A Major Shareholder Sells Off Travelzoo Stock for a Lucrative Deal Amid Q2 2025 Earnings Report

A major shareholder, Azzurro Capital Inc, has sold 47,500 shares of Travelzoo (TZOO) stock for $485,425. The company reported Q2 2025 earnings with a 13% YoY revenue increase to $23.9 million, but operating profit decreased to $2.1 million due to marketing expenses. Noble Capital adjusted its price target citing conservative gross margin expectations for 2026. Spark, TipRanks' AI Analyst, rates TZOO as Neutral, citing strong profitability and cash flow but weak balance sheet and technical indicators.

Travelzoo (NASDAQ: TZOO), an internet media company specializing in travel deals and experiences, reported its second-quarter 2025 financial results on July 23, 2025. The company reported a 13% year-over-year (YoY) increase in GAAP revenue to $23.9 million, surpassing analyst estimates of $23.3888 million (GAAP) [1]. However, GAAP earnings per share (EPS) declined sharply to $0.12, missing consensus expectations of $0.236 and falling from $0.23 a year ago. The quarter was characterized by robust top-line growth but near-term profitability pressure due to aggressive spending on marketing for its paid membership program.

Key highlights from the quarter include:

- Revenue Growth: Travelzoo's GAAP revenue increased 13% year-over-year to $23.9 million, driven by membership gains in North America and within Jack’s Flight Club, a subscription service offering discounted flight alerts to members. The North America segment saw revenue increase 14% year-over-year to $16.1 million, with an operating profit of $2.8 million. However, its operating margin declined to 17% from 26% a year ago, reflecting higher marketing investments [1].
- Jack's Flight Club: The segment grew revenue by 33% year-over-year to $1.4 million and saw premium subscriber numbers rise 15% year-over-year. This segment posted an operating profit of $156,000, compared to a small loss last year [1].
- Europe Segment: Revenue in Europe advanced 7% to $6.4 million, but the segment swung to a loss of $0.88 million from a $0.51 million profit a year earlier. The loss was mainly attributed to increased spending on acquiring new Club Members [1].
- Operating Profit: Operating profit (GAAP) for the whole company dropped substantially year-over-year, coming in at $2.1 million under generally accepted accounting principles (GAAP) and $2.4 million on a Non-GAAP basis. This decline was primarily due to the immediate expense recognition for marketing spend, coupled with the recognition of membership revenue over a full year [1].
- Cash Position: Travelzoo's cash and cash equivalents at quarter end totaled $10.4 million, and cash flow from operations (GAAP) fell to $1.3 million versus $3.3 million in Q1 2025 [1].
- Share Repurchases: The company used $2.5 million to repurchase 172,088 of its own shares, as management sought to take advantage of perceived value in the company’s stock [1].

Looking ahead, Travelzoo management projects that revenue growth will accelerate in Q3 2025 and beyond as more membership fees are recognized over time and additional free Legacy Members convert to paid status. The company expects that as the base of recurring fee revenue builds, profitability should "substantially increase," although short-term EPS and profit may continue to see fluctuations due to the timing of marketing expenses and recognized revenue [1].

On July 30 and July 31, 2025, Azzurro Capital Inc., a ten-percent owner of Travelzoo, sold a total of 47,500 shares of common stock for approximately $485,425. The sales come as Travelzoo trades near its 52-week low of $9.16, having declined nearly 50% over the past six months [2].

Investors will likely focus on the conversion rate of free to paid members, retention trends, further development of Travelzoo META experiences, and any noticeable improvement in segment profitability. Ongoing cash allocation to share repurchase and negative equity trends on the balance sheet will also be important to watch over the coming quarters.

References:
[1] https://www.nasdaq.com/articles/travelzoo-posts-13-revenue-gain-q2
[2] https://www.investing.com/news/insider-trading-news/azzurro-capital-sells-travelzoo-tzoo-shares-worth-485k-93CH-4166651