Shares of Trivago (NASDAQ:TRVG) were sinking again today after the hotel-booking platform offered underwhelming third-quarter results and issued weak guidance for the fourth quarter. The company also named a new CEO in a surprise announcement.
As a result, the stock was down 20.2% as of 10:52 a.m. EST today.
Revenue slipped 1.3% to 250.3 million euros ($279.2 million), essentially in line with expectations of a 1.1% decline. Performance was strong in the Americas region, where revenue jumped 19% as the company stepped up advertising spending, but revenue declined 9% in Europe, its biggest market, as Trivago cited softness in the marketplace.
Qualified referrals, or the number of customers who click to partner listings on the platform, continued to slip in response to previous product optimizations to strengthen conversion rates. However, revenue per qualified referral rose 16% to 1.53 euros, a sign that its bidding partners are seeing more conversions and therefore more value from clicks on the Trivago site.
On the bottom line, adjusted EBITDA fell from 26.6 million euros to 10.9 million, and earnings per share slipped from $0.03 to breakeven, missing estimates at $0.02.
CEO Rolf Schromgens said: "We are pleased that we reaccelerated growth in the Americas in the quarter, which we believe is a positive sign of the strength of our value proposition. We also saw continued progress in our alternative accommodations as a result of both better integration with our search capabilities and expansion of our offerings."
Trivago's alternative accommodations listings rose from more than 1 million a year ago to more than 2.3 million as the company continues to seek out vacation rentals, apartments, and home-sharing options, to be competitive with Airbnb and other new platforms.
Separately, Trivago also said that Schromgens would be stepping down from the CEO role and going on to the supervisory board. CFO Axel Hefer, who has been in that position since 2016, will take over as CEO at the end of the year.
Trivago maintained its full-year adjusted EBITDA guidance at 60 million to 80 million euros, but Hefer said on the earnings call that the result was likely to arrive in the lower half of that range. He also said that revenue in the fourth quarter would decline.
For 2020, the company did not offer specific guidance, but Hefer said he aimed to grow adjusted EBITDA. While Trivago is making strategic improvements, financial results have not improved. With both revenue and earnings falling, it's not surprising to see this onetime growth stock dive again today.