Sign in

You're signed outSign in or to get full access.

LT

Liberty TripAdvisor Holdings, Inc. (LTRPA)·Q3 2014 Earnings Summary

Executive Summary

  • Liberty TripAdvisor consolidated revenue rose to $375M (+$101M y/y) in Q3 2014, while adjusted OIBDA was $114M and operating income declined sequentially to $17M, driven primarily by TripAdvisor’s operating results .
  • TripAdvisor reported strong growth: revenue $354M (+39% y/y), adjusted EBITDA $119M (34% margin, +14% y/y); net income $54M and diluted EPS $0.37 (-4% y/y), with 315M average monthly unique visitors in the quarter .
  • Balance sheet shifts were notable: Liberty TripAdvisor consolidated cash and liquid investments fell to $666M (cash GAAP $543M) and total debt increased to $746M, reflecting the $400M margin loan; access to TripAdvisor cash is limited due to non-controlling interest .
  • No formal quantitative guidance was provided; catalysts include TripAdvisor’s instant booking rollout and the Viator acquisition expanding monetization of attractions .

What Went Well and What Went Wrong

  • What Went Well

    • TripAdvisor delivered robust top-line growth and margin: revenue $354M (+39% y/y), adjusted EBITDA $119M (34% of revenue, +14% y/y) .
    • Strategic expansion: “TripAdvisor recently closed the acquisition of Viator, significantly growing its presence in the tours and attractions reservation business” (Greg Maffei) .
    • Platform engagement: ~315M average monthly unique visitors during Q3, reinforcing user-generated content moat and monetization opportunities .

  • What Went Wrong

    • Liberty TripAdvisor operating income fell sequentially to $17M (from $31M in Q2), and adjusted OIBDA decreased to $114M (from $120M in Q2), despite higher revenue .
    • Consolidated cash decreased by $57M, primarily due to the Viator acquisition; total debt rose by $393M in the quarter from new margin loan, increasing financial leverage .
    • TripAdvisor EPS of $0.37 declined 4% y/y, reflecting higher investments and mix; Liberty TripAdvisor GAAP net earnings attributable to LTRPA stockholders were modest at $4M .

Financial Results

  • Liberty TripAdvisor Holdings – Quarterly Summary
MetricQ3 2013Q4 2013Q1 2014Q2 2014Q3 2014
Revenue ($MM)$274 $250 $294 $335 $375
Adjusted OIBDA ($MM)$102 $49 $116 $120 $114
Depreciation & Amortization ($MM)($78) ($82) ($70) ($72) ($77)
Stock Compensation Expense ($MM)($14) ($16) ($17) ($17) ($20)
Operating Income ($MM)$10 ($52) $29 $31 $17
  • Liberty TripAdvisor Holdings – Q3 Income Statement Snapshot
Metric ($MM)Q3 2013Q3 2014
Total Net Sales$274 $375
Operating Income$10 $17
Earnings (Loss) Before Income Taxes$10 $5
Income Tax (Expense) Benefit$37 ($3)
Net Earnings (Loss)$47 $2
Less: NCI$39 $7
Net Earnings (Loss) Attributable to LTRPA Stockholders$8 $4
  • TripAdvisor – Stand-alone Performance (as reported by TripAdvisor; not reflecting LTRPA purchase accounting)
MetricQ3 2013Q3 2014
Revenue ($MM)— (not disclosed in LTRPA release)$354
Adjusted EBITDA ($MM)$104 $119
Adjusted EBITDA Margin (%)—34%
Net Income ($MM)$56 $54
Diluted EPS ($)—$0.37
YoY Revenue Growth (%)—39%
YoY Adj. EBITDA Growth (%)—14%
YoY EPS Growth (%)—(4%)
  • Cash and Debt (Consolidated)
Metric ($MM)6/30/20149/30/2014
Cash & Liquid Investments – Liberty TripAdvisor$2 $52
Cash & Liquid Investments – TripAdvisor$721 $614
Total Cash & Liquid Investments$723 $666
Short-term Marketable Securities – TripAdvisor$51 $85
Long-term Marketable Securities – TripAdvisor$83 $38
Total Consolidated Cash (GAAP)$589 $543
TripAdvisor Debt Facilities$353 $346
Liberty TripAdvisor Margin Loan— $400
Total Consolidated Debt$353 $746

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company Guidance (Revenue, Margins, OpEx, etc.)FY/Q4 2014None provided in prior filings retrievedNone provided in Q3 2014 8-K/Investor DayMaintained (no formal guidance)

No specific numerical guidance was disclosed in the Q3 2014 8-K or at the Investor Day; the 8-K includes only standard forward-looking statements without ranges .

Earnings Call Themes & Trends

Note: No Q3 2014 earnings call transcript was available for LTRPA; Investor Day remarks on Nov 19, 2014 are used for themes -.

TopicPrevious Mentions (Q2/Q1)Current Period (Q3 2014)Trend
Instant booking (TripAdvisor)Not available in retrieved docsRolled out on phone in Q2 and on desktop/tablet in Q3; aim to keep transactions on-platform and partner-fulfillment Expanding rollout and partner adoption
Attractions monetizationNot available in retrieved docsViator acquired; integrating to monetize 480k attractions pages and enable bookings (e.g., skip-the-line tours) Accelerating monetization of non-hotel traffic
Restaurants bookingNot available in retrieved docsLaFourchette expansion across EU; in-app dated reservations with discount mechanics Broadening geographic and product reach
Mobile engagementNot available in retrieved docsFull mobile stack (Android/iOS/web); instant booking necessity; 150M downloads to support on-trip engagement Increasing mobile-first execution
Macro (consumer tailwinds)Not available in retrieved docsLower gas prices seen as stimulative for consumer spend (QVC commentary) Moderately positive near-term backdrop

Management Commentary

  • “We are pleased to have completed the spin-off of Liberty TripAdvisor Holdings in August. TripAdvisor recently closed the acquisition of Viator, significantly growing its presence in the tours and attractions reservation business.” — Greg Maffei .
  • “Keeping the transaction on TripAdvisor… we let you select the rooms, put in payment information… Best Western is servicing this reservation… conversion rate’s higher… everyone wins.” — Stephen Kaufer on instant booking .
  • “Total cash and liquid investments for Liberty TripAdvisor decreased $57 million, primarily due to the acquisition of Viator… Total debt… increased by $393 million… due to borrowings under the Liberty TripAdvisor margin loan.” — Company commentary .
  • “TripAdvisor is all about helping travelers plan… 315 million unique visitors… 200 million reviews and opinions… global scale with 28 languages.” — Stephen Kaufer .

Q&A Highlights

  • Macro backdrop: lower gas prices are a “massive tax cut” and generally positive for consumer spend; QVC sees some benefit and psychology tailwind .
  • Shipping cost inflation: QVC balances fair shipping pricing with logistics optimization and CommerceHub capabilities; may shift more items to shipping-included pricing .
  • Strategic options for Liberty TripAdvisor: combination with TripAdvisor is “highly likely” at some point, but no plans or near-term compulsion; levered control supports long-term investment horizon .
  • Talent/programming at QVC: succession plans for on-air hosts; Joan Rivers Collection to continue under Melissa Rivers’ ownership .

Estimates Context

  • Wall Street consensus (S&P Global) for LTRPA Q3 2014 EPS and revenue was unavailable due to missing SPGI/CIQ mapping for the ticker. As a result, beat/miss versus consensus cannot be assessed for LTRPA this quarter. TripAdvisor’s reported results (revenue $354M, EPS $0.37, adj. EBITDA $119M) are presented for context .

Key Takeaways for Investors

  • Consolidated top-line strength: Liberty TripAdvisor revenue accelerated to $375M, but adjusted OIBDA and operating income softened sequentially, highlighting investment mix and consolidation effects .
  • TripAdvisor growth drivers intact: strong y/y revenue growth (+39%), expanding attractions and restaurants booking, and broader instant booking rollout should support sustained monetization .
  • Balance sheet leverage: total debt rose to $746M on the $400M margin loan; consolidated GAAP cash fell to $543M; LTRPA lacks ready access to TripAdvisor’s cash given non-controlling interest — monitor financing flexibility and hedging strategies .
  • No formal guidance: absence of quantitative guidance increases reliance on operational KPIs (instant booking adoption, mobile conversion, non-hotel monetization) for near-term narrative .
  • Spin-off positioning: completed in August; Liberty maintains strategic optionality around TripAdvisor while supporting a longer-term investment horizon .
  • Short-term trading: momentum may hinge on TripAdvisor product execution (instant booking UX/conversion) and integration of Viator/LaFourchette; lack of consensus comps could reduce near-term volatility linked to “beat/miss” dynamics .
  • Medium-term thesis: diversified monetization beyond hotels (attractions, restaurants), mobile engagement, and the UGC moat remain durable competitive advantages for TripAdvisor within LTRPA’s portfolio .

All data and statements are sourced from the Q3 2014 8-K and Investor Day transcript as cited above.