It's hard to maintain growth in a competitive industry, and online travel company TripAdvisor (TRIP -0.11%) has been at the forefront of a hard-fought battle over this increasingly important portion of the travel and tourism industry. TripAdvisor has worked hard to expand its scope and become a true rival to larger companies in the space, but despite the progress it has made, TripAdvisor has seen some negative impacts on its financial results.

Coming into Tuesday's first-quarter financial report, TripAdvisor investors were ready to see some weakness in the company's bottom line, but they wanted sales growth to return to more typical levels. TripAdvisor's report was far from perfect, but shareholders nevertheless responded favorably. Let's look more closely at TripAdvisor to see what it said and what lies ahead for the travel company.

Review of space museum.

Image source: TripAdvisor.

TripAdvisor posts mixed results

TripAdvisor's first-quarter results weren't everything that investors had wanted to see. Revenue climbed 6% to $372 million, and that was only a bit less than the consensus forecast for a 7% growth rate. Similarly, adjusted net income dropped almost 30% to $35 million, and that resulted in adjusted earnings of just $0.24 per share, $0.02 per share less than what most of those following the stock had expected from the online travel specialist.

Taking a closer look at TripAdvisor's report, the company's segment performance was fairly consistent with how it has done in previous quarters. The non-hotel segment led the way higher on the top line, with 18% sales growth. Within the hotel space, click-based and transaction revenue climbed at a 12% pace, but display-based advertising and subscription revenue was down 4% from year-ago levels. As we've seen a lot recently, the other hotel revenue segment, which includes revenue from non-TripAdvisor branded websites, performed the worst, with a 17% drop in segment sales.

Geographically, TripAdvisor also continued its trend of seeing more sales come from its home territory. A five percentage point jump in North America's share of TripAdvisor's total revenue brought the figure up to 57%. That came at the expense of a three point drop in Europe to 26% and a two point decline in the rest-of-world category, which came in at 17%.

A look at TripAdvisor's internal metrics showed continued growth. User review counts hit the 500 million mark, and coverage now includes 1.08 million hotels, 4.3 million restaurants, and 790,000 attractions and experiences within its information base. Interestingly, though, the number of vacation rentals fell from end-of-2016 levels, dropping 15,000 to 820,000.

CEO Steve Kaufer was happy with the progress that TripAdvisor has made. "2017 is off to a productive start," Kaufer said, "and we are building on [our] strength as we further streamline the hotel shopping experience." The CEO also noted that the TripAdvisor brand is gaining recognition and value around the world, and that's a key aspect of the company's long-term strategy.

What's next for TripAdvisor?

TripAdvisor has big plans for the near future. As Kaufer noted, "Later in [the second quarter], we plan to launch a brand advertising campaign to build user awareness of TripAdvisor as not only a great place to research a hotel, but a great place to find the lowest prices when a user is ready to book."

TripAdvisor continues to believe that it has the capacity to grow at an accelerated pace. The company repeated its guidance for double-digit percentage growth in overall revenue, much of which will come from click-based and transaction revenue gains. Adjusted pre-tax operating earnings will likely fall slightly, but that reflects spending that the company sees as an investment in its future.

One area to watch going forward will be TripAdvisor's tax expense. The company paid a 48% effective tax rate on GAAP profit, citing stock-based compensation shortfalls and losses in jurisdictions beyond the U.S. as reasons for the high tax rate. TripAdvisor is counting on a lower tax rate to help earnings in the long run.

TripAdvisor shareholders were pleased with the progress the company has made, and the stock climbed 6% in after-hours trading following the announcement. Still, TripAdvisor has further to go before it can truly declare victory and call itself fully recovered from its tough times.