Travelzoo (TZOO) investor relations material

Executive summary

• Q2 2025 revenue grew 13% year-over-year to $23.9M, driven by all segments, Getaways vouchers, and membership fees.

• Operating profit declined to $2.1M due to increased marketing and member acquisition costs, with a focus on long-term growth.

• Net income attributable to shareholders was $1.4M, down from $2.9M in Q2 2024, reflecting higher costs.

• Membership fees are becoming a significant revenue driver, expected to reach 25% of total revenue next year.

• Immediate payback on member acquisition costs, with new members generating revenue that offsets acquisition expenses.

Financial highlights

• Q2 2025 revenue: $23.9M, up 13% year-over-year; six-month revenue up 9% to $47.0M.

• Q2 operating profit: $2.1M (8.6%-9% margin), down from $4M prior year.

• Non-GAAP operating profit: $2.4M (10% margin), down from $4.8M prior year.

• Cash, cash equivalents, and restricted cash at $10.4M-$11.2M as of June 30, 2025.

• Cash flow from operations: $1.3M; 172,088 shares repurchased during the quarter.

Outlook and guidance

• Year-over-year revenue growth expected to continue and accelerate as membership fee revenue is recognized over 12 months.

• Profitability expected to increase as recurring membership revenue accumulates, though short-term net income may fluctuate due to immediate expensing of marketing costs.

• Management expects margins to recover or exceed previous levels as membership revenue grows.

• Cash on hand projected to be sufficient for working capital needs for at least the next twelve months.

• Ongoing evaluation of investments in products and technologies may increase future capital requirements.