Travelzoo — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue was $22.9 million, a 3% increase year-over-year from $22.2 million; revenue in constant currencies was $23.0 million.
• Consolidated operating loss was $2.6 million, compared to an operating profit of $0.5 million in the prior-year period.
• Non-GAAP consolidated operating loss was $2.1 million, excluding stock option expenses of $338,000 and severance expenses of $150,000.
• Net loss attributable to Travelzoo was $2.0 million, or $(0.20) per share, compared to net income of $0.01 per share in the prior-year period.
• Cash flow from operations was $1.8 million.
• Cash, cash equivalents, and restricted cash totaled $8.8 million as of September 30, 2026.
• Deferred revenue increased to $13.5 million from $8.7 million at the end of 2025 due to membership fees recognized ratably over 12 months.
• Income tax benefit for the quarter was $436,000.

Guidance and Future Outlook:

• The company expects year-over-year revenue growth for Q4 2026 and subsequent quarters.
• Future growth is anticipated as the Club Member base expands and Legacy Members convert to paying Club Members.
• Management expects profitability to increase over time as recurring membership fees revenue is recognized, though short-term fluctuations in reported net income are likely.

Business Segments and Product Lines:

• Travelzoo North America: Revenue increased 4% year-over-year to $14.8 million; operating loss was $1.4 million (9% of revenue), compared to an operating profit of $1.1 million (8% of revenue) in the prior year.
• Travelzoo Europe: Revenue increased 5% year-over-year to $6.9 million; operating loss was $1.2 million (18% of revenue), compared to an operating loss of $0.6 million (10% of revenue) in the prior year.
• Jack's Flight Club: Revenue decreased 15% year-over-year to $1.2 million; operating profit was $34,000, up from $20,000 in the prior year. Travelzoo holds a 60% ownership interest.
• New Initiatives: Revenue was $27,000, including Licensing and Travelzoo META; operating loss was $3,000.
• Licensing: Revenue from the Australia licensee was $11,000 and from the Japan licensee was $5,000; revenue from these licensees is expected to increase.
• Club Members: The number of Club Members increased 65% year-over-year.

Market and Competitive Landscape:

• Travelzoo reaches 30 million travelers, including Jack's Flight Club; comparisons to prior periods regarding reach are no longer considered meaningful due to strategic membership developments.
• The company leverages relationships with top travel suppliers to negotiate Club Offers and adds benefits such as complimentary airport lounge access.

Risks and Challenges:

• Forward-looking statements involve risks and uncertainties, including changes in plans, objectives, and expectations, which could cause actual results to differ materially.
• Short-term fluctuations in reported net income are expected due to the ratable recognition of membership fees.

Management Commentary and Tone:

• Holger Bartel, Global CEO, stated the company will continue to leverage its global reach and trusted brand to negotiate more Club Offers and add new benefits.
• Management described Travelzoo members as affluent, active, and open to new experiences, positioning the service as a "must-have membership" for travel enthusiasts.
• The company is accelerating the shift towards membership fees revenue, with marketing costs expensed immediately while membership fees are recognized ratably.

Other Key Points:

• During Q3 2026, the Company repurchased 256,898 shares of its outstanding common stock.
• In 2024, Travelzoo introduced a membership fee; Legacy Members joined prior to 2024 continue to receive certain offers, but Club Offers and new benefits are restricted to paying Club Members.
• Royalty-bearing licensing agreements were entered into in 2020 for Australia, Japan, New Zealand, and Singapore, with Travelzoo retaining ownership of existing members in those regions.