Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What's happening: Shares of TripAdvisor Inc. (NASDAQ:TRIP) were up 25% as of 12 p.m. Thursday after the company announced solid fourth-quarter results and impressive 2015 revenue guidance.
Why it's happening: Quarterly revenue increased 35% year over year to $288 million on broad-based growth across all categories, including a 25% increase from click-based ads to $181 million, 13% growth from display-based ads to $36 million, and a 97% increase in revenue from subscription, transaction, and "other" categories to $71 million. TripAdvisor also saw solid growth across all geographies, including an increase of 35% in North America to $89 million, 13% in Asia-Pacific to $36 million, and 89% growth in Latin America to $17 million.
That translated to 88% growth in adjusted earnings before interest, taxes, depreciation, and amortization to $98 million, and a 73% year-over-year increase in net income to $0.35 per diluted share. Analysts, on average, were expecting slightly higher earnings of $0.37 per share on lower sales of $285.1 million.
Perhaps most importantly, TripAdvisor CEO Steve Kaufer noted that TripAdvisor has begun enabling more users to complete booking in its three largest demand categories -- hotels, attractions, and restaurants -- making it "the most comprehensive one-stop shop in travel." He elaborated, "Starting in 2015, we plan to aggressively scale and promote this more complete user proposition."
During the subsequent conference call, CFO Julie Bradley also stated while they won't be providing their traditional product guidance moving forward, they expect full-year 2015 revenue growth in the "high 20s," with 2015 EBITDA growth in the low- to mid-teens. By comparison, Wall Street was looking for 2015 revenue to increase around 25% to $1.55 billion.