Trip.com Group Limited Reports Unaudited First Quarter of 2024 Financial Results

Rhea-AI Summary

Trip.com Group (Nasdaq: TCOM; HKEX: 9961) reported its unaudited financial results for Q1 2024, highlighting significant growth in both domestic and international markets. Key performance indicators include a 29% year-over-year increase in net revenue to RMB11.9 billion (US$1.6 billion) and a net income of RMB4.3 billion (US$599 million), up from RMB3.4 billion in Q1 2023. Adjusted EBITDA saw a 43% rise to RMB4.0 billion (US$550 million) with an improved margin of 33%. Notably, outbound hotel and air bookings surged over 100% year over year.

Accommodation reservation revenue increased by 29% to RMB4.5 billion (US$623 million), and transportation ticketing revenue rose 20% to RMB5.0 billion (US$692 million). Packaged-tour revenue grew by 129% to RMB883 million (US$122 million), while corporate travel revenue increased by 15% to RMB511 million (US$71 million). However, corporate travel revenue decreased by 19% from the previous quarter due to seasonality.

The company ended the quarter with RMB81.9 billion (US$11.3 billion) in cash and equivalents. Expenses rose across the board with cost of revenue increasing by 37%, product development by 16%, sales and marketing by 32%, and general and administrative expenses by 4% compared to Q1 2023.

Positive

• Net revenue increased by 29% year over year to RMB11.9 billion (US$1.6 billion).
• Net income rose to RMB4.3 billion (US$599 million), up from RMB3.4 billion in Q1 2023.
• Adjusted EBITDA grew by 43% to RMB4.0 billion (US$550 million) with a 33% margin.
• Outbound hotel and air bookings increased by over 100% year over year.
• Accommodation reservation revenue increased by 29% to RMB4.5 billion (US$623 million).
• Transportation ticketing revenue rose 20% to RMB5.0 billion (US$692 million).
• Packaged-tour revenue saw a significant rise of 129% to RMB883 million (US$122 million).
• Corporate travel revenue grew by 15% to RMB511 million (US$71 million).
• Closing cash and equivalents were RMB81.9 billion (US$11.3 billion).

Negative

• Cost of revenue increased by 37% to RMB2.2 billion (US$310 million).
• Product development expenses rose by 16% to RMB3.1 billion (US$431 million).
• Sales and marketing expenses increased by 32% to RMB2.3 billion (US$320 million).
• General and administrative expenses grew by 4% to RMB931 million (US$129 million).
• Corporate travel revenue decreased by 19% from the previous quarter due to seasonality.
• Income tax expense more than doubled year over year to RMB664 million (US$92 million).

Insights

Financial Analyst

The first-quarter financial results of Trip.com Group Limited show a significant positive trend in both domestic and international operations. Net revenue increased by 29% year-over-year to US$1.6 billion, which indicates a robust recovery in the travel sector, especially given the challenging economic landscape of recent years due to the pandemic. These substantial gains in revenue are further supported by a 29% increase in domestic hotel and air bookings and an impressive over 100% jump in outbound bookings. This suggests a resurgence in consumer confidence and travel demand.

Despite a 37% increase in the cost of revenue, the company's adjusted EBITDA improved to US$550 million, with a margin increase from 31% to 33%. This margin expansion underscores efficient cost management and scalability of operations. However, it's important to note that sales and marketing expenses increased by 32%, which might indicate aggressive efforts to maintain or grow market share and could be a future area of concern if not managed prudently.

In terms of liquidity, Trip.com Group maintains a strong position with US$11.3 billion in cash and equivalents as of March 31, 2024. This liquidity buffer provides ample room for the company to invest in growth initiatives or weather potential economic downturns. The substantial net income of US$599 million further highlights the company's profitable operational model. Retail investors should consider the solid financial health, but also keep an eye on expense management strategies.

Market Research Analyst

The travel industry is clearly rebounding and Trip.com Group is successfully capitalizing on this trend. A notable highlight is the 129% increase in packaged-tour revenue, reflecting a shift in consumer preferences towards comprehensive travel solutions. This could indicate that travelers are seeking more convenience and value-added services post-pandemic and Trip.com's ability to cater to this demand bodes well for future growth.

Seasonal factors played a role in sequential increases in revenue across various segments, but the year-over-year growth figures are particularly telling. The travel boom, especially in the outbound segment, suggests a pent-up demand that is now being realized. However, the 19% sequential decrease in corporate travel revenue suggests a potential area of weakness, which could be attributed to the Chinese New Year holiday season. Investors should monitor how this segment performs in the coming quarters to gauge if this is a temporary dip or a longer-term trend.

The company's strategic focus on product and technology innovations, as highlighted by the management, is important for sustaining long-term growth. Investors should watch for future announcements on technological advancements and new product offerings that could further enhance Trip.com's competitive edge.

SINGAPORE, May 20, 2024 /PRNewswire/ -- Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) ("Trip.com Group" or the "Company"), a leading one-stop travel service provider of accommodation reservation, transportation ticketing, packaged tours, and corporate travel management, today announced its unaudited financial results for the first quarter of 2024.

Key Highlights for the First Quarter of 2024

• Both domestic and international businesses maintained robust growth momentum in the first quarter of 2024
  • Domestic hotel and air bookings each increased by over 20% year over year.
  • Outbound hotel and air bookings both increased by over 100% year over year.
  • Total revenue generated from the Company's global OTA platform, Trip.com, increased by around 80% year over year.

• The Company delivered strong results in the first quarter of 2024
  • Net revenue for the first quarter increased by 29% compared to the same period in 2023.
  • Net income for the first quarter was RMB4.3 billion (US$599 million), compared to RMB3.4 billion for the same period in 2023.
  • Adjusted EBITDA for the first quarter was RMB4.0 billion (US$550 million). Adjusted EBITDA margin was 33%, improved from 31% for the same period in 2023.

"The year 2024 has begun with a significant increase in both domestic and outbound travel demand in China, facilitated by a more stabilized supply and further relaxation of visa requirements," said James Liang, Executive Chairman. "Additionally, our global business has experienced robust growth, driven by our improved product offerings. We are committed to investing in product and technology innovations to deliver a superior travel experience to our users."

"We are delighted to see that our first quarter results have demonstrated the resilience of the travel market and the strong execution of our team," said Jane Sun, Chief Executive Officer. "Recognizing the importance of creating a sustainable future, we are dedicated to generating greater value for our stakeholders by creating more job opportunities and contributing to the development of the travel industry through collaboration with our partners."

First Quarter 2024 Financial Results and Business Updates

For the first quarter of 2024, Trip.com Group reported net revenue of RMB11.9 billion (US$1.6 billion), representing a 29% increase from the same period in 2023. Net revenue for the first quarter of 2024 increased by 15% from the previous quarter, primarily due to seasonality.

Accommodation reservation revenue for the first quarter of 2024 was RMB4.5 billion (US$623 million), representing a 29% increase from the same period in 2023 primarily driven by an increase in accommodation reservations. Accommodation reservation revenue for the first quarter of 2024 increased by 15% from the previous quarter, primarily due to seasonality.

Transportation ticketing revenue for the first quarter of 2024 was RMB5.0 billion (US$692 million), representing a 20% increase from the same period in 2023 primarily driven by an increase in ticketing reservations. Transportation ticketing revenue for the first quarter of 2024 increased by 22% from the previous quarter, primarily due to seasonality.

Packaged-tour revenue for the first quarter of 2024 was RMB883 million (US$122 million), representing a 129% increase from the same period in 2023 primarily driven by an increase in packaged-tour reservations. Packaged-tour revenue for the first quarter of 2024 increased by 25% from the previous quarter, primarily due to seasonality.

Corporate travel revenue for the first quarter of 2024 was RMB511 million (US$71 million), representing a 15% increase from the same period in 2023 primarily driven by an increase in corporate travel reservations. Corporate travel revenue for the first quarter of 2024 decreased by 19% from the previous quarter, primarily due to seasonality as corporates clients generally have relatively mild traveling activities in the first quarter in light of the Chinese New Year holiday.

Cost of revenue for the first quarter of 2024 increased by 37% to RMB2.2 billion (US$310 million) from the same period in 2023 and increased by 11% from the previous quarter, which was generally in line with the increase in net revenue. Cost of revenue as a percentage of net revenue was 19% for the first quarter of 2024.

Product development expenses for the first quarter of 2024 increased by 16% to RMB3.1 billion (US$431 million) from the same period in 2023 and increased by 7% from the previous quarter, primarily due to the increase in product development personnel related expenses. Product development expenses as a percentage of net revenue was 26% for the first quarter of 2024.

Sales and marketing expenses for the first quarter of 2024 increased by 32% to RMB2.3 billion (US$320 million) from the same period in 2023 primarily due to the increase in expenses relating to sales and marketing promotion activities. Sales and marketing expenses remained relatively stable compared to the previous quarter. Sales and marketing expenses as a percentage of net revenue was 19% for the first quarter of 2024.

General and administrative expenses for the first quarter of 2024 increased by 4% to RMB931 million (US$129 million) from the same period in 2023 and increased by 7% from the previous quarter. General and administrative expenses as a percentage of net revenue was 8% for the first quarter of 2024.

Income tax expense for the first quarter of 2024 was RMB664 million (US$92 million), compared to RMB341 million for the same period in 2023 and RMB399 million for the previous quarter. The change in Trip.com Group's effective tax rate was primarily due to the combined impacts of changes in respective profitability of its subsidiaries with different tax rates, changes in deferred tax liabilities relating to withholding tax, certain non-taxable income or loss resulting from the fair value changes in equity securities investments and exchangeable senior notes recorded in other income/(expense), and changes in valuation allowance provided for deferred tax assets.

Net income for the first quarter of 2024 was RMB4.3 billion (US$599 million), compared to RMB3.4 billion for the same period in 2023 and RMB1.3 billion for the previous quarter. Adjusted EBITDA for the first quarter of 2024 was RMB4.0 billion (US$550 million), compared to RMB2.8 billion for the same period in 2023 and RMB2.9 billion for the previous quarter. Adjusted EBITDA margin was 33% for the first quarter of 2024, compared to 31% for the same period in 2023 and 28% for the previous quarter.

Net income attributable to Trip.com Group's shareholders for the first quarter of 2024 was RMB4.3 billion (US$597 million), compared to RMB3.4 billion for the same period in 2023 and RMB1.3 billion for the previous quarter. Excluding share-based compensation charges, fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), and their tax effects, non-GAAP net income attributable to Trip.com Group's shareholders for the first quarter of 2024 was RMB4.1 billion (US$561 million), compared to RMB2.1 billion for the same period in 2023 and RMB2.7 billion for the previous quarter.

Diluted earnings per ordinary share and per ADS was RMB6.38 (US$0.88) for the first quarter of 2024. Excluding share-based compensation charges, fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), and their tax effects, non-GAAP diluted earnings per ordinary share and per ADS was RMB6.00 (US$0.83) for the first quarter of 2024. Each ADS currently represents one ordinary share of the Company.

As of March 31, 2024, the balance of cash and cash equivalents, restricted cash, short-term investment, and held to maturity time deposit and financial products was RMB81.9 billion (US$11.3 billion).

Conference Call

Trip.com Group's management team will host a conference call at 8:00 PM EST on May 20, 2024 (or 8:00 AM CST on May 21, 2024) following this announcement.

The conference call will be available live on Webcast and for replay at: https://investors.trip.com. The call will be archived for twelve months on our website.

All participants must pre-register to join this conference call using the Participant Registration link below:
https://register.vevent.com/register/BI081613f1346b45419466c3b6c9ce0001

Upon registration, each participant will receive details for this conference call, including dial-in numbers and a unique access PIN. To join the conference, please dial the number provided, enter your PIN, and you will join the conference instantly.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident," or other similar statements. Among other things, quotations from management in this press release, as well as Trip.com Group's strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Trip.com Group's ADSs or shares, Trip.com Group's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Trip.com Group operates, failure to successfully develop Trip.com Group's existing or future business lines, damage to or failure of Trip.com Group's infrastructure and technology, loss of services of Trip.com Group's key executives, adverse changes in economic and business conditions in the relevant jurisdictions where Trip.com Group operates, any regulatory developments in laws, regulations, rules, policies or guidelines applicable to Trip.com Group and other risks outlined in Trip.com Group's filings with the U.S. Securities and Exchange Commission or the Stock Exchange of Hong Kong Limited. All information provided in this press release and in the attachments is as of the date of the issuance, and Trip.com Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Trip.com Group's consolidated financial statements, which are prepared and presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Trip.com Group uses non-GAAP financial information related to adjusted net income attributable to Trip.com Group Limited, adjusted EBITDA, adjusted EBITDA margin, and adjusted diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges that are not tax deductible, fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), net of tax, and other applicable items. Trip.com Group's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods. 

Non-GAAP information is not prepared in accordance with GAAP, does not have a standardized meaning under GAAP, and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges, fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), and their tax effects that have been and will continue to be significant recurring expenses in Trip.com Group's business for the foreseeable future.

Reconciliations of Trip.com Group's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Trip.com Group Limited

Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) is a leading global one-stop travel platform, integrating a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in China, and increasingly for travelers around the world, to explore travel, get inspired, make informed and cost-effective travel bookings, enjoy hassle-free on-the-go support, and share travel experience. Founded in 1999 and listed on Nasdaq in 2003 and HKEX in 2021, the Company currently operates under a portfolio of brands, including Ctrip, Qunar, Trip.com, and Skyscanner, with the mission "to pursue the perfect trip for a better world."

For further information, please contact:

Investor Relations
Trip.com Group Limited
Tel: +86 (21) 3406-4880 X 12229
Email: iremail@trip.com

 

 

Trip.com Group Limited
Unaudited Consolidated Balance Sheets
(In millions, except share and per share data)
			December 31, 2023		March 31, 2024		March 31, 2024
			RMB (million)		RMB (million)		USD (million)
	ASSETS
	Current assets:
	Cash, cash equivalents and restricted cash		43,983		44,773		6,201
	Short-term investments		17,748		25,507		3,533
	Accounts receivable, net		11,410		12,251		1,697
	Prepayments and other current assets		15,591		17,496		2,423
	Total current assets		88,732		100,027		13,854
	Property, equipment and software		5,142		5,103		707
	Intangible assets and land use rights		12,644		12,596		1,745
	Right-of-use asset		641		627		87
	Investments (Includes held to maturity time deposit and financial products of RMB15,530 million and RMB11,628 million as of December 31,2023 and March 31, 2024, respectively)		49,342		47,672		6,602
	Goodwill		59,372		59,377		8,224
	Other long-term assets		688		623		86
	Deferred tax asset		2,576		2,481		344
	Total assets		219,137		228,506		31,649
	LIABILITIES
	Current liabilities:
	Short-term debt and current portion of long-term debt		25,857		38,627		5,350
	Accounts payable		16,459		17,736		2,456
	Advances from customers		13,380		13,928		1,929
	Other current liabilities		16,715		16,516		2,288
	Total current liabilities		72,411		86,807		12,023
	Deferred tax liability		3,825		3,608		500
	Long-term debt		19,099		8,688		1,203
	Long-term lease liability		477		468		65
	Other long-term liabilities		319		326		45
	Total liabilities		96,131		99,897		13,836
	SHAREHOLDERS' EQUITY
	Total Trip.com Group Limited shareholders' equity		122,184		127,774		17,697
	Non-controlling interests		822		835		116
	Total shareholders' equity		123,006		128,609		17,813
	Total liabilities and shareholders' equity		219,137		228,506		31,649

 

 

 

Trip.com Group Limited
Unaudited Consolidated Statements of Income
(In millions, except share and per share data)
			Quarter ended		Quarter ended		Quarter ended		Quarter ended
			March 31, 2023		December 31, 2023		March 31, 2024		March 31, 2024
			RMB (million)		RMB (million)		RMB (million)		USD (million)
	Revenue:
	Accommodation reservation		3,480		3,903		4,496		623
	Transportation ticketing		4,156		4,106		5,000		692
	Packaged-tour		386		704		883		122
	Corporate travel		445		634		511		71
	Others		744		991		1,031		143
	Total revenue		9,211		10,338		11,921		1,651
	Less: Sales tax and surcharges		(13)		(13)		(16)		(2)
	Net revenue		9,198		10,325		11,905		1,649
	Cost of revenue		(1,637)		(2,010)		(2,238)		(310)
	Gross profit		7,561		8,315		9,667		1,339
	Operating expenses:
	Product development *		(2,674)		(2,916)		(3,109)		(431)
	Sales and marketing *		(1,755)		(2,333)		(2,312)		(320)
	General and administrative *		(891)		(869)		(931)		(129)
	Total operating expenses		(5,320)		(6,118)		(6,352)		(880)
	Income from operations		2,241		2,197		3,315		459
	Interest income		441		593		592		82
	Interest expense		(486)		(497)		(499)		(69)
	Other income/(expense)		1,652		(903)		759		105
	Income before income tax expense and equity in (loss)/income of affiliates		3,848		1,390		4,167		577
	Income tax expense		(341)		(399)		(664)		(92)
	Equity in (loss)/gain of affiliates		(133)		351		822		114
	Net income		3,374		1,342		4,325		599
	Net loss/(income) attributable to non-controlling interests		1		(45)		(13)		(2)
	Net income attributable to Trip.com Group Limited		3,375		1,297		4,312		597
	Earnings per ordinary share
	- Basic		5.18		1.99		6.62		0.92
	- Diluted		5.02		1.94		6.38		0.88
	Earnings per ADS
	- Basic		5.18		1.99		6.62		0.92
	- Diluted		5.02		1.94		6.38		0.88
	Weighted average ordinary shares outstanding
	- Basic		651,849,468		652,033,082		651,349,707		651,349,707
	- Diluted		672,743,729		668,332,395		675,933,592		675,933,592
	* Share-based compensation included in Operating expenses above is as follows:
	Product development		179		215		214		30
	Sales and marketing		31		39		38		5
	General and administrative		168		196		198		27

 

 

 

Trip.com Group Limited
Unaudited Reconciliation of  GAAP and Non-GAAP Results
(In millions, except %, share and per share data)
			Quarter ended		Quarter ended		Quarter ended		Quarter ended
			March 31, 2023		December 31, 2023		March 31, 2024		March 31, 2024
			RMB (million)		RMB (million)		RMB (million)		USD (million)
	Net income		3,374		1,342		4,325		599
	Less: Interest income		(441)		(593)		(592)		(82)
	Add: Interest expense		486		497		499		69
	Add: Other (income)/expense		(1,652)		903		(759)		(105)
	Add: Income tax expense		341		399		664		92
	Add: Equity in loss/(income) of affiliates		133		(351)		(822)		(114)
	Income from operations		2,241		2,197		3,315		459
	Add: Share-based compensation		378		450		450		62
	Add: Depreciation and amortization		201		208		209		29
	Adjusted EBITDA		2,820		2,855		3,974		550
	Adjusted EBITDA margin		31 %		28 %		33 %		33 %
	Net income attributable to Trip.com Group Limited		3,375		1,297		4,312		597
	Add: Share-based compensation		378		450		450		62
	Add: (Gain)/loss from fair value changes of equity securities investments and exchangeable senior notes		(1,648)		989		(679)		(94)
	Add: Tax effects on fair value changes of equity securities investments and exchangeable senior notes		(40)		(61)		(28)		(4)
	Non-GAAP net income attributable to Trip.com Group Limited		2,065		2,675		4,055		561
	Weighted average ordinary shares outstanding-  Diluted-non GAAP		672,743,729		668,332,395		675,933,592		675,933,592
	Non-GAAP Diluted income per share		3.07		4.00		6.00		0.83
	Non-GAAP Diluted income per ADS		3.07		4.00		6.00		0.83
	Notes for all the condensed consolidated financial schedules presented:
	Note 1: The translations of Renminbi (RMB) into U.S. dollars (USD) are based on the certified exchange rate of USD1.00=RMB7.2203 on March 29, 2024 published by the Federal Reserve Board.

 

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SOURCE Trip.com Group Limited

FAQ

What was Trip.com Group's net revenue for Q1 2024?

Trip.com Group's net revenue for Q1 2024 was RMB11.9 billion (US$1.6 billion), representing a 29% year-over-year increase.

How much did Trip.com Group's net income increase in Q1 2024?

Net income for Trip.com Group in Q1 2024 was RMB4.3 billion (US$599 million), up from RMB3.4 billion in Q1 2023.

What was Trip.com Group's adjusted EBITDA for Q1 2024?

Adjusted EBITDA for Trip.com Group in Q1 2024 was RMB4.0 billion (US$550 million), a 43% increase from the same period in 2023.

How did Trip.com Group's outbound bookings perform in Q1 2024?

Outbound hotel and air bookings for Trip.com Group increased by over 100% year over year in Q1 2024.

What is Trip.com Group's stock symbol?

Trip.com Group's stock symbol is 'TCOM' on Nasdaq and '9961' on HKEX.

What was the revenue from accommodation reservations in Q1 2024 for Trip.com Group?

Revenue from accommodation reservations was RMB4.5 billion (US$623 million), representing a 29% year-over-year increase.

How did Trip.com Group's transportation ticketing revenue change in Q1 2024?

Transportation ticketing revenue for Q1 2024 was RMB5.0 billion (US$692 million), a 20% increase from the same period in 2023.

What was Trip.com Group's revenue from packaged tours in Q1 2024?

Revenue from packaged tours in Q1 2024 increased by 129% to RMB883 million (US$122 million).

How much cash and equivalents did Trip.com Group have at the end of Q1 2024?

Trip.com Group had RMB81.9 billion (US$11.3 billion) in cash and equivalents as of March 31, 2024.