TripAdvisor (TRIP) Tops Q4 EPS by 12c

TripAdvisor (NASDAQ: TRIP) reported Q4 EPS of $0.16, $0.12 better than the analyst estimate of $0.04. Revenue for the quarter came in at $354 million versus the consensus estimate of $344.24 million.

Outlook:

Our fiscal 2023 outlook assumes no change in the macro environment, which remains uncertain, yet also assumes resilient travel demand. At this time, for the full year in 2023, we expect:

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Consolidated adjusted EBITDA margin to remain flat year-over-year, which assumes approximately flat year-over-year margins in Tripadvisor Core.
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Full year consolidated revenue growth that reflects the diverse growth profiles across our portfolio, and is consistent with broader travel growth trends.

Additionally, in the first quarter of 2023, as part of the IRS audit of Expedia, we received and accepted a closing notice related to transfer pricing for the years 2009 through 2011. We disclosed a potential exposure in our prior filings based on prior communications with the IRS. As a result of the acceptance of the closing notice, we will record an incremental income tax expense as a discrete item, inclusive of interest, in an estimated range of $25 million to $35 million during the first quarter of 2023. This income tax adjustment will not impact adjusted EBITDA. From a cash flow perspective, a net cash outflow of approximately $70 - $80 million is expected during 2023, related to the closing of this audit. We are currently reviewing the impact of this settlement to our remaining transfer pricing income tax reserves for subsequent tax years. Based on this new information received subsequent to year end, future adjustments to income tax expense may occur, which could be material to our financials.

We begin the year excited about the opportunities ahead of us–in particular, the coalescence of our long-term objectives, rooted in our near-term 2023 operating plan, and a travel industry that we believe will continue to drive opportunities. We look forward to discussing more about our results tomorrow morning, Wednesday, February 15, 2023 at 8:30 am Eastern Time.

For earnings history and earnings-related data on TripAdvisor (TRIP) click here.

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