2024-12-23 07:49:24
Author: Trip.com Group Limited / 2023-07-24 01:20 / Source: Trip.com Group Limited

Trip.com Group Limited Reports Unaudited Third Quarter of 2022 Financial Results

SHANGHAI,Dec. 15,2022 -- Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) ("Trip.com Group" or the "Company"),a leading one-stop travel service provider of accommodation reservation,transportation ticketing,packaged tours and corporate travel management,today announced its unaudited financial results for the third quarter of 2022.

Key Highlights for the Third Quarter of 2022

The Company's China domestic and international business continued to show strong recovery momentum.


- Both domestic hotel and air reservation revenue saw positive year-over-year growth in the third quarter,with the domestic hotel booking revenue increasing by 25% year over year.


- International business maintained rapid recovery,with the overall air-ticket bookings on global platforms increasing over 100% year over year.

The Company delivered strong results in the third quarter of 2022.


- Total net revenue increased by 29% year over year and increased by 72% quarter over quarter,mainly driven by the robust recovery in China's domestic market and overseas markets.


- Net income for the third quarter of 2022 was RMB245 million (US$34 million),which improved from a net loss of RMB868 million for the same period in 2021 and net income of RMB43 million for the previous quarter.


- Adjusted EBITDA for the third quarter of 2022 was RMB1.4 billion (US$198 million),representing a 164% increase from RMB537 million for the same period in 2021 and a 300% increase from RMB355 million for the previous quarter. Adjusted EBITDA margin was 21% for the third quarter,compared with 10% for the same period in 2021 and 9% for the previous quarter.

"In the third quarter of 2022,the global markets made continued progress towards normalcy," said James Liang,Executive Chairman. "The EMEA (Europe,the Middle East and Africa) and America regions maintained strong growth momentum driven by the travel needs in summer. Travel activities also rebounded quickly across the Asia-Pacific region as more and more markets are reopening the borders and lifting quarantine measures. We are excited about the long-term outlook of the global travel industry and the opportunities that lie ahead."

"We achieved strong results in the third quarter despite market volatility in the back half of this quarter. Our domestic hotel bookings showed positive growth over the last year and almost recovered fully to pre-pandemic levels," said Jane Sun,Chief Executive Officer. "Our team delivered solid execution,with the topline and bottom line profitability showing strong improvements. Supported by our strengthened product capabilities and improved operating efficiency,we remain positive and confident about our competitive position in global markets."

Third Quarter of 2022 Financial Results and Business Updates

In the third quarter of 2022,the Company's domestic business has shown robust recovery due to relaxed travel restrictions and strong travel needs in summer,which led to an increased volume of travel bookings. The Company's international business also maintained its growth momentum as countries continued to open up and return to normalcy.

For the third quarter of 2022,Trip.com Group reported net revenue of RMB6.9 billion (US$969 million),representing a 29% increase from the same period in 2021 and a 72% increase from the previous quarter,primarily due to the strong recovery of China's domestic market.

Accommodation reservation revenue for the third quarter of 2022 was RMB2.9 billion (US$408 million),representing a 32% increase from the same period in 2021 and a 114% increase from the previous quarter,primarily due to the strongrecovery of China's domestic market.

Transportation ticketing revenue for the third quarter of 2022was RMB2.6 billion (US$369 million),representing a 44% increase from the same period in 2021 and a 49% increase from the previous quarter,primarily due to the strong recovery of China's domestic market and the overseas market.

Packaged-tour revenue for the third quarter of 2022 was relatively stable at RMB387million (US$54million) comparing to the same period in 2021. Packaged-tour revenue increased by 217% from the previous quarter,primarily due to the strong recovery of China's domestic market.

Corporate travel revenue for the third quarter of 2022 was RMB370million (US$52 million),representing a9% increase from the same period in 2021 and a 76% increase from the previous quarter,primarily due to the strong recovery of China's domestic market.

Cost of revenue for the third quarter of 2022 increased by 4% to RMB1.3 billion (US$179 million) from the same period in 2021 and increased by 30% from the previous quarter,primarilydue to the strong recovery of China's domestic market. Cost of revenue as a percentage of net revenue was 18% for the third quarter of 2022.

Product development expenses for the third quarter of 2022 increased by 8% to RMB2.5billion (US$350 million) from the same period in 2021 and increased by 41% from the previous quarter,primarily due to an increase in product development personnel related expenses. Product development expenses as a percentage of net revenuewas 36% for the third quarter of 2022.

Sales and marketing expenses for the third quarter of 2022 increased by 13% to RMB1.4 billion (US$201 million) from the same period in 2021 and increased by 73% from the previous quarter,primarily due to an increase in expenses relating to sales and marketing promotion activities. Sales and marketing expenses as a percentage of net revenue was 21% for the third quarter of 2022.

General and administrative expenses for the third quarter of 2022 increased by 6% to RMB843 million (US$119million) from the same period in 2021 and increased by 40% from the previous quarter,primarily due to an increase in general and administrative personnel related expenses. General and administrative expensesas a percentage of net revenue was 12% for the third quarter of 2022.

Income tax expense for the third quarter of 2022 wasRMB277 million (US$39 million),compared to RMB95 million for the same period in 2021 and RMB173 million for the previous quarter. The change in Trip.com Group's effective tax rate was primarily due to the combined impacts of changes in respective profitability of its subsidiaries with different tax rates,certain non-taxable income or loss resulting from the fair value changes in equity securities investments and exchangeable senior notes,and changes in valuation allowance provided for deferred tax assets.

Net income for the third quarter of 2022 was RMB245 million (US$34 million),compared to net loss of RMB868 million for the same period in 2021 and net income of RMB43 million for the previous quarter. Adjusted EBITDA for the third quarter of 2022 was RMB1.4billion (US$198million),compared to RMB537 million for the same period in 2021 and RMB355 million for the previous quarter. Adjusted EBITDA margin was 21% for the third quarter of 2022,compared to 10% for the same period in 2021 and 9% for the previous quarter.

Net income attributable to Trip.com Group's shareholders for the third quarter of 2022 was RMB266 million (US$37 million),compared to net loss attributable to Trip.com Group's shareholders of RMB849 million for the same period in 2021 and net income attributable to Trip.com Group's shareholders of RMB69 million for the previous quarter. Excluding share-based compensation charges,fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense) and their tax effects,non-GAAP net income attributable to Trip.com Group's shareholders for the third quarter of 2022 was RMB1.0 billion (US$145 million),compared to non-GAAP net income attributable to Trip.com Group's shareholders of RMB523 million for the same period in 2021 and non-GAAP net loss attributable to Trip.com Group's shareholders of RMB203 million for the previous quarter.

Diluted income per ordinary share and per ADS was RMB0.41(US$0.06) for the third quarter of 2022. Excluding share-based compensation charges,fair value changes of equity securities investments and exchangeable senior notes and their tax effects,non-GAAP diluted income per ordinary share and per ADS was RMB1.58(US$0.22) for the third quarter of 2022. Each ADS currently represents one ordinary share of the Company.

In September 2022,the Company repurchased the remaining US$51 million principal amount of the 1.25% convertible senior notes due 2022 and the entire US$25 million principal amount of the 1.25% convertible notes due 2022 issued to a subsidiary of Booking Holdings Inc.

As of September 30,2022,the balance of cash and cash equivalents,restricted cash,short-term investment,held to maturity time deposit and financial products was RMB62.0 billion (US$8.7 billion).

Conference Call

Trip.com Group's management team will host a conference call at 7:00 PM EST on December 14,2022 (or 8:00 AM CST on December 15,2022) following this announcement.

The conference call will be available live on Webcast and for replay at: https://investors.trip.com. The call will be archived for twelve months on our website.

All participants must pre-register to join this conference call using the Participant Registration link below:


https://register.vevent.com/register/BI824db219146c4652937934eb6277037b.

Upon registration,each participant will receive details for this conference call,including dial-in numbers and a unique access PIN. To join the conference,please dial the number provided,enter your PIN,and you will join the conference instantly.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things,quotations from management in this press release,as well as Trip.com Group's strategic and operational plans,contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include,but are not limited to,severe or prolonged downturn in the global or Chinese economy,general declines or disruptions in the travel industry,the impact of COVID-19 pandemic to Trip.com Group's business operations,volatility in the trading price of Trip.com Group's ADSs or shares,Trip.com Group's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances,failure to compete against new and existing competitors,failure to successfully manage current growth and potential future growth,risks associated with any strategic investments or acquisitions,seasonality in the travel industry in the relevant jurisdictions where Trip.com Group operates,failure to successfully develop Trip.com Group's existing or future business lines,damage to or failure of Trip.com Group's infrastructure and technology,loss of services of Trip.com Group's key executives,adverse changes in economic and political policies of the PRC government,inflation in China,risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Trip.com Group's affiliated Chinese entities and the contractual arrangements among Trip.com Group,its affiliated Chinese entities and their shareholders,and other risks outlined in Trip.com Group's filings with the U.S. Securities and Exchange Commission or the Stock Exchange of Hong Kong Limited. All information provided in this press release and in the attachments is as of the date of the issuance,and Trip.com Group does not undertake any obligation to update any forward-looking statement,except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Trip.com Group's unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"),Trip.com Group uses non-GAAP financial information related to adjusted net income attributable to Trip.com Group Limited,adjusted EBITDA,adjusted EBITDA margin and adjusted diluted earnings per ordinary share and per ADS,each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges that are not tax deductible,fair value changes of equity securities investments and exchangeable senior notes,net of tax,and other applicable items. Trip.com Group's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP,does not have a standardized meaning under GAAP,and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges,fair value changes of equity securities investments and exchangeable senior notes and their tax effects that have been and will continue to be significant recurring expenses in Trip.com Group's business for the foreseeable future.

Reconciliations of Trip.com Group's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Trip.com Group Limited

Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) is a leading global one-stop travel platform,integrating a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in China,and increasingly for travelers around the world,to explore travel,get inspired,make informed and cost-effective travel bookings,enjoy hassle-free on-the-go support,and share travel experience. Founded in 1999 and listed on Nasdaq in 2003 and HKEX in 2021,the Company currently operates under a portfolio of brands,including Ctrip,Qunar,Trip.com and Skyscanner,with the mission "to pursue the perfect trip for a better world."

For further information,please contact:

Investor Relations

Trip.com Group Limited


Tel: +86 (21) 3406-4880 X 12229


Email: iremail@trip.com

Trip.com Group Limited

Unaudited Consolidated Balance Sheets

(In millions,except share and per share data)


December 31,2021


September 30,2022


September 30,2022

RMB (million)

RMB (million)

USD (million)


ASSETS


Current assets:


Cash,cash equivalents and restricted cash


21,196


18,916


2,659

Short-term investments


29,566


28,684


4,032

Accounts receivable,net


4,649


6,151


865

Prepayments and other current assets


10,697


13,294


1,869


Total current assets


66,108


67,045


9,425


Property,equipment and software


5,534


5,224


734

Intangible assets and land use rights


13,046


12,869


1,809

Right-of-use assets


777


871


122

Investments (Includes held to maturity time deposit and


financial products of RMB13,112 million and RMB14,386


million as of December 31,2021 and September 30,


2022,respectively)


44,961


47,004


6,608

Goodwill


59,353


59,313


8,338

Other long-term assets


396


404


57

Deferred tax asset


1,684


1,568


220


Total assets


191,859


194,298


27,313


LIABILITIES


Current liabilities:


Short-term debt and current portion of long-term debt


39,866


33,868


4,761

Accounts payable


6,019


7,389


1,039

Advances from customers


7,535


7,844


1,103

Other current liabilities


12,798


12,607


1,770

Total current liabilities


66,218


61,708


8,673


Deferred tax liability


3,527


3,477


489

Long-term debt


11,093


17,435


2,451

Long-term lease liability


400


553


78

Other long-term liabilities


165


182


26


Total liabilities


81,403


83,355


11,717


SHAREHOLDERS' EQUITY


Total Trip.com Group Limited shareholders' equity


109,677


110,230


15,496


Non-controlling interests


779


713


100


Total shareholders' equity


110,456


110,943


15,596


Total liabilities and shareholders' equity


191,313

Trip.com Group Limited

Unaudited Consolidated Statements of Income/(Loss)

(In millions,except share and per share data)


Quarter ended


Quarter ended


Quarter ended


Quarter ended

September 30,2021


June 30,2022

RMB (million)


RMB (million)


RMB (million)


USD (million)


Revenue:


Accommodation reservation


2,194


1,357


2,904


408

Transportation ticketing


1,817


1,763


2,623


369

Packaged-tour


392


122


387


54

Corporate travel


338


210


370


52

Others


605


564


613


86


Total revenue


5,346


4,016


6,897


969


Less: Sales tax and surcharges


(2)


(5)


(5)


(1)


Net revenue


5,344


4,011


6,892


968


Cost of revenue


(1,223)


(976)


(1,271)


(179)


Gross profit


4,121


3,035


5,621


789


Operating expenses:


Product development *


(2,305)


(1,772)


(2,491)


(350)

Sales and marketing *


(1,270)


(826)


(1,433)


(201)

General and administrative *


(792)


(604)


(843)


(119)


Total operating expenses


(4,367)


(3,202)


(4,767)


(670)


(Loss)/Income from operations


(246)


(167)


854


119


Interest income


485


544


453


64

Interest expense


(382)


(351)


(395)


(55)

Other (expense)/income


(854)


469


(492)


(69)


(Loss)/Income before income tax expense and


equity in income of affiliates


(997)


495


420


59


Income tax expense


(95)


(173)


(277)


(39)

Equity in income/(loss) of affiliates


224


(279)


102


14


Net (loss)/income


(868)


43


245


34


Net loss attributable to non-controlling interests


19


26


21


3


Net (loss)/income attributable to Trip.com


Group Limited


(849)


69


266


37


(Losses)/Earnings per ordinary share


- Basic


(1.32)


0.10


0.41


0.06

- Diluted


(1.32)


0.10


0.41


0.06


(Losses)/Earnings per ADS


- Basic


(1.32)


0.10


0.41


0.06

- Diluted


(1.32)


0.10


0.41


0.06


Weighted average ordinary shares outstanding


- Basic


643,856,428


647,866,001


647,909,665


647,665

- Diluted


643,428


650,906,465


653,485,857


653,857


* Share-based compensation included in Operating expenses above is as follows:


Product development


221


146


167


24

Sales and marketing


35


28


32


4

General and administrative


258


130


152


21

Trip.com Group Limited

Unaudited Reconciliation of GAAP and Non-GAAP Results

(In millions,except % and per share data)


Quarter ended


Quarter ended


Quarter ended


Quarter ended

September 30,2022

RMB (million)


RMB (million)


RMB (million)


USD (million)


Net (loss)/income


(868)


43


245


34


Less: Interest income


(485)


(544)


(453)


(64)

Add: Interest expense


382


351


395


55

Add: Other expense/(income)


854


(469)


492


69

Add: Income tax expense


95


173


277


39

Add: Equity in (income)/loss of affiliates


(224)


279


(102)


(14)

(Loss)/income from operations


(246)


(167)


854


119

Add: Share-based compensation


514


304


351


49

Add: Depreciation and amortization


269


218


214


30

Adjusted EBITDA


537


355


1,419


198

Adjusted EBITDA margin


10%


9%


21%


21%


Net (loss)/income attributable to Trip.com Group Limited


(849)


69


266


37

Add: Share-based compensation


514


304


351


49

Add: Loss/(gain) from fair value changes of equity securities


investments and exchangeable senior notes


903


(668)


490


69

Add: Tax effects on fair value changes of equity securities


investments and exchangeable senior notes


(45)


92


(72)


(10)

Non-GAAP net income/(loss) attributable to Trip.com Group


Limited


523


(203)


1,035


145

Weighted average ordinary shares outstanding- Diluted-non


GAAP


646,684,353


647,001


653,857

Non-GAAP Diluted income/(losses) per share


0.81


(0.31)


1.58


0.22

Non-GAAP Diluted income/(losses) per ADS


0.81


(0.31)


1.58


0.22


Notes for all the condensed consolidated financial schedules presented:


Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB7.1135 on September 30,2022 published


by the Federal Reserve Board.

Trip.com Group Limited Reports Unaudited Third Quarter of 2022 Financial Results

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