Travelzoo Reports Third Quarter 2025 Results

Travelzoo® (NASDAQ: TZOO):

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— Revenue of $22.2 million, up 10% year-over-year

— Consolidated operating profit of $0.5 million

— Non-GAAP consolidated operating profit of $1.1 million

— Cash flow from operations of ($0.4) million

— Earnings per share (EPS) of $0.01

Travelzoo, the club for travel enthusiasts, today announced financial results for the third quarter ended September30, 2025. Consolidated revenue was $22.2 million, up 10% from $20.1 million year-over-year. In constant currencies, revenue was $21.9 million, up 9%year-over-year. Travelzoo's reported revenue consists of advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, and membership fees.

In Q3, Travelzoo continued to invest significantly in acquiring more Club Members when we saw that we can achieve a payback and positive return on investment (ROI) within a quarter. Marketing costs were expensed immediately. Membership fees revenue is recognized ratably over the subscription period of 12 months. The effect is a sizable reduction in EPS. We refer to our investor presentation.

Net income attributable to Travelzoo was $0.2 million for Q3 2025, or $0.01 per share, compared with $0.26 per share in the prior-year period.

Non-GAAP operating profit was $1.1 million. Non-GAAP operating profit excludes amortization of intangibles ($2,000), stock option expenses ($399,000), and severance-related expenses ($167,000). Please refer to “Non-GAAP Financial Measures” and the tabular reconciliation below.

“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 and add new benefits, such as our popular complementary airport lounge access worldwide in case of a delayed flight,” said Holger Bartel, Travelzoo's Global CEO. “Travelzoo members are affluent, active, and open to new experiences. We inspire travel enthusiasts to travel to places they never imagined they could. Travelzoo is the must-have membership for those who love to travel as much as we do.”

Travelzoo North America North America business segment revenue increased 11% year-over-year to $14.2 million. Operating profit for Q3 2025 was $1.1 million, or 8% of revenue, compared to operating profit of $3.2 million or 25% of revenue in the prior-year period.

Travelzoo Europe Europe business segment revenue increased 9% year-over-year to $6.6 million. Operating loss for Q3 2025 was $640,000, or 10% of revenue, compared to operating profit of $1.0 million, or 17% of revenue in the prior-year period. The reported operating loss occurred because we acquired more Club Members.

Jack's Flight Club Jack's Flight Club is a membership subscription service in which Travelzoo has a 60% ownership interest. Revenue increased 12% year-over-year to $1.4 million. The number of premium subscribers increased 8% year-over-year. Jack's Flight Club's revenue from subscriptions is recognized ratably over the subscription period (quarterly, semi-annually, annually). Operating profit for Q3 2025was $20,000, compared to operating profit of $27,000 in the prior-year period.

New Initiatives New Initiatives business segment revenue, which includes Licensing and Travelzoo META, was $27,000. Operating loss for Q3 2025 was $20,000.

In 2020, Travelzoo entered into royalty-bearing licensing agreements with local licensees for the exclusive use of Travelzoo's brand, business model, and members in Australia, Japan, New Zealand, and Singapore. Under these arrangements, Travelzoo's existing members in Australia, Japan, New Zealand, and Singapore will continue to be owned by Travelzoo as the licensor. Licensing revenue from the licensee in Australia was $9,000 for Q3 2025. Licensing revenue from the licensee in Japan was $7,000 for in Q3 2025. Licensing revenue is expected to increase going forward.

Reach Travelzoo reaches 30 million travelers. This includes Jack's Flight Club. Comparisons to prior periods are no longer meaningful due to strategic developments of the Travelzoo membership.

Income Taxes The reported income tax provision and reserves for Q3 2025 are $244,000. Travelzoo intends to utilize available net operating losses (NOLs) to largely offset its tax liability for Q3 2025.

Balance Sheet As of September30, 2025, cash, cash equivalents and restricted cash were $9.2 million. Cash flow from operations was ($0.4) million.

Deferred revenue increased because membership fees revenue is recognized ratably over the subscription period.

Share Repurchase Program During Q3 2025, the Company repurchased 148,602 shares of its outstanding common stock.

Looking Ahead For Q4 2025, we expect year-over-year revenue growth to continue. We expect revenue growth to accelerate as a trend in subsequent quarters, as membership fees revenue is recognized ratably over the subscription period of 12 months, as we acquire new members, and as more Legacy Members become Club Members. Over time, we expect profitability to substantially increase as recurring membership fees revenue will be recognized. In the short-term, fluctuations in reported net income are possible. We might see attractive opportunities to increase marketing. We expense marketing costs immediately.

In 2024, we introduced a membership fee for Travelzoo. Legacy Members, who joined prior to 2024, continue to receive certain travel offers. However, Club Offers and new benefits are only available to Club Members, who pay the membership fee. Therefore, we are seeing many Legacy Members become Club Members over time-in addition to new members who join.

Non-GAAP Financial Measures Management calculates non-GAAP operating income when evaluating the financial performance of the business. Calculation of non-GAAP operating income, also called “non-GAAP operating profit” in this press release and today's earnings conference call, excludes the following items: amortization of intangibles, stock option expenses, and severance-related expenses. This press release includes a table which reconciles GAAP operating income to the calculation of non-GAAP operating income. Non-GAAP operating income is not required by, or presented in accordance with, generally accepted accounting principles in the United States of America (“GAAP”). This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Conference Call Travelzoo will host a conference call to discuss third quarter 2025 results today at 11:00 a.m. ET. Please visit http://ir.travelzoo.com/events-presentations to

— download the management presentation (PDF format) to be discussed in the conference call

— access the webcast.

About Travelzoo We, Travelzoo®, are the club for travel enthusiasts. We reach 30 million travelers. Club Members receive Club Offers personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with thousands of top travel suppliers-our long-standing relationships give us access to irresistible deals.

Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

TravelzooCondensed Consolidated Statements of Operations(Unaudited)(In thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024Revenues $ 22,198 $ 20,098 $ 69,245 $ 63,224Cost of revenues 4,519 2,548 13,132 7,708Gross profit 17,679 17,550 56,113 55,516Operating expenses:Sales and marketing 12,198 8,247 34,378 26,231Product development 631 594 1,963 1,763General and administrative 4,362 4,664 13,419 13,875Total operating expenses 17,191 13,505 49,760 41,869Operating income 488 4,045 6,353 13,647Other income (loss), net (64) 359 727 674Income from operations before income taxes 424 4,404 7,080 14,321Income tax expense 244 1,148 2,157 3,920Net income 180 3,256 4,923 10,401Net income attributable to non-controlling interest 29 72 201 54Net income attributable to Travelzoo $ 151 $ 3,184 $ 4,722 $ 10,347Net income per share-basic $ 0.01 $ 0.26 $ 0.41 $ 0.81Net income per share-diluted $ 0.01 $ 0.26 $ 0.39 $ 0.79Shares used in per share calculation-basic 10,987 12,176 11,585 12,851Shares used in per share calculation-diluted 11,213 12,386 11,974 13,035TravelzooCondensed Consolidated Balance Sheets(Unaudited)(In thousands) September 30, December 31, 2025 2024AssetsCurrent assets:Cash and cash equivalents $ 8,491 $ 17,064Accounts receivable, net 12,460 12,825Prepaid income taxes 654 736Income taxes receivable 887 -Prepaid expenses and other 1,931 1,148Total current assets 24,423 31,773Deposits and other 302 374Deferred tax assets 3,469 3,380Restricted cash 756 675Operating lease right-of-use assets 4,540 5,655Property and equipment, net 278 423Intangible assets, net 1,452 1,498Goodwill 10,944 10,944Total assets $ 46,164 $ 54,722Liabilities and EquityCurrent liabilities:Accounts payable $ 8,405 $ 6,162Merchant payables 11,767 16,294Accrued expenses and other 4,557 3,404Deferred revenue 9,060 6,545Income tax payable – 1,619Operating lease liabilities 2,058 2,472Total current liabilities 35,847 36,496Long-term tax liability 8,906 7,851Long-term operating lease liabilities 4,494 5,646Other long-term liabilities – 376Total liabilities 49,247 50,369Common stock 109 118Tax indemnification (9,537) (9,537)Retained earnings 6,925 14,284Accumulated other comprehensive loss (5,596) (5,327)Total Travelzoo stockholders' equity (deficit) (8,099) (462)Non-controlling interest 5,016 4,815Total stockholder's equity (deficit) (3,083) 4,353Total liabilities and stockholder's equity $ 46,164 $ 54,722TravelzooCondensed Consolidated Statements ofCash Flows(Unaudited)(In thousands) Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024Cash flows from operating activities:Net income $ 180 $ 3,256 $ 4,923 $ 10,401Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization 57 179 239 737Stock-based compensation 399 457 1,108 1,240Deferred income tax (1) (12) 4 (39)Net foreign currency effects 71 (154) (224) (165)Provision of loss (net recoveries) on accounts (93) 128 30 121receivable and refund reserveChanges in operating assets and liabilities:Accounts receivable (988) 127 756 (258)Prepaid income taxes (154) (134) 84 (461)Prepaid expenses, deposits and other (560) (69) (703) 464Accounts payable 2,314 (284) 2,134 430Merchant payables (612) 431 (5,053) (3,348)Accrued expenses and other (981) 463 859 2,162Deferred revenue 643 – 2,363 -Income tax payable (576) 315 (2,584) 593Other liabilities (73) 628 273 1,381Net cash provided by operating activities (374) 5,331 4,209 13,258Cash flows from investing activities:Purchases of property and equipment (15) (46) (49) (129)Net cash used in investing activities (15) (46) (49) (129)Cash flows from financing activities:Repurchase of common stock (1,545) (6,183) (12,964) (16,605)Exercise of stock options and taxes paid for – (335) (104) (592)net share settlement of equity awardsNet cash used in financing activities (1,545) (6,518) (13,068) (17,197)Effect of exchange rate on cash, cash equivalents (17) 96 415 (215)and restricted cashNet increase in cash, cash equivalents and (1,951) (1,137) (8,493) (4,283)restricted cashCash, cash equivalents and restricted cash at 11,198 13,243 17,740 16,389beginning of periodCash, cash equivalents and restricted cash at end $ 9,247 $ 12,106 $ 9,247 $ 12,106of periodTravelzooSegment Information from Continuing Operations(Unaudited)(In thousands)Three months ended September 30, 2025 Travelzoo Travelzoo Jack's New Consolidated North Europe Flight Club Initiatives AmericaRevenues from unaffiliated $ 13,728 $ 7,036 $ 1,407 $ 27 $ 22,198customersIntersegment revenues 503 (471) (32) – -Total net revenues 14,231 6,565 1,375 27 22,198Sales and marketing expenses 6,998 4,549 651 – 12,198Other expenses 6,104 2,656 704 48 9,512Operating profit (loss) 1,128 (640) 20 (20) 488Other income (loss), net (64)Income from operations before 424income taxesThree months ended September 30, 2024 Travelzoo Travelzoo Jack's New Consolidated North Europe Flight Club Initiatives AmericaRevenues from unaffiliated $ 12,846 $ 6,021 $ 1,198 $ 33 $ 20,098customersIntersegment revenues (24) (3) 27 – -Total net revenues 12,822 6,018 1,225 33 20,098Sales and marketing expenses 4,557 3,038 511 145 8,251Other expenses 5,115 1,952 687 48 7,802Operating profit (loss) 3,150 1,028 27 (160) 4,045Other income, net 359Income from operations before 4,404income taxesNine months ended September 30, 2025 Travelzoo Travelzoo Jack's New Consolidated North Europe Flight Club Initiatives AmericaRevenues from unaffiliated $ 44,296 $ 20,745 $ 4,140 $ 64 $ 69,245customersIntersegment revenues 1,196 (1,084) (112) – -Total net revenues 45,492 19,661 4,028 64 69,245Sales and marketing expenses 19,400 13,101 1,877 – 34,378Other expenses 18,550 7,856 1,963 145 28,514Operating profit (loss) 7,542 (1,296) 188 (81) 6,353Other income, net 727Income from operations before 7,080income taxesNine months ended September 30, 2024 Travelzoo Travelzoo Jack's New Consolidated North Europe Flight Club Initiatives AmericaRevenues from unaffiliated $ 41,134 $ 18,605 $ 3,397 $ 88 $ 63,224customersIntersegment revenues 50 26 (76) – -Total net revenues 41,184 18,631 3,321 88 63,224Sales and marketing expenses 15,107 9,429 1,393 280 26,209Other expenses 14,772 6,280 2,034 282 23,368Operating profit (loss) 11,305 2,922 (106) (474) 13,647Other income, net 674Income from operations before 14,321income taxesTravelzooReconciliation of GAAP to Non-GAAP Information(Unaudited)(In thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024GAAP operating expense $ 17,191 $ 13,505 $ 49,760 $ 41,869Non-GAAP adjustments:Amortization of intangibles (A) 2 95 45 500Stock option expenses (B) 399 456 1,108 1,239Severance-related expenses (C) 167 330 395 360Non-GAAP operating expense 16,623 12,624 48,212 39,770GAAP operating income 488 4,045 6,353 13,647Non-GAAP adjustments (A through C) 568 881 1,548 2,099Non-GAAP operating income 1,056 4,926 7,901 15,746

Investor Relations:ir@travelzoo.com

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SOURCE Travelzoo

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