Travelzoo Reports 5.3% Revenue Increase to $23.1 Million in Q1 2025

Travelzoo reported a revenue increase of 5.3% for the first quarter of 2025, reaching $23.1 million compared to $22.0 million in the same period of 2024. The company's net income for the quarter was $3.3 million, a decline from $4.2 million year-over-year. This resulted in a net income per share of $0.27, down from $0.31 in the prior year. The increase in revenue was primarily driven by a significant rise in membership fees, which grew by $1.3 million due to the introduction of an annual membership fee for new members in select markets.

In terms of operational metrics, Travelzoo's total current assets decreased to $26.3 million as of March 31, 2025, down from $31.8 million at the end of 2024. The company reported a negative net working capital of $10.3 million, attributed to $14.8 million in merchant payables related to unredeemed vouchers. The total liabilities remained relatively stable at $50.3 million, compared to $50.4 million at the end of the previous fiscal year. The company’s cash and cash equivalents also saw a decline, dropping to $11.5 million from $17.1 million.

Travelzoo has made strategic moves to enhance its offerings, including the launch of Travelzoo META, a subscription service aimed at providing metaverse travel experiences. The company also continues to expand its licensing agreements in the Asia-Pacific region, which now cover Australia, Japan, New Zealand, Singapore, and South Korea. These agreements allow Travelzoo to earn quarterly royalty payments based on net revenue, contributing to its overall revenue stream.

The company’s operational expenses increased, with sales and marketing costs rising to $10.2 million from $8.6 million, reflecting a strategic focus on member acquisition. General and administrative expenses decreased slightly to $4.3 million from $4.5 million, while product development costs increased marginally. The increase in sales and marketing expenses was primarily due to higher member acquisition costs, which the company anticipates will continue as it transitions to a paid membership model.

Looking ahead, Travelzoo expects to continue investing in its membership offerings and marketing strategies to drive growth. The company remains cautious about external factors that could impact its business, including economic conditions and competition in the travel and advertising sectors. Management believes that the current cash position will be sufficient to meet operational needs for at least the next twelve months, despite the challenges posed by the ongoing economic landscape.