Tripadvisor's Q2 Earnings and Revenues Miss Amid Macro Pressures

Revenues decreased 16.5% year over year to $441.9 million and missed the consensus mark by 13.12%.

TripAdvisor shares have appreciated 38.3% year to date, outperforming the Zacks Retail-Wholesale sector's 9.3% decline.

Q2 Details of TRIP

Experiences: Revenues for the segment came in at $278.6 million, reflecting year-over-year growth of 3%. Excluding currency, growth was approximately 2%.

The number of experience bookings was approximately 6.5 million in the quarter, up approximately 5% year over year. Viator, TripAdvisor's largest owned and operated point of sale, delivered 10% bookings growth, while sustained SEO headwinds on the TripAdvisor point of sale pressured overall segment growth by approximately 5 percentage points.

Gross booking value reached approximately $1.4 billion, reflecting year-over-year growth of approximately 3%. Testing around discounting and a higher mix of lower-priced items pressured average booking value.

Adjusted EBITDA for the segment was $30.8 million, or 11.1% of segment revenue, compared with $37.8 million, or 14% of segment revenue, in the year-ago quarter. Deleverage was primarily driven by a free-to-paid channel mix shift across Viator and the TripAdvisor point of sale.

Hotels & Other: Revenues totaled $163.3 million, down 21% year over year.

Hotels revenues were $117.9 million, down 23% year over year, as strong pricing growth was more than offset by hotel shopper volume headwinds. Media and advertising revenues declined 12% to $31.2 million on softer on-site traffic. Other revenues fell 20% to $14.2 million.

Adjusted EBITDA for the segment was $45.6 million, or 27.9% of segment revenues, compared with $59.4 million, or 28.9% of segment revenues, a year ago. Margin deleverage was driven by an ongoing shift in prepaid channel mix and higher technology costs, partly offset by lower personnel costs.

TheFork: Following the June 2026 agreement to sell TheFork to American Express for $700 million, the business is now classified as discontinued operations and is no longer a reportable segment. Revenues for TheFork were $61 million, up 13% year over year (10% in constant currency), with adjusted EBITDA of $11 million, or approximately 19% of revenues. The transaction, expected to close by the end of 2026, is anticipated to generate net proceeds of approximately $680 million.

TRIP's Operating Results

Total costs and expenses from continuing operations were $404.1 million, down 3% year over year.

Cost of sales fell 15% year over year to $31 million, or 7% of revenue, aided by a benefit of approximately $2 million tied to an indirect tax refund.

Marketing costs rose 4% year over year to $215.4 million, or 48.7% of revenue, driven by continued free-to-paid channel mix pressure, including SEO headwinds in Experiences and Hotels & Other.

Personnel costs declined 21% year over year to $99.2 million, or 22.4% of revenue, reflecting lower Hotels & Other costs and reduced stock-based compensation tied to the 2025 cost savings program.

Technology costs were largely flat year over year at $21.6 million, or 4.9% of revenues. General and administrative costs rose 53% year over year to $14.5 million, or 3.3% of revenues, against an easier prior-year comparison stemming from a one-time true-up.

Operating income was $37.8 million compared with $57.9 million in the year-ago quarter.

Total adjusted EBITDA from continuing operations was $76.4 million, 17.3% of revenues, down 21% from $97.2 million and 20.4% of revenues, a year ago.

TRIP's Balance Sheet and Cash Flow

As of Jun 30, 2026, cash and cash equivalents from continuing operations were $843.2 million, down from $1.12 billion as of March 31, 2026, primarily reflecting the repayment of $345.4 million in 2026 Senior Notes on April 1. Long-term debt stood at $815.9 million, compared with $817.5 million at the end of the first quarter.

Operating cash flow from continuing operations was $141.2 million compared with $203.7 million in the year-ago quarter. Free cash flow was $129.8 million compared with $183.4 million a year ago.

The company did not repurchase any shares in the quarter given its ongoing portfolio review, including the TheFork sale process. Approximately $110 million remains available under the existing share repurchase authorization.

Q3 2026 Guidance

For the third quarter, TripAdvisor expects Experiences bookings growth of approximately 5% to 7% and revenues in a range of a 2% decline to 1% growth, including approximately 1 percentage point of currency headwind. Experiences adjusted EBITDA margin is expected in the 14% to 17% range.

Hotels & Other revenues are expected to decline approximately 20-23%, with adjusted EBITDA margin of approximately 22-25%.

On a consolidated continuing operations basis, TripAdvisor expects third-quarter revenues to decline 7-10%, with adjusted EBITDA margin of 17-20%. Management noted a more prudent outlook for the second half of 2026, citing continued macro uncertainty, weather-related cancellations and softer U.S. to Europe demand, while characterizing these pressures as transitory rather than structural.

Zacks Rank & Other Stocks to Consider

TRIP currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader sector are The TJX Companies TJX, Abercrombie & Fitch ANF and Five Below FIVE. Each stock carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The TJX Companies is set to report second-quarter fiscal 2027 results on Aug. 19. The Zacks Consensus Estimate for The TJX Companies’ second-quarter EPS is pegged at $1.18, up by a penny over the past 30 days and indicating an improvement of 5.1% year over year.

Abercrombie & Fitch is slated to report second-quarter fiscal 2027 results on Aug. 26. The Zacks Consensus Estimate for Abercrombie & Fitch’s second-quarter earnings is pegged at $1.9 per share, unchanged over the past 30 days and indicating a decline of 18.1% year over year.

Five Below is slated to report second-quarter fiscal 2027 results on Aug. 26. The Zacks Consensus Estimate for Five Below’s second-quarter earnings is pegged at $1.28 per share, up by 4cents over the past 30 days and indicating an improvement of 58.02% year over year.

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