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SEC Filings

6-K
TRIVAGO N.V. filed this Form 6-K on 10/24/2018
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Cost of revenue
For the third quarter of 2018, cost of revenue decreased by €0.4 million to €1.4 million, or 22% year-over-year, compared to the same period in 2017 due to lower data center and server expenses.

For the nine months ended September 30, 2018, cost of revenue remained stable at €4.4 million, compared to the same period in 2017.

Selling and marketing
Selling and marketing expense was 80% and 92% of total revenue in the third quarter of 2018 and in the nine months ended September 30, 2018, respectively, compared to 95% and 91% in the same periods in 2017.

In the third quarter of 2018, selling and marketing expense decreased by €70.2 million, or by 26% year-over-year to €204.2 million, of which €184.3 million, or 90%, was Advertising Spend. The decrease was driven by reductions in Advertising Spend to €59.6 million, €76.3 million and €48.5 million in Americas, Developed Europe and RoW, respectively, compared to €98.5 million, €94.0 million and €63.4 million in the same period in 2017. In the nine months ended September 30, 2018, selling and marketing expense decreased by €93.3 million, or by 12% period-over-period to €687.9 million, of which €631.6 million, or 92% was Advertising Spend. The decrease was driven by reductions in Advertising Spend to €227.7 million, €230.7 million and €173.2 million in Americas, Developed Europe and RoW.

For the third quarter of 2018, we made significant reductions in our Advertising Spend across all segments in order to improve our Return on Advertising Spend ("ROAS"). In the third quarter of 2018, we reduced Advertising Spend by 39% in Americas, 19% Developed Europe and 24% in RoW, in each case compared to the same period in 2017. In the nine months ended September 30, 2018, Advertising Spend decreased by 20% in Americas, 16% in Developed Europe and 2% in RoW, in each case compared to the same period in 2017. The decreases in Advertising Spend in the nine months ended September 30, 2018 were primarily due to the reductions we made during the second and third quarter of 2018. In Americas and RoW, Advertising Spend also benefited from favorable movements in foreign exchange rates in the first half of 2018, reflecting the relative weakening of the U.S. dollar and of certain currencies in the Asian Pacific region to the euro as a smaller part of the Advertising Spend in these regions is also invoiced in local currencies.

For the third quarter of 2018, other selling and marketing expense excluding share-based compensation increased by €1.4 million to €19.1 million, or 8% year-over-year, and for the nine months ended September 30, 2018, increased by €10.2 million to €53.7 million, or 23% period-over-period.

Most of the increase in the third quarter of 2018 compared to the same period in 2017 was driven by higher production costs for television advertisements of €2.2 million, including advertisements which were aired and should have been expensed in prior quarters in accordance with our accounting policies. In the nine months ended September 30, 2018, production costs for television advertisements increased €7.7 million compared to the same period in 2017.

Personnel costs decreased by €0.3 million in the third quarter of 2018 compared to the same period in 2017 driven by a reduction in our compensation expense and employee benefits, that was partly offset by severance payments in the third quarter of 2018. In the nine months ended September 30, 2018, personnel costs increased by €1.9 million mainly driven by higher compensation expense as our headcount was higher in the first two quarters of 2018 compared to the same period in 2017, combined with severance payments in 2018. This increase was partly offset by lower people related costs in the nine months ended September 30, 2018 compared to the same period in 2017.

Share-based compensation remained stable at €0.8 million in the third quarter of 2018 and decreased by €0.1 million to €2.6 million in the nine months ended September 30, 2018, compared to the same periods in 2017.

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