Travelzoo (TZOO) investor relations material

Executive summary

• Q1 2026 revenue reached $24.3 million, up 5% year-over-year, driven by higher membership fees and strong growth in both North America and Europe, despite declines in advertising and commerce revenue.

• Club membership grew 112% year-over-year, with half of new members from legacy conversions and half new to the platform.

• Membership fees now exceed 20% of total revenue, providing a stable and predictable income stream.

• Net income attributable to shareholders was $2.5 million, or $0.23 per share, down from $3.2 million ($0.26 per share) in Q1 2025, reflecting increased costs and lower operating profit.

• New features and perks, such as lounge access, a travel hotline, and upcoming culinary journeys, were added to enhance membership value.

Financial highlights

• Q1 consolidated revenue: $24.3 million; constant currency revenue: $23.6 million, up 2% year-over-year.

• Operating profit was $3.4 million (14% margin), down from $3.8 million prior year; non-GAAP operating profit was $3.5 million.

• Gross profit was $19.0 million, with gross margin at approximately 78%.

• Cash, cash equivalents, and restricted cash at quarter-end were $11.3 million; cash flow from operations was $3.9 million.

• Repurchased 500,000 shares for $3.3 million during the quarter under a new buyback program.

Outlook and guidance

• Year-over-year revenue growth is expected to continue in Q2 2026 and subsequent quarters, driven by recurring membership fees and new member acquisitions.

• Profitability and EPS are expected to increase over time as recurring revenue from renewals grows and acquisition costs are offset.

• Short-term net income may fluctuate due to immediate expensing of marketing costs and timing of renewals.

• Management expects cash on hand to be sufficient for at least the next twelve months.