Trip.com Group Limited Reports Unaudited Second Quarter and First Half of 2023 Financial Results

Rhea-AI Summary

Trip.com Group reports strong financial results for Q2 2023 with significant revenue growth and recovery in travel bookings. Domestic hotel bookings grew by 170% YoY and outbound hotel and air reservations reached over 60% of pre-COVID levels. Total net revenue increased by 180% YoY, and net income for Q2 was RMB648 million ($91 million), a significant improvement from the same period in 2022. Adjusted EBITDA margin was 33%, compared to 9% in 2022. The company remains optimistic about the long-term market outlook.

Positive

• Significant revenue growth and recovery in travel bookings
• Domestic hotel bookings grew by 170% YoY
• Outbound hotel and air reservations reached over 60% of pre-COVID levels
• Total net revenue increased by 180% YoY
• Net income for Q2 was RMB648 million ($91 million), a significant improvement

Negative

• None.

SHANGHAI, Sept. 4, 2023 /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 second quarter and first half of 2023.

Key Highlights for the Second Quarter of 2023

• Domestic and international business continued to show robust recovery in the second quarter of 2023

- Domestic hotel bookings grew by 170% year over year and by over 60% compared to the pre-COVID level for the same period in 2019.
- Outbound hotel and air reservations recovered to over 60% of the pre-COVID level for the same period in 2019, surpassing the industry-wide recovery rate of 37% in terms of international air passenger volume for the same period.
- Air ticket bookings on the Company's global OTA platform grew by over 120% year over year and nearly doubled compared to the pre-COVID level for the same period in 2019.

• The Company delivered strong results in the second quarter of 2023 

- Total net revenue increased by 180% year over year and exceeded the pre-COVID level for the same period in 2019 by 29%.
- Net income for the second quarter was RMB648 million (US$91 million), which improved from RMB43 million for the same period in 2022.
- Adjusted EBITDA for the second quarter was RMB3.7 billion (US$507 million). Adjusted EBITDA margin was 33%, compared to 9% for the same period in 2022 and 31% for the previous quarter.

"During the second quarter of 2023, the demand for both domestic and international travel remained resilient." said James Liang, Executive Chairman. "Despite limited air capacity recovery, the robust rebound of travel activities reflects travelers' strong desire to explore the world. We remain optimistic about the enduring demand for travel and the long-term market outlook."

"We are encouraged by our solid results in the second quarter," said Jane Sun, Chief Executive Officer. "With the thriving market demand and our outstanding performance, we are poised to take the lead in driving the industry's recovery and actively creating an abundance of job opportunities alongside our esteemed business partners."

Second Quarter of 2023 Financial Results and Business Updates

The Company's business continued to recover significantly since the pent-up demand for travel remains strong, which led to an increasing volume of travel bookings.

For the second quarter of 2023, Trip.com Group reported net revenue of RMB11.2 billion (US$1.6 billion), representing a 180% increase from the same period in 2022 and a 22% increase from the previous quarter, primarily due to the substantial recovery of travel market.

Accommodation reservation revenue for the second quarter of 2023 was RMB4.3 billion (US$591 million), representing a 216% increase from the same period in 2022 and a 23% increase from the previous quarter, primarily due to the substantial recovery of travel market.

Transportation ticketing revenue for the second quarter of 2023 was RMB4.8 billion (US$664 million), representing a 173% increase from the same period in 2022 and a 16% increase from the previous quarter, primarily due to the substantial recovery of travel market.

Packaged-tour revenue for the second quarter of 2023 was RMB722 million (US$100 million), representing a 492% increase from the same period in 2022 and an 87% increase from the previous quarter, primarily due to the substantial recovery of travel market.

Corporate travel revenue for the second quarter of 2023 was RMB584 million (US$81 million), representing a 178% increase from the same period in 2022 and a 31% increase from the previous quarter, primarily due to the substantial recovery of travel market.

Cost of revenue for the second quarter of 2023 increased by 106% to RMB2.0 billion (US$277 million) from the same period in 2022 and increased by 23% from the previous quarter, primarily due to the substantial recovery of travel market. Cost of revenue as a percentage of net revenue was 18% for the second quarter of 2023.

Product development expenses for the second quarter of 2023 increased by 67% to RMB3.0 billion (US$407 million) from the same period in 2022 and increased by 10% from the previous quarter, primarily due to an increase in product development personnel related expenses. Product development expenses as a percentage of net revenue was 26% for the second quarter of 2023.

Sales and marketing expenses for the second quarter of 2023 increased by 185% to RMB2.4 billion (US$325 million) from the same period in 2022 and increased by 34% from the previous quarter, primarily due to an increase in expenses relating to sales and marketing promotion activities. Sales and marketing expenses as a percentage of net revenue was 21% for the second quarter of 2023.

General and administrative expenses for the second quarter of 2023 increased by 58% to RMB955 million (US$132 million) from the same period in 2022 primarily due to an increase in general and administrative personnel related expenses and increased by 7% from the previous quarter. General and administrative expenses as a percentage of net revenue was 8% for the second quarter of 2023.

Income tax expense for the second quarter of 2023 was RMB562 million (US$77 million), compared to RMB173 million for the same period in 2022 and RMB341 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, certain non-taxable income or loss resulting from the fair value changes in equity securities investments and exchangeable senior notes, and changes in valuation allowance provided for deferred tax assets.

Net income for the second quarter of 2023 was RMB648 million (US$91 million), compared to RMB43 million for the same period in 2022 and RMB3.4 billion for the previous quarter. Adjusted EBITDA for the second quarter of 2023 was RMB3.7 billion (US$507 million), compared to RMB355 million for the same period in 2022 and RMB2.8 billion for the previous quarter. Adjusted EBITDA margin was 33% for the second quarter of 2023, compared to 9% for the same period in 2022 and 31% for the previous quarter.

Net income attributable to Trip.com Group's shareholders for the second quarter of 2023 was RMB631 million (US$89 million), compared to RMB69 million for the same period in 2022 and RMB3.4 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 second quarter of 2023 was RMB3.4 billion (US$475 million), compared to non-GAAP net loss attributable to Trip.com Group's shareholders of RMB203 million for the same period in 2022 and non-GAAP net income attributable to Trip.com Group's shareholders of RMB2.1 billion for the previous quarter.

Diluted earnings per ordinary share and per ADS was RMB0.94 (US$0.13) for the second quarter of 2023. Excluding share-based compensation charges, fair value changes of equity securities investments and exchangeable senior notes and their tax effects, non-GAAP diluted earnings per ordinary share and per ADS was RMB5.11 (US$0.70) for the second quarter of 2023. Each ADS currently represents one ordinary share of the Company.

As of June 30, 2023, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB75.0 billion (US$10.3 billion).

Conference Call

Trip.com Group's management team will host a conference call at 8:00 PM EST on September 4, 2023 (or 8:00 AM CST on September 5, 2023) 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/BI90bc7b46919e4b55a896bf30b59d4a4a 

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, the impact of COVID-19 to Trip.com Group's business operations, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of the variable interest entities and the contractual arrangements among Trip.com Group, the variable interest entities and their shareholders, 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, 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 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, 2022		June 30, 2023		June 30, 2023
			RMB (million)		RMB (million)		USD (million)
	ASSETS
	Current assets:
	Cash, cash equivalents and restricted cash		18,487		36,843		5,080
	Short-term investments		25,545		18,532		2,556
	Accounts receivable, net		5,486		10,689		1,474
	Prepayments and other current assets		11,917		17,028		2,348
	Total current assets		61,435		83,092		11,458
	Property, equipment and software		5,204		5,192		716
	Intangible assets and land use rights		12,825		12,738		1,757
	Right-of-use asset		819		715		99
	Investments (Includes held to maturity time deposit and financial products of RMB15,527 million and RMB19,581 million as of December 31,2022 and June 30, 2023, respectively)		50,177		54,757		7,551
	Goodwill		59,337		59,382		8,189
	Other long-term assets		570		624		86
	Deferred tax asset		1,324		1,716		237
	Total assets		191,691		218,216		30,093
	LIABILITIES
	Current liabilities:
	Short-term debt and current portion of long-term debt		32,674		32,414		4,470
	Accounts payable		7,569		14,729		2,031
	Advances from customers		8,278		13,505		1,862
	Other current liabilities		12,718		15,029		2,073
	Total current liabilities		61,239		75,677		10,436
	Deferred tax liability		3,487		3,647		503
	Long-term debt		13,177		19,697		2,716
	Long-term lease liability		534		484		67
	Other long-term liabilities		235		310		43
	Total liabilities		78,672		99,815		13,765
	SHAREHOLDERS' EQUITY
	Total Trip.com Group Limited shareholders' equity		112,283		117,649		16,224
	Non-controlling interests		736		752		104
	Total shareholders' equity		113,019		118,401		16,328
	Total liabilities and shareholders' equity		191,691		218,216		30,093

 

Trip.com Group Limited
Unaudited Consolidated Statements of Income/(Loss)
(In millions, except share and per share data)
			Three Months Ended								Six Months Ended
			June 30, 2022		March 31, 2023		June 30, 2023		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2023
			RMB (million)		RMB (million)		RMB (million)		USD (million)		RMB (million)		RMB (million)		USD (million)
	Revenue:
	Accommodation reservation		1,357		3,480		4,285		591		2,807		7,765		1,071
	Transportation ticketing		1,763		4,156		4,814		664		3,426		8,970		1,237
	Packaged-tour		122		386		722		100		246		1,108		153
	Corporate travel		210		445		584		81		432		1,029		142
	Others		564		744		857		118		1,216		1,601		221
	Total revenue		4,016		9,211		11,262		1,554		8,127		20,473		2,824
	Less: Sales tax and surcharges		(5)		(13)		(15)		(2)		(7)		(28)		(4)
	Net revenue		4,011		9,198		11,247		1,552		8,120		20,445		2,820
	Cost of revenue		(976)		(1,637)		(2,007)		(277)		(2,043)		(3,644)		(502)
	Gross profit		3,035		7,561		9,240		1,275		6,077		16,801		2,318
	Operating expenses:
	Product development *		(1,772)		(2,674)		(2,953)		(407)		(3,746)		(5,627)		(776)
	Sales and marketing *		(826)		(1,755)		(2,355)		(325)		(1,669)		(4,110)		(567)
	General and administrative *		(604)		(891)		(955)		(132)		(1,188)		(1,846)		(255)
	Total operating expenses		(3,202)		(5,320)		(6,263)		(864)		(6,603)		(11,583)		(1,598)
	(Loss)/income from operations		(167)		2,241		2,977		411		(526)		5,218		720
	Interest income		544		441		513		71		1,135		954		132
	Interest expense		(351)		(486)		(555)		(77)		(692)		(1,041)		(144)
	Other income/(expense)		469		1,652		(1,961)		(270)		(238)		(309)		(43)
	Income/(loss) before income tax expense and equity in income of affiliates		495		3,848		974		135		(321)		4,822		665
	Income tax expense		(173)		(341)		(562)		(77)		(159)		(903)		(124)
	Equity in (loss)/gain of affiliates		(279)		(133)		236		33		(478)		103		14
	Net income/(loss)		43		3,374		648		91		(958)		4,022		555
	Net loss/(income) attributable to non- controlling interests		26		1		(17)		(2)		38		(16)		(2)
	Net income/(loss) attributable to Trip.com Group Limited		69		3,375		631		89		(920)		4,006		553
	Earnings/(losses) per ordinary share
	- Basic		0.10		5.18		0.97		0.13		(1.42)		6.14		0.85
	- Diluted		0.10		5.02		0.94		0.13		(1.42)		5.98		0.82
	Earnings/(losses) per ADS
	- Basic		0.10		5.18		0.97		0.13		(1.42)		6.14		0.85
	- Diluted		0.10		5.02		0.94		0.13		(1.42)		5.98		0.82
	Weighted average ordinary shares outstanding
	- Basic		647,866,001		651,849,468		653,392,956		653,392,956		647,843,829		652,625,256		652,625,256
	- Diluted		650,906,465		672,743,729		671,942,381		671,942,381		647,843,829		670,838,392		670,838,392
	* Share-based compensation included in Operating expenses above is as follows:
	Product development		146		179		234		32		253		413		57
	Sales and marketing		28		31		44		6		46		75		10
	General and administrative		130		168		219		30		228		387		53

 

Trip.com Group Limited
Unaudited Reconciliation of  GAAP and Non-GAAP Results
(In millions, except %, share and per share data)
			Three Months Ended								Six Months Ended
			June 30, 2022		March 31, 2023		June 30, 2023		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2023
			RMB (million)		RMB (million)		RMB (million)		USD (million)		RMB (million)		RMB (million)		USD (million)
	Net income/(loss)		43		3,374		648		91		(958)		4,022		555
	Less: Interest income		(544)		(441)		(513)		(71)		(1,135)		(954)		(132)
	Add: Interest expense		351		486		555		77		692		1,041		144
	Add: Other (income)/expense		(469)		(1,652)		1,961		270		238		309		43
	Add: Income tax expense		173		341		562		77		159		903		124
	Add: Equity in loss/(income) of affiliates		279		133		(236)		(33)		478		(103)		(14)
	(Loss)/income from operations		(167)		2,241		2,977		411		(526)		5,218		720
	Add: Share-based compensation		304		378		497		68		527		875		120
	Add: Depreciation and amortization		218		201		204		28		445		405		56
	Adjusted EBITDA		355		2,820		3,678		507		446		6,498		896
	Adjusted EBITDA margin		9 %		31 %		33 %		33 %		5 %		32 %		32 %
	Net income/(loss) attributable to Trip.com Group Limited		69		3,375		631		89		(920)		4,006		553
	Add: Share-based compensation		304		378		497		68		527		875		120
	Add: (Gain)/loss from fair value changes of equity securities investments and exchangeable senior notes		(668)		(1,648)		2,351		324		117		703		97
	Add: Tax effects on fair value changes of equity securities investments and exchangeable senior notes		92		(40)		(45)		(6)		37		(85)		(12)
	Non-GAAP net (loss)/income attributable to Trip.com Group Limited		(203)		2,065		3,434		475		(239)		5,499		758
	Weighted average ordinary shares outstanding-  Diluted-non GAAP		647,866,001		672,743,729		672,031,445		672,031,445		647,843,829		670,838,392		670,838,392
	Non-GAAP Diluted (losses)/income per share		(0.31)		3.07		5.11		0.70		(0.37)		8.20		1.13
	Non-GAAP Diluted (losses)/income per ADS		(0.31)		3.07		5.11		0.70		(0.37)		8.20		1.13
	Notes for all the condensed consolidated financial schedules presented:
	Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB7.2513 on June 30, 2023 published by the Federal Reserve Board.

 

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SOURCE Trip.com Group Limited