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SEC Filings

20-F
TRIVAGO N.V. filed this Form 20-F on 03/06/2018
Entire Document
 



Cost of Revenue and Expenses
Cost of revenue, including related party
Our cost of revenue consists primarily of our data center costs, personnel-related expenses and share-based compensation for our data center operations staff and our customer service team. Cost of revenue, including from related party, was €2.9 million, €4.3 million and €5.9 million for the years ended December 31, 2015, 2016 and 2017, respectively.
Cost of revenue for the year ended December 31, 2017 increased by €1.6 million, or 37.2%, compared to the year ended December 31, 2016 mainly due to an increase in maintenance fees for servers and depreciation of €1.1 million and €0.6 million, respectively, as we continued to extend and upgrade our data center operations and continue to make investments to reach scale. Our personnel-related costs increased by €0.6 million due to an increase in headcount from 26 employees as of December 31, 2016 to 60 employees as of December 31, 2017 and were offset by a €0.6 million decrease in share-based compensation due to fluctuations in the fair value accounting treatment of awards which were classified as liability awards in the prior periods. See Note 10—Share based awards and other equity instruments in the notes to our consolidated financial statements.
Cost of revenue for the year ended December 31, 2016 increased by €1.4 million, or 48.3%, compared to the year ended December 31, 2015 due to a €1.2 million increase in depreciation and maintenance of servers and a €0.2 million increase in personnel-related costs. The increase in personnel-related costs was primarily driven by increases in share-based compensation expense of €0.5 million due to fluctuations in the fair value accounting treatment of liability classified awards granted in prior periods. See Note 10—Share based awards and other equity instruments in the notes to our consolidated financial statements. The €0.5 million increase was partially offset by a €0.3 million decrease of other personnel-related costs due to a decrease in headcount from 39 employees as of December 31, 2015 to 26 employees as of December 31, 2016 due to reallocation of certain IT employees to general and administrative.
Selling and marketing
Selling and marketing consists of all selling and marketing related costs and is divided into advertising expense and other selling and marketing expenses, including share-based compensation expense.
Advertising expense consists of fees that we pay for our various marketing channels like TV, out-of-home advertising, radio, search engine marketing, search engine optimization, display and affiliate marketing, email marketing, online video, app marketing and content marketing.
Other selling and marketing expenses include research costs, production costs for our TV spots and other marketing material, as well as personnel-related expenses and share-based compensation for our marketing, sales, hotel relations and country development teams.
 
Year ended December 31,
 
% Change
(in millions)
2015
 
 
2016
 
 
2017
 
 
2016 vs 2015

 
2017 vs 2016

Advertising expense
 
432.2

 
 
623.5

 
 
884.7

 
44.3
%
 
41.9
 %
% of total revenue
 
87.6
%
 
 
82.7
%
 
 
85.4
%
 
 
 
 
Other selling and marketing
 
25.7

 
 
38.8

 
 
58.7

 
51.0
%
 
51.3
 %
% of total revenue
 
5.2
%
 
 
5.1
%
 
 
5.7
%
 
 
 
 
Share-based compensation
 
3.4

 
 
10.9

 
 
3.5

 
220.6
%
 
(67.9
)%
% of total revenue
 
0.7
%
 
 
1.4
%
 
 
0.3
%
 
 
 
 
Total selling and marketing expense
 
461.3

 
 
673.2

 
 
946.9

 
45.9
%
 
40.7
 %
% of total revenue
 
93.6
%
 
 
89.3
%
 
 
91.5
%
 
 
 
 
Selling and marketing expenses for the year ended December 31, 2017 increased by €273.7 million, or 40.7%, compared to the year ended December 31, 2016, primarily driven by overall increased advertising

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