off-platform media advertising costs in hotels and others. Marketing costs were 46% of revenue, an increase of approximately 330 basis points.

This was driven by growth in experience in marketing spend, which more than offset declines in both the Fork and Hotels and Others. Personnel costs were 34% of revenue, lower by approximately 220 basis points. Lower personnel costs in HNO more than offset growth in personnel costs in experiences and the work. Absent share-based compensation, Personnel costs were approximately 28% of revenue, lower by approximately 60 basis points. Lower year share-based compensation expense was primarily due to the forfeitures related to our cost savings program announced in Q4 2025.

Technology costs in Q1 were 7% of revenue, an increase of approximately 80 basis points, primarily driven by higher licensing fees and data center costs. G&A costs of approximately 4% of revenue, lower by 60 basis points. This figure includes the recovery of costs associated with an external fraud incident from late 2022. And and expenses related to shareholder activism, both of which were excluded from our adjusted EBITDA results.

Now turning to cash and liquidity. In Q1, operating cash flow was $118 million and free cash flow was $101 million. The increase in operating cash flow and free cash flow was due to changes in working capital related to the timing of receivable and vendor payments. which more than offset lower net income.

Total cash and equivalents at March 31 were approximately $1.1 billion. Subsequent to quarter end, on April 1, we repaid our convertible notes, which reduced both cash and short-term debt by approximately $345 million. Excluding our deferred merchant payables of approximately $406 million, our excess cash balance after repayment of the notes was approximately $369 million and our total debt was approximately $838 million.

During the quarter, we had no share purchase activity. While the program remains active, we were unable to purchase shares in the public market due to our ongoing portfolio review. We will continue to evaluate opportunities for share repurchases, balancing our capital requirements, market conditions and other relevant factors.

Turning now to our outlook for 2026 in Q2. In the month of April, cancellation rates improved after spiking in March, while booking demand began to recover as we exited the month. We expect bookings and GBV to continue to recover throughout the quarter, reaching normalized levels as we exit Q2. Due to book travel timing in Q2, we expect revenue growth to lag bookings and GBV growth.

While we are encouraged by the early signs of recovery in April, macro uncertainty remains a key consideration for the rest of the year. Our current outlook assumes that the leisure travel environment continues to normalize through the peak summer season, however, our outlook does not incorporate any further deteriorating of macroeconomic conditions or full disruptions.

Given the discretionary nature of travel, we will continue to monitor the macro environment as we manage the business moving forward. As a result, -- our Q2 outlook anticipates consolidated revenue down by mid-single digits. On a segment basis, we expect Experience bookings growth of approximately 5% to 8% and revenue growth of approximately 2% to 5%.

Macro headwinds and resulting impact of cancellations will most meaningfully impact Q2 revenue growth given the compounding effect of higher cancellations and lower demand. We expect growth to reaccelerate in the second half of the year. We expect revenue growth at the fork of approximately 10% to 13%, which includes approximately 400 basis points of currency benefit based on recent exchange rates.

In Hotels and other, we expect declines of approximately 21% to 24%, after which we expect to lap easier comparisons in the second half of the year. We expect Q2 consolidated adjusted EBITDA margin of approximately 15% to 17%. In experiences, we expect margins of approximately 12% to 14%, approximately flat with last year. At the port, -- we expect margins of approximately 11% to 13% lower versus last year due to the aforementioned timing shift of marketing spend from Q1 to Q2.

First half adjusted EBITDA margin is expected to be higher than last year by approximately 500 basis points. In Hotels and Others, we expect margins of approximately 22% to 24%, lower versus last year. Lower fixed costs more than offset by hotels prepaid channel mix skewing more towards paid channels and increased media costs due to higher mix of off-platform revenue. For the full year, we've adjusted our outlook based on the impact of these macro events are expected to have on the first half of the year but have left the second half of the year unchanged given the level of uncertainty that still exists today.

However, updating for the impact of these macro events have on the first half alone would result in approximately flat consolidated revenue growth and approximately flat adjusted EBITDA margin for the full year.

It's still early in the quarter and the macro environment remains dynamic, but we continue to see strong traction in our Experiences business and our belief in the size of this opportunity remains unchanged. We remain focused on extending our category leadership and accelerating revenue growth while expanding profitability. We will monitor developing trends and provide an update on our next call. With that, I'd like to turn the call back to the operator for Q&A.

[Operator Instructions] &A roster. Our first question today comes from Richard Clarke from Bernstein.

Just you mentioned you're sort of tracking geopolitical risks through the back end of the year. Should we take that to mean the Middle East continued weak demand in Mexico? Or are you also sort of beginning to see some signs of that geopolitical sort of macro risk coming into the U.S. as well? I know you mentioned domestic bookings of Viator were also down in March. .

So are you seeing some sort of macro weakness maybe beyond the sort of geopolitical evidence you're also seeing.

Thanks, Richard. I'll take it off, and if Mike wants to add anything. We were referencing tracking the broad macro, which includes both how the consumer behaves as well as geopolitical, and of course, we've all seen varying levels of disruption over the years and every situation is different. The 1 thing we know is that the travel consumer has always been resilient in the face of external disruptions.

And travel always bounces back. We're confident of that. The question is when and how. And so what we want to do is to focus on the things that we can control to enable travelers as they're looking to discover plan and book, and we think we're well positioned to continue to serve them.

We don't see why resilience won't be part of the equation. Now there's uncertainty in the macro. And that's why we say we're going to track it. And we're monitoring this, right? It's not just the Middle East conflict, it's its impact on energy prices, potential fuel shortages, capacity and how that all plays out. And consumer confidence, we know has been at a lower point and it got worse in March when the conflict started. And we combine that with other factors like inflation and unemployment.

But what we know is that travelers are going to go out and find a way to travel. Even if they adjust to being closer to home and shorter stays. And that's, in fact, what we actually saw even in March and into April as Demand shifted up from maybe long-haul across regional corridors into domestic and intra-regional corridors, which was more resilient, we saw booking windows contracting, length of stay dipping a bit, but the U.S. traveler has been the most resilient on a relative basis, really across the board. And so we're watching what happens with long-haul travel, how domestic share increases. And of course, we've got great supply as domestic is more of a priority. And we will watch that and adjust accordingly. But we feel that there will be build back through Q2. And again, it's hard to predict the back half of the year. But we are confident that in the medium to long term, travelers are going to bounce back.

Our next question is from Naved Khan with B. Riley Securities.

Just a couple of questions from me. One, on the -- I think in your prepared commentary, you said that more than half the bookings are from new bookers. So when do we -- when should we start to see sort of the older cohorts start to layer in and account for a bigger chunk of your bookings? And then maybe just on the cancellations and sort of you spoke about macro impact. Can you maybe -- it seems like there are a few things going on, right?

So you mentioned Hawaii, you mentioned Mexico and obviously, there's a conflict in West Asia. Maybe can you just isolate for us the impact from West Asia and how big was that? -- versus the others. I think in total, I think, Mike, you said, 300 basis points of impact, but just kind of parse it out for us.

Yes. Let me parse this a little bit, Naved. So I think the key point that we're saying around new bookers is important. I think Matt's commentary, that was really around the supply piece and really how we think about supply -- strategic supply and how we use that to attract new bookers. And that's kind of inherent in our formula how we acquire. And these booker cohorts will grow over time. And this is the formula of how we think about new acquisition booking and a piece of that important aspect of new acquisition.

As it relates to your cancel rate question, I would say a couple of things. As you pointed out, the macro impact on bookings growth was about 3 points in Q1, 4 points on the revenue, bigger on revenue because of the cancel impact. And so the cancel impact in Q1 was probably a little bit greater because we saw a lot of those cancels in March. For us, we had 2 kind of -- as Matt said in the first question, 2 very distinct events. We had the Mid East event, but then also these unique events to us, which is really Mexico and Hawaii.

Mexico and Hawaii are meaningful destination geos for us, each in kind of the mid-single digits or greater. And so when we think about impacts that has a meaningful impact. I think they will normalize over time because these are more unique unique events in themselves. But again, they are important to us.

Our next question is from Doug Anmuth from JPMorgan.

Great. This is Dae on for Doug. I have 2. The first one on AI LLM traffic. I know you guys said you're still early and small, but you also noted higher conversion. So what do you believe is driving that uplift? And what other near-term behavioral differences are you seeing versus traditional channels? And then secondly, in the release, Mike, you talked about disciplined investments -- could you talk about like what that means for the Experiences segment? How are you prioritizing incremental dollars across marketing versus product versus data or AI in experiences? And what are the 1 or 2 internal milestones you'll be using to judge the success in 2026?

I'll take the first, and Michael will take the second. On AI-first traffic, we are seeing that it is relatively small. It's a relatively small percent of the mix. It's growing quickly, and these are relatively high intent because of the way that conversational search works, right? You wind up getting answers to a variety of questions and then being potentially interested in what you've learned to go and book.

The challenge, of course, with these sources and our strategy has been to weave this AI product development through our own products and services to drive the flywheel and improve the metrics that I described in my opening remarks and also to begin to connect that intent with the ability to book. When you think about these sources coming in, that is the biggest gap is is that intent and the work that's happening and people experimenting with a new way of discovering and planning to booking, which is lagging. And we think that to bridge that gap is really all about the data, the content, the trust and the inventory, which we feel really good about our position for experiences and beyond to provide that trust layer, that human judgment to bridge that gap.

And so we're -- we recognize it's early innings. We think it's exciting. We spend a lot of time thinking about GEO and how our teams can adjust all the work we've always done to drive this AI-first traffic, and that's going well, and we think we have a lot of capabilities there. But we -- it's small but high intent, and we see it as a meaningful opportunity ahead.

Yes. And on the experience investment question, I would say when we look at investment experiences, we look at it across all phases of the flywheel, so to speak, product supply and demand. On the product side, as you can imagine, it's all things of how you drive conversion rates. So that's the key KPI that we use to manage and measure effectiveness of the investment there. How you drive -- and that's across all aspects of the storefront on all the surfaces. On the supply side, this is what Matt touched upon in his prepared remarks, it's not just adding the most supply or more supply, it's adding strategic supply in the key word strategic.

And that means, is it adding to the flywheel? Is it adding to conversion rate? Is it driving incremental bookings for us? And that's the key KPI that we're using to measure the incrementality of that supply driving incremental bookings. And on the demand side, it's really around how we have organized ourselves starting last year of combining the teams, managing the 2 points of sale in a unified coordinated way, how are you using those investments in tooling, channel diversification to drive growth and ROI. And those changes -- there's trade-offs in that, obviously. We've given ourselves a position to make those trade-off choices on growth and profitability.

Our next question is from Nafeesa Gupta of BofA Securities.

So on the Experiences outlook revenue growth of 2% to 5%, building in almost like a 5-point decel versus first quarter. Is that mostly on Middle East now? And are you -- is that 5 point totally Middle East versus 3 points of the first quarter headwind? And is there any impact of Mexico and Hawaii in that? And my second question, on the fourth, could you maybe tell us a little bit where the process stands today and whether a transaction is still an active priority? And in case that comes through, how would you prioritize the use of proceeds?

Great. I'll take the first question. Matt can take the second one. Yes. So on the experiences guide for Q2, revenue guide for Q2, the base assumption is that we build up through the quarter and then as we exit the quarter, we get back to a more normalized levels. Implicit in that guide is the fact that we would continue to have impacting the business, Mexico, Hawaii and broader Middle East during that quarter.

The broader Middle East conflict would probably be the larger of those 3 impacts. But yes, they would -- assumption would be we gradually have recovery as we move through the quarter. The impact, as we said, it's 4 points in Q1. You can't really size the impact in Q2. Obviously, if you look back to what our previous expectations would be, it would be much higher than 4 points impact in Q2 for sure.

Yes. And on the second question related to the Fork, in our strategic pivot last year, we said we'd focus on experiences and simplify our portfolio. And of course, we also announced that we're conducting an ongoing portfolio review, and we've made good progress to date. And of course, the Fork is a great asset. It's performing well. It has a really bright future. We also recognize we don't have to own it to deliver on our strategy. We can have a commercial relationship.

And so we are making good progress. And of course, we'll provide an update if and when we have something definitive to announce. As it relates to proceeds, if we were -- had additional cash as an outcome of that process, we would have flexibility and choices to make about expanding our capacity for capital return to shareholders, whether that be additional share repurchases or to pare back debt.

And we'd also have an opportunity to invest further in our experiences strategy, and we could see both organic and inorganic opportunities there. And so given our free cash flow profile is healthy, it gives us the flexibility to focus on both.

And our next question is from Brian Pitz with BMO Capital Markets.

Maybe 2 quick ones. Maybe you could elaborate a little bit more on your strategy for monetizing your proprietary data, the over 1 billion reviews through collaborations with the major AI platforms. And then separately, maybe on Viator, what trends are you seeing in terms of repeat booking behavior and long-term customer retention on that asset?

Thanks, Brian. I'll take the first and maybe Mike will break down the second. So we're excited about our partnership discussions with AI. And last year, we really established a very strong foundation to learn what partners wanted from us, and we did that across a set of partners to learn. And of course, there was value exchange there. And I think I've said in the past that it was meaningful and growing.

And we signed deals with OpenAI, putting our all 3 of our brands, Viator Tripadvisor and the Fork apps and ChatGPT through product integration there. We experimented around Agentic. We've got a licensing deal. We did an early deal with Proplexity around AI-first search to learn there. And of course, Amazon and Microsoft and others are now phanthropic, which we are excited to get working with.

Each one of these relationships comes with value, and it also comes with a learning agenda, and we are in conversations about how we can deepen and scale because we believe we have many of the things that they are looking for. Here's what we've learned. Our data is valuable and it's incremental.

We haven't -- we block if we don't have a relationship. And as we continue to add, the freshest material has to come through one of these transactions. The data is structured, and it helps address customer problems through judgment and real traveler insight. And so we bring all of that along with our knowledge of the category. And there's a real opportunity to go further and think about would we be willing to allow some of these partners to train with our data because that hasn't been a part of our relationship in the past.

We are looking at different business models that could make sense in different objective functions. And so we've got good conversations going. We think we can do something better and bigger with one or more of these. And that conversation is a big opportunity because of the gap I described between the number of travelers who are experimenting with AI and the small number who actually book with AI.

And we think that gap gets closed by bringing a judgment layer, which -- and trust that comes from our brand content and data at scale going deep. So we're excited about the conversations. We continue to execute. Of course, we'll update as we go further.

Yes, Brian. And on the second point, while we didn't really call it out specifically in prepared remarks on the repeat behavior, it is still a very fundamental point of how we think about margin for our long-term margin profile. Our repeat cohorts are growing faster than the average, which has been the case for some time. Our retention rates remain very consistent.

And so we're very pleased with the continued steady progress here. As I said, these cohorts take time to build, but are a key underpinning to our long-term margin target.

Our next question is from Tom White with D.A. Davidson & Company.

This is Wyatt on for Tom. I've got one on AI. With one of the major LLMs now allowing advertisers, and I realize it's still early, but how do you think about that channel going forward versus the existing ad channels? And can you share any early takeaways on that?

Yes. So we're testing with that party that you described. It's early, but we were a launch test partner so that we could really understand it. The volume isn't particularly high, but we do think it could be an interesting channel. because there's a great amount of intent through those channels that I mentioned earlier. And so it makes it interesting for us.

And we think of it as an expansive ad platform for the future for those who choose to do it that way, and we think we can capture the intent now. We'll continue to test and scale as we would with any other high potential platform. And for those who aren't choosing to put advertising on their platform, we think that there's a real opportunity to monetize by bringing our market-leading experiences inventory into these channels and really drive both volume of demand and conversion given the intent. So we think there are multiple ways to win. We think we're well set up to do that.

I'm showing no other questions at this time. So I would now like to turn it back to Matt Goldberg for closing remarks.

Thanks for joining us this morning. Before closing out, I want to briefly welcome our newest Board members, Andy Cates and Darn Ponseka, who joined the Board late in the first quarter. Andy and Darn each bring energy experience and insights from both inside and out of the travel sector that I have no doubt will be valuable ahead.

We're excited to execute through peak travel season to capture demand and deliver on our strategy, and we look forward to our next update. Thank you all.

Thank you for your participation in today's conference. You may now disconnect.

Hello, and thank you for standing by. Welcome to TripAdvisor Fourth Quarter 2025 Conference Call. [Operator Instructions]

I would now like to hand the conference over to Angela White, Vice President of Investor Relations. You may begin.

Thank you, Towanda. Good morning, everyone, and welcome to TripAdvisor's Fourth Quarter and Full Year 2025 Financial Results Call.

Joining me today are Matt Goldberg, President and CEO; and Mike Noonan, CFO.

Earlier this morning, we filed and made available our earnings release. In that release, you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measure discussed on this call.

Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today, February 12, 2026. TripAdvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements.

With that, I'll turn the call over to Matt.

Thanks, Angela, and good morning, everyone. We're pleased with our 2025 results, which reflected continued momentum in our experiences and European dining marketplace offerings, which are increasingly replacing the declines in our legacy metasearch and media offerings. We achieved record high revenue of $1.9 billion, a result of 10% revenue growth in Experiences and 22% growth at TheFork, offsetting legacy revenue declines of 8% in our Hotels and Other segment. Group adjusted EBITDA was $319 million or 17% of revenue.

TripAdvisor Group is fundamentally different today than it was 3 years ago. Our focus and investment are now deliberately centered on a large and growing marketplace opportunity, particularly in experiences rather than on constrained SEO-dependent legacy offerings. This shift is changing the composition of our revenue and profit profile. In 2025, our marketplace businesses represented 61% of group revenue and 35% of adjusted EBITDA. By contrast, in 2022, our legacy offerings generated 59% of revenue [ in ] all of the group's profit.

In 2026, we expect this transition to advance further. Marketplace revenue is expected to deliver 2/3 of total group revenue and half of adjusted EBITDA. And Experiences on its own is expected to contribute more than 50% of our revenue and roughly 40% of our adjusted EBITDA, firmly establishing it as the group's primary value driver. Over the past year, we streamlined our corporate structure and made deliberate operational choices to concentrate on the areas of travel with the greatest long-term opportunity grounded in our competitive advantages. As we enter 2026, our priorities are clear. We'll extend our leadership position in experiences globally, leverage our differentiated assets to position ourselves for an AI-enabled future and simplify our legacy offerings while we continue to evaluate strategic options across the portfolio to unlock shareholder value.

As we concentrate the group more fully on becoming an experiences-first company, we're mindful that TheFork has more limited strategic synergies with where we're headed. At the same time, it's growing fast, diversifying its revenue, expanding profitability and innovating as the only dining marketplace in Europe operating at scale across both B2B and B2C. We believe this is a uniquely valuable business with an attractive long-term growth profile, which may be underappreciated in our portfolio given the market activity we've seen around the dining category. As a result, we've decided to explore strategic alternatives for TheFork as part of our broader portfolio review. We view this as one potential path to creating additional capacity for meaningful capital return to shareholders, balanced with opportunities to invest further in our experiences strategy.

I'd like to spend most of my time today on Experiences, our highest strategic priority and the area where we believe we have the assets, track record and teams to be the global leader. We have a proven business model with growing customer loyalty, driving improving unit economics in a highly attractive market. We see a durable long-term position ahead, thanks to tailwinds in consumer preferences and low online penetration, the fragmented long-tail nature of the supply base and the critical role our unique brands play in smoothing the friction between customers and small operators. Over the next few years, the online portion of the experiences market is expected to grow by double digits, and our profitability and scale provides us the flexibility to invest in capturing even more share and accelerate our growth at attractive ROIs.

We've achieved meaningful scale. Our gross booking value, or GBV, is rapidly approaching $5 billion, with the majority of bookings coming from loyal repeat customers that spend more and increasingly return to us through direct channels. We're driving this growth profitably as we expanded adjusted EBITDA margins in Experiences to 10% in 2025 and see a clear path for healthy margin growth in the future.

Last year, our bookings volume and GBV growth progressed quarter-by-quarter, and we exited 2025 strong with 18% bookings growth and 16% GBV growth in Q4, a profile that suggests we're accelerating, taking share in our core markets and entering 2026 with momentum. As we look forward, our priorities are to drive demand from a diverse set of channels, improve our product experience to lift conversion and grow our supply base to attract new customers.

Let me walk through each of these elements of our flywheel briefly, demand, product and supply. We've made progress in our marketing efficiency by coordinating our 2 brands to capture more demand at improving ROIs. Our operating model changes have increased the combined click share in our core U.S. performance marketing channels, outpacing other players. This year, we'll build on this playbook as we broaden our demand sources, expand investment in social media and evolve our engagement with scaled strategic partners in AI while continuing to lower our marketing spend as a percent of revenue.

Our product teams are aggressively accelerating experimentation velocity, ending 2025 with more than double our testing volume versus the prior year. This lift has resulted in a meaningful lift to conversion, a critical driver of improving unit economics. We drove higher conversion rates on the TripAdvisor point of sale quarter-by-quarter through last year and are now approaching the conversion rates of the Viator point of sale. As we move into 2026, we're sustaining that pace, leveraging AI, machine learning and predictive modeling to optimize the user experience in areas like personalization, merchandising and booking flexibility. Working with suppliers, we're also launching new tools to deliver the right price at the right time to travelers, benefiting both sides of the marketplace.

We're extending our supply coverage and quality across markets, leveraging the group's reach and customer signals. In 2025, we've grown supply in our core markets to more than 425,000 products from 70,000 suppliers, and our quality scores above 4.5 out of 5 stars are rising, up approximately 20% from last year. We'll continue to build on our supply scale advantage, focusing on relevance and conversion to attract new customers. We have a clear signal that our efforts are stimulating new demand. As we've added new supply, we continue to improve the all-important rate to achieve the first booking and a strong mix of the new experiences are proving to be incremental. For 2026, this all adds up to higher quality of supply, driving more travelers to more relevant experiences and increased revenue opportunities for our operators.

Looking forward, repeat bookers will continue to be our largest and fastest-growing cohort, which is especially important given the impact these loyal customers have on our marketing leverage and profitability. We also see opportunities to target new customers by capturing more of the global TAM. This year, we'll build on our strengths by extending our marketing investment outside of our core U.S. point of sale, leveraging the power of both brands, localizing our storefronts for non-English native language customers and adding locally relevant new supply across geographies and categories.

Before turning to some commentary on our other segments, a quick word on how we'll continue to position ourselves for an AI-enabled future. Last quarter, we mentioned that we would rapidly launch an AI-native MVP in Q4, and we did just that. Our goal is simple: utilize the substantial data and content we have to make more relevant personalized recommendations, better matched to travel intent and easier to book, whether in the planning phase or in destination. While it's too early to say how or when this AI innovation will change our financial profile, we were pleased that we could deploy smaller teams working at higher velocity to go live quickly with a fully AI-first approach so we can test and learn from the large audience at TripAdvisor. And the early data indicates that our MVP is outperforming our prior on-site AI efforts across key customer engagement and conversion metrics.

And of course, as we innovate on our own platforms, we're also taking advantage of direct relationship with key AI partners to experiment and learn across AI-first search and agentic AI through licensing and product integration. The Viator app in ChatGPT is now live as a proof of concept joining our apps from TripAdvisor and TheFork. This cooperation has reinforced the value of our brand, content and data and suggests the power of the trust and travel category insight we provide. It's also resulting in significant increases in traffic coming from LLMs with higher revenue per visitor, although it's still small relative to other traffic sources. We believe there's a big opportunity ahead to scale our partnerships further by helping travelers close the trust gap between using AI for discovery and planning and using AI to book with confidence.

Next, turning to TheFork. As I mentioned earlier, over the last few years, we've strengthened our market position and financial profile. We diversified our revenue, improving our marketing efficiency and leveraging our R&D investments to increase profitability. In our more mature B2C offering, more than 80% of our bookings are coming from repeat diners. And with nearly 80% of bookings coming through the mobile app, we're also bringing more diners direct, improving the unit economics and validating the long-term margin opportunity for this business at scale.

In our higher-growth B2B subscription offering, our improved product is delivering strong growth in premium plan adoption, which in turn is driving higher-than-average revenue per restaurant within our base of more than 50,000 restaurants, a clear sign of the value in the B2B product. TheFork innovation agenda is expanding reach and conversion gains through an engaging social feed while leveraging AI to improve search, matching and conversion for diners and increasing productivity in customer service. Finally, we'll continue to simplify our hotel and other offerings as we streamline the cost base while leveraging TripAdvisor's heritage of trusted travel guidance to support our strategic objectives.

We continue to hold a unique position in this space despite ongoing declines in flyby visitors to our site due to the changing search landscape and the rise of AI overviews. Last year, a stable base of travelers shared nearly 80 million contributions on TripAdvisor, impressive and consistent volumes despite the traffic headwinds we've endured. This reflects a commitment of our most loyal travelers and the valuable proprietary data asset we'll deploy to advance our experiences and AI priorities.

At the same time, we'll run our hotel and other legacy offerings for profit. We'll continue to align costs with revenue, evaluate strategic partnerships to stabilize and add scale or potentially exit certain business lines. Where we aren't driving value to our broad base of customers or partners, we'll continue to anchor on simplification.

We just kicked off 2026, but we've hit the ground running with energy, focus and confidence in our plans. We couldn't be more excited about our experiences future, the innovation and execution across our teams and the opportunity we see to catalyze shareholder value and drive sustainable long-term revenue growth and margin expansion ahead.

With that, I'll turn the call over to Mike.

Thanks, Matt, and good morning. I'll start with a review of our financial performance and then provide more information on our outlook for 2026, each under our new segment reporting. As a reminder, all growth rates are relative to the comparable period in 2025 unless noted otherwise.

Q4 consolidated revenue was $411 million, flat with a year ago and in line with our expectations. Revenue growth in Experiences and TheFork came in at the high end of our guidance range, but was offset by slightly lower revenue performance in Hotels and Other. Full year consolidated revenue was $1.9 billion or 3% growth. Q4 consolidated adjusted EBITDA was $45 million or 11% of revenue, which was at the low end of our expectations. In the quarter, we saw an opportunity to capture incremental demand through increased marketing investment, which we believe will benefit experiences growth in 2026. Full year consolidated adjusted EBITDA was $319 million or 17% of revenue. Experiences and TheFork both delivered adjusted EBITDA margin expansion that was more than offset by deleverage from Hotels and Other.

Before discussing segment performance, I'd like to briefly review the key changes to our new segment reporting. This morning, we posted materials with a detailed explanation of the changes in recast of historical periods. I would like to make a few key points on the changes. In the Experiences segment, revenue in all related metrics are the same as our prior Viator segment reporting. Adjusted EBITDA reflects all costs associated with the entirety of our Experiences business, including the fixed and variable costs for both the Viator and TripAdvisor points of sale. Therefore, there's no longer intersegment experiences revenue because the new Experience segment reflects the full P&L for both brands.

In Hotels and Other segment, revenue and adjusted EBITDA includes all revenue and fixed and variable costs included in the prior Brand TripAdvisor segment, less any revenue and cost associated with the TripAdvisor experiences point of sale. TheFork segment remains unchanged. Certain shared group costs are allocated across the segments consistent with our prior segment reporting approach.

Now turning to the results in each segment for Q4. In our Experiences segment, the number of experiences booked grew 18%, which was at the high end of our expectations. Bookings growth in our owned and operated platforms, Viator and TripAdvisor, accelerated faster than the overall segment as we continue to lead into coordinated marketing investments across the brands, driving increased conversion. In North America, our largest source market, we saw another quarter of sequential acceleration a positive sign that our combined brand approach is delivering results. Bookings volume growth from third-party points of sale remained higher than overall segment, though it stepped down sequentially as we began lapping a period of high growth from third-party merchant partners that began scaling in Q4 2024.

Experiences gross booking value, or GBV, grew 16% in Q4, a modest sequential acceleration to approximately $980 million. We also saw faster GBV acceleration in our owned and operated points of sale. Q4 Experiences revenue grew 10% to $204 million, a slight acceleration from 9% growth in Q3. The difference in growth between GBV, bookings volume and revenue continues to be driven by higher bookings volume growth from third-party merchant partners. However, this gap narrowed in Q4. Changes in FX positively impacted both GBV and revenue growth by approximately 3 percentage points.

Revenue for the full year grew 10% to $924 million. We were pleased with the sequential acceleration in both GBV and bookings volume growth through the year with GBV reaching more than $4.7 billion for the full year. While the progression of total GBV demonstrates our meaningful scale in the category, we are also operating with consistently improving unit economics. Repeat bookings continue to be our fastest growing cohort comprising the majority of our GBV and represent our most profitable customer base. We are managing our business prudently to balance growth and profitability progression while investing for long-term competitive positioning.

The financial performance we delivered in 2025 and the momentum we are carrying into 2026 reflect the resiliency of our financial model and the strength of loyal booker cohorts maturing at scale. We believe the diversity of our brands and business model is an advantage and uniquely positions us for sustainable leadership in the category.

Viator and TripAdvisor represent a significant majority of total segment GBV, with Viator contributing the bulk of GBV. Viator and TripAdvisor leverage a shared industry-leading supply asset that we merchandise to each audience and increasingly in a more personalized way through data and AI. We also leverage our supply to reach incremental audiences through third-party demand partners. This set of distribution channels is diverse and growing fast, serving thousands of partners globally, extending our reach beyond our core markets.

Importantly, bookings from third-party partners are immediately profitable on every transaction. In terms of channel mix on our owned and operated platforms, our direct channels are growing the fastest as a result of our investments in supply and products that convert first-time bookers to loyal repeat cohorts. Importantly, unlike our legacy hotels offering where we faced SEO headwinds, SEO is not a large channel for us in experiences, and we expect this channel to contribute less than 10% of GBV as we exit 2026. We will continue to leverage both of our brands in the paid channels to attract high-intent new bookers while testing new paid channels that diversify our investment mix from SEM.

Experiences adjusted EBITDA in Q4 was $15 million or 7% of revenue, down from $29 million last year. We anticipate deleverage in the quarter due to a known indirect tax benefit of approximately $4 million realized last year. Additionally, in service of our strategic focus, increasing our execution velocity as we enter 2026, we made incremental investments in the quarter to accelerate bookings while continuing to invest in engineering data and AI to drive product and supply enhancements that we believe will benefit growth in competitive differentiation in the medium term.

For the full year, Experiences adjusted EBITDA was $91 million or a 10% margin, which we believe makes us the most profitable scaled experiences platform in the world. This adjusted EBITDA profile demonstrates our financial discipline exhibiting strong and improving unit economics while continuing to invest for future growth.

Turning now to TheFork. Revenue in Q4 was $57 million or 18% growth and 9% growth in constant currency. Total bookings in our B2C channel grew 9%. While a smaller contributor, our B2B subscription revenue grew at a much higher rate, driven by ongoing restaurant adoption of higher-priced premium plans, highlighting the strong value proposition TheFork delivers to restaurants.

On a full year basis, revenue was $221 million, representing 22% growth and 17% constant currency. Adjusted EBITDA in Q4 was $1 million or 2% of revenue, approximately 150 basis points higher than last year, driven primarily by leverage in marketing and overall fixed cost. For the full year, adjusted EBITDA was $21 million or a margin of 9%, a meaningful improvement of over 600 basis points driven by prudent fixed cost management while delivering strong revenue growth.

In Hotels and Other, Q4 revenue was $151 million, a decline of 15%, which we anticipated given the impact of structural demand headwinds in this category. As we mentioned last quarter, we're managing our hotels offerings to optimize for profitability rather than chase low-margin revenue. As a result of product improvements we've made, hotel meta pricing continued to be strong due to high-quality travel intent our platform is delivering to our Hotel and OTA partners. Structural traffic headwinds also continued to impact our media and advertising offerings with revenue declining 17% in Q4 up to $30 million. For the full year, Hotels and Other revenue declined 8% to $750 million.

Adjusted EBITDA in the hotel and Other category was nearly $30 million or 20% of revenue. Lower personnel costs related to our cost savings program we announced last quarter partially offset the lower revenue stemming from SEO headwinds, which is driving a higher mix of revenue from paid channels. Full year adjusted EBITDA was $207 million or 28% of revenue.

Turning to consolidated expenses, starting with the quarter and for the full year. Cost of revenue in Q4 was 9% of revenue, up almost 200 basis points year-over-year due to the benefit of last year of indirect tax credit. For the full year, cost of revenue was 8% of revenue, flat with last year. Marketing costs in Q4 were 43% of revenue, higher by approximately 550 basis points year-over-year due to marketing investment in Experiences. For the full year, marketing was 42% of revenue, deleverage of approximately 200 basis points which is largely driven by revenue headwinds at Hotel and Other. Importantly, Experiences improved its marketing leverage for the full year by approximately 130 basis points.

Personnel costs in Q4 were 32% of revenue, lower by approximately 300 basis points year-over-year. Lower personnel costs were largely driven by the previously announced gross cost savings program, primarily impacting Hotels and Other. Absent share-based compensation, personnel costs as a percent of revenue was lower by approximately 200 basis points. For the full year, personnel costs were 30% of revenue, lower by approximately 200 basis points or 100 basis points absent share-based compensation.

Technology costs in Q4 at 6% of revenue were approximately flat with last year. The full year technology costs were flat with last year as well. G&A as a percent of revenue in Q4 was approximately flat with last year. On a full year basis, G&A as a percent of revenue was lower by a little over 100 basis points.

Now turning to cash and liquidity. For the full year, operating cash flow was $245 million, and free cash flow was $163 million. The increase in operating cash flow and free cash flow was driven primarily by changes in working capital as a result of lapping the impact of last year's nonrecurring tax settlement.

Total cash and cash equivalents at December 31 were approximately $1 billion. Our cash balance includes approximately $350 million in term loan B proceeds raised in the first quarter of 2025, which we plan to use to pay our outstanding convertible notes due in April of this year. After taking into account deferred merchant payables of approximately $308 million and a $350 million term loan, our remaining excess cash balance is approximately $377 million.

During the fourth quarter, we repurchased 3.3 million shares at an average cost per share of $15.14 for a total of $50 million. Over the course of the year, we have repurchased 6.1 million shares pursuant to our program totaling approximately $90 million at an average price per share of $14.72. Today, we have approximately $110 million remaining in our share repurchase authorization. Combined with the [ LTRIP ] transaction earlier in the year, we've reduced share count by approximately 21% since the end of 2024. We believe that our current cash profile and net leverage levels reflect strong capital structure, with appropriate cash for operating needs.

Turning now to our outlook for 2026 and Q1. For the full year, we expect modest consolidated revenue growth which reflects the ongoing mix shift we are driving towards our growth marketplace businesses. Our marketplace growth, which we believe is outpacing the overall travel market and the category growth rates where we operate continues to be offset by structural traffic headwinds impacting our legacy hotels and media advertising business.

We expect the mix of our marketplace businesses to continue to grow meaningfully and represent approximately 2/3 of our consolidated revenue as we exit 2026. Experiences revenue alone is expected to comprise over half of our consolidated revenue. In addition, we expect quarterly performance throughout 2026 to reflect higher seasonality trends that are inherent in scale travel marketplace businesses as experiences in TheFork become a larger portion of our consolidated revenue.

Now some brief commentary on each of the segments for the full year 2026. Starting with Experiences. We expect accelerating growth in bookings, GBV and revenue in our Viator and TripAdvisor point of sale and slowing growth in our [ 3P ] points of sale as we continue to lap the steep ramp in this channel. As a result of this mix shift, we expect approximately flat bookings volume growth in the year-over-year for the segment. We expect GBV and revenue growth to accelerate with revenue growth in the low teens. Importantly, we expect to exit the year at a higher revenue growth rate relative to the start of the year as combined marketing, product and supply efforts gained momentum.

At TheFork, we expect revenue growth in the low to mid-teens. This growth rate reflects solid volume-driven bookings growth in the B2C business and healthy expansion in our premium software, driving B2B growth above 20%. Segment growth expectations include an estimated currency benefit of approximately 400 basis points on current rates.

In Hotels and Other, we have taken a prudent approach based on the more pronounced trends we observed in the second half of last year. As a result, our current expectations are for mid- to high-teens revenue declines, largely driven by SEO traffic headwinds and our focus on maintaining consistent ROIs in the paid channels within hotel meta. Our hotel metal performance is lapping a difficult comp in the first half of this year as we observed strong pricing last year. By the second half of the year, we expect to see some stabilization in segment revenue declines as we lap easier comps.

Turning to consolidated EBITDA, we expect to deliver flat to modest margin expansion alongside mid-single-digit growth EBITDA growth. Driven by our marketplace businesses and the year-in-year impact from our cost savings program we announced on our last call, offsetting anticipated declines in our Hotels and Other segment. We expect our marketplace businesses to contribute approximately 50% of our overall EBITDA, up from 35% in 2025, with Experiences adjusted EBITDA alone expected to contribute approximately 40% of the total.

On a segment basis, for the full year adjusted EBITDA, in Experiences, we expect margins to expand between 300 and 400 basis points, which implies healthy adjusted EBITDA growth primarily due to greater marketing efficiencies driven by strong repeat cohorts and by operating our 2 brands in a more coordinated manner. Adjusted EBITDA will be back half weighted due to the typical seasonality in marketing investment in Q1 relative to large seasonal travel period in Q3. At TheFork, we expect to deliver margin expansion between 200 and 300 basis points, primarily due to more efficient marketing mix and continued fixed cost leverage. Finally, in Hotels and Other. We expect adjusted EBITDA margin to decline by between 150 and 250 basis points as we continue to manage this business on both variable and fixed cost despite anticipated revenue declines.

Turning now to our outlook for Q1. We expect consolidated revenue to be down by 3% to 5% year-over-year despite continued growth in our marketplace businesses, the anticipated declines in our legacy offering will pressure overall growth in particular, given that Q1 is seasonally low revenue in our marketplace offerings. And therefore, it's weighting on consolidation -- consolidated revenue was lower. However, we expect to see consolidated revenue acceleration throughout the year as our marketplace business continued to increase their share of group revenue mix.

On a segment basis, we expect experiences items growth in the low teens which is due to the lapping of strong 3P growth last year despite solid growth in our Viator and TripAdvisor points of sale. Revenue is expected to accelerate by approximately 1% to 2% sequentially, in part due to the aforementioned investment we made in Q4. We expect revenue growth at TheFork of between 20% and 22%, which includes a currency benefit of approximately 12 percentage points. We expect Hotels and Other declines of approximately 21% to 23% due to a continuation of recent trends and a more difficult year-over-year compare in pricing that we expect to [ erase ] in the second half.

We expect consolidated Q1 adjusted EBITDA margin of approximately 3% to 5%. The step-down is due to the aforementioned revenue headwinds in Hotels and Other segments as well as growth investments in Experiences this quarter. In Experiences, we expect adjusted EBITDA margins to step back by approximately 200 basis points year-over-year, primarily due to an increased marketing investment. At TheFork, we expect margins to swing positive year-over-year, increasing approximately 800 basis points to about 1% of revenue, benefiting from marketing efficiencies expected in the quarter. In Hotels and Other, we expect adjusted EBITDA margin between 21% and 23%, which reflects revenue headwinds previously discussed.

We're excited about 2026 and the priorities we've established to continue to extend our leadership in global experiences. We expect to see the increased impact of its contribution to our group financial profile this year, establishing a foundation for multiyear group revenue acceleration while delivering healthy levels of profitability. We look forward to updating you on our progress on our next call.

With that, I'll turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Eric Sheridan with Goldman Sachs.

Sticking with the Experiences side of the business, can you characterize how you're thinking about the incremental growth investments in the business, especially on the marketing side in response to 2 things, both the demand signal you think you're getting from the market in terms of Experiences growing as a percentage of consumer spend and also in light of what might be different or stable elements of the competitive intensity in Experiences. I'd love to get some characterization on both [ against ] your growth investments.

Yes. Thanks, Eric. I appreciate the question. It's Matt. I'll take the question, and Mike can fill in as he likes. We see the Experiences market as very attractive. Obviously, it's growing faster than other travel categories. We saw from '19 to '25, the online portion growing at 13%. In that period, we grew 22%. From '22 to '25, the market grew 16%, online 22%, we grew 22% over that period. So we feel really good about our ability to grow not only in line with the online portion, but to exceed it over time.

Looking forward, we think there are a number of reasons that we can really deliver here. The first is the scale we've already achieved, the position we have in our core market in the U.S. and the ability to extend that globally. You can see that in our GBV that's accelerating and approaching $5 billion last year. You can see that in how our supply is growing and the relationship we have with operators. And you can see demand signals very, very clearly, both in our TripAdvisor point of sale, where we're able to take that data and match supply and demand as we target the supply we want to go after, that's going to allow us to extend internationally.

We brought our team together to drive marketing efficiency, and we have a stronger competitive position there. we're leveraging our product, and as I mentioned, supply across those brands and really smoothing the friction to get more conversion and ultimately driving our unit economics across the business. So that's driving profitability. And as we see scale and accelerating growth with profitability, we really think that, that gives us the flexibility to invest further to drive global leadership. So the operating model is helping. We see it in our data, and you can obviously see it externally anybody you talk to in travel is talking about the power of experiences and how that's driving all of the other categories. So we feel we sit bull's-eye there.

As we relate to others in this space, I think it's really interesting because when you look at where we stand, it's really -- we're the most profitable experiences player in there. I think we come from the strongest market, which gives us an opportunity to extend that into other markets. Our unit economics are progressing. And we just feel that between our ability to go after demand and meet that with supply extend the TAM growth, right, by looking into new geographies and categories, we're really well positioned to double down in experiences, add resources and investment that are going to accelerate both growth and profitability over time.

Yes. The only thing I'd add on to that, Eric, would be a little bit about specifically in the marketing approach to add on. I think a few fundamental things about the category. One, we believe, obviously, it's very large as Matt said, but the awareness is still relatively low. And so I think it is how you find intent, how you convert that intent. And we see that intent primarily through the paid channels. And I think we have exceedingly good teams that are good at those conversions importantly, importing that -- those wins over to both our points of sale, Viator and TripAdvisor. And so really, we have to follow that intent and convert that where we can. And that is really the basis of how we think about our ROIs in the paid channels.

We understand that as an investment in a new user, particularly a new user in the category, and [ it's ] all then how you drive that repeat behavior. And how we target those ROIs is just based on where we see our long-term margin progression and target margin can be over the long period of time. And that's the formation of how we think about our ROIs.

Our next question comes from the line of Naved Khan with B. Riley Securities.

Great. I have a question on the Experiences margin expansion. I think you're guiding to a few hundred basis points of EBITDA margin expansion and experiences. And my question is about the fact that you mentioned the [ seasonal ] bookings are up from the previously acquired cohorts, why not double down on customer acquisition versus giving back some on the EBITDA margin, why not just optimize for long-term customer growth and maximize potential there?

And then second question is, I think you mentioned that you expect that SEO will be less than 10% of the traffic for 2026. How should we think about that and your long-term sort of margin view of maybe this business operating at around mid-20s EBITDA margin? Just give us you thoughts there.

Yes. I'll hit both and Matt can chime in. So I think the question on growth and profitability, what you're getting at, so I think the profitability this year and experiences are driven by 2 factors. One, which we believe we can continue to drive efficiencies in our -- in marketing, driven by really product-driven conversion growth operating 2 teams, operating 2 platforms is one. We can drive a lot of efficiencies there. We're excited about that.

And then two, as you said, Naved, the natural repeat cohorts that are building in the business. I would just say when we think about our growth profit trade-off, we are not targeting profitability over growth. I think what we have to look at and continue to look at is what is that incremental ROI and marginal ROI for new users, which as I just said, is an investment and we're continuing to look at where we can be smarter and make trade-offs. We made some trade-offs in Q4 that we liked. And so you've seen us demonstrate that into Q4, and we'll continue to be flexible and do that as we move through the year.

But listen, when we are sitting primarily in a North American market where new users are, we are always looking at that marginal incremental ROI to see where we can drive more growth at profit levels that make sense based on repeat rates we see. Part of the algorithm, we talked about this last call, we mentioned again this call about how we are expanding our TAM, our addressable TAM by looking at new regions outside of North America, and we're very excited about the work that's underway there. And there's a great example where you could see us leaning into marketing spend as we are growing more aggressively in a new geo. And we'll absolutely update you with that -- with our progress as we move forward with that. But I think we're remaining very nimble and open-minded as we think about the growth algorithm.

Secondly, on SEO, I think it's just very important that we do see the Experiences business not having a major reliance on SEO. And most of the SEO is coming through the [ CA ] channel today, but we are expecting on a combined basis to be that below 10%, as I mentioned on the call. So when we think about long-term margin progression, we're not relying on SEO to hit our long-term margin target. What we are relying on is continued progress and all the things we just talked about, which is marketing leverage, the 2 platforms being able to leverage the brands more effectively in the paid channels, wherever they may be, finding new paid channels outside of SEM, which we're excited about the progress there. And it's the continued maturation of our repeat cohorts that are building very nicely. So all those ladder up to, we believe, feel very strongly still about our long-term margin progression, and we're excited about the growth trade-ups we have to make to get there.

Our next question comes from the line of Nafeesa Gupta with Bank of America.

Matt, could you tell us more about this AI-native MVP that you launched in the fourth quarter and how that is different from your earlier [ Trip Planner ]? And then I have one more after this.

Yes. Did you say you had a second question? Go ahead and ask it.

Yes. So I just want to understand about the economics that you're seeing from the large [ air ] platforms in terms of user acquisition? And also, how are you thinking about monetizing your users -- [ to view ] data that you have from TripAdvisor core?

Okay. Yes. So on the AI-native MVP, what we wanted to do was to shift the way that we deliver AI products to our customers. And so we wanted to be AI first, AI-native, use the tools and really reimagine what TripAdvisor could be in a fully AI-native world. So we're going back to our roots. We want to help people validate their travel choices with better recommendations that understand who they are, drive personalization that these recommendations can be better explained through social proof and that they can immediately be more actionable.

And so we've been learning off the last quarters and years of our investment in our AI infrastructure in our products, which we're really adding on to our existing product. Now we're going fully AI native to reinvent. And so we like the data that we're learning. We believe that we can build trust in the why behind travel choices. We believe that our UGC, which as I said, is stable and we intend to really drive growth there, gives the social proof that users want before they're willing to book. And we think that we can ultimately become that trust layer, whether it be on our own products and services or in partnership with a scaled AI partner.

So we're taking a very different approach. The teams have been running really fast. They're extraordinarily lean. And we're iterating on live customer behavior to understand how we can improve and drive that conversion and that revenue. I will say we're live to a slice of our audience, so it's still early. But in Q4, we saw that the approach drove multiples higher engagement with users than our prior AI travel assistant on the site and had good early monetization signals.

Now that can be applied to whether you're planning or whether you're in destination. So when travels are in destination, they have a lot of last-minute decisions around what they want to do, what they want to see, what they want to eat. But availability, pricing and logistics are tricky, especially in experiences. So we're leveraging our assets there to help travelers experience the destination better and really testing what's around me now, [ geo aware ] recommendations proactive offers to drive incremental demand, making it much easier to book and access real-time customer support, and we think that's going to drive some good activity.

And your second question was how are we going to leverage, I think, our UGC to drive -- can you just repeat the second question?

Yes. I just want to understand what kind of traffic that you're seeing from large platforms? And how are you -- what's the economics behind that compared to traditional SEO? And then how do you think about monetizing your user review data that you have, like the large data that you have from users on TripAdvisor?

Yes. As I mentioned, the UGC data continues to be solid, and we continue to have both the contributors who are slightly up year-on-year and the contributions, which has been relatively stable year-on-year as a really differentiated quality content and data asset to leverage. We're using that both on our own platforms as well as in our partnerships. And what we're seeing is that as AI traffic comes in, it tends to be higher intent tends to be these long queries tend to help us get the answers more quickly. And so we are seeing the conversions to be a bit stronger because it's relatively higher intent. We think lower down the funnel.

Now that traffic that we're driving through that AI-first approach is a lower relative percentage of our overall traffic, but it's growing much, much faster, and we're pretty excited about what we can do there, both on our products and through our partnerships ahead. So more to come there. Thank you.

Our next question comes from the line of Stephen Ju with UBS.

For Viator, I think there was a push for a number of years, if not from yourself, but generally, across the segment to make it progressively less episodic by maybe asking your users to use it in their home markets. So is that proving to be more challenging? Or is it just an awareness factor? Are you getting that activity picking up currently? And because with folks thinking that maybe they should only open Viator only when they travel?

Yes, thanks. We're definitely continuing our work to attract customers who are interested in experiences wherever they may be, whether that's on a long-haul trip, a domestic short-haul trip closer to home or even an experience that they want to have over a long weekend. And of course, our supply is the largest supply available anywhere. So we think that matching that kind of demand is something that we can do now. We are growing our supply, and it will depend on really going after more local experiences. And that's something that as we continue to invest in supply, we can continue to add.

I would say that our primary focus right now has been to enter new geos. But as we enter new categories and think about extending that supply, going deeper perhaps into attractions, maybe that local supplier who you rent the canoe from to go down the river with your kids. That will be something we will continue to do. So it's an area of future growth. I wouldn't say that it's the priority we're driving hardest at. Otherwise, we would have called it out, but it's definitely something that we believe our platform can deliver on. So there will be more there to discuss going forward.

Our next question comes from the line of Lloyd Walmsley with Mizuho.

I've got 2 questions. First, just drilling into the geographic expansion for Experiences. Like how much of that is building supply in new markets and demand in new markets versus maybe selling North American experiences into new points of sale where you don't need new supply it's more marketing. Just anything you can help us understand on the plan for geographic expansion.

And then the second one was just you sort of hinted at the potential for evolution in the partnerships with the larger AI search platforms. Like anything you can tell us either specifically or should we expect evolution there this year in any meaningful way? Anything you could share there would be great.

Yes. Thanks, Lloyd. On the geo expansion, it's a combination of both, but of course, we're already serving U.S. and North American customers going to international destinations. We think we do that relatively well. Of course, we can continue to improve as we think about specific supply in particular locations. But I think going after the geo expansion is very much about the supply that will appeal to international source markets that we haven't served in the past. We've done some in English language, but I would say we were underoptimized as we think about that native traveler from international source markets. So think about a different kind of experience that they may want to have relative to an American.

That is supply we will go out. We have the TripAdvisor brand, which is highly trusted and huge awareness in Europe and Asia. And obviously, we can leverage that. We can use those signals of intent to go target the right supply. We can use AI to localize through translation and do that relatively quickly. And then of course, we can leverage all of our data to go and target through our marketing channels in those geographic locations. So think local sourcing of new markets as a meaningful opportunity for us ahead, which we're just getting going on and we're excited about that with more to come.

In the second question about our partnership opportunities, we are very excited about what's ahead in our partnership opportunities. I would say that 2025 was very much about establishing a foundation. We wanted to learn from partners what worked, what didn't, what we had that was valuable and really get a set of partners going. So you saw us working with OpenAI, with TripAdvisor and the forecasting we just announced today that this week, the Viator app is there. We're learning a lot through that integration about agentic AI, where we've got a licensing arrangement there. With companies like Amazon and Snap, we're exploring multimodal AI. We've explored marketplace data with Microsoft. And we're playing with others around new AI form factors and devices like glasses where you'll hear more about that in the future.

We generated meaningful revenue through these in a diverse way. I don't think we've broken that out publicly. But we expect it's been growing, and we expect that to continue growing across licensing revenue, linked back traffic and integrating our products. We also learned a lot. I think what we learned is that our data is valuable it's incremental and it's structured. And so it can really help address customer problems. We're just getting started there. We bring a deep knowledge of the category that I think is very helpful to these horizontal players because specialization and vertical focus is helpful.

And as we put our foundation together, we were limited in how we wanted our brand, our content and data to be used. We were more looking to understand the value ahead. And so we are having meaningful conversations about doing something bigger that would be less constrained and we think we have the assets to be a deeper partner with a select partner because what they need is a trust layer. They need fast category content. They need the data and of course, leading supply and experiences is very helpful, too.

And so what we think we can do there is to really close what I call the confidence gap between planning and booking. And let me explain why that's such a big opportunity. Almost half of travelers use AI to plan trips, but less than 10% of them are actually booking with AI. And the gap represents a huge amount of unrealized value. And we think it exists because we need -- there needs to be an improvement in trust and there needs to be an execution capability in the current tools. And so we think that nobody has figured that out or cracked it yet. And we think that we bring brand content, data and scale to help make that happen. It's an execution challenge, and that's where we think our role is really compelling, because we bring trusted human judgment, scaled experience supply and a transaction layer that with our 8 million-plus POIs and our sort of social proof through our UGC that may be missing. And so we're going to go after it. We also think that trust and being neutral and being able to work with a broad player is an opportunity ahead.

Our next question comes from the line of Jed Kelly with Oppenheimer & Co.

Great. Just drilling down to Experiences. Obviously, the marketing was up quite a bit in the fourth quarter. Can you just talk about the competitive intensity around that? Or is that more from you testing new channels? And then the other thing with experiences, have you looked into getting into more partnerships that could actually drive more repeat traffic such as like event ticketing.

Yes, I'll take the first one. Matt, take the second one. Listen, I think, in terms of the marketing spend in Q4, one, no change in approach, as I was talking earlier with Naved, we are looking and driving a very disciplined set of ROIs in our marketing spend and where we think we can drive growth, we will look to do so based on the same set of criteria. I would say when you're accelerating that deleverage as a percent of revenue is going to show through for sure. When you look at our marketing as a percent of GBV, it's pretty flat year-over-year. So in our minds, the marketing spend was kind of in line with our historical disciplined approach, the way we approach it.

And as I said earlier, we're going to be flexible as we approach as we move through the year. We always are going to be seeking ways to grow, accelerate, take share, but we're going to do it in a way that's disciplined, that ladders up to a long-term target market. And again, I think as we open up our geo expansion, that opens up a different set of really exciting choices for us.

Yes. And on your second question, Jed, around partnerships to drive repeat booking, absolutely. We are always talking with a variety of partners. We have a strong B2B team and a partnerships team. Live events and ticketing, as you just described, is one area. Earlier, we were talking about local activities that we could go after. So it's a combination of partnerships and supply. And absolutely, that is something we're focused on. We think there's any number of additional opportunities to go after. I don't want to get ahead of ourselves and start talking about those now, but we talked about 2 of them and I think you can expect to hear more from us on some of those opportunities ahead.

Our next question comes from the line of Tom White with D.A. Davidson & Co.

This is Wyatt on for Tom. Just given the heavy fragmentation in Experiences, is that technically better insulated from potential AI disintermediation. And I'd like to hear your thoughts on maybe how Experiences are maybe uniquely positioned in the travel space.

Yes. I think that -- Tom (sic) [ Wyatt ], thanks for the question. I think your commentary about the long tail of fragmented supply with all of those hundreds of thousands of small businesses that are out there to go after, and we feel really good about our penetration there. I think you're right. I think that does insulate AI disintermediation.

There's a couple of other reasons why I think it's insulated and durable ahead. First, as Mike was saying earlier, it's much less dependent on the structurally-challenged SEO traffic. Second, I think it's really hard to bring that structure to the supply base and connect them directly to consumers taking friction out of the journey putting in place all of the infrastructure as a marketplace, applying customer service, dealing with the logistical challenges. And then I think the way that we've been competing effectively in these high-intent demand channels and getting these repeat economics going is also an insulation there. So we think that positions us really well. And of course, we will continue to drive that flywheel and only strengthen the durability and potential to defend. So it's a good question, and that's exactly how we're approaching it.

Ladies and gentlemen, due to the interest of time, I would now like to turn the call back over to Matt Goldberg for closing remarks.

Yes. Thanks for that. And thanks, everyone, for joining us today. We covered a lot on this morning's call. I think the most important thing is we are excited about 2026 and executing on our priorities. We think it will drive durable, sustained long-term shareholder returns. I also just want to take a moment to thank all of our employees for their good work to deliver on our clear priorities ahead. We're looking forward to 2026 and updating you on our progress and plans on the next call. Thank you, everyone.

Ladies and gentlemen, that in today's conference call. Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Tripadvisor's Third Quarter 2025 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Angela White, Vice President of Investor Relations. Angela, please go ahead.

Thank you so much, Felicia. Good morning, and welcome to Tripadvisor's Third Quarter 2025 Financial Results Call. Joining me today are Matt Goldberg, President and CEO; and Mike Noonan, CFO. Earlier this morning, we filed and made available our earnings release. In that release, you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measure discussed on this call.

Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today, November 6, 2025. Tripadvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements. With that, I'll turn the call over to Matt.

Thanks, Angela, and good morning, everyone. In Q3, we delivered consolidated revenue growth of 4% to $553 million and adjusted EBITDA of $123 million or 22% of revenue. We were pleased with this performance, which beat our expectations on adjusted EBITDA and was within range for overall revenue growth. This week, we've initiated a set of changes that represent a fundamental shift in our operating model to support a more focused set of strategic priorities. These actions will sharpen our execution focus, which we expect to accelerate revenue growth, improve operating margins and create a more durable financial profile.

To do so, we'll focus on three priorities. First, extending our leadership position in experiences to drive long-term growth by fully deploying our differentiated assets across Tripadvisor and Viator to win in this category. Second, leveraging our unique content, data and brand trust for an AI-enabled future by powering our marketplaces and positioning Tripadvisor at the center of an emerging AI ecosystem. And third, narrowing the focus at brand Tripadvisor to support experiences and our AI future while managing our legacy offerings for profitability.

These priorities reflect a shift from optimizing individual brand strategies to speed our transformation into an experiences-led and AI-enabled company. We will direct our focus, talent and investments to what matters most, resulting in a simpler, leaner and faster-moving organization. Our plan is expected to drive significant operational efficiencies of at least $85 million of annualized gross cost savings, which Mike will discuss shortly.

But this is not just a cost-cutting exercise. We are aligning ourselves to drive accelerated growth going forward. This is an important moment in the evolution of Tripadvisor Group. We're a very different company than we were 3 years ago with a portfolio mix now anchored in high-growth marketplaces, delivering more sustainable revenue and profit. In the past 12 months, Viator and TheFork accounted for almost 60% of group revenue, up from approximately 40% in the same period 3 years ago, representing a 27% CAGR over that period.

In that time, these businesses contributed an incremental gain of more than $150 million of adjusted EBITDA and now comprise 30% of overall group profitability. Today, we are far less dependent on a legacy model built on SEO with its well-known structural headwinds. These trends have reshaped our financial composition, and we expect them to continue. Now let's walk through these priorities in more detail. Our first priority is extending our leadership position in experiences to drive long-term growth.

Strategically, we're already well positioned to win in experiences. We've achieved scale and established a clear track record of growing the top line while expanding profitability from breakeven in 2023 and now approaching double-digit adjusted EBITDA margins. Earlier this year, we shared that Experiences is becoming the strategic and financial center of gravity for the group. Over the last 12 months, we've achieved $4.6 billion in GBV, driven by 17% items growth. And over that same period, for the first time, our total Experiences revenue has surpassed the revenue from our legacy business lines.

Now experiences will become the unified focus of both Viator and Brand Tripadvisor. The global experiences TAM is expected to reach $350 billion in GBV by 2028, growing faster than any other category in travel. To date, we've been concentrating on the U.S. as our primary source market and focusing mostly on tours and activities. We believe we can accelerate our growth by addressing new geographic markets and expanding into new categories while benefiting from the tailwinds of growing demand and the offline to online shift. This is a dynamic, fast-growing category without a global digital brand leader. Going after this opportunity will be our primary objective as a Group.

We believe that our strength to lead the experiences category lies in the differentiated assets across our brands that are hard to replicate. At Viator, we're leading in the world's biggest market with the largest global catalog of experiences. Our improved storefront is driving uplift in conversion, repeat and customer loyalty trends.

Tripadvisor offers two key assets that we expect will drive growth and expansion in experiences, a trusted global brand and proprietary data on more trips and travelers than anyone else in the category. This combined reach, along with our third-party distribution creates unmatched value for operators. Together, we believe these capabilities give us a unique advantage for our experiences business that we have not yet fully realized. In order to accelerate the next phase of growth, we're unifying our Viator and Tripadvisor experiences operations, unlocking the power of all our resources to focus squarely on this opportunity.

This is a significant shift in our operating model designed to drive meaningful outcomes with more efficiency. Our conviction to go all in on this opportunity is grounded in what we've learned from a period of increased coordination between the Viator and Tripadvisor teams across marketing, product and supply over the past several months.

Here are a few examples. From a demand perspective, as I shared last quarter, we've been experimenting with how Tripadvisor and Viator can operate together in a more coordinated manner, not as two separate brands with different goals, one focused more on growth, the other focus more on profitability, but as a united team aimed at winning the Experiences category.

We began coordinated testing in marketing and found that we could compete more effectively on a combined basis to deliver more efficient marketing spend overall, improving revenue while maintaining profitability. This is just one experiment, but it demonstrates the power of treating our brands as complementary levers working together rather than as separate independent P&Ls. We also believe there's an opportunity to lead with Tripadvisor to put our large global audience in service to Experiences in key international markets while leveraging our high brand awareness to acquire more customers more efficiently in paid channels.

From a product perspective, we've increased our experiment velocity and coordinated learnings across points of sale. As a result, our conversion rate has continued to show improvement at both Viator and Tripadvisor. In this new formation, we will lean even harder into these dynamics, focusing on key conversion drivers like personalization, pricing and availability with more resources deployed to scale our optimizations seamlessly across our full Experiences offerings.

From a supply perspective, we're expanding on our unmatched scale, over 400,000 experiences globally and growing. In the last year, we've seen healthy double-digit growth in active products and suppliers. We're broadening our supply coverage in new categories and strengthening our presence in secondary and emerging destinations while building industry-leading connectivity with our recently updated APIs, now enabling real-time and dynamic management of pricing and availability.

And we're using Tripadvisor data to identify where new supply is most needed, all while optimizing how new supply performs, improving conversion, refining pricing and smoothing the experience for both travelers and operators. By unifying our teams behind experienced leadership, we'll build on our strong marketplace flywheel. Our product and supply optimizations accelerate our conversion wins to fuel more efficient and effective marketing, which in turn compounds the conversion gains, driving higher repeat rates and improved unit economics.

And now we're unleashing the full power of the Tripadvisor brand and its unmatched global awareness in service of Experiences. Our second priority is leveraging our assets to position ourselves for an AI-enabled future. Tripadvisor is among the most trusted names in travel, built on decades of authentic contributions. Sitting at the privileged intersection of hundreds of millions of travelers and the operators who serve them, we have unique insights about how people make travel decisions, a proprietary knowledge graph across experiences, hotels and restaurants, which is unique in the industry and a powerful foundation for what comes next.

AI is collapsing discovery, planning and booking into a single conversational moment. For travelers, it means less friction and faster decisions. For Tripadvisor Group, it plays directly to our strengths in the space we helped invent, helping people travel smarter. At a time when it's hard to know what information to trust for a highly considered purchase decision like travel, we believe our first-party data, user-generated content and decades of trust, combined with supplier connectivity, detailed pricing information and booking gives us a unique advantage to lead in the age of AI.

Over the past several quarters, we've experimented with a broad set of efforts to learn how travelers use AI. We built data science and machine learning capabilities to drive conversation and conversion, and we've explored the role of our content in the AI ecosystem. Here are a few things we've learned. First, our content and data are unique and valuable. Internally, it's been the foundation of our product innovation and growing engagement. And Tripadvisor is already among the most cited sources by LLMs. According to a recent third-party study,Tripadvisor appeared as the #8 overall and the only travel company in the top 20.

Second, travelers have a very specific problem. It's hard to make decisions. There are too many options and getting it wrong means wasting time and money. That friction is why travelers come to Tripadvisor to inform and validate their travel decisions. While LLMs do a good job of generating high-level trip plans, the opportunity lies in the underlying recommendations, their social validation and actionability, which we are uniquely positioned to deliver to help travelers make it happen.

And finally, AI is raising customer expectations as they look to solve these problems. Customers are choosing AI-native products over legacy products with AI features. They want technology to remove friction. We will follow the consumer and shift our focus from AI-powered features to a fully AI-native approach. Based on these learnings, we've identified a few specific AI opportunities, each of which we believe has the potential to become the primary way travelers engage. The first opportunity is in the planning phase when travelers have a rough idea of an itinerary and are trying to decide what's right for them amidst the unlimited options.

Tripadvisor's first-party data and insights position us to curate the most personalized recommendations validated by relevant travelers and make them as immediately actionable as possible. The second opportunity is during the trip itself. Travelers make a lot of last-minute decisions around what to do, see and eat, but availability, pricing and logistics are tricky, especially in Experiences.

So we'll leverage our assets to help travelers experience the destination better while traveling. This presents an opportunity to deploy geo-aware recommendation algorithms and deliver proactive offers with single tap booking and access to real-time customer support. We're advancing rapidly on these opportunities and expect to launch an AI-native MVP for the planning phase in the coming weeks in Q4. From there, we'll intend to build a strong foundation to scale and continuously iterate and enhance the customer experience.

Of course, we're also exploring how Tripadvisor can deliver value to travelers as a deeply embedded partner with broader AI platforms. As part of our learning agenda, we're directly integrating our Tripadvisor and TheFork brands into ChatGPT through first-of-their-kind apps with a differentiated approach from others. We expect these to be live over the next few weeks. We've signed valuable licensing deals with the majority of the leading AI companies, and we're experimenting with use cases like Agentic and multimodal AI.

Ultimately, whether we scale AI value creation through on-platform innovation or off-platform partnerships will be decided by our customers. We believe that by focusing on where we are uniquely positioned to serve travelers, maximizing speed of execution and continuing to fuel the content flywheel that is our most differentiated asset, we can position Tripadvisor at the center of the AI ecosystem in travel. Our final priority is narrowing Brand Tripadvisor's focus.

Beyond experiences in AI, we'll optimize Brand Tripadvisor's portfolio to enhance profitability. Over the last few years, we've invested incrementally in Tripadvisor's broad engagement strategy designed to fuel new monetization paths and stabilize our legacy offerings.

However, we recognize that the pace of impact from these investments has not been enough to offset increasing pressure from the shifting SEO landscape. So in our most mature legacy categories, we'll focus strictly on optimizing for profitability. We'll deprioritize the areas that we expect to be in secular decline in favor of shifting resources towards our marketplace growth opportunities while driving efficiency across areas that are more exposed to ongoing headwinds.

Operationally, this will reduce our headcount and better align costs with revenue expectations. Let me be clear. Taken together, these actions are not a deprioritization of the Tripadvisor brand. In fact, we believe Tripadvisor will play an even larger role in Group level value creation moving forward.

Hotels and restaurants will continue to be an important part of planning a trip and the hundreds of millions of travelers coming to Tripadvisor each month will still enjoy those features. Our partners will continue to benefit from access to these audiences. While this functionality isn't going away, we'll shift Tripadvisor's focus and resourcing to areas where we believe we can deliver the most value to customers, leverage the brand and traffic to drive experiences growth, position our content and data at the center of the AI ecosystem and enhance profit from the legacy portfolio.

In addition to this set of priorities, TheFork will continue to execute on a financially disciplined growth strategy. This quarter, the segment continued its strong performance with growth of 28% and a 22% adjusted EBITDA margin, nearly double what it was last year at this time. We will continue to build on our position as the leader in European dining and prioritize the diversification in revenue across B2B and B2C while increasing profitability.

We're also excited about the team's innovation agenda, which includes an AI-powered booking assistant that's driving an uplift in conversion and a social feed that allows diners to discover restaurants based on reviews and contributions from their contacts. In summary, we believe that the priorities we shared today position us well for the future to drive value for shareholders.

As part of this ongoing program of work, we will also take additional steps to review our group portfolio as we determine where we'll invest and where we'll simplify further through partnership or divestment. We are building a stronger Tripadvisor Group focused on faster-growing categories with large TAMs, durable transactional economics and strong supply.

We're prioritizing areas where we have a proven track record and the capabilities to win. We'll do fewer things better, move faster and optimize the lines of business where our scale or competitive position can't lead the market. We believe that our actions will strengthen our financial profile by reducing costs, accelerating revenue growth and growing profitability, both in the experiences category and for the group as a whole. With that, I'll turn the call over to Mike.

Thanks, Matt, and good morning. I'll start with a review of our financial performance, and later, we'll provide more information on the cost savings program, what our operating model changes will mean for how we report our segments and some thoughts on Q4. As a reminder, all growth rates are relative to the comparable period in 2024, unless noted otherwise.

Q3 consolidated revenue was in line with our expectations of $553 million or 4% growth and consolidated adjusted EBITDA exceeded our expectations at $123 million or 22% of revenue. In the Viator segment, the number of experiences booked grew 18%. Growth improved sequentially in both the Tripadvisor and Viator points of sale, while growth in third-party points of sale continued to outpace the overall segment.

Importantly, the number of experiences booked through the Tripadvisor point of sale returned to growth this quarter. In North America, our largest source market, we saw bookings growth accelerate sequentially across both points of sale, which we believe is reflective of the strength of both of our brands as we scale our coordinated marketing efforts.

Gross booking value, or GBV, grew 15% to approximately $1.3 billion and revenue grew 9% to $294 million. Changes in FX positively impacted GBV revenue growth by approximately 3 percentage points. The difference between the growth in the number of experiences booked and growth in revenue continues to be driven by the high growth of our third-party merchant bookings relative to 2024. As a reminder, merchant bookings generally have a lower average booking value, which impacts GBV growth relative to volume growth.

They also carry a lower implied take rate, which impacts revenue growth relative to GBV growth. While the implied take rate is lower than our owned and operated points of sale, third-party merchant bookings are both financially and strategically valuable. From a financial perspective, these bookings carry an attractive profitability profile. Strategically, these bookings are largely sourced from regions outside of our core markets, which enable us to reach incremental traveler demand as we continue to scale our new and repeat booker cohorts globally.

Viator adjusted EBITDA was $50 million or 17% of revenue, a margin improvement of 550 basis points, driven primarily by a more efficient marketing channel mix. We continue to see outsized growth in our direct channels and in repeat bookings, each contributing to our profitable growth profile as repeat bookings cohorts continue to scale. In addition, growth in third-party merchant bookings, which come with no marketing spend contributed to the segment's total marketing leverage.

Lower marketing costs more than offset modest increases in personnel costs related to targeted investments in technology, product and supply. Altogether, these trends continue to reinforce our belief in the long-term margin opportunity for this business at scale. At Brand Tripadvisor, Q3 revenue was $235 million, a decline of 8%, which was below our expectations. We experienced stronger-than-anticipated traffic headwinds that accelerated throughout the quarter, negatively affecting both free and paid channels.

In branded hotels, revenue was $143 million, a decline of 5%. In hotel meta, strong pricing in both free and paid channels was more than offset by accelerating traffic volume headwinds. Regionally, single-digit growth in U.S. hotel meta revenue was more than offset by declines in Europe and APAC. As a reminder, we will continue to manage our branded hotels business for margin stability and not chase low-margin revenue in this category.

We remain focused on improving the quality of our hotels offering and delivering highly qualified incremental demand to our partners, and we believe that success is evident by the sustained pricing growth we continue to witness. Media and advertising revenue declined 11% to $36 million, primarily due to the aforementioned traffic headwinds we incurred in the quarter.

Experiences and Dining revenue was $47 million, a decline of 9%. Growth in Brand Tripadvisor's Experiences revenue lags unit volume growth, which returned to growth in the quarter, as I mentioned earlier. Experiences revenue performance was largely stable sequentially. And going forward, we expect Experience revenue growth on the Tripadvisor point of sale to accelerate as a result of our new operating model. Brand Tripadvisor adjusted EBITDA was $59 million and 25% of revenue, which exceeded our expectations.

Despite accelerating traffic headwinds in the quarter, placing additional pressure on revenue, the team did a good job managing the growing reliance on paid channels with fixed cost prudence to exceed margin expectations despite pressure on adjusted EBITDA. At TheFork, Q3 revenue was $63 million or 28% growth and 20% growth in constant currency.

B2C bookings volume grew 11% across all channels and 13% on TheFork's branded direct channel. The strength of B2B subscription revenue growth continues to be driven by restaurants adopting higher-priced premium plans, ongoing evidence of the strength of the feature set and overall value proposition we deliver to restaurants.

While still a minority of TheFork's total revenue, B2B subscription revenue is contributing an increasingly share of the overall revenue mix, which we expect to continue in the future as the team executes on its business model diversification strategy. Adjusted EBITDA at TheFork was $14 million or 22% of revenue, representing a margin improvement of approximately 10 percentage points, driven primarily by leverage in personnel costs.

Turning to consolidated expenses for the quarter. Cost of revenue was 7% of revenue, an improvement of 10 basis points. Marketing costs were 41% of revenue, higher by 150 basis points. Modest leverage at Viator was offset by deleverage at Brand Tripadvisor due to the aforementioned traffic headwinds. Personnel costs as a percent of revenue improved by 100 basis points. Investment in Viator personnel offset lower personnel costs at BrandTripadvisor.

Absent share-based compensation, personnel costs were approximately flat as a percent of revenue. Technology costs at under 5% of revenue were approximately flat with last year. G&A as a percent of revenue improved by approximately 70 basis points, driven primarily by lower real estate costs. Now turning to cash and liquidity. Q3 operating cash flow was $45 million and free cash flow was $26 million. On an LTM basis, operating cash flow was $347 million and free cash flow was $261 million, which represents significant improvement from last year due to a more favorable working capital and onetime cash tax settlement charges in the comparable period last year.

Total cash and cash equivalents at September 30 were approximately $1.2 billion. Our cash balance includes approximately $350 million in Term Loan B proceeds raised in the first quarter of 2025, which we plan to use to pay our outstanding convertible notes due in April 2026. After taking into account deferred merchant payables of approximately $393 million and the $350 million term loan, our remaining excess cash balance is approximately $475 million.

During the third quarter, we did not repurchase shares given the operating model changes and cost savings programs we were contemplating. However, we expect to restart our open market repurchases this quarter aligned with our previously communicated programmatic approach, subject to a stable macro environment. Today, we have approximately $160 million remaining in our authorization. We believe that our current cash profile and net leverage levels reflect a strong capital structure with appropriate cash for operating needs.

Turning to the gross cost savings program Matt mentioned in his prepared remarks. At the group level, we are sharpening our strategic focus in order to accelerate our ambition in the areas where we believe we have differentiated assets and that can drive meaningful shareholder value. We believe that realigning our strategy, our resources and our brand and data assets across Viator and Brand Tripadvisor into a new operating model provides an attractive opportunity to accelerate growth and innovation.

This operating model change will result in a greatly simplified organization and allow us to operate more efficiently. We will be launching an annualized gross cost savings program of $85 million in Q4 that we intend to execute throughout 2026 and expect to fully realize by 2027. This savings program will primarily include reductions in headcount spanning Brand Tripadvisor, corporate G&A and Viator by approximately 20%, but will also include other operating expenses -- expense efficiencies as a result of our operating model change.

In 2026, the net impact of our savings program is expected to be lower than $85 million due to the timing of these actions. For example, we expect approximately $10 million of the savings to be recognized in Q4 of this year. And as I mentioned earlier, our plan to invest behind reaccelerating experience growth in 2026 may offset a portion of the savings impact. While it's too early to provide detailed guidance for next year, our preliminary estimate today on this program's impact to fiscal '26 would be an improvement of approximately 100 basis points to consolidated adjusted EBITDA margin.

We will provide another update next quarter, given we're still finalizing the '26 plan.

Next quarter, we also intend to update our reportable segments to align with our updated operating model and resource allocation strategy. We expect to maintain three segments, which we anticipate will be Experiences, Hotels and Other and TheFork. We believe updating our reportable segments will provide investors with a clearer understanding of the growth and margin performance and future opportunity of our entire Experiences business as well as more clearly highlight how we'll manage our legacy businesses.

Let me take a moment to quickly explain the major changes that bridge our existing segment structure to our planned updates. In the Experiences segment, the definition and disclosure of unit volume, GBV and revenue will be consistent and unchanged from the way the Viator segment reports today. However, the cost profile will change to include all fixed and variable expenses related to both brands for Experiences, which have been split between the Brand Tripadvisor and Viator segments.

By doing this, there will no longer be a need for intersegment eliminations related to experiences, which today is recognized as an affiliate marketing expense in the Viator segment and intercompany revenue for brand Tripadvisor. The Hotels and Other segment will effectively be the current Brand Tripadvisor segment, but without experiences-related revenue and expenses. Finally, TheFork segment will remain unchanged from today's disclosure.

Given these changes are still in process, I will provide guidance for the fourth quarter and full year consistent with our existing segment structure. Turning to our outlook for Q4. Our expectations for the quarter include the benefit of approximately $10 million to adjusted EBITDA from our aforementioned cost savings program impacting both brand Tripadvisor and Viator, but do not assume any revenue benefits from our new organizational structure, which we are implementing this quarter and expect to drive benefits throughout 2026.

For Q4, we expect consolidated revenue to be approximately flat to last year and consolidated adjusted EBITDA margin of approximately 11% to 13%, which implies the following for each brand. At Viator, we expect total bookings growth in Q4 of approximately 16% to 18%, driven by an acceleration at the Viator and Tripadvisor points of sale. We expect some sequential pressure in GBV growth due to the impact of promotions and a higher mix of lower-priced tickets to average booking value.

We expect revenue growth to be in line to a slight acceleration with Q3 growth. Adjusted EBITDA margin is expected to be approximately 100 basis points lower due to a nonrecurring indirect tax credit incurred last year. Absent that onetime benefit, we would expect Viator's adjusted EBITDA margin to increase by approximately 200 basis points. At Brand Tripadvisor, our current expectation is for revenue to decline in the low teens, which assumes Q3 traffic headwinds persist. Adjusted EBITDA margin is expected to decline approximately 900 basis points, driven primarily by pressure in the hotel meta free channels as well as planned marketing spend resulting from ongoing coordinated efforts in experiences.

At TheFork, we expect revenue growth in the mid-teens, which reflects a currency benefit of approximately 10 percentage points. The sequential step down in growth is expected as we are now lapping the scaled growth initiatives in B2B and partnerships we began realizing in Q4 of last year. Adjusted EBITDA is expected to be approximately flat year-over-year. Given our Q4 outlook, we now expect full year consolidated revenue growth of 3% to 4%. However, our adjusted EBITDA margin expectations remain unchanged at 16% to 18%.

We are excited about our strategic direction as we finish the year and believe that the operating model changes and cost savings actions will sharpen our focus and allow us to grow consolidated revenue and adjusted EBITDA and improve adjusted EBITDA margin in fiscal year 2026. In Experiences, our targeted investments will unlock a larger TAM and position us to accelerate revenue growth and grow adjusted EBITDA.

At TheFork, we will continue to execute a financially disciplined growth strategy, and we expect to optimize our legacy offerings and deliver cost savings to maximize profitability in the face of structural headwinds. Over the past few years, we've made notable progress driving a deliberate business model diversification strategy to grow the mix of revenue and adjusted EBITDA from our marketplace businesses.

As Matt stated earlier, this year, revenue from Viator and TheFork, our marketplace businesses are expected to represent 60% of total consolidated revenue and 30% of total adjusted EBITDA in our current segment reporting. Under our new operating model and segment reporting structure, we expect this revenue mix shift to steadily continue and the mix of adjusted EBITDA to surpass 50% consolidated EBITDA in fiscal 2026, which we believe reflects our strength as an experiences and AI-enabled company and our overall marketplace mix. We look forward to sharing more detail with you on our Q4 earnings call next year.

I'll pass the call back over to Matt briefly.

Thanks, Mike. Before we start Q&A, I wanted to take a moment and welcome Alex Dichter to our Board of Directors. Alex joins us with many years of experience as an adviser and operator with deep travel industry knowledge and an extensive background working with organizations across multiple travel verticals to transform and scale their businesses. This is the first step to bringing on fresh perspectives from independent directors, and we're excited to have Alex join the Board. He joins us as Greg O'Hara departs, and I want to thank Greg for his contributions and leadership over the years.

With that, I'd like to turn the call back to the operator for Q&A.

[Operator Instructions]

The first question comes from the line of Richard Clarke of Bernstein.

I'd just maybe like to ask a question on your revenue growth assumptions going forward. I think you said you think you can accelerate growth. I'm just wondering what the shape of that will be. If you're investing even less in the sort of meta and Brand Tripadvisor product, is the revenue growth -- can you still stabilize better than the mid-teens guide you set out for Q4? And with the new organizational structure, would you expect your Experiences segment to be able to grow faster than the 9% sort of high single digits that Viator is doing at the moment? What's the kind of shape of revenue growth going forward?

Yes. Richard, it's Mike. I'll take this. In terms of thinking about the longer-term shape of revenue and as reflective of our overall operating model, I'll say a few things as we set ourselves up. In Experiences, we do think the operating model and how we're allocating investment to Experiences, we are expecting our Experiences in our new segment to reaccelerate next year, right?

And that is both a focus on two things: one, geo TAM expansion, looking at new source markets to acquire bookers, very important in that equation and category expansion as we think about other opportunities to bring other types of things to commercialize in the storefront, think of attractions, right, for example. So those are two important things as we think about that reacceleration statement next year.

We also then, I think, as we think about our hotels and other category, which would be our other second new segment, I think we're taking a very pragmatic view of what this looks like. We are -- when you think about the traffic headwinds we've seen, particularly accelerating in the free channels and then you take that with how we will be investing in growth, meaning we're not going to be prioritizing growth necessarily in the paid channels just for growth.

We're going to really divert those resources to Experiences. We would expect continued revenue headwinds next year. And then in TheFork, just to round out in terms of the growth, we are continuing to expect that TheFork is going to grow nicely with continued margin evolution. So when you take that all in, when we think about where we sit today, and to be clear, we will be refining our plans as we move through the next 3 months. From a consolidated perspective, we would expect that we would grow both revenue and EBITDA next year.

When we take into consideration the cost savings program that we've enacted that really stop the growth of fixed costs in both the Viator and Brand TA segments, which we'd deliver about -- we said about 1 point of margin improvement to the consolidated financial profile next year. So again, important moves we're making today that we believe are important for growth in margin for next year, but not just next year. It's really how we set ourselves up for the next several years and driving the experiences opportunity we have in front of us.

The next question comes from the line of Naved Khan of B. Riley Securities.

A lot to digest here and I think some of the steps here that you described, Matt, do make sense. I'm just wondering, as you look to reaccelerate growth in the Viator business or the Experiences business, is it possible to kind of get kind of closer to your closest competitor? I think they recently disclosed around 30%.

And also, you have kind of expanded margins very nicely in this segment. Is it possible to remain on this margin expansion trajectory as you accelerate growth? How -- give us your thoughts on how we think between the trade-off between growth reacceleration versus margins?

Thanks, Naved. And I think you've hit right at the core of why we are so enthusiastic about this fundamental shift to our operating model because we believe it allows us to do just that, reaccelerate growth while we continue to expand margins. And we are already really leading the category today. You can look at it in many different ways and make judgments about who's got the best profile. But let me tell you what I'm excited about our profile. We believe we're in a real position to shape what comes next as the global brand leader in this category.

Together with Tripadvisor, it's the category's largest, most trusted and most profitable platform, and we are building it for sustained growth. Why do I say largest? It's largest because of our scale and reach. We're the global leader in scale with unmatched supply and reach, 400,000 experiences, 65,000 operators. And of course, we can more fully tap the hundreds of millions of travelers using Tripadvisor monthly, giving that supply more visibility and more demand that really no competitor can replicate.

And the proof points in my mind are the last 12 months GBV of $4.6 billion and 17% items growth. and we believe we can accelerate off that. Being trusted has an advantage. We've got this global reputation of trust, and it's a foundation to grow Experiences globally. A very good percentage of our audience from Tripadvisor is coming outside the U.S., even though Viator has primarily focused on U.S. source market. So that gives us immediate credibility to expand experiences into new markets.

We think there'll be lower barriers to adoption in those source markets where travelers already know and use Tripadvisor. And we think that it signals sort of a reliability, which is critical for the emerging category. And in Europe alone, we have 70% brand awareness and it's relatively unmonetized today. So by focusing Tripadvisor on Experiences, we have many, many times more visitors to go take advantage of than others. And finally, profitability. We are driving this performance with financial discipline.

And what we've shown is that the category can scale profitably. And we're the only ones who have shown that. And we're doing it efficiency and with discipline and performance. And so Viator was profitable since 2023. Last year, we delivered a mid-single-digit margin. The last 12 months, we have a high single-digit margin, and we are approaching double-digit margins. And as we move from regional strength to building a global platform, we think that, that leadership is within our capability, and we're going to go after it. So thanks for the question. We're super enthusiastic about reaccelerating growth and expanding margins.

And I'll just add to the second point of your question. Yes, sorry. And just to underscore a few points that Matt said, we are really pleased with the unit growth. And I think I want to make sure that we all focus on the most important metric, we think, is that because it's a statement of real customer conversion and it's a statement of you have the ability to bring back customers on a repeat basis, and that's super important.

And so we'll continue to really focus on driving that scale and that unit volume growth. And on the margin, I would say we -- this model, as we continue our disciplined new user acquisition is really around growing margins. And I think we will continue to think about, particularly as we're excited about reaccelerating next year into new geos, there'll be some modest investment into that. But all in all, I expect to continue to see the model produce margin enhancement.

The next question comes from the line of Ronald Josey of Citi.

This is Robert on for Ron. Can you maybe give us a sense of new user trends at Viator and as you continue to expand into the secondary and tertiary markets and into newer categories, help us understand your approach to growing supply in each of these newer markets.

Yes, Rob, I'll take that real quick, and Matt can chime in. Great question because it does tie directly of how we're thinking about the reacceleration point. In the U.S. and North America as our core market, we continue to see very high repeat revenue growth rate from our repeat customers, very important, because that is long-term customers and they generally -- the more times they come to us, the less reliant they are on paid channels. It's part of our core flywheel.

On new users, we are very disciplined, right? And it does explain some of the overall growth profile because we are looking at new user acquisition in light of do those ROIs make sense and do they contribute to our long-term margin targets. So we're very disciplined in terms of that new user acquisition.

We do believe that a core tenet of the geo expansion and Matt mentioned some of this around where we would think to go would be, hey, where is our brand Tripadvisor, for example, well known, a lot of traffic volumes, which is in Europe, gives us the opportunity to grow that new user base at attractive ROIs, and we're excited about that. And again, is a key principle of how we're thinking about that reacceleration comment?

Yes. And look, I just want to add, Rob, that the marketplace flywheel that we have working between how we generate demand across both of our brands and do that with an ROI-driven acquisition strategy, the way we expand geographically, bring those new users into our store and give them a better experience where we're leveraging AI to do personalization and matching and our sort to be far more relevant for them and then making sure that we have the right supply in those secondary, tertiary markets in new categories.

All of that works together to attract new users, get them coming in, converting and then being more loyal, so you get the new and repeat working really well together. And we think that our marketing tests and the tests we've done on our product and with our supply across the two brands allow us to do that with more efficiency than we've ever been able to do it before, and we're going to scale that.

Got it. That's great. And then as a quick follow-up, Matt, you had mentioned a few months ago that AI was already making a difference financially across the business today. So can you maybe elaborate on how AI is driving cost efficiencies across the business? And then given your focus on AI going forward, help us understand how you're thinking about the potential revenue opportunities and licensing deals ahead.

Yes. Thanks, Rob. So we're deploying AI fully across the organization in every part of our organization. And from an efficiency and productivity perspective, we've done it in a lot of enterprise use cases across customer service, where we're making major strides in our content moderation and fraud detection, the way we localize, the way we think about driving our marketing teams. It's giving us a lot of advantage.

And we will continue to roll that out in every area of the business. In fact, as we're planning for next year, one of the things we want to do is really measure that very clearly so that we can see not only the pilots making sense, but the way we scale that making sense. And I think our -- we've rolled out the tools to do that, and we're excited about how that will continue.

More importantly, right, is the way that we are using it in our product to drive innovation. And we've learned a lot over the last couple of years. We've built the AI infrastructure, and we've leveraged it for our product enhancements. And we've shown in succession how we can work with trips and planning and itineraries to the way that we summarize and synthesize our content through to a travel assistant, which we recently learned.

And these were all efforts that are leading us to a place where we can go fully AI native and really serve the customer however and wherever they want to engage with that. So we're building on those learnings from our AI innovation. And we are setting ourselves up to put a deep focus on that and not get distracted by trying to chase other things that might not make as much sense at the expense of being able to do it.

And that's why we're going to launch an AI native MVP in the coming weeks, and we're excited to continue that. I will say I also believe that the way that we are doing partnerships has been differentiated, and we're learning. We're seeing good value exchange. And we believe that going forward, we can really scale that opportunity. So we're always having conversations to do that. So feeling real good about the AI future.

The next question comes from the line of Doug Anmuth of JPMorgan.

This is Dae Lee on for Doug. I have two. Firstly, on -- with the reset to an experience-led strategy, will the consumer experience on Tripadvisor change? And how do you expect Tripadvisor and Viator brand to be positioned for consumers shopping for experience going forward?

Yes. So thanks for that. Absolutely, the user experience will change because we are going to primarily be focused on how the Experiences category can play on Tripadvisor. We will continue to offer the features that we've had in the past, but our primary focus as we allocate resources, as we set goals with all of our KPIs is going to be driving that experiences future.

And we do believe that bringing it together under one team, which we've already proved that we can do with our product, all of the work we're doing in the store to optimize the funnel to take friction out, all the myriad of little things we do to drive conversion and loyalty and repeat will benefit both brands, both points of sale, which will come together in a more seamless fashion so that consumers can engage with us wherever it makes the most sense for them. And I think that will drive that flywheel that we were talking about, which once you get it going, really has a lot of potential to accelerate our revenue.

I'd just add a few things on to that, Dae, which is this work has -- this is not a cold start. We've been doing this work. And you've seen us talk about the coordinated bidding as an example of this. And the learnings we've gotten from that has enabled us to lean in and actually gain increasing confidence around what we can do in the Tripadvisor points of sale. So we're very excited and it's a key point of -- as we think about experiences reacceleration.

Got it. And as a follow-up to that, what's been driving the acceleration in volume growth at Viator? And then for your guide for 4Q, what will drive acceleration, especially given the tough 4Q comps? Are there any specific channels, products or regions that's driving the acceleration?

Yes. On the unit side, it's -- on the unit side, it's really been the 3P mixing higher, and that's been growing very fast, albeit on a much smaller base, but growing very fast. I think we've consistently said it around the other channels, Viator, which is by far the largest channel and TA and Viator are the vast majority of that.

Viator has been generally growing around the average, and Viator has been growing lower than the average. And earlier in the year is actually -- it was declining year-over-year. But that has been improving largely because of the efforts around product that Matt just mentioned, largely because of the efforts around coordinated bidding. And this quarter, we just mentioned that both channels accelerated in the quarter.

The TA point of sale actually turned to positive growth in the quarter, again, reflective -- and these are all on unit basis to be clear, all reflective of that. And so as we move forward, we are very excited about our merchant 3P business for all the reasons we've talked historically, and we'll continue to work with our partners to advance that.

But the work very much continues on our owned and operated channels at both Viator and Tripadvisor point of sale, and we're going to continue to work on those. And we expect embedded in our Q4 guide would be expectations of both the TA and Viator channels to have modest acceleration again.

Yes. And just remember, Tripadvisor Experiences has previously been a drag on growth. That's going to shift, and it will no longer be a drag on growth, and we'll get these things working really well. We have marketing products, supply, data plans to do that.

The next question comes from the line of Jed Kelly of Oppenheimer & Co.

Just two. Will you market -- will the go-to-market strategy for your Experiences, will that be built more around the Viator brand or the Tripadvisor brand? And then can you talk about how you think potentially expanding into other experiences into other regions, particularly Western Europe?

Yes. So the go-to-market strategy is something that we can continue to work on, and we think that it will be where we believe we have the strongest ability to go. Now both brands can exist in both markets because they do different things. They are different products, right? Viator is a very focused vertical when you kind of already know I want an experience and I want the best way to book it.

Tripadvisor still is a broad planning and recommendation platform across multiple categories. And that's not going to necessarily change where we'll put our focus and energy is in making sure that if you come to find your hotel, we're also doing a really good job to cross-market experiences to you in a fundamental way. If you're thinking about where you want to eat, there's probably a really interesting tour around that restaurant that we want to make sure you know about and book. So it will depend category by category in experiences and market by market, how we go to market. We think both brands can be there. We may choose to lead with one or the other depending on the market.

Yes. And I'll follow up on that point, which is your second question on geo expansion. So we are excited about geo expansion, particularly as we think about accelerating growth in new users. When we look at the geos, obviously, we want to look for a large addressable TAM and look for areas we actually have a competitive advantage and Europe clearly is that when we think about the large TAM size, but we also think about -- and this is where it's so critical about the operating model change.

The traffic and brand awareness of Tripadvisor is very large there. And so our ability to really enhance and tighten our focus around experiences, leveraging the Tripadvisor brand is going to be very important to how we think about that expansion. And that doesn't mean -- and Viator will always play a point, and we have two brands to think about how we want to grow in the new market. So a lot of work underway as we're working on this, but we're very excited about that expansion opportunity.

The next question comes from the line of Nafeesa Gupta of Bank of America.

So my first question is on Metasearch. How are you thinking about the legacy business now that you are consolidating both the experiences in Viator and Tripadvisor? Will that business still have investments that you were planning for the last couple of quarters? And the second one is on Fork. There are reports going around regarding exploring sale of TheFork. Any thoughts on that? And how should we think about TheFork revenue growth in 2026 given the B2B lapping?

Well, thanks for those questions. First of all, on our meta business and our hotel business, the hotel product continues to provide real value for both travelers and partners. We have the best advice, the most photos, and we're trusted really over everyone else in the space. And we recognize that with Google taking more and more share of the search traffic for themselves, we're just not going to be able to grow that business at the level of profitability that we'd like.

So we know that it's an important part of the journey that travelers find value and price compare, and we're able to send our partners really good quality leads. And we've done some really good product work there to drive conversion rates higher. And we're -- I think we're still focused on that. But what we won't do is we're not going to continue to invest incrementally. You can think of it as an add-on or incremental product to our primary focus that we will make sure maintains the quality for both travelers and partners.

Now as it relates to your question about TheFork. TheFork is a great business that is performing really well. We are excited about the path of sustainable growth and the improving profitability profile that really benefits the Group. But of course, we consistently evaluate all options to unlock value in all of our assets, and that includes TheFork. And our primary focus is what's going to drive the most shareholder value ahead. Nothing is off the table.

We see it's a leader in core European markets. We have a good and mix of B2C and with growing B2B, and that's giving us advantage. And as a leading European dining platform, we know it's a valuable asset, both for global and regional travelers. It is run separately. There's optionality there. And we recognize there have been precedent transactions out there that suggest TheFork is a highly valuable asset, especially given its unique scale position in Europe. So optionality, and we are focused on it. We love what the team is doing there.

Just on the revenue growth for Fork, how should we think about that going ahead? I know this last couple of quarters, there was a lot of FX tailwind as well. And how should we think about next year?

Yes, sorry about that. Yes, listen, I think a couple of things important to understand the growth profile. Big picture, one, but we still expect nice growth and profit improvement next year for sure. We are -- we will have a bit harder comp next year because we're comping and we're seeing some of this before. We're comping some very strong growth in B2B as well as some of the partnership initiatives we've put in place.

So we would expect a step down in growth year-over-year, but we still believe we're very excited about the revenue diversification strategy. We're very excited about the B2B business and the ability to continue to grow into our existing restaurant base, new restaurant base, more and more premium plans. Those all offer a very, very nice upside as well as we continue to see very healthy growth -- volume growth in our B2C business, particularly in our proprietary Fork network. So I think, yes, there'll probably -- there will be -- we expect a step down in growth from what we saw this year, but still very healthy as we move into next year.

This concludes the question-and-answer session. I would now like to turn it back to Matt Goldberg for closing remarks.

Thank you all for joining us on this morning's call. The changes we walked through today represent a meaningful shift in our strategic focus and how we'll deliver value for shareholders ahead. We're excited to move into this new phase of our growth for the group. Before I close out, I also want to take a moment to acknowledge the impact these decisions have on our teams. We're grateful for their continued hard work and dedication. We look forward to updating you on our progress and plans for 2026 on the next call. Thanks, everyone.

Goodbye.

All right. I think in the interest of time, we'll get started with the next session. It's my pleasure to welcome to the stage the team from Tripadvisor, Matt Goldberg, CEO; Mike Noonan, CFO. Thanks for being at the conference again this year.

Good to be having us.

So maybe just to level set and lay the foundation for the discussion. I would love to just kind of hear some of the key themes coming out of Q2 earnings across the segments of the business and what you're seeing in the broader current demand picture.

Yes. So in Q2, I think the biggest thing coming out of Q2 is really the progress we are making to shift the mix in the business. We're really seeing our marketplace businesses come on. Over the last 12 months, I would say Viator and TheFork, which is our Experiences and European dining business, are now nearly 60% of our revenue.

2 years ago, they were burning. This year, they're contributing nearly 1/4 of our profit over that 12-month period. So really excited about that. And when you look across, experiences is the most exciting part of travel, and I think we are well positioned to go and win in that category to drive meaningful double-digit growth and EBITDA expansion. And there's a lot of reasons for that. I know we'll get into it. We are excited about how TheFork is progressing.

We think dining in Europe is a great position to have, given the traveler perspective on dining as an experience and a category that they care about, but also corridors into Europe and intra-Europe. It's really good to have the market leader for dining in Europe. And then, of course, we're making progress on our transformation of TripAdvisor and really focusing on what matters most, which is the highest value audience, which is largely increasingly going to come to us direct, is going to log in increasingly book and be a member, and we intend to enhance our membership and reward that.

So that's really exciting. All of that is underpinned by an opportunity to bring our brands together to drive synergistic value, underpinned by AI, and we're really excited. We believe we're going to be a winner in AI, and we're setting ourselves up for that.

Great. Well, let's touch on that topic in AI. Maybe just from a high level, broadly, how is AI impacting or not your business? And just share any early learnings from generative search optimization, how you're showing up in AI search and any impact from zero-click search on Google?

Well, look, the way we're showing up, I don't need to say what I think is happening. There's third-party research out there. We just saw Semrush, which showed the citation rates, and we came up #8 in there, similar to what we're seeing, a really good strong citation rate, double-digit citation rate.

And we were the only travel company and brand to come up in the top 20. And that's because our brand is highly valued. We have content that is high quality, and we're focused on positioning ourselves well. Now while SEO has its challenges, and you talk about zero-click search, we're positioning ourselves to adjust to that.

First, for our strategy to get more travelers to come direct to think about how we want to leverage our content and data. But similarly, how we use our SEO capability to appear highly in AI-first search. And our partnerships are driving that. We're doing a lot of partnership to learn, learn about AI-first search, multimodal search, agentic AI. And our view is that we're going to position ourselves leveraging all of these assets to really shape how AI changes the travel future, and we're excited about it.

And you have obviously a history and a muscle that you've built out around SEO and SEM optimization. Maybe just talk about how that can help you in a world of AI search in ensuring that you're showing up and optimizing inside of generative search.

Well, absolutely. I mean the same skills that allow you to be crawled and cited are the same skills for SEO that they are for AI. That's what Google has indicated they're seeing. That's what we're seeing with our capability.

Clearly, brands that are trusted, and we are still the most trusted brand of all the travel verticals. Content that is from real travelers. So user-generated content is very helpful. We're focused on that content asset and ensuring that not only is that a stable and durable content asset that continues to renew itself, but it's something we're going to focus on for the future. So we're going to make it easier for travelers to rate and review and leave their points of view on our platform. We can leverage AI to make it easier, to make it more effective, but they're real travel reviews, not AI-generated reviews, real traveler reviews.

So we are very excited about how that's performing. And what we're seeing is that AI-first traffic from that search ecosystem, sometimes called generative engine optimization is growing exponentially. It's a small base, but it's growing exponentially, and the traffic is higher intent. So we're converting it more effectively.

And every single one of our partnerships is around a learning agenda and being very adaptive and eclectic about what the value exchange is could be that we're going to license, could be that we're going to see traffic that we're going to convert. It could be that we're going to build entirely new experiences in our partnerships that we're going to share revenue for.

So we're really excited. And I think the proof is that we get called from all of the major LLM companies saying, let's figure out how to do something together. And we've signed 5 deals in the last 6 months. So that's exciting, and we're going to learn and scale.

Great. Well, maybe let's move to Viator and experiences. From a demand perspective, just talk about the trends you're seeing in experiences more broadly. And any updated views on the competitive landscape and market structure, which is evolving with various players entering the space?

Well, experiences is the most exciting category in travel. It's the fastest growing. It's going to grow faster than the category overall. And I believe that we are better positioned than anyone to go after it because we have these unique advantages. We have brands that are trusted. We've got a vertical experiences marketplace in Viator with the largest supply of asset, 400,000 experiences from 65,000 operators. It's multiples larger than anybody else.

Quantity is not everything. Quality is important, too, and we're constantly thinking about the quality, but that quantity allows us to get not only our flywheel spinning and serve the demand, but also to go and serve others, the third parties that we're serving very profitably. It's incremental bookings for us. We are getting far more efficient in our marketing. We're investing in product R&D and seeing that we can make really meaningful improvements in our -- reducing our bounce rates, increasing our booking initiation rates and our conversion rates, all of which are growing double digits.

We think that the combination of Viator as a deep vertical and TripAdvisor as a demand generation platform, there are so many assets at TripAdvisor that we can use to drive both growth and together get efficiency, which we think means operating leverage and strategic advantage. And if you think about TripAdvisor and that brand and how well known it is globally and how much of our traffic is coming from the U.S., Europe and Asia, we can use that brand to drive demand, to match supply and demand to take the data to target not only the most high-intent audience, but also the best supply.

And we're using that. And we're seeing that demand-driven supply targeting is actually paying off because we're able to get more supply around new geos, more supply around new categories and get it matched to that demand so that when we do bring new suppliers onto the platform, we're getting their first booking much faster.

And that also helps that we have the leading content rating and review platform in the world because you need ratings and reviews for people to try your product. And that really all works together. So we think together, that's an advantage, and we're going to lean into it. And I said at earnings, we see real synergy potential between the 2, and we're going to go after it.

Maybe expand a little bit more on that dual brand approach with Viator and Brand Trip and leaning into that for experiences. How do you ensure -- like why is that the right approach? And how do you ensure that optimizing things like marketing ROI and it's not dilutive for one brand over another?

Well, it's the right approach because we -- first of all, it's not new. We've been testing quite a bit over the last couple of years, and we've had some real success. So having 2 brands on the shelf allows you to go after audiences in the way that it is most effective to acquire those customers. It might be more effective to acquire TripAdvisor. It might be more effective to acquire at Viator.

And if we do that well together, we can drive growth while keeping EBITDA stable or we can drive more EBITDA while keeping growth stable because having 2 brands allows you to go out into those sort of auctions and be far more effective. But that's not all -- it's not just marketing. We also see opportunity around R&D. So when we're investing in optimizing our funnel, when we're thinking about the way we merchandise, the way that we do our sort, take friction out and make these far more sticky experiences, it doesn't make sense to do it in 2 separate places.

We can do it once and export the learnings from one brand to the other. We can go after supply and have supply go across both of those brands. And increasingly, we think leveraging the data asset and going after an international opportunity because we've been largely U.S.-sourced for our traffic. We have opportunities to go after Europe, you think about TripAdvisor in Europe. And I think we'll be able to make some real strides there in the quarters and years to come.

Great. Another area within Viator is B2B, your third-party point of sale as a channel, and that's been growing best for you. Maybe just share why you think that's incremental to bookings as opposed to cannibalizing the Viator point of sale? And how sustainable is that as a driver of growth for Viator?

Sure. I'll take that one. First of all, third party or we call 3P channel is a pretty diverse channel. It encapsulates travel agents, white labels, affiliates and our merchant partners and the OTAs. It is the smallest channel, to be fair, but it's growing fastest. And to be really clear, it's a channel we have invested behind, right, to make it easier to connect folks -- connect these partners into experiences.

So has been very purposeful to help power all these channels and empower the merchant OTAs. So why? Why do we do this? It is very incremental both from a revenue and profit perspective. From a revenue perspective, we are getting economics on bookings that are very difficult for us to get, i.e., in Europe, for example. These bookings come without marketing. So they're very profitable for us.

So the incrementality is very important for our business model as we scale, it helps support our scale, helps support our investments around the global platform. So the incremental point is important. Secondly, we -- this is enabling the experiences category to come online. It's one of the biggest unlocks of growth for the entire category, and we will benefit greatly from that.

So if we are empowering partners around the world to bring more people, bring awareness to, hey, I didn't know you could do this online and book through a channel. You know what, we have a really good chance and a good opportunity to acquire to that user the next time they interact with our channel. So for those reasons, we're really pleased with the performance, and we'll continue to invest behind this.

Great. I was just going to say you asked about the competitive intensity in this category. And I think this is a real competitive advantage for us to be positioned to serve B2B as well as B2C. And we're focused on it, and we're -- I think the supply that we have means that people really want to work with us.

So it's a very diverse channel, and we think there's opportunity there in the future. But we also know that having Viator be the leading point of sale is the key, and we want to make it more direct, more in the app, more sticky and get people to repeat. And that's why we're seeing shifting cohort unit economics, which is really exciting.

Great. I guess maybe shifting to the kind of growth versus margin debate. First, what is kind of the world view and how you're optimizing or managing the Viator segment for growth versus margins? And maybe just double-click on some of the specific initiatives we talked about, the B2B or 3P point of sale, the dual-brand approach and how that does or doesn't impact your view of being able to achieve OTA-like margins over a long enough time horizon?

Yes, I'll take that. Matt, you can chime in where you want to. So I think we've been pretty consistent in saying we are growing as fast as we can with unit economics that support long-term -- our long-term margin goals. And that's an important, important statement. I think when we look at the flywheel, acquisition flywheel, newer acquisition does tend to be expensive.

It's all measured on that repeat business and coming back to you. And so we do believe, as you mentioned, that we can achieve OTA-like margins over the longer term. Why do we believe that? We continue to look at very healthy take rates. So our unit economics are favorable there. We have very high gross margins. So our ability to leverage EBITDA margins relative to gross margins really come down to how you think about that marketing spend and fixed costs.

On marketing spend, we continue, as I just mentioned, to focus on the repeat user. the acquisition and then bringing people back. And when they tend to come back with us for repeat usage, they tend to come back less and less through paid channels. So a very important piece of how we think about the leverageability in the model. And when we look out in that fourth, fifth and sixth booking, those contribution margins are very strong, and it gives me confidence in that margin statement.

Secondly, this is a big year for our experiences team in product and product work. And you can see how we're investing in that this year in the P&L. That translates and intend to translate to conversion wins. So all the conversion wins on the product side that we can actually acquire or convert fewer clicks into bookings is leverageability in the marketing spend.

And then leverage on fixed costs, we certainly, over the longer term, would expect those fixed costs to grow slower than revenue growth, which further supports that. So we feel really good about where we are in our growth and growth and profitability algorithm. We would expect in the current flying formation to continue to progress the margin. We're on a track to do what we said we're going to do, double margins this year, which we're really excited about, and we'll continue to do so.

With respect to your dual-branded question, and as Matt alluded to, so we are -- we want to go out and make the smartest decision possible about acquiring a user period, not really worried about where segment and where it's going to come and where it's going to flow. How do we acquire that user the best possible way and gives us the best possible chance to have that user to stay with us. That's it. And so that may be through -- and that may be through TripAdvisor, it may be through Viator.

And certainly, that's going to depend on different markets, different keywords, different auctions. That's where the excitement and the nimbleness comes from in terms of our marketing teams. And so you heard me say a little bit even in our guide this quarter, around there can be some variability shifting between TripAdvisor and Viator.

And we're not so focused on that segment piece per se, but how we make smart acquisitions. And so we may have more acquisition opportunities at TA, and that would drive more expense in the TA segment and drive some more profitability in the Viator segment. All the while, we're going to manage this experience business to be a long-term sustainable growth business with growing profitability.

I do want to go back to the supply comment for Viator experiences more broadly. I think historically, it's been more of a North America-focused supply type of business.

Not supply. Demand.

Demand, demand. Yes. Yes.

Is there a growth engine in expanding internationally, other regions of the world that you're focused on? Or are you still focused on the core kind of North America customer?

We are definitely focused on expanding growth, going after new TAM. And there's a lot of different ways to get there. There's offline to online. There is, as you say, going after new geographies. And really, we think we have lots of assets to leverage to go after it.

The TripAdvisor brand where it is strong, where we are currently not leaning in as much as we possibly could. There's opportunities there. I think Europe is really interesting. But certainly, we think it can be a global platform. So there's geographic expansion. There's new categories that we haven't been highly penetrated in. So we're relatively low penetration and attractions and ticket attractions, whether that's live or museums or there's a lot more that we can be doing there.

And then, of course, there's other categories that are coming on strong, whether it be people who are focused on sports or music or wellness, and we can really create experiences and bring on inventory. And then finally, we're -- we've been pretty focused on the top experiences around the world. There's second and third-tier destinations that we can go after, including in the United States that we think there will be a lot of growth.

So we see many different ways to grow. And we think that by really being aligned and coordinated, we're going to go after this, and we're going to accelerate growth. We're going to continue to accrete profitability. And we feel really good about the growth and profit progression. Remember, we got profitable in 2023, and we added on in 2024. We said we're going to double again in 2025. And we think that, that -- we are literally just getting started. There is a lot of headroom ahead.

Got it. Let's turn to the Brand Tripadvisor segment here. And you've talked about historically getting back to growth in 2026. So I'm curious if you could just expand on what's embedded in that assumption? What do we have to believe to get back to growth in 2026 within Brand Tripadvisor specifically?

Yes. And we started this year with that ambition for sure. And I think underpinning that is stabilization in the core legacy business, the core meta business. And that was -- there was an assumption around stabilization, particularly in traffic.

Now I think as we sit here today, it's probably a little harder, right? We've seen the ecosystem continue to evolve for sure. And traffic has -- particularly on the free side, has been a little bit more headwinds to it. Now we've done a really good job, I think, on the pricing side, a lot of product innovation help rebust a lot of that.

So I think as we sit here today and we think about 2026, we're in early plannings, as you would expect us to be thinking about that. It's about how we narrow our focus, really think about the engagement-led products we've been working on to drive that truly people staying and doing things with us in a product-led way.

It's thinking about alignment -- continued alignment of our cost structure reflective of that. And so listen, we're not taking this off the table. But I think we are thinking about how we continue to double down and focus our resources to deliver.

And Matt, can you just expand on some of the strategic initiatives? You've given some KPIs around app-based usage and monetization of more of a direct app-based user, logged-in user. What are you seeing now as you -- we're now further into that strategic...

Right. All of our traffic is not created equal. In fact, the traffic that gets impacted by the SEO evolution is the lower-value traffic. We're focused on the high-value traffic that is increasingly coming to us more direct. They are logging in. They are downloading our app. They're looking to book. They're planning, they're contributing, and we're focused on that.

So when you look at our KPIs, we're more interested in a member and logged-in app user than any other user. And that is the highest growth segment of our traffic. So we'll lean into that. And we've launched new elements to our membership. So we're going to enhance the value exchange when someone comes in and logs in with us, and we're rewarding not only your activity in booking, but we're going to reward engagement.

The more time you spend with us, the more you contribute, the more that you look and build an itinerary, we're going to reward that. And that's real credits in your wallet. And so that's unique in the sector, and we're excited about how membership can bring that together.

But in the end, what's most exciting is the way that TripAdvisor and the assets that we have, that quality content, the data, the brand of trust in a world of AI, we think we can assemble that to really drive the experiences future and get real value as an AI innovator in travel.

Great. Maybe if we drill down specifically to the Branded Hotel segment, returned to growth for the first time in a couple of years. Maybe just talk about the moving pieces of getting that to growth this past quarter and how sustainable or not that is as we look forward?

Yes. Some of it just echoed what I just said. We've seen really strong pricing this year. And again, just as a reminder, pricing is, I think, as much driven by a healthy travel market for sure. We have to have that. But it's also by a lot of product innovation. And product innovation is simply meaning how do we deliver to our advertising partners, the OTAs and hotels a very high-value click that converts.

And so we've done a lot of things, if you just looked at our surfaces over the past several quarters even a lot to innovate around that. So as we look forward to that piece and trajectory around that, we're going to continue to try to innovate around pricing and always want to deliver value to our customers in that regard.

So a lot of it comes down to traffic, right, and where we see it. Now I think we -- to be fair, an easier comp this quarter, right? As we move forward, we'll continue to evaluate that. But again, we're going to be focusing on managing the asset prudently and focus on how we deliver value to our customers.

And then just on margins for Brand Tripadvisor, the dual brand approach on experiences probably factors into this. But what are -- how should we think about the growth versus margin dynamic for Brand Tripadvisor from here as we look into the back half of the year and next year?

Yes. Well, we started this year talking outlook for Brand Tripadvisor on a margin perspective. And we did say we expected margin pressure really as a result of the revenue pressure. And so we still expect that. I think what you've seen from us in managing this brand is one of thinking about the investments on the revenue side, which is on the price piece I just talked about, but also thinking very prudently about delivering margin and cash flow, protecting that as best we can.

And so we've been very thoughtful about how we spend in the paid markets. We've said our paid ROASs have been pretty consistent year-over-year. So we're very thoughtful about how we, again, think about margin in this business. And we've been pretty prudent in thinking about our operating costs and operating structure. And so you would -- you should expect we'll continue to do so as we think through top line and revenue implications as we move through this year.

Can you just talk about that opportunity on the fixed cost side in various scenarios for growth, how much is inside of your control to pull levers on costs? What are you seeing on cost savings from AI or other process improvements? Just anything there that you could share?

Yes. So I'll say it 2 ways. Just on the cost -- 3 ways. On the cost things that are in our control, one is like that growth algorithm. So we could go out and try to drive more growth by paying more and more in the auctions, right? And again, I think those are things we always evaluate.

And again, but we're trying to strike how to deliver as much consistent profitability in this business as possible. So we're pretty prudent in that regard. Secondly, it's a fixed cost and how do we think about continuing to look at our top line revenue and think about our fixed cost and make sure there's alignment there.

And then three, there are things operationally in that fixed cost piece, which you mentioned, that we're always doing when we think about AI, AI technologies. And you see that across our businesses where it's customer service related. We're seeing more on the content piece.

A lot of just repetitive things without the organization certainly are in the front line of things that we're looking at to replace and I see that in the finance organization as well. So I think there continues to be ample opportunities for us to kind of get at that fixed cost piece, which we are always doing.

We put AI tools into the hands of every single employee in our company everywhere around the world and encourage them to be experimenting with it, not only that they can serve the consumer so they can do their jobs better. This is the -- and we've already seen some efficiency gains.

This is the first year where we'll go into make AI efficiency and advantage as part of our annual planning, and we're going to measure it. And it's table stakes. It's what everybody is doing. I'm far more excited about what we're doing in our product and through our partnerships, but we are putting it at the core of how we run the business.

Great. Let's move to TheFork segment and just frame what you're seeing from a demand perspective there. And you've done a lot on the partnership side at TheFork. So talk about some of the partnerships and potential runway for more partnerships there to unlock demand.

Do you want to kick off with demand, and I'll do partners.

Yes. Thank you. Yes, I'll kick off demand. I think the growth algorithm at TheFork was pretty exciting. And we see it in kind of 3 pieces, and I'll let Matt touch on the last piece of the partnership piece. But -- we have a really exciting, growing diversification in that revenue stream. It started very much as a B2C-only business in 11 countries in Europe.

We still think there's a lot of runway for us in the B2C product. We're in 11 countries in Europe, but the preponderance of revenue is clustered in more deeper penetrated countries. So how we further penetrate some of those 11 is exciting for B2C. We have a very fast but smaller, growing B2B business, and that's responding to our customers on the other side -- one side of the marketplace, our operators, restaurant operators and how do we help them, right?

So our operators look for 2 things from us, demand and helping them manage the restaurant. And I think we've been investing against the product for some time now that we really feel good about that product we're delivering to our restaurant operators. So that B2B, we will continue to push B2B as it solves customer problems, our restaurant operator problems.

And we do see a further diversification of that B2B, B2C mix over time, which we think is a really healthy one and drives a very much stickier revenue growth as it is a recurring revenue software type of product. And the third piece, which is the partnerships, which is exciting, which Matt, I'll let you talk...

Look, I think we get excited about the diversification of this business and the sustainability of it. The partnerships are a good testament to the brand in Europe. It is the leading dining brand. And so when you have players who want to come to us and do affiliate gift card anniversary celebration programs like we did with Vodafone, those can be replicated and meaningful.

Then we did a really interesting partnership long term with Mastercard, which is all about dining as an experience and going and identifying exclusive and hard-to-access restaurants for the users, doing experiences behind-the-scenes tours with top chefs and then, of course, they're going to partner with us on the events that we do and be the preferred payment provider. So that's exciting.

And we have partnerships with the folks at Michelin. And that's a suggestion that we're not just a commodity offer, but rather Michelin wants to partner with us. And so we're going deep there. That's just a suggestion we can do, and there is a lot more that we can do in partnerships. So we're excited about that as well.

And then just on the margin front at TheFork, how do you think about the structural margin profile of that business? And as you do more B2B and partnership stuff, how does that factor in versus the historical B2C mix?

Yes. So that is an important piece of our push in the last couple of years. I think when Matt and I joined, this business was losing about $30 million a year in EBITDA. Big focus of ours to come in, number one and really look deeply at unit economics. on our supply side, which really affects the B2C and the B2B side.

So we did, I think, a lot of hard work in terms of thinking about operational efficiencies and reorganizing that business to really address the marketplace needs on a more efficient manner. So we're pretty pleased about they're going to deliver -- they delivered 20% revenue growth, 22% constant currency and on target to nearly triple margins this year, which we set out at the beginning of the year.

So I think that B2B business helps support that margin attainment, and we're going to continue to focus on making sure we are bringing the right supply in, supply that utilizes the marketplace, supply that utilizes our B2B tooling, which helps in that and at the same time, being very focused on efficiency of cost.

Got it. Maybe in the last couple of minutes here, I wanted to touch on capital allocation, how you think about the potential for asset value unlock. You've in the last year, cleaned up a lot of the share class structure. You're now one-class share structure.

How does that impact at all kind of the priorities and where you're thinking about allocating capital investments in the business, returning capital to shareholders? And as you talk to the Board, how do you think about managing various assets inside of your portfolio versus the potential to unlock asset value?

Do you want to kick off? I'll kick off or I'll close out.

You close out, yes, better. So just our capital framework, obviously, it is a priority of growing organically, first and foremost. And we have a very low-intensity CapEx model, right? So most of our investment comes through our P&L, as you would imagine. And so coming out of the LTRIP transaction, where we repurchased a healthy amount of our stock, 17% retired there.

We feel very good about that transaction, simplified our capital structure and I think greatly simplified our story, which is important. I think we have then now have a capital structure that is very strong from a net cash position and a debt position.

We are looking at -- continue to look at opportunities to think about if we're happy with our cash right now, future excess cash, we look to redeploy into buying back stock, and we've announced our program, which how we think about that, a bit more programmatic way of looking at our future cash flow to buy that back in our shares, and we'll continue to do that. We always have -- we'll keep some ambition or thought around M&A as a way to enhance or speed up our organic activity, but our priority clearly remains in the organic one.

I would just say we're increasingly positioned as an experience company, and that is the most exciting part of travel. We're going after it. We think we're really well-positioned for it. Mike and I want to create value. We want to create value quickly, but we also know that it's not an overnight thing. It's something that happens quarter-by-quarter, year-by-year.

You can see the progress in our mix. You can see how we are driving a growth and profitability algorithm for the experiences category. We believe that there are big organic opportunities. We're going to go after them by aligning our assets, by driving synergy. We think there's growth and efficiency. We think there's operating leverage and strategic advantage there.

We are also cognizant that there may be opportunities to go and acquire some assets to go after that category. And where we see opportunities, we're going to look at that. And of course, we're always looking at our portfolio. And we're open-minded. If we thought there was a way to accrete value for our shareholders quickly by doing something different in our portfolio, we will absolutely look at that. We're open-minded and flexible. But we're really excited about the way we're operating these assets, and that's what we plan on continuing to do quarter-by-quarter, year by year.

Great.

We do that.

Yes. Do that. Well, with that, please join me in thanking the team from TripAdvisor for being here this year again.