Good day, ladies and gentlemen. Thank you for standing by, and welcome to trivago's Q3 Earnings Call 2025. I must advise you the call is being recorded today, Wednesday, the 5th of November 2025. We are pleased to be joined on the call today by Johannes Thomas, trivago's CEO and Managing Director; and Wolf Schmuhl, trivago's CFO and Managing Director. The following discussion, including responses to your questions, reflect management's view as of Tuesday, November 4, 2025 only, unless expressly stated otherwise, in which case it reflects management's view as of today, Wednesday, November 5, 2025 only. Trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to the Q3 2025 operating and financial review and trivago's all other filings with the SEC for information about factors which could cause trivago's actual results to differ materially from those forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on trivago's Investor Relations website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations website for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2024. With that, let me turn the call over to Johannes.

Good morning, and thank you for joining our Q3 2025 earnings call. We delivered 13% year-over-year revenue growth, making it our third consecutive quarter of double-digit growth. Q3 exceeded expectations on both the top and bottom lines, and we are encouraged by the strength and durability of our momentum. We achieved this acceleration despite major foreign exchange headwinds while improving adjusted EBITDA by 18% year-over-year. The quality of this growth gives us confidence. It's led by our strong double-digit branded traffic revenue growth, which continues to outperform and benefit from compounding effects. Our AI-powered campaign featuring brand ambassador, Jürgen Klopp as well as our local productions made a significant impact this summer. Our product has materially improved quarter after quarter, delivering a better user experience and stronger marketing efficiency. We have observed a promising start into Q4 and expect to close the quarter and the year at mid-teens level. We see our strategy unfolding and expect this to continue to fuel our double-digit growth trajectory in the years to come. While we continue to elevate our brand investment next year, we will operate with discipline and expect compounding effects to increase our profitability gradually. In the following, I will provide an update on our strategic priorities. Our first strategic priority is branded growth. Our brand engine is accelerating and continues to compound. Our summer creators were striking. We are steadily improving marketing efficiency and have diversified our new -- into new brand marketing channels. We remain disciplined, investing where we see strong response. The club campaign, together with strong local productions lifted branded traffic and revenue across all segments with standout performance in the Americas. We aim to broaden our reach and strengthen creative testing to drive higher traveler engagement with our brand. A recent U.S. test underscores our approach.…

Thank you, Johannes, and good morning, everyone. We are thrilled to report that the third quarter of 2025 was yet another successful quarter with strong performance. This quarter, we achieved a 13% year-over-year increase in total revenue, which was driven by our successful brand strategy. We maintained a stable return on advertising spend even as we levered up our brand investments where elasticities are attractive, but the returns come over time. This not only reaffirms the effectiveness of our marketing strategy, it also builds the foundation to further scale branded traffic in the future. Despite economic uncertainties and foreign exchange-related headwinds, we remain confident about our outlook. We continue to expect mid-teens percentage revenue growth for the full year of 2025 and a positive adjusted EBITDA of at least EUR 10 million. Now let's review our third quarter results and our 2026 outlook. Unless otherwise indicated, all comparisons for 2025 are on a year-over-year basis. In the third quarter, our total revenue reached EUR 165.6 million, representing a 13% increase compared to the same period of 2024. We are pleased to note this marks our fourth consecutive quarter of growth. This growth was driven by yet another strong quarter of year-over-year double-digit referral revenue growth of 14% in Americas, 12% in Rest of World and 9% in Developed Europe. Our Developed Europe segment faced headwinds from strong prior year comps, especially early in the quarter, as we called out in our last earnings call. The trend normalized over the course of the third quarter in 2025. Our growth was primarily driven by increased branded channel traffic in response to our ongoing brand marketing investments as well as product improvements, enhancing our booking conversion. Unfavorable foreign exchange headwinds negatively affected our revenue development by approximately 4% globally. Due to our strong…

[Operator Instructions] Your next question comes from the line of Tom White with D.A. Davidson & Co.

This is Wyatt Swanson on for Tom. First one, it's great to hear that revenue from logged-in users continues to increase. Curious to hear your goals of what percentage of users could be logged in over the next 12 to 18 months and maybe some of the initiatives being put in place to retain these more loyal/logged-in users?

Yes. Thank you for the question. I think a very important one. And the number has increased, and it's important on the target. So it's not that we are dogmatically having a target, let's say, we want to bring this to 50% or so. It will rather be an outcome of diligent testing and experimenting in what moment in time do we ask users to log in, in a way that this improves conversion, doesn't cost us short-term revenue at unreasonable levels. So we now have increased it. We last time said it's north of 20%. I would say if we are reaching something like 30%, it is a number where we can say we have a core -- identified a core user segment that when they log in, they will have a different trivago experience. So maybe it is 40%. We don't know exactly, and we will find out. We know the current users that we have behind the log-in more than 20%. They convert 25% better than the others. So it's really a meaningful difference to all others. They have more engagement on our side, and we will continue to offer special deals to them. We have done the enhanced sharing functionality, collaboration functionality. We expect to have price alerts, expanded the functionality. And you can think about it when a user comes to the site and we have a closer relationship. We know there is this 2 to 4 weeks period where they are likely to book. And in this period, we need to maximize the contacts over time. So they are not just coming through trivago one time. And that's really the goal here to increase engagement during this hot period where they're likely to book. And then also if they had a better experience certainly to increase retention, which is much harder to measure and estimate and which is not kind of part of our direct planning, but increasing conversion rate with those users and the engagement, it's already attractive from what we are seeing today and that we will continue to embrace. Whether it will be 30% or 40%, it will be an outcome. It's not a fixed target.

Got it. That's very helpful. And then one more. B2B has been a pretty notable area of growth for the large OTAs recently. Curious whether trivago could potentially play a role in that space in the coming years? And how would you see that looking exactly?

Yes, we have been discussing B2B here and then. Also with Holisto now having a white label platform, you could access B2B rates and build a special proposition for the B2B world and offer white labels for those who are seeking that. We work with affiliates and there is some attractive business. But we really are focused around leisure at this point in time. That's where our proposition is strong and the space is huge. And we -- simplicity as beauty, we are not doing flights. We are not doing package and so on because there's so much meat in this space. And that's where we see a lot of opportunity to grow. Long term, there's certainly options that we can look into, but the timing is not right for that.

Your next question comes from the line of Naved Khan with B. Riley Securities.

A few questions from me. Maybe first of all, just a clarification on the outlook for 2026. When you say you expect revenue to grow double digits, EBITDA EUR 20 million. How should we think about growth in the core business, the lead gen business versus Holisto? Should we expect both to be growing double digits or a different pace? Just talk about that.

Naved, thanks for your question. So regarding Holisto, for the future, we will only guide on a consolidated level. But to give some clarity there, we expect both segments to grow double digit. And maybe it's helpful to add some color on 2026 and on the budget. As we have now entered around 27 core travel markets. And for the next year, we plan to optimize these existing markets. We are quite optimistic that these markets offer enough room for growth. And as well, we will also gradually optimize profitability. And this is reflected in our 2026 guidance with an adjusted EBITDA of around EUR 20 million. So what are the major reasons for giving us this confidence? So first of all, the market we are tackling is large, and our share is still below 1%, and this gives us a substantial runway. We are one of the strongest brands in the category, and we offer a very differentiated product, and this also creates a clear room to grow. Our brand investments are still below 2019 levels. And also there, we see a strong opportunity to invest at attractive returns. Recent and current brand investments are compounding, and we expect them to support our profitability in 2026.

Maybe let me build on this point. I think that's very important to explain more exactly what we mean with expansion versus optimization. In the past years and also when we built trivago, we have basically been growth-oriented, and we took profits from markets that have delivered substantial profitability and invested it into markets that we activated or reactivated. And for some markets, it goes fast. For some markets, it takes time to optimize those markets and compounding effects to make them profitable. But now when we stop expanding markets, we basically take some of the compounding effect to our bottom line. And it's a matter of optimizing country mix, marketing mix and improving our creative. And that's where gradually we see more profitability landing in our bottom line as well.

Super helpful on that. So maybe just talk about the compounding. What kind of improvement are you seeing in the marketing efficiency? Just give us a sense of that, it seems to be playing a role in this increased profitability.

Yes, it's something -- I mean, what we look at how much of our volume -- how much of our growth is coming from branded growth versus other channels. And by far, the majority of our growth is coming from branded growth. And this is only possible if you see compounding effects year-over-year or summer into off-season periods, and that's what we see clearly. And every year, we are investing the year after will benefit from that. That's something we have seen in the past. We are seeing it today in some markets more, in some markets less. And that's part of our optimization, what elasticity and how much compounding effects we are seeing over time.

Got it. And then last point -- last question is around this logged-in contribution to revenue. What are the incentives or benefits that you're giving to the logged-in so that they come back and again transact directly with you?

Yes. The most important one is private deals. If you go to trivago, you will find log-in triggers that show you, you would get an even cheaper deal if you log in. And these logged-in users, we see a higher engagement, and that's a strong signal that conversion is a strong signal for retention, for satisfaction and those users we expect to come back with a higher probability. And this share is increasing. We are increasing the amount of deals we are showing to our users. We are optimizing with our partners what's the right level of deals that we are providing to our users. So the higher the deals, the higher the conversion rate, the higher the satisfaction and we aim to find a good balance between having a margin out of that and still having a steep conversion rate improvement while we are doing that.

Congrats on the progress.

Your next question comes from the line of Doug Anmuth with JPMorgan.

Great. This is Dae Lee on for Doug. First one on just AI overall. So we've seen consumers' search behavior increasingly shift across platforms and notably AI-driven tools such as like Google's AI, ChatGPT. So how is trivago positioned to defend or grow your share of top-of-funnel traffic in this type of environment? And do you see a strategic need for trivago to be present on these new experiences? If not, like what differentiates trivago's value proposition in capturing those consumers' intent versus the broader search and AI ecosystems?

Yes. Thank you for the question. I think an important one that we are observing very closely. I think very important, and that's true for us and other players we are talking to. The shift to the AI platforms is really small when it comes closer to the planning and booking process. So it's a tiny share of traffic we are seeing today. If you use it, you probably see there's a benefit of inspirational and so on. But as soon as it goes a bit down the planning and a bit more concrete and considering it's more clunky to use a chat experience to really nail down your selection. I'm not saying nobody is doing it, but we don't see like a flood of people doing this. So the traffic we get from these AI engines today is very small. It is growing. It's converting better than other traffic. So we are looking at how fast is this growing. If we look at the impact we have seen from the AI mode, for instance, in the U.S. when it got rolled out or in Europe recently, we have not seen a huge impact on any major Google metric. Our SEO, for instance, it's a small part of our business. We're not concerned of losing much SEO business in general because it's so small. But last quarter, it has not been a headwind for us. It was rather flattish. And overall, we have not seen what happened so far, which was not small, which had quite some scope, AI summaries and the AI mode didn't really have a substantial impact on what we are doing. One part is that we have built our brand. So we have lots of business coming direct and then the dependency is lower. And I…

Got it. And as a follow-up, I think in 2024 and this year, you guys try to operate with a breakeven mentality in terms of adjusted EBITDA prioritizing growth. So when you look at your 2026 guidance, EUR 20 million in adjusted EBITDA, does that embed a similar mentality? Or should we expect some like a beginning of margin expansion story given your comments about optimization and brand marketing versus expansionary?

Yes. Maybe let me build on what I said. I think this will mostly come out of the effect that we stop taking profits out of profitable markets and push it into new markets. So you basically just move the profits to bottom line and not move it into new markets. This doesn't mean we are not expanding our marketing investment and brand in general. On a relative scale, we likely will invest it less than in previous year on a relative scale to revenue, but we expect growth to be higher than our spend increase. And we are -- our -- what we explained at the beginning of the year, our general way of becoming more profitable is keeping our cost base flat and growing with our revenue on top. Margin expansion is not necessarily -- it's not part of our current projection. It's really about taking the compounding effects into our bottom line, improving efficiency in our markets and not increasing OpEx at unreasonable levels.

Your next question comes from the line of [ Jack Hu Wong ] with Mizuho.

This is Jack on for Lloyd Walmsley of Mizuho. I just have 2 quick questions. First, are you seeing any uptick in bidding from Airbnb as they pivot to more full focus on hotel? And second one, how are you seeing customer acquisition costs trending in paid search, especially when we think about one of the write-downs for Kayak that happened last week?

Yes. Thank you for the question on Airbnb, they have been on our platform for a while. I think we can -- we hear about the efforts that they want to lean more into hotels. We work on the relevant inventory where there is a likeliness they get visibility on our platform. We are by far making most of our returns with hotels. Still, if you have periods where there is, let's say, a fair in a city or when you have small cities where there are few hotels, the alternative accommodations are a great complementary for our properties. We see Airbnb as an attractive partner to enable that. And then on the question of our -- of performance marketing, we have never been so dependent on SEO. So for us, the paid game was always part of where we are. We are very disciplined in paid. So we are -- whenever we have opportunities, we prefer investing into brand. We aim to keep a disciplined approach in performance. We have not seen any major inflation in the economics on performance marketing that are worth mentioning.

Your next question comes from the line of Ron Josey with Citi.

This is Robert on for Ron. You guys have mentioned that AI is driving product improvements that previously required 100-plus person teams in the prepared remarks. Can you maybe double-click on this and expand on where we'll start to see these productivity gains across the P&L next year, either in the form of kind of double-digit revenue growth and reaccelerating revenues or potential cost efficiencies?

So maybe let me -- so in the past, an example that I outlined here was we had a content team of 100-plus people where we were basically editing, creating condensed information about a hotel. So it was a lot of people for -- with lots of different languages. They were summarizing what reviews said, what are hotels unique about and try to create a condensed view of a hotel. And I think that's where trivago differentiates to other platforms. We don't give you a whole lot of content. Now our goal is to aggregate and give you a distilled view on what's important to know about this hotel, so you can take a decision fast. We have you save time and money. And we had that before the pandemic. We still had a big content team, and we never rebuilt it. We have a compact small team that leverages AI to improve our images, to improve our content to distill it and in ways that were not possible before and also refreshing this on a constant basis. So accuracy of the information you find on trivago is even better. So that's, I think, a very good, very tangible example, and that's why I pointed it out and where this has created value. And I would rather see this as an opportunity upside because that improves engagement on the platform that improves satisfaction that improves conversion and that ultimately drives marketing efficiency and the ability to deliver profits. And then generally, what we say internally and what I strongly believe, we are a company that's very small and compact, and we need to be the speedboat of the industry, the fastest learning, fastest executing team in the space. And more like we with 600 people need to be as impactful as 6,000 people. So every person having the 10x impact in order to compete in a space that's big and competitive. We don't have this huge workforce that we need to optimize. That's also why your answer on cost efficiency. I don't think that is a big leverage. And if you would look at our cost basis, reducing a little bit of cost efficiencies there will not make a huge difference. It's really an upside game. And if we can deliver a few percentages more in conversion, that can be a dozens of millions that we move to our bottom line. If we do this month by 1 month, quarter-by-quarter, that -- that is what makes the business more attractive. And given its size and the amount of problems users have while they are searching for hotels, I think there's lots of upside opportunity. And that's how I would think about it. So we can rather deliver growth or profitability by leveraging AI and it's less about a cost efficiency game.

Your next question comes from the line of Stephen Ju with UBS.

This is Vanessa on for Stephen. So I just have one question. And now that Holisto was officially part of the company, you are in a position to send more of your traffic to your supply partners. So can you talk about the extent of any potential channel conflicts that may or may not have risen with the OTAs? And if that's just something we need to think about?

So what Holisto is doing, and we have renamed Holisto into Trivago Deals. And for us, Holisto is now an innovation center in Israel that we are -- that we are focusing on non-core meta search products. They have their own OTA brands that have been competing before in the space. So there's not a huge difference there. What they are doing for us is building a white label booking engine that we actually offer to our partners and every partner is invited to join it from small to big. We believe more value is created for the smaller ones that have less resources to invest into conversion optimization. So we see small and medium-sized OTAs joining this product, potentially hotel chains are interested in joining that product that don't have a good converting booking funnel. So it actually creates value for our partners, end users, and that's a win-win situation that we aim to create.

There are no further questions at this time. I will now turn the call back to Johannes Thomas for closing remarks.

Yes. Thank you for joining us. This quarter marks another milestone in our turnaround. Our strategy is working, and we will remain laser-focused on executing on our key initiatives. Thank you for joining today and for your continued trust and support. We look forward to keep you updated in the quarters ahead.

This concludes today's call. Thank you for attending. You may now disconnect.