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SEC Filings

20-F
TRIVAGO N.V. filed this Form 20-F on 03/06/2018
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Item 5: Operating and financial review and prospects
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with Item 3 A. Key information—Selected financial dataof this annual report and our consolidated financial statements and related notes appearing elsewhere in this annual report. In addition to historical information, this discussion contains forward-looking statements based on our current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the “Risk factors” and “Special note regarding forward-looking statements” sections and elsewhere in this annual report.
A.
Operating results
Overview
Our total revenue for the years ended December 31, 2015, 2016 and 2017 was €493.1 million, €754.2 million and €1,035.4 million, respectively, representing an increase of 53% from 2015 to 2016 and 37% from 2016 to 2017. Our Referral Revenue for the years ended December 31, 2015, 2016 and 2017 was €490.2 million, €745.8 million and €1,020.3 million, respectively. Referral Revenue grew by 37% year-over-year from 2016 to 2017. Our Americas and Rest of World segments were the main contributors to that growth, with year-over-year increases of 37% and 84%, respectively, from 2016 to 2017, while Referral Revenue in our Developed Europe segment also grew by 22% year over year.
Our net losses for the years ended December 31, 2015, 2016 and 2017 were €39.4 million, €51.4 million and €13.0 million, respectively, increasing by 30% from 2015 to 2016 and decreasing by 75% from 2016 to 2017.
Adjusted EBITDA for the years ended December 31, 2015, 2016 and 2017 amounted to €(1.1) million, €28.2 million and €6.7 million respectively. This implies an Adjusted EBITDA margin (calculated as Adjusted EBITDA divided by total revenue) of (0.2)%, 3.7% and 0.6%, respectively.
Key factors affecting our financial condition and results of operations
How we earn and monitor revenue
We earn substantially all of our revenue when users of our websites and apps click on hotel offers in our search results and are referred to one of our advertisers. We call this our Referral Revenue. Each advertiser determines the amount that it wants to pay for each referral by bidding for advertisements on our marketplace. We also earn subscription fees for certain services we provide to advertisers, such as Hotel Manager Pro, although such subscription fees do not represent a significant portion of our revenue.
Key metrics we use to monitor our revenue include the number of Qualified Referrals we make, the revenue we earn for each Qualified Referral, or RPQR, and our return on advertising spend, or ROAS.
Qualified Referrals
We use the term “referral” to describe each time a visitor to one of our websites or apps clicks on a hotel offer in our search results and is referred to one of our advertisers. We charge our advertisers for each referral on a cost-per-click, or CPC, basis.
Since a visitor may generate several referrals on the same day, but typically intends to only make one booking on a given day, we track and monitor the number of Qualified Referrals from our platform. We define a "Qualified Referral" as a unique visitor per day that generates at least one referral. For example, if a single visitor clicks on multiple hotel offers in our search results in a given day, they count as multiple referrals, but as only one Qualified Referral. While we charge advertisers for every referral, we believe that the Qualified

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