What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-16 · 714 added, 654 removed, 1614 unchanged (46% of the section changed)

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Our actual results may differ from the results discussed in any forward looking statements, which may be due to factors discussed in “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

The Company renamed our Tripadvisor Core segment to “Brand Tripadvisor”, and its “Tripadvisor-branded display and platform” revenue stream within the Brand Tripadvisor segment, as “Media and advertising” revenue.

These nomenclature changes had no impact on the composition of our segments, revenue streams, or on any current or historic financial information.

The Tripadvisor group operates as a family of brands with a purpose of connecting people to experiences worth sharing.

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The Company operates across three business segments:

Brand Tripadvisor (formerly Tripadvisor Core), Viator, and TheFork.

Brand Tripadvisor, Viator, and TheFork.

We leverage our brands, technology platforms, and capabilities to connect our large, global audience with partners by offering rich content, travel guidance products and services, and two-sided marketplaces for experiences, accommodations, restaurants, and other travel categories.

Brand Tripadvisor’s purpose is to empower everyone to be a better traveler by serving as the world’s most trusted and essential travel guidance platform.

Since Tripadvisor’s founding in 2000, the Tripadvisor brand has developed a relationship of trust and community with travelers and experience seekers by providing an online global platform for travelers to discover, generate, and share authentic user-generated content (“UGC”) in the form of ratings and reviews for destinations, points-of-interest (“POIs”), experiences, accommodations, restaurants, and cruises in over 40 countries and in more than 20 languages across the world.

Tripadvisor offers more than 1 billion user-generated ratings and reviews on over 8 million experiences, accommodations, restaurants, airlines, and cruises.

Since Tripadvisor’s founding in 2000, the Tripadvisor brand has developed a relationship of trust and community with travelers and experience seekers by providing an online global platform for travelers to discover, generate, and share authentic user-generated content (“UGC”) in the form of reviews and opinions for destinations, points-of-interest (“POIs”), experiences, accommodations, restaurants, and cruises in over 40 countries and in more than 20 languages across the world.

Tripadvisor offers more than 1 billion user-generated reviews and opinions on over 9 million experiences, accommodations, restaurants, airlines, and cruises.

Tripadvisor’s online platform attracts one of the world’s largest travel audiences, with hundreds of millions of visitors annually.

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Viator delivers on its purpose by enabling travelers to discover and book iconic, unique and memorable experiences from experience operators around the globe.

Our online marketplace is comprehensive and easy-to-use, connecting millions of travelers to the world’s largest supply of bookable tours, activities and attractions—over 350,000 experiences from more than 55,000 operators.

Viator is a pure-play experiences OTA singularly focused on the needs of both travelers and operators with the largest supply of bookable experiences available to travelers.

TheFork’s purpose is to deliver happiness through amazing dining experiences.

TheFork delivers on its purpose by providing an online marketplace that enables diners to discover and book online reservations at approximately 55,000 restaurants in 11 countries across the U.K., western and central Europe.

TheFork has become an urban, gastronomic guide with a strong community that offers approximately 20 million restaurant reviews.

Our online marketplace is comprehensive and easy-to-use, connecting millions of travelers to the world’s largest supply of bookable tours, activities and attractions—nearly 400,000 experiences from more than 65,000 operators.

Viator is a pure-play experiences online travel agency (“OTA”) singularly focused on the needs of both travelers and operators with the largest supply of bookable experiences available to travelers.

TheFork’s purpose is to deliver happiness through amazing dining experiences as the leading online restaurant booking platform in Europe.

At the forefront of championing restaurant culture, TheFork harnesses technology to promote real life connections between diners and restaurateurs.

With a network of approximately 55,000 partner restaurants across 11 countries, nearly 40 million app downloads and more than 20 million reviews, TheFork is a go-to platform for all food lovers to enjoy unforgettable restaurant experiences.

Through TheFork, users can easily find restaurants according to their preferences, check real-time availability, instantly book online 24/7, benefit from special offers and pay directly to the restaurants.

For restaurateurs, TheFork's technology enables them to optimize reservation management and occupancy rates, increase bookings and visibility, limit the impacts of no-shows, manage payments and streamline operations, all while accessing the broadest community of loyal diners.

The online travel industry in which we operate is large, highly dynamic and competitive.

We describe below current trends affecting our overall business and segments, including uncertainties that may impact our ability to execute on our objectives and strategies.

Public health-related events, such as a pandemic, political instability, geopolitical conflicts, including the evolving events in the Middle East, acts of terrorism, fluctuations in currency values, and changes in global economic conditions, are examples of other events that could have a negative impact on the travel industry, and as a result, our financial results in the future.

The COVID-19 pandemic had a significant negative impact on the travel and hospitality industries, and consequently, adversely and materially affected our business, results of operations, liquidity and financial condition during the year ended December 31, 2021.

In 2022, we generally experienced a travel demand recovery fueled by the continued easing of government restrictions globally and increasing consumer travel demand, however, during the first quarter of 2022, we experienced a negative impact from the Omicron variant across all segments which helped contribute to the year-over-year revenue growth rate during 2023.

During 2023, we continued to experience strong consumer demand, particularly for our experiences offerings, across our Viator and Brand Tripadvisor segments.

Asia-Pacific, which represents a small portion of our overall business, has been slower to recover due to longer and sustained travel restrictions as a result of the COVID-19 pandemic.

However, starting in the first quarter of 2023, travel restrictions across Asia began to ease relative to 2022, contributing to increased year-over-year revenue growth within this region.

Prior to Google introducing changes to its SERP (search engine results page), we generated a significant amount of direct traffic from search engines, such as Google, through strong SEO (search engine optimization) performance across all segments.

We believe our SEO traffic acquisition performance has been negatively impacted in the past, and may be impacted in the future, by metasearch and search engines (primarily Google) changing their search result placement and underlying algorithms, including to increase the prominence of their own products in search results across our business, most notably within our hotel meta offering within our Brand Tripadvisor segment.

In response to strong consumer demand for our experiences offerings across our Viator and Brand Tripadvisor segments, we continued to increase investment in performance marketing and brand spend during 2023 to drive awareness and grow market share in this large underpenetrated market.

Public health-related events, such as a pandemic;

political instability, geopolitical conflicts, including the evolving events in the Middle East and between Ukraine and Russia;

acts of terrorism;

fluctuations in currency values’ and changes in global economic conditions, are examples of other events that could have a negative impact on the travel industry and, as a result, our financial results in the future.

We generate a significant amount of direct traffic from search engines, including Google, through strong search engine optimization (“SEO”) performance across all segments.

We believe our SEO traffic acquisition performance has been negatively impacted, and may be impacted in the future, by search engines (primarily Google) changing their search result placement and underlying algorithms to increase the prominence of their own products in search results across our business.

This has most notably impacted our hotel meta offering within our Brand Tripadvisor segment.

In response to the large underpenetrated market for experiences, Viator continues to invest in product, supply, and marketing to drive bookings and grow market share.

Over the long-term, we are focused on driving a greater percentage of our bookings from direct channels.

We are doing this by continuing to focus on increasing our brand recognition and improving the user experience across products on our website and mobile app, providing high quality customer service, and offering leading customer choice for online bookable experiences supply.

We are doing this by continuing to focus on increasing our brand loyalty and improving the user experience across products on our website and mobile app, providing high-quality customer service, and offering leading customer choice for online bookable experiences supply.

In addition, we are evolving and growing our partnerships with leading global and e-commerce brands and general OTAs to increase demand for experiences and drive positive unit economics.

The global experiences market is large, growing, and highly fragmented, with the vast majority of bookings still occurring through traditional offline sources.

We are observing a secular shift, however, as this market continues to grow and accelerate the pace of online adoption.

We expect to benefit from ongoing market tailwinds as consumers increasingly book experiences online and consumer behavior continues to allocate discretionary spending more to travel and experiences and away from physical goods.

Likewise, the global restaurants category is also benefiting from increased online adoption by both consumers and restaurant partners, particularly in Europe.

Given the competitive positioning of our businesses relative to the attractive growth prospects in these categories, we expect to continue to invest in these categories across the Tripadvisor group, and in particular, within the Viator and

TheFork segments, to continue accelerating revenue growth, operating scale, and market share gains for the long-term.

Given the competitive positioning of our businesses relative to the attractive growth prospects in the experiences and restaurant categories, we expect to continue to invest in these categories across Tripadvisor group and, in particular, within the Viator and TheFork segments, to continue growing revenue, operating scale, and market share gains for the long-term.

For information regarding our business strategy and business models, see the discussion set forth in Part I, Item 1.

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Recent Developments

Tripadvisor and Liberty TripAdvisor Planned Merger

On December 18, 2024, the Company and LTRIP entered into an agreement and plan of merger (the "Merger Agreement") whereby Tripadvisor will acquire Liberty TripAdvisor (the "Merger").

In connection with the Merger, (i) the shares of LTRIP Series A Common Stock and Series B Common Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive $0.2567 per share in cash (without interest), totaling approximately $20 million in the aggregate;

(ii) all of the shares of LTRIP's 8% Series A Cumulative Redeemable Preferred Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive, in the aggregate, approximately $42 million in cash, without interest, and 3,037,959 validly issued, fully paid and non-assessable shares of the Company's common stock;

and (iii) LTRIP's 0.50% Exchangeable Senior Debentures of approximately $330 million will be repaid in accordance with their terms.

Pursuant to the Merger Agreement, the Company will provide a loan facility (the “TRIP Loan Facility”) to LTRIP of approximately $330 million, to repay LTRIP debentures prior to the closing of the Merger.

The TRIP Loan Facility will be repaid on the earlier of (i) the closing of the Merger, and (ii) 15 business days after the valid termination of the Merger Agreement or (b) such later date as jointly agreed to by LTRIP and the Company.

The transaction is expected to close in the second quarter of 2025, and based on 10-day volume-weighted average share price (“VWAP”) of $13.98 at December 17, 2024, the expected aggregate transaction value to be paid by the Company is approximately $435 million (which includes approximately $392 million of cash consideration and 3,037,959 validly issued, fully paid and non-assessable shares of the Company's common stock based on 10-day VWAP of $13.98 at December 17, 2024).

The implied share price for the acquisition of such shares of the Company's common stock from LTRIP is $16.21 (which reflects a premium of approximately 16% based on the 10-day VWAP as of December 17, 2024).

Refer to “Note 1:

Organization and Business Description ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

Restructuring and Related Reorganization Actions

During the third quarter of 2023, the Company approved and subsequently initiated a set of actions across its businesses in order to reduce its cost structure, improve operational efficiencies, and realign its workforce with its strategic initiatives.

These actions taken by the Company resulted in reduced global headcount.

Additional cost reduction measures taken included discretionary spend and real estate.

As a result, the Company incurred estimated pre-tax restructuring and other related reorganization costs of $22 million during the year ended December 31, 2023, consisting primarily of employee severance and related benefits.

Potential job position eliminations in each country remain subject to local law and consultation requirements, which have extended beyond 2023 in certain countries.

Therefore, actual costs incurred may differ from estimated costs recorded as of December 31, 2023.

As of December 31, 2023, the Company paid $9 million of these costs, and expect the majority of remaining unpaid costs as of December 31, 2023, to be disbursed during the first quarter of 2024.

During the fourth quarter of 2024, the Company approved and subsequently initiated a set of actions across its businesses in order to reduce its cost structure, improve operational efficiencies, and realign its workforce with its strategic initiatives.

As a result, the Company incurred pre-tax restructuring and other related reorganization costs totaling $21 million, which consisted of a one-time contract termination fee to a third-party professional services firm and employee severance and related benefits.

Refer to “Note 7:

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Segment and Geographic Information ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information regarding restructuring and other related reorganization costs incurred for each reportable segment.

These cost reduction actions undertaken by the Company are anticipated to result in an estimated $35 million in annualized cost savings in the Brand Tripadvisor segment, which includes corporate general and administrative expenses, and in addition, we estimate $10 million in annualized cost savings in TheFork segment, primarily related to global workforce reduction measures.

Although we expect the aforementioned, annualized cost savings in Brand Tripadvisor and TheFork during 2024, these cost reduction measures did not materially impact our actual expenses during 2023 due to the timing of when these actions occurred during the year.

Stock Buyback Program

On September 7, 2023, our Board of Directors authorized the repurchase of $250 million in shares of our common stock under a new share repurchase program.

This share repurchase program, which has a term of two years, does not obligate the Company to acquire any particular number of shares and may be modified, suspended or discontinued at any time.

During the three months ended December 31, 2023, we repurchased 1,324,524 shares of our outstanding common stock at an average share price of $18.85 per share, exclusive of fees, commissions, and excise taxes, or $25 million in the aggregate.

In light of the recent disclosure by Liberty Tripadvisor Holdings, Inc.

(“LTRIP”) of its intent to evaluate potential alternatives and the Company’s formation of a Special Committee to evaluate any proposals that may be brought forward, the Company has suspended its share repurchase program.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, the Company had received Notices of Proposed Adjustments (“NOPA”) in January 2017 and April 2019 from the IRS with respect to income tax returns for the years 2009, 2010 and 2011 filed by Expedia when Tripadvisor was part of Expedia Group Inc’s consolidated income tax return.

This assessment was related to certain transfer pricing arrangements with its foreign subsidiaries, and we requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for those years.

In January 2023, the Company received a final notice from the IRS regarding a MAP settlement for the 2009 through 2011 tax years, which the Company accepted in February 2023.

During the second quarter of 2023, the Company made a U.S.

federal tax payment of $113 million to Expedia related to this IRS audit

settlement pursuant to the Tax Sharing Agreement with Expedia.

During the third quarter of 2023, we received a competent authority refund of $49 million associated with this IRS audit settlement.

As previously disclosed, during August 2020 we received a NOPA issued by the IRS for the 2014, 2015, and 2016 tax years.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries.

We have previously requested competent authority assistance under MAP for these tax years.

As a result of subsequent actions, the Company expects to incur additional pre-tax restructuring and other related reorganization costs in an estimated range of $9 million to $11 million during the first quarter of 2025, consisting of employee severance and related benefits, primarily in the Brand Tripadvisor segment.

We expect these cost reduction measures to be completed by the Company during the first quarter of 2025.

Term Loan B Facility

On July 8, 2024, under the Amended Credit Agreement, the Company issued a $500 million Term Loan B Facility maturing July 8, 2031, with an interest rate based on secured overnight financing rate ("SOFR") plus 2.75%.

On July 15, 2024, the Company used these borrowed funds to fully redeem the outstanding $500 million, 2025 Senior Notes.

The Term Loan B Facility was offered at 99.75% of par and is required to be paid down at 1.00% of the aggregate principal amount per year, repayable in quarterly installments on the last day of each calendar quarter, commencing December 31, 2024, equal to 0.25% of the original principal amount with the balance due on the maturity date.

Refer to “Note 8:

Debt ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

As previously disclosed, in August 2023, we received a Notices of Proposed Adjustments (“NOPA”) from the IRS for the 2014 through 2016 tax years relating to certain transfer pricing arrangements with our foreign subsidiaries.

In response, we requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for the 2014 through 2016 tax years.

In January 2024, we received notification of a MAP resolution agreement for the 2014 through 2016 tax years, which we accepted in February 2024.

We anticipate this MAP resolution will result in an estimated net operating cash outflow of $80 million to $130 million, net of anticipated competent authority relief and inclusive of related interest expense, expected during 2024, and an increase to our worldwide income tax expense in an estimated range of $30 million to $60 million in the first quarter of 2024.

In connection with this IRS audit settlement:

(i) during the second quarter of 2024, we made a payment to the IRS of $141 million, inclusive of estimated interest, (ii) during the second half of 2024, we made various state tax payments totaling $26 million, inclusive of estimated interest, and (iii) during the fourth quarter of 2024, we received a competent authority refund of $42 million, inclusive of net interest income, from a foreign jurisdiction.

This IRS audit settlement resulted in total net operating cash outflow during 2024 of $105 million, which includes federal tax benefits from these payments of $20 million.

Refer to “Note 10:

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As of December 31, 2024, we had a valuation allowance of approximately $106 million related to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

We classify deferred tax assets and liabilities

as noncurrent on our consolidated balance sheet.

We classify deferred tax assets and liabilities as noncurrent on our consolidated balance sheet.

Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates.

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Consolidated Results of Operations

Revised Operating Expense Presentation

During the fourth quarter of 2024, the Company revised its operating expense captions on its consolidated statement of operations to better align the Company’s financial presentation with how management assesses performance and makes strategic decisions in its business operations, and to provide additional clarity and understanding of our operating expenses for investors.

Prior year amounts have been reclassified to conform to the current period presentation.

The revised presentation did not result in any changes to previously reported revenues, total costs and expenses, operating income (loss), income (loss) before income taxes, or net income (loss).

For further information, refer to “Note 2:

Significant Accounting Policies ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023 is presented below.

A discussion regarding our financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022 can be found in Part II, Item 7.

"Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 17, 2023.

"Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 16, 2024, except for the discussion related to consolidated operating expenses which are presented below.

We have included a discussion of certain operating expense captions for fiscal year 2023 compared to fiscal year 2022, given the changes made to those same operating expenses captions, as noted above.

Results of Operations

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Costs and expenses:

Cost of revenue

Selling and marketing

Technology and content

Cost of sales

Personnel (including stock-based compensation of $120, $96, and $88)

General and administrative

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Revenue and Segment Information

Brand Tripadvisor Segment

Year ended December 31,

Revenue by Segment:

(in millions)

Brand Tripadvisor (1)

Intersegment Eliminations (1)

Total revenue

Adjusted EBITDA by Segment:

Brand Tripadvisor

Cost of sales

Personnel (exclusive of stock-based compensation)

General and administrative

Total Adjusted EBITDA

Adjusted EBITDA Margin by Segment (3)

Brand Tripadvisor

= not meaningful

(1) Brand Tripadvisor segment revenue figures are shown gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis.

Refer to “Note 18:

Segment and Geographic Information ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for a discussion of intersegment revenue for all periods presented.

Segment and Geographic Information ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for a discussion of intersegment revenue and expenses for all periods presented.

(2) Refer to “Note 18:

Segment and Geographic Information ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for expense information needed in order to reconcile to the consolidated operating expense captions on the consolidated statements of operations.

(3) “Adjusted EBITDA Margin by Segment” is defined as Adjusted EBITDA by segment divided by revenue by segment.

Brand Tripadvisor Segment (formerly Tripadvisor Core Segment)

Brand Tripadvisor revenue increased by $65 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to an increase in Tripadvisor experiences revenue, and to a lesser extent, an increase in hotel B2B revenue, media and advertising revenue, and improved hotel meta revenue in the rest of world geographic markets, all of which were primarily driven by strong consumer demand, which was partially offset primarily by a decrease in our European hotel meta revenue during the last three quarters of 2023.

In addition, this segment’s revenue was negatively impacted by the Omicron variant in the first quarter of 2022, which helped contribute to the year-over-year revenue growth rate during 2023.

Adjusted EBITDA in our Brand Tripadvisor segment increased $3 million during the year ended December 31, 2023 when compared to the same period in 2022, while adjusted EBITDA margin decreased by 2 percentage points during the year ended December 31, 2023 when compared to the same period in 2022.

The increase in our Brand Tripadvisor segment revenue of $65 million, as noted above, substantially offset increases in personnel and overhead costs to support business growth, despite the impact of our cost reduction measures which did not materially impact our segment expenses during 2023, as discussed above.

In addition, Brand Tripadvisor experienced an increase in direct selling and marketing expenses related to paid online traffic acquisition costs, direct revenue generation costs related to data center and other direct revenue related costs, and software licensing costs.

The slight decline in adjusted EBITDA margin during the year ended December 31, 2023 when compared to the same period in 2022, was largely impacted due to increased cost of revenue and technology and content personnel and overhead costs as a percent of revenue.

Brand Tripadvisor revenue decreased by $82 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to a decrease in hotel meta revenue and, to a lesser extent, a decrease in hotel B2B revenue.

Adjusted EBITDA in our Brand Tripadvisor segment decreased $47 million during the year ended December 31, 2024 when compared to the same period in 2023, while adjusted EBITDA margin decreased by 2 percentage points during the year ended December 31, 2024 when compared to the same period in 2023.

The decrease in adjusted EBITDA was primarily due to a decrease in revenue, as noted above, partially offset by a decrease in the segment's operating expenses during the year ended December 31, 2024 when compared to the same period in 2023 of $35 million, primarily related to a decrease in marketing expenses, primarily paid online traffic acquisition costs, and to a lesser extent a decrease in personnel costs.

The decrease in adjusted EBITDA margin during the year ended December 31, 2024 when compared to the same period in 2023, was largely due to an increase in personnel costs as a percent of revenue.

The following is a detailed discussion of the revenue sources within our Brand Tripadvisor segment:

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Tripadvisor-branded Hotels Revenue

Tripadvisor-branded hotels revenue increased $9 million during the year ended December 31, 2023 when compared to the same period in 2022.

This increase was primarily driven by improved hotel B2B revenue, as well as to a lesser extent, improved hotel meta revenue in the rest of world geographic markets, primarily driven by strong consumer travel demand when compared to the same period in 2022.

In addition, our 2022 results were negatively impacted by the Omicron variant during the first quarter of 2022, which contributed to year-over-year growth.

Company saw sustained pricing strength in both free and paid traffic channels, including, continued strength in hotel meta monetization in the U.S., where CPC rates remained robust when compared to 2022.

This performance during 2023 was partially offset primarily by a decrease in our European hotel meta revenue during the last three quarters of 2023, as described above, as well as an increased competitive environment in paid online marketing channels and product decisions we have implemented to provide more qualified referrals to our partners, leading to a decrease in click volumes.

Tripadvisor-branded hotels revenue decreased $74 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to a decrease in hotel meta revenue and, to a lesser extent, a decrease in hotel B2B revenue as the Company transitioned from a sales-led model to a self-service model during 2024.

The decrease in hotel meta revenue during the year ended December 31, 2024 when compared to the same period in 2023 was driven by declines in U.S.

hotel meta revenue and, to a lesser extent, European hotel meta revenue, primarily due to weaker demand related to increased competition in paid online marketing channels and continued headwinds impacting direct channels, including SEO traffic, contributing to a decrease in click volumes, and to a lesser extent, a deceleration in cost-per-click (“CPC”) rates, particularly in the U.S.

Media and Advertising Revenue

Media and advertising revenue consists of revenue from display-based advertising (or “media advertising”) across our platform and increased $15 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily driven by an increase in marketing spend from advertisers, in correlation with growth in consumer travel demand.

Media and advertising revenue consists of revenue from display-based advertising (or “media advertising”) across our platform and increased $5 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to an increase in overall advertising campaigns and pricing.

Advertising through creative offerings and programmatic advertising, more than offset declines in traditional display advertising that correlates more closely with traffic volume, as well as the broader display advertising market, which is growing slower than other advertising formats.

Tripadvisor Experiences and Dining Revenue

Tripadvisor experiences and dining revenue, which includes intercompany (intersegment) revenue consisting of 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, and are eliminated on a consolidated basis, in addition to revenue earned from Brand Tripadvisor’s restaurant offerings.

Tripadvisor experiences and dining revenue increased $42 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily driven by strong consumer demand for experiences, combined with enhancements to our websites and mobile apps.

Tripadvisor experiences and dining revenue includes intercompany (intersegment) revenue consisting of 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 is eliminated on a consolidated basis, in addition to revenue earned from Brand Tripadvisor’s restaurant offerings.

Tripadvisor experiences and dining revenue decreased $7 million during the year ended December 31, 2024 when compared to the same period in 2023, due to a decline in dining revenue as the Company transitioned from a sales-led model to a self-service model during 2024.

Other Revenue

Other revenue, which includes alternative accommodation rentals revenue, in addition to primarily click-based advertising and display-based advertising revenue from our cruise, flights, and rental cars offerings on Tripadvisor websites and mobile apps, decreased by $1 million during the year ended December 31, 2023 when compared to the same period in 2022.

Other revenue, which includes vacation rentals revenue, in addition to primarily click-based advertising and display-based advertising revenue from cruise, flights, and rental cars offerings on Tripadvisor websites and mobile apps, decreased by $6 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to a decline in vacation rentals revenue as this offering continues to be strategically de-emphasized.

Viator Segment

Viator segment revenue increased by $244 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily driven by strong consumer demand for experiences across all geographies, including growth in both bookings and pricing of experiences, as well as, enhancements to our websites and mobile apps.

In addition, this segment’s revenue was negatively impacted by the Omicron variant in the first quarter of 2022, which helped contribute to the year-over-year revenue growth rate during 2023.

Viator is also benefiting from a larger macro trend, or secular shift, as the large global market in which it operates continues to grow and migrate online from traditional offline sources.

Adjusted EBITDA loss in our Viator segment improved by $11 million during the year ended December 31, 2023 when compared to the same period in 2022, and adjusted EBITDA margin improved by 2 percentage points during the year ended December 31, 2023 when compared to the same period in 2022.

The improvement in adjusted EBITDA was primarily due to an increase in revenue as noted above, partially offset by an increase in selling and marketing expenses related to SEM, other online paid traffic acquisition costs, and other marketing costs, including brand spend, in response to strong consumer demand for experiences and increased investment to grow market share, acquire new customers, and drive brand awareness, and to a lesser extent, an increase in revenue generation costs resulting from credit card payments and other revenue-related transaction costs in direct correlation with the increase in revenue.

In addition, Viator segment revenue growth was partially offset by increases in personnel and overhead costs to support business growth related to strong consumer demand.

Year ended December 31,

(in millions)

Cost of sales

Marketing (2)

Personnel (exclusive of stock-based compensation)

General and administrative

Total Adjusted EBITDA

Adjusted EBITDA Margin by Segment (3)

= not meaningful

(1) Refer to “Note 18:

(2) Viator segment marketing expenses are shown gross of intersegment (intercompany) expenses, which is eliminated on a consolidated basis.

Refer to “Note 18:

(3) “Adjusted EBITDA Margin by Segment” is defined as Adjusted EBITDA by segment divided by revenue by segment.

Viator segment revenue increased by $103 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily driven by growth in booking volume across all points of sale in all major geographies and, to a lesser extent, an increase in pricing.

Adjusted EBITDA in the Viator segment improved by $33 million during the year ended December 31, 2024 when compared to the same period in 2023, and adjusted EBITDA margin improved by 4 percentage points during the year ended December 31, 2024 when compared to the same period in 2023.

The improvement in adjusted EBITDA and adjusted EBITDA margin was primarily due to differences in marketing channel mix driving increased spend efficiency.

These improvements were partially offset by increased personnel costs to support growth, and to a lesser extent, increased licensing costs, as well as revenue generation costs resulting from credit card payments in direct correlation with the increase in revenue, all negatively impacted adjusted EBITDA.

TheFork Segment

TheFork segment revenue increased by $28 million during the year ended December 31, 2023 when compared to the same period in 2022.

This improvement was driven by increased consumer demand for dining, including increased bookings and pricing, during 2023 when compared to the same period in 2022, as well as the negative impact of the Omicron variant that occurred during the first quarter of 2022, which helped contribute to the year-over-year revenue growth rate during 2023.

In addition, we estimate this segment's revenue growth rate was positively impacted by foreign currency fluctuations of approximately 3% during the year ended December 31, 2023 when compared to the same period in 2022.

Adjusted EBITDA loss in TheFork segment improved by $25 million during the year ended December 31, 2023 when compared to the same period in 2022, and adjusted EBITDA margin improved by 22 percentage points during the year ended December 31, 2023 when compared to the same period in 2022.

The improvement in adjusted EBITDA was primarily due to an increase in revenue as noted above, and a decrease in selling and marketing expenses related to SEM, other online paid traffic acquisition costs, and television advertising costs.

These improvements were partially offset by $11 million of non-income tax government assistance benefits related to COVID-19 relief received during the second quarter of 2022 recorded as a benefit to general and administrative expenses, which did not reoccur in 2023, and an increase in personnel and overhead costs to support business growth related to the travel demand recovery that began during 2022, despite the impact of our cost reduction measures which did not materially impact our segment expenses during 2023, as discussed above.

The improvement in adjusted EBITDA margin during the year ended December 31, 2023 when compared to the same period in 2022, was primarily due to decreased selling and marketing costs as a percent of revenue, which more than offset the aforementioned $11 million of non-income tax government assistance benefits related to COVID-19 relief received during the second quarter of 2022.

Year ended December 31,

(in millions)

Cost of sales

Marketing (2)

Personnel (exclusive of stock-based compensation)

General and administrative

Total Adjusted EBITDA

Adjusted EBITDA Margin by Segment (3)

= not meaningful

(1) Refer to “Note 18:

(2) TheFork segment marketing expenses are shown gross of intersegment (intercompany) expenses, which is eliminated on a consolidated basis.

Refer to “Note 18:

(3) “Adjusted EBITDA Margin by Segment” is defined as Adjusted EBITDA by segment divided by revenue by segment.

TheFork segment revenue increased by $27 million during the year ended December 31, 2024 when compared to the same period in 2023, driven primarily by increased booking volumes largely in direct channels and, to a lesser extent, an increase in pricing.

Adjusted EBITDA in TheFork segment improved by $19 million during the year ended December 31, 2024 when compared to the same period in 2023, and adjusted EBITDA margin improved by 12 percentage points during the year ended December 31, 2024 when compared to the same period in 2023.

The improvement in adjusted EBITDA was primarily due to an increase in revenue as noted above, and lower personnel costs, partially offset by an increase in paid online traffic acquisition costs and other costs to support revenue growth.

The improvement in adjusted EBITDA margin was primarily due to lower personnel costs as a percent of revenue.

Consolidated Expenses

Cost of Revenue

Cost of revenue consists of expenses that are directly related or closely correlated to revenue generation, including direct costs, such as credit card and other booking transaction payment fees, data center costs, ad serving fees, and other revenue generating costs.

In addition, cost of revenue includes personnel and overhead expenses, including salaries, benefits, stock-based compensation and bonuses for certain customer support personnel who are directly involved in revenue generation.

Cost of Sales

Cost of sales consists of expenses that are directly related or closely correlated to revenue generation, including direct costs, such as credit card and other booking transaction payment fees, media production costs, ad serving fees, and other revenue generating costs.

In addition, cost of sales includes operating costs such as bad debt expense and non-income taxes, including sales, use, digital services, and other non-income related taxes.

Year ended December 31,

(in millions)

Personnel and overhead

Total cost of revenue

Cost of revenue increased $33 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to increased direct costs from credit card payment processing fees and other revenue-related transaction costs of $23 million in our Viator segment in direct correlation with the increase in revenue, as Viator serves as the merchant of record for the significant majority of its experience booking transactions, and to a lesser extent, increased direct revenue generation costs related to data center costs and other revenue-related transaction costs in our Brand Tripadvisor segment.

Selling and Marketing

Selling and marketing expenses consist of direct costs, including traffic generation costs from paid online traffic acquisition costs (including SEM and other online traffic acquisition costs), syndication costs and affiliate marketing commissions, social media costs, brand advertising (including television and other offline advertising),

promotions and public relations.

In addition, our selling and marketing expenses consist of indirect costs such as personnel and overhead expenses, including salaries, commissions, benefits, stock-based compensation, and bonuses for sales, sales support, customer support and marketing employees.

Cost of sales

Cost of sales increased $12 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to increased direct costs from credit card payment processing fees and other revenue-related transaction costs of $7 million in the Viator segment in direct correlation with the increase in revenue, as Viator serves as the merchant of record for the significant majority of its experience booking transactions, and to a lesser extent, increased direct revenue generation costs related to media production costs in the Brand Tripadvisor segment, as well as other costs to support revenue growth in TheFork segment.

These increased costs were partially offset by a decrease in non-income related taxes of $4 million in our Viator segment.

Cost of sales increased $41 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to increased direct costs from credit card payment processing fees and other revenue-related transaction costs of $20 million in the Viator segment in direct correlation with the increase in revenue, and to a lesser extent, increased direct revenue generation costs related to media production costs in the Brand Tripadvisor segment and incremental digital service taxes of $9 million, primarily in the Viator segment, for the year ended December 31, 2023.

Marketing expenses consist of direct costs, including traffic generation costs from paid online traffic acquisition costs (including SEM and other online traffic acquisition costs), syndication costs and affiliate marketing commissions, social media costs, brand advertising (including connected television, traditional television and other offline advertising), promotions and public relations.

Year ended December 31,

(in millions)

Personnel and overhead

Total selling and marketing

Direct selling and marketing costs increased $138 million during the year ended December 31, 2023 when compared to the same period in 2022.

In addition, direct selling and marketing costs as a percentage of total consolidated revenue was 41% during the year ended December 31, 2023, an increase from 39% when compared to the same period in 2022.

This incremental expense was primarily driven by an increase of $137 million in paid online traffic acquisition costs, including SEM and other paid online traffic acquisition spend, and other marketing costs, including brand spend, the substantial majority of which was incurred within our Viator segment and to a lesser extent, our Brand Tripadvisor segment, in order to capture consumer demand, including increased investment within these segments in order to grow market share, slightly offset by a decrease in SEM and other paid online traffic acquisition spend in TheFork segment.

Personnel and overhead costs increased $18 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to an increase in headcount and contingent staff to support business growth during the first half of 2023.

The impact of our cost reduction measures, as discussed above, did not materially impact our personnel and overhead costs during 2023.

Technology and Content

Technology and content expenses consist primarily of personnel and overhead expenses, including salaries and benefits, stock-based compensation expense, and bonuses for salaried employees and contractors engaged in the design, development, testing, content support, and maintenance of our platform.

Other costs include licensing, maintenance, computer supplies, telecom, content translation and localization, and consulting costs.

Marketing - Brand Tripadvisor

Marketing - Viator

Marketing - TheFork

Intersegment (intercompany) marketing expenses

Total Marketing

Marketing costs increased $24 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily driven by an increase in overall marketing costs in the Viator and TheFork segments of $53 million, in order to capture consumer demand, including increased investment within the Viator segment focused on growing market share, acquiring new customers, and driving brand awareness, partially offset by a decrease in overall marketing costs in the Brand Tripadvisor segment of $28 million.

Marketing costs increased $129 million during the year ended December 31, 2023 when compared to the same period in 2022.

This incremental expense was primarily driven by an increase of $147 million in overall marketing costs, the substantial majority of which was incurred within the Viator segment of $128 million, net of intersegment (intercompany) marketing expenses of $40 million, and to a lesser extent, the Brand Tripadvisor segment of $19 million, in order to capture consumer demand, including increased investment within these segments in order to grow market share, slightly offset by a decrease in overall marketing costs in TheFork segment of $17 million.

Personnel expenses consist primarily of salaries, payroll taxes, bonuses, employee health and other benefits, and stock-based compensation.

In addition, personnel expenses include costs associated with contingent staff, bonuses and commissions for sales, sales support, customer support and marketing employees.

Year ended December 31,

(in millions)

Personnel and overhead

Total technology and content

Technology and content costs increased $51 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to increased personnel and overhead costs resulting from additional headcount and contingent staff to support business growth, primarily in the Brand Tripadvisor and Viator segments.

Other costs increased by $6 million during the year ended December 31, 2023, when compared to the same period in 2022, primarily due to increased software licensing costs in our Brand Tripadvisor segment.

Personnel (exclusive of stock-based compensation)

Stock-based compensation

Total Personnel

Personnel costs increased $1 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily driven by costs to support business growth in the Viator segment, partially offset by a reduction in headcount related to our cost-reduction measures taken during 2023 in the Brand Tripadvisor and TheFork segments.

Stock-based compensation increased $24 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to a modification during the first quarter of 2020 related to the Company wide annual grant which reduced the original grant-date vesting period from four years to two years.

Personnel costs increased $59 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to additional headcount and contingent staff to support business growth, primarily in the Brand Tripadvisor and Viator segments.

The impact of our cost reduction measures in July 2023, did not materially impact our personnel costs during 2023.

Stock-based compensation increased $8 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to an increase in stock-based compensation granted to support business growth during 2023.

Technology expenses consist primarily of licensing, data center costs including cloud-based solutions, maintenance, computer supplies, telecom, and content translation and localization costs.

Year ended December 31,

(in millions)

Technology costs increased $11 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to increased licensing costs in the Viator segment, and to a lesser extent, increased data center costs in the Brand Tripadvisor segment.

Technology costs increased $17 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to increased licensing costs, and to a lesser extent, increased data center costs in both the Brand Tripadvisor and Viator segments.

General and Administrative

General and administrative expenses consist primarily of personnel and related overhead costs, including personnel engaged in leadership, finance, legal, and human resources, as well as stock-based compensation expense for those same personnel.

General and administrative costs also include professional service fees and other fees

including audit, legal, tax and accounting, and other operating costs including bad debt expense, non-income taxes, such as sales, use, digital services, and other non-income related taxes.

General and administrative expenses consist primarily of professional service fees and other fees including audit, legal, tax and accounting, and other operating costs including real estate and office expenses, and non-compensation related personnel expenses such as travel, relocation, recruiting, and training expenses.

Year ended December 31,

(in millions)

Personnel and overhead

Professional service fees and other

Total general and administrative

General and administrative costs increased $19 million during the year ended December 31, 2023 when compared to the same period in 2022.

Personnel and overhead costs did not materially change during the year ended December 31, 2023 when compared to the same period in 2022.

Professional service fees and other costs increased $18 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to non-income tax related government assistance benefits related to COVID-19 relief of $11 million received by the Company during 2022 in TheFork segment, which did not reoccur in 2023, incremental digital service tax costs of $9 million for the year ended December 31, 2023, as well as, and to a lesser extent, a non-recurring cost of $3 million related to previously capitalized transaction costs during 2023.

These increases were partially offset by an approximate $8 million loss incurred during the fourth quarter of 2022 as the result of a fraud scheme resulting in payments to an external party, as previously disclosed, which did not reoccur in 2023.

General and administrative

General and administrative costs increased $12 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to an estimated accrual for the potential settlement of a regulatory related matter of $10 million during 2024 in the Brand Tripadvisor segment.

General and administrative costs increased $5 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to non-income tax related government assistance benefits related to COVID-19 relief of $11 million received by the Company during 2022 in TheFork segment, which did not reoccur in 2023, as well as, and to a lesser extent, a non-recurring cost of $3 million related to transaction costs during 2023.

These increases were partially offset by an approximate $8 million loss incurred during the fourth quarter of 2022 as the result of a fraud scheme resulting in payments to an external party in the Brand Tripadvisor segment, as previously disclosed, which did not reoccur in 2023.

Depreciation and amortization

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Total depreciation and amortization

Depreciation and amortization decreased $10 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to the completion of amortization related to certain capitalized website development costs and intangible assets purchased in business acquisitions from previous years.

Depreciation and amortization decreased $2 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to the completion of amortization related to intangible assets purchased in business acquisitions from previous years.

Restructuring and other related reorganization costs

Restructuring and other related reorganization costs consist primarily of employee severance and related benefits.

Restructuring and other related reorganization costs consist primarily of employee severance and related benefits and other related reorganization costs.

Year ended December 31,

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The Company incurred pre-tax restructuring and other related reorganization costs of $21 million during the year ended December 31, 2024, as discussed above.

These costs consist primarily of employee severance and related benefits.

Refer to “Note 7:

Accrued Expenses and Other Current Liabilities ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more information regarding restructuring and other related reorganization costs.

Interest Expense

Interest expense primarily consists of interest incurred, commitment fees, and debt issuance cost amortization related to the Credit Facility, the 2025 Senior Notes, the 2026 Senior Notes, as well as imputed interest on finance leases.

Interest expense primarily consists of interest incurred, commitment fees, and debt issuance cost amortization related to the Credit Facility, the Term Loan B Facility, the 2025 Senior Notes, the 2026 Senior Notes, as well as imputed interest on finance leases.

Year ended December 31,

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Interest expense

Interest expense did not change materially during the year ended December 31, 2023 when compared to the same period in 2022, as our capital structure did not change significantly.

The significant majority of interest expense incurred during the years ended December 31, 2023, 2022, and 2021, was related to the 2025 Senior Notes.

Interest expense increased $2 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to the issuance of our Term Loan B Facility in July 2024, which increased our cost of capital.

The significant majority of interest expense incurred during the year ended December 31, 2024 was primarily related to the Term Loan B Facility and 2026 Senior Notes.

Refer to “Note 8:

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Interest income

Interest income increased $32 million during the year ended December 31, 2023 when compared to the same period in 2022, primarily due to an increase in the average amount of cash invested and increased interest rates received on bank and term deposits, as well as an increase in interest earned on money market funds during 2023.

Interest income increased $1 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to an increase in the average amount of cash invested.

Other Income (Expense), Net

Other income (expense), net generally consists of net foreign exchange gains and losses, forward contract gains and losses, earnings/(losses) from equity method investments, gain/(loss) and impairments on non-marketable investments, gain/(loss) on sale/disposal of businesses, and other non-operating income (expenses).

Year ended December 31,

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Other income (expense), net

Other expense, net primarily consists of the net result of foreign exchange gains and losses incurred as a result of foreign currency movements.

Other expense, net increased $3 million during the year ended December 31, 2024 when compared to the same period in 2023, primarily due to a loss on disposal of certain assets and aforementioned loss on extinguishment of debt of $2 million, partially offset by net foreign exchange gains incurred as a result of foreign currency movements.

Refer to “Note 16:

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Our effective tax rate differed from the U.S.

federal statutory rate of 21% during the year ended December 31, 2023, primarily as a result of the IRS audit settlement, as described below, during the first quarter of 2023.

federal statutory rate of 21% during the year ended December 31, 2024, primarily related to an IRS audit settlement reached during the first quarter of 2024.

We recorded a total income tax provision of $82 million for the year ended December 31, 2024.

The change in our income taxes and our effective tax rate during the year ended December 31, 2023, when compared to the same period in 2022, was primarily the result of an IRS audit settlement and related adjustment to our existing transfer pricing income tax reserves for subsequent tax years, totaling $55 million, which was recognized during the three months ended March 31, 2023.

The change in our income taxes and our effective tax rate during the year ended December 31, 2024, when compared to the same period in 2023, was primarily the result of an IRS audit settlement, which we recorded an income tax expense of $42 million, inclusive of interest, primarily during the first quarter of 2024, related to this settlement on our consolidated statement of operations.

In addition, we reviewed the impact of the acceptance of this settlement position against our existing transfer pricing income tax reserves for the subsequent open tax years during the first quarter of 2024, which resulted in an income tax benefit, inclusive of estimated interest, of $4 million.

During the year ended December 31, 2023, we recorded a net income tax expense of $55 million related to another IRS audit settlement and related adjustment to existing transfer pricing income tax reserves for subsequent tax years.

Refer to “Note 10:

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Net income decreased $5 million during the year ended December 31, 2024 when compared to the same period in 2023.

The decrease in net income was largely driven by increased direct selling and marketing costs in response to strong consumer travel demand and investment to grow market share in our experiences offerings, increased personnel and overhead costs to help support business growth and consumer demand, as well as an incremental income tax expense of $55 million recognized during the first quarter of 2023 as a result of an IRS audit settlement and related adjustment to our existing transfer pricing income tax reserves for subsequent tax years and to a lesser extent, restructuring and other related reorganization costs, primarily consisting of employee severance and related benefits, increased direct costs from credit card payment and other revenue-related transaction costs in direct correlation with the increase in experiences revenue during the year ended December 31, 2023, all of which are described in more detail above under “ Consolidated Expenses ”, largely offset by an increase in revenue, as described in more detail above under “ Revenue and Segment Information.

The decrease in net income was largely driven by a decrease in revenue and adjusted EBITDA in the Brand Tripadvisor segment and partially offset by an increase in revenue and adjusted EBITDA in the Viator and TheFork segments.

In addition, an increase in stock-based compensation expense and an estimated accrual for the potential settlement of a regulatory related matter of $10 million during the first quarter of 2024, contributed to the decrease in net income during the year ended December 31, 2024.

These cost increases were largely offset by increased revenue, as described in more detail above under “ Revenue and Segment Information ”, and a decrease in income tax expense of $33 million, as described in more detail above under “ (Provision) Benefit for Income Taxes ”.

All drivers discussed above are described in more detail above under “ Revenue and Segment Information ” and “ Consolidated Expenses.

Adjusted EBITDA

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A “non-GAAP financial measure” refers to a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in such company’s financial statements.

Adjusted EBITDA is also our segment profit measure and a key measure used by our management and board of directors to understand and evaluate the financial performance of our business and on which internal budgets and forecasts are based and approved.

Adjusted EBITDA is also our reported measure of segment profit and a key measure used by our CODM, management and Board of Directors to understand and evaluate the operating performance of our business as a whole and our individual operating segments, and on which internal budgets and forecasts are based and approved.

In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons and better enables management and investors to compare financial results between periods as these costs may vary independent of ongoing core business performance.

Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

We define Adjusted EBITDA as net income (loss) plus:

(1) provision (benefit) for income taxes;

(2) other income (expense), net;

(2) other expense (income), net;

(3) depreciation and amortization;

(4) stock-based compensation and other stock-settled obligations;

(5) goodwill, long-lived asset, and intangible asset impairments;

(6) legal reserves and settlements;

(4) stock-based compensation;

(5) goodwill, long-lived asset, and intangible assets impairments;

(6) legal reserves, settlements and other (including indirect tax reserves related to audit settlements and the impact of one-time changes resulting from enacted indirect tax legislation);

(7) restructuring and other related reorganization costs;

and (8) other non-recurring expenses and income.

(8) transaction related expenses;

and (9) non-recurring expenses and income unusual in nature or infrequently occurring.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results reported in accordance with GAAP.

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• Adjusted EBITDA does not reflect the interest expense, or cash requirements necessary to service interest or principal payments on our debt;

• Adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation or other stock-settled obligations;

• Adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA does not reflect certain income and expenses not directly tied to the ongoing core operations of our business, such as legal reserves and settlements, restructuring and other related reorganization costs;

• Adjusted EBITDA does not reflect certain income and expenses not directly tied to the ongoing core operations of our business, such as legal reserves, settlements and other, restructuring and other related reorganization costs, and transaction related expenses;

• Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

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Restructuring and other related reorganization costs

Legal reserves and settlements

Legal reserves, settlements and other (1)

Transaction related expenses (2)

Other non-recurring expenses (income) (3)

2 unchanged sentences

Adjusted EBITDA

(1) The Company expensed $3 million of previously capitalized transaction costs during 2023 to general and administrative expenses on our consolidated statement of operations.

The Company considers such costs to be non-recurring in nature.

(2) The Company incurred a loss of approximately $8 million during the fourth quarter of 2022, as the result of a targeted payment fraud scheme by an external party, as previously disclosed.

(1) This amount primarily includes an estimated accrual for the potential settlement of a regulatory related matter of $10 million, expensed during 2024.

Refer to "Note 11:

Commitments and Contingencies " for further information.

This cost is reflected in general and administrative expenses on our consolidated statement of operations.

In addition, this amount includes a one-time charge of $3 million during the year ended December 31, 2024, resulting from enacted tax legislation in Canada during June 2024 related to digital service taxes, which requires retrospective application back to January 1, 2022.

This amount represents the one-time retrospective liability for the periods prior to April 1, 2024, while all prospective periods are and will be included within adjusted EBITDA, respectively.

This cost is reflected in cost of sales on our consolidated statement of operations.

(2) The Company expensed certain transaction related costs of $3 million during both the years ended December 31, 2024 and 2023, to general and administrative expenses on our consolidated statements of operations.

(3) The Company incurred a loss of approximately $8 million during the fourth quarter of 2022, as the result of external fraud.

This loss was recorded to general and administrative expenses on the consolidated statement of operations during 2022.

The Company considers such costs to be non-recurring in nature.

To the extent the Company recovers any losses in future periods related to this incident, the Company plans to reduce Adjusted EBITDA by the recovery amount in that same period.

Liquidity and Capital Resources

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Our liquidity needs can also be met through drawdowns under the Credit Facility.

As of December 31, 2023 and 2022, we had approximately $1.1 billion and $1.0 billion, respectively, of cash and cash equivalents, and $496 million of available borrowing capacity under our Credit Facility as of December 31, 2023.

As of both December 31, 2024 and 2023, we had approximately $1.1 billion of cash and cash equivalents, and $497 million of available borrowing capacity under our Credit Facility as of December 31, 2024.

As of December 31, 2024, approximately $227 million of our cash and cash equivalents were held by our international subsidiaries outside of the U.S., of which approximately 44% was held in the U.K.

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Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

As of December 31, 2023, we are party to a credit agreement, which, among other things, provides for a $500 million revolving credit facility (the “Credit Facility”) with a maturity date of June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $200 million or more, then the maturity date will be such business day).

As of December 31, 2024, we are party to a credit agreement (“Amended Credit Agreement”), which, among other things, provides for a $500 million revolving credit facility (“Credit Facility”) with a maturity date of June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $200 million or more, then the maturity date will be such business day).

As of December 31, 2024 and 2023, we had no outstanding borrowings under the Credit Facility.

The Company may borrow from the Credit Facility in U.S dollars, Euros and Sterling.

The Company may borrow from the Credit Facility in U.S.

dollars, Euros and Sterling.

For information regarding interest rates on potential borrowings under the Credit Facility refer to “Note 8:

Debt ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

We are required to pay a quarterly commitment fee, at an applicable rate ranging from 0.25% to 0.40%, on the daily unused portion of the Credit Facility for each fiscal quarter and in connection with the issuance of letters of credit.

We are required to pay a quarterly commitment fee, at an applicable rate ranging from 0.25% to 0.40%, on the

daily unused portion of the Credit Facility for each fiscal quarter and in connection with the issuance of letters of credit.

As of December 31, 2024, our unused revolver capacity was subject to a commitment fee of 0.25%, given the Company’s total net leverage ratio.

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While there can be no assurance that we will be able to meet the total net leverage ratio covenant in the future, based on our current projections, we do not believe there is a material risk that we will not remain in compliance throughout the next twelve months.

As of December 31, 2023, the Company had an aggregate outstanding principal amount of $845 million in long-term debt, as a result of the 2025 Senior Notes and 2026 Senior Notes, as discussed below.

In July 2020, the Company completed the sale of $500 million in 2025 Senior Notes.

The 2025 Senior Notes provide, among other things, that interest, at an interest rate of 7.0% per annum, is payable on January 15 and July 15 of each year, until their maturity on July 15, 2025.

The 2025 Senior Notes are senior unsecured obligations of the Company, although unconditionally guaranteed on a joint and several basis by certain of the Company’s domestic subsidiaries.

As of December 31, 2024, the Company had an aggregate outstanding principal amount of $5 million and $831 million in short-term and long-term debt, respectively, on our consolidated balance sheet pertaining to the 2026 Senior Notes and Term Loan B Facility, both of which are discussed below.

In March 2021, the Company completed the sale of $345 million of the 2026 Senior Notes.

The 2026 Senior Notes provide, among other things, that interest, at an interest rate of 0.25% per annum, is payable on April 1 and October 1 of each year, until their maturity on April 1, 2026.

The 2026 Senior Notes provide, among other things, that interest at a rate of 0.25% per annum, is payable on April 1 and October 1 of each year, until their maturity on April 1, 2026.

The 2026 Senior Notes are senior unsecured obligations of the Company, although unconditionally guaranteed on a joint and several basis, by certain of the Company’s domestic subsidiaries.

The 2025 Senior Notes and 2026 Senior Notes are not registered securities and there are currently no plans to register these notes as securities in the future.

We may from time to time repurchase the 2025 Senior Notes or 2026 Senior Notes through tender offers, open market purchases, privately negotiated transactions or otherwise.

On July 15, 2024, the Company used these funds to fully redeem its outstanding $500 million, 2025 Senior Notes.

Principal payments of $1 million were made during the year ended December 31, 2024.

The 2026 Senior Notes are not registered securities and there are currently no plans to register these notes as securities in the future.

We may from time to time repurchase the 2026 Senior Notes and Term Loan B Facility through tender offers, open market purchases, privately negotiated transactions or otherwise.

Such repurchases, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors.

For further information on the Credit Facility, 2025 Senior Notes, and 2026 Senior Notes, refer to “Note 8:

For further information on the Amended Credit Agreement, the Credit Facility, the Term Loan B Facility, 2025 Senior Notes and 2026 Senior Notes, refer to “Note 8:

Debt ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

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This share repurchase program, which has a term of two years, does not obligate the Company to acquire any particular number of shares and may be modified, suspended or discontinued at any time.

During the three months ended December 31, 2023, we repurchased 1,324,524 shares of our outstanding common stock at an average price of $18.85 per share, exclusive of fees, commissions, and excise taxes, or $25 million, under our share repurchase program.

As of December 31, 2023, we had $225 million remaining available to repurchase shares of our common stock under this share repurchase program.

During the year ended December 31, 2023, we repurchased 1,324,524 shares of our outstanding common stock at an average price of $18.85 per share, exclusive of fees, commissions, and excise taxes, or $25 million, under our share repurchase program.

During the year ended December 31, 2024, the Company repurchased 1,366,385 shares of its common stock at an average price of $18.28 per share, exclusive of fees, commissions, and excise taxes, or $25 million in the aggregate.

As of December 31, 2024, there was $200 million remaining available to repurchase shares of its common stock under this share repurchase program.

Our business typically experiences seasonal fluctuations that affect the timing of our annual cash flows during the year related to working capital.

As a result of our experience bookings, we generally receive cash from travelers at the time of booking or prior to the occurrence of an experience, and we record these amounts, net of commissions, on our consolidated balance sheet as deferred merchant payables.

As a result of our experience bookings, we generally receive cash from travelers

at the time of booking or prior to the occurrence of an experience, and we record these amounts, net of commissions, on our consolidated balance sheet as deferred merchant payables.

We pay the experience operator, or the supplier, after the travelers’ use.

Therefore, we generally receive cash from the traveler prior to paying the experience operator and this operating cycle represents a source or use of cash to us.

During the first half of the year, experiences bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.

During the first half of the year, experiences bookings typically exceed completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.

Other factors may also impact typical seasonal fluctuations, such as significant shifts in our business mix, adverse economic conditions, public health-related events, as well as other factors that could result in future seasonal patterns that are different from historical trends.

In addition, new or different payment options offered to our customers could impact the timing of cash flows.

For example, our “Reserve Now, Pay Later” payment option, which allows our travelers the option to reserve certain experiences and defer payment until a date no later than two days before the experience date.

In addition, new or different payment options offered to our customers could impact the timing of cash flows, such as our “Reserve Now, Pay Later” payment option, which allows travelers the option to reserve certain experiences and defer payment until a date no later than two days before the experience date.

Usage of this payment option may continue to increase, though it is still not used in a majority of bookings to date, and affect the timing of our future cash flows and working capital.

As discussed in “Note 10:

Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K, we received a final notice regarding a MAP settlement with the IRS for the 2009 through 2011 tax years in January 2023, which the Company subsequently accepted in February 2023.

Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K, we received a final notice regarding a MAP resolution agreement for the 2014 through 2016 tax years in January 2024, which we subsequently accepted in February 2024.

In connection with this IRS audit settlement:

and (iii) during the fourth quarter of 2024, we received a competent authority refund of $42 million, inclusive of net interest income, from a foreign jurisdiction.

This audit settlement resulted in total net operating cash outflow during 2024 of $105 million, which includes federal tax benefits from these payments of $20 million.

Additionally, as discussed in “Note 10:

Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K, we received a final notice regarding a MAP settlement for the 2009 through 2011 tax years in January 2023, which the Company subsequently accepted in February 2023.

During the three months ended June 30, 2023, we made a U.S.

federal tax payment of $113 million, inclusive of interest, to Expedia related to this IRS audit settlement, pursuant to the Tax Sharing Agreement with Expedia.

During the three months ended September 30, 2023, we received a competent authority refund of $49 million, inclusive of interest income, related to the IRS audit settlement.

We anticipate the federal tax benefits, net of remaining state tax payments due, associated with this IRS audit settlement will be substantially settled during 2024, resulting in an estimated net cash inflow of $5 million to $10 million.

Additionally, during August 2020 we received a NOPA issued by the IRS for the 2014, 2015, and 2016 tax years.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries.

In January 2024, we received notification of a MAP resolution agreement for the 2014 through 2016 tax years, which we accepted in February 2024.

We anticipate this MAP resolution will result in an estimated net operating cash outflow of $80 million to $130 million, net of anticipated competent authority relief and inclusive of related interest expense, during 2024, and an increase to our worldwide income tax expense in an estimated range of $30 million to $60 million in the first quarter of 2024.

These estimated ranges take into consideration competent authority relief, existing income tax reserves, transition tax regulations and estimated interest expense.

This MAP resolution supersedes the NOPA previously received for 2014 through 2016 from the IRS, described above.

We will review the impact of this resolution to our transfer pricing income tax reserves for the subsequent open tax years during the first quarter of 2024.

Based on this new information received subsequent to year end, adjustments for

open tax years subsequent to 2016 may also occur, which could be material and negatively impact our future operating cash flows.

In addition, we received an issue closure notice from HM Revenue & Customs (“HMRC”) relating to adjustments for the 2012 through 2016 tax years in January 2021.

During the three months ended September 30, 2023, we received a competent authority refund of $49 million, inclusive of interest income, related to this IRS audit settlement.

In addition, in January 2021, we received an issue closure notice from HM Revenue & Customs (“HMRC”) in the U.K.

relating to adjustments for the 2012 through 2016 tax years.

These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to income tax expense in an estimated range of $25 million to $35 million, exclusive of interest expense, at the close of the audit if HMRC prevails.

Although the ultimate timing for resolution of these matters is uncertain, any future payments required would negatively impact our operating cash flows.

The CARES Act, enacted in March 2020, made tax law changes to provide financial relief to companies as a result of the impact to businesses related to COVID-19.

Key income tax provisions of the CARES Act include changes in NOL carryback and carryforward rules, increase of the net interest expense deduction limit, and immediate write-off of qualified improvement property.

The CARES Act allowed the Company to carryback our U.S.

federal NOLs incurred in 2020, generating an expected U.S.

federal tax benefit of $76 million, of which $64 million was refunded during the year ended December 31, 2022 ($15 million of this refund is recorded in other long-term liabilities on our consolidated balance sheet as of December 31, 2023, reflecting future transition tax payments to be made by the Company related to the 2017 Tax Act).

The remaining refund of $12 million is expected to be received during the year ending December 31, 2024.

We believe that our available cash and cash equivalents will be sufficient to fund our foreseeable working capital requirements, capital expenditures, existing business growth initiatives, debt and interest obligations, lease commitments, and other financial commitments through at least the next twelve months.

We are also currently subject to audit by HMRC in tax years 2017 through 2022.

If HMRC were to seek adjustments of a similar nature through a closure notice for transactions in these years, we could be subject to significant additional tax liabilities.

Although the ultimate timing for resolution of this matter is uncertain, any future payments required would negatively impact our operating cash flows.

On December 18, 2024, as noted above, the Company and LTRIP entered into the Merger Agreement.

This transaction is expected to close in the second quarter of 2025.

The expected aggregate transaction value to be paid by the Company is approximately $435 million (which includes approximately $392 million of cash consideration and 3,037,959 validly issued, fully paid and non-assessable shares of the Company's common stock based on 10-day VWAP of $13.98 at December 17, 2024).

Refer to “Note 1:

Organization and Business Description ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.

We believe that our available cash and cash equivalents will be sufficient to fund our foreseeable working capital requirements, capital expenditures, existing business growth initiatives, debt and interest obligations, lease commitments, obligations under the Merger Agreement, and other financial commitments through at least the next twelve months.

Our future capital requirements may also include capital needs for acquisitions and/or other expenditures in support of our business strategy, which may potentially reduce our cash balance and/or require us to borrow under the Credit Facility or to seek other financing alternatives.

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Financing activities

During the year ended December 31, 2023, our primary use of cash was used in operations, and from financing activities (including repurchases of our outstanding common stock at an aggregate cost of $100 million under our share repurchase programs at the time and payment of withholding taxes on net share settlements of our equity awards of $17 million) and investing activities (including capital expenditures of $63 million incurred during the year ended December 31, 2023).

During the year ended December 31, 2024, our primary source of cash was from operations, while our primary use of cash was from financing activities (including repurchases of our outstanding common stock at an aggregate cost of $25 million under our existing share repurchase program, payment of withholding taxes on net share settlements of our equity awards of $21 million, and financing costs related to the issuance of our Term Loan B Facility of $7 million) and investing activities (including capital expenditures of $74 million incurred during the year ended December 31, 2024).

This use of cash was funded with cash and cash equivalents and operating cash flows during the period.

Net cash provided by operating activities for the year ended December 31, 2023, decreased by $165 million when compared to the same period in 2022, primarily due to a decrease in working capital of $149 million, as well as, and to a lesser extent, a decrease in net income of $10 million.

The decrease in working capital was largely driven by a U.S.

federal tax payment of $113 million during the second quarter of 2023 related to the IRS audit settlement, discussed above, a $64 million U.S.

federal tax refund related to the CARES Act received in 2022, which did not reoccur in 2023, and increased cash outflows from accounts payable due to timing of vendor payments.

These changes were partially offset by the timing of and improvement in collection from customers, resulting in increased operating cash flows from accounts receivable during the period, and a competent authority refund received of $49 million during the third quarter of 2023 related to the IRS audit settlement, discussed above.

Net cash used in investing activities for the year ended December 31, 2023 increased by $11 million when compared to the same period in 2022, largely due to an increase in capital expenditures across the business.

Net cash used in financing activities for the year ended December 31, 2023 increased by $100 million when compared to the same period in 2022, primarily due to the repurchase of shares of our common stock during 2023.

Net cash provided by operating activities for the year ended December 31, 2024, decreased by $91 million when compared to the same period in 2023, primarily due to a decrease in working capital of $121 million, and to a lesser extent, a decrease in net income of $5 million, partially offset by an increase in non-cash items of $35 million, primarily due to an increase in stock-based compensation expense.

The decrease in working capital was partially driven by an increase in income tax payments of $30 million, net of refunds, largely impacted by the IRS audit settlements, discussed above, combined with a decrease of $33 million in our income tax provision during 2024, when compared to the same period in 2023.

Also contributing to the decrease in working capital was a decrease in deferred merchant payables, reflecting the timing of when cash is received from travelers and then remitted to experiences operators.

In addition, changes in working capital related to accounts receivable and accounts payable were primarily due to the timing of customer payments and vendor payments, respectively, which contributed to the fluctuation in working capital.

Net cash used in investing activities for the year ended December 31, 2024 increased by $10 million when compared to the same period in 2023, due to an increase in capital expenditures across the business.

Net cash used in financing activities for the year ended December 31, 2024 decreased by $64 million when compared to the same period in 2023, primarily due to a decrease in net cash used to purchase shares of our common stock under share repurchase programs of $75 million, partially offset by financing costs related to the issuance of our Term Loan B Facility of $7 million during 2024.

The following table summarizes our current and long-term material cash requirements, both accrued and off-balance sheet, as of December 31, 2024:

(in millions)

2025 Senior Notes (1)

Expected interest payments on 2025 Senior Notes (2)

Term Loan B Facility (1)

Expected interest payments on Term Loan B Facility (2)

2026 Senior Notes (3)

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Total (9)(10)(11)

(1) Represents outstanding principal on our 2025 Senior Notes due July 2025 and assumes that our existing debt is repaid at maturity.

(2) Expected interest payments on our 2025 Senior Notes are based on a fixed interest rate of 7.0%, as of December 31, 2023 and assumes that our existing debt is repaid at maturity.

(3) Represents outstanding principal on our 2026 Senior Notes due April 2026 and assumes that our existing debt is repaid at maturity.

(4) Expected interest payments on our 2026 Senior Notes are based on a fixed interest rate of 0.25%, as of December 31, 2023 and assumes that our existing debt is repaid at maturity.

(1) Represents outstanding principal on our Term Loan B Facility due July 2031 and assumes that existing debt is repaid at maturity.

(2) Expected interest payments on our Term Loan B Facility are based on the effective interest rate as of December 31, 2024, however, this effective interest rate is variable and could change significantly in the future.

Amount assumes that our existing debt is repaid at maturity.

(3) Represents outstanding principal on our 2026 Senior Notes due April 2026 and assumes that existing debt is repaid at maturity.

(4) Expected interest payments on our 2026 Senior Notes are based on a fixed interest rate of 0.25% as of December 31, 2024, and assumes that existing debt is repaid at maturity.

(5) Estimated future lease payments for our corporate headquarters in Needham, Massachusetts.

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however, these variables could change significantly in the future.

(8) Estimated purchase obligations that are fixed and determinable, primarily related to telecommunication and licensing contracts, with various expiration dates through approximately June 2029.

(8) Estimated purchase obligations that are fixed and determinable, primarily related to telecommunication and licensing contracts, with various expiration dates through June 2029.

These contracts have non-cancelable terms or are cancelable only upon payment of significant penalty.

Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

(9) Excluded from the table was $153 million of unrecognized tax benefits, including interest, which is included in other long-term liabilities on our consolidated balance sheet as of December 31, 2023, for which we cannot make a reasonably reliable estimate of the amount and period of payment.

(10) Excluded from the table was $4 million of undrawn standby letters of credit, primarily as security deposits for certain property leases as of December 31, 2023.

(9) Excluded from the table is $78 million of unrecognized tax benefits, including interest, which is included in other long-term liabilities on our consolidated balance sheet as of December 31, 2024, for which we cannot make a reasonably reliable estimate of the amount and period of payment.

(10) Excluded from the table is $3 million of undrawn standby letters of credit, primarily as security deposits for certain property leases as of December 31, 2024.

(11) Excluded from the table is the TRIP Loan Facility of approximately $330 million, related to the Merger with LTRIP anticipated to be completed during the second quarter of 2025.

Refer to “Note 1:

Organization and Business Description ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information on the Merger.

As of December 31, 2024, other than the items discussed above, we did not have any off-balance sheet arrangements, that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

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We account for this lease as a finance lease as of December 31, 2024.

In addition to our corporate headquarters lease, we have contractual obligations in the form of operating leases for office space, in which we lease an aggregate of approximately 340,000 square feet, at nearly 30 other locations across North America, Europe and Asia Pacific, in cities such as New York, London, Sydney, Barcelona and Paris, primarily used for sales offices, subsidiary headquarters, and international management teams, pursuant to leases with various expiration dates, with the latest expiring in October 2034.

Paris, primarily used for sales offices, subsidiary headquarters, and international management teams, pursuant to leases with various expiration dates, with the latest expiring in March 2034.

Contingencies

In the ordinary course of business, we are party to legal, regulatory and administrative matters, including threats thereof, arising out of or in connection with our operations.

These matters may involve claims involving patent and other intellectual property rights (including privacy, alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition, consumer matters and data privacy), defamation and reputational claims.

Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure.

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The results of an audit could have a material effect on our financial position, results of operations, or cash flows in the period for which that determination is made.

We are currently under examination by the IRS for the 2014 through 2016 and 2018 tax years, and have various ongoing audits for foreign and state income tax returns.

These audits include questioning of the timing and the amount of income and deductions and the allocation of income among various tax jurisdictions.

These examinations may lead to proposed or ordinary course adjustments to our taxes.

We are no longer subject to tax examinations by tax authorities for years prior to 2014.

As of December 31, 2023, no material assessments have resulted, except as noted below regarding our 2014 through 2016 standalone IRS audit, and our 2012 through 2016 HMRC audit.

During August 2020, we received a NOPA from the IRS for the 2014, 2015, and 2016 tax years.

These proposed adjustments pertain to certain transfer pricing arrangements with our foreign subsidiaries.

We disagree with the proposed adjustments, and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

In addition to the risk of additional tax for the years discussed above, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we may be subject to significant additional tax liabilities.

We have previously requested competent authority assistance under MAP for the tax years of 2014 through 2016.

We have reviewed our transfer pricing reserves as of December 31, 2023, based on the facts and circumstances that existed as of the reporting date, and consider them to be the Company’s best estimate as of December 31, 2023.

In January 2024, we received notification regarding a MAP resolution agreement for the 2014 through 2016 tax years, which we accepted in February 2024.

We anticipate this will result in an increase to our worldwide income tax expense in an estimated range of $30 million to $60 million in the first quarter of 2024.

This estimated range takes into consideration competent authority relief, existing income tax reserves, transition tax regulations and estimated interest expense.

This MAP resolution supersedes the NOPA for 2014 through 2016 previously received from the IRS, described above.

We will review the impact of this resolution to our transfer pricing income tax reserves for the subsequent open tax years during the first quarter of 2024.

Based on this

new information received subsequent to year end, adjustments for the open tax years subsequent to 2016 may also occur, which could be material.

In January 2021, we received an issue closure notice from HMRC relating to adjustments for the 2012 through 2016 tax years.

We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

Our policy is to review and update tax reserves as facts and circumstances change.

Over the last several years, the Organization for Economic Cooperation and Development (“OECD”) has been developing its “two pillar” project to address the tax challenges arising from digitalization.

The OECD project, if broadly implemented by participating countries, will result in significant changes to the international taxation system under which our current tax obligations are determined.

Pillar Two of the project calls for a minimum tax rate on corporations of 15% and has begun to be implemented by a significant number of countries starting in 2024.

The OECD and implementing countries are expected to continue to offer further guidance to the rules, however, the impact of Pillar Two is not expected to be material at this time.

The Company will continue to monitor developments to determine any potential impact of Pillar Two in the countries in which we operate.

Pillar One, which would reallocate profits from the largest and most profitable businesses to countries where the customers of those businesses are located, remains under discussion at the OECD, and its implementation remains uncertain.

If implemented, Pillar One would potentially result in the removal of unilateral digital services tax initiatives, such as those enacted in France, Italy, Spain, and the U.K.

In July 2023, more than 138 countries and jurisdictions agreed to refrain from imposing newly enacted digital service tax initiatives or similar measures before December 31, 2024, provided the Pillar One negotiations have made sufficient progress by the end of 2023.

In December 2023, the OECD Inclusive Framework reaffirmed their commitment to achieve a consensus-based solution and to complete the multilateral agreement by June 2024, thereby extending the standstill on new digital service tax initiatives.

Furthermore, certain U.S.

states, such as Maryland, have deployed comparable digital services tax initiatives.

We will continue to monitor these developments to determine the financial impact to the Company.

During the years ended December 31, 2023, 2022 and 2021, we recorded $18 million, $9 million and $1 million, respectively, of digital service tax to general and administrative expense on our consolidated statement of operations.

Refer to “Note 10:

Income Taxes ” and “Note 11:

Commitments and Contingencies ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on other potential contingencies, including ongoing audits by the IRS and various other domestic and foreign tax authorities, and other tax and legal matters.

Over recent years, the Organization for Economic Cooperation and Development (OECD) through its “Inclusive Framework” has been working on a “two-pillar” global tax consensus project that, if implemented, would result in certain changes to the current global tax regulatory framework.

The OECD’s “Pillar One” initiative proposes to reallocate certain profits from the largest and most profitable multinational businesses to countries where the customers of those businesses are located, and the “Pillar Two” initiative proposes a global minimum income tax rate on corporations of 15%.

In response to these proposals, certain jurisdictions have enacted legislation to implement a global minimum income tax of 15%, which currently has no impact on our financial results, as well as legislation to impose new forms of gross receipts taxes, such as digital services taxes imposed on digital advertising and online marketplace platforms/services.

If consensus is reached on Pillar One, unilateral digital services taxes should be repealed, however until such time we continue to be subject to these taxes.

We are currently subject to unilateral digital services taxes, and during the years ended December 31, 2024, 2023 and 2022, we recorded $18 million, $18 million and $9 million, respectively, of digital service taxes to cost of sales on our consolidated statements of operations.

While the future of the global tax regulatory landscape remains uncertain, we continue to monitor the OECD’s and members ongoing discussions to determine the current and potential impact on our consolidated financial statements.

Due to the one-time transition tax on the deemed repatriation of undistributed foreign subsidiary earnings and profits in 2017, as a result of the 2017 Tax Act, the majority of previously unremitted earnings have been subjected to U.S.

federal income tax.

To the extent future distributions from these subsidiaries will be taxable, a deferred income tax liability has been accrued on our consolidated balance sheet, which was not material as of December 31, 2023.

To the extent future distributions from these subsidiaries will be taxable, a deferred

income tax liability has been accrued on our consolidated balance sheet, which was not material as of December 31, 2024.

As of December 31, 2024, $582 million of our cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested.

Refer to “Note 10:

Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on potential tax contingencies, including current audits by the IRS and various other domestic and foreign tax authorities, and other income tax and non-income tax matters.

Qua ntitative and Qualitative Disclosures About Market Risk

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The risk of loss can be assessed from the perspective of adverse changes in our future earnings, cash flows, fair values of our assets, and financial condition.

Our exposure to market risk, at any point in time, may include risks related to any borrowings under the Credit Facility, or outstanding debt related to the 2025 Senior Notes and 2026 Senior Notes, derivative instruments, capped calls, cash and cash equivalents, short-term and long-term marketable securities, if any, accounts receivable, intercompany receivables/payables, accounts payable, deferred merchant

payables and other balances and transactions denominated in foreign currencies.

Our exposure to market risk, at any point in time, may include risks related to any borrowings under the Credit Facility, or outstanding debt related to the 2026 Senior Notes and Term Loan B Facility, derivative instruments, capped calls, cash and cash equivalents, short-term and long-term marketable securities, if any, accounts receivable, intercompany receivables/payables, accounts payable, deferred merchant payables and other balances and transactions denominated in foreign currencies.

We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage and attempt to mitigate our exposure to such risks.

Interest Rates

Our primary exposure to changes in interest rates relates primarily to our cash, cash equivalents, investment portfolio at any point in time, 2025 and 2026 Senior Notes, and borrowings, if any, under our existing Credit Facility.

Our primary exposure to changes in interest rates relates primarily to our cash, cash equivalents, investment portfolio at any point in time, 2026 Senior Notes and Term Loan B Facility, and borrowings, if any, under our existing Credit Facility.

Changes in interest rates affect the amount of interest earned on our cash, cash equivalents, and marketable securities, if any, and the fair value of those securities.

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As of December 31, 2024 and 2023, respectively, we had no outstanding marketable securities in our investment portfolio, and no outstanding borrowings under our Credit Facility.

In July 2020, we issued 2025 Senior Notes with a principal balance of $500 million at a fixed rate of 7.0% and in March 2021, we issued 2026 Senior Notes with a principal balance of $345 million at a fixed rate of 0.25%.

As of December 31, 2023, the fair value of our 2025 Senior Notes and 2026 Senior Notes were approximately $502 million and $304 million, respectively, based on recently reported market transactions and prices for identical or similar financial instruments obtained from a third-party pricing source.

Since our 2025 Senior Notes and 2026 Senior Notes bear interest at a fixed rate, we are more sensitive to the capital market conditions of our shares than changes in interest rates.

The fair value of the 2025 Senior Notes and 2026 Senior Notes will likely change based on the capital market conditions.

In March 2021, we issued 2026 Senior Notes with a principal balance of $345 million at a fixed rate of 0.25% and in July 2024, we entered into the Term Loan B Facility with a principal balance of $500 million at a variable rate equal to SOFR plus 2.75%.

Based on our Term Loan B Facility current outstanding balance as of December 31, 2024, a 25 basis-point change in our interest rates on our Term Loan B Facility would result in an increase or decrease to interest expense of approximately $1 million per annum.

As of December 31, 2024, we estimated the fair value of our 2026 Senior Notes and Term Loan B Facility were approximately $323 million and $504 million, respectively, based on recently reported market transactions and prices for identical or similar financial instruments obtained from a third-party pricing source.

Since our 2026 Senior Notes bear interest at a fixed rate, we are more sensitive to the capital market conditions of our shares than changes in interest rates.

The fair value of the 2026 Senior Notes and Term Loan B Facility will likely change based on the capital market conditions.

Refer to “Note 3:

Financial Instruments and Fair Value Measurements ” and “Note 8:

Debt ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information on our cash and cash equivalents, investments and other financial instruments, 2026 Senior Notes, 2025 Senior Notes and our Credit Facility.

We currently do not hedge our interest rate risk;

however, we are continually evaluating the interest rate market, and if we become increasingly exposed to potentially volatile movements in interest rates, and if these movements are material, this could cause us to adjust our financing strategy.

however, we are continually evaluating the interest rate market, and if we become increasingly exposed to potentially volatile movements in interest rates, and if these

movements are material, this could cause us to adjust our financing strategy.

We did not experience material changes in interest rate exposures or any material financial impact from adverse changes in interest rates for the years ended December 31, 2024, 2023 or 2022.

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Similarly, our net assets, revenue, operating expenses, operating income and net income will decrease upon consolidation if the U.S.

dollar strengthens

against the functional currency.

dollar strengthens against the functional currency.

The effect of foreign currency exchange on our business historically has varied from quarter to quarter and may continue to do so, potentially materially.

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Refer to “Note 3:

Financial Instruments and Fair Value Measurements ” in the notes to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further detail on our derivative instruments.

Financial Instruments and Fair Value

Measurements ” in the notes to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further detail on our derivative instruments.

Our exposure to potentially volatile movements in foreign currency exchange rates will increase as we increase our operations in international markets.

Foreign currency exchange rate movement is linked to variability in the macroeconomic environment such as inflation and interest rates, governmental actions, and geopolitical events such as regional conflicts.

We regularly monitor the macroeconomic environment, which has seen some volatility from the conflict between Russia and Ukraine, sanctions and increased cyberattacks, and, more recently, the conflict in the Middle East.

The economic impact of foreign currency exchange rate movement is linked to variability in the macroeconomic environment such as inflation and interest rates, governmental actions, and geopolitical events such as regional conflicts.

We regularly monitor the macroeconomic environment, which has seen some volatility as a result of geopolitical tensions resulting from Russia’s invasion of Ukraine, the conflict in the Middle East, as well as increased cyberattacks, other military conflicts and sanctions.

Developments in the macroeconomic environment could cause us to adjust our foreign currency risk strategies.

Continued uncertainty regarding our international operations and U.K.

Continued uncertainty regarding our international operations, including U.K.

relations, may result in future currency exchange rate volatility which may impact our business and results of operations.

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Tripadvisor, Inc.:

Opinion on the Consolidated Financial Statements

Opinions on the Consolidated Financial Statemen ts and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Tripadvisor, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 16, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission .

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of unrecognized tax benefits related to transfer pricing

As discussed in Notes 2 and 10 to the consolidated financial statements, during the year ended December 31, 2023, the Company recorded additional income tax expense and transfer pricing income tax reserves, inclusive of estimated interest, of $24 million for open tax periods based on a review of the impact of a settlement for certain transfer pricing arrangements between its U.S.

subsidiaries and foreign subsidiaries

for the 2009 through 2011 tax years.

The Company records a liability to address uncertain tax positions taken in previously filed tax returns or that the Company expects to take in a future tax return.

The determination to record a liability is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that the tax position, based on technical merits, will be sustained upon examination.

We identified the evaluation of certain inputs to the estimate of unrecognized tax benefits related to transfer pricing as a critical audit matter.

Complex auditor judgment, including specialized skills and knowledge, was required in assessing estimated unrecognized tax benefits related to transfer pricing based on interpretation of tax laws and regulations and settlements.

The following are the primary procedures we performed to address this critical audit matter:

• We evaluated the design and tested the operating effectiveness of an internal control over the Company's process for estimating unrecognized tax benefits related to transfer pricing, including a control related to certain inputs to the estimate.

• We involved tax professionals with specialized skills and knowledge, who assisted in analyzing certain inputs to the Company’s determination of unrecognized tax benefits related to transfer pricing based on interpretation of tax laws and regulations and settlements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over revenue

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Each of these categories of revenue has multiple revenue streams and the Company's processes and information technology (IT) systems differ between each revenue stream.

We identified the evaluation of sufficiency of audit evidence over revenue as a critical audit matter.

This matter required especially subjective auditor judgment due to the number of revenue streams and the related IT applications utilized throughout the revenue recognition processes.

We identified the evaluation of sufficiency of audit evidence over Brand Tripadvisor and Viator revenue as a critical audit matter.

Subjective auditor judgment was required due to the number of revenue streams and the related IT applications utilized throughout the revenue recognition processes.

Subjective auditor judgment was required to evaluate that relevant revenue data was captured and aggregated throughout these various IT applications.

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The following are the primary procedures we performed to address this critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue.

For each revenue stream where procedures were performed:

• We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

We applied auditor judgment to determine the nature and extent of procedures to be performed over Brand Tripadvisor and Viator revenue.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue recognition process for Brand Tripadvisor and Viator revenue.

This included controls related to accurate recording of amounts.

For certain revenue streams, we assessed the recorded revenue by selecting a sample of transactions and compared the amounts recognized for consistency with underlying documentation, including evidence of contracts with customers.

• For certain revenue streams, we assessed the recorded revenue by comparing the total cash received during the year to the revenue recognized, including evaluating the relevance and reliability of the inputs to the assessment.

We involved IT professionals with specialized skills and knowledge, who assisted in:

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• testing the transfer of relevant revenue data between certain systems used in the revenue recognition processes.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We have served as the Company’s auditor since 2014.

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Costs and expenses:

Cost of revenue (1) (exclusive of depreciation and amortization as shown separately below)

Selling and marketing (1)

Technology and content (1)

Cost of sales (exclusive of depreciation and amortization as shown separately below)

Personnel (including stock-based compensation of $ 120 , $ 96 , and $ 88 - Note 13)

General and administrative

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Earnings (loss) per share attributable to common stockholders (Note 15):

Numerator used to compute net income (loss) per share attributable to common stockholders (Note 15):

Numerator used to compute earnings (loss) per share attributable to common stockholders (Note 15):

Weighted average common shares outstanding (Note 15):

(1) Includes stock-based compensation expense as follows (Note 13):

Cost of revenue

Selling and marketing

Technology and content

General and administrative

The accompanying notes are an integral part of these consolidated financial statements.

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(1) Deferred income tax liabilities related to these amounts are not material.

Refer to “Note 10:

Income Taxes ” for further information.

The accompanying notes are an integral part of these consolidated financial statements.

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Deferred income taxes, net (Note 10)

Other long-term assets, net of allowance for credit losses of $ 10 and $ 10 , respectively

Other long-term assets, net of allowance for credit losses of $ 10 and $ 10 , respectively (Note 3)

LIABILITIES AND STOCKHOLDERS' EQUITY

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Deferred revenue (Note 2)

Current portion of debt (Note 8)

Income taxes payable (Note 10)

Accrued expenses and other current liabilities (Note 7)

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Issuance of common stock related to exercise of options and vesting of RSUs

Purchase of capped calls, net of tax of $ 9 million (Note 8)

Withholding taxes on net share settlements of equity awards

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Other comprehensive income (loss), net of tax

Issuance of common stock related to exercise of options and vesting of RSUs

Issuance of common stock related to vesting of RSUs

Repurchase of common stock (Note 14)

Withholding taxes on net share settlements of equity awards

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Other comprehensive income (loss), net of tax

Issuance of common stock related to vesting of RSUs

Issuance of common stock related to exercise of options and vesting of RSUs

Repurchase of common stock (Note 14)

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Repurchase of common stock (Note 14)

Proceeds from issuance of 2026 Senior Notes, net of financing costs (Note 8)

Purchase of capped calls in connection with 2026 Senior Notes (Note 8)

Proceeds from the issuance of Term Loan B Facility, net of financing costs (Note 8)

Principal payments on Term Loan B Facility (Note 8)

Payment of 2025 Senior Notes (Note 8)

Payment of financing costs related to Credit Facility (Note 8)

Proceeds from exercise of stock options (Note 13)

Payment of withholding taxes on net share settlements of equity awards

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and our wholly-owned subsidiaries as “Tripadvisor,” “Tripadvisor group,” “the Company,” “us,” “we” and “our” in these notes to the consolidated financial statements.

These nomenclature changes had no impact on the composition of our segments, revenue streams, or on any current or historic financial information.

On December 20, 2011, Expedia Group, Inc.

(“Expedia”) completed a spin-off of Tripadvisor into a separate publicly traded Delaware corporation.

We refer to this transaction as the “Spin-Off.” Tripadvisor’s common stock began trading on The Nasdaq as an independent public company on December 21, 2011, under the trading symbol “TRIP.”

We refer to this transaction as the “Spin-Off.” Tripadvisor’s common stock began trading on The Nasdaq Stock Market as an independent public company on December 21, 2011, under the trading symbol “TRIP.”

On December 11, 2012, Liberty Interactive Corporation, or Liberty, purchased an aggregate of approximately 4.8 million shares of common stock of Tripadvisor from Barry Diller, our former Chairman of the Board of Directors and Senior Executive, and certain of his affiliates.

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Simultaneously, Liberty, LTRIP’s former parent company, distributed, by means of a dividend, to the holders of its Liberty Ventures common stock, Liberty’s entire equity interest in LTRIP.

We refer to this transaction as the “Liberty Spin-Off”.

As a result of the Liberty Spin-Off, effective August 27, 2014, LTRIP became a separate, publicly traded company holding 100 % of Liberty’s interest in Tripadvisor.

We refer to this transaction as the “Liberty Spin-Off.” As a result of the Liberty Spin-Off, effective August 27, 2014, LTRIP became a separate, publicly traded company holding 100 % of Liberty’s interest in Tripadvisor.

As a result of these transactions, and as of December 31, 2024, LTRIP beneficially owned approximately 14.0 million shares of our common stock and 12.8 million shares of our Class B common stock, which constitute approximately 11 % of the outstanding shares of common stock and 100 % of the outstanding shares of Class B common stock.

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However, because each share of Class B common stock is entitled to ten votes per share and each share of common stock is entitled to one vote per share , LTRIP may be deemed to beneficially own equity securities representing approximately 56 % of our voting power.

On December 18, 2024, the Company, LTRIP and Telluride Merger Sub Corp., a Delaware corporation (“Merger Sub”) and an indirect wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, and subject to the terms and conditions, (i) Merger Sub will be merged with and into LTRIP (the “Merger”), with LTRIP surviving the Merger as the surviving corporation and an indirect, wholly-owned subsidiary of the Company, and (ii) immediately following the Merger, LTRIP (as the surviving corporation in the Merger) will be merged with and into TellurideSub LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of the Company (“ParentSub LLC”) (such merger, the “ParentSub LLC Merger”), with ParentSub LLC surviving the ParentSub LLC Merger as the surviving company and a wholly-owned subsidiary of the Company.

In connection with the Merger, (i) the shares of LTRIP Series A Common Stock and Series B Common Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive $ 0.2567 per share in cash (without interest), totaling approximately $ 20 million in the aggregate;

(ii) all of the shares of LTRIP's 8 % Series A Cumulative Redeemable Preferred Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive, in the aggregate, approximately $ 42 million in cash, without interest, and 3,037,959 validly issued, fully paid and non-assessable shares of the Company's common stock;

and (iii) LTRIP's 0.50 % Exchangeable Senior Debentures of approximately $ 330 million will be repaid in accordance with their terms.

Pursuant to the Merger Agreement, the Company will provide a loan facility (the “TRIP Loan Facility”) to LTRIP of approximately $ 330 million, to repay LTRIP debentures prior to the closing of the Merger.

The transaction is expected to close in the second quarter of 2025, and based on 10-day

volume-weighted average share price (“VWAP”) of $ 13.98 at December 17, 2024, the expected aggregate transaction value to be paid by the Company is approximately $ 435 million (which includes approximately $ 392 million of cash consideration and 3,037,959 validly issued, fully paid and non-assessable shares of the Company's common stock based on 10-day VWAP of $ 13.98 at December 17, 2024).

The implied share price for the acquisition of such shares of the Company's common stock from LTRIP is $ 16.21 (which reflects a premium of approximately 16 % based on the 10-day VWAP as of December 17, 2024).

Assets held by LTRIP substantially consist of the shares of the Company’s common stock described above.

As a result, the Company views this transaction as a repurchase of the Company's common stock held by LTRIP and, as such, the Merger will be substantially accounted for as a treasury stock repurchase transaction within stockholders’ equity on our consolidated balance sheet.

The amount allocated to the treasury stock repurchase transaction will be the aggregate transaction value paid by the Company, plus all direct expenses and fees associated with the transaction incurred by the Company.

Upon consummation of the Merger, the Com pany plans to retire the approximately 26.8 million shares of the Company's common stock held by LTRIP as reported on LTRIP's Form 13D/A filed on December 20, 2024.

Following the closing of the Merger, the Company will no longer have a controlling shareholder or be considered a “controlled company”.

The transaction is subject to various closing conditions, including LTRIP stockholder approval, regulatory clearances, and other customary conditions.

There can be no assurance that the conditions to closing will be satisfied or that the transactions contemplated by the Merger Agreement will be completed on the contemplated terms or timeline, or at all.

Description of Business

The Tripadvisor group operates as a family of brands with a purpose of connecting people to experiences worth sharing.

Our vision is to be the world’s most trusted source for travel and experiences.

The Tripadvisor group operates as a family of brands with the purpose of connecting people to experiences worth sharing.

The Company's vision is to be the world’s most trusted source for travel and experiences.

The Company operates across three reportable segments:

Brand Tripadvisor (formerly Tripadvisor Core), Viator, and TheFork.

Brand Tripadvisor, Viator, and TheFork.

Brand Tripadvisor’s purpose is to empower everyone to be a better traveler by serving as the world’s most trusted and essential travel guidance platform.

The Tripadvisor brand offers travelers and experience seekers an online global platform for travelers to discover, generate, and share authentic user-generated content (“UGC”) in the form of ratings and reviews for destinations, points-of-interest (“POIs”), experiences, accommodations, restaurants, and cruises in over 40 countries and in more than 20 languages across the world.

Tripadvisor offers more than 1 billion user-generated ratings and reviews on over 8 million experiences, accommodations, restaurants, airlines, and cruises.

Brand Tripadvisor offers travelers and experience seekers an online global platform for travelers to discover, generate, and share authentic user-generated content (“UGC”) in the form of reviews and opinions for destinations, points-of-interest (“POIs”), experiences, accommodations, restaurants, and cruises in over 40 countries and in more than 20 languages across the world.

Tripadvisor offers more than 1 billion user-generated reviews and opinions on over 9 million experiences, accommodations, restaurants, airlines, and cruises.

Viator enables travelers to discover and book iconic, unique and memorable experiences from experience operators around the globe.

Our online marketplace is comprehensive, connecting travelers to bookable tours, activities and attractions—consisting of over 350,000 experiences from more than 55,000 operators.

Our online marketplace is comprehensive, connecting travelers to bookable tours, activities and attractions—consisting of nearly 400,000 experiences from more than 65,000 operators.

TheFork provides an online marketplace that enables diners to discover and book online reservations at approximately 55,000 restaurants in 11 countries, across the U.K., western and central Europe.

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Our business was negatively impacted by the risks and uncertainties related to the COVID-19 pandemic and our business would be adversely and materially affected upon a resurgence of COVID-19 or the emergence of any new pandemic or other health crisis that results in reinstated travel bans and/or other government restrictions and mandates.

Following the lifting of restrictions in connection with the COVID-19 pandemic, travel demand increased.

In addition, the U.S.

and other countries saw significant increased inflation and decreases in discretionary spending patterns by consumers.

If macroeconomic conditions deteriorate, consumer demand and spending may decline, we may not be able to pass on increased costs to our customers and our inability or failure to navigate the macroeconomic environment could harm our business, results of operations and financial condition.

Additionally, natural disasters, public health-related events, political instability, geopolitical conflicts, including the evolving events in the Middle East, acts of terrorism, fluctuations in currency values, and changes in global economic conditions, are examples of other events that could have a negative impact on the travel industry, and as a result, our financial results in the future.

and other countries have seen elevated levels of inflation and fluctuating discretionary spending patterns by consumers all of which may impact our business.

If macroeconomic conditions deteriorate, consumer demand and spending may decline, we may not be able to pass on increased costs to our

customers and any inability to navigate the macroeconomic environment could harm our business, results of operations and financial condition.

Additionally, natural disasters, public health-related events, political instability, geopolitical conflicts, including the evolving events in the Middle East and between Ukraine and Russia, acts of terrorism, fluctuations in currency values, and changes in global economic conditions are examples of other events that could have a negative impact on the travel industry, and as a result, our financial results.

Consumer travel expenditures have historically followed a seasonal pattern.

Correspondingly, travel partner advertising investments, and therefore our revenue and operating profits, have also historically followed a seasonal pattern.

Our financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, including traveler accommodation stays, and travel experiences taken, compared to the first and fourth quarters, which represent seasonal low points.

In addition, during the first half of the year, experience bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative .

Our financial performance tends to be highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, including traveler accommodation stays, and travel experiences taken, compared to the first and fourth quarters, which represent seasonal low points.

In addition, during the first half of the year, experience bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital;

while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.

Other factors may also impact typical seasonal fluctuations, such as significant shifts in our business mix, adverse economic conditions, public health-related events, as well as other factors .

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All inter-company accounts and transactions have been eliminated in consolidation.

Additionally, certain prior period amounts may have been reclassified for comparability with the current period presentation, none of which were material.

Additionally, certain prior period amounts may have been reclassified for comparability with the current period presentation, none of which were material, except as discussed below in “ Revised Operating Expense Presentation.

” The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

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Our variable interest entities’ financial results were not material for all periods presented.

Investments in entities in which we do not have a controlling financial interest are accounted for under

the equity method, the fair value option, as available-for-sale securities, or at cost adjusted for observable price changes and impairments, as appropriate.

Investments in entities in which we do not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities, or at cost adjusted for observable price changes and impairments, as appropriate.

Revised Operating Expense Presentation

Prior year amounts have been reclassified to conform to the current period presentation.

The revised presentation did not result in any changes to previously reported revenues, total costs and expenses, operating income (loss), income (loss) before income taxes, or net income (loss).

Below is a brief description of the major cost components within the revised operating expense captions presented on our consolidated statements of operations:

• Cost of Sales :

Cost of sales consists of expenses that are directly related or closely correlated to revenue generation, including direct costs, such as credit card and other booking transaction payment fees, media

production costs, ad serving fees, and other revenue generating costs.

In addition, cost of sales includes operating costs such as bad debt expense and non-income taxes, including sales, use, digital services, and other non-income revenue related taxes.

• Marketing :

Marketing expenses consist of direct costs, including traffic generation costs from paid online traffic acquisition costs (including search engine marketing (“SEM”) and other online traffic acquisition costs), syndication costs and affiliate marketing commissions, social media costs, brand advertising (including connected television, traditional television and other offline advertising), promotions and public relations.

• Personnel :

Personnel expenses consist primarily of salaries, payroll taxes, bonuses, employee health and other benefits, and stock-based compensation.

In addition, personnel expenses include costs associated with contingent staff, bonuses and commissions for sales, sales support, customer support and marketing employees.

• Technology :

Technology expenses consist primarily of licensing, data center costs including cloud-based solutions, maintenance, computer supplies, telecom, and content translation and localization costs.

• General and administrative :

The following table below shows the reclassification adjustments made amongst costs and expenses on our consolidated statements of operations for the periods presented below:

As Reported December 31, 2023

As Adjusted December 31, 2023

As Reported December 31, 2022

As Adjusted December 31, 2022

(in millions)

Costs and expenses:

Cost of sales (formerly Cost of revenue)

Marketing (formerly Selling and marketing)

Personnel (including stock-based compensation of $ 96 and $ 88 )

Technology (formerly Technology and content)

General and administrative

Depreciation and amortization

Restructuring and other related reorganization costs

Total costs and expenses

(1) Primarily related to the reclass of people costs to Personnel, and data center costs, and to a lesser extent, licensing costs to Technology;

partially offset by the reclass of digital service taxes ("DST") and bad debt expense from General and administrative to Costs of sales .

(2) Primarily related to the reclass of people costs to Personnel, and to a lesser extent, licensing costs to Technology and real estate and office expenses to General and administrative .

(3) Related to the reclass of people costs, including stock-based compensation expense, from all legacy operating expense captions to Personnel.

(4) Primarily related to the reclass of people costs to Personnel, and to a lesser extent, the reclass of real estate and office expenses to General and administrative;

partially offset by the reclass of data center and licensing costs from all legacy operating expense captions to Technology.

(5) Primarily related to the reclass of people costs to Personnel, and to a lesser extent, the reclass of DST and bad debt expense to Costs of sales;

partially offset by the reclass of real estate and office expenses to General and administrative from all legacy operating expense captions .

Accounting Estimates

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Sales incentives are not paid upon renewal of these contracts and therefore are not commensurate with the initial sales incentive costs.

As of December 31, 2023 and 2022, there was $ 3 million and $ 4 million, respectively, of unamortized contract costs in other long-term assets on our consolidated balance sheet.

As of both December 31, 2024 and 2023, there was $ 3 million of unamortized contract costs in other long-term assets on our consolidated balance sheet.

We amortize these contract costs on a straight-line basis over the estimated customer life, which is based on historical customer retention rates.

Amortization expense recorded to selling and marketing expense on our consolidated statements of operations during each of the years ended December 31, 2023, 2022 and 2021, wa s $ 1 million.

Amortization expense recorded to personnel expense on our consolidated statements of operations during each of the years ended December 31, 2024, 2023 and 2022, was $ 1 million.

We assess such asset for impairment when events or circumstances indicate that the carrying amount may not be recoverabl e.

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The recognition of revenue may require the application of judgment related to the determination of the performance obligations and the timing of when the performance obligations are satisfied.

The determination of our

performance obligations does not require significant judgment given that we generally do not provide multiple services to a customer in a transaction, and the point in which control is transferred to the customer is readily determinable.

In instances where we recognize revenue over time, we generally have either a subscription service that is recognized over time on a straight-line basis using the time-elapsed output method, or based on other output measures that provide a faithful depiction of the transfer of our services.

The determination of our performance obligations does not require significant judgment given that we generally do not provide multiple services to a customer in a transaction, and the point in which control is transferred to the customer is readily determinable.

In instances where we recognize revenue over time, we generally have either a subscription service

that is recognized over time on a straight-line basis using the time-elapsed output method, or based on other output measures that provide a faithful depiction of the transfer of our services.

When an estimate for cancellations is included in the transaction price, we base our estimate on historical cancellation rates and current trends.

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The application of our revenue recognition policies and description of our principal activities, organized by reportable segment from which we generate our revenue, are presented below.

Brand Tripadvisor Segment (formerly Tripadvisor Core Segment)

Brand Tripadvisor Segment

Tripadvisor-branded Hotels Revenue.

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CPA revenue is generally billed to our travel partners two months after traveler stays are completed.

In addition, we offer business-to-business, or “B2B,” solutions to hotels, including subscription-based advertising to hotels, owners of B&Bs, and other specialty lodging properties.

In addition, we offer business-to-business, or “B2B,” solutions, including subscription-based advertising to hotels, owners of B&Bs, and other specialty lodging properties.

Our performance obligation is generally to enable subscribers to advertise their businesses on our platform, as well as to manage and promote their website URL, email address, phone number, special offers and other information related to their business.

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When prepayments are received, we recognize deferred revenue initially on our consolidated balance sheet for the amount of prepayment in excess of revenue recognized, until the performance obligation is satisfied.

To a lesser extent, we offer travel partners the opportunity to advertise and promote their

business through hotel sponsored placements on our platform.

To a lesser extent, we offer travel partners the opportunity to advertise and promote their business through hotel sponsored placements on our platform.

This service is generally priced on a CPC basis, with payments from travel partners determined by the number of travelers who click on the sponsored link multiplied by the CPC rate for each specific click.

CPC rates for hotel sponsored placements that our travel partners pay are generally based on bids submitted as part of an auction by our travel partners or a pre-determined contractual CPC rate.

CPC rates for hotel sponsored placements that our travel partners pay are generally based on bids

submitted as part of an auction by our travel partners or a pre-determined contractual CPC rate.

The travel partner agrees to pay us the CPC rate amount each time a traveler clicks on a link to the travel partner’s website.

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Other Revenue.

We also offer travelers alternative accommodation rentals, cruises, flights, and rental cars solutions on our platforms which complement our end-to-end travel experience.

Our alternative accommodation rentals offering provides information and services that allow travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages.

Our alternative accommodation rentals offering primarily generates revenue by offering individual property owners and managers the ability to list their properties on our platform thereby connecting with travelers through a free-to-list, commission-based option.

We also offer travelers cruises, vacation rentals, flights, and rental cars solutions on our platforms which complement our end-to-end travel experience.

Our vacation rentals offering provides information and services that allow travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages.

These properties are listed on our Tripadvisor-branded websites and mobile apps, and Tripadvisor's portfolio of travel media brands, including, www.flipkey.com, www.holidaylettings.co.uk, and www.niumba.com.

We earn commissions associated with rental transactions through our free-to-list model from both the traveler and the property owner or manager.

We provide post-booking services to the travelers, property owners and managers until the time the rental commences, which is the time the performance obligation is completed.

Revenue from transaction fees is recognized at the time that the rental commences.

Under GAAP, we act

as an agent in the transactions, as we do not control any properties before the property owner provides the accommodation to the traveler and do not have inventory risk.

We generally collect payment from the traveler at the time of booking, representing the amount due to the property owner or manager, as well as our commission.

That portion of the payment representing our commission is recorded as deferred revenue on our consolidated balance sheet until revenue is recognized, and that portion of the payment representing the amount due to the property owner is recorded as a deferred merchant payable on our consolidated balance sheet until payment is made to the property owner after the completion of the rental.

Prior to the fourth quarter of 2024, we earned commissions associated with rental transactions through our free-to-list model from both the traveler and the property owner or manager.

We provided post-booking services to the travelers, property owners and managers until the time the rental commenced, which was the time the performance obligation was satisfied and revenue was recognized.

Under GAAP, we acted as an agent in these transactions, as we did not control any properties before the property owner provided the accommodation to the traveler and had no inventory risk.

Accordingly, this commission revenue was recorded on a net basis.

As of the beginning of the fourth quarter of 2024, our performance obligation in the vacation rentals offering is to display and promote vacation rentals inventory from partners on our platform, including contextually-relevant booking links to third-party booking partners, our customers, in exchange for a commission when travelers complete a booking on the third-party booking partner's website.

The third-party booking partner is responsible for completing the booking, payment processing and post-booking services to the travelers.

We do not control the service or have inventory risk, and therefore act as an agent for these transactions under GAAP.

Accordingly, our performance obligation is satisfied and revenue is recognized at the time of the booking, as we have no post-booking obligations to the traveler.

We recognize this revenue net of an estimate of the impact of cancellations, which is not material, using historical cancellation rates and current trends.

We generally invoice and receive commissions directly from third-party bookings partners upon the completion of a traveler's stay.

Therefore, contract assets are recognized at the time of booking for commissions earned that are billable upon the completion of a traveler's stay.

In addition, Other Revenue includes revenue generated from cruises, flights, and rental cars offerings on Tripadvisor-branded websites and mobile apps and Tripadvisor’s portfolio of brands, which primarily includes click-based advertising and display-based advertising revenue.

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To a much lesser extent, we earn commissions from third-party distribution partners, in this case, the customers, who display and promote on their websites the operator experiences available on our platform to generate bookings.

In these transactions, we are not the merchant of record, and we generally invoice and receive commissions directly from third-party distribution partners.

In these transactions, we are not the merchant of record, and we generally invoice and receive commissions directly from third-party distribution partners upon completion of the experience and make payments to the operators after the experience is complete.

Our performance obligation is to allow the third-party distribution partners to display and promote on their website experiences offered by operators who utilize our platform, in exchange for which, we earn a commission when travelers book and complete an experience on the third-party distribution partner's website.

We do not control the service or have inventory risk, and therefore act as an agent for these transactions under GAAP.

We generally receive payment prior to the experience date for these transactions, and make payments to the operators after the experience is complete.

Our performance obligation is complete, and revenue is recognized at the time of the booking, as we have no post-booking obligations to the customer.

We recognize this revenue net of an estimate of the impact of cancellations, which is not material, using historical cancellation rates and current trends.

We recognize this revenue net of an estimate

of the impact of cancellations, which is not material, using historical cancellation rates and current trends.

Contract assets are recognized for commissions that are contractually billable contingent upon completion of the experience.

TheFork Segment

We provide information and services for consumers to research and book restaurants through our online restaurant reservations platform, TheFork.

We provide information and services for consumers to research and book dining reservations through our online restaurant reservations platform, TheFork.

We primarily generate transaction fees (or per seated diner fees) that are paid by our restaurant customers for diners seated primarily from bookings through TheFork’s online reservation system.

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Deferred Revenue

Contract liabilities generally include payments received in advance of performance under the contract, and are realized as revenue as the performance obligation to the customer is satisfied, which we present as deferred revenue on our consolidated balance sheet.

As of January 1, 2023, we had $ 44 million re corded as deferred revenue on our consolidated balance sheets, of which $ 41 million was recognized in revenue and $ 3 million was refunded due to cancellations by travelers during the year ended December 31, 2023.

As of January 1, 2022, we had $ 36 million recorded as deferred revenue on our consolidated balance sheets, of which $ 34 million was recognized in revenue and $ 2 million was refunded due to cancellations by travelers during the year ended December 31, 2022.

As of January 1, 2024, we had $ 49 million recorded as deferred revenue on our consolidated balance sheet, of which $ 46 million was recognized in revenue and $ 3 million was refunded due to cancellations by travelers during the year ended December 31, 2024.

As of January 1, 2023, we had $ 44 million recorded as deferred revenue on our consolidated balance sheet, of which $ 41 million was recognized in revenue and $ 3 million was refunded due to cancellations by travelers during the year ended December 31, 2023.

The difference between the opening and closing balances of our deferred revenue primarily results from the timing differences between when we receive customer payments and the time in which we satisfy our performance obligations.

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Deferred Merchant Payables

In our experience offerings and free-to-list alternative accommodation rental offerings, we receive payment from travelers at the time of booking or prior to the experience or property rental date, and we record these amounts, net of our commissions, on our consolidated balance sheet as deferred merchant payables.

We pay the experience operators and rental property owners, after the travelers’ use.

Therefore, we receive payment from the traveler prior to paying the experience operator or rental property owner and this operating cycle represents a working capital source or use of cash to us.

In our experience offerings we receive payment from travelers at the time of booking or prior to the experience, and we record these amounts, net of our commissions, on our consolidated balance sheet as deferred merchant payables.

We pay the experience operators after the travelers’ use.

Therefore, we receive payment from the traveler prior to paying the experience operator and this operating cycle represents a working capital source or use of cash to us.

Our deferred merchant payables balance was $ 255 million and $ 237 million at December 31, 2024 and 2023 , respectively, on our consolidated balance sheets.

The increase in our deferred merchant payables during the year ended December 31, 2023 was primarily due to increased consumer demand for our experience offerings.

Cost of Revenue

Selling and Marketing

In addition, our selling and marketing expenses consist of indirect costs such as

personnel and overhead expenses, including salaries, commissions, benefits, stock-based compensation, and bonuses for sales, sales support, customer support and marketing employees.

Advertising costs

We incur advertising costs consisting of online advertising expense, including SEM and other online channels, and offline advertising costs, including television costs and other offline channels, to promote our brands.

The Company's advertising costs are reported as "Marketing expenses" on our consolidated statements of operations.

We incur advertising costs consisting of paid online traffic acquisition costs (including SEM and other online traffic acquisition costs), syndication costs and affiliate marketing commissions, social media costs, brand advertising (including connected television, traditional television and other offline advertising), promotions and public relations, to promote our brands.

We expense the costs associated with communicating the advertisements in the period in which the advertisement takes place.

We expense the production costs associated with advertisements in the period in which the advertisement first takes place.

For the years ended December 31, 2023, 2022 and 2021, we recorded advertising expense of $ 706 million, $ 572 million, and $ 282 million, respectively, in selling and marketing expense on our consolidated statements of operations.

We include prepaid advertising expenses in prepaid expenses and other current assets on our consolidated balance sheet, which was not material as of December 31, 2023 and 2022 .

Technology and Content

Other costs include licensing, maintenance, computer supplies, telecom, content translation and localization, and consulting costs.

General and Administrative

General and administrative costs also include professional service fees and other fees including audit, legal, tax and accounting, and other operating costs including bad debt expense, non-income taxes, such as sales, use, digital services, and other non-income related taxes.

For the years ended December 31, 2024, 2023 and 2022, we recorded advertising expense of $ 729 million, $ 705 million, and $ 576 million, respectively, in marketing expense on our consolidated statements of operations.

We include prepaid advertising expenses in prepaid expenses and other current assets on our consolidated balance sheets, which was not material as of December 31, 2024 and 2023 .

Stock-Based Compensation

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Treasury issues, in effect at the time of the grant, whose remaining maturity period most closely approximates the stock option’s expected term assumption.

Our expected volatility is calculated by equally weighting the historical volatility and implied volatility on our own common stock.

We estimate our expected volatility by using the historical volatility of our own common stock.

Historical volatility is determined using actual daily price observations of our common stock price over a period equivalent to or approximate to the expected term of our stock option grants to date.

Implied volatility represents the volatility calculated from the observed prices of our actively traded options on our common stock.

When measuring implied volatility for a specific employee stock option grant, we generally rely on traded contracts with six month maturities or more and exercise prices approximately equal to the exercise price of the specific option grant.

We estimate our expected term using historical exercise behavior and expected post-vest termination data.

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We record liabilities to address uncertain tax positions we have taken in previously filed tax returns or that we expect to take in a future tax return.

The determination for required liabilities is based upon an analysis of each

individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination.

The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination.

Cash, Cash Equivalents, Restricted Cash and Marketable Securities

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We record property and equipment at cost, net of accumulated depreciation.

We capitalize certain costs incurred during the application development stage related to the development of websites and internal use software when it is probable the project will be completed and the software will be used as intended.

We capitalize certain costs incurred during the application development stage related to website development when it is probable the project will be completed and the software will be used as intended.

Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant.

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Our corporate headquarters is our most significant office space lease and is accounted for as a finance lease under GAAP.

The Company has also entered into data center and certain equipment leases, such as network equipment and other leases, which are not material to our consolidated financial statements.

The Company has also entered into other leases, such as data center leases, which are not material to our consolidated financial statements.

We determine whether a contract is or contains a lease at inception of a contract.

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The Company uses its estimated incremental borrowing rate as the discount rate in measuring the present value of our lease payments given the rate implicit in our leases is not typically readily determinable.

Given we do not currently borrow on a collateralized basis, our incremental borrowing rate is estimated to approximate the interest rate in which the Company would expect to pay on a collateralized basis over a similar term and payments, and in economic environments where the leased asset is located.

not currently borrow on a collateralized basis, our incremental borrowing rate is estimated to approximate the interest rate in which the Company would expect to pay on a collateralized basis over a similar term and payments, and in economic environments where the leased asset is located.

We use the portfolio approach to determine the discount rate for leases with similar characteristics or when the Company is reasonably certain that doing so would not materially affect the accounting for those leases to which a single discount rate is applied.

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Operating Leases

Our office space leases, exclusive of our corporate headquarters, are operating leases, which we lease an aggregate of approximately 340,000 square feet at nearly 30 locations across North America, Europe and Asia Pacific, in cities such as New York, London, Sydney, Barcelona and Paris, primarily used as sales offices, subsidiary headquarters, and for international operations, pursuant to leases with various expiration dates, with the latest expiring in October 2034 .

Our office space leases, exclusive of our corporate headquarters, are operating leases, which we lease an aggregate of approximately 165,000 square feet at nearly 25 locations across North America, Europe and Asia Pacific, in cities such as New York, London, Singapore, Barcelona and Paris, primarily used as sales offices, subsidiary headquarters, and for international operations, pursuant to leases with various expiration dates, with the latest expiring in March 2034 .

Operating lease ROU assets and liabilities are recognized at lease commencement date, or the date the lessor makes the leased asset available for use, based on the present value of lease payments over the lease term using the Company’s estimated incremental borrowing rate.

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Lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease.

Our operating leases generally include options to extend the lease terms for up to approximately 5 years and/or terminate the leases within 1 year , which we include in our lease term if we are reasonably certain to exercise these options.

Our operating leases generally include options to extend the lease terms for up to approximately 6 years and/or terminate certain leases within 1 year , which we include in our lease term if we are reasonably certain to exercise these options.

Payments under our operating leases are primarily fixed, however, certain of our operating lease agreements include rental payments which are adjusted periodically for inflation.

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We also establish assets and liabilities at the present value of estimated future costs to return certain of our leased facilities to their original condition to satisfy any asset retirement obligations.

Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs and are included in other long-term liabilities on our consolidated balance sheet.

Such assets are depreciated

over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs and are included in other long-term liabilities on our consolidated balance sheet.

Our asset retirement obligations were not material as of both December 31, 2024 and 2023 .

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Qualitative factors considered include industry and market conditions, financial performance, business prospects, and other relevant events and factors.

When indicators of impairment exist, we prepare a quantitative assessment of the fair value of our equity investments, which may

include using both the market and income approaches which require judgment and the use of estimates, including discount rates, investee revenues and costs, and available comparable market data of private and public companies, among others.

When indicators of impairment exist, we prepare a quantitative assessment of the fair value of our equity investments, which may include using both the market and income approaches which require judgment and the use of estimates, including discount rates, investee revenues and costs, and available comparable market data of private and public companies, among others.

When our assessment indicates that an impairment exists, we measure our non-marketable equity investments at fair value.

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As part of the qualitative assessment for our annual 2024 goodwill impairment analysis of our reporting units, the factors that we considered included, but were not limited to:

(a) changes in macroeconomic conditions in the overall economy and the specific markets in which we operate, (b) our ability to access capital, (c) changes in the online travel industry, (d) changes in the level of competition, (e) evaluation of current and future forecasted financial results of the reporting units, (f) comparison of our current financial performance to historical and budgeted results of the reporting units, (g) change in excess of the Company’s market capitalization over its book value, (h) changes in estimates, valuation inputs, and/or assumptions since the last quantitative analysis of the reporting units during the second quarter of 2022, (i) changes in the regulatory environment, (j) changes in strategic outlook or organizational structure and leadership of the reporting units;

reporting units, (f) comparison of our current financial performance to historical and budgeted results of the reporting units, (g) change in excess of the Company’s market capitalization over its book value, (h) changes in estimates, valuation inputs, and/or assumptions since the last quantitative analysis of the reporting units during the second quarter of 2022, (i) changes in the regulatory environment, (j) changes in strategic outlook or organizational structure and leadership of the reporting units;

and (k) other relevant factors, and how these factors might impact specific performance in future periods.

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This method assumes that the trade name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them.

requires us to estimate future revenues, the appropriate royalty rate and the weighted average cost of capital, however, such assumptions are inherently uncertain and actual results could differ from those estimates.

This method requires us to estimate future revenues, the appropriate royalty rate and the weighted average cost of capital, however, such assumptions are inherently uncertain and actual results could differ from those estimates.

During the Company's annual indefinite-lived intangible impairment test during the fourth quarter of 2024, a qualitative assessment was performed.

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If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows, using an appropriate discount rate.

Any impairment would be measured by the amount that the carrying values, of such asset groups, exceed their estimated fair value and would be included in operating income (loss) on the consolidated statement of operations.

Any impairment would be measured by the amount that the carrying values, of such asset groups, exceed their

estimated fair value and would be included in operating income (loss) on the consolidated statement of operations.

Considerable management judgment is necessary to estimate the fair value of asset groups.

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Derivative Financial Instruments

We account for derivative instruments that do not qualify for hedge accounting as either assets or liabilities and carry them at fair value, with any subsequent adjustments to fair value recorded in other income (expense), net

on our consolidated statements of operations.

Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in foreign currency exchange rates reported in other income (expense), net on our consolidated statements of operations.

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Our business is subject to certain risks and concentrations, including a concentration related to dependence on our relationships with our customers.

For the years ended December 31, 2023, 2022 and 2021 , our two most significant travel partners, Expedia (and its subsidiaries) and Booking (and its subsidiaries), each accounted for 10 % or more of our consolidated revenue and together accounted for approximately 25 %, 31 % and 34 % , respectively, of our consolidated revenue, with nearly all of this revenue concentrated in our Brand Tripadvisor segment.

For the year ended December 31, 2024, Booking (and its subsidiaries) accounted for 10 % or more of our consolidated revenue, and together with Expedia (and its subsidiaries), our two most significant travel partners, accounted for approximately 22 % of our consolidated revenue.

For the years ended December 31, 2023 and 2022 , Expedia and Booking each accounted for 10 % or more of our consolidated revenue, and together accounted for approximately 25 % and 31 % , respectively, of our consolidated revenue.

Nearly all of this concentration of revenue is recorded in our Brand Tripadvisor segment during these reporting periods.

Additionally, our business is dependent on relationships with third-party service providers that we rely on to fulfill service obligations to our customers where the Company is the merchant of record, such as our experience operators.

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Segment and Geographic Information ” for information regarding concentrations related to geographic and product revenues and fixed assets by geographic location.

As of December 31, 2023 and 2022 , Expedia accounted for approximately 10 % and 19 %, respectively, of our consolidated accounts receivable, net.

As of both December 31, 2024 and 2023, Expedia accounted for approximately 10 % of our consolidated accounts receivable, net.

Financial instruments, which potentially subject us to concentration of credit risk, generally consist, at any point in time, of cash and cash equivalents, corporate debt securities, forward contracts, capped calls, and accounts receivable.

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When (i) it is probable that an asset has been impaired or a liability has been incurred;

and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statement of operations.

and (ii) the amount

of the loss can be reasonably estimated, we record the estimated loss in our consolidated statement of operations.

We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the consolidated financial statements.

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We compute the weighted average number of common and common equivalent shares outstanding during the period using the sum of (i) the number of shares of common stock and Class B common stock used in the Basic EPS calculation as indicated above;

(ii) if dilutive, the incremental weighted average common stock that we would issue upon the assumed exercise of outstanding common equivalent shares, primarily related to stock options and the vesting of restricted stock units using the treasury stock method;

(ii) if dilutive, the incremental weighted average common stock that we would issue upon the assumed exercise of outstanding common equivalent shares, primarily stock options and restricted stock units using the treasury stock method;

and (iii) if dilutive, performance-based and market-based awards based on the number of shares that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period.

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Capped Calls are excluded from the calculation of Diluted EPS, as they would be antidilutive.

However, upon conversion of the 2026 Senior Notes, unless the market price of our common stock exceeds the cap price, an exercise of the Capped Calls would generally offset any dilution from the 2026 Senior Notes from the conversion price up to the cap price.

However, upon conversion of the 2026 Senior Notes, unless the market price of our common stock exceeds the cap price, an exercise of the Capped Calls would generally offset any dilution from the 2026

Senior Notes from the conversion price up to the cap price.

As of December 31, 2024, 2023, and 2022 , the market price of a share of our common stock did not exceed the $ 107.36 cap price.

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In periods of a net loss, common equivalent shares are excluded from the calculation of Diluted EPS as their inclusion would have an antidilutive effect.

Accordingly, for periods in which we report a net loss, such as for the year ended December 31, 2021, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is antidilutive.

Accordingly, for periods in which we report a net loss, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is antidilutive.

Recently Adopted Accounting Pronouncement

In November 2023, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This guidance is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted, including adoption in any interim period.

We adopted this accounting guidance on December 31, 2024, and applied it retrospectively to all prior periods presented in our consolidated financial statements.

The adoption of this accounting guidance did not result in a change to our previously reported segments revenue or adjusted EBITDA.

Refer to “Note 18:

Segment and Geographic Information ” for our reportable segment disclosure information required under the adoption of this accounting guidance, including significant segment expenses that are regularly provided to our CODM.

New Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance requiring entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid.

In November 2024, the FASB issued new accounting guidance that clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods.

Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) .

In November 2024, the FASB issued new accounting guidance expanding disclosure requirements related to certain income statement expenses.

The guidance requires tabular footnote disclosure of certain operating expenses disaggregated into categories, such as employee compensation, depreciation, and intangible asset amortization, included within each interim and annual income statement's expense caption, as applicable.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively.

In December 2023, the FASB issued new accounting guidance requiring entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid.

The new accounting guidance requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold.

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Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

In November 2023, the FASB issued new accounting guidance which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

We are currently considering our timing of adoption and are in the process of evaluating the impact of adopting these newly issued accounting rules on our consolidated financial statements and related disclosures.

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Cash, Cash Equivalents and Marketable Securities

As of December 31, 2023 and 2022, we had approximately $ 1.1 billion and $ 1.0 billion of cash and cash equivalents, respectively, which consisted of available on demand bank deposits, term deposits, and money market funds, with maturities of 90 days or less at the date of purchase, in each case, with major global financial institutions.

As of both December 31, 2024 and 2023, we had approximately $ 1.1 billion of cash and cash equivalents, which consisted of available on demand bank deposits and money market funds, with maturities of 90 days or less at the date of purchase, in each case, with major global financial institutions.

We had no outstanding investments classified as either short-term or long-term marketable securities as of December 31, 2024 and 2023, respectively, and there were no purchases or sales of any marketable securities during the years ended December 31, 2024, 2023 and 2022.

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Money market funds

Term deposits

(1) We did not have any unrealized gains and losses related to our cash equivalents.

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We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets.

We recognize any gain or loss resulting from the change in fair value of our forward contracts in other income (expense), net on our consolidated statement of operations, which was not material for the year ended December 31, 2023.

We recorded a net gain of $ 4 million and $ 2 million for the years ended December 31, 2022 and 2021, respectively, related to our forward contracts.

We recognize any gain or loss resulting from the change in fair value of our forward contracts in other income (expense), net on our consolidated statement of operations.

We recorded a net gain of $ 1 million and $ 4 million for the years ended December 31, 2024 and 2022, respectively, related to our forward contracts, while this amount was not material for the year ended December 31, 2023.

The following table shows the notional principal amounts of our outstanding derivative instruments for the periods presented:

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Other Financial Assets and Liabilities

As of December 31, 2023 and 2022, financial instruments not measured at fair value on a recurring basis, including accounts payable, accrued expenses and other current liabilities, and deferred merchant payables, were carried at cost on our consolidated balance sheet, which approximates their fair values because of the short-term nature of these items.

As of December 31, 2024 and 2023, financial instruments not measured at fair value on a recurring basis including accounts payable, accrued expenses and other current liabilities, and deferred merchant payables, were carried at cost on our consolidated balance sheets, which approximates their fair values because of the short-term nature of these items.

Accounts receivable, including contract assets as described below, as well as certain other financial assets, are measured at amortized cost and are carried at cost less an allowance for expected credit losses on our consolidated balance sheet to present the net amount expected to be collected.

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Fair Value of Long-Term Debt

The following table shows the aggregate principal and fair value amount of our outstanding 2025 Senior Notes and 2026 Senior Notes as of the dates presented, which are classified as long-term debt on our consolidated balance sheet, and considered Level 2 fair value measurements.

The following table shows the aggregate principal and fair value amount of the 2025 Senior Notes, 2026 Senior Notes, and Term Loan B Facility as of the dates presented, primarily classified as long-term debt on our consolidated balance sheets, and are considered Level 2 fair value measurements.

Refer to “Note 8:

Debt ” for additional information related to our 2025 Senior Notes and 2026 Senior Notes.

Debt ” for additional information related to our 2025 Senior Notes, 2026 Senior Notes, and Term Loan B Facility.

December 31, 2024

December 31, 2023

Unamortized Debt Issuance Costs

Carrying Value

Fair Value (1)

Unamortized Debt Issuance Costs

Carrying Value

Fair Value (1)

(in millions)

2026 Senior Notes

Aggregate principal amount

Carrying value amount (1)

Fair value amount (2)

Term Loan B Facility (2)

2025 Senior Notes (2)

Aggregate principal amount

Carrying value amount (3)

Fair value amount (2)

(1) Net o f $ 3 million and $ 5 million of unamortized debt issuance costs as of December 31, 2023 and 2022 , respectively.

(2) We estimate the fair value of our outstanding 2025 Senior Notes and 2026 Senior Notes based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source.

(3) Net of $ 3 million and $ 4 million of unamortized debt issuance costs as of December 31, 2023 and 2022 , respectively.

(1) We estimate the fair value of the 2025 Senior Notes, 2026 Senior Notes, and Term Loan B Facility based on recently reported market transactions and/or prices for identical or similar financial instruments obtained from a third-party pricing source .

(2) During the third quarter of 2024, the Company issued the $ 500 million Term Loan B Facility and used these borrowed funds to redeem all $ 500 million aggregate principal amount of the Company's outstanding 2025 Senior Notes.

Refer to “Note 8:

Debt ” for further information .

The Company did not have any assets or liabilities measured at fair value on a recurring basis using Level 3 unobservable inputs at both December 31, 2024 and 2023.

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The carrying value of this minority investment was $ 28 million and $ 30 million as of December 31, 2024 and 2023, respectively, and is included in non-marketable investments on our consolidated balance sheets.

During the years ended December 31, 2023, 2022 and 2021 , we recognized a loss of $ 2 million, $ 2 million an d $ 3 million, respectively, representing our share of the investee’s net loss in other income (expenses), net within the consolidated statements of operations.

During each of the years ended December 31, 2024, 2023 and 2022, we recognized a loss of $ 2 million, representing our share of the investee’s net loss in other income (expenses), net within the consolidated statements of operations.

The Company evaluates this investment for impairment when factors indicate that a decline in the value of its investment has occurred and the carrying amount of its investment may not be recoverable.

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During the years ended December 31, 2024, 2023 and 2022 , respectively, we did no t record any impairment loss on this equity investment.

The remaining deferred income liability of $ 28 million is presented in accrued expenses and other current liabilities and other long-term liabilities on our consolidated balance sheet of $ 3 million and $ 25 million, r espectively, as of December 31, 2023.

The remaining deferred income liability of $ 26 million is presented in accrued expenses and other current liabilities and other long-term liabilities on our consolidated balance sheet of $ 3 million and $ 23 million, respectively, as of December 31, 2024.

The Company has various commercial agreements with Chelsea Investment Holding Company PTE Ltd.

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Other Equity Investments

We also hold a minority investment in equity securities of a privately-held company, which is at an early stage of development and does not have a readily determinable fair value.

As of both December 31, 2023 and 2022, the total carrying value of this investment wa s $ 2 million, and included in non-marketable investments on our consolidated balance sheets.

We also hold a minority investment in equity securities of a privately-held company and does not have a readily determinable fair value.

As of both December 31, 2024 and 2023, the total carrying value of this investment was $ 2 million, and included in non-marketable investments on our consolidated balance sheets.

Our policy is to measure this equity investment at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example.

On a quarterly basis, we perform a qualitative assessment considering impairment indicators, if any, to evaluate whether this investment is impaired and monitor for any

observable price changes.

On a quarterly basis, we perform a qualitative assessment considering impairment indicators, if any, to evaluate whether this investment is impaired and monitor for any observable price changes.

During the years ended December 31, 2024, 2023 and 2022 , we did no t record any impairment loss on this equity investment or note any observable price change indicators.

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In June 2020, the Company was issued collateralized notes (the “Notes Receivable”) with a total principal amount of $ 20 million from a privately-held company, in exchange for an existing equity investment held in the investee by the Company, and other-long term receivables, net, which the Company held due from the same investee.

The Company has classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50 % due in eight years and remaining 50 % due in 10 years from issuance date or the date on which there is a change of control, whichever is earlier.

The Company recorded a $ 5 million allowance for credit losses under GAAP during the year ended December 31, 2021, in other income (expense), net on the consolidated statement of operations, related to the Notes Receivable.

The Company classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50 % due June 2028 and the remaining 50 % due June 2030, or the date on which there is a change in control, whichever is earlier .

As of both December 31, 2024 and 2023, the carrying value of the Notes Receivable was $ 9 million, net of accumulated allowance for credit losses, and is classified in other long-term assets, net on our consolidated balance sheet at amortized cost.

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For the years ended December 31, 2024, 2023 and 2022, we recorded amortization of capitalized website development costs of $ 59 million, $ 55 million and $ 61 million, respectively, which is included in depreciation expense on our consolidated statements of operations.

Operating and finance lease assets and liabilities consists of the following as of the dates presented:

During the year ended December 31, 2024, we retired and subsequently disposed of certain capitalized website development projects, leasehold improvements and computer equipment and purchased software, which were no longer in use and fully depreciated, with a total gross cost and related accumulated depreciation of $ 54 million.

Operating and finance lease assets and liabilities consist of the following as of the dates presented:

Presentation on Consolidated Balance Sheet

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The following table summarizes our goodwill activity by reportable segment for the periods presented:

Hotels, Media & Platform

Experiences & Dining

Brand Tripadvisor

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Foreign currency translation adjustments

Allocation to new segments

Balance as of December 31, 2023

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Balance as of December 31, 2024

(1) Other consists of the combination of alternative accommodation rentals, flights, car, and cruises offerings, and did not previously constitute a reportable segment.

There were no goodwill impairment charges recognized on our consolidated statements of operations during the years ended December 31, 2024, 2023, or 2022.

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Intangible assets with indefinite lives (1)

(1) Indefinite-lived intangible assets include trade names and trademarks for the Tripadvisor brand.

(1) Indefinite-lived intangible assets include trade names and trademarks for Brand Tripadvisor.

Amortization expense for definite-lived intangible assets was $ 6 million, $ 9 million, and $ 13 million, for the years ended December 31, 2024, 2023 and 2022, respectively.

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Interest payable (1)

Income taxes payable - current (2)

Finance lease liability - current portion (2)

Operating lease liabilities - current portion (2)

Restructuring and other related reorganization costs (4)

Non-income taxes payable (3)

(1) Amount relates primarily to unpaid interest accrued on our 2025 Senior Notes.

Accrued legal contingencies (4)

Restructuring and other related reorganization costs (5)

(1) Amount for the year ended December 31, 2023 relates primarily to interest accrued on our 2025 Senior Notes.

Refer to “Note 8:

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(2) Refer to “Note 5:

Income Taxes ” for further information regarding our income tax liabilities.

(3) Refer to “Note 5:

Leases ” for further information regarding our lease obligations.

(4) During the third quarter of 2023, the Company approved and subsequently initiated a set of actions across its businesses in order to reduce its cost structure, improve operational efficiencies, and realign its workforce with its strategic initiatives.

These actions taken by the Company resulted in reduced global headcount.

As a result, the Company incurred estimated pre-tax restructuring and other related reorganization costs of $ 22 million during the year ended December 31, 2023, consisting primarily of employee severance and related benefits.

Potential job position eliminations in each country remain subject to local law and consultation requirements, which have extended beyond 2023 in certain countries.

Therefore, actual costs incurred may differ

from estimated costs recorded as of December 31, 2023.

We expect the majority of remaining unpaid costs as of December 31, 2023 to be disbursed during the first quarter of 2024.

The following table summarizes our restructuring and other related reorganization costs for the year ended December 31, 2023:

Carrying Value

(3) Amount relates primarily to digital service taxes.

(4) Refer to “Note 11:

Commitments and Contingencies ” for further information.

(5) The following table summarizes our restructuring and other related reorganization costs for the periods presented:

Employee Severance and Benefits

(in millions)

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Accrued liability as of December 31, 2023

Accrued liability as of December 31, 2024

(1) During the third quarter of 2023, the Company approved and subsequently initiated a set of actions across its businesses in order to reduce its cost structure, improve operational efficiencies, and realign its workforce with its strategic initiatives.

These actions taken by the Company resulted in reduced global headcount.

As a result, the Company incurred estimated pre-tax restructuring and other related reorganization costs of $ 22 million during the year ended December 31, 2023, consisting of employee severance and related benefits.

We expect the majority of remaining unpaid costs as of December 31, 2024 to be disbursed during the first quarter of 2025.

(2) During the fourth quarter of 2024, the Company approved and subsequently initiated a set of actions across its businesses in order to reduce its cost structure, improve operational efficiencies, and realign its workforce with its strategic initiatives.

As a result, the Company incurred and paid a one-time contract termination fee to a third-party professional services firm of $ 18 million within its Brand Tripadvisor segment.

In addition, these actions also included estimated pre-tax restructuring and other related reorganization costs of $ 3 million during the three months ended December 31, 2024, which consisted of employee severance and related benefits, and expect to be paid during the first quarter of 2025.

The Company’s outstanding debt consisted of the following as of the dates presented:

December 31, 2024

Outstanding Principal Amount

Unamortized Debt Issuance Costs

Carrying Value

(in millions)

Long-Term Debt:

2025 Senior Notes

2026 Senior Notes

Total Long-Term Debt

December 31, 2023

Outstanding Principal Amount

Unamortized Debt Issuance Costs

Carrying Value

(in millions)

Short-term debt:

Term Loan B Facility

Total short-term debt

Long-term debt:

2025 Senior Notes

2026 Senior Notes

Term Loan B Facility due 2031

0.25 % Convertible 2026 Senior Notes due 2026

7.00 % 2025 Senior Notes due 2025

Unamortized Debt Issuance Costs

Total long-term debt

Credit Agreement

We are party to a credit agreement with a group of lenders initially entered into in June 2015 and, amended and restated in June 2023 (the “Credit Agreement”), which, among other things, provides for a $ 500 million secured revolving credit facility (the “Credit Facility”).

The Credit Facility has a maturity date of June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $ 200 million or more, then the maturity date will be such business day).

On July 8, 2024, the Company entered into the First Amendment

to its Credit Agreement (the “Amended Credit Agreement”), which implements the Term Loan B Facility (discussed below);

and among other things:

• Does not change the aggregate amount of revolving commitments available at $ 500 million related to our Credit Facility;

• Makes certain adjustments to the definition of “Consolidated EBITDA”;

• Increases the Available Amount by the portion of excess cash flow and asset sale, casualty and condemnation mandatory prepayments declined by lenders under the Term Loan B Facility, which may be used to make restricted payments and investments;

• Adds a separate dollar basket not to exceed the greater of $ 195 million and 50 % of Consolidated EBITDA for capital leases and purchase money debt;

• Adds a separate “ratio debt” basket for additional indebtedness up to 3.5 times pro forma Total Net Leverage Ratio , subject to certain customary limitations;

• Adds customary extension and modification and refinancing facility provisions.

The Amended Credit Agreement includes certain customary restrictions on the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, grant additional liens, and make investments, acquisitions, dispositions, distributions, and other payments, with certain exceptions as more specifically described in the Amended Credit Agreement.

The Amended Credit Agreement contains customary events of default and modifies the cross-default provision so that the Term Loan B Facility includes a customary cross-acceleration event of default with the Credit Facility under the Amended Credit Agreement.

If an event of default occurs and is continuing, then, among other things, the lenders under the Credit Facility and/or the Term Loan B Facility, as applicable, may declare any outstanding Credit Facility and/or Term Loan B Facility obligations, as applicable, under the Amended Credit Agreement to be immediately due and payable and exercise their rights and remedies against the collateral.

The obligations under the Amended Credit Agreement are secured by substantially all assets, whether personal, tangible or intangible, of the Company and the Subsidiary Loan Parties as granted under the Security Documents.

Any term not otherwise defined herein shall have the meaning ascribed to it in the Amended Credit Agreement.

Credit Facility

We are party to a credit agreement with a group of lenders initially entered into in June 2015 and amended and restated in June 2023 (as amended, the “Credit Agreement”), which, among other things, provid es for a $ 500 million secured revolving credit facility (the “Credit Facility”).

As of December 31, 2024 and 2023 , we had no outstanding borrowings from the Credit Facility.

In addition, the Credit Facility includes $ 15 million of borrowing capacity available for letters of credit and $ 40 million for swing-line borrowings on same-day notice.

As of December 31, 2023 and 2022 , we had issued $ 4 million of undrawn standby letters of credit under the Credit Facility.

For the years ended December 31, 2023, 2022 and 2021 , we recorded total commitment fees on the Credit Facility of $ 1 million, $ 1 million and $ 3 million, respectively, to interest expense on our consolidated statements of operations.

The Credit Agreement, among other things, requires us to maintain a maximum total net leverage ratio and contains certain customary affirmative and negative covenants and events of default, including a change of control.

The Credit Facility also includes $ 15 million of borrowing capacity available for letters of credit and $ 40 million for swing-line borrowings on same-day notice.

As of December 31, 2024 and 2023, we had issued $ 3 million and $ 4 million, respectively, of undrawn standby letters of credit under the Credit Facility.

For the years ended December 31, 2024, 2023 and 2022, we recorded total commitment fees on the Credit Facility of $ 1 million to interest expense on our consolidated statements of operations.

The Amended Credit Agreement, among other things, requires us to maintain a maximum total net leverage ratio of 4.5 to 1.0 solely in respect to the Credit Facility and contains certain customary affirmative and negative covenants and events of default, including a change of control .

As of December 31, 2024 and 2023, the Company was in compliance with its existing covenants.

We amended the Credit Facility during 2020 to, among other things:

suspend the leverage ratio covenant for quarterly testing of compliance beginning in the second quarter of 2020, replacing it with a minimum liquidity covenant through June 30, 2021 (requiring the Company to maintain $ 150 million of unrestricted cash, cash equivalents and short-term investments less deferred merchant payables plus available revolver capacity), until the earlier of (a) the first day after June 30, 2021 through maturity on which borrowings and other revolving credit

utilizations under the revolving commitments exceed $ 200 million, and (b) the election of the Company, at which time the leverage ratio covenant will be reinstated (the “Leverage Covenant Holiday”).

On May 8, 2023, the Company declared a “Covenant Changeover Date” (as defined in the Credit Agreement as in effect prior to the amendment and restatement), thereby declaring the Company out of the Leverage Covenant Holiday and no longer subject to certain of the restrictive covenants contained in the Credit Agreement.

Following that, on June 29, 2023, we amended and restated the Credit Agr eement (the "Restated Credit Agreement") to, among other things, (i) extend the maturity date of the Credit Facility from May 12, 2024 to June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $ 200 million or more, then the maturity date will be such business day);

(ii) maintain the aggregate amount of revolving commitments available at $ 500 million;

(iii) increase the total net leverage ratio from 3.5 to 1.0 to 4.5 to 1.0;

and (iv) replace the LIBOR interest rate benchmark with a secured overnight financing rate ("SOFR") interest rate benchmark.

The Company may borrow from the Credit Facility in U.S dollars, Euros and Sterling.

The Company may borrow from the Credit Facility in U.S.

dollars, Euros and Sterling.

Borrowings under the Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Adjusted Term SOFR rate for the interest period in effect for such borrowing in U.S.

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In addition, we are required to pay a quarterly commitment fee, at an applicable rate ranging from 0.25 % to 0.40 %, on the daily unused portion of the Credit Facility for each fiscal quarter and in connection with the issuance of letters of credit.

As of December 31, 2023, our unused revolver capacity was subject to a commitment fee of 0.25 %, given the Company’s total net leverage ratio .

In connection with the Restated Credit Agreement, we incurred lender fees and other debt financing costs of approximately $ 3 million.

These costs were capitalized as deferred financing costs in other long-term assets on our consolidated balance sheet, while deferred financing costs incurred in previous amendments, which were immediately recognized to interest expense on our consolidated statements of operations, were not material.

As of December 31, 2023 and 2022, the Company had $ 4 million and $ 2 million, respectively, remaining in deferred financing costs in connection with the Credit Facility.

December 31, 2024, our unused revolver capacity was subject to a commitment fee of 0.25 % , given the Company’s total net leverage ratio .

In connection with the Amended Credit Agreement, we incurred lender fees and other debt financing costs of $ 1 million under the Credit Facility.

These costs were capitalized as deferred financing costs in other long-term assets on our consolidated balance sheet as of December 31, 2024.

As of both December 31, 2024 and 2023, the Company had $ 4 million remaining in deferred financing costs in connection with the Credit Facility.

These costs will be amortized over the remaining term of the Credit Facility, using the effective interest rate method, and recorded to interest expense on our consolidated statement of operations.

There is no specific repayment date prior to the maturity date for any borrowings under the Credit Agreement.

There is no specific repayment date prior to the maturity date for any borrowings under the Amended Credit Agreement.

We may voluntarily repay any outstanding borrowing under the Credit Facility at any time without premium or penalty, other than customary breakage costs with respect to Term Benchmark loans.

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As such, we intend to classify any future borrowings under this facility as long-term debt.

The Credit Agreement contains a number of covenants that, among other things, restrict our ability to incur additional indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions, make investments, loans or advances, prepay certain subordinated indebtedness, make certain acquisitions, engage in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness, and change our fiscal year.

In addition, to secure the obligations under the Credit Agreement, the Company and certain subsidiaries have granted security interests and liens in and on substantially all of their assets as well as pledged shares of certain of the Company’s subsidiaries.

If an event of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of all amounts due under the Credit Facility.

Term Loan B Facility

On July 8, 2024, under the Amended Credit Agreement, the Company issued a $ 500 million Term Loan B Facility maturing July 8, 2031, with an interest rate based on secured overnight financing rate ("SOFR") plus 2.75 %.

On July 15, 2024, the Company used these borrowed funds to fully redeem its outstanding 2025 Senior Notes.

As of December 31, 2024, the interest rate on the Term Loan B Facility was 7.11 % and the weighted-average interest rate on the Term Loan B Facility was 7.74 % for the year ended December 31, 2024.

The Term Loan B Facility was offered at 99.75 % of par and is required to be paid down at 1.00 % of the aggregate principal amount per year, repayable in quarterly installments on the last day of each calendar quarter, commencing December 31, 2024, equal to 0.25 % of the original principal amount with the balance due on the maturity date.

Principal payments of $ 1 million were made during the year ended December 31, 2024.

The Term Loan B Facility has no financial covenants.

In connection with the issuance of the Term Loan B Facility, we incurred $ 7 million of debt issuance costs, comprised of the initial purchasers’ discount, lender fees, and other debt financing costs.

These debt issuance costs will be amortized over the remaining term of the Term Loan B Facility, using the effective interest rate method, and recorded to interest expense on our consolidated statement of operations.

As of December 31, 2024, unpaid interest on the Term Loan B Facility was not material and $ 19 million was recorded as interest expense on our consolidated statement of operations during the year ended December 31, 2024.

2025 Senior Notes

On July 9, 2020 , the Company completed the sale of $ 500 million aggregate principal amount of 7.0 % Senior Notes due 2025 (the “2025 Senior Notes”), pursuant to a purchase agreement, dated July 7, 2020 , among the Company, the guarantors party thereto and the initial purchasers party thereto in a private offering to qualified institutional buyers.

The 2025 Senior Notes were issued pursuant to an indenture, dated July 9, 2020 (the “2025 Indenture”), among the Company, the guarantors and the trustee.

The 2025 Indenture provides, among other things, that interest is payable on the 2025 Senior Notes semiannually on January 15 and July 15 of each year, and continues until their maturity date of July 15, 2025 .

The 2025 Senior Notes are senior unsecured obligations of the Company and are guaranteed by certain of the Company’s domestic subsidiaries.

The Company has the option to redeem all or a portion of the 2025 Senior Notes at any time on or after July 15, 2022 at the redemption prices set forth in the 2025 Indenture, plus accrued and unpaid interest, if any.

Subject to certain limitations, in the event of a Change of Control Triggering Event (as defined in the 2025 Indenture), the Company will be required to make an offer to purchase the 2025 Senior Notes at a price equal to 101 % of the aggregate principal amount of the 2025 Senior Notes repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

These features have been evaluated as embedded derivatives under GAAP;

however, the Company has concluded they do not meet the requirements to be accounted for separately.

As of both December 31, 2023 and 2022, unpaid interest on our 2025 Senior Notes was $ 16 million and was included in accrued expenses and other current liabilities on our consolidated balance sheets, and $ 35 million was recorded as interest expense on our consolidated statements of operations for each of the years ended December 31, 2023, 2022 and 2021.

The 2025 Indenture contains covenants that, among other things and subject to certain exceptions and qualifications, restrict the ability of the Company and certain of its subsidiaries to incur or guarantee additional indebtedness or issue disqualified stock or certain preferred stock;

pay dividends and make other distributions or repurchase stock;

make certain investments;

create or incur liens;

create restrictions affecting the ability of restricted subsidiaries to make distributions, loans or advances or transfer assets to the Company or the restricted subsidiaries;

enter into certain transactions with the Company’s affiliates;

designate restricted subsidiaries as unrestricted subsidiaries;

and merge, consolidate or transfer or sell all or substantially all of the Company’s assets.

On July 15, 2024 , as noted above, the Company redeemed all $ 500 million aggregate principal amount of the Company’s outstanding 2025 Senior Notes, in addition to the settlement of accrued and unpaid interest.

As a result, we recognized a loss on extinguishment of debt of $ 2 million, which primarily consisted of a non-cash write-off of unamortized debt issuance costs, and is included in Other income (expense), net on our consolidated statement of operations the year ended December 31, 2024.

As of December 31, 2023, unpaid interest on our 2025 Senior Notes was $ 16 million and was included in accrued expenses and other current liabilities on our consolidated balance sheets.

During the years ended December 31, 2024, 2023 and 2022, we recorded $ 19 million, $ 35 million, and $ 35 million of interest expense, respectively, on our consolidated statements of operations.

2026 Senior Notes

On March 25, 2021, we entered into a purchase agreement for the sale of $ 345 million aggregate principal amount of 0.25 % Convertible 2026 Senior Notes due 2026 (the “2026 Senior Notes”) in a private offering to qualified institutional buyers.

The 2026 Senior Notes included an over-allotment option that provided the initial purchasers of the 2026 Senior Notes with the option to purchase an additional $ 45 million aggregate principal amount of the 2026 Senior Notes;

such over-allotment option was fully exercised.

In connection with the issuance of the 2026 Senior Notes, the Company entered into an Indenture, dated March 25, 2021 (the “2026 Indenture”), among the Company, the guarantors party thereto and the trustee.

The terms of the 2026 Senior Notes are governed by the 2026 Indenture.

The 2026 Senior Notes mature on April 1, 2026 , unless earlier converted, redeemed or repurchased.

The 2026 Senior Notes are senior unsecured obligations of the Company, although guaranteed by certain of the Company’s domestic subsidiaries, with interest payable semiannually in arrears on April 1 and October 1 of each year, which began on October 1, 2021 .

The terms of the 2026 Senior Notes are governed by an Indenture, dated March 25, 2021 (the “2026 Indenture”), among the Company, the guarantors party thereto and the trustee.

The 2026 Senior

Notes mature on April 1, 2026 , unless earlier converted, redeemed or repurchased.

As of December 31, 2024 and 2023, unpaid interest on our 2026 Senior Notes was not material.

The 2026 Senior Notes will be redeemable, in whole or in part, at our option at any time, and from time to time, on or after April 1, 2024 and on or before the 30 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice;

The 2026 Senior Notes are redeemable, in whole or in part, at our option at any time, and from time to time, beginning after April 1, 2024 and on or before the 30 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Senior Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice;

and (2) the trading day immediately before the date we send such notice.

In addition, calling any such note for redemption will constitute a make-whole fundamental change with respect to that note, in which case the

conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption.

In addition, calling any such note for redemption will constitute a make-whole fundamental change with respect to that note, in which case the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption.

The 2026 Senior Notes are unconditionally guaranteed, on a joint and several basis, by the guarantors on a senior, unsecured basis.

The 2026 Senior Notes are our general senior unsecured obligations and rank equally in right of payment with all of our existing and future senior indebtedness, and senior in right of payment to all of our future subordinated indebtedness.

The 2026 Senior Notes will be effectively subordinated to any of our existing and future secured indebtedness, including borrowings under the Credit Facility, to the extent of the value of the assets securing such indebtedness.

The 2026 Senior Notes will be effectively subordinated to any of our existing and future secured indebtedness, including borrowings under the Amended Credit Agreement, to the extent of the value of the assets securing such indebtedness.

Holders may convert their 2026 Senior Notes at any time prior to the close of business on the business day immediately preceding January 1, 2026, in multiples of $ 1,000 principal amount, only under the following conditions and circumstances:

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The proceeds from the issuance of the 2026 Senior Notes were approximately $ 340 million, net of debt issuance costs of $ 5 million comprised primarily of the initial purchasers’ discount, and the Company used a portion of the proceeds from the 2026 Senior Notes to enter into capped call transactions, as discussed below.

T he Company intends to use the remainder of the proceeds from this offering for general corporate purposes, which may include repayment of debt, including the partial redemption and/or purchase of our 2025 Senior Notes prior to maturity.

The debt issuance costs are being amortized over the remaining term of the 2026 Senior Notes, using the effective interest rate method, and recorded to interest expense on our consolidated statement of operations.

T he Company intends to use the remainder of the proceeds from this offering for general corporate purposes, which may include repayment of debt.

The debt issuance

costs are being amortized over the remaining term of the 2026 Senior Notes, using the effective interest rate method, and recorded to interest expense on our consolidated statement of operations.

During the years ended December 31, 2024, 2023 and 2022, our effective interest rate on our 2026 Senior Notes, including debt issuance costs, was approximately 0.33 % , 0.40 % and 0.47 % , respectively, and $ 1 million was recorded as interest expense on our consolidated statements of operations for each of the years ended December 31, 2024, 2023 and 2022.

The 2026 Senior Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or restrictions on the issuance or repurchase of securities by the Company.

The 2026 Senior Notes do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or restrictions on the issuance or repurchase of securities by the Company.

Capped Call Transactions

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The strike price of the Capped Calls is $ 73.81 , while the cap price of the Capped Calls will initially be $ 107.36 per share of our common stock, which represents a premium of 100 % over the close price of our common stock of $ 53.68 per share on March 22, 2021 and is subject to certain customary adjustments under the terms of the Capped Calls.

The Capped Calls are considered indexed to our own stock and are considered equity classified under GAAP, and included as a reduction to additional paid-in-capital within stockholders’ equity on our consolidated balance sheet as of both December 31, 2023 and 2022.

The Capped Calls are considered indexed to our own stock and are considered equity classified under GAAP, and were recorded as a reduction to additional paid-in-capital within stockholders’ equity on our consolidated balance sheet when the Capped Calls were purchased in March 2021.

The Capped Calls are not accounted for as derivatives and their fair value is not remeasured each reporting period.

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Amounts include accrued interest related to this liability .

(2) Amount relates to long-term portion of a deferred income liability recorded as a result of an equity method investment made in the fourth quarter of 2019.

(2) Amount relates to long-term portion of a deferred income liability recorded as a result of an equity method investment.

Refer to “Note 3:

Financial Instruments and Fair Value Measurements ” for additional information .

(3) Amount relates to the long-term portion of transition tax payable related to the 2017 Tax Act.

Refer to “Note 10:

Income Taxes ,” for additional information.

(3) Amount relates to the long-term portion of transition tax payable related to the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act” ), which was reclassified to current income taxes payable on our consolidated balance sheet during 2024.

The following table presents a summary of our domestic and foreign income (loss) before income taxes for the periods presented:

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Net deferred tax asset (liability)

At December 31, 2023, we had federal, state, and foreign net operating loss carryforwards (“NOLs”) of approximately $ 2 million, $ 54 million, and $ 364 million, respectively.

At December 31, 2024, we had U.S.

federal, state, and foreign net operating loss carryforwards (“NOLs”) of approximately $ 2 million, $ 49 million, and $ 354 million, respectively.

federal NOLs of $ 2 million expire at various times starting from 2029 .

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Foreign NOLs of $ 342 million may be carried forward indefinitely, while the remaining foreign NOLs of $ 12 million expire at various times starting from 2025 .

As of December 31, 2023, we had a valuation allowance of approximately $ 106 million rela ted to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

This amount represented a decrease of $ 8 million, as compared to the balance as of December 31, 2022.

The decrease was primarily related to a change in a deferred tax asset in our U.K.

subsidiaries.

Except for such foreign deferred tax assets, discussed above, we expect to realize all of our deferred tax assets.

As of December 31, 2024, we had a valuation allowance of approximately $106 million related to certain foreign NOLs carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

Except for such foreign NOLs and other foreign deferred tax assets, discussed above, we expect to realize all of our deferred tax assets.

Due to economic uncertainty and global inflationary pressures, we will continue to monitor our financial performance to determine if the valuation allowance against our deferred tax assets may be necessary in the future.

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Income tax expense at the federal statutory rate

Foreign rate differential (1)

State income taxes, net of effect of federal tax benefit

Unrecognized tax benefits and related interest

IRS audit settlement

IRS audit settlements

Additional IRS audit impacts (1)

Transfer pricing reserve adjustment

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Provision (benefit) for income taxes

(1) During 2021, intercompany debt was extinguished, which resulted in a reduction of our overall foreign rate differential.

The CARES Act allowed the Company to carryback our U.S.

federal NOLs incurred in 2020, generating an expected U.S.

federal tax benefit of $ 76 million, of which $ 64 million was refunded during the year ended December 31, 2022 ($ 15 million of this refund is recorded in other long-term liabilities on our consolidated balance sheet as of December 31, 2023, reflecting future transition tax payments to be made by the Company related to the 2017 Tax Act).

The remaining refund of $ 12 million is included in accrued expenses and other current liabilities on our consolidated balance sheet as of December 31, 2023 and 2022, and is expected to be received during the year ending December 31, 2024.

In addition, certain governments have passed legislation to assist businesses during the COVID-19 pandemic through loans, wage subsidies, wage tax relief or other financial aid.

We participated in several of these programs, including the CARES Act in the U.S., the United Kingdom's job retention scheme, as well as similar programs in other global jurisdictions.

In addition, in certain countries, such as within the European Union, Singapore, Australia, and other global jurisdictions, we also participated in programs where government assistance was in the form of wage subsidies and reductions in wage-related employer taxes paid by us.

We recognize these government assistance benefits when there is a reasonable assurance of compliance with the conditions associated with the assistance and the amount is received.

During the years ended December 31, 2022 and 2021, we recognized government grants and other assistance benefits of $ 12 million and $ 9 million , respectively, while this amount was not material during the year ended December 31, 2023.

These amounts are not income tax related and were recorded as a reduction of personnel and overhead costs within operating expenses in the consolidated statements of operations.

The Company does not expect any additional future benefits of this nature.

(1) Amount relates to incremental interest associated with the 2009 through 2011 tax years IRS audit period with Expedia.

See below for further information regarding this IRS audit settlement.

Due to the one-time transition tax on the deemed repatriation of undistributed foreign subsidiary earnings and profits in 2017, the majority of previously unremitted earnings have been subjected to U.S.

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As of December 31, 2024, $ 582 million of our cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested.

For purposes of governing certain of the ongoing relationships between Tripadvisor and Expedia at and after the Spin-Off, and to provide for an orderly transition, Tripadvisor and Expedia entered into various agreements at the time of the Spin-Off, and Tripadvisor has satisfied its obligations under such agreements.

However, Tripadvisor continues to be subject to certain post Spin-Off obligations under the Tax Sharing Agreement.

Under the Tax Sharing Agreement between Tripadvisor and Expedia, Tripadvisor is generally required to indemnify Expedia for any taxes resulting from the Spin-Off (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related stockholder litigation or controversies) to the extent such amounts resulted from (i) any act or failure to act by Tripadvisor described in the covenants in the tax sharing agreement, (ii) any

acquisition of Tripadvisor equity securities or assets or those of a member of the Tripadvisor group, or (iii) any failure of the representations with respect to Tripadvisor or any member of our group to be true or any breach by Tripadvisor or any member of the Tripadvisor group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel.

We are currently under examination by the IRS for the 2014 through 2016 and 2018 tax years and have various ongoing audits for foreign and state income tax returns.

These audits include questions regarding or review of the timing and amount of income and deductions and the allocation of income among various tax jurisdictions.

Tripadvisor continues to be subject to certain post Spin-Off obligations under the Tax Sharing Agreement, whereby Tripadvisor is generally required to indemnify Expedia for any taxes resulting from the Spin-Off to the extent such amounts resulted from (i) any act or failure to act by Tripadvisor described in the covenants in the tax sharing agreement, (ii) any acquisition of Tripadvisor equity securities or assets or those of a member of the Tripadvisor group;

or (iii) any failure of the representations with respect to Tripadvisor or any member of our group to be true or any breach by Tripadvisor or any member of the Tripadvisor group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel.

We are currently under examination by the IRS for the 2018 tax year and have various ongoing audits for foreign and state income tax returns.

These examinations may lead to proposed or ordinary course adjustments to our taxes.

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As of December 31, 2024, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia, our 2014 through 2016 standalone IRS audit, and our 2012 through 2016 HM Revenue & Customs (“HMRC”) audit.

As disclosed in previous filings, including in our Annual Report on Form 10-K for the year ended December 31, 2022, we received Notices of Proposed Adjustments ("NOPA") from the IRS with respect to income tax returns filed by Expedia when Tripadvisor was part of Expedia Group’s consolidated income tax return for the 2009, 2010, and 2011 tax years.

The assessment was related to certain transfer pricing arrangements with foreign subsidiaries, for which we had requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for the 2009 through 2011 tax years.

In January 2023, we received a final notice from the IRS regarding a MAP settlement for the 2009 through 2011 tax years, which the Company accepted in February 2023.

In the first quarter of 2023, we recorded additional income tax expense as a discrete item, inclusive of interest, of $ 31 million specifically related to this settlement.

During the first quarter of 2023, we reviewed the impact of the acceptance of this settlement position against our existing transfer pricing income tax reserves for the subsequent tax years, which resulted in incremental income tax expense, inclusive of estimated interest, of $ 24 million.

The total impact of these adjustments resulted in an incremental income tax expense of $ 55 million, which was recognized during the three months ended March 31, 2023.

During the three months ended June 30, 2023, we made a U.S.

federal tax payment of $ 113 million, inclusive of interest, to Expedia related to this IRS audit settlement, pursuant to the Tax Sharing Agreement with Expedia.

During the three months ended September 30, 2023, we received the expected competent authority refund of $ 49 million, inclusive of interest income.

We anticipate the federal tax benefits, net of remaining state tax payments due, associated with this IRS audit settlement will be substantially settled during 2024 , resulting in an estimated net cash inflow of $ 5 million to $ 10 million.

Separately, during August 2020, we received a NOPA from the IRS for the 2014, 2015, and 2016 tax years.

These proposed adjustments pertain to certain transfer pricing arrangements with our foreign subsidiaries.

We disagree with the proposed adjustments, and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

We have previously requested competent authority assistance under MAP for the tax years 2014 through 2016.

We reviewed our transfer pricing reserves as of December 31, 2023 and, based on the facts and circumstances that existed as of the reporting date, consider them to be the Company’s best estimate as of December 31, 2023.

As previously disclosed, we received Notices of Proposed Adjustments ("NOPA") from the IRS for the 2014 through 2016 tax years relating to certain transfer pricing arrangements with our foreign subsidiaries.

In response, we requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for the 2014 through 2016 tax years.

In January 2024, we received notification of a MAP resolution agreement for the 2014 through 2016 tax years, which we accepted in February 2024.

We anticipate this will result in an increase to our worldwide income tax expense in an estimated range of $ 30 million to $ 60 million in the first quarter of 2024, and will result in an estimated net operating cash outflow of $ 80 million to $ 130 million expected during 2024 .

These estimated ranges take into consideration competent authority relief, existing income tax reserves, transition tax regulations and estimated interest expense.

This MAP resolution supersedes the NOPA for 2014 through 2016 from the IRS, described above.

We will review the impact of this resolution in relation to our transfer pricing income tax reserves for the subsequent open tax years during the first quarter of 2024.

Based on this new information received subsequent to December 31, 2023, adjustments for the open tax years subsequent to 2016 may also occur, which could be material.

During the year ended December 31, 2024, we recorded an income tax expense of $ 42 million, inclusive of interest, related to this settlement on our consolidated statement of operations and during the first quarter of 2024, we reviewed the impact of the acceptance of this settlement to our existing transfer pricing income tax reserves for the subsequent open tax years, which resulted in an income tax benefit, inclusive of estimated interest, of $ 4 million.

Additionally, in connection with this IRS audit settlement:

(i) during the second quarter of 2024, we made a payment to the IRS of $ 141 million, inclusive of estimated interest,

(ii) during the second half of 2024, we made various state tax payments totaling $ 26 million, inclusive of estimated interest, and (iii) during the fourth quarter of 2024, we received a competent authority refund of $ 42 million, inclusive of net interest income, from a foreign jurisdiction .

This IRS audit settlement resulted in total net operating cash outflow during 2024 of $ 105 million, which includes federal tax benefits from these payments of $ 20 million.

As of December 31, 2024, there are no remaining outstanding payments or refunds due related to this IRS audit settlement.

As of December 31, 2023, we had recorded $ 153 million of unrecognized tax benefits, inclusive of interest, classified as other long-term liabilities on our consolidated balance sheet.

As a result of the Company's acceptance of MAP with the IRS for the tax years 2009 through 2011, and its impact on other ongoing IRS audits, as described above, during the first quarter of 2023, we reduced this unrecognized tax benefits liability by $ 59 million, reclassifying this balance to accrued expenses and other current liabilities on our consolidated balance sheet, which

was subsequently paid during 2023.

We also reduced our long-term income taxes receivable by $ 45 million, representing our estimate of competent authority relief, or payment due from a foreign jurisdiction, which was received during the third quarter of 2023, as noted above, previously recorded to other long-term assets on our consolidated balance sheet as of December 31, 2022.

As a result of our acceptance of the MAP resolution agreement with the IRS for the 2014 through 2016 tax years, and its impact on other ongoing IRS audits, as described above, we reduced this unrecognized tax benefits liability by $ 79 million during the first quarter of 2024 by reclassifying the balance to current income taxes payable, representing a short-term payment obligation to the IRS, which was subsequently paid during the second quarter of 2024, as noted above.

In addition, as previously disclosed, we received a NOPA from the IRS for the 2009 through 2011 tax years relating to certain transfer pricing arrangements with our foreign subsidiaries.

In response, we requested competent authority assistance under MAP for the 2009 through 2011 tax years.

In January 2023, we received notification of a MAP resolution agreement for the 2009 through 2011 tax years, which we accepted in February 2023.

In the first quarter of 2023, we recorded additional income tax expense of $ 31 million, inclusive of interest.

During the first quarter of 2023, we reviewed the impact of the acceptance of this settlement position against our existing transfer pricing income tax reserves for the subsequent open tax years, which resulted in incremental income tax expense, inclusive of estimated interest, of $ 24 million.

The total impact of these two adjustments resulted in an incremental income tax expense of $ 55 million recorded in the first quarter of 2023.

Additionally, in connection with this IRS audit settlement:

(i) during the second quarter of 2023, we made a U.S.

federal tax payment of $ 113 million, inclusive of interest, to Expedia related to this IRS audit settlement, pursuant to the Tax Sharing Agreement with Expedia, and (ii) during the third quarter of 2023, we received a competent authority refund of $ 49 million, inclusive of interest income, from a foreign jurisdiction .

In January 2021, we received from HMRC an issue closure notice relating to adjustments for 2012 through 2016 tax years.

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We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies.

We are also currently subject to audit by HMRC in tax years 2017 through 2022.

If HMRC were to seek adjustments of a similar nature through a closure notice for transactions in these years, we could be subject to significant additional tax liabilities.

Our policy is to review and update tax reserves as facts and circumstances change.

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Balance, end of year

As of December 31, 2023, we had $ 153 million of unrecognized tax benefits, inclusive of interest, which is classified as long-term and primarily included in other long-term liabilities on our consolidated balance sheet.

The amount of unrecognized tax benefits, if recognized, would reduce income tax expense by $ 114 million, due to correlative adjustments in other tax jurisdictions.

As of December 31, 2024, we had $ 78 million of unrecognized tax benefits, inclusive of interest, which is classified as long-term and included in other long-term liabilities on our consolidated balance sheet.

We also had $ 43 million of unrecognized tax benefits classified as long-term and included as an offset to our deferred tax asset on our consolidated balance sheet.

The amount of unrecognized tax benefits, if recognized, would reduce income tax

expense by $ 53 million, due to correlative adjustments in other tax jurisdictions.

We recognize interest and penalties related to unrecognized tax benefits in income tax expense on our consolidated statement of operations.

As of December 31, 2023, total gross interest accrued was $ 50 million, of which $ 45 million was recorded in unrecognized tax benefits in other long-term liabilities and $ 5 million was recorded in income taxes receivable in other long-term assets, net on the consolidated balance sheet.

As of December 31, 2022, total gross interest accrued was $ 47 million and was recorded to unrecognized tax benefits in other long-term liabilities on the consolidated balance sheet.

As of December 31, 2024 and 2023, total gross interest accrued was $ 22 million and $ 45 million, respectively, and recorded to unrecognized tax benefits in other long-term liabilities on the consolidated balance sheets.

COMMITMENTS AND CONTINGENCIES

As of December 31, 2023, we have contractual obligations and commercial commitments that include expected interest payments on our 2026 Senior Notes and 2025 Senior Notes, expected commitment fees on our Credit Facility, and non-cancellable long-term purchase obligations, as summarized in the table below.

As of December 31, 2024, we have contractual obligations and commercial commitments that include expected interest payments on our 2026 Senior Notes and Term Loan B Facility, expected commitment fees on our Credit Facility, and non-cancellable long-term purchase obligations, as summarized in the table below.

The expected amounts and timing of payments discussed below were estimated based on information available to us as of December 31, 2024.

(in millions)

Expected interest payments on 2025 Senior Notes (1)

Expected interest payments on Term Loan B Facility (1)

Expected interest payments on 2026 Senior Notes (2)

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Purchase obligations and other (4)

(1) Expected interest payments on our 2025 Senior Notes are based on a fixed interest rate of 7.0 % as of December 31, 2023 and assumes that our existing debt is repaid at maturity.

(1) The amounts included as expected interest payments on the Term Loan B Facility in this table are based on the effective interest rate as of December 31, 2024, however, the interest rate is variable and could change significantly in the future.

Amount assumes that our existing debt is repaid at maturity.

Refer to “Note 8:

Debt ” for additional information on our 2025 Senior Notes.

Debt ” for additional information on the Term Loan B Facility.

(2) Expected interest payments on our 2026 Senior Notes are based on a fixed interest rate of 0.25 % as of December 31, 2024, and assumes that our existing debt is repaid at maturity.

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Debt ” for additional information on our Credit Facility.

(4) Estimated purchase obligations that are fixed and determinable, primarily related to telecommunication and licensing contracts, with various expiration dates through approximately June 2029.

(4) Estimated purchase obligations that are fixed and determinable, primarily related to telecommunication and licensing contracts, with various expiration dates through June 2029.

These contracts have non-cancelable terms or are cancelable only upon payment of significant penalty.

Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

(5) Excluded from the table was $ 4 million o f undrawn standby letters of credit, primarily as security deposits for certain property leases as of December 31, 2023 .

(5) Excluded from the table is $ 3 million of undrawn standby letters of credit, primarily as security deposits for certain property leases as of December 31, 2024.

(6) Excluded from the table is the TRIP Loan Facility of approximately $ 330 million, related to the Merger with LTRIP anticipated to be completed during the second quarter of 2025.

Refer to “Note 1:

Organization and Business Description ” for additional information on the Merger .

Legal Proceedings

In the ordinary course of business, we are party to legal, regulatory and administrative matters, including threats thereof, arising out of, or in connection with our operations.

These matters may involve claims involving, but not limited to, intellectual property rights (including privacy rights and alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition, consumer protection matters and data privacy or cybersecurity matters), defamation and reputational claims, personal injury claims, labor and employment matters and commercial disputes.

These matters may involve claims involving, but not limited to, intellectual property rights (including privacy rights and alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition, consumer protection matters and data privacy or cybersecurity matters), contractual claims (including related to our material agreements or other contracts), defamation and reputational claims, personal injury claims, labor and employment matters and commercial disputes.

Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure.

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We base accruals on the best information available at the time, which can be highly subjective.

Although occasional adverse decisions or settlements may occur, we do not believe that the final disposition of any of these matters will have a material adverse effect on our business.

However, the final outcome of these matters could vary significantly from our estimates.

Although occasional adverse decisions or settlements may occur, we do not believe that the final disposition of any of these matters will have a material adverse effect on our business, except for certain known

income tax matters discussed in “Note 10:

Income Taxes .” However, the final outcome of these matters could vary significantly from our estimates.

Finally, there may be claims or actions pending or threatened against us of which we are currently not aware and the ultimate disposition of which could have a material adverse effect on us.

All legal fees incurred by the Company related to any regulatory and legal matters are expensed in the period incurred.

Income and Non-Income Taxes

We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax and non-income tax matters.

We have reserved for potential adjustments that may result from examinations by, or any negotiated agreements with, these tax authorities.

We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax matters.

We have reserved for potential losses that may result from examinations by, or any negotiated agreements with, these tax authorities.

Although we believe our tax estimates are reasonable, the final determination of audits could be materially different from our historical tax provisions and accruals.

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Refer to “Note 10:

Income Taxes ” for further information on potential contingencies surrounding income taxes.

Income Taxes ” for further information on potential contingencies pertaining to current income tax audits.

As of December 31, 2024, we have an accrual of $ 10 million in accrued expenses and other current liabilities in our consolidated balance sheet, as an estimated potential settlement of a regulatory related matter within our vacation rentals offering.

This amount is included in general and administrative expenses in our consolidated statement of operations for the year ended December 31, 2024.

This accrual is based on our best estimate of probable loss;

the ultimate resolution of this contingency may be greater or less than the liability recorded.

EMPLOYEE BENEFIT PLANS

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The matching contributions portion of an employee’s account, vests after two years of service.

Additionally, at the end of the 401(k) Plan year, we make a discretionary matching

contribution to eligible participants.

Additionally, at the end of the 401(k) Plan year, we make a discretionary matching contribution to eligible participants.

This additional discretionary matching employer contribution (or “true up”) is limited to match only contributions up to 3% of eligible compensation.

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Our contribution to the 401(k) Plan and our non-U.S.

defined contribution plans which are recorded in our consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021 were $ 12 million, $ 11 mil lion, and $ 10 million, respectively.

defined contribution plans which are recorded in our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 were $ 12 million, $ 12 million, and $ 11 million, respectively.

Deferred Compensation Plan for Non-Employee Directors

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Under the Deferred Compensation Plan, 100,000 shares of Tripadvisor common stock are available for issuance to non-employee directors.

From the inception of the Deferred Compensation Plan through December 31, 2023, a total of 557 shares h ave been issued for such purpose.

From the inception of the Deferred Compensation Plan through December 31, 2024, a total of 557 shares have been issued for such purpose.

Executive Severance Plan and Summary Plan Description

The Company also maintains its Executive Severance Plan and Summary Plan Description (the “Severance Plan”) which is applicable to certain employees of the Company and its subsidiaries.

The Company also maintains the Executive Severance Plan and Summary Plan Description (the “Severance Plan”) which is applicable to certain employees of the Company and its subsidiaries.

The Severance Plan formalizes and standardizes the Company’s severance practices for certain designated employees (each, a “Participant” and, collectively, the “Participants”).

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(in millions)

Cost of revenue

Selling and marketing

Technology and content

General and administrative

Total stock-based compensation expense

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On June 6, 2023, our stockholders approved the TripAdvisor, Inc.

2023 Stock and Annual Incentive Plan (the “2023 Plan”) primarily for the purpose of providing sufficient reserves of shares of our common stock to ensure our ability to continue to provide new hires, employees, and other participants with equity incentives.

2023 Stock and Annual Incentive Plan (the “2023 Plan”) primarily for the purpose of providing sufficient reserves of shares of our common stock to ensure our

ability to continue to provide new hires, employees, and other participants with equity incentives.

The 2023 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), and other stock-based awards.

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Options outstanding as of December 31, 2023

Exercised (1)

Cancelled or expired

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Vested and expected to vest after December 31, 2024 (2)

(1) Inclusive of 1,100,000 stock options awarded in August 2013 to our former CEO, Stephen Kaufer, that expired during the third quarter of 2023.

The expiration of these stock options had no impact to our stock-based compensation expense under GAAP during the third quarter of 2023.

(1) Inclusive of approximately 67,000 stock options withheld due to net share settlement to satisfy required employee tax withholding requirements.

Potential shares issuable under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2023 Plan and can be reissued by the Company.

Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.

(2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

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Our closing stock price as reported on Nasdaq as of December 31, 2024 was $ 14.77 .

Th e total intrinsic value of stock options exercised for the years ended December 31, 2023 and 2022 was no t material, and for the year ended December 31, 2021 was $ 9 million.

The total intrinsic value of stock options exercised for the years ended December 31, 2024, 2023, and 2022 was no t material .

The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented:

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The total fair value of stock options vested for the years ended December 31, 2024, 2023 and 2022 were $ 7 million, $ 7 million, and $ 16 million, respectively.

Cash received from stock option exercises for the years ended December 31, 2023 and 2022 was no t material, and for the year ended December 31, 2021 was $ 8 million.

Cash received from stock option exercises for the years ended December 31, 2024, 2023, and 2022 was no t material .

2024 RSU Activity

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(1) Inclusive of approximate ly 1,070,000 RSU s withheld due to net share settlement to satisfy required employee tax withholding requirements.

Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2023 Plan and can be reissued by the Company.

Potential shares issuable under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2023 Plan and can be reissued by the Company.

Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.

The total fair value of RSUs vested for the years ended December 31, 2023, 2022 and 2021 was $ 109 million, $ 108 million, and $ 144 million, r espectively.

On December 31, 2021, the Section 16 Committee of our Board of Directors approved and granted to Stephen Kaufer, the Company’s CEO at the time, the following:

(i) stock option to purchase 115,200 shares of common stock, 25 % of which vested and became exercisable on August 1, 2022, while the balance vests in quarterly installments over the following three years;

with an estimated grant-date fair value per option of $ 12.59 , using a Black-Scholes option pricing model;

(ii) stock option to purchase 110,026 shares of common stock, which will vest and become exercisable in full on August 1, 2024;

with an estimated grant-date fair value per option of $ 13.18 ,

using a Black-Scholes option pricing model;

and (iii) 106,382 RSUs, 25 % of which vested and settled on August 1, 2022, while the balance vests in quarterly installments over the following three years, with an estimated grant-date fair value of $ 27.26 per RSU, based on the quoted price of our common stock on the date of grant.

The estimated fair value of these awards totaled $ 6 million and was fully recognized as stock-based compensation expense to the consolidated statement of operations for the year ended December 31, 2021, given the Company concluded there was no substantive future requisite service condition for these awards that existed at grant date for GAAP purposes.

During the year ended December 31, 2022, the Company reversed $ 3 million of this previously recorded stock-based compensation expense related to these awards as the Company concluded that certain awards scheduled to vest were no longer achievable as a result of new terms executed in Mr.

Kaufer's Consulting Service Agreement entered into on May 3, 2022.

The total fair value of RSUs vested for the years ended December 31, 2024, 2023, and 2022 was $ 118 million, $ 109 million, and $ 108 million, respectively.

A summary of our performance-based RSUs ("PSUs") and market-based RSUs (“MSUs”) activity is presented below:

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Unvested and outstanding as of December 31, 2024

(1) Represents PSUs awarded in February 2023.

The PSU awards provide for vesting in two equal annual installments on each of December 31, 2024 and December 31, 2025, based on the extent to which the Company achieves certain financial metrics relative to targets established by the Company’s Compensation Committee of its Board of Directors.

The estimated grant-date fair value per PSU was measured based on the quoted price of our common stock at the date of grant, calculated upon the establishment of performance targets, and will be amortized on a straight-line basis over the requisite service period.

(1) Represents PSUs awarded primarily in February 2023 and March 2024, representing nearly all the unvested and outstanding awards as of December 31, 2024.

The February 2023 PSU awards provide for vesting in two equal annual installments on each of December 31, 2024 and December 31, 2025, if and to the extent the Company achieves pre-determined revenue and adjusted EBITDA metrics (each weighted 50%) established by the Compensation Committee and Section 16 Committee of its Board of Directors (jointly, the "Compensation Committees").

The March 2024 PSU awards provide for vesting in two equal annual installments on each of December 31, 2025 and December 31, 2026, if and to the extent the Company achieves pre-determined revenue and adjusted EBITDA metrics (each weighted 50%) established by the Compensation Committees.

The estimated grant-date fair values per PSU were measured based on the quoted price of our common stock at the date of grant, calculated upon the establishment of performance targets, and are amortized on a straight-line basis over the requisite service period.

Based upon actual attainment relative to the target financial metrics, employees have the ability to receive up to 200% of the target number originally granted, or to be issued none at all.

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(2) MSUs shall vest three years from grant date, generally with 25% vesting if the weighted-average stock price over a 30-day trading period during the vesting period is equal to or greater than $35.00 but less than $45.00, 50% vesting if equal to or greater than $45.00 but less than $55.00, and 100% vesting if equal to or greater than $55.00, subject to continuous employment with, or performance of services for, the Company .

A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was used to calculate the grant-date fair value of our MSU awards.

A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was

used to calculate the grant-date fair value of our MSU awards.

The estimated grant-date fair value of these awards is amortized on a straight-line basis over the requisite service period and is not adjusted based on the actual number of awards that ultimately vest.

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Common stock is entitled to one vote per share and Class B common stock is entitled to 10 votes per share .

Holders of Tripadvisor common

stock, acting as a single class, are entitled to elect a number of directors equal to 25 % of the total number of directors, rounded up to the next whole number, which wa s three directors as of December 31, 2023 .

Holders of Tripadvisor common stock, acting as a single class, are entitled to elect a number of directors equal to 25 % of the total number of directors, rounded up to the next whole number, which wa s three directors as of December 31, 2024 .

Class B common stockholders may, at any time, convert their shares into common stock, on a one for one share basis.

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As of December 31, 2022, the Company had $ 75 million remaining under this existing share repurchase program to repurchase shares of its common stock.

During the three months ended June 30, 2023, we repurchased 4,724,729 shares of our outstanding common stock at an average price of $ 15.85 per share, exclusive of fees, commissions, and excise taxes or $ 75 million in the aggregate, which completed this share repurchase program.

During the year ended December 31, 2023, we repurchased 4,724,729 shares of our outstanding common stock at an average price of $ 15.85 per share, exclusive of fees, commissions, and excise taxes or $ 75 million in the aggregate, which completed this share repurchase program.

On September 7, 2023, our Board of Directors authorized the repurchase of $ 250 million in shares of our common stock under a new share repurchase program.

Our Board of Directors authorized and directed management, working with the Executive Committee of our Board of Directors, to affect the share repurchase program in complia nce with applicable legal requirements.

Our Board of Directors authorized and directed management, working with the Executive Committee of our Board of Directors, to affect the share repurchase program in

complia nce with applicable legal requirements.

The Executive Committee will determine the price, timing, amount and method of such repurchases based on its evaluation of market conditions and other factors, and at prices determined to be attractive and in the best interests of both the Company and its stockholders.

This share repurchase program, which has a term of two years , does not obligate the Company to acquire any particular number of shares and may be modified, suspended or discontinued at any time.

During the three months ended December 31, 2023, we repurchased 1,324,524 shares of our outstanding common stock at an average price of $ 18.85 per share, exclusive of fees, commissions, and excise taxes, or $ 25 million, under this share repurchase program.

During the year ended December 31, 2023, we repurchased 1,324,524 shares of our outstanding common stock at an average price of $ 18.85 per share, exclusive of fees, commissions, and excise taxes, or $ 25 million, under this share repurchase program.

During the year ended December 31, 2024, we repurchased 1,366,385 shares of our outstanding common stock at an average price of $ 18.28 per share, exclusive of fees , commissions, and excise taxes , or $ 25 million in the aggregate .

As of December 31, 2024 , we had $ 200 million remaining available to repurchase shares of our common stock under this share repurchase program.

As of December 31, 2023, the Company held 24,893,867 sha res of its common stock in treasury with an aggregate cost of $ 822 million.

On August 16, 2022, the Inflation Reduction Act was signed into law, and imposed a nondeductible 1 % excise tax on the net value of certain stock repurchases made after December 31, 2022.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

For the year ended December 31, 2023, the excise tax liability incurred and recorded to accrued expenses and other current liabilities on our consolidated balance sheet was not material.

For the years ended December 31, 2024 and 2023, excise tax on our share repurchases was not material.

During the years ended December 31, 2024, 2023 and 2022 , our Board of Directors did no t declare any dividends on our outstanding common stock.

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Potential common shares, consisting of outstanding stock options, RSUs and those issuable under the 2026 Senior Notes, totaling approximately 12.4 million, 14.8 million, and 11.4 million, for the years ended December 31, 2024, 2023 and 2022 , respectively, have been excluded from the calculations of Diluted EPS because their effect would have been antidilutive.

In addition, potential common shares of certain performance-based awards of approximately 1.1 million , 0.3 million, and 0.1 million, for the years ended December 31, 2023, 2022 and 2021, respectively, for which all targets required to trigger vesting had not been achieved, were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods.

In addition, potential common shares of certain performance-based awards of approximately 1.4 million, 1.1 million, and 0.3 million, for the years ended December 31, 2024, 2023 and 2022,

respectively, for which all targets required to trigger vesting had not been achieved, were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods.

The earnings per share amounts are the same for our common stock and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

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Earnings (losses) from equity investment, net

Gain (loss) on extinguishment of debt (2)

(1) Foreign currency exchange gains (losses), net, are related to foreign exchange transaction gains and losses due to required conversion from transaction currency to functional currency, offset by any foreign currency forward contract gains and losses .

(2) Refer to “Note 8:

Debt ” for information regarding the extinguishment loss incurred due to the redemption of the 2025 Senior Notes.

RELATED PARTY TRANSACTIONS

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Refer to “Note 1:

Organization and Business Description ”, which describes the evolution of our relationship with LTRIP, including LTRIP’s stock ownership of Tripadvisor and deemed voting power as of December 31, 2023 .

Organization and Business Description, ” which describes the evolution of our relationship with LTRIP, LTRIP’s stock ownership of Tripadvisor and deemed voting power as of December 31, 2024 , and discussion pertaining to the Merger Agreement entered into by the Company with LTRIP on December 18, 2024.

We had no related party transactions with LTRIP during the years ended December 31, 2024, 2023 and 2022.

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We have three reportable segments:

(1) Brand Tripadvisor (formerly Tripadvisor Core);

(1) Brand Tripadvisor;

and (3) TheFork.

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(2) Media and advertising revenue – consisting primarily of display-based advertising revenue (also referred to as “media advertising”);

(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 offerings;

and (4) Other revenue – consisting of cruises, alternative accommodation rentals, flights, and rental cars revenue.

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 offerings;

and (4) Other revenue – consisting of cruises, vacation rentals, flights, and rental cars revenue.

The nature of the services provided and related revenue recognition policies are summarized by reportable segment in “Note 2:

Significant Accounting Policies .”

Our operating segments are determined based on how our chief executive officer, who also serves as our chief operating decision maker (“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.

Our operating segments are determined based on how our chief executive officer , who also serves as our chief operating decision maker (“CODM”) manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of operating and capital resources.

a djusted EBITDA is our reported measure of segment profit and a key measure used by our COD M and Board of Directors to understand and evaluate the operating performance of our business as a whole and our individual operating segments, and on which internal budgets and forecasts are based and approved.

We define adjusted EBITDA as net income (loss) plus:

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(3) depreciation and amortization;

(4) stock-based compensation and other stock-settled obligations;

(4) stock-based compensation;

(5) goodwill, long-lived asset, and intangible assets impairments;

(6) legal reserves and settlements;

(6) legal reserves, settlements and other (including indirect tax reserves related to audit settlements and the impact of one-time changes resulting from enacted indirect tax legislation);

(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.

(8) transaction related expenses;

and (9) non-recurring expenses and income unusual in nature or infrequently occurring.

Direct costs are included in the applicable operating segments, including certain 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.

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The following tables present our reportable segment information for the years ended December 31, 2024, 2023 and 2022 and includes a reconciliation of Adjusted EBITDA to Net income (loss).

We record depreciation and amortization, stock-based compensation and other stock-settled obligations, goodwill, long-lived asset and intangible asset impairments, legal reserves and settlements, and other non-recurring expenses and income, net, which are excluded from segment operating performance, in "Corporate & 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.

We record depreciation and amortization, stock-based compensation, goodwill, long-lived asset and intangible asset impairments, legal reserves, settlements and other, transaction related expenses, and other non-recurring expenses and income, net, which are excluded from segment operating performance, in “Corporate & 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.

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Intersegment revenue

Total Revenue

Cost of sales (5)

Personnel (exclusive of stock-based compensation as shown separately below)

General and administrative (6)

Adjusted EBITDA

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Restructuring and other related reorganization costs (7)

Other non-recurring expenses (income) (5)

Legal reserves, settlements and other (8)

Transaction related expenses (9)

Operating income (loss)

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Intersegment revenue

Total Revenue

Cost of sales

Personnel (exclusive of stock-based compensation as shown separately below)

General and administrative (10)

Adjusted EBITDA

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Stock-based compensation

Legal reserves and settlements

Other non-recurring expenses (income) (6)

Restructuring and other related reorganization costs (7)

Transaction related expenses (9)

Operating income (loss)

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Intersegment revenue

Total Revenue

Cost of sales

Personnel (exclusive of stock-based compensation as shown separately below)

General and administrative (11)

Adjusted EBITDA

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Stock-based compensation

Legal reserves, settlements and other

Other non-recurring expenses (income) (12)

Operating income (loss)

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Net income (loss)

(1) Corporate general and administrative personnel cost s of $ 6 million, $ 5 million and $ 6 million for the years ended December 31, 2023, 2022 and 2021 , respectively, were allocated to the Viator and TheFork segments.

(2) Includes allocated corporate general and administrative personnel costs from our Brand Tripadvisor segment of $ 3 million, $ 2 million and $ 3 million for the years ended December 31, 2023, 2022 and 2021 , respectively.

(3) Includes allocated corporate general and administrative personnel costs from our Brand Tripadvisor segment of $ 3 million, $ 3 million and $ 3 million for the years ended December 31, 2023, 2022 and 2021, respectively .

(1) Certain personnel cost s of $ 7 million, $ 6 million and $ 5 million for the years ended December 31, 2024, 2023 and 2022 , respectively, were allocated to the Viator and TheFork segments.

(2) Includes allocated certain personnel costs from the Brand Tripadvisor segment of $ 3 million, $ 3 million and $ 2 million for the years ended December 31, 2024, 2023 and 2022 , respectively.

(3) Includes allocated certain personnel costs from the Brand Tripadvisor segment of $ 4 million, $ 3 million and $ 3 million for the years ended December 31, 2024, 2023 and 2022, respectively .

(4) The significant segment expense categories and amounts align with the segment-level information that is regularly provided to our CODM.

(5) Exclusive of $ 2 million and $ 1 million in the Brand Tripadvisor and Viator segments, respectively, which are included separately below in legal reserves, settlements and other.

(6) Exclusive of $ 18 million in the Brand Tripadvisor segment which is included separately below in legal reserves, settlements and other and transaction related expenses.

(7) Refer to “Note 7:

Accrued Expenses and Other Current Liabilities ” for information regarding restructuring and other related reorganization costs.

(5) The Company expensed $ 3 million of previously capitalized transaction costs during 2023, to general and administrative expenses on our consolidated statement of operations.

The Company considers such costs to be non-recurring in nature.

(8) This amount primarily includes an estimated accrual for the potential settlement of a regulatory related matter of $ 10 million expensed during 2024 and is reflected in general and administrative expenses on our consolidated statement of operations.

Refer to "Note 11:

Commitments and Contingencies " for further information.

In addition, this amount includes a one-time charge of $ 3 million during the year ended December 31, 2024, resulting from enacted tax legislation in Canada during June 2024 related to digital service taxes, which requires retrospective application back to January 1, 2022.

This amount represents the one-time retrospective liability for the periods prior to April 1, 2024, while all prospective periods are and will be included within adjusted EBITDA, respectively.

This cost is reflected in cost of sales on our consolidated statement of operations.

(9) The Company expensed certain transaction related costs of $ 3 million during both the years ended December 31, 2024 and 2023, to general and administrative expenses on our consolidated statements of operations .

(10) Exclusive of $ 3 million in the Viator segment which is included separately below in transaction related expenses.

(11) Exclusive of $ 8 million in the Brand Tripadvisor segment which is included separately below in other non-recurring expenses (income).

(12) The Company incurred a loss of approximately $ 8 million during the fourth quarter of 2022, as the result of external fraud.

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The Company considers such costs to be non-recurring in nature.

To the extent the Company recovers any losses in future periods related to this incident, the Company plans to reduce Adjusted EBITDA by the recovery amount in that same period.

Product and Geographic Information

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(2) Tripadvisor experiences and dining revenue within the Brand Tripadvisor segment is shown gross of intersegment (intercompany) revenue, which is eliminated on a consolidated basis.

The Company measures its geographic revenue based on the physical location of the Tripadvisor subsidiary which generates the revenue, which is consistent with our measurement of long-lived physical assets, or property

and equipment, net.

As such, this geographic classification does not necessarily align with where the consumer resides, where the consumer is physically located while using the Company's services, or the location of the travel service provider, experience operator or restaurant.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis