TripAdvisor's EBITDA Margins Widen as Hotels Segment Falters

Date of Call: Feb 12, 2026

Financials Results

• Revenue: Q4: $411 million, flat YOY; Full Year: $1.9 billion, up 3% YOY
• Operating Margin: Q4 Consolidated Adjusted EBITDA margin: 11% of revenue; Full Year Consolidated Adjusted EBITDA margin: 17% of revenue

Guidance:

• Full Year 2026 consolidated revenue expected to grow modestly, with marketplace businesses representing ~2/3 of revenue by year-end.
• Experiences revenue expected to comprise over half of consolidated revenue.
• Experiences adjusted EBITDA margin expected to expand 300-400 bps; TheFork margin expected to expand 200-300 bps; Hotels and Other margin expected to decline 150-250 bps.
• Consolidated EBITDA margin expected flat to modest expansion alongside mid-single-digit EBITDA growth.
• Q1 2026 consolidated revenue expected down 3-5% YOY; Experiences revenue growth in low teens; TheFork revenue growth 20-22%; Hotels and Other revenue decline ~21-23%.
• Q1 consolidated adjusted EBITDA margin expected 3-5%.

Business Commentary:

Revenue Growth and Segment Performance:

• TripAdvisor reported record revenue of $1.9 billion for 2025, a 3% increase from the previous year.
• The growth was driven by a 10% increase in the Experiences segment and a 22% growth in TheFork, offsetting an 8% decline in the Hotels and Other segment.

Shift to Marketplace Focus:

• Marketplace businesses represented 61% of group revenue and 35% of adjusted EBITDA in 2025, compared to 59% of revenue and all of the group's profit from legacy offerings in 2022.
• The company is shifting its focus and investment toward a large and growing marketplace opportunity, particularly in experiences, replacing constrained SEO-dependent legacy offerings.

Experiences Segment Performance:

• The Experiences segment achieved a 10% increase in revenue, with a 16% increase in gross booking value (GBV) in Q4.
• The growth was supported by a strong increase in repeat bookings, which are the most profitable customer base, and strategic investments in marketing, product, and supply.

AI and Innovation Strategy:

• TripAdvisor launched an AI-native MVP in Q4, which showed higher engagement and conversion rates compared to prior AI efforts.
• The AI initiative focuses on utilizing company data to enhance personalized recommendations and customer engagement, with significant traffic increases from AI-related sources.

TheFork's Strategic Positioning:

• TheFork reported an 18% increase in Q4 revenue, with a 9% growth in bookings in its B2C channel and strong growth in its B2B subscription offering.
• The company is exploring strategic alternatives for TheFork, viewing it as a valuable business with attractive long-term growth potential, while focusing on its core experiences strategy.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed being 'pleased with our 2025 results' and 'excited about 2026.' They noted 'record high revenue of $1.9 billion,' 'continued momentum,' and that Experiences 'firmly establishing it as the group's primary value driver.' The AI-native MVP 'outperforming our prior on-site AI efforts' and early data indicating 'higher engagement' and 'good early monetization signals' also support a positive outlook.

Q&A:

• Question from Eric Sheridan (Goldman Sachs): Can you characterize how you're thinking about the incremental growth investments in Experiences, especially on marketing, in response to market demand and competitive intensity?
  Response: Management sees the Experiences market as attractive and growing faster than other travel categories, with scale, strong unit economics, and a profitable position enabling flexibility to invest further in driving global leadership and accelerating growth/profitability.

• Question from Naved Khan (B. Riley Securities): Why not double down on customer acquisition versus giving back some EBITDA margin in Experiences? Also, how should we think about SEO being less than 10% of traffic and the long-term margin view?
  Response: Profitability is driven by marketing efficiencies and repeat cohorts; the company remains nimble on growth/profit trade-offs, especially as it expands into new geographies. Long-term margin progression relies on marketing leverage, repeat cohorts, and new paid channels, not SEO, with SEO expected to be <10% of GBV.

• Question from Nafeesa Gupta (Bank of America): Could you tell us more about the AI-native MVP launched in Q4 and how it differs from the Trip Planner? Also, what economics are you seeing from large AI platforms and how are you thinking about monetizing user review data?
  Response: The AI-native MVP is a reinvented, fully AI-first approach to recommendations and personalization, showing higher engagement and monetization signals early. Traffic from AI platforms is growing fast, has higher intent/conversion, but is a smaller portion of overall traffic. UGC data is stable and valuable for partnerships and own platforms.

• Question from Stephen Ju (UBS): Is the push to make Viator less episodic and more used at home proving challenging or just an awareness factor?
  Response: The focus is currently on entering new geographies and categories; attracting local domestic demand is a future growth area but not the current priority, with supply expansion enabling that over time.

• Question from Lloyd Walmsley (Mizuho): Drilling into geographic expansion for Experiences, how much is building supply vs. demand in new markets? Also, any evolution expected in partnerships with large AI search platforms this year?
  Response: Geo expansion involves a combination of new supply for international source markets and leveraging existing supply. Partnerships with AI platforms are evolving beyond 2025's foundation, with conversations about deeper, less constrained partnerships to address the trust gap between AI planning and booking.

• Question from Jed Kelly (Oppenheimer & Co.): Was the increased marketing spend in Q4 due to competitive intensity or testing new channels? Also, have you looked into partnerships to drive repeat traffic like event ticketing?
  Response: Marketing spend was in line with disciplined ROI targets; as a percent of GBV, it was flat YOY. The company is always exploring partnerships, including event ticketing and local activities, to drive repeat bookings.

• Question from Wyatt Swanson (D.A. Davidson & Co.): Given the fragmentation in Experiences, is that better insulated from AI disintermediation? How are Experiences uniquely positioned?
  Response: Yes, the fragmented long-tail supply base, low SEO dependency, high customer loyalty, and the company's marketplace infrastructure insulate it from AI disintermediation, positioning it durably.

Contradiction Point 1

Strategic Focus on Geographic Expansion for Experiences

The primary focus for geographic expansion shifts from leveraging the Tripadvisor brand and entering new source markets to a combination that prioritizes sourcing new supply appealing to international markets.

What are your thoughts on the recent partnership with Mizuho? - Lloyd Walmsley (Mizuho)

20260212-2025 Q4: The primary focus is on sourcing new supply that appeals to international source markets. This involves leveraging the TripAdvisor brand, using AI for localization, and targeted marketing. - Matthew Goldberg(CEO)

Is the geographic expansion for Experiences focused on building new supply/demand or selling North American offerings into new sales channels? - Robert (on behalf of Ronald Josey, Citi)

2025Q3: Geo expansion (e.g., Europe, where Tripadvisor has strong brand awareness) offers attractive ROIs for new user growth. - Mike Noonan(CFO)

Contradiction Point 2

Partnership Strategy with AI Search Platforms

The timeline and focus for partnerships with AI platforms shift from being in an early-stage, exploratory phase to planning deeper, value-exchange partnerships in 2026.

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20260212-2025 Q4: In 2026, the focus shifts to deeper partnerships, aiming to address the 'confidence gap' between AI planning and booking. - Matthew Goldberg(CEO)

Are there any potential developments in partnerships with larger AI search platforms this year? - Dae Lee (on behalf of Doug Anmuth, JPMorgan Chase & Co.)

2025Q3: Partnerships (e.g., with ChatGPT) are differentiated and offer good value exchange, with scaling opportunities. - Matthew Goldberg(CEO)

Contradiction Point 3

Marketing Efficiency and Spend

Contradiction on whether marketing spend increased due to efficiency or competitive pressure.

What are the key drivers of the company's current earnings performance? - Jed Kelly (Oppenheimer & Co.)

20260212-2025 Q4: The increased marketing spend was part of a disciplined, ROI-driven approach to accelerate growth. Marketing as a percent of GBV remained flat year-over-year, indicating it was in line with historical criteria. - Mike Noonan(CFO)

1) Was the Q4 marketing spend increase due to competitive pressures or new channel testing? 2) Have you explored strategic partnerships to drive repeat traffic, such as event ticketing platforms? - Kevin Kopelman (TD Cowen)

2025Q1: The flat marketing line reflects continued progression and efficiency. The year-over-year comparison was aided by lapping a larger brand campaign in Q1 2024. The primary flywheel for acquisition and loyalty remains efficient performance marketing. - Matt Goldberg(CEO)

Contradiction Point 4

Long-Term Margin Framework

Inconsistency on the primary driver for achieving target margins.

What is the question from Naved Khan (B. Riley Securities)? - Naved Khan (B. Riley Securities)

20260212-2025 Q4: Long-term margin progression is not reliant on SEO. It is based on marketing leverage across paid channels, finding new paid channels beyond SEM, and the continued maturation of high-margin repeat cohorts. - Mike Noonan(CFO)

1) Why prioritize EBITDA margin expansion over customer acquisition in Experiences? 2) How will reduced SEO traffic and mid-20s EBITDA margins affect long-term margin outlook? - Ben Miller (Goldman Sachs)

2025Q1: The primary driver for achieving OTA margins is product-led growth that improves funnel conversion and user experience, allowing for more efficient marketing spend. - Mike Noonan(CFO)

Contradiction Point 5

Characterization and Outlook for Free Traffic Headwinds at Brand Tripadvisor

Contradiction on the persistence and impact of free traffic challenges.

Can you provide an update on Q4 revenue performance? - Jed Kelly (Oppenheimer & Co.)

20260212-2025 Q4: The increased marketing spend was part of a disciplined, ROI-driven approach to accelerate growth. Marketing as a percent of GBV remained flat year-over-year, indicating it was in line with historical criteria. - Mike Noonan(CFO)

1) What drove the increased Q4 marketing spend: competitive intensity or testing new channels? 2) Have you explored partnerships, such as event ticketing, to drive repeat traffic? - Richard J. Clarke (Sanford C. Bernstein & Co., LLC.)

2025Q2: Acknowledged that free traffic headwinds at Brand Tripadvisor have persisted. Stated it's too early to call 2026 as the stabilization year... - Michael Noonan(CFO)