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DATE
Thursday, November 6, 2025 at 8:30 a.m. ET
CALL PARTICIPANTS
Chief Executive Officer — Matt Goldberg
Chief Financial Officer — Mike Noonan
Senior Vice President, Investor Relations — Angela White
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RISKS
Brand Tripadvisor revenue declined by 8% due to "stronger than anticipated traffic headwinds that accelerated throughout the quarter, negatively affecting both free and paid channels," according to Mike Noonan, with expectations for continued revenue declines in the low teens next quarter.
Legacy hotel meta business exposed to structural headwinds from search engine optimization shifts, with management stating, "with Google taking more and more share of the search traffic for themselves, we're just not gonna be able to grow that business at the level of profitability that we'd like."
Segment expense deleverage at Brand Tripadvisor, as "Marketing costs were 41% of revenue, higher by 150 basis points," according to Mike Noonan, primarily due to the traffic headwinds.
Viator and Brand Tripadvisor headcount reductions included in a cost savings program targeting $85 million in annualized savings, which will involve a headcount reduction of approximately 20% across those areas.
TAKEAWAYS
Consolidated Revenue -- $553 million, representing 4% growth, in line with expectations.
Adjusted EBITDA -- $123 million, 22% of revenue, exceeding internal targets.
Viator Segment Performance -- Experiences booked grew 18%, gross booking value (GBV) rose 15% to $1.3 billion, and segment revenue increased 9% to $294 million; FX contributed approximately 3 percentage points to GBV and revenue growth.
Viator Adjusted EBITDA -- $50 million, a 17% margin and 550 basis points improvement, mainly from a more efficient marketing channel mix and direct/repeat bookings.
Brand Tripadvisor Revenue -- $235 million, down 8%, with branded hotels declining 5% to $143 million and media/advertising falling 11% to $36 million; experiences and dining revenue dropped 9% to $47 million.
Brand Tripadvisor Adjusted EBITDA -- $59 million, or 25% of revenue, outperforming internal margin expectations despite revenue pressure.
The Fork Segment -- Revenue was $63 million, up 28% (20% in constant currency), with a 22% adjusted EBITDA margin, nearly double last year; B2C bookings rose 11% overall, 13% direct.
Cost Savings Program -- Targeting $85 million in annualized gross savings, primarily through a 20% headcount reduction across Brand Tripadvisor, corporate G&A, and Viator, executed in Q4 and throughout 2026, with full benefit expected by 2027.
Q4 and Full Year 2025 Outlook -- Q4 consolidated revenue expected to be flat year-over-year, with adjusted EBITDA margin guidance of 11%-13%; full-year 2025 consolidated revenue growth guided at 3%-4%, with unchanged adjusted EBITDA margin expectation of 16%-18%.
Cash Position -- $1.2 billion in cash and equivalents at quarter end, $350 million in term loan B proceeds reserved for convertible notes due April 2026, yielding an excess cash balance of $175 million post-liabilities.
Share Repurchase Authorization -- $160 million remains authorized for share repurchases, with the program expected to restart in the current quarter.
Strategic Operating Model Shift -- The company will "our Viator and Tripadvisor experiences operations," according to Matt Goldberg to focus on experiences as the primary growth lever; management expects to report three new segments: experiences, hotels and other, and The Fork.
Marketplace Revenue Mix -- Viator and The Fork accounted for nearly 60% of group revenue and 30% of group profitability in the past twelve months, up from 40% and a much lower profitability share three years ago; these businesses delivered an incremental $150 million of adjusted EBITDA over that period.
SUMMARY
Tripadvisor (TRIP 0.07%) announced a fundamental strategic shift toward an experiences-led, AI-enabled operating model, underpinned by $85 million in annualized cost savings and a simplified segment structure. Management emphasized that Viator and The Fork now drive the majority of group revenue and profitability, reflecting a deliberate transition from legacy, SEO-dependent models to marketplace businesses. The outlook included stable-to-moderate growth for 2026, with higher adjusted EBITDA expected from margin improvements, disciplined cost control, and continued diversification of the revenue base.
CEO Goldberg said, "We are aligning ourselves to drive accelerated growth going forward," highlighting expectations for the experiences business to surpass legacy segment revenues and approach double-digit adjusted EBITDA margins.
Management confirmed that an AI-native MVP for travel planning would launch in Q4, with incremental partnerships underway, including "first-of-their-kind apps" according to Matt Goldberg for ChatGBT, and licensing deals with "the majority of the leading AI companies," according to Matt Goldberg.
CFO Noonan stated, "mix of adjusted EBITDA to surpass 50% consolidated EBITDA in fiscal 2026," as group profitability migrates further toward experiences and away from structurally challenged segments.
Management intends to optimize legacy offerings, notably in branded hotels and meta, for profitability only, while reducing incremental investment amid secular declines and search engine traffic headwinds.
The company is actively reviewing portfolio composition, with CEO Goldberg noting, "we consistently evaluate all options to unlock value in all of our assets, and that includes The Fork," signaling openness to divestiture or strategic alternatives.
INDUSTRY GLOSSARY
Gross Booking Value (GBV): Total dollar value of all customer bookings processed through the platform, before deducting cancellations, refunds, or partner payments.
Take Rate: Proportion of GBV retained by the company as revenue after paying out operators or suppliers.
Meta (Metasearch): Aggregated search platform that compares travel prices and options from various providers in a single interface.
3P (Third-Party) Merchant Bookings: Experiences booked via external partner channels, typically with lower average booking value and take rate but carrying no direct marketing costs.
B2B (Business-to-Business): Service model providing products or subscriptions directly to business customers (e.g., restaurants), not end consumers.
B2C (Business-to-Consumer): Products or services provided directly to individual customers or travelers.
MVP (Minimum Viable Product): The initial functional version of a product that allows for early use and iterative improvement, often used for technology pilots like AI-native travel planning tools.
Full Conference Call Transcript
Matt Goldberg: Thanks, Angela. Good morning, everyone. In Q3, we delivered consolidated revenue growth of 4%, to $553 million and adjusted EBITDA of $123 million or 22% of revenue. We were pleased with this performance, which beat our expectations on adjusted EBITDA and was within range for overall revenue growth. This week, we've initiated a set of changes that represent a fundamental shift in our operating model to support a more focused set of strategic priorities. These actions will sharpen our execution focus, which we expect to accelerate revenue growth, improve operating margins, and create a more durable financial profile. To do so, we'll focus on three priorities.
First, extending our leadership position and experiences to drive long-term growth by fully deploying our differentiated assets across Tripadvisor and Viator to win in this category. Second, leveraging our unique content, data, and brand trust for an AI-enabled future by powering our marketplaces and positioning Tripadvisor at the center of an emerging AI ecosystem. And third, narrowing the focus of Brand Tripadvisor to support experiences at our AI future while managing our legacy offerings for profitability. These priorities reflect the shift from optimizing individual brand strategies to speed our transformation into an experiences-led and AI-enabled company. We will direct our focus, talent, and investments to what matters most, resulting in a simpler, leaner, and faster-moving organization.
Our plan is expected to drive significant operational efficiencies of at least $85 million of annualized gross cost savings, which Mike will discuss shortly. But this is not just a cost-cutting exercise. We are aligning ourselves to drive accelerated growth going forward. This is an important moment in the evolution of Tripadvisor Group. We're a very different company than we were three years ago, with a portfolio mix now anchored in high-growth marketplaces delivering more sustainable revenue and profit. In the past twelve months, Viator and The Fork accounted for almost 60% of group revenue, up from approximately 40% in the same period three years ago, representing a 27% CAGR over that period.
In that time, these businesses contributed an incremental gain of more than $150 million of adjusted EBITDA and now comprise 30% of overall group profitability. Today, we are far less dependent on a legacy model built on SEO with its well-known structural headwinds. These trends have reshaped our financial composition, and we expect them to continue. Now let's walk through these priorities in more detail. Our first priority is extending our leadership position and experiences to drive long-term growth. Strategically, we're already well-positioned to win in experiences. We've achieved scale and established a clear track record of growing the top line while expanding profitability from breakeven in 2023 and now approaching double-digit adjusted EBITDA margins.
Earlier this year, we shared that Experiences is becoming the strategic and financial center of gravity for the group. Over the last twelve months, we've achieved $4.6 billion in GBV driven by 17% items growth. And over that same period, for the first time, our total experiences revenue has surpassed the revenue from our legacy business lines. Now experiences will become the unified focus of both Viator and Brand Tripadvisor. The global experiences TAM is expected to reach $350 billion in GBV by 2028, growing faster than any other category in travel. To date, we've been concentrating on the US as our primary source market and focusing mostly on tours and activities.
We believe we can accelerate our growth by addressing new geographic markets and expanding into new categories while benefiting from the tailwinds of growing demand and the offline to online shift. This is a dynamic, fast-growing category without a global digital brand leader. Going after this opportunity will be our primary objective as a group. We believe that our strength to lead the experience category lies in the differentiated assets across our brands that are hard to replicate. At Viator, we're leading in the world's biggest market with the largest global catalog of experiences. Our improved storefront is driving uplift in conversion, repeat, and customer loyalty trends.
Tripadvisor offers two key assets that we expect will drive growth and expansion in experiences: a trusted global brand and proprietary data on more trips and travelers than anyone else in the category. This combined reach, along with our third-party distribution, creates unmatched value for operators. Together, we believe these capabilities give us a unique advantage for our experiences business that we have not yet fully realized. In order to accelerate the next phase of growth, we're unifying our Viator and Tripadvisor experiences operations, unlocking the power of all our resources to focus squarely on this opportunity. This is a significant shift in our operating model designed to drive meaningful outcomes with more efficiency.
Our conviction to go all in on this opportunity is grounded in what we've learned from a period of increased coordination between the Viator and Tripadvisor teams across marketing, product, and supply over the past several months. Here are a few examples. From a demand perspective, as I shared last quarter, we've been experimenting with how Tripadvisor and Viator can operate together in a more coordinated manner. Not as two separate brands with different goals, one focused more on growth, the other focused more on profitability, but as a united team aimed at winning the experiences category.
We began coordinated testing in marketing and found that we could compete more effectively on a combined basis to deliver more efficient marketing spend overall, improving revenue while maintaining profitability. This is just one experiment, but it demonstrates the power of treating our brands as complementary levers working together rather than as separate independent P&Ls. We also believe there's an opportunity to lead with Tripadvisor to put our large global audience in service to experiences in key international markets while leveraging our high brand awareness to acquire more customers more efficiently in paid channels. From a product perspective, we've increased our experiment velocity and coordinated learnings across points of sale.
As a result, our conversion rate has continued to show improvement at both Viator and Tripadvisor. In this new formation, we will lean even harder into these dynamics, focusing on key conversion drivers like personalization, pricing, and availability with more resources deployed to scale our optimizations seamlessly across our full experiences offerings. From a supply perspective, we're expanding on our unmatched scale. Over 400,000 experiences globally and growing. In the last year, we've seen healthy double-digit growth in active products and suppliers. We're broadening our supply coverage in new categories and strengthening our presence in secondary and emerging destinations while building industry-leading connectivity with our recently updated APIs now enabling real-time and dynamic management of pricing and availability.
And we're using Tripadvisor data to identify where new supply is most needed, all while optimizing how new supply performs, improving conversion, refining pricing, and smoothing the experience for both travelers and operators. By unifying our teams behind experienced leadership, we'll build on our strong marketplace flywheel. Our product and supply optimizations accelerate our conversion wins to fuel more efficient and effective marketing, which in turn compounds the conversion gains, driving higher repeat rates and improved unit economics. And now we're unleashing the full power of the Tripadvisor brand and its unmatched global awareness in service of experiences. Our second priority is leveraging our assets to position ourselves for an AI-enabled future.
Tripadvisor is among the most trusted names in travel, built on decades of authentic contributions. Sitting at the privileged intersection of hundreds of millions of travelers and the operators who serve them, we have unique insights about how people make travel decisions. A proprietary knowledge graph across experiences, hotels, and restaurants, which is unique in the industry. And a powerful foundation for what comes next. AI is collapsing discovery, planning, and booking into a single conversational moment. For travelers, it means less friction and faster decisions. In the space for Tripadvisor group, it plays directly to our strengths. We helped invent helping people travel smarter.
At a time when it's hard to know what information to trust, for a highly considered purchase decision like travel, we believe our first-party data, user-generated content, and decades of trust combined with supplier connectivity, detailed pricing information, and booking, gives us a unique advantage to lead in the age of AI. Over the past several quarters, we've experimented with a broad set of efforts to learn how travelers use AI. We've built data science and machine learning capabilities to drive conversation and conversion. And we've explored the role of our content in the AI ecosystem. Here are a few things we've learned.
Angela White: First,
Matt Goldberg: our content and data are unique and valuable. Internally, it's been the foundation of our product innovation and growing engagement. And Tripadvisor is already among the most cited sources by LLMs. According to a recent third-party study, Tripadvisor appeared as the number eight overall and the only travel company in the top 20. Second, travelers have a very specific problem. It's hard to make decisions. There are too many options, and getting it wrong means wasting time and money. That friction is why travelers come to Tripadvisor to inform and validate travel decisions. While LLMs do a good job of generating high-level trip plans, the opportunity lies in the underlying recommendations.
Their social validation and actionability, which we are uniquely positioned to deliver, to help travelers make it happen. And finally, AI is raising customer expectations as they look to solve these problems. Customers are choosing AI-native products over legacy products with AI features. They want technology to remove friction. We will follow the consumer and shift our focus from AI-powered features to a fully AI-native approach. Based on these learnings, we've identified a few specific AI opportunities, each of which we believe has the potential to become the primary way travelers engage. The first opportunity is in the planning phase.
When travelers have a rough idea of an itinerary and are trying to decide what's right for them amidst the unlimited options, Tripadvisor's first-party data and insights position us to curate the most personalized recommendations validated by relevant travelers and make them as immediately actionable as possible. The second opportunity is during the trip itself. Travelers make a lot of last-minute decisions around what to do, see, and eat, but availability, pricing, and logistics are tricky, especially in experiences. So we'll leverage our assets to help travelers experience the destination better while traveling. This presents an opportunity to deploy geo-aware recommendation algorithms and deliver proactive offers with single-tap booking and access to real-time customer support.
We're advancing rapidly on these opportunities and expect to launch an AI-native MVP for the planning phase in the coming weeks in Q4. From there, we'll intend to build a strong foundation to scale and continuously iterate and enhance the customer experience. Of course, we're also exploring how Tripadvisor can deliver value to travelers as a deeply embedded partner with broader AI platforms. As part of our learning agenda, we're directly integrating our Tripadvisor and The Fork brands into ChatGBT through first-of-their-kind apps with a differentiated approach from others. We expect these to be live over the next few weeks. We've signed valuable licensing deals with the majority of the leading AI companies.
And we're experimenting with use cases like AgenTic and multimodal AI. Ultimately, whether we scale AI value creation through on-platform innovation or off-platform partnerships will be decided by our customers. We believe that by focusing on where we are uniquely positioned to serve travelers, maximizing speed of execution, and continuing to fuel the content flywheel that is our most differentiated asset, we can position Tripadvisor at the center of the AI ecosystem in travel. Our final priority is narrowing Brand Tripadvisor's focus. Beyond experiences in AI, we'll optimize Brand Tripadvisor's portfolio to enhance profitability. Over the last few years, we've invested incrementally in Tripadvisor's broad engagement strategy designed to fuel new monetization paths and stabilize our legacy offerings.
However, we recognize that the pace of impact from these investments has not been enough to offset increasing pressure from the shifting SEO landscape. So in our most mature legacy categories, we'll focus strictly on optimizing for profitability. We'll deprioritize the areas that we expect to be in secular decline in favor of shifting resources towards our marketplace growth opportunities while driving efficiency across areas more exposed to ongoing headwinds. Operationally, this will reduce our headcount and better align costs with revenue expectations. Let me be clear. Taken together, these actions are not a deprioritization of the Tripadvisor brand. In fact, we believe Tripadvisor will play an even larger role in group-level value creation moving forward.
Hotels and restaurants will continue to be an important part of planning a trip, and the hundreds of millions of travelers coming to Tripadvisor each month will still enjoy those features. Our partners will continue to benefit from access to these audiences. While this functionality isn't going away, we'll shift Tripadvisor's focus and resourcing to areas where we believe we can deliver the most value to customers. Leverage the brand and traffic to drive experiences growth, position our content and data at the center of the AI ecosystem, and enhance profit from the legacy portfolio. In addition to this set of priorities, The Fork will continue to execute on a financially disciplined growth strategy.
This quarter, the segment continued its strong performance with growth of 28% and a 22% adjusted EBITDA margin, nearly double what it was last year at this time. We will continue to build on our position as the leader in European dining and prioritize the diversification in revenue across B2B and B2C while increasing profitability. We're also excited about the team's innovation agenda, which includes an AI-powered booking assistant that's driving an uplift in conversion and a social feed that allows diners to discover restaurants based on reviews and contributions from their contacts. In summary, we believe that the priorities we shared today position us well for the future to drive value for shareholders.
As part of this ongoing program of work, we will also take additional steps to review our group portfolio as we determine where we'll invest and where we'll simplify further through partnership or divestment. We are building a stronger Tripadvisor group. Focused on faster-growing categories with large TAMs, durable transactional economics, and strong supply. We're prioritizing areas where we have a proven track record and the capabilities to win. We'll do fewer things better, move faster, and optimize the lines of business where our scale or competitive position can't lead the market.
We believe that our actions will strengthen our financial profile by reducing costs, accelerating revenue growth, and growing profitability both in the experiences category and for the group as a whole. With that, I'll turn the call over to Mike.
Mike Noonan: Thanks, Matt, and good morning. I'll start with a review of our financial performance, and later, we'll provide more information on the cost savings program, what our operating model changes will mean for how we report our segments, and some thoughts on Q4. As a reminder, all growth rates are relative to the comparable period in 2024 unless noted otherwise. Q3 consolidated revenue was in line with our expectations of $553 million or 4% growth, and consolidated adjusted EBITDA exceeded our expectations at $123 million or 22% of revenue. In the Viator segment, the number of experiences booked grew 18%.
Growth improved sequentially in both the Tripadvisor and Viator points of sale, while growth in third-party points of sale continued to outpace the overall segment. Importantly, the number of experiences booked through the Tripadvisor point of sale returned to growth this quarter. In North America, our largest source market, we saw bookings growth accelerate sequentially across both points of sale, which we believe is reflective of the strength of both of our brands as we scale our coordinated marketing efforts. Gross booking value or GBV grew 15% to approximately $1.3 billion, and revenue grew 9% to $294 million. Changes in FX positively impacted GBV revenue growth by approximately three percentage points.
The difference between the growth in the number of experiences booked
Mike Noonan: and growth in revenue continues to be driven by the high growth of our third-party merchant bookings relative to 2024. As a reminder, merchant bookings generally have a lower average booking value, which impacts GBV growth relative to volume growth. They also carry a lower implied take rate, which impacts revenue growth relative to GBV growth. While the implied take rate is lower than our owned and operated points of sale, third-party merchant bookings are both financially and strategically valuable. From a financial perspective, these bookings carry an attractive profitability profile.
Strategically, these bookings are largely sourced from regions outside of our core markets, which enable us to reach incremental traveler demand as we continue to scale our new and repeat booker cohorts globally. Viator adjusted EBITDA was $50 million or 17% of revenue, a margin improvement of 550 basis points driven primarily by a more efficient marketing channel mix. We continue to see outsized growth in our direct channels and in repeat bookings, each contributing to our profitable growth profile as repeat bookings cohorts continue to scale. In addition, growth in third-party merchant bookings, which come with no marketing spend, contributed to the segment's total marketing leverage.
Lower marketing costs more than offset modest increases in personnel costs related to targeted investments in technology, product, and supply. Altogether, these trends continue to reinforce our belief in the long-term margin opportunity for this business at scale. At Brand Tripadvisor, Q3 revenue was $235 million, a decline of 8%, which was below our expectations. We experienced stronger than anticipated traffic headwinds that accelerated throughout the quarter, negatively affecting both free and paid channels. In branded hotels, revenue was $143 million, a decline of 5%. In hotel meta, strong pricing in both free and paid channels was more than offset by accelerating traffic volume headwinds.
Regionally, single-digit growth in U.S. hotel meta revenue was more than offset by declines in Europe and APAC. As a reminder, we will continue to manage our branded hotels business for margin stability and not chase low-margin revenue in this category. We remain focused on improving the quality of our hotels and delivering highly qualified incremental demand to our partners. And we believe that success is evident by the sustained pricing growth we continue to witness. Media and advertising revenue declined 11% to $36 million, primarily due to the aforementioned traffic headwinds we incurred in the quarter. Experiences and dining revenue was up $47 million, a decline of 9%.
Growth in Brand Tripadvisor's experiences revenue lags unit volume growth, which returned to growth in the quarter, as I mentioned earlier. Experiences revenue performance was largely stable sequentially, and going forward, we expect experience revenue growth on Tripadvisor point of sale to accelerate as a result of our new operating model. Brand Tripadvisor adjusted EBITDA was $59 million and 25% of revenue, which exceeded our expectations. Despite accelerating traffic headwinds in the quarter, placing additional pressure on revenue, the team did a good job managing the growing reliance on paid channels with fixed cost prudence to exceed margin expectations. Despite pressure on adjusted EBITDA.
At The Fork, Q3 revenue was $63 million or 28% growth and 20% growth in constant currency. B2C bookings volume grew 11% across all channels and 13% on The Fork's branded direct channel. The strength of B2B subscription revenue growth continues to be driven by restaurants adopting higher-priced premium plans, ongoing evidence of the strength of the feature set and overall value proposition delivered to restaurants. While still a minority of The Fork's total revenue, B2B subscription revenue is contributing an increasingly share of the overall revenue mix, which we expect to continue in the future as the team executes on its business model diversification strategy.
Adjusted EBITDA at The Fork was $14 million or 22% of revenue, representing a margin improvement of approximately 10 percentage points driven primarily by leverage in personnel costs. Turning to consolidated expenses for the quarter. Cost of revenue was 7% of revenue, an improvement of 10 basis points. Marketing costs were 41% of revenue, higher by 150 basis points. Modest leverage at Viator was offset by deleverage at Brand Tripadvisor due to the aforementioned traffic headwinds. Personnel cost as a percent of revenue improved by 100 basis points. Investment in Viator personnel offset lower personnel costs at Brand Tripadvisor. Absent share-based compensation, personnel costs were approximately flat as a percent of revenue.
Technology costs at under 5% of revenue were approximately flat with last year. G&A as a percent of revenue improved by approximately 70 basis points driven primarily by lower real estate costs. Now turning to cash and liquidity. Q3 operating cash flow was $45 million and free cash flow was $26 million. On an LTM basis, operating cash flow was $347 million and free cash flow was $261 million, which represents significant improvement from last year due to a more favorable working capital and one-time cash tax settlement charges in the comparable period last year. Total cash and cash equivalents at September 30 were approximately $1.2 billion.
Our cash balance includes approximately $350 million in term loan B proceeds raised in 2025, which we plan to use to pay our outstanding convertible notes due in April 2026. After taking into account deferred merchant payables of approximately $393 million and the $350 million term loan, our remaining excess cash balance is approximately $175 million. During the third quarter, we did not repurchase shares given the operating model changes and cost savings programs we were contemplating. However, we expect to restart our open market repurchases this quarter with our previously communicated programmatic approach, subject to a
Angela White: stable macro environment.
Mike Noonan: Today, we have approximately $160 million remaining in our authorization. We believe that our current cash profile and net leverage levels reflect a strong capital structure with appropriate cash for operating needs. Turning to the gross
Matt Goldberg: savings program.
Mike Noonan: Matt mentioned in his prepared remarks. At the group level, we are sharpening our strategic focus in order to accelerate our ambition in the areas where we believe we have differentiated assets and that can drive meaningful shareholder value. We believe that realigning our strategy, our resources, and our brand and data assets across Viator and Brand Tripadvisor into a new operating model provides an attractive opportunity to accelerate growth and innovation. This operating model change will result in a greatly simplified organization and allow us to operate more efficiently. We will be launching an annualized gross cost savings program of $85 million in Q4 that we intend to execute throughout 2026 and expect to fully realize by '27.
This savings program will primarily include reductions in headcount spanning Brand Tripadvisor, corporate G&A, and Viator by approximately 20%. But will also include other operating expense efficiencies as a result of our operating model change. In 2026, the net impact of our savings program is expected to be lower than $85 million due to the timing of these actions. For example, we expect approximately $10 million of the savings to be recognized in Q4 of this year. And as I mentioned earlier, our plan to invest behind reaccelerating experience growth in 2026 may offset a portion of the savings impact.
While it's too early to provide detailed guidance for next year, our preliminary estimate today on this program's impact to fiscal '26 would be an improvement of approximately 100 basis points to consolidated adjusted EBITDA margin. We will provide another update next quarter given we're still finalizing the '26 plan. Next quarter, we also intend to update our reportable segments to align with our updated operating model and resource allocation strategy. We expect to maintain three segments, which we anticipate will be
Matt Goldberg: experiences,
Mike Noonan: hotels and other, and The Fork. We believe updating our reportable segments will provide investors with a clearer understanding of the growth and margin performance and future opportunity of our entire experiences business, as well as more clearly highlight how we'll manage our legacy businesses. Let me take a moment to quickly explain the major changes that bridge our existing segment structure to our planned updates. In the experiences segment, the definition and disclosure of unit volume, GBV, and revenue will be consistent and unchanged from the way the Viator segment reports today.
However, the cost profile will change to include all fixed and variable expenses related to both brands for experiences, which have been split between the Brand Tripadvisor and Viator segments. By doing this, there will no longer be a need for intersegment eliminations related to experiences, which today is recognized as an affiliate marketing expense in the Viator segment and intercompany revenue for Brand Tripadvisor.
Matt Goldberg: The hotels and other segment
Mike Noonan: will effectively be the current Brand Tripadvisor segment but without experiences-related revenue and expenses. Finally, The Fork segment will remain unchanged from today's disclosure. Given these changes are still in process, I will provide guidance for the fourth quarter and full year consistent with our existing segment structure. Turning to our outlook for Q4. Our expectations for the quarter include the benefit of approximately $10 million to adjusted EBITDA from our aforementioned cost savings program impacting both Brand Tripadvisor and Viator but do not assume any revenue benefits from our new organizational structure, which we are implementing this quarter and expect to drive benefits throughout 2026.
For Q4, we expect consolidated revenue to be approximately flat to last year and consolidated adjusted EBITDA margin of approximately 11% to 13%, which implies the following for each brand: Advisor, we expect total bookings growth in Q4 of approximately 16% to 18%, driven by an acceleration at the Viator and Tripadvisor points of sale. We expect some sequential pressure in GBV growth due to the impact of promotions and a higher mix of lower-priced tickets to average booking value. We expect revenue growth to be in line to slight acceleration with Q3 growth. Adjusted EBITDA margin is expected to be approximately 100 basis points lower due to a nonrecurring indirect tax credit incurred last year.
Absent that one-time benefit, we would expect Viator's adjusted EBITDA margin to increase by approximately 200 basis points. At Brand Tripadvisor, our current expectation is for revenue to decline in the low teens, which assumes Q3 traffic headwinds persist. Adjusted EBITDA margin is expected to decline approximately 900 basis points, driven primarily by pressure in the hotel meta free channels as well as planned marketing spend resulting from ongoing coordinated efforts and experiences. At The Fork, we expect revenue growth in the mid-teens, which reflects a currency benefit of approximately 10 percentage points.
The sequential step down in growth is expected as we are now lapping the scaled growth initiatives in B2B and partnership we began realizing in Q4 of last year. Adjusted EBITDA is expected to be approximately flat year over year. Given our Q4 outlook, we now expect full-year consolidated revenue growth of 3% to 4%. However, our adjusted EBITDA margin expectations remain unchanged at 16% to 18%. We are excited about our strategic direction as we finish the year and believe that the operating model changes and cost savings actions will sharpen our focus and allow us to grow consolidated revenue and adjusted EBITDA and improve adjusted EBITDA margin in fiscal year 2026.
In Experiences, our targeted investments will unlock a larger TAM and position us to accelerate revenue growth and grow adjusted EBITDA. At The Fork, we will continue to execute a financially disciplined growth strategy, and we expect to optimize our legacy offerings and deliver cost savings to maximize profitability in the face of structural headwinds. Over the past few years, we've made notable progress driving a deliberate business model diversification strategy to grow the mix of revenue and adjusted EBITDA from our marketplace businesses. As Matt stated earlier, this year, revenue from Viator and The Fork, our marketplace businesses, are expected to represent 60% of total consolidated revenue and 30% of total adjusted EBITDA in our current segment reporting.
Under our new operating model and segment reporting structure, we expect this revenue mix shift to steadily continue and the mix of adjusted EBITDA to surpass 50% consolidated EBITDA in fiscal 2026, which we believe reflects our strength as an experiences and AI-enabled company and our overall marketplace mix. We look forward to sharing more detail with you on our Q4 earnings call next year. I'll pass the call back over to Matt briefly.
Matt Goldberg: Thanks, Mike. Before we start Q&A, I wanted to take a moment and welcome Alex Dichter to our Board of Directors. Alex joins us with many years of experience as an adviser and operator with deep travel industry knowledge and an extensive background working with organizations across multiple travel verticals to transform and scale their businesses. This is the first step to bringing on fresh perspectives from independent directors, and we're excited to have Alex join the board. He joins us as Greg O'Hara departs, and I want to thank Greg for his contributions and leadership over the years. With that, I'd like to turn the call back to the operator for Q&A.
Angela White: Thank you. The first question comes from the line of Richard J. Clarke of Bernstein. Richard, please go ahead.
Richard J. Clarke: Hi, there. Thanks for taking my questions. Just maybe like to ask a question on your revenue growth assumptions going forward. I think you said you think you can accelerate growth. I'm just wondering what the shape of that will be. If you're investing even less in the sort of meta and Brand Tripadvisor product, is the revenue growth, you know, can you still stabilize better than the mid-teens guide you've set out for Q4? And with the new organizational structure, would you expect your experiences segment to be able to grow faster than the 9%, sort of high single digits that Viator's doing at the moment? What's the kind of shape of revenue growth going forward?
Mike Noonan: Yeah. Hey, Richard. It's Mike. I'll take this. You know, in terms of thinking about the longer-term shape of revenue and as reflective of our operating model, I'll say a few things. As we set ourselves up, you know, in experiences, we do think the operating model and how we're allocating investment to experiences, we are expecting our experiences in our new segment to reaccelerate next year. Right? And that is both a focus on two things. One, geo TAM expansion, looking at new source markets to acquire bookers. Very important in that equation. And category expansion. As we think about other opportunities to bring other types of things to commercialize in the storefront. Think of attractions, right, for example.
So those are two important things as we think about that reacceleration statement next year. We also then, I think, as we think about our hotels and other category, would be our other second new segment, I think we're taking a very pragmatic view of what this looks like. We are, when you think about the traffic headwinds we've seen particularly accelerating in the free channels, and then you take that with how we will be investing, you know, in growth, meaning we're not gonna be prioritizing growth necessarily in the paid channels just for growth. We're gonna really divert those resources to experiences. We would expect continued revenue headwinds next year.
And then in The Fork, just to round out in terms of the growth, we are continuing to expect that The Fork's gonna grow nicely with continued margin evolution. So when you take that all in, when we think about where we sit today, and to be clear, we will be refining our plans as we move to the next three months. From a consolidated perspective, we would expect that we would grow both revenue and EBITDA next year.
When we take into consideration the cost savings program that we've enacted, that really stops the growth of fixed cost in both the Viator and Brand Tripadvisor segments, which would deliver about, we said, about a point of margin improvement to the consolidated financial profile next year. So, again, important moves we're making today that we believe are important for growth and margin for next year, but not just next year. It's really how we set ourselves up for the next several years and driving the experiences opportunity we have in front of us.
Richard J. Clarke: Okay. Makes sense. Thank you.
Mike Noonan: Thanks, Richard.
Angela White: One moment for your next question. The next question comes from the line of Naved Khan of B. Riley Securities.
Naved Khan: Great. Thank you very much. A lot to digest here and make some of the steps here. That you described, Matt, do make sense. I'm just wondering, as you look to reaccelerate growth in the Viator business or the experiences business, is it possible to kind of get kind of closer to your closest competitor? I think they recently disclosed around 30%. And, also, you have kind of expanded margins very nicely in this segment. Is it possible to remain on this margin expansion trajectory as you accelerate growth? How give us your thoughts on how we think between the trade-off between growth reacceleration versus margins.
Matt Goldberg: Thanks, Naved. And I think you've hit right at the core of why we are so enthusiastic about this fundamental shift to our operating model because we believe it allows us to do just that. Reaccelerate growth while we continue to expand margins. And, you know, we are already really leading the category today. You can look at it in many different ways and make judgments about, you know, who's got the best profile. But here let me tell you what I'm excited about our profile. We believe we're in a real position to shape what comes next as the global brand leader in this category.
You know, together with Tripadvisor, it's the category's largest, most trusted, and most profitable platform, and we are building it for sustained growth. Why do I say largest? It's largest because of our scale and reach. You know, we're the global leader in scale with unmatched supply and reach. 400,000 experiences, 65,000 operators, and, of course, we can more fully tap the hundreds of millions of travelers using Tripadvisor monthly. Giving that supply more visibility and more demand that really no competitor can replicate. And the proof points in my mind are, you know, the last twelve months, GBV of $4.6 billion and 17% items growth. And we believe we can accelerate off that. Being trusted has an advantage.
You know, we've got this global reputation of trust, and it's a foundation to grow experiences globally. A very good percentage of our audience from Tripadvisor is coming out of the US even though Viator has primarily focused on the US source market. So that gives us immediate credibility to expand experiences into new markets. We think there'll be lower barriers to adoption in those source markets where travelers already know and use Tripadvisor. And we think that it signals sort of a reliability, which is critical for the emerging category. And, you know, in Europe alone, we have 70% brand awareness, and it's relatively unmonetized today.
So by focusing Tripadvisor on experiences, we have many, many times more visitors to go, take advantage of than others. And finally, profitability. You know, we are driving this performance with financial discipline. And what we've shown is that the category can scale profitably, and we're the only ones who have shown that. We're doing it with efficiency and with discipline and performance. And so, you know, Viator was profitable since 2023. Last year, we delivered a mid-single-digit margin. The last twelve months, we have a high single-digit margin, and we are approaching double-digit margin.
And as we move from regional strength to building a global platform, we think that leadership is within our capability, and we're gonna go after it. So thanks for the question. We're super enthusiastic about reaccelerating growth and expanding margins.
Mike Noonan: And I'll just add the second point here quick.
Matt Goldberg: Yeah. That's alright. And just to underscore a few points that Matt said,
Mike Noonan: you know, we are really pleased with the unit growth. And I think, you know, I wanna make sure that we all focus on the most important metric we think is that. Because it's a statement of real customer conversion, and it's a statement of you have the ability to bring back customers on a repeat basis. And that's super important. And so we'll continue to really focus on driving that scale and that unit volume growth. And the margin, I would say, you know, this model, as we continue our disciplined new user acquisition, is really around growing margins.
And I think we will continue to think about particularly as we're excited about reaccelerating next year into new geos, you know, there'll be some modest investment into that. But all in all, expect to continue to see the model produce margin enhancement.
Angela White: Thank you, Mike. One moment for your next question. The next question comes from the line of Ronald Josey of Citi. Ronald, please go ahead.
Robert: Hi. This is Robert on for Ron. Thanks for taking the question here. Can you maybe give us a sense of new user trends at Viator as you continue to expand into these secondary and tertiary markets and into newer categories, help us understand your approach to growing supply in each of these newer markets.
Mike Noonan: Yeah, Rob. I'll take that real quick, and Matt can chime in. Great question because it does tie directly to how we're thinking about the reacceleration point. You know, in the US and North America, which is our core market, we continue to see very high repeat revenue growth rate from our repeat customers. Very important. Because that is, you know, long-term customers, they generally the more times they come, the less we're reliant they are on paid channels. It's part of our core flywheel. On new users, we are very disciplined. Right?
And it does explain some of the overall growth profile because we are looking at new user acquisition in light of do those ROIs make sense, and do they contribute to our long-term margin targets? So we're very disciplined in terms of that new user acquisition. We do believe that a core tenant of the geo expansion and Matt mentioned some of this around, you know, where we would think to go would be hey. Where is our Brand Tripadvisor, for example, well known, a lot of traffic volumes, which is in Europe. Gives us the opportunity to grow that new user base at attractive ROIs, and we're excited about that.
And, again, as a key principle to how we're thinking about that reacceleration comment.
Matt Goldberg: Yeah. And look, I just wanna add, Rob, that the marketplace flywheel that we have working between how we generate demand across both of our brands and do that with an ROI-driven acquisition strategy, the way we expand geographically, bring those new users into our store and give them a better experience, where we're leveraging AI to do personalization and matching, and our sort to be far more relevant for them, and then making sure that we have the right supply in those secondary tertiary markets, in new categories. All of that works together to attract new users, get them coming in, converting, and then being more loyal so you get the new and repeat working really well together.
And we think that our marketing tests, and the tests we've done on our product and with our supply across the two brands allow us to do that with more efficiency than we've ever been able to do it before, and we're going to scale that.
Robert: Got it. That's great. Thank you. And then as a quick follow-up, Matt, you had mentioned a few months ago that AI was already making a difference financially. Across the business today. So can you maybe elaborate on how AI is driving cost efficiencies across the business? And then given your focus on AI going forward, help us understand how you're thinking about the potential revenue opportunities and licensing deals ahead.
Matt Goldberg: Yeah. Thanks, Rob. So we're deploying AI fully across the organization and every part of our organization. And from an efficiency and product perspective, you know, we've done it in a lot of enterprise use cases across customer service where we're making major strides in our content moderation and fraud detection, the way we localize, the way we think about driving our marketing teams. It's giving us a lot of advantage, and we will continue to roll that out in every area of the business.
In fact, you know, as we're planning for next year, one of the things we wanna do is really measure that very clearly so that we can see not only the pilots making sense, but the way we scale that making sense. And, you know, I think we've rolled out the tools to do that, and we're excited about how that will continue. More importantly, right, is the way that we are using it in our product to drive innovation. And we've learned a lot over the last couple of years. We've built the AI infrastructure and we've leveraged it for our product enhancements.
And, you know, we've shown in succession how we can work with trips and planning and itineraries to the way that we summarize and synthesize our content through to a travel assistant, which we recently learned. And these were all efforts that are leading us to a place where we can go fully AI native and really serve the customer however and wherever they want to engage with that. So we're building on those learnings from our AI innovation, and we are setting ourselves up to put a deep focus on that and not get distracted by trying to chase other things that might not make as much sense at the expense of being able to do it.
That's why, you know, we're gonna launch an AI-native MVP in the coming weeks, and we're excited to continue that. I will say, I also believe that the way that we are doing partnerships has been differentiated, and we're learning. We're seeing good value exchange, and we believe that going forward, we can really scale that opportunity. So we're always having conversations to do that. So feeling real good about the AI future.
Robert: Great. Thanks, Matt.
Angela White: One moment for your next question. The next question comes from the line of Doug Anmuth of JPMorgan. Doug, please go ahead.
Daisy: Morning. This is Daisy on for Doug. Thanks for taking the questions. I have two. Firstly, with the reset to an experience-led strategy, will the consumer experience on Tripadvisor change? And how do you expect Tripadvisor and Viator brands to be for consumer shopping for experience going forward?
Matt Goldberg: Yeah. So thanks for that. Absolutely. The user experience will change because we are going to primarily be focused on how the experiences category can play on Tripadvisor. You know, we will continue to offer the features that we've had in the past, but our primary focus as we allocate resources, as we set goals, with all of our KPIs is gonna be driving that experience's future.
And we do believe that bringing it together under one team, which we've already proved that we can do with our product, all of the work we're doing in the store, to optimize the funnel, to take friction out, all the myriad of little things we do to drive conversion and loyalty and repeat will benefit both brands, both points of sale, which will come together in a more seamless fashion so that consumers can engage with us wherever it makes the most sense for them. And I think that will drive that flywheel we were talking about, which once you get it going, really has a lot of potential to accelerate our revenue.
Mike Noonan: I just add a few things onto that, Daisy, which is, you know, this work has not been a cold start. We've been doing this work. And you've seen us talk about the coordinated bidding as an example of this. And the learnings we've gotten from that have enabled us to lean in and actually gain increasing confidence around what we can do under the Tripadvisor points of sale. So we're very excited, and it's a key point of how we think about experiences reacceleration.
Daisy: Alright. And as a follow-up to that, what's been driving the acceleration in volume growth at Viator?
Daisy: And then for you guys for 4Q, what will drive acceleration, especially given the tough 4Q comps? Are there any specific channels, products, or regions that are driving the acceleration?
Mike Noonan: Yeah. On the unit side, it's really been the 3P mixing higher. And that's been growing very fast, albeit on a much smaller base, but growing very fast. You know, I think we've consistently said around the other channels, you know, Viator, which is by far the largest channel, and TA and Viator are the vast majority of that. You know, Viator has been generally growing around the average. And Tripadvisor has been growing lower than average. And earlier in the year, it was actually declining year over year. But that has been improving largely because of the efforts around product that Matt just mentioned. Largely because of the efforts around coordinated bidding.
And this quarter, we just mentioned that both channels accelerated in the quarter. The Tripadvisor point of sale actually turned to positive growth in the quarter. Again, reflective. And these are all on a unit basis. Clear. All reflective of that. And so, you know, as we move forward, we are very excited about our merchant 3P business. For all the reasons we've talked historically. And we'll continue to work with our partners to advance that. But, you know, the work very much continues on our owned and operated channels at both Viator and Tripadvisor points of sale, and we're gonna continue to work on those.
And we expect our Q4 guide would be expectations of both the Tripadvisor and Viator channels have modest acceleration again.
Matt Goldberg: Yeah. Just remember, Tripadvisor experiences previously been a drag on growth. That's gonna shift, and it'll no longer be a drag on growth, and we'll get these things working really well. We have marketing products, supply, data plans to do that. Thank you.
Angela White: One moment for our next question. The next question comes from the line of Jed Kelly of Oppenheimer and Co. Jed, please go ahead.
Jed Kelly: Hey. Thanks for taking my question. Just two. Will the go-to-market strategy for your experiences, will that be built more around the Viator brand? Or the Tripadvisor brand?
Jed Kelly: And then can you talk about, you know, how you think potentially expanding into other experiences and into other regions, particularly Western Europe? Thanks.
Matt Goldberg: Yeah. So the go-to-market strategy is something that we can continue to work on, and we think that, you know, it will be where we believe we have the strongest ability to go. Now both brands can exist in both markets because they do different things. They are different products. Right? Viator is a very focused vertical when you kind of already know I want an experience. And I want the best way to book it.
Tripadvisor still is a broad planning and recommendation platform across multiple categories, and that's not going to necessarily change where we'll put our focus and energy is in making sure that if you come to, you know, find your hotel, we're also doing a really good job to cross-market experiences to you in a fundamental way. If you're thinking about where you wanna eat, there's probably a really interesting tour around that restaurant that we wanna make sure you know about and book. So it will depend category by category in experiences and market by market how we go to market. We think both brands can be there.
We may choose to lead with one or the other depending on the market.
Mike Noonan: Yeah. And I'll follow up on that point, which is your second question on geo expansion. So particularly as we think about, we are excited about geo expansion. You know, accelerating growth in new users. We look at the geos, obviously, we wanna look for large threshold TAM. And look for areas we actually have a competitive advantage in Europe. Clearly is that. When we think about the large TAM size. But we also think about, and this is where it's so critical about the operating model change. The traffic and brand awareness of Tripadvisor is very large there.
And so our ability to really enhance and tighten our focus around experiences leveraging the Tripadvisor brand is very important to how we think about that expansion. And that doesn't mean, and that, you know, Viator will always play a point, and we have two brands to think about how we want to grow in the new market. So a lot of work underway as we're working on this, but we're very excited about that expansion opportunity.
Jed Kelly: Thank you.
Angela White: One moment. Excuse me. Moment for your next question. The next question comes from the line of Nafeesa Gupta of Bank of America. Nafeesa, please go ahead.
Nafeesa Gupta: Hi. Thank you. So my first question is on Metasearch. How are you thinking about the legacy business now that you're consolidating both the experiences in Viator and Tripadvisor? Will that business still have investments that you were planning for the last couple of quarters? And the second one is in The Fork. There are reports going around regarding exploring the sale of The Fork. Any thoughts on that? And how should we think about The Fork revenue growth in 2026? Given the B2B lapping? Thank you.
Matt Goldberg: Well, thanks for those questions. First of all, on our meta business and our hotel business, the hotel product continues to provide real value for both travelers and partners. You know, we have the best advice, the most photos, and we're trusted really over everyone else in the space. And we recognize that, you know, with Google taking more and more share of the search traffic for themselves, we're just not gonna be able to grow that business at the level of profitability that we'd like. So, you know, we know that it's an important part of the journey. That travelers find value in price compare. We're able to send our partners really good quality leads.
And we've done some really good product work there to drive conversion rates higher, and we're, you know, I think we're still focused on that. But what we won't do is we're not gonna continue to invest incrementally. You could think of it as an add-on or incremental product to our primary focus that we will make sure maintains the quality for both travelers and partners. Now as it relates to your question about The Fork, you know, The Fork is a great business that is performing really well. We are excited about the path of sustainable growth. And the improving profitability profile that really benefits the group.
But, of course, you know, we consistently evaluate all options to unlock value in all of our assets, and that includes The Fork. Our primary focus is what's gonna drive the most shareholder value ahead. Nothing's off the table. We see it's a leader in core European markets. We have a good mix of B2C and with growing B2B. And that's giving us advantage. And as the leading European dining, we know it's a valuable asset both for global and regional travelers. It is run separately. There's optionality there. And we recognize there have been precedent transactions out there that suggest The Fork is a highly valuable asset, especially given its unique scale position in Europe.
So optionality, and we are focused on it. We love what the team's doing there.
Nafeesa Gupta: Thank you. Just on the revenue growth for The Fork, how should we think about that going ahead? I know this last couple of quarters, there was a lot of FX tailwind as well, and how should we think about next year?
Mike Noonan: Oh, yeah. Sorry about that. Yeah. Listen. I think a couple of things are important to understand the growth for The Fork. Big picture one, but still expect nice growth and profit improvement next year, for sure. We will have a bit harder comp next year because we're comping and we're seeing some of this before. We're comping, you know, some very strong growth in B2B. As well as some of the partnership initiatives we put in place. So we would expect a step down in growth year over year, but we still believe we're very excited about the revenue diversification strategy. We're very excited about the B2B business.
And the ability to continue to grow, you know, into our existing restaurant base, new restaurant base, more and more premium plans, those all offer a very, very nice upside. As well as, we continue to see very healthy growth, volume growth, in our B2C business, particularly in our proprietary network. So, you know, I think, yes, they'll probably there will be we expect a step down in growth from what we saw this year. But still very healthy as we move into next year.
Nafeesa Gupta: Thank you.
Angela White: Excuse me. This concludes the question and answer session. I would now like to turn it back to Matt Goldberg for closing remarks.
Matt Goldberg: Thank you all for joining us on this morning's call. The changes we walk through today represent a meaningful shift in our strategic focus and how we'll deliver value for shareholders ahead. We're excited to move into this new phase of our growth for the group. Before I close out, I also want to take a moment to acknowledge the impact these decisions have on our teams. We're grateful for their continued hard work and dedication. We look forward to updating you on our progress and plans for 2026 on the next call. Thanks, everyone.
Angela White: Goodbye.