trivago N.V. Sponsored ADR Class A Aktie

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the trivago's Third Quarter Earnings Call 2026. I must advise you the call is being recorded today, Wednesday, the 4th of November 2026. We are pleased to be joined on the call today by Johannes Thomas, trivago's CEO and Managing Director; and Wolf Schmuhl, trivago's CFO and Managing Director.

The following discussion, including responses to your questions, reflects management's view as of Tuesday, November 3, 2026, only, unless expressly stated otherwise, in which case, it reflects management's view as of today, Wednesday, November 4, 2026, only. Trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements.

Please refer to the third quarter 2026 operating and financial review and trivago's other filings with the SEC for information about factors which could cause trivago's actual results to differ materially from these forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on trivago's Investor Relations website at ir.trivago.com.

You are encouraged to periodically visit trivago's Investor Relations website for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2025.

With that, let me turn the call over to Johannes.

Good morning, and thank you for joining our Q3 2026 earnings call. In the third quarter, total revenue grew 16% year-over-year, our seventh consecutive quarter of double-digit growth. Once again, we exceeded our expectation on both top and bottom line. Our adjusted EBITDA was the highest of any quarter since Jasmine, Andrej and I returned to trivago mid-2023.

Americas and Developed Europe each grew referral revenue by 15%. This more than offset currency effects and the situation in the Middle East, which weighed on rest of the world. Let me share a few highlights of the quarter. Branded traffic referral revenue again grew faster than total referral revenue. Our conversion rate is up 50% since the third quarter of 2023 and tangibly up compared to last year. Before intersegment eliminations, logged-in members now generate more than 35% of referral revenue. Our all other advertisers accounted for 35% of referral revenue this quarter, up from 26% in Q3 last year.

trivago Book and Go more than doubles its share of our referral revenue year-over-year and has become a top 5 player in our marketplace. Our theme of 2026 is Optimize Momentum, Pushing Frontiers. This year, we stayed focused on the markets we have built up since mid-2023, emphasizing optimization over market expansion. By concentrating our around 25 key markets, we benefit from the compounding effects of our brand investments and product enhancements, which drives our profitability.

We are confirming our full year 2026 guidance of mid-teens percentage year-over-year total revenue growth and adjusted EBITDA of around EUR 30 million. For 2027, we expect double-digit total revenue growth and adjusted EBITDA of around EUR 45 million. We continue to aim for an adjusted EBITDA margin of 10% by 2028. Our 3 strategic priorities have been in place since 2023, and that consistency is delivered. Let me walk you through the progress we have made on each of them. For more detail, please see our investor presentation on ir.trivago.com.

Our first strategic priority is to drive growth through brand marketing. In recent quarters, more and more travelers have chosen to come to trivago directly. And in the third quarter, branded traffic again grew faster than our referral revenue overall. We also broadened the mix of channels we use for brand marketing. In North America, the response to our campaigns gave us confidence to step up our brand investment in the third quarter.

We also tested new creatives and developed an optimized pipeline of TV ads, which we expect to perform well in our upcoming winter campaign. We remain excited about our partnership with Jürgen Klopp, the iconic soccer coach and now head of the German national team. Its association with trivago resonates strongly with our audiences. Our AI-powered TV campaigns with Tim run in markets around the world, combining global appeal with local relevance.

Performance marketing remains disciplined. We steer each paid channel by its marginal contribution based on incrementality and elasticity testing. Referral revenue from non-branded SEO traffic sources remains a low single-digit share of total referral revenue, which limits our exposure to changes in organic search. Our second strategic priority is to enhance our core hotel search experience so travelers can book with confidence, saving time and money.

This quarter, we focused on a simpler search experience that works the same way on every device. A big step was unifying our iOS and Android code bases into one. We rebuilt our apps from the ground up in a shared design system. This simplifies our technology and speeds up our learning. I'm particularly proud of how we did it because it shows how quickly our teams embrace AI. We took a fully AI-driven approach and AI wrote nearly 100% of the new code base. Under traditional engineering conditions, we estimate this would have taken 12 to 18 months.

Our team completed the rebuild in 4 months and needed 2 more months to qualify it in production. Since mid-October, one trivago app has been live for travelers across the globe on iOS and Android alike. This has been an exemplary achievement by our engineering team. Most of our recent conversion gains came from our algorithms in how we rank hotels and how we expose prices. We launched a new generation of personalization that makes hotels in our search results more relevant.

It takes travelers' preferences, behavioral pattern and location into account in more meaningful ways. Our member experience has improved most from these enhancements. We also changed how we pick and present deals. So rates travelers often value most, such as free cancellation and breakfast included, might come first. Simpler page architecture, better hotel content and new filters added further to our conversion rate gains.

AI-generated content has become a core part of how travelers choose a hotel on trivago. AI highlights and AI review summaries have been upgraded with newer models to improve quality and freshness. We also rebuilt the back end of our smart AI search, which was first of its kind back in 2024. When travelers describe the ideal stay in their own words, our LLM-powered path now handles the request with more accuracy and speed. Travelers get more relevant results and the content we expose for a hotel makes clearer why each hotel fits.

Our member base is growing and the more we know about our members from their history with us and from what they tell us about their preferences, the better we can personalize what they see. A growing number of hotel chains and major booking sites now share loyalty and member-only rates with trivago members. That gives our core users a clearer reason to sign in and come back. Every sign-up gives us a direct line to our users throughout planning and booking.

Through our CRM activities such as e-mail, app notifications, we reach members on channels we own at no dedicated marketing costs. CRM revenue grew at a high pace again this quarter, and CRM is becoming a relevant profit contributor. Together, the path from brand to member to CRM drives higher retention and revenue at structurally better margins. It is an important building block on our path to higher profitability. Our first (sic) [ third ] strategic priority is to help our partners to realize their full potential on our platform.

Today, our marketplace is more balanced than 2023 and in recent years. Hotel direct sites, alternative accommodation sites and midsized advertisers gained share on our platform. Our transaction-based CPA model has been a driver of this shift, taking the complexity of CPC bidding off our partners. It helps advertisers of every size compete more effectively in our marketplace. trivago Book & Go is our branded partner-powered booking funnel, where travelers book without leaving trivago. As we onboarded more partners and launched more markets, Book & Go continued to scale.

Before intersegment eliminations, its share of our referral revenue more than doubled compared to last year. We reached key milestones in integrating trivago Book & Go, formerly Holisto, more natively into our platform, which made the user experience from searching to booking more seamless. Beyond our 3 strategic priorities, I want to give you a short update on AI at trivago. Our ambition remains for our roughly 600 core talent to operate with the impact of 6,000.

We believe our size puts us in a sweet spot for AI, and it gives us an unique opportunity to grow in a vast market. We are big enough to build our own infrastructure and small enough to move fast with a culture built on curiosity and speed. Adoption is broad-based across the company. As we shared last quarter, 93% of our talents use AI daily and 86% say it makes a measurable difference to the output. Engineering is where the change runs deepest.

Our developers work in a cutting-edge AI ecosystem with code repositories and a development environment that is being made AI ready. A dedicated engineering AI playbook sets clear expectations and ambitious targets for what we aim to achieve with AI. The results are tangible. According to our AI coding tools, AI now writes more than 80% of the code in our key repositories. Output per developer rose 44% in the last 6 months compared to the 6 months before. And in September alone, each developer shipped 60% more code changes than a year earlier.

Quality helps with fewer changes rolled back and improvements reaching our users faster. We are moving beyond AI augmented coding. On our own agent platform, autonomous agents already ship complete code changes from start to finish, and the human craft is shifting from writing code to directing agents, judging outcomes and quality at scale. We are also changing how every talent works with knowledge and context windows.

In recent months, almost half of our talents build personal AI brains that connect and distill context across key information sources. They give people and their agents a more comprehensive and situationally relevant context window. So complex tasks get done better and agents work more reliably. Our internal Agentic marketplace now offers more than 500 qualified agents, skills and other AI components, so talents reuse proven and verified solutions instead of building their own. This lets us scale AI safely, quickly and cost efficiently. We keep investing in leading AI tools, and we run them on infrastructure we control.

Our AI gateway allows us to govern AI traffic to the right model, giving us visibility and cost control. Our on-premise GPUs run open source models in-house for scaled, repetitive and privacy-sensitive tasks at lower costs, and we are expanding that capacity. We are progressing well on our path to becoming an AI-native company. Since our new CTO and CIO began leading this transformation, we have seen even stronger traction. I'm proud of the excitement, curiosity and execution I see across our teams. It lets us make the most of the unique opportunity in front of us to get more done at higher quality, to deliver a better experience for travelers and to create more long-term value for our shareholders.

With that, I'll hand over to our CFO, Wolf, for a more detailed financial review.

Thank you, Johannes, and good morning, everyone. The third quarter marked another strong quarter for trivago. And again, we exceeded our internal year-over-year expectations for both total revenue growth and profitability. We delivered 16% year-over-year total revenue growth while shifting the balance further towards profitability.

Our brand strategy, combined with significantly improved unit economics from conversion uplifts and stronger customer retention allows us to drive top line and improve profitability. This strengthens our confidence in delivering a 10% adjusted EBITDA margin by 2028. We continue to believe that our current share price understates trivago's long-term earnings potential, and we will continue our buyback program as we see it as a higher return use of capital.

Let's review our third quarter results as well as our 2027 outlook. Unless otherwise indicated, all comparisons for 2026 are on a year-over-year basis. In the third quarter, total revenue reached EUR 192.5 million, representing year-over-year growth of 16%. Americas and Developed Europe grew both 15% in referral revenue year-over-year, driven by growth in branded channel traffic, compounding brand effects, improved marketing efficiency and booking conversion.

Rest of World referral revenue declined 10% year-over-year, impacted by FX headwinds of approximately 4% and the Middle East conflict. We remain disciplined and took a tactical approach by adjusting bidding spend and targets locally. Rest of World represented only 17% of our third quarter referral revenue, thus limiting the impact to total referral revenue. Our well-diversified revenue base gives us structural resilience against local macro pressures.

For the third quarter, we reported a net income of EUR 5.4 million. At the same time, we delivered an adjusted EBITDA of EUR 18.7 million, ahead of our internal expectations. This marks the highest quarterly adjusted EBITDA since mid-2023. Total expenses increased by EUR 29 million year-over-year, totaling EUR 182.4 million for the third quarter. This was mainly due to a EUR 17.3 million increase in selling and marketing, resulting primarily from higher investments in brand marketing made over the course of the quarter and incremental expenses resulting from the consolidation of trivago Deals.

Trivago core advertising spend increased by EUR 10.3 million or 23% in Americas, EUR 8.2 million or 16% in Developed Europe and decreased by EUR 3.3 million or 12% in Rest of World. In the third quarter, we saw strong investment opportunities in brand marketing and accelerated our spend accordingly. Despite the step-up, our global trivago core ROAS held broadly stable at 133.2% compared with 134.1% in the third quarter of 2025 as compounding returns from brand investments made in prior quarters continued to lift performance.

Americas reflected the bulk of the increased investment and further diversification of our marketing channels with ROAS moving from 135.4% to 129%. This was largely offset by Developed Europe, where prior brand investments compounded into a higher ROAS of 142% versus 141.2% and by Rest of World, which improved from 119.2% to 122.1% on lower advertising spend in line with our disciplined profitability-focused approach despite continued foreign exchange headwinds and the Middle East conflict. By the end of this quarter, we held EUR 139.9 million in cash, cash equivalents and short-term investments without any long-term debt, reinforcing our strong and flexible capital position.

The fourth quarter of 2025 was exceptionally strong. So we are up against tough comparables for this upcoming quarter. That said, the fourth quarter started in line with our expectations. We plan to continue scaling our brand marketing investments, though at a more moderated pace than in prior years, leveraging compounding brand effects to sustain the momentum of increased profitability. We are maintaining our full year guidance for 2026 of mid-teens percentage year-over-year total revenue growth and an adjusted EBITDA of around EUR 30 million.

Looking forward to 2027, we aim to achieve an increased adjusted EBITDA of around EUR 45 million, while continuing our growth trajectory and maintaining double-digit percentage revenue growth. With that, let's open the line for questions. Operator, we are now ready to take the first question.

[Operator Instructions] Your first question comes from the line of Naved Khan with B. Riley Securities.

A couple of questions from me. Maybe just on the outlook that you're providing for 2027. I'm wondering what gives you the confidence in this preliminary outlook for double-digit growth on the top line and your ability to deliver against that. So that's my first question. And then secondarily, I had a question about Google's changes to be compliant with the DMA in EU. And how do you see it affecting trivago? Does it help? Or does it really have no impact? Just talk about that a little bit.

Yes, Naved, thank you for your question. Maybe to reemphasize what gives us confidence is nothing else than the flywheel we have been building in the last couple of years. And maybe you can think about it in a 4-step process. One, we get people come to us directly. What we have mentioned many times that brand has outperformed branded traffic growth, revenue has outperformed total referral revenue. So this has become a more and more important part of our business. We reduced reliability on third-party channels.

So brand driving that is important, and we see room to step up brand further in the coming years. And that's maybe an element to understand as well. We have -- if you look at 2025, the step-up from 2024 was quite significant. in terms of ad spend. This year, we will increase ad spend further, but less than what we did in 2025. And then in 2027, we expect to step up ad spend, but less than 2026.

So the further step-up will deliver growth and that we get more people direct, it's great for retention. And then so you have brand, then you have conversion improvement, then you have member and then you have CRM. So if we get more people come to us direct, we deliver a better product experience, bringing up conversion rates since 2023 and also compared to last year substantially. It gives a better user experience, so people are more happy with our product, come back.

Plus members, we are seeing, and we have shared that in our investor presentation as well. Users, our members are more sticky than they have been in the last years. So you see the stickiness of members and also conversion rates of members is much higher. And then when we have these members, we can also communicate with them directly through CRM, and that makes us deliver more revenue at very attractive costs because there's no marketing cost margin because there's no marketing cost behind it. So the step from brand to product conversion to member to CRM, this flywheel is working. You're seeing it in our numbers today.

If we project that, we are fairly confident that we can achieve double digit next year. There is some uncertainty in rest of the world and how Middle East will affect and evolve. Our expectation is that this will not be -- rest of the world will not be a major growth driver for us. And that's maybe the uncertainty, but it's also only 70% of our business, so it will not have a huge impact. So if we look at Americas, Europe, the dynamics we are seeing, the compounding effects we are seeing, we are fairly confident to give this outlook and that we can deliver against it and the potential to step up in brand in massive market is giving us this confidence.

Then on the Google part, I would bottom line say there are no major impacts on the business that we could measure so far. Google has done relevant changes in Europe in September and has launched this broadly from what we can observe to complying with the Digital Markets Act. They've introduced a new organic ad format where they show hotel booking sites, aggregators kind of next to each other. And that has been an improvement from our perspective in offering a more level playing field where we can compete. And Google is not anymore showing its GHA product inside the generic search results, but rather linking out to the product from an ad where you are eye to eye.

But at the same time, we are not -- we don't think Google is yet compliant because they still have components on the website -- on their search results, which from our perspective is not compliant, like a hotel carousel on top, which is a mini hotel search results in the generic results and that are things that we would like to see continue to change. But overall, has moved in the right direction and a key impact on the business short term, we have not seen. What we certainly believe is that this is a structural advantage on competing with our product more on eye level. So we think we have the better product and can win more customers to our platform.

[Operator Instructions] Next question comes from the line of Doug Anmuth with JPMorgan.

This is Dae Lee on for Doug. I have 2. On your approach to brand investment from here, I appreciate the color you guys gave on the level of spending in '27. But could you kind of walk us through your decisions to push a bit more in the U.S. And when do you expect Americas ROAS to recover? And then secondly, could you give us what you're seeing or tell us what you're seeing in terms of traffic coming from agentic channels? Like how you guys view your platform showing up across those channels and how you think about those channels becoming a source of traffic for you longer term?

Dae, thanks a lot for your question. Happy to answer the first one. So in the Americas, in our segment Americas in this quarter, we saw a very, very favorable market -- very favorable or the market -- our ads in the market resonated very well there. We experienced a strong quarter with very favorable marketing elasticities. And we decided to take advantage of these favorable conditions and increase our brand spend in our Americas segment by 23%.

And as a consequence of this brand investment, the return on ad spend decreased accordingly. This is always the case when you invest into brand and the return of these investments come at later stages. This return on ad spend development has always to be seen in the context of the ad spend development, and we steer our return on ad spend globally and this one, we kept stable. So the general strategy remains the same. Our brand investment, we will invest into brand at a more moderated pace compared to previous years. And together with compounding effects, this will make us more profitable over time.

Good. Maybe one comment on this. If you see in 1 quarter, ROAS coming down in the segment, this is not a negative signal in most cases because we see opportunities, we lean in, and this has a return over several years and even into the next quarter. So we expect this to recover under normal circumstances. But when we see opportunities, we will lean into brand marketing and double down when we see good elasticity.

On AI, I think here, we have shared in the past, it's significantly below 1% in referral revenue. And that is what we also broadly see across players we talk to in the market. And what we have seen in Q3, maybe compared to Q1, Q2, where the AI referral revenue was rather plateauing, even declining a little bit in Q1 and Q2. In Q3, we have seen a step-up. So we have seen growth again what we saw in 2025, we saw growth, and we saw plateauing. And now we see in Q3, it was growing again, but yet significantly below 1%.

So our interpretation of this is 2 things. We more and more understand how we optimize organically in LLM. And then the second is a major AI lab has done changes to their algorithms. And our read is that there are more citations and that they are looking more and more at who are trusted players, so maybe linking less to Reddit or so on and taking these social sources with less weight and then rather looking at sources with more credibility where our brand plays a big role. What you see traditionally from marketing channels, when you have a brand, you see a much higher click-through rate.

And if an algorithm sees that you have a high click-through rates and ad format, then you're seen as more trusted, more relevant and then algorithms naturally pick you up more than others. And this for us is a reconfirmation that having a strong brand is not just important for users on our side, but it's also improving unit economics and visibility in algorithms. So we're excited about that. We are collaborating with all major AI labs, and we embrace formats we think are relevant. We are not jumping on every wagon. We also like to watch where things going. So we are not wasting resources unreasonably and wise where we invested.

But we have joined the OpenAI paid ad program, which is very exciting to see. It has been growing quickly. Their product is improving substantially, and this is promising and an opportunity to reach consumers in the future and win them into our product. So that's exciting to see. And then if we look at AI assistance more broadly, I think our fundamental view has not changed. Travelers use it for inspiration. They use it to navigate in destination. And when we talk to AI labs, that's what they also see.

So information searches and discovery is an important task. But when it comes to planning to booking, that's where it's a lot of complexity. It's not an easy conversion funnel to optimize users use dozens of sites. And that's where AI assistants are complementary, but we play a big role with a richer product, which has a ton more features and abilities to refine and look at what you want. And then live prices, whenever you get into aggregating hundreds of sites, chains at quality, at comparable measures and then picking what's relevant to the user, that's a very complex task, which took Google a decade to build.

So we believe there's quite some edge we have. And whatever we are building out around our own AI search, which we have rebranded this year, which we think is a very competitive product and giving you free text search results is making us competitive. So consumers come to us to do AI search. Then with Book and Go, which makes most of our hotels bookable through agents. So you do transactions on trivago if needed, it's important. And then also, we are logging in members on trivago to make sure we retain them to us so they don't go out to other search engines or Gen AI players. So I think our view fundamentally has not changed. I think most important is let's look at the facts. It's significantly below 1%. And I think we use it where we can, and it is complementary in the process, but our relevance remains very important in the process.

There are no further questions at this time. I will now turn the call back to Johannes, for closing remarks.

Thank you. Since 2023, we have diversified our marketing mix and rebalanced our marketplace. Our brand is stronger in travelers' minds and our product has significantly improved. We believe trivago has become a more resilient business, and it has grown at a double-digit rate for 7 quarters in a row. We see plenty of room to grow in a vast market and AI helps us capture it. Thank you to our team for making this happen, to our partners and investors for their trust and to all of you for joining today.

This concludes today's call. Thank you for attending. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the trivago Second Quarter Earnings Call 2026. I must advise you the call is being recorded today, Wednesday, the 5th of August 2026.

We are pleased to be joined on today's call by Johannes Thomas, trivago's CEO and Managing Director; and Wolf Schmuhl, trivago's CFO and Managing Director.

The following discussion, including responses to your questions, reflects management's view as of Tuesday, August 4, 2026, only, unless expressly stated otherwise, in which case reflects management's view as of today, Wednesday, August 5, 2026 only. trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to the second quarter 2026 operating and financial review and trivago's other filings with the SEC for information about factors which could cause trivago's actual results to differ materially from those forward-looking statements.

You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on trivago's Investor Relations website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations website for important content.

Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2025.

With that, let me turn the call over to Johannes.

Good morning, and thank you for joining our Q2 2026 earnings call. This quarter marked 3 years since Jasmine, Andrej and I returned to trivago with the ambition to turn around the company. At that time, trivago was not at a good place. We had come out of the pandemic weaker than other players in our space. Our product was no longer competitive and our brand has suffered from years of underinvestment. We refocused the company on its core proposition, saving travelers time and money and on bringing trivago back to the top of travelers' minds. That work keeps paying off.

In Q2, we delivered our sixth consecutive quarter of double-digit year-over-year total revenue growth, exceeding our expectation on both top and bottom line. Total revenue grew 21% year-over-year, and we achieved a positive adjusted EBITDA, marking our first positive second quarter since 2023. To put this in context, the first half of the year is our investment period, while the second half is where we expect to earn the majority of our profits, reaching profitability already in Q2, while substantially cutting our first half adjusted EBITDA loss shows how much our earnings profile has strengthened as we head into our strongest season. We achieved this and our continued growth despite foreign exchange headwinds and geopolitical pressures waiting on our Rest of the World segment.

Let me share a few strategic highlights of the quarter. Branded traffic referral revenue growth once again substantially outpaced our total referral revenue growth, demonstrating that we are growing through the channels that are strategically and financially most attractive to us. Our product converts significantly better with conversion rates up 64% since Q2 2023, improving our unit economics. Building on our member strategy and growing member base, CRM-related channels now give us new ways to engage travelers with no dedicated marketing investment required. Referral revenue from CRM channels has more than doubled compared to last year, exceeding our internal expectation and pace and relevance. trivago Book & Go continues to scale in our marketplace, tripling compared to the previous year, and we are pleased to have onboarded Expedia as a supply partner on this part of our platform.

These strong operational and strategic developments give us the confidence to raise our full year guidance. For 2026, we now expect total revenue growth in the mid-teens percentage range and adjusted EBITDA of around $30 million. We are also narrowing our path to a target adjusted EBITDA margin of 10% by 2028. Our long-term strategy is playing out. In 2025, our theme was turning the tide, reflecting our commitment to making our turnaround a reality. This year, under the theme Optimized Momentum, Pushing Frontiers, we are building on that foundation. We aim to strike the right balance between growth and marketing discipline while continuing to innovate at the leading edge of our field. I'm proud of how our teams drive this momentum, leveraging the best of AI in our product, in our marketing and in how we work, making us more impactful as an organization. We are confident that this, alongside our brand and product flywheels can continue to drive growth and profitability.

With that, let me walk you through the progress we made against each of our 3 strategic priorities this quarter. These priorities have been in place since 2023, and that consistency is deliberate. We set a clear strategy, and we have executed against it quarter after quarter. For additional detailed illustrations, please also refer to our investor presentation on ir.trivago.com.

Our first strategic priority is to drive growth through brand marketing. Our brand engine continues to compound. Branded traffic referral revenue growth once again substantially outpaced our total referral revenue growth, meaning our growth is coming disproportionately from the channel that matters most to us long-term. We see branded traffic as more lasting, travelers will return to us directly rather than through paid channels, and this is what compounding effects of our brand investments show up. Through this, we also aim to further diversify our channel mix and improve the resilience of our business. We remain disciplined in how we deploy performance marketing investments. We continuously optimize our paid channels for their marginal contribution and adjust our attribution investment strategy accordingly. In recent months, we have further leveled up how we measure and think about these investments, sharpening our incrementality and elasticity testing. Referral revenue from SEO traffic sources is only accounting for a low single-digit share of our referral revenue.

One topic we haven't touched on much before is how our growth funnel is compounding. Our brand investments bring a growing base of travelers to trivago. Our member initiatives turn a meaningful share of them into signed up profile members and every single sign-up gives us a direct line to travelers throughout their planning and booking journey. From there, our CRM activities such as e-mail and push notifications let us reach them through channels we own at no dedicated marketing costs. CRM is still rather small in terms of revenue, but it is becoming a relevant profit contributor with revenue more than doubling compared to last year. Together, this funnel drives higher retention and revenue at structurally better margins, a meaningful building block on our path to greater profitability.

Our second strategic priority is to enhance our core hotel search experience, so travelers can book with confidence, saving time and money. Our product teams have maintained a high testing velocity, improving the user journey, lifting conversion and strengthening our unit economics. Since Q2 2023, our product conversion rate has increased by 64%, demonstrating how much better our product experience and marketing mix have become. This also makes trivago a more attractive channel for our partners who we believe gain access to more incremental and higher intent travelers.

This quarter, we enhanced the hotel search experience even further to better align with what we know travelers actually expect, less friction and more reason to trust what they see. We aligned our desktop and mobile experience more closely, surfaced more relevant listings on every screen and simplified the path from search to booking. This is the foundation on which our entire product road map is built on.

AI highlights and AI review summaries are now a core part of how travelers compare hotels on trivago. We have continuously advanced both further a new per paragraph format with key elements highlighted and paired with the most relevant images make our AI-generated review summaries easier to scan and more visually appealing. We have also improved the quality and ranking of our hotel highlights for more than 500,000 hotels. They are now context aware, giving travelers a more personalized experience based on what they are looking for. These are just a few examples of how we aim to help people search and decide with more confidence on trivago.

Our member proposition continues to strengthen, and our member base keeps growing. We are turning more and more anonymous visitors into profiled members who have a better reason to return and our 3-month retention rate of new members demonstrates this progress. It's up 24% since Q1 2023. Before intercompany eliminations, logged-in members generate more than 30% of referral revenue. The more we know our users, the more we can do for them and the more we can engage with them.

trivago Book & Go continues to scale rapidly and its share of bookings on our platform has roughly tripled compared to last year, making it one of the top players in our marketplace. In the recent months, we onboarded several new advertisers to Book & Go, including Expedia as a supply partner. Most importantly, we integrated Book & Go more natively into our platform to achieve a more seamless user experience and higher downstream conversion, building on the technology we gained through the Holisto acquisition last year. We continue to bring teams and technologies closer together to maximize the value we create for our users and partners.

Our third strategic priority is to help our partners realize their full potential on our platform. Our partner mix has become structurally more resilient. Before intercompany eliminations, the share of referral revenue from all other advertisers has grown from 20% in Q2 2023 to 35% in Q2 2026, reflecting a broader and more diverse base of advertisers succeeding on our platform. Our transaction-based CPA model has been a key driver of this shift, exceeding our expectation in both adoption and performance. By shifting complexity of bid optimization and risk exposure away from our partners, we believe we are helping advertisers compete more effectively, which strengthens the long-term health of our marketplace.

Beyond our 3 strategic priorities, I want to share the strong progress we are making on AI adoption at trivago. Last time, I described our ambition for our roughly 600 core talents to operate with the impact of 6,000. That ambition is showing up in our internal AI adoption numbers. Our latest internal AI survey found 93% of our talents now use AI daily, up from 63% a year ago and 86% say it makes a real measurable difference in the output. On average, our talents are saving 55 minutes a day, up from 36 minutes last year. Our investment reflects the same trend. In the first 7 months of 2026, we spent more than 5x as much on AI tooling and tokens for our teams as we did across all of 2025.

We believe our size also puts us in a sweet spot and recent research from [ RAM ] supports this. Looking at more than 21,000 U.S. companies, the economists found that AI adoption peaks at companies around our size with a technical talent composition similar to ours. We see a real advantage in this. We are big enough to build cutting-edge infrastructure and small enough to keep a culture built on curiosity and speed.

Saving time and becoming more efficient is great, but we believe the real leverage lies elsewhere. Each of us is becoming dramatically more capable, making better decisions, building products and scaling reliable systems faster. Our ambition is to become an AI-native company where agentic systems take on more of the execution and our people focus on direction, judgment and craft. While we're excited about this progress, we remain disciplined about where our growing investment in this technology creates real value. We are educating our talents. We develop mission-focused AI playbooks for our teams and are building our own infrastructure, drawing on open source models wherever they let us move just as fast at lower cost. I'm confident in how trivago can compete from here. We have the direction, the momentum and talents who are eager to learn and execute faster than anyone else in our space.

With that, I'll hand over to our CFO, Wolf, for a more detailed financial review.

Thank you, Johannes, and good morning, everyone. Q2 marked another strong quarter for trivago, and we are delighted that we exceeded our internal year-over-year expectations for both total revenue growth and profitability. We achieved a 21% year-over-year increase in total revenue while shifting more towards profitability despite tough prior year comparables. Our brand strategy, together with significantly improved unit economics by conversion uplifts underpin our balanced approach of driving top line growth while improving profitability. These developments reinforce our confidence in targeting a 10% adjusted EBITDA margin by 2028.

In our view, the current share price continues to understate trivago's long-term earnings potential, and we will continue our buyback program as we see it as a disciplined and high-return use of capital. As of July 31, 2026, we have repurchased around 700,000 ADS for around $3.5 million.

Let's review our second quarter results as well as our full year 2026 and midterm outlook. Unless otherwise indicated, all comparisons for 2026 are on a year-over-year basis. In the second quarter, total revenue reached EUR 168.4 million, representing year-over-year growth of 21%. Americas grew 16% and Developed Europe 14% in referral revenue year-over-year, both exceeding our expectations, driven by growth in branded channel traffic, compounding brand effects and improved marketing efficiency. Rest of World referral revenue declined 11% year-over-year, impacted by FX headwinds of approximately 7% and geopolitical pressures in the Middle East, including airspace restrictions and elevated oil prices.

Throughout the quarter, we took a tactical approach in these markets, adjusting bidding spend and targets locally. The situation in the Middle East remains fluid and creates near-term uncertainty, and we will manage our exposure dynamically as it evolves. That said, Rest of World represented just 18% of our Q2 referral revenue, so the impact on the total referral revenue was limited. Our revenue base is well diversified, which makes us structurally more resilient to localized macro pressures.

For the second quarter, we reported a net loss of EUR 5.2 million. At the same time, we delivered a positive adjusted EBITDA of EUR 1.1 million, ahead of our internal expectations and marking the first time since 2023 that we have achieved this milestone already in the second quarter.

Operational expenses increased by EUR 26.9 million year-over-year, totaling EUR 174.2 million for the second quarter. This was mainly due to a EUR 14.3 million increase in selling and marketing resulting from higher investment in both brand and performance marketing channels made over the course of the quarter, and incremental expenses resulting from the consolidation of trivago DEALS.

Advertising spend increased by EUR 8.3 million or 18% in Developed Europe, EUR 6.2 million or 14% in Americas and decreased by EUR 2.3 million or 9% in Rest of World. Despite further scaling of our marketing investments this quarter, global ROAS rose from 119.0% in Q2 last year to 121.8% in Q2 this year. Americas delivered a notable ROAS improvement, climbing from 116.9% in Q2 2025 to 125.3% in Q2 2026, while Developed Europe experienced a slight decline from 122.1% to 121.0% due to strong brand investments and Rest of World softened from 117.1% to 115.9%.

By the end of Q2 2026, we held EUR 114.5 million in cash and cash equivalents and no long-term debt, underscoring our exceptional financial position.

Our third quarter is off to an encouraging start. We will continue scaling our brand marketing investments, though at a more moderated pace than in prior years, leveraging compounding brand effects to sustain the momentum of increased profitability in 2026. In addition, we are now consolidating trivago DEALS without the previous 1-month reporting lag, eliminating the timing differences, which impacted our consolidated financial statements since the third quarter of 2025 until the first quarter of 2026. We anticipate sustaining our growth trajectory with steadily improving profitability, targeting a 10% adjusted EBITDA margin by 2028. For 2026, we are increasing our full year guidance to mid-teens percentage year-over-year total revenue growth and an adjusted EBITDA of around EUR 30 million.

With that, let's open the line for questions. Operator, we are now ready to take the first question.

[Operator Instructions] Your first question comes from the line of Naved Khan with B. Riley Securities.

A couple of questions from me and great execution here, guys. I like the fact that you guys now are guiding to 10% and put a date on that, so 2028. How should we be thinking about your ability to grow the top line as you kind of march towards the 10% target by 2028? Give us your thoughts on that.

And then the second question I have is, in terms of the trivago Book & Go, it's now around 35% of your -- in terms of share. How high do you think the share can go? And also, curious why Expedia opted to participate in that. They have their own brand and just trying to understand why they would opt to participate in Book & Go.

Thanks for your question. So let me take the first one. So how do we think about the top line development and combined with the 10% adjusted EBITDA margin that we call out for 2028. So first of all, we were comfortable to setting this target because the sum of trends that we already observed independently contributed to this new target. We see the compounding effect from our brand flywheel. We see an improved product, which led to conversion rate improvements of around 64%, and all these factors gave us confidence in order to call this out.

And in terms of top line, we are still plan to grow above market, and this is how we look at it at the moment.

I can comment on Book & Go. And maybe, the further we go into the year, we will give guidance on next year on top line, but that's what we feel confident sharing right now. I think it will be very interesting how our member strategy turns out, how we create stickiness with users. And I think we are second year into this. We see encouraging results, and we want to see how this unfolds before we give more top line guidance as well.

On the Book & Go side, I think what's important here that we continue expanding it across markets. So it's 16 markets now that we have launched the product in. And the question on Expedia is that, they just want additional visibility. And when you join our Book & Go product, they are basically visible with their own brand. And then with their inventory, they are also visible with our branded channels. So it's basically giving them incrementality, that's the belief. And we -- so they have the benefit of incremental visibility. And we have the benefit of offering this on a more broad scale as we prospectively believe this can be more attractive for members as well to, on a long-term basis, book more consistently through the Book & Go channel, so you have a convenient experience.

And this growth quickly. It tripled its share over the course of the year. I'm not sure if you said a percentage number, so we are not sharing an absolute percentage number of size. It's a relevant part of the all other segments, but not the majority. This is maybe what we can share here. And it's one of several drivers of the all other segment. The all other segment has been growing because of a combination of things. It's alternative accommodation player being more active in our space, the direct segment becoming more competitive from changes we have done around our hotel details pages, which we shared last quarter and the previous quarter, I believe, where we make them more competitive in our marketplace. They don't have a search results list like Booking or Expedia, and we basically improve the experience and make them more competitive. So the direct players have leaned in more and also enjoy a bigger share in our marketplace. And that's it around Book & Go and the dynamics with the all other segments.

Does that answer your question?

Yes. So yes, sorry, I want to correct myself. I think the 35% is to all other and not just Book & Go, which is a part of it. But do you think this 35% can continue to climb higher? Where do you see it over the sort of medium-term? So that's sort of a follow-up question on that.

And then the second part of this is, are you also seeing Google implement changes in Europe? I think they've been required to do that. And is that a tailwind for you? Or are they still not implementing those changes?

Yes. So I think very good questions. On the all others, whether -- how this develops, we are kind of agnostic to that. If it's around 35%, we think our marketplace is more balanced. We see it's very elastic if different players are acting on our marketplace. So that's what we see as much more healthy than it used to be when I think back in the times. So it depends on what the different market participants decide where this goes. So we don't control this. And it's definitely, I think, rather unhealthy if this goes below 30%, everything between 30% and 40%, we perceive as a healthy distribution. So where it is, we feel quite good about that.

And then your question on Google, it's a very good one. And we have not seen Google implementing a solution into their general search results case, and you're pointing to the DMA case probably. So that is something we expect. You have probably heard that in July 2026, the commission has found Google noncompliant and find them EUR 890 million because of self-referencing in search, among other things. And they also explicitly named hotels among the verticals that Google favored. So I think overall, we have been quite vocal about this case, and this validated also the claim we have filed. This directionally supports the case of the claim we have been filing in May against Google. And what we expect Google to react on this is because the commission also emphasized if Google is not reacting in 30 days, they face daily penalties up to 5% of global turnover. So there is a continued fine that Google would expect. So we expect Google to react. We have seen Google testing new versions that appear to be compliant. So we will see how this goes.

And then will this be a tailwind? We always said there's lots of different changes on search results. It's very hard to predict what's the tailwind, what's the headwind. It's generally volatile. I think it's a structural tailwind. So when I say structural, I think strategic long-term, they are not preferencing their own product anymore. So we have a more fair playing field where we can compete on high level. And that's good for us because we believe we have a better product for consumers. And I think that's generally positive to see and that they continue to deliver on compliance. I think that's important to us, and we are keen to see how this will develop.

Your next question comes from the line of Doug Anmuth with JPMorgan.

This is Dae on for Doug. First one, on your 10% adjusted EBITDA margin target being brought forward, what are the key building blocks of -- or that's giving you confidence to move that higher? Is it more of the channel mix that you're seeing benefit from? Or is it more of the conversion lift or marketing discipline that's giving you the confidence?

And then secondly, could you talk about some of the primary drivers behind bookings strong growth that you're seeing right now? And do you feel like -- or do you have a preference and whether a user goes down that Book & Go funnel or the metasearch funnel?

So thank you for the question. Maybe I repeat what Wolf said to make it clear. I think generally, and I said it in my remarks as well, one thing is through brand marketing, we bring more people on our platform. We see branded users are more sticky, have a higher probability to return than people coming from performance marketing channels. So as we lean into that down the line, you will have the effect that we mentioned that last time, we have stepped up brand marketing over the years quite -- with quite big steps. I believe last year, ad spend went up 20%. This year, ad spend first half of the year went up around 10%. We continue to expect to bring up brand spend, but at lower magnitude than the previous years. So just from increasing brand spend slower profitability, we expect profitability to come into the bottom line from the compounding effect.

And additionally, apart from brand marketing, and this is a major part of our equation, to your question how to weigh these things. And then the second one is conversion improvement. And that is a direct one. If you improve conversion rate by 1%, this has -- 1 percentage point, this has a big impact on the bottom line. So it's the second big building block. And then what I mentioned around the member strategy, we shared members are 24% more sticky than they used to be back in the days. This signals we have a better member proposition that's more meaningful, and we believe increase the probability of users coming back. That's the third building block. That's kind of -- so increased brands, increased conversion and more stickiness of users.

And one thing we mentioned first time this time is our CRM revenue. This is a very easy one to think about that already has become much more relevant for us. We have now for members that make more than 30% of our referral revenue, we have the e-mails and we can build a direct relationship. And there is a window of roughly 2 weeks where people take their decision where to book, what hotel to book. The research stage certainly goes further back, but these 2 weeks are very important. And if we have a higher engagement through our app -- through app notifications or e-mails, we don't have to rebuy users expensive through certain channels. We can get them through CRM, which is -- which doesn't have direct marketing costs. So that's a very easy one to think about how to bring profitability up among the 2 others I explained as well. And we are seeing -- and we have shared in our investor presentation, we have shared you a graph that show the operational trajectory we are seeing in all of these dimensions, and that makes us confident that we can achieve that.

And then Book & Go, no. Generally, travel is quite chaotic, have different touch points and how people book and how they jump between sites, how they pick flights first, hotels first and when they book what, it's a quite chaotic process and it usually involves or often involves several decision-makers. That's also what makes it chaotic. And about Book & Go, you can think that some users have a preference and our base belief is, if you think about these 30% of members, maybe at some point, 40%, these are the ones that will have a preference for Book & Go. But then there will be a segment that just appreciates the meta proposition. And by no means we plan to weaken our meta proposition. We think this is our differentiating factor in our positioning, in our marketing, in our product that we will not weaken by in any way.

So we expect to be a multi-partner and our Book & Go is a funnel that facilitates it for those users who want to. So we maybe see 10%, 15%, 20% of our users in the future using Book & Go, but that -- it's very hard to decide and understand which user has which preference at what point, given the chaotic user journey that is just inherently there.

[Operator Instructions] There are no further questions at this time. I will now turn the call back to Johannes for closing remarks.

Yes. Thank you. Over the past 3 years, we have deliberately diversified our marketing mix and rebalanced our marketplace. The result is a structurally more resilient business now delivering its sixth consecutive quarter of double-digit growth. From here, we remain focused on steering towards continued growth at higher profitability. None of this would be possible without the team behind it. What stands out to me is the discipline and pace at which our talents are executing and learning, that's our greatest competitive advantage. I want to thank everyone for their commitment and dedication. To our partners and investors, thank you for your continued trust, and thank you all for joining today.

This concludes today's call. Thank you for attending. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to trivago's First Quarter Earnings Call 2026. I must advise you the call is being recorded today, Wednesday, the 6th of May 2026. We are pleased to be joined on the call today by Johannes Thomas, trivago's CEO and Managing Director; and Wolf Schmuhl, trivago's CFO and Managing Director.

The following discussion, including responses to your questions, reflects management's view as of Tuesday, May 5, 2026, only, unless expressly stated otherwise, in which case, reflects management's view as of today, Wednesday, May 6, 2026 only. Trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to the Q1 2026 operating and financial review and trivago's other filings with the SEC for information about factors which could cause trivago's actual results to differ materially from these forward-looking statements.

You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted in trivago's Investor Relations website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations website for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2025.

With that, let me turn the call over to Johannes.

Good morning, and thank you for joining our Q1 2026 earnings call. We are off to a strong start to 2026, delivering 15% year-over-year total revenue growth and our fifth consecutive quarter of double-digit growth, while improving profitability against our prior year. Americas grew 17% and Developed Europe, 14% in referral revenue, both substantially exceeding our expectations. This performance came despite tangible FX headwinds and geopolitical pressures in parts of our Rest of the World segment. The results reflect our balanced approach to growth and profitability with cost discipline and the compounding effects of prior brand investments translating into tangible outcomes.

Branded traffic revenue once again outpaced total revenue growth this quarter, demonstrating that our long-term brand strategy continues to compound. Our product is converting better with conversion rate up 58% since Q1 2023. Before intercompany eliminations, our logged-in member base now drives more than 30% of referral revenue. Trivago Book & Go's relevance has increased significantly compared to previous year. This is what optimizing momentum and pushing frontiers, our theme for 2026 looks like in practice. We continue to grow at a healthy pace in markets we have built up since mid-2023 while increasing profitability through the compounding effects of the investments we have already made.

While we are facing challenging year-over-year comparables across the first half of 2026, Q1 surprised us positively and Q2 has had a promising start. On the back of our strong Q1 performance and the momentum we are carrying into the rest of the year, we are reaffirming our full year revenue outlook of double-digit percentage growth and raising our profitability guidance. We now expect adjusted EBITDA of around EUR 25 million for 2026, up from prior guidance of at least EUR 20 million. We are also announcing a planned share buyback program up to EUR 20 million, reflecting our confidence in trivago's long-term value creation potential. Wolf will cover the rationale and more context on this.

Before walking you through our strategic priorities, I want to address one further announcement. Yesterday, we filed an antitrust damages claim against Google before the Regional Court of Hamburg in Germany, seeking compensation for damages trivago has suffered as a result of Google's self-preferencing in general search results. For more than a decade, we have raised concerns that Google has systematically steered travelers away from competing hotel metasearch platforms and towards its own service. We believe the claim rests on a strong legal foundation.

The EU Commission's 2017 Google Shopping decision upheld by European Court of Justice in September 2024, established a legal framework for damages actions of this nature and 2 first instance awards have already been granted in comparable cases before the Regional Court of Berlin in November 2025. The claim covers the period from January 2014 through December 2025 and seeks substantial monetary damages based on an independent expert analysis. We expect this to be a multiyear effort and the outcome of litigation is inherently uncertain.

That said, the size of the potential claim is meaningful, and we believe pursuing it is in the best interest of our shareholders and of a travel ecosystem that benefits from competing based on merit. For details, please refer to our separate press release published on ir.trivago.com. With that, let me return to business and walk you through the great progress we made against each of our 3 strategic priorities this quarter. For additional details, please also refer to our investor presentation on ir.trivago.com.

Our first strategic priority is to drive growth through brand marketing. The flywheel we have been building since mid-2023 continues to compound. Branded traffic revenue grew faster than overall top line in Q1, demonstrating that our brand spend produces returns that extend well beyond the period in which it incurred. Our successful 2025 campaigns, combined with the deliberate diversification of our marketing mix into owned and direct channels set up Q1 well, and we have meaningfully reduced our reliance on search-related channels.

Before intercompany eliminations, the share of referral revenue from Google is down 34% compared to Q1 2023, and our non-branded SEO exposure remains at low single-digit levels. We believe the business is structurally less exposed to search volatility as a result. Traffic referred from GenAI sources remains below 1% of revenue. These channels are small in absolute terms. And in our view, their near-term impact often appears overestimated. We see them as an emerging marketing opportunity gradually growing in relevance, operating more upper funnel than traditional search.

We are actively integrating and testing new ad formats, calibrating investments to the relevance those channels demonstrate over time. Our strong brand, deep performance marketing expertise and vertical focus positions us well to leverage them to our advantage. In our view, AI systems will play an increasingly relevant role in the travelers' journey, but primarily at the top of the funnel, helping users get inspired and explore where to go. Once users move into planning, selection and booking, the experience they need is fundamentally different. They compare hotels side by side, check different booking sites, build shortlists, filter across many dimensions, check room types and explore locations through a rich map experience.

These are only a few examples. In essence, our user experience is much richer and has been optimized over decades. This is not a result of taste or opinion, but of tens of thousands of tests that have shaped our interface into what it is today and how it addresses the nuanced needs of travelers. We believe this is where trivago plays a distinct role as a trusted guide backed by comprehensive pricing, availability and rich content that AI assistants are likely struggle to build a competitive edge on. Our partnership with Jurgen Klopp continues to be a meaningful asset, and his association with the trivago brand resonates strongly across our audiences.

Ahead of the summer travel season, we have produced new creative spots, including dedicated TV ads that combine Klopp with a major sporting event taking place this summer. We are heading into the year's most important travel period with a strong creative pipeline. We are now operating in 30 active markets, though our brand investment remains meaningful below 2019 levels, and our market share in these markets is still small. We believe significant growth potential lies ahead. Our second strategic priority is to enhance our core hotel search experience, so travelers can book with confidence, saving time and money.

Our testing velocity remained high in Q1, and we have increased our product conversion rates by 58% since Q1 2023. This is significant. It reflects how much better our product has become and is having a direct impact on our unit economics and marketing efficiency. We also expect this increased conversion rates to have a meaningful impact on our user satisfaction and retention over time. For partners, it means more qualified travelers landing on their site. Our member strategy is advancing faster than we expected.

Before intersegment elimination, locked-in members now account for more than 30% of referral revenue. Members unlock access to exclusive partner deals, creating a compelling reason to log in and return to trivago. This deepens our understanding of users, gives us more touch points to extend the user life cycle, and we expect this to drive long-term retention. As more data accumulates within the member experience, we expect to unlock further opportunities around loyalty features and reengagement through CRM activities.

Personalization is becoming an increasingly important lever for us. We continue to refine our ranking logic based on user behavior. And this quarter, we expanded our explicit preference settings, allowing users to indicate what matters most to them across dimensions like hotel style, quality, star rating, location and budget. The combination of real-time behavioral signals and stated preferences gives us a much richer picture of what each user is looking for. This lays the foundation for increasingly accurate recommendations and a more tailored search experience at scale, and we believe personalization can become a true differentiator for us.

We also shipped 2 important product improvement in Q1. We launched Nova Vista, our new desktop architecture, which gives us a stronger foundation for the more structural experimentation required to rethink the user experience for a conversational AI native era. As part of our AI Smart Search initiative, we're experimenting with conversational experiences that keep our core search and rich user interface at the center, combining the familiar with the new capabilities GenAI-based technology unlocks. We also introduced AI synthesized top 10 badges by theme, surfacing each hotel's standout qualities at a glance across attributes like pool, breakfast, location and family-friendliness, a simple but effective way to reduce decision fatigue and help users move from search to booking with more confidence.

The progress across these fronts is mutually reinforcing. Better conversion makes us a stronger channel for partners. Members deepen our personalization and personalization improves conversion. We are building a flywheel inside the product itself, and we are still at the early stages of what we believe it can deliver. Our third strategic priority is to help our partners realize their potential on our platform. Our marketplace is healthier than it has ever been in years, and the numbers reflect it. Before inter-comp eliminations, the share of referral revenue from all others advertisers has grown from 20% in Q1 2023 to 35% in Q1 2026, Partners increasingly recognize the quality of traffic we deliver, and this is showing up across the board.

Over the past 3 years, we have made deliberate investments to rebalance our marketplace and reduce advertiser concentrations. Initiatives like our transaction-based CPA model, our second price auction, trivago Book & Go and our Property Details Page share a common goal, making it easier for small and midsized partners to compete effectively on our marketplace. We believe all of these have contributed to this shift and drove advertiser engagement. Our Property Details Page has now been rolled out globally after being qualified over the course of the past year. It addresses a structural disadvantage independent hotels and chains have long faced. Previously, when users click through from trivago to a partner site, they would often land on a room selection page, far further into the journey than they actually were. By qualifying our Property Details Page as an intermediary referral destination, we now hand off users at the right moment. We have seen this meaningfully improve conversion for our direct partners.

Trivago Book & Go continues to scale rapidly. Since Q1 2023, referral revenue before intercompany eliminations generated through this funnel has grown by 530%, and it has doubled its share compared to last year. Globally, trivago Book & Go has become a top 5 player in our marketplace. By combining our trusted brand with a seamless booking experience, we are creating value for users and partners alike. Our transaction-based CPA model continues to grow with over 30% of referral revenue before intercompany eliminations now processed through this model, up from 25% just 1 quarter ago. CPA is particularly valuable for small and midsized partners who often do not have the resources to optimize bids and manage exposure effectively.

By removing that complexity, we believe we are helping them to compete more effectively, which is good for partners and for the long-term health of our marketplace. Before closing, I want to address one topic that cuts across all 3 of our strategic priorities. AI transformation. The pace of AI is accelerating and driving its diffusion across the organization is a key focus for us as a leadership team. In recent months, new impactful AI capabilities have become available, and therefore, we have further elevated AI's role inside the company. We are leading this transformation actively with a clear ambition for our approximately 600 core talents to operate with the impact of 6,000.

Importantly, we are not starting from 0. Trivago has run AI in production for over a decade, across our marketplace, search ranking, coding and advertising infrastructure. A majority of our workforce already thinks in systems, acts as builders and operates in close feedback loops, giving us a strong foundation to build on. From here, we see teams evolving through 4 stages, from AI-assisted work to automated workflows to agentic-first systems and ultimately self-improving systems. There is broad consensus that AI will absorb a meaningful share of execution work, and we view this as a great efficiency gain. It expands our capacity and lets the same number of people deliver more.

This has become a base expectation for us, but we believe the real upside is much bigger, reaching the impact of 6,000 will come from human craft being amplified by AI leverage. As execution work is absorbed, our people do not just gain time. They become meaningfully better at what they do, sharper decision-makers, faster and more ambitious builders, capable of governing greater complexity and with real capacity to deepen the relationships that move the business. This is where the real leverage lies, and this is what makes us excited about the path ahead.

To execute on this opportunity, with sharper focus and clear accountability, we expanded our leadership team in the recent months with 3 C-level appointments. Ioannis Papadopoulos joined as Chief Technology Officer at the end of the last year, leading our technology agenda and AI enablement. In March, Alexander Volkmann was appointed Chief Intelligence Officer, owning machine learning and AI data strategy. And Sherin Hegazy was appointed Chief Commercial Officer, deepening our partner ecosystem. The pace of AI is reshaping what is possible in travel search, how we build products and what travelers and partners will expect.

All 3 additions have helped building what trivago is today and the institutional depth and judgment they bring is exactly what this next chapter requires. I'm excited to have them on board and to shape the future of trivago together. None of this would be possible without our standout team. What gives me confidence is how our people are stepping up to this moment. They are curious, fanatic learners and deeply committed to defining the next chapter of trivago. That mindset more than any single technology or strategy is what can set us apart. Thank you all for your hard work and dedication.

With that, I'll hand over to our CFO, Wolf, for a more detailed financial review.

Thank you, Johannes, and good morning, everyone. We are thrilled to report that Q1 was another strong quarter for trivago, exceeding our internal total revenue growth expectations. We achieved a 15% year-over-year increase in total revenues while shifting more towards profitability despite ongoing FX-related headwinds. This is a result of optimizing existing markets and making use of compounding brand effects, showcasing our balanced approach between top line growth and improving profitability.

We are announcing an up to EUR 20 million share buyback program with details to be finalized and execution plan to start at the end of May. Given our strong cash position of EUR 136.1 million and 0 long-term debt as of March 31, we believe this represents a disciplined and high return use of capital. Our view is that the current share price does not reflect the company's long-term earnings potential, and we are putting capital behind it.

Let's review our first quarter results as well as our 2026 outlook. Unless otherwise indicated, all comparisons for 2026 are on a year-over-year basis. In the first quarter, total revenue reached EUR 142.9 million, representing 15% year-over-year growth despite foreign exchange headwinds of approximately 5% globally. Americas grew 17% and Developed Europe 14% in referral revenue, both exceeding our expectations, driven by better quality traffic from higher branded channel traffic and compounding brand effects. In Americas, prior quarter brand investments compounded particularly well.

In Developed Europe, demand remains strong. Rest of World declined 12% in referral revenue year-over-year, impacted by FX headwinds of approximately 9% and geopolitical pressures in the Middle East, including airspace restrictions and elevated oil prices. We have managed these markets tactically through the quarter, adjusting bidding, spend and targets locally. The evolving situation in the Middle East continues to create near-term uncertainty, and we will continue to manage our exposure dynamically as conditions develop.

With Rest of World representing only 17% of our Q1 referral revenue, the overall impact on total referral revenue was limited. More broadly, with Developed Europe at 44% and Americas at 39% of Q1 referral revenue, our business is well diversified across segments, making us structurally more resilient to localized macro pressures. During the first quarter, we reported a net loss of EUR 7.3 million and achieved an adjusted EBITDA loss of EUR 4.5 million, which was above our internal expectations. Operational expenses increased by EUR 19.2 million, totaling EUR 152.9 million for the first quarter. This was mainly due to a EUR 10.6 million increase in selling and marketing, resulting from higher investments in both brand and performance marketing channels made over the course of the quarter, and incremental expenses resulting from the consolidation of trivago DEALS, formerly Holisto.

Advertising spend increased by EUR 7.8 million or 20% in Developed Europe, EUR 4.1 million or 9% in the Americas and decreased by EUR 1 million or 5% in Rest of World. Despite the continued scaling of our marketing investments in this quarter, global ROAS improved from 118.1% in Q1 last year to 121% in Q1 this year. We observed a significant ROAS improvement in Americas, increasing from 102.7% in Q1 2025 to 116.1% in Q1 2026, while we observed reductions in Developed Europe from 134% to 130.5% and in Rest of World from 120.3% to 111.2%.

By the end of Q1 2026, we had EUR 136.1 million in cash and cash equivalents and no long-term debt, highlighting our exceptional financial position. Despite challenging comps in the first half of the year, we are off to an encouraging start to Q2. We expect to further scale our brand marketing investments, but at a more moderate pace compared to previous years and make use of compounding brand effects in order to gradually increase profitability in 2026.

Additionally, in 2026, we aim to begin consolidating trivago deals without the 1-month reporting lag, our current accounting policy election, which currently causes timing differences in our consolidated financial statements. We anticipate sustaining our growth trajectory with steadily improving profitability, targeting 10% adjusted EBITDA margin in the next few years. For 2026, we are maintaining our expectation of double-digit year-over-year total revenue growth and increasing our adjusted EBITDA guidance to around EUR 25 million.

With that, let's open the line for questions. Operator, we are now ready to take the first question.

[Operator Instructions] Your first question comes from the line of Naved Khan with B. Riley Securities.

Congrats on the results and the raised outlook. A couple of questions from me. It seems like you may be further ahead in getting the compounding benefits of brand advertising in Americas versus Europe, just looking at where the ROAS is on these markets. Can you maybe just talk about why that may or may not be the case, if I'm thinking about it the right way? And then on your 10% EBITDA margin over the next few years, maybe just give us a better sense of like maybe the time line, if it's like 2 or 3 years or maybe further out or not? And then maybe on the -- just on Google, I think you've been testing some changes as part of remedies. And I just wanted to know if that's -- if those changes are favorable to your business or not or if it's too early to say?

Naved, thanks for your questions. So if I get it right, your first question was related to the developments in Americas and in Developed Europe. So in our Americas segment, we [indiscernible] use of compounding brand effects. This was basically the major impact we saw there. So basically, we the investments we did in previous quarters are now compounding. And if you take a look at the ad spend development there, it is reduced to prior quarters or year-on-year comparables. And therefore, we need to spend less in order to generate the same revenue. That was the main driver we saw in the Americas.

An additional point that also influences the development is that we improved our conversion rate tremendously that we were able to generate better quality traffic. All these developments are also related to this. When we then take a look at our Developed Europe segment, there, we also saw a slight decrease in the ROAS. And the reason is mainly due to the fact that we saw strong investment opportunities in Developed Europe. And as you increase your brand spend at the same point, your ROAS also decreases due to the fact that the positive effect from your brand investment will set in at later stages. That's on the development in the segments.

And your next question was related to the -- our way to the 10% margin that we called out. So we are comfortable with this 10% target within the next few years. We -- at the moment, we don't want to narrow it down further, but thinking about it in the next -- or in the upcoming quarters, most probably. And -- but what we can say and what leads to this positive margin development, I would like to point out here. So first, we see compounding effects on the one hand from our increased brand investments and on the other hand, from a much improved product. More travelers become aware of us and more travelers engage with our product.

And yes, at the same hand -- on the other hand, the loyalty of the users increases -- the probability that they come back increases. The second important point is that we also in the future will further increase our brand investments, but at a more moderated pace compared to previous quarters and make further use of these compounding brand effects in order to gradually increase our profitability. And here again, the example of our ad spend in Q1 where we -- in Q1 2025, where we increased our ad spend by about 24%. And now in Q1 2026, only on a more moderated level by 10%. And the additional contribution that we expect from these measurements will directly go to the bottom line instead then of reinvesting them again into marketing. So the U.S. market or the Americas market at the moment is a good example for this.

Yes. And maybe I can add one aspect here what makes us excited and how we believe we can improve bottom line. And before I do that, maybe the point you asked initially on Americas, if you look at our ad spend increase last year in Q1 was I think, 3x higher compared to this year. And this is exactly the path we are going just to incremental -- our incremental investment will slow down gradually, but there's still lots of room to grow compared to our investment in 2029. So there can be a multiyear uplift in brand investment, but slower than in the past years. And then that will go into bottom line.

A third point that we believe will drive the 10% EBITDA or what makes us rather comfortable about the 10% adjusted EBITDA is that one effect that's not -- that we haven't talked much about is the logged-in member aspect has won a higher loyalty because people have more touch points with us. But then you also have aftermath of that. You have e-mails and a chance to engage with users. And we call this owned media internally. So we are reengaging users in this period where there's like users come to us and they tend to book within 1 day and like 2 weeks. That's a high converting period. And if we have e-mails, we can engage with these users much more actively, make sure we stay on top of mind with the users and then drive and convert these users and bring them back.

So that has a direct impact. We see our CRM activities, sending e-mails to users. This is growing a lot internally, and it will start to become meaningful for our bottom line very soon. And over time, the more our members go up, the better we optimize the engagement with our members, the more this will contribute to the bottom line. And then the 10% is realistic. And the time line, I think we will figure out and create more clarity. I think the next few years is indicating that we don't want to make this a long process, but rather go there with confidence as soon as we can.

Great. And then on Google?

On Google, yes, the third point on Google. So Google from our perspective, is still not complying with DMA. I think the commission had the preliminary finding that they are not and everybody is waiting for the final finding of the commission. This can happen any time. What we see on the Google front is that they do some changes. We have not seen any material impact. They are testing, they're evolving.

Overall, I think what has been true over the long term, and they are not allowed to put their full hotel search product and price comparison product on top of the search results, and that is strategically a positive development because they are not pushing a product in front of people's mind on top of the generic search results. So this is generally positive. I wouldn't say this has a short-term impact on us. It's rather a stronger position we have as a metasearch with a better product that we can operate for users. So there's no change we can see in the last week.

Your next question comes from the line of Doug Anmuth with JPMorgan.

This is Dae on for Doug. I have 2. The first one, it looks like the share of referral revenue from all others appears to have inflected more meaningfully over the past 2 quarters. Curious what's driving that acceleration? And can you speak to the competition within the bucket? Is it broad-based long tail or specific partners scaling into material individual share? And I have a follow-up.

Yes. I think -- thank you for the question, a very important one. On the one side, on the marketing hand, we are diversifying our marketing mix, and we believe this makes us more resilient. And then on the other hand, also the partner mix is becoming much better, and the mix has moved from 20% in Q1 2023 to 35% in 2026. And that's quite substantial. And I think the main reasons, it's many things. If you have a marketplace, lots of dynamics come together. So it's hard to dissect and say what are individual things that drove this. Overall, it's always a matter of how our advertisers engage in our marketplace. Some engage more, some engage less. But overall, the engagement, I think, is very good. And we have seen that the improved conversion rates we deliver, so higher quality of traffic has resonated very positively with our partners.

And then there is a range of structural things that we have done. You might remember, I think it's 2 to 3 years ago, that was the time line when we rolled our second price auction, which made our marketplace dynamics different. Then over the last quarters, we have reported that the CPA model has been very successful being rolled out, which is a transaction-based model. So partners don't need to do the bidding. Bidding is very complicated, especially for small partners that have scarcity of data. And that has been a very successful initiative.

Book & Go took more share. It doubled its share into our marketplace. So you asked about who in the all others mix have taken share. Book & Go is one. There's other players that joined our auctions, that joined our marketplace that are relevant in the alternative accommodation space, and Book & Go took more space. And also the direct players have significantly increased in size as well. And here, the connected part is Property Details Pages that we rolled out. We qualified in the course of the last year, a very long testing process, lots of diligence, making sure this drives conversion and is positive for our direct partners.

What I explained in my remarks earlier is that if you come as a user and land from trivago on a room selection page, this is a very big step in the decision-making process. So what we have introduced now when you click on a direct partner, you land on a hotel page, we call it Property Details Page, that gives you content, images and the different room types and so on, on trivago. And we only forward more highly qualified users to our direct partners. So you remove some of the structural disadvantages independent hotels or chains have. And this had a significant impact in the recent months as well together with Book & Go, other partners, CPA model, and this all had an impact that contributed to the shift.

Okay. Great. And as a follow-up and somewhat related, when you guys talk about referral revenue from log-in members growing to 30% of referral revenue. I'm curious like where does that log-in conversion happens through the travel funnel? And I guess is the log-in members growth from new users and logging in for the first time, drawn by exclusive deals? Or are you seeing meaningful repeat behavior and higher revenue per member from existing base?

Yes. I think very good question as well. I think overall, and we have shown this in the Investor Relations presentation, an example, the most important drivers for this are the prompts in -- if you go to the desktop, you are prompted, there are better prices when you log in. You have unlocked rates in the price comparison stack that you have on the hotel level and when you are -- a main driver as well. If you use our app, you are quite prominently asked to log in. And these are drivers that do this. And it's both. It is people returning to trivago, the share there of logged-in members is much higher than for the general population. So it's a combination of both.

But most important is unlocking new deals and pushing users in our app to log in, where users tend to be more core trivago loyal users and where trivago -- and where people are more used to logging in. And in the app, the great thing is we not only have CRM activities with e-mails. And if you get somebody to log into the app, you can create push notifications, which then drives contribution as there's little cost to these activities compared to other marketing.

We have no further questions at this time. I'll now turn the call back to Johannes Thomas for closing remarks.

Thank you. Over the past 3 years, we have deliberately diversified our marketing mix, reduced our reliance on Google and rebalanced our marketplace effectively. The result is a structurally a more resilient business that we expect to continue to grow at a strong pace. From here, we are increasingly focused on steering towards profitability to maximize returns for our shareholders. Our planned share buyback program reflects our conviction. To our investors, thank you for the trust you place in us. And to everyone on the call, thank you for joining us today.

This concludes today's call. Thank you for attending. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the trivago Q4 Earnings Call 2025. I must advise you the call is being recorded today, Wednesday, the 4th of February 2026. We are pleased to be joined on the call today by Johannes Thomas, trivago's CEO and Managing Director; and Wolf Schmuhl, trivago's CFO and Managing Director.

The following discussion, including responses to your questions, reflects management's view as of Tuesday, February 3, 2026, only, unless expressly stated otherwise, in which case, it reflects management's view as of today, Wednesday, February 4, 2026, only. Trivago does not undertake any obligation to update or revise this information.

As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to the Q4 2025 operating and financial review and trivago's other filings with the SEC for information about factors which could cause trivago's actual results to differ materially from these forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on trivago's Investor Relations website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations website for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2024.

With that, let me turn the call over to Johannes.

Good morning, and thank you for joining our Q4 2025 earnings call. We are thrilled to share the results of an exceptional year 2025, and our fourth consecutive quarter with double-digit year-over-year growth in Referral revenue and higher-than-expected profitability. For the full year 2025, we exceeded both our top and bottom line expectations despite material FX-related headwinds, delivering 19% year-over-year total revenue growth and EUR 15.8 million in adjusted EBITDA. We closed the year with an exceptionally strong fourth quarter, achieving 27% year-over-year total revenue growth.

In 2025, our strategic theme for the year was turning the tide, steering our focus on making our turnaround a reality. In 2026, we are rallying behind the theme, optimizing momentum, pushing frontiers, striking the right balance between growth and marketing discipline while continuing to innovate at the leading edge of our space. Our long-term strategy is playing out. We are confident that our brand and product flywheels can continue to drive growth and profitability.

For 2026, we expect double-digit total revenue growth and are targeting at least EUR 20 million of adjusted EBITDA. Despite strong comparables in the first half of the year, we anticipate our fifth consecutive quarter of double-digit total revenue growth in Q1 at higher profitability compared to previous years.

Let me now highlight a few developments of the past year that demonstrate our outstanding progress the trivago team has achieved since Andrej, our CPO; Jasmine, our CMO, and I returned to the company in mid-2023. Our increased brand marketing investments since mid-'23 are paying off. Branded traffic revenue growth has outpaced top line revenue growth significantly in the recent years. We are seeing compounding effects and sustained attractive return on incremental brand marketing spend.

Our core hotel search product continues to advance quickly. In 2025, we have improved our conversion reaching 37% increase versus 2023, materially enhancing our unit economics. These gains are powered by AI and hundreds of experiments each quarter. We have evolved our member proposition, driving revenue from logged-in members to more than 25% of Referral revenue, a 93% increase in Q4 2025 compared to Q4 2023.

Our investments in empowering partners are translating into meaningful gains. Our partners reach more qualified leads than ever, and our transaction-based CPA model continues to exceed expectations. More than 140 partners have adopted this operating model and over 25% of Referral revenue is now processed under this model. Referral revenue flowing through our higher-converting trivago Book & Go funnel has increased by 137% in Q4 2025 compared to Q4 2023.

Zooming out, we believe we are well positioned within a $1.6 trillion travel market with hotels representing about $500 billion of that opportunity. Our recent research shows that roughly half of travelers prioritize value for money and competitive prices. More than 40% of travelers compare prices between different booking sites. Our deal-oriented value proposition is tailored to this need, giving us conviction that we have a substantial room to grow.

Let me now recap our key success drivers behind each of our strategic pillars and outline our priorities for 2026. For additional detail, please refer to our investor presentation on ir.trivago.com, which further demonstrates our progress and the points I'm about to cover.

Our first strategic priority is to drive growth through brand marketing. Our brand engine continues to gain momentum. Our brand marketing team has run campaigns in 30 countries and have delivered success across all geographical segments in 2025. Our AI-powered summer campaign featuring global icon and soccer coach, Jurgen Klopp, has proven very effective, and our winter campaign started with promising results.

In the last quarter, we followed a different approach compared to previous year. We leaned into LatAm markets, which have a different peak seasonality, and invested in other key markets where we identified exceptional opportunities that we chose to exploit. We're consistently improving brand marketing efficiency and have expanded into new brand marketing channels. We remain disciplined and invest behind what we see is working.

In 2026, we will continue to increase brand marketing spend, primarily in the markets we have focused on in the recent years. However, the pace of growth and brand spend will be substantially lower than in the past years as we are now getting closer to our target brand marketing investment levels. Our priority will shift from entering new markets to further optimizing existing ones.

Unlike prior years, when profitable regions subsidized newly activated markets to a greater extent, we expect a slower growth in incremental brand marketing spend, combined with compounding effects of the past investments to make us progressively more profitable in 2026 and beyond.

Our second strategic priority is to enhance our hotel search and price conversion experience. In 2025, we significantly increased the number of tests run on our platform, delivering meaningful product improvements and conversion rate gains. Advanced machine learning and LLMs have enabled us to develop and scale AI-powered features that are broadly adopted by our users.

Our AI highlights and AI review summaries are changing how people discover and evaluate hotels in every search on trivago today. Our AI-driven natural language search allows travelers to search hotels in entirely new ways. We launched our AI Smart Search in Q4 2024, becoming the first hotel search platform to offer this capability. It's an advanced free-text search powered by large language models that lets users find hotels using natural conversational queries.

Since the launch, we have steadily increased its visibility, continuously refined both the UX as well as the underlying logic. As a result, we are seeing growing user adoption. Our member proposition continues to strengthen as well, which we expect to improve retention. The key drivers behind this success are the exclusive rates that our partners provide to our members and our enhanced ability to personalize search results.

Looking ahead to 2026, we will maintain our relentless focus on improving our core product. We see clear upside in further increasing conversion through high-velocity testing. We will continue to invest in AI-powered features that are central to offering a superior hotel search experience.

We aim to lead on price perception, offering great deals and making them easy for users to find. We will also stay focused on expanding our member base. In addition, we will double down on trivago Book & Go, which we aim to integrate more deeply in our user platform's journey with a goal to facilitate a more seamless booking experience that further elevates conversion rates for our partners and trivago.

Our third strategic priority is to empower our partners to realize their full potential on our platform. Our transaction-based CPA model has seen broad adoption among small and midsized partners. These partners often lack resources and data scale needed to optimize bids and exposure effectively in our auction. By shifting risk and optimization complexity away from bidding, the CPA model helps smaller partners compete more effectively in our marketplace. Going forward, we will continue to deliver highly qualified users to our partners, equip them with even better tools and increase our efforts to help them optimize their rates on trivago. In particular, we will focus on working with our partners to deliver more exclusive deals to our members.

Finally, let me share my enthusiasm on the evolution of AI. I see this as a huge opportunity for our business and shareholders. Our vision is to operate with 600 people as if we were 6,000. We are fast, nimble team adopting AI in every possible way, using it to amplify our marketing impact with previously unimaginable features for our users, and boost our team's productivity day by day. In short, we are doing far more without expanding our workforce.

With that, I'll hand over to our CFO, Wolf, for a more detailed financial review.

Thank you, Johannes, and good morning, everyone. We are excited to report that the fourth quarter reflected our profitable growth trajectory with a year-over-year total revenue growth of 27%. For the full year, we achieved total revenue growth of 19% year-over-year, a net income of EUR 11.2 million and an adjusted EBITDA of EUR 15.8 million, despite FX-related headwinds. Our brand strategy as well as our continuous product improvements led to an all-time high in our conversion rate, which significantly improved our unit economics.

Let's review our fourth quarter results and our 2026 outlook. Unless otherwise indicated, all comparisons for 2025 are on a year-over-year basis.

In the fourth quarter, our total revenue reached EUR 120 million, representing a 27% increase compared to the same period in 2024. We are pleased to note this marks our fifth consecutive quarter of total revenue growth. This growth was driven by yet another quarter of strong year-over-year double-digit Referral revenue growth of 20% in Americas, 16% in Rest of the World and 15% in Developed Europe. We achieved this despite FX-related headwinds of approximately 5% globally.

The growth was primarily driven by increased branded channel traffic in response to our ongoing brand marketing investments. Strong creatives and the diversification of our branded marketing channels create further potential to scale and reduce our dependency on search engines.

During the fourth quarter, we reported a net income of EUR 14.5 million and achieved a better-than-expected adjusted EBITDA of EUR 11.3 million. Operational expenses increased by EUR 26 million, totaling EUR 113 million for the fourth quarter. This was mainly due to a EUR 19.7 million increase in selling and marketing, resulting from higher brand marketing investments made over the course of the quarter and incremental expenses resulting from our acquisition of trivago DEALS, formerly Holisto.

Advertising spend increased by EUR 9.8 million or 43% in Americas, EUR 4.3 million or 31% in Rest of World, and EUR 3.8 million or 18% in Developed Europe, driven largely by increased brand marketing investments in all trivago core segments. Due to the scaling of our brand marketing investments in this quarter, global ROAS decreased from 162.9% in the prior year to 147.9% in 2025. We observed a reduction in ROAS year-over-year across all trivago core segments during the fourth quarter with Americas decreasing from 159.6% in 2024 to 137.5% in 2025, rest of World decreasing from 148.3% in 2024 to 131% in 2025 and Developed Europe from 176% in 2024 to 173.8% in 2025.

As of December 31, 2025, we held EUR 130.9 million in cash and cash equivalents and no long-term debt, underscoring our exceptional financial position. Although we are facing tough comps in Q1 and Q2 2026, we are off to an encouraging start in line with our expectations. We will maintain cost discipline and keep our headcount stable by leveraging AI. We will further scale our brand marketing investments, but on a lower level compared to previous years, and make use of compounding brand effects in order to gradually increase profitability in 2026. For 2026, we expect double-digit percentage total revenue growth and an adjusted EBITDA of at least EUR 20 million.

With that, let's open the line for questions. Operator, we are now ready to take the first question.

[Operator Instructions] Your first question comes from the line of Naved Khan with B.Riley Securities. Please go ahead.

So my first question is just a little bit of clarification on the guidance. So for the double-digit growth in 2026, how should we think about the growth in Referral revenues because you do have some contribution from the Holisto acquisition? Should we expect Referral revenue to also grow in the double digits?

And then maybe a related question is, pre-COVID, I think you had around over EUR 800 million in Referral revenue, and you had kind of set out an aspiration goal of getting back to those kind of levels. Do you still expect to get back to where you were pre-COVID levels? And I think the EBITDA margin around the time was around 6%. So how should we think about that over the kind of medium term?

And then maybe just a clarification on the brand advertising channel. I think you talked about kind of finding a new opportunity. Can you just elaborate on that a little bit, if it's offline or online? And what's the opportunity to scale that channel?

Naved, here's Wolf. Thanks for your question. So let me start with your first question and clarify on how we want to give guidance from now. We decided and we also mentioned it in the last earnings call that from now on, we will only give guidance on total revenue. Why do we do this?

We think it's more meaningful because when you look at Referral revenue as a proxy for the development of trivago Core, this is from our perspective not meaningful anymore because you will have a distorted picture because -- and this is also described in our 6-K, if you look only at the Referral revenue, because we presented after intercompany elimination. And therefore, the part that is related to trivago DEALS is not included. And it will be added as other revenue, and then you end up with a total revenue, which is, I guess, a meaningful picture from our perspective.

And another important point, which is important in this context is that the more trivago Book & Go will gain traction in the future, the more this picture that you miss when you only look at Referral revenue will be distorted. We will only give guidance on the total revenue and so on a consolidated level. And yes, here we are with a double-digit top line growth.

And what maybe one other point that I would like to mention is, or what I can say is, that we saw an encouraging start in January, in line with our expectation for Q1, which is double-digit top line growth and improved profitability. That's it on the first question.

Maybe I can talk about aspirations. And I think two things here. You mentioned 2019 numbers. It remains our aspiration to get as close as possible towards that. But it's not like a hard goal we want to achieve. It's more an outcome of executing what we do in marketing. We are more disciplined in performance marketing, and we are not after just generating volumes. We are after driving branded traffic revenue growth, which means we are increasing our ad spend. We increased our marketing efficiency. We increased the impact of our creative.

And we think we do still a substantial increase in brand marketing investment this year. We will also see brand marketing investments in the next few years, but there will be a degressive curve. So the increased spend will kind of slow down, and then the revenue is more an outcome because in terms of percentage -- in terms of profitability, we want to get to around 10% adjusted EBITDA share rather in the next few years. And from there, then decide, do we expand into new markets or do we further focus on expanding profitability and margins? And that's still open.

But I think in the short term, you should think about 2019 is the aspiration. Whether it's EUR 800 million or EUR 700 million, I think we will figure that out. We're not dogmatic about it. What's then important for us is to expand the bottom line, deliver a solid outcome and then decide, do we continue to lean into growth? Or do we focus more on margin? And this decision is part dependent and we will take in a few years.

And then the brand marketing, I think I explained a bit the brand marketing strategy around the incremental spends being degressive and slowing down. I think this year, what you have seen in this quarter, the ROAS has been lower compared to previous year and even the previous year, the year before that. Typically, we had a higher ROAS in the fourth quarter. The major reason is that we've leaned into LatAm markets. Latin American markets have a different seasonality, that peak seasonality is around these times.

So it's basically a flipped peak seasonality in Europe. And in the U.S. also, it's around July June, August and in Latin America, it's the opposite side. We have leaned into those markets. They used to be very successful. Last year, we made a big leap in becoming more successful in these markets. And we doubled down this year in those markets in Q4. That's why you will see the ROAS is lower in terms of dynamics.

And then we have also other markets where we saw opportunities and how you can think about that is, we are around the world talking to media stations and marketing outlets. And when we see there's opportunity and being exposure available for an attractive price, we would take that opportunity and as we expect, a very attractive return on that. We have seen that in Q4. So we saw opportunities to lean into in other key markets, and we have done that as well. I think that's maybe how you can think about Q4, and what we did differently compared to previous years.

Excellent. Thank you very much, and keep up the good execution.

Thank you.

Your next question comes from the line of Doug Anmuth with JPMorgan.

This is Dae Lee, on for Doug. First one, just talk a little bit about how you will characterize the health of global travel as we sit today? And are you expecting any impact from major sporting events, such as the Winter Olympics or the World Cup on your platform?

And then secondly, where do you expect the most benefits to show up from the newer products like Book & Go and CPA model? And can these products drive further diversification in your advertiser base?

Thanks for your question. Let me begin with -- I'll give you a quick overview on the travel trends we are currently seeing. So the development we are describing here is based on our internal data for Q4. And we see ADRs were positive in Rest of World, Americas, and Developed Europe were slightly negative. Length of stay was slightly up in all 3 segments, and ABV was positive in Developed Europe and Rest of World, and stable in Americas.

When we look at recent search interest based on our internal data for travel that starts in Q1 2026, the clicked ABV overall looks stable. Clicked ABV for Q1 in Developed Europe and Rest of World is positive. And for Americas, it's slightly negative. Share of search interest for 4- to 5-star categories is stable on a global level. And the average travel distance clicked during the fourth quarter remains positive year-on-year, while the mix of search requests for international travel destinations remain stable, except for trips by travelers from Americas, where we continue to see a shift more towards domestic trips by U.S. travelers combined with double-digit declines in travel to the U.S. from countries like Canada, Germany or France. So that's it on the travel trends.

Maybe the mega events, we have not modeled anything into neither positive nor negative impact around World Cup or Olympics. It's more a problem with many mega events overlapping each other. We don't see that. And they rather get more people to travel than less. So I think there's nothing we would call out here. We also don't see trends. We certainly see prices up during those periods in the effective cities, but that's probably no news.

And then what you asked around Book & Go and CPA, you can see in the share and the partner mix that our mix has become more healthy in the course of the last 2, 3 years after pandemic, which is more -- it's back to where it has been 2019. And we think that's a good level. And part of this development is that I think, in particular, maybe if you compare both, CPA has bigger impact in making partners more competitive. And Book & Go over the course also increased an impact. But it's still compared to CPA, I think, a smaller impact.

Book & Go, I think we shared it has grown 137% Q4 '25 compared to Q4 2023. And this trajectory you see also in the investor presentation has been a trajectory that also happened into 2025 and coming -- during 2024 and 2025. We expect this trend to continue and this will further support driving up conversions for our partners and for trivago as a whole. And that will contribute to that as well.

Your next question comes from the line of Stephen Ju with UBS.

This is Vanessa, calling in for Stephen. So you previously mentioned Holisto now in trivago DEALS could provide white label booking engine services, particularly for small and medium-sized OTAs and potentially hotel chains. I was just hoping if we could get an update on this opportunity.

I think I touched on it a bit in my remarks and in the previous question. So what this means is, we facilitate the booking for our partners. Our priority is not and might be an opportunity in the future is that we kind of power full tech stacks of other OTAs or so on. That's not a priority for us. What we focus on this Book & Go being a channel that completes the booking on trivago on behalf of our partners. And on behalf of trivago DEALS or the underlying product Holista has been operating in the past. And that is developing very well in our platform, and with the main goal of driving conversion. And we outlined that conversion has been up 37% compared to 2023, which means marketing is more effective, which means user satisfaction is a lot higher and that, I think, will be the payoff year and not kind of a separate business line that we are after.

Your next question comes from the line of Wei Fang with Mizuho Securities.

Congrats on the solid growth as well. I just want to double-click on the commentary you're saying you're getting much closer to your plan like brand marketing level, right? And does that mean you will need to maybe shift a little bit of your traffic strategy to some of the other channels on the way? Just wanted to see if you can comment on that.

Thank you for your question. I'm not sure if I fully got it. But if you think about how we increase our brand investment, I think I have touched on it before, our strategy is to keep increasing this year substantially in the years ahead, but with less incremental growth than previous years. I think we generally -- what I mentioned is that we have also worked -- that we have also been successful in other brand market and new or additional brand marketing channels, if you are after that.

So in the past, we had a strong focus on linear TV. And over the past 2 years, we have tried a lot of new channels from streaming to podcasts to social media, all kinds of new channels that have emerged, and really we're now able to scale because technologically, they evolve very well. And we have diversified into channels. And today, we are less dependent on linear TV.

And when it comes to broader marketing channels, we have been very disciplined in performance marketing. As we know, the attractive and the profitable traffic that we get that has stickiness and then also gives us lifetime value is branded traffic, when people come to us directly and they have our brand in mind, compared to performance marketing channels where you have a touch point and then don't have so much stickiness.

So we have reduced dependencies on performance marketing channels or on search channels over the course of the year, which was an important step as well, and we will continue to be disciplined on those channels. And I think on the brand channel, we have become more diversified, which was also an objective to get confidence that we have avenues to grow in brands and with a high elasticity when we incrementally invest.

There are no further questions at this time. I will now turn the call back to Johannes for closing remarks.

Thank you. I'm proud to be on this journey with such a strong team, and I want to say thanks a lot to everyone at trivago for making our turnaround a reality. Our shareholders can be confident that we will remain focused on sustaining our momentum and be disciplined in executing on our strategy. Thank you to our partners and investors for your continued trust and support, and we look forward to sharing further updates in our next quarterly call. Thanks a lot.

This concludes today's call. Thank you for attending. You may now disconnect.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to trivago's Q3 Earnings Call 2025.

I must advise you the call is being recorded today, Wednesday, the 5th of November 2025.

We are pleased to be joined on the call today by Johannes Thomas, trivago's CEO and Managing Director; and Wolf Schmuhl, trivago's CFO and Managing Director.

The following discussion, including responses to your questions, reflect management's view as of Tuesday, November 4, 2025 only, unless expressly stated otherwise, in which case it reflects management's view as of today, Wednesday, November 5, 2025 only. Trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements.

Please refer to the Q3 2025 operating and financial review and trivago's all other filings with the SEC for information about factors which could cause trivago's actual results to differ materially from those forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on trivago's Investor Relations website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations website for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2024.

With that, let me turn the call over to Johannes.

Good morning, and thank you for joining our Q3 2025 earnings call. We delivered 13% year-over-year revenue growth, making it our third consecutive quarter of double-digit growth. Q3 exceeded expectations on both the top and bottom lines, and we are encouraged by the strength and durability of our momentum. We achieved this acceleration despite major foreign exchange headwinds while improving adjusted EBITDA by 18% year-over-year. The quality of this growth gives us confidence. It's led by our strong double-digit branded traffic revenue growth, which continues to outperform and benefit from compounding effects.

Our AI-powered campaign featuring brand ambassador, Jürgen Klopp as well as our local productions made a significant impact this summer. Our product has materially improved quarter after quarter, delivering a better user experience and stronger marketing efficiency.

We have observed a promising start into Q4 and expect to close the quarter and the year at mid-teens level. We see our strategy unfolding and expect this to continue to fuel our double-digit growth trajectory in the years to come. While we continue to elevate our brand investment next year, we will operate with discipline and expect compounding effects to increase our profitability gradually.

In the following, I will provide an update on our strategic priorities. Our first strategic priority is branded growth. Our brand engine is accelerating and continues to compound. Our summer creators were striking. We are steadily improving marketing efficiency and have diversified our new -- into new brand marketing channels. We remain disciplined, investing where we see strong response. The club campaign, together with strong local productions lifted branded traffic and revenue across all segments with standout performance in the Americas. We aim to broaden our reach and strengthen creative testing to drive higher traveler engagement with our brand. A recent U.S. test underscores our approach. We body swapped Jürgen Klopp with another actor in the same TV ad to isolate the impact of the creative concept versus the use of a high-profile brand ambassador.

For our winter campaign launching in December, we are producing new TV spots that we expect to build on the strong results. For the rest of this year and throughout 2026, we will focus on the markets we prioritized over the past 2 years, emphasizing optimization over expansion. Our second strategic priority is to enhance our core hotel search experience so travelers can book with confidence saving time and money. We maintained a high product testing velocity, delivering notable enhancements and conversion rate gains that we expect will further improve marketing efficiency and user satisfaction.

Our AI Smart search feature was expanded across key languages on desktop and mobile web. It's now faster and even more relevant for complex queries. We have deployed AI review summaries at scale, providing clear insights distilled from thousands of reviews. We introduced new guest sentiment ratings that summarize review sentiment, allowing travelers to compare hotels and understand their relative strengths and weaknesses in the region.

Over the past year, we significantly elevated the hotel content across our product, tangibly improving the user experience and closing a long-standing gap in our offering. We achieved this with AI powering the kind of work that once requires 100-plus people team while making the content more relevant and updating it more frequently. Personalization and smart filter recommendation have further improved and the map experience is now more intuitive across devices. Our member proposition keeps enhancing through attracted exclusive deals provided by our partners and features such as the list sharing functionality to foster collaborative trip planning. Revenue from logged-in members continued to rise, which we expect to enhance retention and conversion.

Our third strategic priority is to create more value for our partners and a healthier marketplace. Our transaction-based model continues to gain share, simplifying participation for small and midsized partners and helping reduce auction volatility. Book & Go accelerated by our Holisto integration is gaining traction. Pilot partners are seeing meaningful conversion uplifts and market share gains in our platform, evidence that a streamlined trivago-branded booking funnel creates value for our users and partners.

In summary, we delivered another quarter of double-digit growth and healthy returns despite foreign exchange headwinds. A stronger brand and a better hotel search experience are resonating with travelers and partners alike. Thank you to our teams for your focus, creativity and discipline. Your work powers our progress every day. I'm especially proud of how broadly our team is adopting AI in novel ways, strengthening our position and delivering more value to our users faster.

With that, I'll hand over to our CFO, Wolf, for a more detailed financial review.

Thank you, Johannes, and good morning, everyone. We are thrilled to report that the third quarter of 2025 was yet another successful quarter with strong performance. This quarter, we achieved a 13% year-over-year increase in total revenue, which was driven by our successful brand strategy. We maintained a stable return on advertising spend even as we levered up our brand investments where elasticities are attractive, but the returns come over time. This not only reaffirms the effectiveness of our marketing strategy, it also builds the foundation to further scale branded traffic in the future. Despite economic uncertainties and foreign exchange-related headwinds, we remain confident about our outlook. We continue to expect mid-teens percentage revenue growth for the full year of 2025 and a positive adjusted EBITDA of at least EUR 10 million.

Now let's review our third quarter results and our 2026 outlook. Unless otherwise indicated, all comparisons for 2025 are on a year-over-year basis. In the third quarter, our total revenue reached EUR 165.6 million, representing a 13% increase compared to the same period of 2024. We are pleased to note this marks our fourth consecutive quarter of growth. This growth was driven by yet another strong quarter of year-over-year double-digit referral revenue growth of 14% in Americas, 12% in Rest of World and 9% in Developed Europe. Our Developed Europe segment faced headwinds from strong prior year comps, especially early in the quarter, as we called out in our last earnings call. The trend normalized over the course of the third quarter in 2025. Our growth was primarily driven by increased branded channel traffic in response to our ongoing brand marketing investments as well as product improvements, enhancing our booking conversion.

Unfavorable foreign exchange headwinds negatively affected our revenue development by approximately 4% globally. Due to our strong fundamentals and diversified global footprint, we have still been able to demonstrate strong growth.

During the third quarter, we reported a net profit of EUR 11 million and achieved a better-than-expected adjusted EBITDA of EUR 16 million. Operational expenses decreased by EUR 12.3 million, totaling EUR 153.4 million for the third quarter. This was mainly due to the nonrecurrence of a EUR 30 million impairment charge recorded in the prior year. Excluding this impairment charge, operational expenses increased by EUR 17.7 million, mainly driven by a EUR 14.5 million increase in selling and marketing expenses resulting from higher brand marketing investments made over the course of the quarter. Advertising spend increased by EUR 7.2 million or 17% in Developed Europe, EUR 2.8 million or 11% in Rest of World and EUR 3.6 million or 9% in the Americas, driven largely by brand marketing investments.

Despite the significant scaling of our marketing investments in this quarter, Global Rewards remained stable compared to prior year at 134.1%. We observed a solid ROAS improvement year-on-year during the third quarter in Americas and increasing from 126% in 2024 to 135.4% in 2025 and Rest of World increasing from 117.6% in 2024 to 119.2% in 2025, while we observed a reduction in Developed Europe from 151.2% to 141.2%.

As of September 30, 2025, we held EUR 106.3 million in cash and cash equivalents and no long-term debt, continuing to maintain our strong financial position.

Looking forward to 2026, we aim to achieve an increased adjusted EBITDA of around EUR 20 million while continuing our growth trajectory and maintaining double-digit percentage revenue growth. We continue to see substantial opportunities to scale our brand marketing activities, enabling us to reach a larger audience and positively impact overall revenues and profitability long term. Additionally, we consolidated Trivago Deals Limited, formerly Holisto Limited, for the first time and are moving forward with our post-merger integration. We view Trivago Deals Limited as an integral part of trivago, and it will be included in our financial guidance going forward. We already see our initiatives gaining traction in terms of conversion improvements and an increased market share on our platform, showcasing the value for our users and partners of a facilitated booking funnel.

With that, let's open the line for questions. Operator, we are now ready to take the first question.

[Operator Instructions] Your next question comes from the line of Tom White with D.A. Davidson & Co.

This is Wyatt Swanson on for Tom. First one, it's great to hear that revenue from logged-in users continues to increase. Curious to hear your goals of what percentage of users could be logged in over the next 12 to 18 months and maybe some of the initiatives being put in place to retain these more loyal/logged-in users?

Yes. Thank you for the question. I think a very important one. And the number has increased, and it's important on the target. So it's not that we are dogmatically having a target, let's say, we want to bring this to 50% or so. It will rather be an outcome of diligent testing and experimenting in what moment in time do we ask users to log in, in a way that this improves conversion, doesn't cost us short-term revenue at unreasonable levels. So we now have increased it. We last time said it's north of 20%. I would say if we are reaching something like 30%, it is a number where we can say we have a core -- identified a core user segment that when they log in, they will have a different trivago experience. So maybe it is 40%. We don't know exactly, and we will find out. We know the current users that we have behind the log-in more than 20%. They convert 25% better than the others. So it's really a meaningful difference to all others. They have more engagement on our side, and we will continue to offer special deals to them.

We have done the enhanced sharing functionality, collaboration functionality. We expect to have price alerts, expanded the functionality. And you can think about it when a user comes to the site and we have a closer relationship. We know there is this 2 to 4 weeks period where they are likely to book. And in this period, we need to maximize the contacts over time. So they are not just coming through trivago one time. And that's really the goal here to increase engagement during this hot period where they're likely to book. And then also if they had a better experience certainly to increase retention, which is much harder to measure and estimate and which is not kind of part of our direct planning, but increasing conversion rate with those users and the engagement, it's already attractive from what we are seeing today and that we will continue to embrace. Whether it will be 30% or 40%, it will be an outcome. It's not a fixed target.

Got it. That's very helpful. And then one more. B2B has been a pretty notable area of growth for the large OTAs recently. Curious whether trivago could potentially play a role in that space in the coming years? And how would you see that looking exactly?

Yes, we have been discussing B2B here and then. Also with Holisto now having a white label platform, you could access B2B rates and build a special proposition for the B2B world and offer white labels for those who are seeking that. We work with affiliates and there is some attractive business. But we really are focused around leisure at this point in time. That's where our proposition is strong and the space is huge. And we -- simplicity as beauty, we are not doing flights. We are not doing package and so on because there's so much meat in this space. And that's where we see a lot of opportunity to grow. Long term, there's certainly options that we can look into, but the timing is not right for that.

Your next question comes from the line of Naved Khan with B. Riley Securities.

A few questions from me. Maybe first of all, just a clarification on the outlook for 2026. When you say you expect revenue to grow double digits, EBITDA EUR 20 million. How should we think about growth in the core business, the lead gen business versus Holisto? Should we expect both to be growing double digits or a different pace? Just talk about that.

Naved, thanks for your question. So regarding Holisto, for the future, we will only guide on a consolidated level. But to give some clarity there, we expect both segments to grow double digit. And maybe it's helpful to add some color on 2026 and on the budget. As we have now entered around 27 core travel markets. And for the next year, we plan to optimize these existing markets. We are quite optimistic that these markets offer enough room for growth. And as well, we will also gradually optimize profitability. And this is reflected in our 2026 guidance with an adjusted EBITDA of around EUR 20 million. So what are the major reasons for giving us this confidence? So first of all, the market we are tackling is large, and our share is still below 1%, and this gives us a substantial runway. We are one of the strongest brands in the category, and we offer a very differentiated product, and this also creates a clear room to grow. Our brand investments are still below 2019 levels. And also there, we see a strong opportunity to invest at attractive returns. Recent and current brand investments are compounding, and we expect them to support our profitability in 2026.

Maybe let me build on this point. I think that's very important to explain more exactly what we mean with expansion versus optimization. In the past years and also when we built trivago, we have basically been growth-oriented, and we took profits from markets that have delivered substantial profitability and invested it into markets that we activated or reactivated. And for some markets, it goes fast. For some markets, it takes time to optimize those markets and compounding effects to make them profitable. But now when we stop expanding markets, we basically take some of the compounding effect to our bottom line. And it's a matter of optimizing country mix, marketing mix and improving our creative. And that's where gradually we see more profitability landing in our bottom line as well.

Super helpful on that. So maybe just talk about the compounding. What kind of improvement are you seeing in the marketing efficiency? Just give us a sense of that, it seems to be playing a role in this increased profitability.

Yes, it's something -- I mean, what we look at how much of our volume -- how much of our growth is coming from branded growth versus other channels. And by far, the majority of our growth is coming from branded growth. And this is only possible if you see compounding effects year-over-year or summer into off-season periods, and that's what we see clearly. And every year, we are investing the year after will benefit from that. That's something we have seen in the past. We are seeing it today in some markets more, in some markets less. And that's part of our optimization, what elasticity and how much compounding effects we are seeing over time.

Got it. And then last point -- last question is around this logged-in contribution to revenue. What are the incentives or benefits that you're giving to the logged-in so that they come back and again transact directly with you?

Yes. The most important one is private deals. If you go to trivago, you will find log-in triggers that show you, you would get an even cheaper deal if you log in. And these logged-in users, we see a higher engagement, and that's a strong signal that conversion is a strong signal for retention, for satisfaction and those users we expect to come back with a higher probability. And this share is increasing. We are increasing the amount of deals we are showing to our users. We are optimizing with our partners what's the right level of deals that we are providing to our users. So the higher the deals, the higher the conversion rate, the higher the satisfaction and we aim to find a good balance between having a margin out of that and still having a steep conversion rate improvement while we are doing that.

Congrats on the progress.

Your next question comes from the line of Doug Anmuth with JPMorgan.

Great. This is Dae Lee on for Doug. First one on just AI overall. So we've seen consumers' search behavior increasingly shift across platforms and notably AI-driven tools such as like Google's AI, ChatGPT. So how is trivago positioned to defend or grow your share of top-of-funnel traffic in this type of environment? And do you see a strategic need for trivago to be present on these new experiences? If not, like what differentiates trivago's value proposition in capturing those consumers' intent versus the broader search and AI ecosystems?

Yes. Thank you for the question. I think an important one that we are observing very closely. I think very important, and that's true for us and other players we are talking to. The shift to the AI platforms is really small when it comes closer to the planning and booking process. So it's a tiny share of traffic we are seeing today. If you use it, you probably see there's a benefit of inspirational and so on. But as soon as it goes a bit down the planning and a bit more concrete and considering it's more clunky to use a chat experience to really nail down your selection. I'm not saying nobody is doing it, but we don't see like a flood of people doing this. So the traffic we get from these AI engines today is very small. It is growing. It's converting better than other traffic.

So we are looking at how fast is this growing. If we look at the impact we have seen from the AI mode, for instance, in the U.S. when it got rolled out or in Europe recently, we have not seen a huge impact on any major Google metric. Our SEO, for instance, it's a small part of our business. We're not concerned of losing much SEO business in general because it's so small. But last quarter, it has not been a headwind for us. It was rather flattish. And overall, we have not seen what happened so far, which was not small, which had quite some scope, AI summaries and the AI mode didn't really have a substantial impact on what we are doing. One part is that we have built our brand. So we have lots of business coming direct and then the dependency is lower. And I think if you ask about the positioning for us in the future, I think brand is a very important answer to that. So people come to us to play with AI features to leverage AI. And I think we have demonstrated in the last 2 years how much AI is in the center of our strategy. I honestly believe we wouldn't be where we are today with our user experience and with our marketing and with our operations if we wouldn't have AI with a fairly small team of 600 people.

I mentioned the example today a small compact team is doing the work of 100 people that we used to have on AI content. We've launched AI highlights, AI review summaries, AI search, which continues to improve a lot. So I hope people come to us, engage with our product. And I think it's a UX game that we have a good chance to be winning and to be ahead of the curve, whereas the big AI players are on -- they basically optimize and have very different priorities than optimizing down a vertical. If I would call out one player that I believe is leading in travel in the AI space, it is Google. Google has built out their travel vertical since more than a decade. Combining these features with their AI functionalities is something that we probably will see, but Google has a strong position as well. So they will probably shift inside their channel size, so move traffic from general search into AI, into vertical. I don't necessarily see that they are gaining market share through that. And we are present there. We are part of Google Hotel Ads. We are part of all kinds of ad formats in Google, and we are where we see attractive volumes and returns.

So I think where it matters at this point in time, we are very present, and we know how the game works. If I think about the long term, it's very hard to predict what role will play a pure AI players, chatbots, agents, will they become mainstream in really complex search processes, decision-making processes where it's not obvious for me that one of the general ones will make it such a smooth process anytime soon.

And therefore, I believe we are strong in brand. If we are strong in leveraging AI, this can make our business very attractive, our proposition stronger, and that's where we are playing. And I'm not hugely concerned about a flood of people suddenly switching the way and their behavior and how they search travel. It's chaotic. People have chaos when they book their trip, they look for dozens of sites. And whether they now use AI on top, we will be there when it's relevant.

Got it. And as a follow-up, I think in 2024 and this year, you guys try to operate with a breakeven mentality in terms of adjusted EBITDA prioritizing growth. So when you look at your 2026 guidance, EUR 20 million in adjusted EBITDA, does that embed a similar mentality? Or should we expect some like a beginning of margin expansion story given your comments about optimization and brand marketing versus expansionary?

Yes. Maybe let me build on what I said. I think this will mostly come out of the effect that we stop taking profits out of profitable markets and push it into new markets. So you basically just move the profits to bottom line and not move it into new markets. This doesn't mean we are not expanding our marketing investment and brand in general. On a relative scale, we likely will invest it less than in previous year on a relative scale to revenue, but we expect growth to be higher than our spend increase. And we are -- our -- what we explained at the beginning of the year, our general way of becoming more profitable is keeping our cost base flat and growing with our revenue on top. Margin expansion is not necessarily -- it's not part of our current projection. It's really about taking the compounding effects into our bottom line, improving efficiency in our markets and not increasing OpEx at unreasonable levels.

Your next question comes from the line of [ Jack Hu Wong ] with Mizuho.

This is Jack on for Lloyd Walmsley of Mizuho. I just have 2 quick questions. First, are you seeing any uptick in bidding from Airbnb as they pivot to more full focus on hotel? And second one, how are you seeing customer acquisition costs trending in paid search, especially when we think about one of the write-downs for Kayak that happened last week?

Yes. Thank you for the question on Airbnb, they have been on our platform for a while. I think we can -- we hear about the efforts that they want to lean more into hotels. We work on the relevant inventory where there is a likeliness they get visibility on our platform. We are by far making most of our returns with hotels. Still, if you have periods where there is, let's say, a fair in a city or when you have small cities where there are few hotels, the alternative accommodations are a great complementary for our properties. We see Airbnb as an attractive partner to enable that. And then on the question of our -- of performance marketing, we have never been so dependent on SEO. So for us, the paid game was always part of where we are. We are very disciplined in paid. So we are -- whenever we have opportunities, we prefer investing into brand. We aim to keep a disciplined approach in performance. We have not seen any major inflation in the economics on performance marketing that are worth mentioning.

Your next question comes from the line of Ron Josey with Citi.

This is Robert on for Ron. You guys have mentioned that AI is driving product improvements that previously required 100-plus person teams in the prepared remarks. Can you maybe double-click on this and expand on where we'll start to see these productivity gains across the P&L next year, either in the form of kind of double-digit revenue growth and reaccelerating revenues or potential cost efficiencies?

So maybe let me -- so in the past, an example that I outlined here was we had a content team of 100-plus people where we were basically editing, creating condensed information about a hotel. So it was a lot of people for -- with lots of different languages. They were summarizing what reviews said, what are hotels unique about and try to create a condensed view of a hotel. And I think that's where trivago differentiates to other platforms. We don't give you a whole lot of content. Now our goal is to aggregate and give you a distilled view on what's important to know about this hotel, so you can take a decision fast. We have you save time and money.

And we had that before the pandemic. We still had a big content team, and we never rebuilt it. We have a compact small team that leverages AI to improve our images, to improve our content to distill it and in ways that were not possible before and also refreshing this on a constant basis. So accuracy of the information you find on trivago is even better. So that's, I think, a very good, very tangible example, and that's why I pointed it out and where this has created value. And I would rather see this as an opportunity upside because that improves engagement on the platform that improves satisfaction that improves conversion and that ultimately drives marketing efficiency and the ability to deliver profits.

And then generally, what we say internally and what I strongly believe, we are a company that's very small and compact, and we need to be the speedboat of the industry, the fastest learning, fastest executing team in the space. And more like we with 600 people need to be as impactful as 6,000 people. So every person having the 10x impact in order to compete in a space that's big and competitive. We don't have this huge workforce that we need to optimize. That's also why your answer on cost efficiency. I don't think that is a big leverage. And if you would look at our cost basis, reducing a little bit of cost efficiencies there will not make a huge difference. It's really an upside game. And if we can deliver a few percentages more in conversion, that can be a dozens of millions that we move to our bottom line. If we do this month by 1 month, quarter-by-quarter, that -- that is what makes the business more attractive. And given its size and the amount of problems users have while they are searching for hotels, I think there's lots of upside opportunity. And that's how I would think about it. So we can rather deliver growth or profitability by leveraging AI and it's less about a cost efficiency game.

Your next question comes from the line of Stephen Ju with UBS.

This is Vanessa on for Stephen. So I just have one question. And now that Holisto was officially part of the company, you are in a position to send more of your traffic to your supply partners. So can you talk about the extent of any potential channel conflicts that may or may not have risen with the OTAs? And if that's just something we need to think about?

So what Holisto is doing, and we have renamed Holisto into Trivago Deals. And for us, Holisto is now an innovation center in Israel that we are -- that we are focusing on non-core meta search products. They have their own OTA brands that have been competing before in the space. So there's not a huge difference there. What they are doing for us is building a white label booking engine that we actually offer to our partners and every partner is invited to join it from small to big. We believe more value is created for the smaller ones that have less resources to invest into conversion optimization. So we see small and medium-sized OTAs joining this product, potentially hotel chains are interested in joining that product that don't have a good converting booking funnel. So it actually creates value for our partners, end users, and that's a win-win situation that we aim to create.

There are no further questions at this time. I will now turn the call back to Johannes Thomas for closing remarks.

Yes. Thank you for joining us. This quarter marks another milestone in our turnaround. Our strategy is working, and we will remain laser-focused on executing on our key initiatives. Thank you for joining today and for your continued trust and support. We look forward to keep you updated in the quarters ahead.

This concludes today's call. Thank you for attending. You may now disconnect.