New York, October 27th / PRNewswire / -- Travelzoo ® (Nasdaq ticker: TZOO) releases its third-quarter financial results for the period ending September 30, 2026:
- Revenues of $22.9 million, a year-on-year increase of 3%
- Combined operating losses amounted to $2.6 million.
- Non-GAAP incurred a combined operating loss of $2.1 million
- Cash flow from operating activities: $1.8 million
- Earnings per share ( EPS ) are a loss of $0.20.
- Club Members achieved a year-on-year growth of 65%
Travelzoo indicates that the consolidated revenue for the third quarter of 2026 was 22.9 million US dollars, representing a 3% increase from 22.2 million US dollars in the same period last year. Calculated at a fixed exchange rate, the revenue amounted to 23 million US dollars. Travelzoo discloses that the revenue includes advertising income and commissions, which come from and are related to the purchasing behavior of Travelzoo members, and also includes membership fee income.
The company stated that in the third quarter, it continued to make substantial investments to expand the scale of Club Members and accelerated its transition towards membership fee revenue. Marketing costs are recognized as expenses as they occur; membership fee revenue, on the other hand, is recognized proportionally over a 12-month subscription period. Travelzoo mentioned that in the future, as the membership base expands, it will generate new and ongoing membership fee revenue. The company noted that investors can refer to its presentation materials for more details.
The net loss attributable to Travelzoo is $2 million, equivalent to a loss of $0.20 per share; the earnings per share for the same period last year were $0.01.
The operating loss of non-GAAP amounted to $2.1 million. Travelzoo stated that the operating loss of non-GAAP does not include stock option expenses of $338,000 and severance payments of $150,000. The company recommends referring to the "non-GAAP financial indicators" and the reconciliation statement below.
Travelzoo Global CEO Holger Bartel stated: "We will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more Club Offers for Club Members, as well as add new benefits such as free access to our popular global airport lounges in case of flight delays." He also said, "The Travelzoo members have a higher income level, are active, and are willing to try new experiences. We encourage travel enthusiasts to go to places they have never imagined before. For those who love traveling, Travelzoo is an indispensable membership service."
Travelzoo North American Business
North American business segment revenue increased by 4% year-over-year to $14.8 million. In the third quarter of 2026, the operating loss was $1.4 million, accounting for 9% of revenue; whereas in the same period last year, there was an operating profit of $1.1 million, accounting for 8% of revenue.
Travelzoo European Business
The revenue from the European business segment increased by 5% year-on-year to $6.9 million. In the third quarter of 2026, the operating loss was $1.2 million, accounting for 18% of revenue; in the same period last year, the operating loss was $600,000, accounting for 10% of revenue.
Jack 's Flight Club
Jack's Flight Club is a membership subscription service, with Travelzoo holding 60% of its equity. The revenue from this business decreased by 15% year-on-year to $1.2 million. Jack's Flight Club subscription income is recognized proportionally during the subscription period, which can be calculated on a quarterly, semi-annual, or annual basis. The operating profit for the third quarter of 2026 was $34,000, compared to $20,000 in the same period last year.
New Business
The revenue from new business segments amounted to $27,000, which includes licensing business and Travelzoo META. The operating loss in the third quarter of 2026 was $3,000.
According to Travelzoo, in 2020, the company signed licensing agreements with local licensees that were based on royalty payments, authorizing them to exclusively use the brand, business model, and membership system of Travelzoo in Australia, Japan, New Zealand, and Singapore. Under these arrangements, the existing members of Travelzoo in the aforementioned markets are still held by Travelzoo as the licensor. In the third quarter of 2026, the licensing revenue from the Australian licensee was $11,000, and from the Japanese licensee it was $5,000. The company expects that licensing revenue will continue to grow in the future.
Coverage Scope
Travelzoo claims to cover 30 million travelers, including Jack's Flight Club. Due to changes in the Travelzoo membership strategy, comparisons with previous periods are no longer meaningful.
Travelzoo indicates that the company introduced a membership fee system in 2024. Those who joined Legacy Members before 2024 can still enjoy certain travel discounts, but Club Offers and new benefits are only available to those who pay the membership fee, namely Club Members. As a result, the company has observed that an increasing number of Legacy Members have transitioned to Club Members over time, while at the same time, new members have also joined. In the third quarter, the number of Club Members increased by 65% year-on-year.
Income Tax
Income tax revenue confirmed for the third quarter of 2026 was $436,000.
Balance Sheet
As of September 30, 2026, cash, cash equivalents, and restricted cash amounted to 8.8 million US dollars. Cash flow from operating activities was 1.8 million US dollars.
The increase in deferred revenue is due to the gradual recognition of membership fees over the subscription period. Membership fee revenue is recognized proportionally throughout the subscription period.
Stock Repurchase Plan
In the third quarter of 2026, the company repurchased 256,898 outstanding common shares.
Outlook
For the fourth quarter of 2026, the company expects its revenue to increase year-over-year. The company also anticipates that revenue will continue to grow in subsequent quarters, as membership fees will be recognized proportionally over the 12-month subscription period, and the scale of Club Members will continue to expand, with more Legacy Members converting to Club Members. The company states that as regular membership fee revenue is gradually recognized, there is hope for an improvement in profitability in the long term; however, in the short term, fluctuations in reported net profit may still exist.
Non-GAAP financial indicators
When evaluating the financial performance of the business, management calculates non-GAAP operating income. This indicator is also referred to as "non-GAAP operating profit" in this press release and today's financial report conference call. Its calculation does not include the following items: amortization of intangible assets, stock option expenses, and costs related to layoffs. A table is attached to this press release that reconciles the calculation of GAAP operating income with non-GAAP operating income. Non-GAAP operating income is not an indicator required or prepared in accordance with Generally Accepted Accounting Principles (GAAP). It should be considered only as supplementary information and should not be viewed in isolation, nor should it replace the financial information prepared in accordance with GAAP. Furthermore, similar non-GAAP indicators may vary from company to company.
Teleconference
Travelzoo will hold a teleconference at 11:00 a.m. Eastern Time today to discuss the third-quarter results for 2026. Please visit http://ir.travelzoo.com/events-presentations to:
- Download the management presentation materials to be discussed during the teleconference (in PDF format).
- Listen to online live broadcasts.
About Travelzoo
Travelzoo claims to be a membership club for travel enthusiasts. The company covers 30 million travelers. Members of Club Members can enjoy Club Offers that have been negotiated by the company's global trading experts and strictly selected. The company's partnership with thousands of top tourism enterprises enables it to offer highly attractive discounts. Its club and related benefits are designed around the lifestyle of modern travel enthusiasts.
Certain statements contained in this press release are not historical facts and may constitute forward-looking statements as defined by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements regarding the company's plans, objectives, expectations, prospects, and intentions, the markets in which it operates, and other non-historical facts mentioned in this press release. The use of terms such as “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek”, and similar phrases is intended to identify such forward-looking statements. Due to the risks and uncertainties associated with these forward-looking statements, actual results may differ significantly from those stated or implied. Relevant factors include changes in the company's plans, objectives, expectations, prospects, and intentions, as well as other factors discussed in the documents submitted by the company to the U.S. Securities and Exchange Commission (SEC). The company cannot guarantee future levels of activity, performance, or achievements. Travelzoo assumes no obligation to update forward-looking statements to reflect events or circumstances that occur after the date of this press release.
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