trivago N.V. (NASDAQ:TRVG) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 08:00 am ET

Previous

trivago N.V. (NASDAQ:TRVG) Q3 2019 Earnings Conference Call Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good day, ladies and gentlemen, thank you for standing by, and welcome to the trivago's Q3 Earnings Call 2019. I must advise you, that the call is being recorded today, that's Tuesday, November 5, 2019. We are pleased to be joined on the call today by Rolf Schromgens, trivago's CEO and Managing Director; Axel Hefer, trivago's CFO and Managing Director. The following discussions include responses to your questions. Reflects management's views as of today, November 5, 2019 only.

trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to today's press release on the company filings with the SEC for information about factors which could cause trivago's actual results to differ materially from these forward-looking statements.

You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed in today's trivago's earnings release, which is posted on the company's IR website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations site for more important content including today's earnings release. Finally, unless otherwise stated all comparisons on this call will be against results for the comparable period of 2018.

With that let me turn the call over to Rolf. Please go ahead, sir.

Executive
Rolf Schromgens

Good morning and welcome everybody. Many thanks for joining our third quarter 2019 earnings call. Overall, this quarter brought mixed results but some developments make us hopeful for the long-term future. Q3 was the first quarter since we started our marketing optimization in which we have reinvested again into growth. At the same time, it marks the fifth consecutive quarter with nice profitability. We were able to improve our revenue growth compared to the second quarter, but less than we expected.

On the one hand, one can clearly see that in the Americas, the segment where we raised our advertising spend our investment paid out, we were able to reach profitability growth close to 20%, which we believe is fairly above market growth.

This gives us confidence that we are able to grow our market share in a relatively stable environment. On the other hand, the softness in the business in Developed Europe and Rest of the World generally and the volatility in our marketplace, specifically, had direct negative impact, and we did not foresee the magnitude of this. We continue to invest into learning and progress. The removal of the relevance assessment and the introduction of bid modifiers led to a adaption process that increase the volatility in our marketplace. For some of our asset holders, it takes longer to adapt to the new environment, and as they adapt, this can have a negative impact on competition.

Nevertheless, we are confident that our investment into increased flexibility is the right step and will benefit our advertisers and trivago in the long term. Besides the roll out of bid modifiers which are life in