Q4 2025 TripAdvisor Inc Earnings Call

Speaker #1: All participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press start 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press start 11 again. I will now like to hand the conference over to Angela White, Vice President of Investor Relations.

Speaker #1: You may begin.

Speaker #2: Thank you, Tonda. 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: With that, I'll turn the call over to Matt.

Speaker #3: 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.

Speaker #3: We achieved record-high revenue of $1.9 billion, a result of 10% revenue growth in experiences and 22% growth at the fork, offsetting legacy revenue declines of 8% in our hotels and other segments.

Speaker #3: Group-adjusted EBITDA was $319 million, or 17% of revenue. TripAdvisor Group is fundamentally different today than it was three years ago. Our focus and investment are now deliberately centered on a large and growing marketplace opportunity.

Speaker #3: Particularly in experiences, rather than on constrained SEO-dependent legacy offerings. This shift is changing the composition of our revenue and profit profile, and 2025, our marketplace businesses represented 61% of group revenue and 35% of adjusted EBITDA.

Speaker #3: By contrast, in 2022, our legacy offerings generated 59% of revenue and all of the group's profit. In 2026, we expect this transition to advance further.

Speaker #3: Marketplace revenue is expected to deliver two-thirds 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.

Speaker #3: 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.

Speaker #3: As we enter 2026, our priorities are clear. We'll extend our leadership position and 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.

Speaker #3: As we concentrate the group more fully on becoming an experiences-first company, we're mindful that the fork has more limited strategic synergies with where we're headed.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: As a result, we've decided to explore strategic alternatives for the fork 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: We've achieved meaningful scale. Our gross booking value, or GBV, is rapidly approaching $5 billion. With a majority of bookings coming from loyal, repeat customers that spend more and increasingly return to us through direct channels.

Speaker #3: We're driving this growth profitably as we expanded adjusted EBITDA margins in experiences to 10% in 2025 and see a 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.

Speaker #3: 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.

Speaker #3: 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 two brands to capture more demand at improving ROIs.

Speaker #3: Our operating model changes have increased the combined click share in our core US 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #1: To support improved quality and consistency for this growing category. Tim's ongoing industry outperformance wouldn't be possible without Axel and his team's constant focus on delivering a great guest experience.

Speaker #1: I guess even more reasons to engage with Tim's, and accelerate loyalty adoption through the launch of our partnership with Canadian Tire later this year.

Speaker #3: 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.

Speaker #1: On development, Tim Horton's return to net restaurant growth in Canada for the first time since 2021. As expected, growth this year was measured and targeted, focused on suburban developments, capacity-constrained markets, and urban densification.

Speaker #1: Speed of service improved across day parts in 2025, and guest satisfaction reached record levels, including in the PM. Digital engagement also continued to build, with digital ordering and payment.

Speaker #1: 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.

Speaker #3: 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.

Speaker #1: This represents a positive step forward for the system, and with a strong pipeline, we're confident in our ability to accelerate development again in 2026.

Speaker #3: 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.

Speaker #1: Meanwhile, in the U.S., Tim's delivered its highest level of new restaurant openings in the past decade, reflecting continued progress in both existing and new markets like Florida and Virginia.

Speaker #1: 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.

Speaker #3: 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 US 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.

Speaker #1: Lastly, I'd like to touch on franchisee profitability in 2025. In Canada, Tim Horton's delivered solid top-line sales performance, which helped offset headwinds from tariffs and increased operating commodity costs, including coffee.

Speaker #1: 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.

Speaker #1: While cost pressures impacted P&Ls, average four-wall EBITDA proved resilient at approximately $295,000 Canadian dollars. This underscores the strength of the Tim Horton's business and the durability of its franchisee economics.

Speaker #1: 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.

Speaker #3: 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.

Speaker #1: Overall, the fourth quarter capped another year of steady performance for Tim Hortons, supported by strong brand fundamentals, delicious menu innovation, and consistent execution. That foundation positions the business well as we move into 2026.

Speaker #1: With that, I'll turn the call over to Mike.

Speaker #2: 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.

Speaker #3: Our goal is simple. Utilize the substantial data and content we have to make more relevant, personalized recommendations better match to travel intent and easier to book, whether in the planning phase or in destination.

Speaker #1: Turning now to international, which drives about 27% of our operating profit. 2025 was a standout year for this business. Across a diverse set of markets, our teams and franchisees executed a balanced operational and marketing playbook that led to another year of double-digit system-wide sales growth.

Speaker #2: 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.

Speaker #3: 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.

Speaker #1: While international is often viewed as a unit growth story, it's worth highlighting that this segment has also delivered strong comps and double-digit system-wide sales growth for years, with a mid-single-digit average royalty rate that flows efficiently to AOI.

Speaker #2: Revenue growth and experiences in the fork came in at the high end of our guidance range but was offset by slightly lower revenue performance in hotels and other.

Speaker #3: And the early data indicates that our MVP is outperforming our prior onsite 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.

Speaker #2: 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.

Speaker #1: For the full year, comparable sales grew 4.9%, including 6.1% in the fourth quarter, and net restaurant growth was 4.9%, driving system-wide sales growth of nearly 11%.

Speaker #1: Performance was strong across several of our largest markets, reflecting the quality. Objective. We continue to hold a unique position in this space despite ongoing declines in fly-by visitors to our site, due to the changing search landscape and the rise of AI overviews.

Speaker #2: In the quarter, we saw an opportunity to capture incremental demand through increased marketing and investment, which we believe will benefit Experiences growth in 2026.

Speaker #2: Full year consolidated adjusted EBITDA was $319 million, or 17% of revenue. Experiences and the fork both delivered adjusted EBITDA margin expansion that was more than offset by deleverage from hotels and other.

Speaker #3: The Viator app in ChatGPT is now live as a proof of concept joining our apps from TripAdvisor and the fork. 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.

Speaker #2: 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.

Speaker #3: 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.

Speaker #2: I would like to make a few key points on the changes. In the Viator, in the experiences segment, revenue in all related metrics are the same as our prior Viator segment reporting.

Speaker #3: 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.

Speaker #2: 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.

Speaker #3: Next, turning to the fork. As I mentioned earlier, over the last few years, we've strengthened our market position in financial profile. We diversified our revenue, improving our marketing efficiency and leveraging our R&D investments to increase profitability.

Speaker #2: Therefore, there is no longer intersegment Experiences revenue, because the new Experiences segment reflects the full P&L for both brands. In the Hotels and Other segment, revenue and adjusted EBITDA include all revenue and fixed and variable costs included in the prior brand TripAdvisor segment, less any revenue and costs associated with the TripAdvisor Experiences point of sale.

Speaker #3: 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.

Speaker #2: The fork 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.

Speaker #3: 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.

Speaker #2: 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.

Speaker #3: The fork's 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.

Speaker #2: 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.

Speaker #3: 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.

Speaker #2: 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.

Speaker #3: We continue to hold a unique position in this space despite ongoing declines in fly-by visitors to our site due to the changing search landscape and the rise of AI overviews.

Speaker #2: 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.

Speaker #3: 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.

Speaker #2: 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.

Speaker #3: 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.

Speaker #2: 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.

Speaker #3: 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.

Angela White: To get even more reasons to engage with Tim Hortons and accelerate loyalty adoption through the launch of our partnership with Canadian Tire later this year. On development, Tim Hortons returned to net restaurant growth in Canada for the first time since 2021. As expected, growth this year was measured and targeted, focused on suburban developments, capacity-constrained markets, and urban densification. This represents a positive step forward for the system, and with a strong pipeline, we're confident in our ability to accelerate development again in 2026. Meanwhile, in the US, Tim Hortons delivered its highest level of new restaurant openings in the past decade, reflecting continued progress in both existing and new markets like Florida and Virginia. Lastly, I'd like to touch on franchisee profitability in 2025. In Canada, Tim Hortons delivered solid top-line sales performance, which helped offset headwinds from tariffs and increased operating commodity costs, including coffee.

Angela White: To get even more reasons to engage with Tim Hortons and accelerate loyalty adoption through the launch of our partnership with Canadian Tire later this year. On development, Tim Hortons returned to net restaurant growth in Canada for the first time since 2021. As expected, growth this year was measured and targeted, focused on suburban developments, capacity-constrained markets, and urban densification. This represents a positive step forward for the system, and with a strong pipeline, we're confident in our ability to accelerate development again in 2026. Meanwhile, in the US, Tim Hortons delivered its highest level of new restaurant openings in the past decade, reflecting continued progress in both existing and new markets like Florida and Virginia. Lastly, I'd like to touch on franchisee profitability in 2025. In Canada, Tim Hortons delivered solid top-line sales performance, which helped offset headwinds from tariffs and increased operating commodity costs, including coffee.

Speaker #2: 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.

Speaker #3: 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.

Speaker #2: 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.

Speaker #3: With that, I'll turn the call over to Mike.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: Revenue growth and experiences in the fork came in at the high end of our guidance range but was offset by slightly lower revenue performance in hotels and other.

Angela White: While cost pressures impacted P&Ls, average Four-Wall EBITDA proved resilient at approximately CAD 295 thousand. This underscores the strength of the Tim Hortons business and the durability of its franchisee economics. Overall, the fourth quarter capped another year of steady performance for Tim Hortons, supported by strong brand fundamentals, delicious menu innovation, and consistent execution. That foundation positions the business well as we move into 2026. Turning now to international, which drives about 27% of our operating profit. 2025 was a standout year for this business. Across a diverse set of markets, our teams and franchisees executed a balanced operational and marketing playbook that led to another year of double-digit System-Wide Sales growth.

Angela White: While cost pressures impacted P&Ls, average Four-Wall EBITDA proved resilient at approximately CAD 295 thousand. This underscores the strength of the Tim Hortons business and the durability of its franchisee economics. Overall, the fourth quarter capped another year of steady performance for Tim Hortons, supported by strong brand fundamentals, delicious menu innovation, and consistent execution. That foundation positions the business well as we move into 2026. Turning now to international, which drives about 27% of our operating profit. 2025 was a standout year for this business. Across a diverse set of markets, our teams and franchisees executed a balanced operational and marketing playbook that led to another year of double-digit System-Wide Sales growth.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: In the quarter, we saw an opportunity to capture incremental demand through increased marketing and investment, which we believe will benefit experiences growth in 2026.

Speaker #2: 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.

Speaker #2: Full year consolidated adjusted EBITDA was $319 million or 17% of revenue. Experiences and the fork both delivered adjusted EBITDA margin expansion that was more than offset by a deleverage from hotels and other.

Speaker #2: 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 product that convert first-time bookers to loyal repeat cohorts.

Speaker #2: 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.

Angela White: While international is often viewed as a unit growth story, it's worth highlighting that this segment has also delivered strong comps and double-digit system-wide sales growth for years, with a mid-single-digit average royalty rate that flows efficiently to AOI. For the full year, comparable sales grew 4.9%, including 6.1% in Q4, and net restaurant growth was 4.9%, driving system-wide sales growth of nearly 11%. Performance was strong across several of our largest markets, reflecting the quality of our-

Angela White: While international is often viewed as a unit growth story, it's worth highlighting that this segment has also delivered strong comps and double-digit system-wide sales growth for years, with a mid-single-digit average royalty rate that flows efficiently to AOI. For the full year, comparable sales grew 4.9%, including 6.1% in Q4, and net restaurant growth was 4.9%, driving system-wide sales growth of nearly 11%. Performance was strong across several of our largest markets, reflecting the quality of our-

Speaker #2: I would like to make a few key points on the changes. In the Viator, in the experiences segment, revenue in all related metrics are the same as our prior Viator segment reporting.

Speaker #2: Importantly, unlike our legacy hotels' offering where we faced SEO headwinds, SEO is not a large channel for this channel to contribute less than 10% of GBV as we exit 2026.

Speaker #2: Adjusted EBITDA reflects all costs associated with entirety of our experiences business, including the fixed and variable costs for both the Viator and TripAdvisor points of sale.

Speaker #2: 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.

Speaker #2: Therefore, there is no longer intersegment experiences revenue because of the new experiences 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 costs associated with the TripAdvisor experiences point of sale.

Speaker #2: Experiences adjusted EBITDA in Q4 was 15 million, or 7% of revenue, down from 29 million last year. We anticipated the leverage in the quarter due to a known indirect tax benefit of approximately $4 4 million realized last year.

Speaker #2: Additionally, in service of our strategic focus and 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 and competitive differentiation in the medium term.

Speaker #2: The fork 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: This adjusted EBITDA profile demonstrates our financial discipline exhibiting strong and improving unit economics while continuing to invest for future growth. Turning now to the fork.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: Bookings volume growth from third-party

Speaker #1: You points of sale remained higher than overall segment , though it stepped down sequentially as we began lapping a period of high growth Growth from third party merchant partners that began scaling in Q4 2020 for Experiences .

Speaker #2: Highlighting the strong value proposition the fork delivers to restaurants. On a full-year basis, revenue was $221 million, representing 22% growth and 17% constant currency.

Speaker #1: 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 .

Speaker #2: Adjusted EBITDA at the fork in Q4 was $1 million, or 2% of revenue, approximately $150 basis points higher than last year driven primarily by leverage and marketing and overall fixed costs.

Speaker #2: 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.

Speaker #1: 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 pH positively impacted both GBV and revenue growth by approximately three percentage points Revenue for the full year grew 10% to 924 million .

Speaker #2: 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.

Speaker #2: As we mentioned last quarter, we’re re-managing our hotels' offering 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 the high-quality travel intent our platform is delivering to our hotel and OTA partners.

Speaker #1: 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 GBV and represent our most profitable customer base .

Speaker #2: Structural traffic headwinds also continued to impact our media and advertising offerings, with revenue declining 17% in Q4 to $30 million. For the full year, hotels and other revenue declined 8% to $750 million.

Speaker #2: 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.

Speaker #1: 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 , loyal Booker cohorts maturing at scale We believe the diversity of our brands and business model is an advantage in uniquely positions us for sustainable leadership in the category TripAdvisor represent a significant majority of total segment GBV , with Viator contributing the bulk of GBV .

Speaker #2: 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.

Speaker #2: 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 500 basis points year over year due to marketing investments and experiences.

Speaker #1: Vytorin TripAdvisor leveraged a shared industry leading supply asset that we merchandise to each audience , and increasingly in a more personalized way through data and AI .

Speaker #2: For the full year, marketing was 42% of revenue, the leverage of approximately 200 basis points, which is largely driven by revenue headwinds at hotel and other.

Speaker #1: 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 .

Speaker #2: Importantly, experiences improved with 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.

Speaker #2: 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.

Speaker #1: Operated platforms . Our direct channels are growing the fastest as a result of our investments in supply and product 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 and experiences , and we expect this channel to contribute less than 10% of GBV as we exit 2026 .

Speaker #2: 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.

Speaker #1: 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 .

Speaker #2: 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.

Speaker #2: 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.

Speaker #1: Adjusted EBITDA in Q4 was 15 million , or 7% of revenue , down from 29 million last year . We anticipated 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 and competitive differentiation in the medium term .

Speaker #2: 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 non-recurring tax settlement.

Speaker #2: Total cash and cash equivalents at December 31st 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.

Speaker #1: For the full year experiences , adjusted EBITDA was 91 million , or a 10% margin , which we believe makes us the most profitable scaled experience 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 the fork , revenue in Q4 was 57 million , or 18% growth and 9% growth in constant currency .

Speaker #2: 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.

Speaker #2: 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.

Speaker #1: 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 to fork delivers to restaurants on a full year basis Revenue was 221 million , representing 22% growth and 17% in constant currency .

Speaker #2: Today, we have approximately $110 million remaining in our share of purchase authorization. Combined with the L-trip transaction earlier in the year, we've reduced share count by approximately 21% since the end of 2024.

Speaker #2: 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.

Speaker #1: Adjusted EBITDA at the fork 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 costs .

Speaker #2: For the full year, we expect modest consolidated revenue growth, which reflects the ongoing mixed 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.

Speaker #1: 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 , offering offerings to optimize for profitability rather than chase low margin revenue as a result of product improvements .

Speaker #2: We expect the mix of our marketplace businesses to continue to grow meaningfully and represent approximately two-thirds of our consolidated revenue as we exit 2026.

Speaker #2: 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 scaled travel marketplace businesses as experiences and the fork become a larger portion of our consolidated revenue.

Speaker #1: We've made hotel meta pricing continued to be strong due to high quality travel intent . Our platform is delivering to our hotels and OTA partners .

Speaker #1: Structural headwinds also continue to impact our media and advertising offerings , with revenue declining 17% in Q4 to 30 million for the full year .

Speaker #2: 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 points of sale and slowing growth in our 3P points of sale as we continue to lap the steep ramp in this channel.

Speaker #1: 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 .

Speaker #1: 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 .

Speaker #2: As a result of this mixed shift, we expect approximately flat bookings volume growth in the year over year for this segment. We expect GBV and revenue growth to accelerate with revenue growth in the low teens.

Speaker #1: 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 500 550 basis points year over year due to marketing , investment and experiences .

Speaker #2: 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.

Speaker #2: At the fork, 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%.

Speaker #1: 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 .

Speaker #2: Segment growth expectations include an estimated currency benefit of approximately 400 basis points at 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.

Speaker #1: 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 percentage 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 .

Speaker #2: As a result, our current expectations are for a mid to high teens revenue declines largely and our focus on maintaining consistent ROIs in the paid channels within hotel meta.

Speaker #2: Our hotel meta performance is lapping a difficult comp in the first half of this year as we observe 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.

Speaker #1: Absent share based compensation Technology . 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 .

Speaker #2: 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 a year-in-year impact from our cost savings program, we announced on our last call, offsetting anticipated declines in our hotels and other segments.

Speaker #1: G&A as percent of revenue in Q4 was approximately flat , with last year on a full year basis , G&A is percent . Revenue was lower by a little over 100 basis points .

Speaker #1: Now turning to cash and liquidity . For the full year , operating cash flow was $245 million and free cash flow was 163 million .

Speaker #2: 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.

Speaker #1: 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 non-recurring tax settlement Total cash and cash equivalents at December 31st were approximately 1 billion .

Speaker #2: 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 market inefficiencies driven by strong repeat cohorts and by operating our two brands in a more coordinated manner.

Speaker #1: Our cash balance includes approximately 350 million term loan 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 are remaining , excess cash balances approximately 377 million .

Speaker #2: Adjusted EBITDA will be back half-weighted due to the typical seasonality and marketing investment in Q1 relative to large seasonal travel period in Q3. At the fork, we expect to deliver margin expansion between $200 and $300 basis points, primarily due to more efficient marketing mix and continued fixed cost leverage.

Speaker #1: During the fourth quarter , we repurchased 3.3 million shares at an average cost per share of $1,515.14 , for a total of 50 million .

Speaker #1: Over the course of the year , we we have repurchased 6.1 million shares pursuant to our program totaling approximately 90 million at an average price per share of 14.72 .

Speaker #2: 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 the anticipated revenue declines.

Speaker #1: Today , we have approximately 110 million remaining in our share repurchase authorization . Combined with the transaction earlier in the year , we've reduced share count by approximately 21% since the end of 20 2024 .

Speaker #2: Turning now to our outlook for Q1. We expect consolidated revenue to be down by 3 to 5 percent 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.

Speaker #1: 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 headwinds impacting our legacy hotels and media advertising business .

Speaker #2: And therefore, it's weighting on consolidated revenue is lower. However, we expect to see consolidated revenue acceleration throughout the year as our marketplace businesses continue to increase their share of group revenue mix.

Speaker #2: 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.

Speaker #1: We expect the mix of our marketplace businesses to continue to grow meaningfully and represent approximately two thirds of our consolidated revenue as we exit 2026 experiences , revenue alone is expected to comprise over half of our consolidated revenue .

Speaker #2: Despite solid growth in our Viator and TripAdvisor points of sale, revenue is expected to accelerate by approximately 1 to 2 percent sequentially in part due to the aforementioned investment we made in Q4.

Speaker #2: We expect revenue growth at the fork of between 20 and 22 percent, which includes the currency benefit of approximately 12 percentage points. We expect hotels and other declines of approximately 21 to 23 percent 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.

Speaker #1: In addition , we expect quarterly performance throughout 2026 to reflect higher seasonality trends that are inherent in scaled Travel marketplace businesses . As experiences and the fork become a larger portion of our consolidated revenue Now , some brief commentary on each of the segments for the full year 2026 .

Speaker #1: Starting with experiences we expect accelerating growth in bookings , GBV , and revenue in our Viator and TripAdvisor points of sale and slowing growth in our three key points of sale .

Speaker #2: We expect consolidated Q1 adjusted EBITDA margin of approximately 3 to 5 percent, a step down is due to the aforementioned revenue headwinds in hotels and other segment, as well as growth investments in experiences this quarter.

Speaker #1: 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 .

Speaker #2: 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.

Speaker #2: At the fork, we expect margins to swing positive year over year, increasing approximately 800 basis points to about 1 percent of revenue, benefiting from marketing efficiencies expected in the quarter.

Speaker #1: 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 gain momentum at the fork .

Speaker #2: In hotels and other, we expect adjusted EBITDA margin between 21 and 23 percent, 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.

Speaker #1: We expect revenue growth in the low to mid teens . This growth rate reflects solid volume driven bookings growth in the B2B , B2C business and healthy expansion in our premium software .

Speaker #2: We expect to see the increased impact of its contribution to our group-finished profile this year, establishing a foundation for multi-year group revenue acceleration while delivering healthy levels of profitability.

Speaker #1: 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 .

Speaker #2: We look forward to updating you on our progress on our next call. With that, I turn the call back over to the operator for Q&A.

Speaker #1: 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 ROI in the paid channels within hotel meta .

Speaker #1: Thank you. Ladies and gentlemen, as a reminder to ask the question, please press start 11 on your telephone. Then wait for your name to be announced.

Speaker #1: To withdraw your question, please press start 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Eric Sheridan with Goldman Sachs.

Speaker #1: Our hotel meta performance is lapping a difficult comp in the first half of this year , as we observe strong pricing . Last year .

Speaker #1: 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 , EBITDA , we expect to deliver flat to modest margin expansion alongside mid single digit growth .

Speaker #1: Your line is open.

Speaker #2: Thanks so much for taking the question. Sticking with the experiences side of the business, can you characterize how you're thinking about the incremental growth investments in the business, especially in the marketing side in response to two things, both the demand signal you think you're getting from the market in terms of experiences growing as percentage of consumer spend, and also in light of what might be different or stable elements of the competitive intensity and experiences?

Speaker #1: EBITDA growth driven by our marketplace businesses and a year in year impact from our cost savings program . We announced on our last call offsetting anticipated declines in our hotels and other segment .

Speaker #1: 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 market efficiencies driven by strong repeat cohorts and by operating our two brands in a more coordinated manner .

Speaker #2: We'd love to get some characterization on both against your growth investments. Thanks so much.

Speaker #3: Yeah, thanks, Eric. Appreciate the question. It's Matt, and I'll take the question and Mike can fill in as he likes. We see the experiences market as very attractive.

Speaker #3: Obviously, it's growing faster than other travel categories. We saw from 19 to 25, the online portion growing at 13 percent. In that period, we grew 22 percent.

Speaker #3: From 22 to 25, the market grew 16 percent online, 22 percent. We grew 22 percent 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.

Speaker #1: 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 .

Speaker #1: At the fork , we expect to deliver margin expansion between 200 300 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 costs , despite the anticipated revenue declines .

Speaker #3: 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 US, and the ability to extend that globally.

Speaker #3: 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.

Speaker #1: 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 .

Speaker #3: 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.

Speaker #1: The anticipated declines in our legacy offering pressure , overall growth in particular , given that Q1 is seasonally low revenue in our marketplace offerings and therefore it's waiting on consolidation , consolidated revenue is lower .

Speaker #3: 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.

Speaker #3: 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.

Speaker #1: However , we expect to see consolidated revenue throughout the year as our marketplace businesses continue to increase their share of group revenue mix on a segment basis .

Speaker #1: We expect experiences , items , growth in the low teens , which is due to the lapping of strong £0.03 growth last year .

Speaker #3: 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.

Speaker #1: 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 .

Speaker #3: 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.

Speaker #1: We expect revenue growth at the fork of between 2020 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% .

Speaker #3: So we feel we sit bullseye 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.

Speaker #3: 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, we can extend the TAM growth, right, by looking into new geographies and categories. We're really well positioned to double down in experiences, at resources and investment that are going to accelerate both growth and profitability over time.

Speaker #1: Step down is due to the aforementioned revenue headwinds in hotels and other segment , as well as growth investments and 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 the fork .

Speaker #1: 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 .

Speaker #2: Yeah, and the only thing I'd add on to that, Eric, would be a little bit about specifically in the marketing approach to add on.

Speaker #2: 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.

Speaker #1: 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 .

Speaker #2: And so I think it is how you find intent and how you convert that intent and we see that intent primarily through the paid channels.

Speaker #1: We expect to see the increased impact of its contribution to our group financial profile this year , establishing a foundation for multi-year group revenue acceleration while delivering healthy levels of profitability .

Speaker #2: And I think we have exceedingly good teams that are good at those conversions. And importantly, importing that those wins over to both our points of sale advisor and TripAdvisor.

Speaker #1: 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 .

Speaker #2: 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.

Speaker #2: Thank you . Ladies and gentlemen , as a reminder to ask the question , please press star one one on your telephone . Then wait for your name to be announced to withdraw your question , please press star one one again .

Speaker #2: We understand that as an investment in a new user, particularly a new user in the category, and that's all then how you drive that repeat behavior.

Speaker #2: Please stand by while we compile the Q&A roster Our first question comes from the line of Eric Sheridan with Goldman Sachs . Your line is open

Speaker #2: 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.

Speaker #2: And that's the formation of how we think about our ROIs.

Speaker #3: Thanks so much for taking the question . Sticking with the experience this side of the business , can you characterize how you're thinking about the incremental growth investments in the business , especially in the marketing side , in response to two 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 and experiences , we'd love to get some characterization on both against your growth investments .

Speaker #1: Thank you. Please stand by for our next question. Our next question comes from the line of Nave Khan with B Riley Securities. Your line is open.

Speaker #4: Okay. Thank you very much. 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.

Speaker #3: Thanks so much

Speaker #4: Yeah . Thanks , Eric . I the question it's Matt . I'll take the question . And Mike can can fill in as he likes We see the experiences market as very attractive .

Speaker #4: And my question is about the fact that you mentioned repeat bookings are up from the previously acquired cohorts. Why not double down on customer acquisition versus giving back some on the EBITDA margin?

Speaker #4: Obviously it's growing faster than other travel categories . We saw , you know , from 19 to 25 . The online portion growing at 13% in that period .

Speaker #4: Why not just optimize for long-term customer growth and maximize the potential there? And then second question is, I think you mentioned that you expect that SEO will be less than 10 percent of the traffic for 2026.

Speaker #4: 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 .

Speaker #4: 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 your thoughts there.

Speaker #4: Looking forward , you know , we think there are a number of reasons that we can really deliver here . The first is the scale .

Speaker #4: We've already achieved , the position we have in our core market in the US , and the ability to extend that globally . You can see that in our GBV .

Speaker #4: Thank you.

Speaker #2: Yeah. I'll hit both and Matt can chime in. So I think the question on growth and profitability, which you're getting at, so I think the profitability this year and experiences are driven by two, two factors.

Speaker #4: 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 .

Speaker #2: One, which we believe we can continue to drive efficiencies in our marketing driven by really product-driven conversion growth, operating two teams, operating two platforms as one, we can drive a lot of efficiencies there.

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #2: We're excited about that. And then two, as you said, Nived, 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.

Speaker #4: We're leveraging our product . And as I mentioned , supply across those brands . And really smoothing the friction to get more conversion .

Speaker #4: 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 .

Speaker #2: 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?

Speaker #2: Which I said, 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.

Speaker #4: 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 .

Speaker #2: And so you've seen us demonstrate that in the Q4 and we'll continue to be flexible and do that as we move through the year.

Speaker #2: 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 the repeat rates we see.

Speaker #4: So we feel we sit bullseye 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 , you know , we're the most profitable experiences player in there .

Speaker #2: Part of the algorithm—we talked about this last call, and we mentioned it again on this call—is how we are expanding our TAM, our addressable TAM, by looking at new regions outside of North America.

Speaker #4: 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 .

Speaker #2: 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.

Speaker #2: And we will 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.

Speaker #4: We're really well positioned to double down and experiences , add resources and investment that are going to accelerate both growth and profitability over time .

Speaker #2: 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.

Speaker #1: Yeah , the only thing I'd add on to that , Eric , would be a little bit about specifically in the marketing approach to add on .

Speaker #1: You know , 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 .

Speaker #2: But we are expecting, on a combined basis, to be below 10 percent, 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.

Speaker #1: And so I think it is how you find intent and how you convert that intent . If and , you know , we see that intent primarily through the paid channels .

Speaker #1: And I think we have exceedingly good teams that that are good at those conversions . And importantly , importing that those wins over to both our points of sale Advisor and TripAdvisor .

Speaker #2: What we are relying on is continued progress in all the things we just talked about, which is marketing leverage—the two platforms being able to leverage the brands more effectively in the paid channels.

Speaker #2: Wherever they may be. Finding new paid channels outside of them, SEM, which we're excited about—the progress there. And it's the continued maturation of our repeat cohorts that are building very nicely.

Speaker #1: 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 and the paid channels .

Speaker #1: You know , we understand that there's an investment in a new user , particularly a new user in the category , and that's all .

Speaker #2: 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-offs we have to make to get there.

Speaker #1: 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 .

Speaker #4: Thank you, Mike.

Speaker #1: And that's the formation of how we think about our Rois

Speaker #2: Yeah. Thanks, Nived.

Speaker #1: Please stand by for our next question. Our next question comes from the line of Nafessa Guptow with Bank of America. Your line is open.

Speaker #2: Thank you Please stand by for our next question Our next question comes from the line of Naved Khan with B Riley Securities . Your line is open

Speaker #5: Hi. Thank you. Hi, 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 TripAdvisor?

Speaker #5: Great . Thank you very much I have a question on the on the experiences margin expansion . I think you're guiding to a few hundred basis points of EBITDA margin expansion in experiences .

Speaker #5: And then I have one more after this.

Speaker #4: Yeah. Did you say you had a second question? Go ahead and ask it.

Speaker #5: Yeah. So I just want to understand about the economics that you're seeing from the large AI platforms in terms of user acquisition. And also how are you thinking about monetizing your user to view data that you have from TripAdvisor core?

Speaker #5: And my question is about the fact that you mentioned repeat bookings are up from the previously acquired cohorts . Why not ? Why not double down on customer acquisition versus giving back some of the EBITDA margin ?

Speaker #4: Okay. Thanks. Yeah. So on the end, AI-native MVP, what we wanted to do was to shift the way that we deliver AI products to our customers.

Speaker #5: Why not just optimize for long term customer growth and maximize the 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 .

Speaker #4: 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.

Speaker #4: 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.

Speaker #5: How should we think about that ? And your long term sort of margin view of maybe this business operating at around mid-twenties EBITDA margin ?

Speaker #5: Just give us your thoughts there . Thank you

Speaker #1: Yeah , I'll hit both . And Matt can chime in . So I think , you know , the question on growth and profitability , which you're getting at .

Speaker #4: And so we've been learning off the last quarters and years of our investment in our AI infrastructure and our products. Which we're really adding on to our existing product.

Speaker #1: So I think the profitability this year and experiences is driven by two two factors . One which we believe we can continue to drive efficiencies in our in marketing driven by really product driven conversion growth , operating two teams operating , you know , two platforms is one we can drive a lot of efficiencies there .

Speaker #4: 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.

Speaker #4: 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.

Speaker #1: We're excited about that . And then two , as you said , Naved Khan 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 .

Speaker #4: And we think that we can ultimately become that trust layer, whether it be on our own products or services, or in partnership with a scaled AI partner.

Speaker #4: 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.

Speaker #1: 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 I said , as I just said , is an investment .

Speaker #1: And we're continuing to look at where we can be smarter and make trade offs . We made some trade offs on Q4 that we liked .

Speaker #4: 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 multiple higher engagement with users than our prior AI travel assistant.

Speaker #1: And so you've seen us demonstrate that in the Q4 , and we'll continue to be flexible and do that as we move through the year .

Speaker #1: But listen , when we are 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 .

Speaker #4: 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 travelers 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.

Speaker #1: 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 cam , our addressable Tam , by looking at new regions outside of North America .

Speaker #4: 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.

Speaker #1: 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 in a new geo , and we will and we'll absolutely update , update you with that with our progress as we move forward with that .

Speaker #4: 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 our I think our UGC to drive can you just repeat the second question?

Speaker #1: But I think we're remaining very nimble and open minded as we think about the growth , growth algorithm . Secondly , on SEO , I think it's just very important that we do see the experience as business , not having a major reliance on SEO and the most of the SEO is coming through the channel today , but we are expecting on a combined basis to be that below 10% .

Speaker #5: Yeah. 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?

Speaker #5: And then, how do you think about monetizing your user review data, given the large data set that you have from users on TripAdvisor?

Speaker #1: As I mentioned on the call . So when we think about long term margin progression , we're not reliant on SEO to to hit our long term margin target .

Speaker #4: 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 have been relatively stable year-on-year, as a really differentiated quality content and data asset to leverage.

Speaker #1: What we are relying on is continued progress on all the things we just talked about , which is marketing leverage to to , you know , two platforms being able to leverage the brands more effectively in the paid channels , wherever they may be .

Speaker #1: You know , finding new paid channels outside of M SM , which we're excited about . The progress there . And it's the continued maturation of our repeat cohorts that are building very nicely .

Speaker #4: 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.

Speaker #1: So , you know , all of those ladder up to we believe , feel very strongly still about our long term margin progression .

Speaker #4: It 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.

Speaker #1: And we're excited about the growth trade offs . We have to make to get there

Speaker #5: Thank you . Mike

Speaker #4: 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.

Speaker #1: Yeah . Thanks

Speaker #2: Please stand by for our next question . Our next question comes from the line of Nafeesa Gupta with Bank of America . Your line is open

Speaker #4: 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.

Speaker #6: Hi . Thank you . Hi , Matt . Could you tell us more about this AI native MVP that you launched in the fourth quarter ?

Speaker #4: So more to come there. Thank you.

Speaker #6: And how that is different from your earlier trip planner ? And then I have one more . After this

Speaker #5: Thank you.

Speaker #4: Yeah . Did you say you had a second question ? Go ahead and ask it

Speaker #6: Yeah . So I just want to understand about the economics that you're seeing from the large AI platforms in terms of user acquisition and also , how are you thinking about monetizing your user review data that you have from TripAdvisor core

Speaker #4: Okay . Thanks . Yeah . So on the on the AI native MVP , what we wanted to do was to shift the way that we deliver AI products to our customers .

Speaker #4: And so we want it to be AI first AI native use the tools and really reimagine what TripAdvisor could in a fully AI native world .

Speaker #4: So we're we're going back to our roots . We want to help people validate their travel choices . With better recommendations that understand who they are .

Speaker #4: 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 .

Speaker #4: Now we're going fully AI native to 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 .

Speaker #4: 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 .

Speaker #4: And we think that we can ultimately become that trust layer , whether it be on our own products or and services or in partnership with a scaled AI partner .

Speaker #4: So we're taking a very different approach . The teams have been , you know , 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 .

Speaker #4: And that revenue . I will say , you know , we're live to a slice of of our 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 .

Speaker #4: And had good early monetization signals . Now , that can be applied to whether you're planning or whether you're in destination . So you know , when when travelers 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 .

Speaker #4: But availability , pricing and logistics are tricky , especially in experiences . So we're we're leveraging our assets there to help travelers experience the destination better .

Speaker #4: And really testing , you know , what's around me now , Geo aware recommendations , proactive offers to drive incremental demand . You know , making it much easier to book and access real time customer support .

Speaker #4: And we think that's going to drive some good , good activity And your second question was how are we going to leverage our I think our UGC to drive .

Speaker #4: Can you just repeat the second question

Speaker #6: Yeah , 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 ?

Speaker #6: 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

Speaker #4: Yeah . So 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 that have been relatively stable year on year as they really differentiated quality content and data asset to leverage .

Speaker #4: 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 .

Speaker #4: It tends to be , you know , 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 .

Speaker #4: We think lower down the funnel . Now that traffic that we're driving through that AI first approach is , is a lower relative percentage of our overall traffic .

Speaker #4: 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 .

Speaker #4: So more to come there . Thank you .

Speaker #6: Thank you

Speaker #2: Thank you Please stand by for our next question . Our next question comes from the line of Stephen Ju with UBS . Your line is open .

Speaker #7: Hey , thank you so much . So I thank , you know , for Viator , I think there was a push for a number of years , if not from yourself , but generally , you know , across the segment to make it progressively less episodic by maybe asking your users to use it , you know , in their home markets .

Speaker #7: So , you know , is that proving to be more challenging or is it just an awareness factor ? Are you getting that activity , picking up currently ?

Speaker #7: And , you know , because , you know , with folks thinking that maybe they should only open up Viator only when they travel ?

Speaker #7: Thanks .

Speaker #4: Yeah , thanks . You know , 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 , you know , an experience that they want to have over a long weekend .

Speaker #4: And of course , you know , our supply is the largest supply available anywhere . So we think that matching that kind of demand is something that we can do .

Speaker #4: Now . We are growing our supply and it will depend on , you know , really going after more local experiences . And that's something that as we continue to invest in supply , we 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 .

Speaker #4: You know , maybe that local supplier who you rent a canoe from to go down the river with your kids , you know , that will be something we will continue to do .

Speaker #4: 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 .

Speaker #4: But it's definitely something that we believe our platform can deliver on . So there will be more there to discuss going forward Thanks .

Speaker #7: Thank you .

Speaker #8: Thank you

Speaker #2: Please stand by for our next question Our next question comes from the line of Lloyd Walmsley with Mizuho . Your line is open

Speaker #9: Thanks . I've got two questions . First , just drilling into the geographic expansion for experiences . How much of that is building supply ?

Speaker #9: You know , 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 ?

Speaker #9: It's more marketing , just anything you can help us understand on on the plan for geographic expansion And then the second one was just , you know , you sort of hinted at the potential for evolution in the partnerships with the larger AI search platforms .

Speaker #9: Like anything you can tell us either specifically or should we expect evolution , there ? This year in any meaningful way ? Anything you can share there would be great .

Speaker #9: Thanks

Speaker #4: Yeah , thanks , Lloyd . On the Geo expansion , it's a combination of both , but of course , you know , we're already serving U.S.

Speaker #4: 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 and particular locations .

Speaker #4: 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 .

Speaker #4: We've done some in English language , but I would say we are under optimized as we think about that native traveler from international source markets .

Speaker #4: 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 .

Speaker #4: We have the TripAdvisor brand , which is highly trusted and huge awareness in Europe . And Asia . And obviously we can leverage that .

Speaker #4: We can use those signals of intent to go target the right We can use AI to localize through translation and do that relatively quickly .

Speaker #4: And then , of course , we can leverage all of our data to go and target through our marketing channels in those geographic locations .

Speaker #4: So think local sourcing of new markets as a meaningful opportunity for us ahead , which we're just getting going on . And we're we're excited about that .

Speaker #4: With more to come . In the second question about our partnership opportunities , we are very excited about what's ahead in our partnership opportunities .

Speaker #4: 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 .

Speaker #4: That was valuable and really get a set of partners going . So you saw us working with OpenAI , with TripAdvisor and the fork apps , and we just announced today that this week the Viateur app is there .

Speaker #4: We're learning a lot through that integration about Agentic AI . We're we've got a licensing arrangement there with companies like Amazon and Snap .

Speaker #4: We're exploring multimodal AI . We've explored marketplace data with Microsoft and 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 .

Speaker #4: We generated meaningful revenue through these in a diverse way . I don't think we've broken that out publicly , but , you know , we expect it's been growing and we expect that to continue growing across licensing revenue linked back traffic and integrating our products .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: And as we put our foundation together , we were limited in how we wanted our brand , our content and data to be used .

Speaker #4: 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 .

Speaker #4: And we think we have the assets to be a deeper partner with a select partner , because what they need is a trust layer .

Speaker #4: They need cross 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 .

Speaker #4: 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 .

Speaker #4: 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 .

Speaker #4: And so we think that nobody's figured that out or cracked it yet . And we think that we bring brand , content , data and scale to help make that happen .

Speaker #4: It's an execution challenge . And that's where we think our role is really compelling because we bring trusted human judgment scaled experiences , supply and a transaction layer that , you know , with our 8 million plus POIs , it's our and our sort of , you know , social proof through our UGC that may be missing .

Speaker #4: And so we're going to go after it . We also think that , you know , trust and being neutral and being able to work with a with a broad player is an opportunity ahead

Speaker #2: Thank you Please stand by for our next question . Our next question comes from the line of Jed Kelly with Oppenheimer and Company .

Speaker #2: Your line is open

Speaker #10: Hey , great . Thanks for taking my question Just just drilling down to experiences . You know , obviously the marketing was up quite a bit in fourth quarter .

Speaker #10: Can you just talk about the competitive intensity around that or is that more from from you testing new channels ? And then the other thing with , with experiences , have you looked into getting into more partnerships that could actually drive more repeat traffic , such as like event ticketing ?

Speaker #10: Thank you

Speaker #1: Yeah , I'll take the first one . Yeah . Matt , take the second one . You know , listen , I think in terms of the marketing spend in Q4 , one no change in approach .

Speaker #1: As I , as I was talking earlier with Naved , you know , we are looking and driving a very disciplined set of Rois in our marketing spend .

Speaker #1: And where we think we can drive growth , we will look to do so based on the same set of of of criteria .

Speaker #1: 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 .

Speaker #1: So in our minds , you know , the marketing spend was , was , was kind of in line to our historical discipline approach .

Speaker #1: The way we approach it . And as I said earlier , we're going to be flexible . And as we approach , as we move through the year , we always are going to be seeking ways to , you know , grow , accelerate , take , share .

Speaker #1: 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 .

Speaker #4: Yeah . And on your second question , Jed , around partnerships to drive repeat booking . Absolutely . We are always talking with a variety of partners .

Speaker #4: We have a strong B2B team and a partnerships team , live events and ticketing . As you just described , is one area .

Speaker #4: Earlier we were talking about local activities that we could go after . So it's a combination of partnerships and supply and is something we're focused on .

Speaker #4: 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 two of them , and I think you can expect to hear more from us on on some of those opportunities ahead .

Speaker #10: Thank you .

Speaker #1: Thanks , Jed .

Speaker #2: Our next question comes from the line of Tom white with D.A. Davidson and Company . Your line is open .

Speaker #5: Hey .

Speaker #11: This is Wyatt on for Tom . Thanks for taking our question . Just given the heavy fragmentation and experiences , is that technically better insulated from potential AI disintermediation ?

Speaker #11: And I'd like to hear your thoughts on maybe how experiences or maybe uniquely positioned in the travel space . Thanks

Speaker #4: Yeah , I think that , Tom , thanks for the question . I think you're commentary about the long tail of fragmented supply with , you know , all of those hundreds of thousands of small businesses that are out there to go after .

Speaker #4: And we feel really good about our penetration there . I think you're right . I think that does insulate AI , disintermediation . You know , there's a couple other reasons why I think it's insulated and durable .

Speaker #4: Ahead . First , you know , 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 .

Speaker #4: Taking friction out of the journey , putting in place all of the infrastructure as a marketplace You know , customer service , dealing with the logistical challenges .

Speaker #4: And then I think , you know , the way that , you know , we've been competing effectively in these high intent demand channels and getting these repeat economics going is also , you know , an insulation .

Speaker #4: There . So we think that positions us really well . And of course , you know , we will continue to to drive that flywheel and only strengthen the durability and potential to defend .

Speaker #4: So I think it's a good question . And that's exactly how we're approaching it . Thanks .

Speaker #2: Thank you . 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 .

Speaker #4: Yeah , thanks for thanks for that . And thanks , everyone , for joining us today . We covered a lot on this morning's call .

Speaker #4: I think the most important thing is , you know , we are excited about 2026 . And executing on our priorities . We think will drive durable , sustained long term shareholder returns .

Speaker #4: 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 .

Speaker #4: We're looking forward to 2026 and updating you on our progress and plans on the next call . Thank you everyone