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Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information

NOTE 14: SEGMENT INFORMATION

In the second quarter of 2022, we revised our segment reporting structure. We now measure our business within three operating segments, which are also our reportable segments: (1) Tripadvisor Core; (2) Viator; and (3) TheFork. Our Tripadvisor Core segment includes the following revenue sources: (1) Tripadvisor-branded hotels – consisting of hotel auction (or hotel meta) revenue, primarily click-based advertising revenue, and hotel B2B revenue, which includes primarily subscription-based advertising and hotel sponsored placements revenue; (2) Tripadvisor-branded display and platform revenue – consisting primarily of display-based advertising revenue; (3) Tripadvisor experiences and dining revenue – consisting of intercompany (intersegment) revenue related to affiliate marketing commissions earned primarily from experience bookings, and to a lesser extent, restaurant reservation bookings on Tripadvisor-branded websites and mobile apps, fulfilled by Viator and TheFork, respectively, which are eliminated on a consolidated basis, in addition to external revenue generated from Tripadvisor restaurant service offerings; and (4) Other revenue – consisting of cruises, rentals, flights, and cars revenue. The nature of the services provided and related revenue recognition policies are summarized by reportable segment in “Note 3: Revenue Recognition.” All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-Q. These reclassifications had no effect on our unaudited condensed consolidated financial statements in any period. Our segment profit measure (Adjusted EBITDA), including its definition, and other information provided to our CODM remain consistent with prior periods, except for certain segment expense allocations, which are described below.

Our operating segments are determined based on how our CODM manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. Adjusted EBITDA is our segment profit measure and a key measure used by our CODM and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved. We define Adjusted EBITDA as net income (loss) plus: (1) (provision) benefit for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (4) stock-based compensation and other stock-settled obligations; (5) goodwill, intangible asset, and long-lived asset impairments; (6) legal reserves and settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income.

Direct costs are included in the applicable operating segments, including certain corporate general and administrative personnel costs, which have been allocated to each segment. We base these allocations on time-spent analyses, headcount, and other allocation methods we believe are reasonable. We do not allocate certain shared expenses to our reportable segments, such as certain information system costs, technical infrastructure costs, and other costs supporting the Tripadvisor platform and operations, that we do not believe are a material driver of individual segment performance, which is consistent with the financial information viewed by our CODM. We include these expenses in our Tripadvisor Core segment. Our allocation methodology is periodically evaluated and may change.

The following tables present our reportable segment information for the three and nine months ended September 30, 2022 and 2021 and includes a reconciliation of Adjusted EBITDA to Net income (loss). We record depreciation and amortization and stock-based compensation and other stock-settled obligations, goodwill, intangible asset and other long-lived asset impairments, legal reserves and settlements, restructuring and other related reorganization costs, and other non-recurring expenses and income, net, which are excluded from segment operating performance, in Corporate and Eliminations. In addition, we do not report total assets, capital expenditures and related depreciation expense by segment as our CODM does not use this information to evaluate operating segment performance. Accordingly, we do not regularly provide such information by segment to our CODM.

Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Tripadvisor Core segment to both our Viator and TheFork segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within Corporate and Eliminations in the table below.

 

 

Three months ended September 30, 2022

 

 

 

 

 

 

Tripadvisor Core (1)

 

 

Viator (2)

 

 

TheFork (3)

 

 

Corporate &
Eliminations

 

 

Total

 

 

 

(in millions)

 

External revenue

 

$

250

 

 

$

174

 

 

$

35

 

 

$

—

 

 

$

459

 

Intersegment revenue

 

 

34

 

 

 

—

 

 

 

—

 

 

 

(34

)

 

 

—

 

  Total Revenue

 

$

284

 

 

$

174

 

 

$

35

 

 

$

(34

)

 

$

459

 

Adjusted EBITDA

 

 

112

 

 

 

12

 

 

 

(9

)

 

 

—

 

 

 

115

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

(23

)

 

 

(23

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

(22

)

 

 

(22

)

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

Income (loss) before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

62

 

(Provision) benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

 

 

 

Three months ended September 30, 2021

 

 

 

 

 

 

Tripadvisor Core (1)

 

 

Viator (2)

 

 

TheFork (3)

 

 

Corporate &
Eliminations

 

 

Total

 

 

 

(in millions)

 

External revenue

 

$

200

 

 

$

73

 

 

$

30

 

 

$

—

 

 

$

303

 

Intersegment revenue

 

 

12

 

 

 

—

 

 

 

—

 

 

 

(12

)

 

 

—

 

  Total Revenue

 

$

212

 

 

$

73

 

 

$

30

 

 

$

(12

)

 

$

303

 

Adjusted EBITDA

 

 

73

 

 

 

1

 

 

 

(2

)

 

 

—

 

 

 

72

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

(27

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

(29

)

 

 

(29

)

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13

)

Income (loss) before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

(Provision) benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

Nine months ended September 30, 2022

 

 

 

 

 

 

Tripadvisor Core (1)

 

 

Viator (2)

 

 

TheFork (3)

 

 

Corporate &
Eliminations

 

 

Total

 

 

 

(in millions)

 

External revenue

 

$

679

 

 

$

366

 

 

$

93

 

 

$

—

 

 

$

1,138

 

Intersegment revenue

 

 

70

 

 

 

—

 

 

 

—

 

 

 

(70

)

 

 

—

 

  Total Revenue

 

$

749

 

 

$

366

 

 

$

93

 

 

$

(70

)

 

$

1,138

 

Adjusted EBITDA

 

 

284

 

 

 

(8

)

 

 

(24

)

 

 

—

 

 

 

252

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

(73

)

 

 

(73

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

(65

)

 

 

(65

)

Legal reserves and settlements

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

113

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

Income (loss) before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83

 

(Provision) benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(61

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

 

Nine months ended September 30, 2021

 

 

 

 

 

 

Tripadvisor Core (1)

 

 

Viator (2)

 

 

TheFork (3)

 

 

Corporate &
Eliminations

 

 

Total

 

 

 

(in millions)

 

External revenue

 

$

481

 

 

$

125

 

 

$

55

 

 

$

—

 

 

$

661

 

Intersegment revenue

 

 

22

 

 

 

—

 

 

 

—

 

 

 

(22

)

 

 

—

 

  Total Revenue

 

$

503

 

 

$

125

 

 

$

55

 

 

$

(22

)

 

$

661

 

Adjusted EBITDA

 

 

128

 

 

 

(25

)

 

 

(32

)

 

 

—

 

 

 

71

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

(85

)

 

 

(85

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

(89

)

 

 

(89

)

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(103

)

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35

)

Income (loss) before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(138

)

(Provision) benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(119

)
(1)
Corporate general and administrative personnel costs of $2 million and $4 million for the three and nine months ended September 30, 2022 and 2021, respectively, were allocated to the Viator and TheFork segments.
(2)
Includes allocated corporate general and administrative personnel costs from our Tripadvisor Core segment of $1 million and $2 million for the three and nine months ended September 30, 2022 and 2021, respectively.
(3)
Includes allocated corporate general and administrative personnel costs from our Tripadvisor Core segment of $1 million and $2 million for the three and nine months ended September 30, 2022 and 2021, respectively.

Customer Concentrations

Refer to “Note 4: Financial Instruments and Fair Value Measurements” under the section entitled “Risks and Concentrations” for information regarding our major customer concentrations.

 

Product Information

Revenue sources within our Tripadvisor Core segment, consisting of Tripadvisor-branded hotels revenue, Tripadvisor-branded display and platform revenue, Tripadvisor experiences and dining revenue, and other revenue, along with our Viator and TheFork segment revenue sources, comprise our products. Refer to “Note 3: Revenue Recognition” for our revenue by product.