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Revenue and Adjusted EBITDA by Segment
Year ended December 31, % Change
2015 2014 2013 2015 vs. 2014 2014 vs. 2013
REVENUE: (in millions)
Hotel $ 1,263 $ 1,135 $ 899 11% 26%
Other 229 111 46 106% 141%
Totalrevenue $ 1,492 $ 1,246 $ 945 20% 32%
ADJUSTED EBITDA (1):
Hotel $ 472 $ 472 $ 384 0% 23%
Other (6) (4) (5) (50)% 20%
TotalAdjustedEBITDA $ 466 $ 468 $ 379 0% 23%
ADJUSTED EBITDA Margin (2):
Hotel 37% 42% 43%
Other (3)% (4)% (11)%
(1) IncludedinAdjustedEBITDAisageneralandadministrativeexpenseallocationforeachsegment,whichisbasedonthesegment’spercentageofourtotalpersonnelcosts,
excludingstock-basedcompensation.See“Note16 — Segment and Geographic Information ,”inthenotestoourconsolidatedfinancialstatementsinItem8formore
informationandforareconciliationofAdjustedEBITDAtonetincome,themostdirectlycomparablefinancialmeasurecalculatedandpresentedinaccordancewithGAAP,
fortheperiodspresentedabove.
(2) Wedefine“AdjustedEBITDAmargin”,anon-GAAPmeasure,asAdjustedEBITDAasapercentageofrevenue.See“AdjustedEBITDA”discussionaboveformore
informationonthelimitationsofusingAdjustedEBITDA,anon-GAAPmeasure,asananalyticaltool.
Hotel
OurHotelsegmentrevenueincreased$128millionduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,andincreased
$236millionduringtheyearendedDecember31,2014whencomparedtothesameperiodin2013,primarilyduetoanincreaseinclick-basedadvertisingrevenue
of$86millionand$174million,respectively,andanincreaseindisplay-basedadvertisingof$19millionand$21million,respectively.Subscription,transaction
andotherrevenueincreasedby$23millionduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,andincreasedby$41million
duringtheyearendedDecember31,2014whencomparedtothesameperiodin2013,primarilyduetogrowthinBusinessListings.
OurHotelsegmentrevenuegrowthratedeceleratedto11%duringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,primarily
duetoadeclineinrevenueperhotelshopper.Asdiscussedabove,thedeclineinrevenueperhotelshopperwasprimarilyduetopricingpressureexperienced
during2015particularlyinthesecondhalfoftheyear;whichincludestheimpactfrom(i)productchanges,suchasourdecisiontoacceleratetherolloutofour
instantbookingfeaturetoourUSandUKmarketsonalldevicesinthethirdquarterof2015,(ii)theprolongedweaknessoftheEuro,whichhasdecreasedour
CPCs,and(iii)agrowingnumberofhotelshoppersvisitingourwebsitesonmobiledevices.
AdjustedEBITDAinourHotelsegmentfortheyearendedDecember31,2015,wasflatwhencomparedtothesameperiodin2014,andincreased$88
millionduringtheyearendedDecember31,2014whencomparedtothesameperiodin2013,duetoanincreaseinrevenue,offsetprimarilybyincreased
personnelandoverheadcosts,searchenginemarketing,orSEMcosts,andotheronlinetrafficacquisitioncosts,andTVadvertising.OurHotelsegmentadjusted
EBITDAmargindeceleratedslightlyduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,primarilyduetothedecelerationin
revenuegrowthyearoveryear.Thesegment’sAdjustedEBITDAmarginfortheyearendedDecember31,2014,wasessentiallyflatwhencomparedtothesame
periodin2013.
Other
OurOthersegmentrevenueincreased$118millionduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,andincreased$65
millionduringtheyearendedDecember31,2014whencomparedtothesameperiodin2013.ThiswasdrivenbygrowthinourVacationRentalsbusiness,
primarilyduetoourfree-to-listcommission-basedbookingmodel,and$96millionand$43millioninincrementalrevenueduringtheyearsendedDecember31,
2015and2014,respectively,relatedtoourAttractionandRestaurantbusinesses.
AdjustedEBITDAinourOthersegmentdecreased$2millionduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014and
wasessentiallyflatduringtheyearendedDecember31,2014whencomparedtothesameperiodin2013.Thiswasprimarilyduetoinvestmentstofundgrowth
initiativesatourAttractions,Restaurants,andVacationRentalsbusinesses,whichareallatearlierstagesoftheirgrowthandbusinesslifecycle,andisa
contributingfactortothisreportablesegmentoperatingataloss.
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