Travelzoo Reports Third Quarter 2025 Results

Rhea-AI Summary

Travelzoo (NASDAQ: TZOO) reported Q3 2025 results: revenue $22.2M (+10% year-over-year; constant currency $21.9M, +9%), consolidated operating profit $0.5M, and non-GAAP operating profit $1.1M. Net income attributable to Travelzoo was $0.2M or $0.01 per share. Cash flow from operations was ($0.4M) and cash, equivalents and restricted cash totaled $9.2M as of September 30, 2025.

Segment highlights: North America revenue $14.2M (+11%) with operating profit $1.1M (8% margin); Europe revenue $6.6M (+9%) with operating loss $640k (10% of revenue). Jack's Flight Club revenue was $1.4M (+12%) and premium subscribers rose 8%.

Company repurchased 148,602 shares in Q3. Income tax provision was $244k. Management expects continued year-over-year revenue growth and accelerating membership-fee recognition over time.

Positive

• Revenue +10% year-over-year to $22.2M
• Non-GAAP operating profit of $1.1M
• North America revenue +11% to $14.2M
• Jack's Flight Club revenue +12% to $1.4M; premium subscribers +8%
• Cash, cash equivalents and restricted cash of $9.2M

Negative

• Cash flow from operations negative ($0.4M)
• Europe operating loss of $640,000 (10% of revenue)
• GAAP operating profit compressed to $0.5M; EPS $0.01
• Q3 marketing spend expensed immediately reduced EPS

Insights

Equity analyst

Q3 shows modest revenue growth with mixed profitability and continued member-acquisition investment.

Consolidated revenue rose to $22.2 million, up 10% year‑over‑year, and constant‑currency revenue grew to $21.9 million, up 9%; this demonstrates demand traction for the paid membership model. Reported consolidated operating profit was $0.5 million while non‑GAAP operating profit was $1.1 million, and GAAP EPS was $0.01; management attributes EPS pressure to immediate expensing of marketing and the ratable recognition of membership fees over 12 months.

Key segment facts: North America revenue reached $14.2 million (+11%) with operating profit of $1.1 million (about 8% of revenue); Europe revenue was $6.6 million (+9%) with an operating loss of $640,000 (about 10% of revenue) driven by member acquisition spend; Jack's Flight Club (60% owned) revenue was $1.4 million (+12%) with modest operating profit. Cash and equivalents were $9.2 million and cash flow from operations was ($0.4 million), while the company repurchased 148,602 shares in the quarter.

The business mechanism is straightforward: growing recurring membership fees should smooth revenue recognition over time, but current marketing invested to buy members is expensed immediately and compresses near‑term GAAP profitability. This creates a timing mismatch between customer acquisition cost and recognition of subscription revenue under the disclosed accounting policy. Monitorable, concrete items include membership conversion and recognition trends into Q4 2025 and subsequent quarters, operating margin trajectory as deferred revenue converts to recognized membership fees, and quarterly cash flow improvement; management also stated licensing revenue is expected to increase. The observable facts in this release support revenue growth but mixed short‑term margins, so the disclosed impact is assessed as neutral given the balance of positive revenue trends and near‑term profit/cash concerns.

NEW YORK, Oct. 28, 2025 /PRNewswire/ -- Travelzoo® (NASDAQ: TZOO):

• Revenue of $22.2 million, up 10% year-over-year
• Consolidated operating profit of $0.5 million
• Non-GAAP consolidated operating profit of $1.1 million
• Cash flow from operations of ($0.4) million
• Earnings per share (EPS) of $0.01

Travelzoo, the club for travel enthusiasts, today announced financial results for the third quarter ended September 30, 2025. Consolidated revenue was $22.2 million, up 10% from $20.1 million year-over-year. In constant currencies, revenue was $21.9 million, up 9% year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, and membership fees.

In Q3, Travelzoo continued to invest significantly in acquiring more Club Members when we saw that we can achieve a payback and positive return on investment (ROI) within a quarter. Marketing costs were expensed immediately. Membership fees revenue is recognized ratably over the subscription period of 12 months. The effect is a sizable reduction in EPS. We refer to our investor presentation.

Net income attributable to Travelzoo was $0.2 million for Q3 2025, or $0.01 per share, compared with $0.26 per share in the prior-year period.

Non-GAAP operating profit was $1.1 million. Non-GAAP operating profit excludes amortization of intangibles ($2,000), stock option expenses ($399,000), and severance-related expenses ($167,000). Please refer to "Non-GAAP Financial Measures" and the tabular reconciliation below.

"We will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more Club Offers for Club Members and add new benefits, such as our popular complementary airport lounge access worldwide in case of a delayed flight," said Holger Bartel, Travelzoo's Global CEO. "Travelzoo members are affluent, active, and open to new experiences. We inspire travel enthusiasts to travel to places they never imagined they could. Travelzoo is the must-have membership for those who love to travel as much as we do."

Travelzoo North America
North America business segment revenue increased 11% year-over-year to $14.2 million. Operating profit for Q3 2025 was $1.1 million, or 8% of revenue, compared to operating profit of $3.2 million or 25% of revenue in the prior-year period.

Travelzoo Europe
Europe business segment revenue increased 9% year-over-year to $6.6 million. Operating loss for Q3 2025 was $640,000, or 10% of revenue, compared to operating profit of $1.0 million, or 17% of revenue in the prior-year period. The reported operating loss occurred because we acquired more Club Members.

Jack's Flight Club
Jack's Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. Revenue increased 12% year-over-year to $1.4 million. The number of premium subscribers increased 8% year-over-year. Jack's Flight Club's revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Operating profit for Q3 2025 was $20,000, compared to operating profit of $27,000 in the prior-year period.

New Initiatives
New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $27,000. Operating loss for Q3 2025 was $20,000.

In 2020, Travelzoo entered into royalty-bearing licensing agreements with local licensees for the exclusive use of Travelzoo's brand, business model, and members in  Australia, Japan, New Zealand, and Singapore. Under these arrangements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Licensing revenue from the licensee in Australia was $9,000 for Q3 2025. Licensing revenue from the licensee in Japan was $7,000 for in Q3 2025. Licensing revenue is expected to increase going forward.

Reach
Travelzoo reaches 30 million travelers. This includes Jack's Flight Club. Comparisons to prior periods are no longer meaningful due to strategic developments of the Travelzoo membership.

Income Taxes
The reported income tax provision and reserves for Q3 2025 are $244,000. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its tax liability for Q3 2025.

Balance Sheet
As of September 30, 2025, cash, cash equivalents and restricted cash were $9.2 million. Cash flow from operations was ($0.4) million.

Deferred revenue increased because membership fees revenue is recognized ratably over the subscription period.

Share Repurchase Program
During Q3 2025, the Company repurchased 148,602 shares of its outstanding common stock.

L ooking Ahead
For Q4 2025, we expect year-over-year revenue growth to continue. We expect revenue growth to accelerate as a trend in subsequent quarters, as membership fees revenue is recognized ratably over the subscription period of 12 months, as we acquire new members, and as more Legacy Members become Club Members. Over time, we expect profitability to substantially increase as recurring membership fees revenue will be recognized. In the short-term, fluctuations in reported net income are possible. We might see attractive opportunities to increase marketing. We expense marketing costs immediately.

In 2024, we introduced a membership fee for Travelzoo. Legacy Members, who joined prior to 2024, continue to receive certain travel offers. However, Club Offers and new benefits are only available to Club Members, who pay the membership fee. Therefore, we are seeing many Legacy Members become Club Members over time—in addition to new members who join.

Non-GAAP Financial Measures
Management calculates non-GAAP operating income when evaluating the financial performance of the business. Calculation of non-GAAP operating income, also called "non-GAAP operating profit" in this press release and today's earnings conference call, excludes the following items: amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Conference Call
Travelzoo will host a conference call to discuss third quarter 2025 results today at 11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to

• download the management presentation (PDF format) to be discussed in the conference call
• access the webcast.

About Travelzoo
We, Travelzoo®, are the club for travel enthusiasts. We reach 30 million travelers. Club Members receive Club Offers personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with thousands of top travel suppliers—our long-standing relationships give us access to irresistible deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words "expect", "predict", "project", "anticipate", "believe", "estimate", "intend", "plan", "seek" and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Travelzoo Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts)
	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Revenues	$        22,198		$        20,098		$        69,245		$        63,224
Cost of revenues	4,519		2,548		13,132		7,708
Gross profit	17,679		17,550		56,113		55,516
Operating expenses:
Sales and marketing	12,198		8,247		34,378		26,231
Product development	631		594		1,963		1,763
General and administrative	4,362		4,664		13,419		13,875
Total operating expenses	17,191		13,505		49,760		41,869
Operating income	488		4,045		6,353		13,647
Other income (loss), net	(64)		359		727		674
Income from operations before income taxes	424		4,404		7,080		14,321
Income tax expense	244		1,148		2,157		3,920
Net income	180		3,256		4,923		10,401
Net income attributable to non-controlling interest	29		72		201		54
Net income attributable to Travelzoo	$             151		$          3,184		$          4,722		$        10,347
Net income per share—basic	$            0.01		$            0.26		$            0.41		$            0.81
Net income per share—diluted	$            0.01		$            0.26		$            0.39		$            0.79
Shares used in per share calculation—basic	10,987		12,176		11,585		12,851
Shares used in per share calculation—diluted	11,213		12,386		11,974		13,035

 

Travelzoo Condensed Consolidated Balance Sheets (Unaudited) (In thousands)
	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$               8,491		$            17,064
Accounts receivable, net	12,460		12,825
Prepaid income taxes	654		736
Income taxes receivable	887		—
Prepaid expenses and other	1,931		1,148
Total current assets	24,423		31,773
Deposits and other	302		374
Deferred tax assets	3,469		3,380
Restricted cash	756		675
Operating lease right-of-use assets	4,540		5,655
Property and equipment, net	278		423
Intangible assets, net	1,452		1,498
Goodwill	10,944		10,944
Total assets	$             46,164		$            54,722
Liabilities and Equity
Current liabilities:
Accounts payable	$               8,405		$              6,162
Merchant payables	11,767		16,294
Accrued expenses and other	4,557		3,404
Deferred revenue	9,060		6,545
Income tax payable	—		1,619
Operating lease liabilities	2,058		2,472
Total current liabilities	35,847		36,496
Long-term tax liability	8,906		7,851
Long-term operating lease liabilities	4,494		5,646
Other long-term liabilities	—		376
Total liabilities	49,247		50,369
Common stock	109		118
Tax indemnification	(9,537)		(9,537)
Retained earnings	6,925		14,284
Accumulated other comprehensive loss	(5,596)		(5,327)
Total Travelzoo stockholders' equity (deficit)	(8,099)		(462)
Non-controlling interest	5,016		4,815
Total stockholder's equity (deficit)	(3,083)		4,353
Total liabilities and stockholder's equity	$             46,164		$            54,722

 

Travelzoo Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)
	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Cash flows from operating activities:
Net income	$             180		$          3,256		$          4,923		$       10,401
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	57		179		239		737
Stock-based compensation	399		457		1,108		1,240
Deferred income tax	(1)		(12)		4		(39)
Net foreign currency effects	71		(154)		(224)		(165)
Provision of loss (net recoveries) on accounts receivable and refund reserve	(93)		128		30		121
Changes in operating assets and liabilities:
Accounts receivable	(988)		127		756		(258)
Prepaid income taxes	(154)		(134)		84		(461)
Prepaid expenses, deposits and other	(560)		(69)		(703)		464
Accounts payable	2,314		(284)		2,134		430
Merchant payables	(612)		431		(5,053)		(3,348)
Accrued expenses and other	(981)		463		859		2,162
Deferred revenue	643		—		2,363		—
Income tax payable	(576)		315		(2,584)		593
Other liabilities	(73)		628		273		1,381
Net cash provided by operating activities	(374)		5,331		4,209		13,258
Cash flows from investing activities:
Purchases of property and equipment	(15)		(46)		(49)		(129)
Net cash used in investing activities	(15)		(46)		(49)		(129)
Cash flows from financing activities:
Repurchase of common stock	(1,545)		(6,183)		(12,964)		(16,605)
Exercise of stock options and taxes paid for net share settlement of equity awards	—		(335)		(104)		(592)
Net cash used in financing activities	(1,545)		(6,518)		(13,068)		(17,197)
Effect of exchange rate on cash, cash equivalents and restricted cash	(17)		96		415		(215)
Net increase in cash, cash equivalents and restricted cash	(1,951)		(1,137)		(8,493)		(4,283)
Cash, cash equivalents and restricted cash at beginning of period	11,198		13,243		17,740		16,389
Cash, cash equivalents and restricted cash at end of period	$          9,247		$        12,106		$          9,247		$       12,106

 

Travelzoo Segment Information from Continuing Operations (Unaudited) (In thousands)
Three months ended September 30, 2025	Travelzoo North America		Travelzoo Europe		Jack's Flight Club		New Initiatives		Consolidated
Revenues from unaffiliated customers	$       13,728		$         7,036		$         1,407		$              27		$          22,198
Intersegment revenues	503		(471)		(32)		—		—
Total net revenues	14,231		6,565		1,375		27		22,198
Sales and marketing expenses	6,998		4,549		651		—		12,198
Other expenses	6,104		2,656		704		48		9,512
Operating profit (loss)	1,128		(640)		20		(20)		488
Other income (loss), net									(64)
Income from operations before income taxes									424
Three months ended September 30, 2024	Travelzoo North America		Travelzoo Europe		Jack's Flight Club		New Initiatives		Consolidated
Revenues from unaffiliated customers	$       12,846		$         6,021		$         1,198		$              33		$          20,098
Intersegment revenues	(24)		(3)		27		—		—
Total net revenues	12,822		6,018		1,225		33		20,098
Sales and marketing expenses	4,557		3,038		511		145		8,251
Other expenses	5,115		1,952		687		48		7,802
Operating profit (loss)	3,150		1,028		27		(160)		4,045
Other income, net									359
Income from operations before income taxes									4,404
Nine months ended September 30, 2025	Travelzoo North America		Travelzoo Europe		Jack's Flight Club		New Initiatives		Consolidated
Revenues from unaffiliated customers	$       44,296		$       20,745		$         4,140		$              64		$          69,245
Intersegment revenues	1,196		(1,084)		(112)		—		—
Total net revenues	45,492		19,661		4,028		64		69,245
Sales and marketing expenses	19,400		13,101		1,877		—		34,378
Other expenses	18,550		7,856		1,963		145		28,514
Operating profit (loss)	7,542		(1,296)		188		(81)		6,353
Other income, net									727
Income from operations before income taxes									7,080
Nine months ended September 30, 2024	Travelzoo North America		Travelzoo Europe		Jack's Flight Club		New Initiatives		Consolidated
Revenues from unaffiliated customers	$       41,134		$       18,605		$         3,397		$              88		$          63,224
Intersegment revenues	50		26		(76)		—		—
Total net revenues	41,184		18,631		3,321		88		63,224
Sales and marketing expenses	15,107		9,429		1,393		280		26,209
Other expenses	14,772		6,280		2,034		282		23,368
Operating profit (loss)	11,305		2,922		(106)		(474)		13,647
Other income, net									674
Income from operations before income taxes									14,321

 

Travelzoo Reconciliation of GAAP to Non-GAAP Information (Unaudited) (In thousands, except per share amounts)
	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
GAAP operating expense	$        17,191		$        13,505		$        49,760		$        41,869
Non-GAAP adjustments:
Amortization of intangibles (A)	2		95		45		500
Stock option expenses (B)	399		456		1,108		1,239
Severance-related expenses (C)	167		330		395		360
Non-GAAP operating expense	16,623		12,624		48,212		39,770
GAAP operating income	488		4,045		6,353		13,647
Non-GAAP adjustments (A through C)	568		881		1,548		2,099
Non-GAAP operating income	1,056		4,926		7,901		15,746

 

Investor Relations:
ir@travelzoo.com

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SOURCE Travelzoo

FAQ

What were Travelzoo (TZOO) Q3 2025 revenue and EPS?

Travelzoo reported Q3 2025 revenue of $22.2M and EPS of $0.01.

How did Travelzoo's North America and Europe segments perform in Q3 2025?

North America revenue was $14.2M (+11%) with operating profit $1.1M; Europe revenue was $6.6M (+9%) with an operating loss of $640k.

What is Travelzoo's Q3 2025 cash position and cash flow from operations?

As of September 30, 2025, Travelzoo had $9.2M in cash, equivalents and restricted cash and cash flow from operations of ($0.4M).

How did Jack's Flight Club contribute to Travelzoo's Q3 2025 results?

Jack's Flight Club revenue was $1.4M (+12%) and premium subscribers increased 8%, with operating profit of $20k.

Did Travelzoo repurchase shares in Q3 2025 and how many?

Yes; Travelzoo repurchased 148,602 shares during Q3 2025.

What guidance did Travelzoo give for Q4 and beyond (2025)?

Management expects continued year-over-year revenue growth, with accelerating recognition of membership-fee revenue over subsequent quarters and potential short-term net income fluctuations.