TripAdvisor, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying consolidated financial statements including the notes in Item 8 of this Annual Report on Form 10-K, and the Section entitled “Cautionary Note Regarding Forward-Looking Statements,” included elsewhere in this Annual Report on Form 10-K. 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. Overview 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 Company operates across three business segments: 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 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. Viator’s purpose is to bring extraordinary, unexpected, and forever memorable experiences to more people, more often, wherever they are traveling. In doing so, Viator elevates tens of thousands of businesses, large and small. 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—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. 36 Trends 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 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 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 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 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. “Business,” of this Form 10-K under the captions “Our Business Strategy,” and “Our Business Models.” 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. 37 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 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: Accrued Expenses and Other Current Liabilities ” and “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 further information regarding restructuring and other related reorganization costs incurred for each reportable segment. 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. Income Taxes 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. 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: Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K and the “Contingencies” discussion below for further information regarding potential material contingencies related to ongoing audits regarding income taxes. 38 Critical Accounting Estimates We prepare our consolidated financial statements and accompanying notes in accordance with GAAP. Preparation of the consolidated financial statements and accompanying notes requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as revenue and expenses during the periods reported. Management bases its estimates on historical experience, when applicable and other assumptions that it believes are reasonable under the circumstances. Actual results may differ from estimates under different assumptions or conditions. There are certain critical estimates that we believe require that management use significant judgment and estimates in applying those policies in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if: • It requires us to make an assumption because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate; and/or • Changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations. 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 for an overview of our significant accounting policies and any new accounting pronouncements that we have adopted or that we plan to adopt that have had or may have an impact on our financial statements. A discussion of information about the nature and rationale for our critical accounting estimates is below: Income Taxes We record income taxes under the asset and liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted income tax rates expected to be in effect when we realize the underlying items of income and expense. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. 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. 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. Therefore, actual income taxes could materially vary from these estimates. 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. For those positions for which we conclude it is more likely than not it will be sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. 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 and the “Contingencies” discussion below for further information, including certain uncertainties, critical estimates, and potential contingencies related to ongoing audits regarding income taxes. 39 Certain Relationships and Related Party Transactions For information on our related party transactions, refer to “Note 17: Related Party Transactions ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 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, 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. 40 Results of Operations Selected Financial Data (in millions, except percentages) Year ended December 31, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenue $ 1,835 $ 1,788 $ 1,492 3 % 20 % Costs and expenses: Cost of sales 131 119 78 10 % 53 % Marketing 729 705 576 3 % 22 % Personnel (including stock-based compensation of $120, $96, and $88) 595 570 503 4 % 13 % Technology 91 80 63 14 % 27 % General and administrative 91 79 74 15 % 7 % Depreciation and amortization 85 87 97 (2 )% (10 )% Restructuring and other related reorganization costs 21 22 — (5 )% n.m. Total costs and expenses: 1,743 1,662 1,391 5 % 19 % Operating income (loss) 92 126 101 (27 )% 25 % Other income (expense): Interest expense (46 ) (44 ) (44 ) 5 % 0 % Interest income 48 47 15 2 % 213 % Other income (expense), net (7 ) (4 ) (5 ) 75 % (20 )% Total other income (expense), net (5 ) (1 ) (34 ) 400 % (97 )% Income (loss) before income taxes 87 125 67 (30 )% 87 % (Provision) benefit for income taxes (82 ) (115 ) (47 ) (29 )% 145 % Net income (loss) $ 5 $ 10 $ 20 (50 )% (50 )% Other financial data: Adjusted EBITDA (1) $ 339 $ 334 $ 295 1 % 13 % n.m. = not meaningful (1) Consolidated Adjusted EBITDA is considered a non-GAAP measure as defined by the SEC. Please refer to the “Adjusted EBITDA” discussion below for more information, including tabular reconciliations to the most directly comparable GAAP financial measure. 41 Revenue and Segment Information Brand Tripadvisor Segment Year ended December 31, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Revenue (1) $ 949 $ 1,031 $ 966 (8 )% 7 % Less: (2) Cost of sales 33 31 20 6 % 55 % Marketing 251 279 260 (10 )% 7 % Personnel (exclusive of stock-based compensation) 266 273 249 (3 )% 10 % Technology 54 50 42 8 % 19 % General and administrative 44 50 50 (12 )% 0 % Total Adjusted EBITDA $ 301 $ 348 $ 345 (14 )% 1 % Adjusted EBITDA Margin by Segment (3) 32 % 34 % 36 % (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 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 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: Year ended December 31, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Brand Tripadvisor: (in millions, except percentages) Tripadvisor-branded hotels $ 585 $ 659 $ 650 (11 %) 1 % % of Brand Tripadvisor revenue* 62 % 64 % 67 % Media and advertising 150 145 130 3 % 12 % % of Brand Tripadvisor revenue* 16 % 14 % 13 % Tripadvisor experiences and dining (1) 169 176 134 (4 %) 31 % % of Brand Tripadvisor revenue* 18 % 17 % 14 % Other 45 51 52 (12 %) (2 %) % of Brand Tripadvisor revenue* 5 % 5 % 5 % Total Brand Tripadvisor Revenue $ 949 $ 1,031 $ 966 (8 %) 7 % 42 *Percentages may not total to 100% due to rounding (1) Tripadvisor experiences and dining revenue within the Brand Tripadvisor segment is 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. Tripadvisor-branded Hotels Revenue 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 $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 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 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. 43 Viator Segment Year ended December 31, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Revenue $ 840 $ 737 $ 493 14 % 49 % Less: (1) Cost of sales 80 79 51 1 % 55 % Marketing (2) 562 519 351 8 % 48 % Personnel (exclusive of stock-based compensation) 126 110 81 15 % 36 % Technology 25 18 9 39 % 100 % General and administrative 14 11 12 27 % (8 )% Total Adjusted EBITDA $ 33 $ — $ (11 ) n.m. n.m. Adjusted EBITDA Margin by Segment (3) 4 % 0 % (2 %) n.m. = not meaningful (1) 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. (2) Viator segment marketing expenses are shown gross of intersegment (intercompany) expenses, 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 and expenses for all periods presented. (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. 44 TheFork Segment Year ended December 31, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Revenue $ 181 $ 154 $ 126 18 % 22 % Less: (1) Cost of sales 15 9 7 67 % 29 % Marketing (2) 51 41 58 24 % (29 )% Personnel (exclusive of stock-based compensation) 83 91 85 (9 )% 7 % Technology 12 12 12 0 % 0 % General and administrative 15 15 3 0 % 400 % Total Adjusted EBITDA $ 5 $ (14 ) $ (39 ) n.m. (64 )% Adjusted EBITDA Margin by Segment (3) 3 % (9 %) (31 %) n.m. = not meaningful (1) 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. (2) TheFork segment marketing expenses are shown gross of intersegment (intercompany) expenses, 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 and expenses for all periods presented. (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 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, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Cost of sales $ 131 $ 119 $ 78 10 % 53 % % of revenue 7.1 % 6.7 % 5.2 % 45 2024 vs. 2023 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. 2023 vs. 2022 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 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, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Marketing - Brand Tripadvisor $ 251 $ 279 $ 260 (10 %) 7 % Marketing - Viator 562 519 351 8 % 48 % Marketing - TheFork 51 41 58 24 % (29 %) Intersegment (intercompany) marketing expenses (135 ) (134 ) (93 ) 1 % 44 % Total Marketing $ 729 $ 705 $ 576 3 % 22 % % of revenue 39.7 % 39.4 % 38.6 % 2024 vs. 2023 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. 2023 vs. 2022 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. 46 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. Year ended December 31, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Personnel (exclusive of stock-based compensation) $ 475 $ 474 $ 415 0 % 14 % Stock-based compensation 120 96 88 25 % 9 % Total Personnel $ 595 $ 570 $ 503 4 % 13 % % of revenue 32.4 % 31.9 % 33.7 % 2024 vs. 2023 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. 2023 vs. 2022 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 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, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) Technology $ 91 $ 80 $ 63 14 % 27 % % of revenue 5.0 % 4.5 % 4.2 % 2024 vs. 2023 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. 47 2023 vs. 2022 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 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, % Change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (in millions) General and administrative $ 91 $ 79 $ 74 15 % 7 % % of revenue 5.0 % 4.4 % 5.0 % 2024 vs. 2023 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. 2023 vs. 2022 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 Depreciation expense consists of depreciation on computer equipment, leasehold improvements, furniture, office equipment and other assets, and amortization of capitalized website development costs and right-of-use (“ROU”) assets related to our finance lease. Amortization consists of the amortization of definite-lived intangibles purchased in business acquisitions. Year ended December 31, 2024 2023 2022 (in millions) Depreciation $ 79 $ 78 $ 84 Amortization of intangible assets 6 9 13 Total depreciation and amortization $ 85 $ 87 $ 97 % of revenue 4.6 % 4.9 % 6.5 % 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. 48 Restructuring and other related reorganization costs Restructuring and other related reorganization costs consist primarily of employee severance and related benefits and other related reorganization costs. Year ended December 31, 2024 2023 2022 (in millions) Restructuring and other related reorganization costs $ 21 $ 22 $ — % of revenue 1.1 % 1.2 % 0.0 % The Company incurred pre-tax restructuring and other related reorganization costs of $21 million during the year ended December 31, 2024, as discussed above. 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 Term Loan B Facility, the 2025 Senior Notes, the 2026 Senior Notes, as well as imputed interest on finance leases. Year ended December 31, 2024 2023 2022 (in millions) Interest expense $ (46 ) $ (44 ) $ (44 ) 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: Debt ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information. Interest Income Interest income primarily consists of interest earned from available on demand bank deposits, term deposits, money market funds, and marketable securities, including amortization of discounts and premiums on our marketable securities. Year ended December 31, 2024 2023 2022 (in millions) Interest income $ 48 $ 47 $ 15 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 assets, gain/(loss) on extinguishment of debt, and other non-operating income (expenses). 49 Year ended December 31, 2024 2023 2022 (in millions) Other income (expense), net $ (7 ) $ (4 ) $ (5 ) 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: Other Income (Expense), Net ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information. (Provision) Benefit for Income Taxes Year ended December 31, 2024 2023 2022 (in millions) (Provision) benefit for income taxes $ (82 ) $ (115 ) $ (47 ) Effective tax rate 94.3 % 92.0 % 70.1 % Our effective tax rate differed from the U.S. 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, 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: Income Taxes ” in the notes to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information. Net income (loss) Year ended December 31, 2024 2023 2022 (in millions) Net income (loss) $ 5 $ 10 $ 20 Net income (loss) margin 0.3 % 0.6 % 1.3 % 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 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 ”. 50 All drivers discussed above are described in more detail above under “ Revenue and Segment Information ” and “ Consolidated Expenses. ” Adjusted EBITDA To provide investors with additional information regarding our financial results, we also disclose consolidated Adjusted EBITDA, which is a non-GAAP financial measure. 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 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 CODM, management and Board of Directors. We define Adjusted EBITDA as net income (loss) plus: (1) provision (benefit) for income taxes; (2) other expense (income), net; (3) depreciation and amortization; (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; (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. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results. Some of these limitations are: • Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • 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; • 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, 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; • Adjusted EBITDA is unaudited and does not conform to SEC Regulation S-X, and as a result such information may be presented differently in our future filings with the SEC; and • other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. 51 The following table presents a reconciliation of Adjusted EBITDA to Net Income (Loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, for the periods presented: Year ended December 31, 2024 2023 2022 (in millions) Net income (loss) $ 5 $ 10 $ 20 Add: Provision (benefit) for income taxes 82 115 47 Add: Other expense (income), net 5 1 34 Add: Restructuring and other related reorganization costs 21 22 — Add: Legal reserves, settlements and other (1) 18 — 1 Add: Transaction related expenses (2) 3 3 — Add: Other non-recurring expenses (income) (3) — — 8 Add: Stock-based compensation 120 96 88 Add: Depreciation and amortization 85 87 97 Adjusted EBITDA $ 339 $ 334 $ 295 (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. Liquidity and Capital Resources Our principal source of liquidity is cash flow generated from operations and our existing cash and cash equivalents balance. Our liquidity needs can also be met through drawdowns under the Credit Facility. 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. As of December 31, 2024, the significant majority of our cash was denominated in U.S. dollars. As of December 31, 2024, we had $582 million of cumulative undistributed earnings in foreign subsidiaries which were no longer considered to be indefinitely reinvested. As of December 31, 2024, we maintained a deferred income tax liability on our consolidated balance sheet, which was not material, for the U.S. federal and state income tax and foreign withholding tax liabilities on the cumulative undistributed foreign earnings that we no longer consider 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. 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. 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 52 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. The Credit Facility, 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 for a change of control. As of December 31, 2024 and 2023, we were in compliance with our covenant requirements in effect under the Credit Facility. 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, 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 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. 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%, payable monthly. On July 15, 2024, the Company used these funds to fully redeem its 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. 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 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. Significant uses of capital and other liquidity matters On November 1, 2019, our Board of Directors authorized the repurchase of an additional $100 million in shares of our common stock under our existing share repurchase program, which increased the amount available to the Company under this share repurchase program to $250 million. 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. 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 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 53 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 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, 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 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: (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, related to this 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 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. 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. 54 Our cash flows from operating, investing and financing activities, as reflected in our consolidated statements of cash flows, are summarized in the following table: Year ended December 31, 2024 2023 2022 (in millions) Net cash provided by (used in): Operating activities $ 144 $ 235 $ 400 Investing activities (73 ) (63 ) (52 ) Financing activities (63 ) (127 ) (27 ) 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, 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. 55 The following table summarizes our current and long-term material cash requirements, both accrued and off-balance sheet, as of December 31, 2024: By Period Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years (in millions) Term Loan B Facility (1) $ 499 $ 5 $ 10 $ 10 $ 474 Expected interest payments on Term Loan B Facility (2) 219 35 68 67 49 2026 Senior Notes (3) 345 — 345 — — Expected interest payments on 2026 Senior Notes (4) 1 1 — — — Finance lease obligations (5) 57 10 20 18 9 Operating lease obligations (6) 20 7 6 3 4 Expected commitment fee payments on Credit Facility (7) 4 1 2 1 — Purchase obligations and other (8) 106 35 54 17 — Total (9)(10)(11) $ 1,251 $ 94 $ 505 $ 116 $ 536 (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. These amounts exclude expected rental income under non-cancelable subleases. (6) Estimated future lease payments for our operating leases, primarily for office space, with non-cancelable lease terms. These amounts exclude expected rental income under non-cancelable subleases. (7) Expected commitment fee payments are based on the daily unused portion of the Credit Facility, issued letters of credit, and the effective commitment fee rate as of December 31, 2024; 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 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 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. Office Lease Commitments As of December 31, 2024, we leased approximately 280,000 square feet of office space for our corporate headquarters in Needham, Massachusetts, which has an expiration date of December 2030 and an option to extend the lease term for two consecutive terms of five years each. 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 165,000 square feet, at nearly 25 other locations across North America, Europe and Asia Pacific, in cities such as New York, London, Singapore, Barcelona and 56 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), contractual disputes (including breach of a covenant or disagreements as to interpretation), defamation and reputational claims. Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. 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 and is material, we record the estimated loss in our consolidated statements of operations. We provide disclosures in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the consolidated financial statements. 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, except for certain known income tax matters discussed below. 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. 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 to our provision for income taxes 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 income tax provisions and accruals. 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. 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 57 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. Item 7A. Qua ntitative and Qualitative Disclosures About Market Risk Market Risk Management Market risk refers to the risk of loss arising from adverse changes in stock prices, interest rates and foreign currency exchange rates. We are exposed to market risks primarily due to our international operations, our ongoing investment and financial activities, as well as changes in economic conditions in all significant markets in which we operate. 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 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, 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. Our interest income and expense are most sensitive to fluctuations in U.S. interest rates. We generally invest our excess cash in available on demand bank deposits and term deposits at major global financial institutions, money market funds, and marketable securities. Our investment policy and strategy is focused on capital preservation and supporting our liquidity requirements. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer. Our investment policy requires our investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. 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 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, Term Loan B Facility 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 58 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. Foreign Currency Exchange Rates We conduct business in certain international markets, largely in the Europe, including the U.K., and also in countries such as Singapore and Australia. Because we operate in international markets, we have exposure to different economic climates, political arenas, tax systems and regulations that could affect foreign currency exchange rates. Some of our subsidiaries maintain their accounting records in their respective local currencies other than the U.S. dollar. Consequently, changes in foreign currency exchange rates may impact the translation of those subsidiary’s financial statements into U.S. dollars. As a result, we face exposure to adverse movements in foreign currency exchange rates as the financial results of our non-U.S. dollar operations are translated from local currency, or functional currency, into U.S. dollars upon consolidation. If the U.S. dollar weakens against the functional currency, the translation of these foreign currency denominated balances will result in increased net assets, revenue, operating expenses, operating income and net income upon consolidation. 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. The effect of foreign currency exchange on our business historically has varied from quarter to quarter and may continue to do so, potentially materially. In order to provide a meaningful assessment of the foreign currency exchange rate risk associated with our consolidated financial statements, we performed a sensitivity analysis. A hypothetical 10% decrease of the foreign currency exchange rates in our significant international markets relative to the U.S. dollar, or strengthening of the U.S. dollar, would generate an estimated unrealized loss of approximately $35 million related to a decrease in our net assets as of December 31, 2024, which would initially be recorded to accumulated other comprehensive income (loss) on our consolidated balance sheet. In addition, foreign currency exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in transactional gains and losses. We recognize these transactional gains and losses (primarily Euro and British pound currency transactions) in our consolidated statement of operations and have recorded net foreign currency exchange losses of $3 million, $5 million and $9 million for the years ended December 31, 2024, 2023 and 2022, respectively, in “other income (expense), net” on our consolidated statements of operations. Future transactional gains and losses are inherently difficult to predict as they are reliant on how the multiple currencies in which we transact fluctuate in relation to the U.S. dollar and other functional currencies, and the relative composition and denomination of monetary assets and liabilities each period. We manage our exposure to foreign currency risk through internally established policies and procedures. To the extent practicable, we minimize our foreign currency exposures by maintaining natural hedges between our current assets and current liabilities in similarly denominated foreign currencies, as well as, using derivative financial instruments. We use foreign currency forward exchange contracts (“forward contracts”) to manage certain short-term foreign currency risk to attempt to reduce the effects of fluctuating foreign currency exchange rates on our cash flows denominated in foreign currencies. We do not use financial instruments for trading purposes and are not a party to any leveraged derivatives. Our objective is to hedge only those foreign currency exposures that can be confidently identified and quantified and that may result in significant impacts to our cash or the consolidated statement of operations. Our policy does not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. The forward contracts which we have entered into to date, have principally addressed foreign currency exchange fluctuation risk between the Euro and the U.S. dollar. We account for these forward contacts, which have not been designated as hedges under GAAP to date, as either assets or liabilities and carry them at fair value. We had outstanding forward contracts as of December 31, 2024 and 2023, with a total notional value of $11 million and $9 million, respectively. These forward contracts were not designated as hedges and had maturities of less than 90 days. We recognize gains and losses from forward contracts in other income (expense), net on our consolidated statement of operations upon settlement or a change in fair value, which was not material for the year ended December 31, 2023. 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. Refer to “Note 3: Financial Instruments and Fair Value 59 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. 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, including U.K. and E.U. relations, may result in future currency exchange rate volatility which may impact our business and results of operations. 60 Ite m 8. Financial Statements and Supplementary Data Index to Financial Statements and Supplementary Data: Report of Independent Registered Public Accounting Firm (KPMG LLP, Boston, Massachusetts, Auditor Firm ID: 185 ) 62 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 65 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022 66 Consolidated Balance Sheets as of December 31, 2024 and 2023 67 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 68 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 69 Notes to Consolidated Financial Statements 70 61 REP ORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors Tripadvisor, Inc.: 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). 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. 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 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. 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. 62 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 As discussed in Notes 2 and 18 to the consolidated financial statements, and disclosed in the consolidated statements of operations, the Company had $1,835 million in revenue, net of intersegment revenue of $135 million, for the year ended December 31, 2024, of which $949 million was Brand Tripadvisor related, $840 million was Viator related and $181 million was TheFork related. 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 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. This matter also included determining the revenue streams over which procedures would be performed and evaluating the nature and extent of evidence obtained over each revenue stream, both of which included the involvement of IT professionals with specialized skills and knowledge. 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 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. 63 We involved IT professionals with specialized skills and knowledge, who assisted in: • testing certain IT applications used by the Company in its revenue recognition processes. • 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, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2014. Boston, Massachusetts February 20, 2025 64 TRIPADVISOR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) Year ended December 31, 2024 2023 2022 Revenue (Note 2, Note 18) $ 1,835 $ 1,788 $ 1,492 Costs and expenses: Cost of sales (exclusive of depreciation and amortization as shown separately below) 131 119 78 Marketing 729 705 576 Personnel (including stock-based compensation of $ 120 , $ 96 , and $ 88 - Note 13) 595 570 503 Technology 91 80 63 General and administrative 91 79 74 Depreciation and amortization 85 87 97 Restructuring and other related reorganization costs (Note 7) 21 22 — Total costs and expenses 1,743 1,662 1,391 Operating income (loss) 92 126 101 Other income (expense): Interest expense ( 46 ) ( 44 ) ( 44 ) Interest income 48 47 15 Other income (expense), net (Note 16) ( 7 ) ( 4 ) ( 5 ) Total other income (expense), net ( 5 ) ( 1 ) ( 34 ) Income (loss) before income taxes 87 125 67 (Provision) benefit for income taxes (Note 10) ( 82 ) ( 115 ) ( 47 ) Net income (loss) $ 5 $ 10 $ 20 Earnings (loss) per share attributable to common stockholders (Note 15): Basic $ 0.04 $ 0.07 $ 0.14 Diluted $ 0.04 $ 0.08 $ 0.14 Numerator used to compute earnings (loss) per share attributable to common stockholders (Note 15): Basic $ 5 $ 10 $ 20 Diluted $ 6 $ 11 $ 21 Weighted average common shares outstanding (Note 15): Basic 139 139 140 Diluted 145 145 146 The accompanying notes are an integral part of these consolidated financial statements. 65 TRIPADVISOR, INC. CONSOLIDATED STATEMENTS OF COMPREHENSI VE INCOME (LOSS) (in millions) Year ended December 31, 2024 2023 2022 Net income (loss) $ 5 $ 10 $ 20 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments, net of tax (1) ( 23 ) 11 ( 27 ) Reclassification adjustments included in net income (loss), net of tax (1) 3 — 1 Total other comprehensive income (loss), net of tax ( 20 ) 11 ( 26 ) Comprehensive income (loss) $ ( 15 ) $ 21 $ ( 6 ) (1) Deferred income tax liabilities related to these amounts are not material. The accompanying notes are an integral part of these consolidated financial statements. 66 TRIPADVISOR, INC. CONSOLIDATED BALANCE SHEETS (in millions, except number of shares and per share amounts) December 31, December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents (Note 3) $ 1,064 $ 1,067 Accounts receivable, net (allowance for expected credit losses of $ 25 and $ 21 , respectively) (Note 2, Note 3) 207 192 Prepaid expenses and other current assets 49 38 Total current assets 1,320 1,297 Property and equipment, net (Note 4, Note 5) 200 191 Operating lease right-of-use assets (Note 5) 17 15 Intangible assets, net (Note 6) 36 43 Goodwill (Note 6) 814 829 Non-marketable investments (Note 3) 30 32 Deferred income taxes, net (Note 10) 101 86 Other long-term assets, net of allowance for credit losses of $ 10 and $ 10 , respectively (Note 3) 43 44 TOTAL ASSETS $ 2,561 $ 2,537 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 49 $ 28 Deferred merchant payables (Note 2) 255 237 Deferred revenue (Note 2) 47 49 Current portion of debt (Note 8) 5 — Income taxes payable (Note 10) 23 6 Accrued expenses and other current liabilities (Note 7) 249 252 Total current liabilities 628 572 Long-term debt (Note 8) 831 839 Finance lease obligation, net of current portion (Note 5) 43 51 Operating lease liabilities, net of current portion (Note 5) 11 6 Deferred income taxes, net (Note 10) 1 1 Other long-term liabilities (Note 9) 104 197 Total Liabilities 1,618 1,666 Commitments and contingencies (Note 11) Stockholders’ equity: (Note 14) Preferred stock, $ 0.001 par value — — Authorized shares: 100,000,000 Shares issued and outstanding: 0 and 0 , respectively Common stock, $ 0.001 par value — — Authorized shares: 1,600,000,000 Shares issued: 153,655,038 and 149,775,361 , respectively Shares outstanding: 127,394,786 and 124,881,494 , respectively Class B common stock, $ 0.001 par value — — Authorized shares: 400,000,000 Shares issued and outstanding: 12,799,999 and 12,799,999 , respectively Additional paid-in capital 1,605 1,493 Retained earnings 276 271 Accumulated other comprehensive income (loss) ( 91 ) ( 71 ) Treasury stock-common stock, at cost, 26,260,252 and 24,893,867 shares, respectively ( 847 ) ( 822 ) Total Stockholders’ Equity 943 871 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,561 $ 2,537 The accompanying notes are an integral part of these consolidated financial statements. 67 TRIPADVISOR, INC. CONSOLIDATED STATEMENTS OF CHA NGES IN STOCKHOLDERS’ EQUITY (in millions, except number of shares) Accumulated Class B Additional other Common stock common stock paid-in Retained comprehensive Treasury stock Shares Amount Shares Amount capital earnings income (loss) Shares Amount Total Balance as of December 31, 2021 144,656,649 $ — 12,799,999 $ — $ 1,326 $ 241 $ ( 56 ) ( 18,844,614 ) $ ( 722 ) $ 789 Net income (loss) 20 20 Other comprehensive income (loss), net of tax ( 26 ) ( 26 ) Issuance of common stock related to exercise of options and vesting of RSUs 2,234,889 — — — Withholding taxes on net share settlements of equity awards ( 20 ) ( 20 ) Stock-based compensation (Note 13) 98 98 Balance as of December 31, 2022 146,891,538 $ — 12,799,999 $ — $ 1,404 $ 261 $ ( 82 ) ( 18,844,614 ) $ ( 722 ) $ 861 Net income (loss) 10 10 Other comprehensive income (loss), net of tax 11 11 Issuance of common stock related to vesting of RSUs 2,883,823 — — — Repurchase of common stock (Note 14) ( 6,049,253 ) ( 100 ) ( 100 ) Withholding taxes on net share settlements of equity awards ( 17 ) ( 17 ) Stock-based compensation (Note 13) 106 106 Balance as of December 31, 2023 149,775,361 $ — 12,799,999 $ — $ 1,493 $ 271 $ ( 71 ) ( 24,893,867 ) $ ( 822 ) $ 871 Net income (loss) 5 5 Other comprehensive income (loss), net of tax ( 20 ) ( 20 ) Issuance of common stock related to exercise of options and vesting of RSUs 3,879,677 — — Repurchase of common stock (Note 14) ( 1,366,385 ) ( 25 ) ( 25 ) Withholding taxes on net share settlements of equity awards ( 21 ) ( 21 ) Stock-based compensation (Note 13) 133 133 Balance as of December 31, 2024 153,655,038 $ — 12,799,999 $ — $ 1,605 $ 276 $ ( 91 ) ( 26,260,252 ) $ ( 847 ) $ 943 The accompanying notes are an integral part of these consolidated financial statements. 68 TRIPADVISOR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year ended December 31, 2024 2023 2022 Operating activities: Net income (loss) $ 5 $ 10 $ 20 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 85 87 97 Stock-based compensation expense (Note 13) 120 96 88 Deferred income tax expense (benefit) (Note 10) ( 14 ) ( 25 ) ( 19 ) Provision for expected credit losses (Note 2) 8 6 6 Other, net 9 9 7 Changes in operating assets and liabilities, net: Accounts receivable, prepaid expenses and other assets ( 24 ) 6 ( 87 ) Accounts payable, accrued expenses and other liabilities 13 11 72 Deferred merchant payables 19 32 99 Income tax receivables/payables, net ( 75 ) ( 1 ) 107 Deferred revenue ( 2 ) 4 10 Net cash provided by (used in) operating activities 144 235 400 Investing activities: Capital expenditures, including capitalized website development ( 74 ) ( 63 ) ( 56 ) Other investing activities, net 1 — 4 Net cash provided by (used in) investing activities ( 73 ) ( 63 ) ( 52 ) Financing activities: Repurchase of common stock (Note 14) ( 25 ) ( 100 ) — Proceeds from the issuance of Term Loan B Facility, net of financing costs (Note 8) 493 — — Principal payments on Term Loan B Facility (Note 8) ( 1 ) — — Payment of 2025 Senior Notes (Note 8) ( 500 ) — — Payment of financing costs related to Credit Facility (Note 8) ( 1 ) ( 3 ) — Payment of withholding taxes on net share settlements of equity awards ( 21 ) ( 17 ) ( 20 ) Payments of finance lease obligation and other financing activities, net (Note 5) ( 8 ) ( 7 ) ( 7 ) Net cash provided by (used in) financing activities ( 63 ) ( 127 ) ( 27 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 11 ) 1 ( 23 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 3 ) 46 298 Cash, cash equivalents and restricted cash at beginning of period 1,067 1,021 723 Cash, cash equivalents and restricted cash at end of period $ 1,064 $ 1,067 $ 1,021 Supplemental disclosure of cash flow information: Cash paid (received) during the period for income taxes, net of refunds $ 170 $ 140 $ ( 40 ) Cash paid during the period for interest $ 58 $ 39 $ 40 Supplemental disclosure of non-cash investing and financing activities: Stock-based compensation capitalized website development costs (Note 13) $ 13 $ 10 $ 10 The accompanying notes are an integral part of these consolidated financial statements. 69 TRIPADVISOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: ORGANIZATION AND BUSINESS DESCRIPTION We refer to Tripadvisor, Inc. and our wholly-owned subsidiaries as “Tripadvisor,” “Tripadvisor group,” “the Company,” “us,” “we” and “our” in these notes to the consolidated financial statements. 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 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. As a result, Liberty beneficially owned approximately 18.2 million shares of our common stock and 12.8 million shares of our Class B common stock. On August 27, 2014, the entire beneficial ownership of our common stock and Class B common stock held by Liberty was acquired by Liberty TripAdvisor Holdings, Inc., or LTRIP. 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. 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. Assuming the conversion of all of LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own approximately 19 % of the outstanding common stock. 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 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 70 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 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, 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. 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 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. Risks and Uncertainties 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. In addition, the U.S. 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 71 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. Seasonality 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 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 . NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying consolidated financial statements include Tripadvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. 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, 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”). We believe that the assumptions underlying our consolidated financial statements are reasonable. However, these consolidated financial statements do not present our future financial position, or the results of our future operations and cash flows. One of our subsidiaries that operates in China has variable interests in affiliated entities in China in order to comply with Chinese laws and regulations, which restrict foreign investment in internet content provision businesses. Although we do not own the capital stock of these Chinese affiliates, we consolidate their results as we are the primary beneficiary of the cash losses or profits of these variable interest affiliates and have the power to direct the activity of these affiliates. 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. 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). 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 72 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 : 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. 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 Adjustments As Adjusted December 31, 2023 As Reported December 31, 2022 Adjustments As Adjusted December 31, 2022 (in millions) (in millions) Costs and expenses: Cost of sales (formerly Cost of revenue) $ 149 $ ( 30 ) 1 $ 119 $ 116 $ ( 38 ) 1 $ 78 Marketing (formerly Selling and marketing) 940 ( 235 ) 2 705 784 ( 208 ) 2 576 Personnel (including stock-based compensation of $ 96 and $ 88 ) — 570 3 570 — 503 3 503 Technology (formerly Technology and content) 273 ( 193 ) 4 80 222 ( 159 ) 4 63 General and administrative 191 ( 112 ) 5 79 172 ( 98 ) 5 74 Depreciation and amortization 87 — 87 97 — 97 Restructuring and other related reorganization costs 22 — 22 — — — Total costs and expenses $ 1,662 $ — $ 1,662 $ 1,391 $ — $ 1,391 (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 . 73 Accounting Estimates We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our consolidated financial statements are within accounting for income taxes. Refer to our accounting policy for income taxes disclosed below and “Note 10: Income Taxes ” for information regarding our significant income tax estimates. Revenue Recognition We generate all our revenue from contracts with customers. We recognize revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. When we act as an agent in the transaction, we recognize revenue for only our commission on the arrangement. We determine revenue recognition through the following steps: (1) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, we satisfy a performance obligation. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. We have provided qualitative information about our performance obligations for our principal revenue streams discussed below. There was no significant revenue recognized in the years ended December 31, 2024, 2023 and 2022 related to performance obligations satisfied in prior periods, respectively. We have applied a practical expedient and do not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year. The Company expects to complete its performance obligations within one year from the initial transaction date. The value related to our remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved. Our timing of services, invoicing and payments are discussed in more detail below and do not include a significant financing component. Our customer invoices are generally due 30 days from the time of invoicing. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. Although the substantial majority of our contract costs have an amortization period of less than one year , we have determined contract costs arising from certain sales incentives have an amortization period in excess of one year given the high likelihood of contract renewal. Sales incentives are not paid upon renewal of these contracts and therefore are not commensurate with the initial sales incentive costs. 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 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. No impairments were recognized during the years ended December 31, 2024, 2023 and 2022. 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 74 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. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue–producing transaction, that are collected by us from a customer, are reported on a net basis, or in other words excluded from revenue on our consolidated financial statements. Practical Expedients and Exemptions • We expense costs to obtain a contract as incurred, such as sales incentives, when the amortization period would have been one year or less. • We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. 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 Tripadvisor-branded Hotels Revenue. Our largest source of Brand Tripadvisor segment revenue is generated from click-based advertising on Tripadvisor-branded websites, which we refer to as our hotel meta (also referred to as hotel auction) revenue, which is primarily comprised of contextually-relevant booking links to our travel partners’ websites. Our click-based travel partners are predominantly online travel agencies, or OTAs, and hotels. Click-based advertising is generally priced on a cost-per-click, or “CPC” basis, with payments from travel partners determined by the number of travelers who click on a link multiplied by the CPC rate for each specific click. CPC rates are determined in a dynamic, competitive auction process, where the travel partner bids for rates and availability to be listed on our platform. When a CPC bid is submitted, the travel partner agrees to pay us the bid amount each time a traveler clicks on the link to that travel partner’s website. Bids can be submitted periodically – as often as daily – on a property-by-property basis. We record click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner’s website as our performance obligation is fulfilled at that time. Click-based revenue is generally billed to our travel partners monthly, consistent with the timing of the service. We also generate revenue from our cost-per-acquisition, or “CPA” model, which consists of contextually-relevant booking links to our travel partners’ websites which are advertised on our platform. We earn a commission from our travel partners, based on a pre-determined contractual commission rate, for each traveler who clicks to and books a hotel reservation on the travel partner's website, which results in a traveler stay. CPA revenue is billable only upon the completion of each traveler’s stay resulting from a hotel reservation. The travel partners provide the service to the travelers, and we act as an agent under GAAP. Our performance obligation is complete at the time of the hotel reservation booking, and the commission earned is recognized upon booking, as we have no post-booking service obligations. We recognize this revenue net of an estimate of the impact of cancellations, using historical cancellation rates and current trends. Contract assets are recognized at the time of booking for commissions that are billable upon the completion of a traveler's stay. 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, 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. Subscription-based advertising services are predominantly sold for a flat fee for a contracted period of time of one year or less and revenue is recognized on a straight-line basis over the period of the subscription service as efforts are expended evenly throughout the contract period. Subscription-based advertising services are generally billed at the inception of the service. 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. 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 75 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. We record this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as our performance obligation is fulfilled at that time. Hotel sponsored placements revenue is generally billed to our travel partners monthly, consistent with the timing of the service. Media and Advertising Revenue. We offer travel partners the ability to promote their brands through display-based advertising, or sometimes referred to as “media advertising,” placements across our platform. Our display-based advertising clients are predominantly direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations. We also sell display-based advertising to OTAs and other travel related businesses, as well as to advertisers from non-travel categories. Display-based advertising is sold predominantly on a cost per thousand impressions, or “CPM,” basis. The performance obligation in our display-based advertising arrangements is to display a number of advertising impressions on our platform and we recognize revenue for impressions as they are delivered. Services are generally billed monthly. We have applied the practical expedient to measure progress toward completion, as we have the right to invoice the customer in an amount that directly corresponds with the value to the customer of our performance to date, which is measured based on impressions delivered. Tripadvisor Experiences and Dining Revenue. We generate revenue from our experiences and restaurant offerings on Tripadvisor-branded websites and mobile apps. Tripadvisor receives 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 are eliminated on a consolidated basis. The performance obligations, timing of customer payments for our experiences and dining transactions, and methods of revenue recognition are consistent with the Viator and TheFork segments, as described below. In addition, Tripadvisor restaurant offerings, or B2B restaurant offerings, generate subscription fees for subscription-based advertising to our restaurant partners that allow restaurants to manage and promote their website URL, email address, phone number, special offers and other information related to their business, as well as access to certain online reservation management services, marketing analytic tools, and menu syndication services. As the performance obligation is to provide restaurants with access to these services over a subscription period, the subscription fee revenue is recognized over the subscription period on a straight-line basis as efforts are expended evenly throughout the contract period. Subscription-based advertising services are generally billed at the inception of the service. 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. In addition, we offer restaurant partners the opportunity to advertise and promote their business through restaurant media advertising placements on our platform. This service is generally priced on a CPC basis, with payments from restaurant partners determined by the number of clicks by consumers on the sponsored link multiplied by the CPC rate for each specific click. CPC rates for media advertising placements agreed to by our restaurant partners are based on a pre-determined contractual rate. We record this click-based advertising revenue as the click occurs and diner leads are sent to the restaurant partner as our performance obligation is fulfilled at that time. Click-based revenue is generally billed to our restaurant partners monthly, consistent with the timing of the service. Other Revenue. 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. 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. 76 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. The performance obligations, timing of customer payments for these offerings, and methods of revenue recognition are generally consistent with click-based advertising and display-based advertising revenue, as described above. Viator Segment We provide an online marketplace that allows travelers to research and book tours, activities and attractions in popular travel destinations across the globe through our Viator-branded platform, which includes website, mobile web, and mobile app. Through Viator, we also power traveler bookings of tours, activities and attractions on behalf of third-party distribution partner websites, including the Tripadvisor platform as well as many of the world’s major OTA’s, airlines, hotels, online and offline travel agencies, and other prominent content and eCommerce brands. We work with local tour, activity, and experience operators (“operators”) to provide travelers (“customers”) the ability to book tours, activities and attractions, or “experiences,” in destinations around the world. We generate commissions for each booking transaction we facilitate through our online reservation system, in exchange for certain activities, including the use of the Company’s booking platform, post-booking 24/7 customer support until the time of the experience and payment processing activities as the merchant of record, which is the completion of the performance obligation. These activities are not distinct from each other and are not separate performance obligations. As a result, the Company’s single performance obligation is to facilitate an experience, which is complete upon the time the experience occurs, and when revenue is recognized. We do not control the experience or have inventory risk before the operator provides the experience to our customer and therefore act as agent for substantially all of these transactions under GAAP. We collect payment from the customer prior to the experience occurring, which includes both our commission and the amount due to the operator. We record our commissions as deferred revenue on our consolidated balance sheet when payment is received, including amounts which are refundable subject to cancellation, until the experience occurs and revenue is recognized. The amount due to the operator is recorded as a deferred merchant payable on our consolidated balance sheet until completion of the experience, after which payment is remitted to the operator. 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 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. 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 77 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 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. The transaction fee is recognized as revenue after the reservation is fulfilled, or as diners are seated by our restaurant customers. We invoice restaurants monthly for transaction fees. To a lesser extent, we also generate subscription fees for providing access to certain online reservation management services, marketing analytic tools, and menu syndication services. For these services, our performance obligation is to provide restaurants with access to these services over the subscription period, which generally is one-month, and we recognize revenue once our performance obligation is met and invoice restaurants monthly for these subscription services. Refer to “Note 18: Segment and Geographic Information ” for disaggregation of the Company’s revenue by major products and revenue sources. We have determined that disaggregating revenue into these categories achieves the disclosure objective under GAAP, which is to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. 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 sheets. 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. There were no significant changes in deferred revenue during the years ended December 31, 2024 and 2023 related to business combinations, impairments, cumulative catch-ups or other material adjustments. Deferred Merchant Payables 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. Advertising costs 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, 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 . 78 Stock-Based Compensation Stock Options. Our employee stock options generally consist of service based awards. The exercise price is equal to the market price of the underlying shares of our common stock at the date of grant. In this regard, when granting stock option awards, our practice is to determine the applicable grant date and to specify that the exercise price shall be the closing price of our common stock on the date of grant. Our stock options generally have a term of ten years from the date of grant and typically vest equally over a four-year requisite service period. We amortize the grant-date fair value of our stock option grants as stock-based compensation expense over the vesting term on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. The estimated grant-date fair value of stock options is calculated using a Black-Scholes Merton option-pricing model (“Black-Scholes model”). The Black-Scholes model incorporates assumptions to fair value stock-based awards, which includes the risk-free rate of return, expected volatility, expected term, and expected dividend yield. Our risk-free interest rate is based on the yields currently available on zero-coupon U.S. Treasury issues, in effect at the time of the grant, whose remaining maturity period most closely approximates the stock option’s expected term assumption. 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. We estimate our expected term using historical exercise behavior and expected post-vest termination data. Our expected dividend yield is zero as we have not historically paid regular cash dividends on our common stock and do not expect to pay regular cash dividends for the foreseeable future. Restricted Stock Units. Restricted stock units (“RSUs”) are stock awards that are granted to employees entitling the holder to shares of our common stock as the award vests. RSUs are measured at fair value based on the quoted price of our common stock at the date of grant. We amortize the fair value of RSUs as stock-based compensation expense over the vesting term, which is typically over a four-year requisite service period on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. Performance-Based Awards. Performance-based stock options and RSUs vest upon achievement of certain company-based performance conditions and a requisite service period. On the date of grant, the fair value of a performance-based award is calculated using the same method as our service based stock options and RSUs as described above. We then assess whether it is probable that the individual performance targets would be achieved. If assessed as probable, compensation expense will be recorded for these awards over the estimated performance period. At each reporting period, we reassess the probability of achieving the performance targets and the performance period required to meet those targets. The estimation of whether the performance targets will be achieved and the performance period required to achieve the targets requires judgment, and to the extent actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized. The ultimate number of shares issued and the related compensation expense recognized will be based on a comparison of the final performance metrics to the specified targets. Market-Based Awards . We issue market-based performance RSUs, or MSUs, which vest upon achievement of specified levels of market conditions. The fair value of our MSUs is estimated at the date of grant using a Monte-Carlo simulation model. The probabilities of the actual number of market-based performance units expected to vest and resultant actual number of shares of common stock expected to be awarded are reflected in the grant date fair values; therefore, the compensation expense for these awards will be recognized assuming the requisite service period is rendered and are not adjusted based on the actual number of awards that ultimately vest. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value. 79 The Company accounts for forfeitures in the period in which they occur, rather than estimating expected forfeitures. Income Taxes We record income taxes under the asset and liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted income tax rates expected to be in effect when we realize the underlying items of income and expense. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. 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. Therefore, actual income taxes could materially vary from these estimates. We classify deferred tax assets and liabilities as noncurrent on our consolidated balance sheet. 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. Cash, Cash Equivalents, Restricted Cash and Marketable Securities Our cash consists of available on demand bank deposits held in global financial institutions. Our cash equivalents generally consist of highly liquid investments, generally including money market funds, term deposits and marketable securities, with maturities of 90 days or less at the date of purchase. As of December 31, 2024 and 2023, our restricted cash, which primarily consists of legally restricted deposits and escrowed security deposits, was not material. We classify marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify marketable equity securities, limited by policy to money market funds and mutual funds, as either a cash equivalent, short-term or long-term based on the nature of each security and its availability for use in current operations. Our marketable securities are classified and accounted for as available-for-sale, and therefore are carried at fair value, with unrealized gains and losses, net of taxes, reported in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Fair values are determined for each individual security in the investment portfolio. We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate the designations at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Realized gains and losses on the sale of marketable securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration, liquidity, and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months , and no security shall have a final maturity date greater than three years , according to our investment policy. 80 We continually review any available-for-sale securities to determine whether their fair value is below their carrying value. If the fair value of an available-for-sale security is below their carrying value, and either we intend to sell the security or we will be required to sell before recovery, then the difference between fair value and carrying value is recognized as a loss in other income (expense), net on our consolidated statements of operations. If we do not intend to sell and we will not be required to sell before recovery, then we analyze whether a portion of the unrealized loss is the result of a credit loss. When a portion of the unrealized loss is the result of a credit loss, we recognize an allowance for expected credit losses on our consolidated balance sheet and a corresponding loss in other income (expense), net on our consolidated statements of operations. Any portion of the unrealized loss on the available-for-sale securities that is not attributable to a credit loss would be recognized as an unrealized loss in accumulated other comprehensive income (loss) within our consolidated statements of changes in stockholders’ equity. The Company's investment portfolio at any point in time may contain various investments, including, in U.S. treasury and U.S. government agency securities, taxable and tax-exempt municipal notes, corporate notes and bonds, commercial paper, non-U.S. government agency securities, overnight demand deposits, and money market funds. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero loss expectation for U.S. treasury and U.S. government agency securities. The Company regularly reviews the securities in an unrealized loss position and evaluates the expected credit loss risk by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of December 31, 2024 and 2023 , the Company had no available-for-sale securities. Accounts Receivable and Allowance for Expected Credit Losses Accounts receivable are recognized when the right to consideration becomes unconditional and are recorded net of an allowance for expected credit losses. We record accounts receivable at the invoiced amount. Our customer invoices are generally due 30 days from the time of invoicing. The Company uses the “expected credit loss” methodology, allowed under GAAP, in estimating its allowance for expected credit losses. We apply the “expected credit loss” methodology by first assessing our historical losses based on credit sales and then adding in an assessment of expected changes in the foreseeable future, whether positive or negative, to the Company’s ability to collect its outstanding accounts receivables, or the expectation for future losses. The Company develops its expectation for future losses by assessing the profiles of its customers using their historical payment patterns, any known changes to those customers’ ability to fulfill their payment obligations, and assessing broader economic conditions that may impact our customers’ ability to pay their obligations. Where appropriate, the Company performs this analysis using a portfolio approach. Portfolios comprise customers with similar characteristics and payment history, and we have concluded that the aggregation of these customers into various portfolios does not produce a result that is materially different from considering the affected customers individually. Customers are assigned internal credit ratings, as determined by the Company, based on our collection profiles. Customers whose outstanding obligations are less likely to experience a credit loss are assigned a higher internal credit rating, and those customers whose outstanding obligations are more likely to experience a credit loss are assigned a lower credit rating. We recognize a greater credit loss allowance on the accounts receivable due from those customers in the lower credit rating tranche, as determined by the Company. When the Company becomes aware of facts and circumstances affecting an individual customer, it also takes that specific customer information into account as part of its calculation of expected credit losses. The Company's exposure to credit losses may increase if our customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, or other customer-specific factors. 81 The following table presents the changes in our allowance for expected credit losses for the periods presented: December 31, 2024 2023 2022 (in millions) Allowance for expected credit losses: Balance, beginning of period $ 21 $ 28 $ 28 Provision charged to expense 8 6 6 Write-offs, net of recoveries and other adjustments ( 4 ) ( 13 ) ( 6 ) Balance, end of period $ 25 $ 21 $ 28 Property and Equipment We record property and equipment at cost, net of accumulated depreciation. 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. We expense costs related to the planning and post-implementation phases of website development as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment, capitalized website development, office furniture and other equipment. We depreciate leasehold improvements using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Leases We lease office space in a number of countries around the world, generally under non-cancelable operating lease agreements. 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 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. We define a lease as a contract, or part of a contract, that conveys the right to control the use of identified property or equipment (an identified asset) for a period of time in exchange for consideration. Control over the use of the identified asset means that we have both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. Our lease contracts contain both lease and non-lease components which we combine as a single component under our accounting policy by asset class, except for office space leases and certain other leases, such as colocation data center leases, which we account separately for the lease and non-lease components. For leases which the consideration in the contract is allocated to lease and non-lease components, we base it on each component’s relative standalone price. We determine standalone prices for the lease components based on the prices for which other lessors lease similar assets on a standalone basis. We determine standalone prices for the non-lease component based on the prices that third-party suppliers charge for services for similar assets on a standalone basis. If observable standalone prices are not readily available, we estimate the standalone prices based on other available observable information. However, for certain categories of equipment leases, such as network equipment and others, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases that have similar characteristics, we apply a portfolio approach to effectively account for operating lease right-of-use ROU assets and operating lease liabilities. 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 82 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. We establish assets and liabilities for the estimated construction costs incurred under lease arrangements where we are considered the owner for accounting purposes only, or build-to-suit leases, to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance under GAAP. If we continue to be the deemed owner, for accounting purposes, the facilities are accounted for as finance obligations. Finance Leases Finance lease ROU assets and finance lease liabilities are recognized at the lease commencement date or the date the lessor makes the leased asset available for use. Finance lease ROU assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of finance lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable; and (2) reduced to reflect lease payments made during the period. Amortization expense for finance lease ROU assets and interest accretion on finance lease liabilities are recorded to depreciation and interest expense, respectively, in our consolidated statement of operations. We lease approximately 280,000 square feet of office space for our corporate headquarters in Needham, Massachusetts. This lease has an expiration date of December 2030 , with an option to extend the lease term for two consecutive terms of five years each and is accounted for as a finance lease. Operating Leases 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. ROU assets associated with operating leases comprise the initial lease liability, and are then adjusted for any prepaid or deferred rent payments, unamortized initial direct costs, and lease incentives received. Amortization expense for operating lease ROU assets and interest accretion on operating lease liabilities are recognized as a single operating lease cost in our consolidated statement of operations, which results effectively in recognition of rent expense on a straight-line basis over the lease period. The carrying amount of operating lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable; and (2) reduced to reflect lease payments made during the period. We present the combination of both the amortization of operating lease ROU assets and the change in the operating lease liabilities in the same line item within the adjustments to reconcile net income (loss) to net cash provided by operating activities in our consolidated statement of cash flows. 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 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. We recognize these costs as variable lease costs on our consolidated statement of operations, which were not material during the years ended December 31, 2024, 2023 and 2022. In addition, our short-term lease costs were not material in any period presented. 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 83 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 . Non-Marketable Equity Investments We account for non-marketable equity investments through which we exercise significant influence but do not have control over the investee under the equity method. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investment as they occur rather than as dividends or other distributions are received. Losses are limited to the extent of the Company’s investment in, advances to and commitments for the investee. In the event we are unable to obtain accurate financial information from the investee in a timely manner, we record our share of earnings or losses of such equity investment on a lag. Non-marketable equity investments that are not accounted for under the equity method and that do not have a readily determinable fair value are accounted for under the measurement alternative, allowed under GAAP. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date. We classify our non-marketable equity investments as long-term assets on our consolidated balance sheet as those investments do not have stated contractual maturity dates. On a quarterly basis, we perform a qualitative assessment considering impairment indicators, if any, to evaluate whether these investments are impaired. 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 our assessment indicates that an impairment exists, we measure our non-marketable equity investments at fair value. Valuations of such privately-held companies are inherently complex and uncertain due to the lack of liquid market for such company’s securities. In addition, such investments are inherently risky in that such companies are typically at an early stage of development, may have no or limited revenues, may not be or may never become profitable, may not be able to secure additional funding or their technologies, services or products may not be successfully developed or introduced into the market. Business Combinations We account for acquired businesses using the acquisition method of accounting which requires that tangible assets and identifiable intangible assets acquired and assumed liabilities be recorded at the date of acquisition at their respective fair values. Any excess purchase price over the estimated fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include but are not limited to future expected cash flows from customer and supplier relationships, acquired technology and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Valuations are performed by management or third-party valuation specialists under management's supervision, where appropriate. Any changes to provisional amounts identified during the measurement period, calculated as if the accounting had been completed as of the acquisition date, are recognized in the consolidated financial statements in the reporting period in which the adjustment amounts are determined. 84 Goodwill and Intangible Assets Goodwill We assess goodwill, which is not amortized, for impairment annually during the fourth quarter, or more frequently, if events and circumstances indicate impairment may have occurred. We test goodwill for impairment at the reporting unit level. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination in which such goodwill was generated as of the acquisition date. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety. Accordingly, the fair value of the reporting unit as a whole is available to support the recoverability of its goodwill. The Company has the option to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In the evaluation of goodwill for impairment, we generally first perform a qualitative assessment to determine whether it is more likely than not (i.e., a likelihood of more than 50 %) that the estimated fair value of the reporting unit is less than the carrying amount. Periodically, we may choose to forgo the initial qualitative assessment and proceed directly to a quantitative analysis to assist in our annual evaluation. When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, including, but not limited to the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments from the date of acquisition or to establish an updated baseline quantitative analysis, and other performance and market indicators. During a qualitative assessment, if we determine that it is not more likely than not that the implied fair value of the goodwill is less than its carrying amount, no further testing is necessary. If, however, we determine that it is more likely than not that the implied fair value of the goodwill is less than its carrying amount, we then perform a quantitative assessment and compare the estimated fair value of the reporting unit to the carrying value. If the carrying value of a reporting unit exceeds its estimated fair value, the goodwill impairment is measured using the difference between the carrying value and the estimated fair value of the reporting unit; however, any loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. In determining the estimated fair values of reporting units in a quantitative goodwill impairment test, we generally use a blend, of the following recognized valuation methods: the income approach (i.e. discounted cash flows model) and the market valuation approach, which we believe compensates for the inherent risks of using either model on a stand-alone basis. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: weighted average cost of capital; long-term rate of growth and profitability of the reporting unit; income tax rates and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison to comparable publicly traded firms in similar lines of business and other precedent transactions. Our significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units. Valuations are performed by management or third-party valuation specialists under management's supervision, where appropriate. We believe that the estimated fair values assigned to our reporting units in impairment tests are based on reasonable assumptions that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ from those estimates. The use of substantially different assumptions, estimates or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge. During the Company's annual goodwill impairment test in the fourth quarter of 2024, a qualitative assessment was performed for all our reporting units, which are Brand Tripadvisor, Viator, and TheFork. We determined that it was not more likely than not that the fair value of any reporting unit was less than its carrying value, and, accordingly, no impairment charges were recorded during the year ended December 31, 2024. 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 85 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. Intangible Assets Intangible assets with estimable useful lives, or definite-lived intangibles, are carried at cost and are amortized on a straight-line basis over their estimated useful lives and reviewed for impairment upon certain triggering events. We routinely review the remaining estimated useful lives of our definite-lived intangible assets. If we reduce the estimated useful life assumption, the remaining unamortized balance is amortized over the revised estimated useful life. Intangible assets that have indefinite lives are not amortized and are tested for impairment annually during the fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Similar to the qualitative assessment for goodwill, we may assess qualitative factors to determine if it is more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount. If we determine that it is not more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount, no further testing is necessary. If, however, we determine that it is more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount, we compare the implied fair value of the indefinite-lived asset with its carrying amount. If the carrying amount of an individual indefinite-lived intangible asset exceeds its implied fair value, the individual asset's carrying value is written down by an amount equal to such excess. The assessment of qualitative factors is optional and at our discretion. We may bypass the qualitative assessment for any indefinite-lived intangible asset in any period and resume performing the qualitative assessment in any subsequent period. We base our quantitative measurement of fair value of indefinite-lived intangible assets, which consist of Tripadvisor-brand trade name and trademarks, using the relief-from-royalty method. 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. 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. As part of our qualitative assessment we considered, amongst other factors, the amount of excess fair value of our trade names and trademarks to the carrying value of those same assets, changes in estimates, and valuation input assumptions, since our previous quantitative analysis. After considering these factors and the impact that changes in such factors would have on the inputs used in our previous quantitative assessment, we determined that it was more likely than not that our indefinite-lived intangible assets were not impaired as of December 31, 2024. Impairment of Long-Lived Assets We periodically review the carrying amount of our definite-lived intangible assets and other long-term assets, including property and equipment, net and operating lease right-of-use assets, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. The Company’s impairment evaluation is performed at the asset group level or the lowest level for which identified cash flows are largely independent, which the Company has defined as the reporting unit level. If such facts indicate a potential impairment, we assess the recoverability of the asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset of the group. 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 86 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. Accordingly, actual results could vary significantly from such estimates. We have not identified any circumstances that would warrant an impairment charge for any recorded definite-lived intangibles or other long-term assets on our consolidated balance sheet at December 31, 2024 or 2023 . Foreign Currency Translation and Transaction Gains and Losses Our consolidated financial statements are reported in U.S. dollars. Certain of our subsidiaries outside of the U.S. use the local currency as their functional currency and not the U.S. dollar. Therefore assets and liabilities of our foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable reporting period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity on our consolidated balance sheet. In addition, our subsidiaries also engage in transactions in currencies other than its functional currency. Transactions denominated in currencies other than the functional currency are recorded based on foreign currency exchange rates at the time such transactions arise. Subsequent changes in foreign currency exchange rates result in transaction gains and losses which are reflected in our consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded net foreign currency exchange losses of $ 2 million, $ 5 million and $ 5 million, respectively, for the years ended December 31, 2024, 2023 and 2022, in other income (expense), net on our consolidated statements of operations. These amounts also include transaction gains and losses, both realized and unrealized from forward contracts. 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. In certain circumstances, we enter into forward contracts to reduce, to the extent practical, our potential exposure to the effects of fluctuating foreign currency exchange rates on our cash flows denominated in foreign currencies. Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not expected to be significant due to the short-term nature of the contracts, which to date, have typically had maturities at inception of 90 days or less. The net cash received or paid related to our derivative instruments are classified in other investing activities in our consolidated statements of cash flows. Counterparties to forward contracts consist of major global financial institutions. We monitor our positions and the credit ratings of the counterparties involved and, by policy limits, the amount of credit exposure to any one party. We do not use derivatives for trading or speculative purposes. We did not enter into any cash flow, fair value or net investment hedges during the years ended December 31, 2024, 2023 or 2022. Refer to “Note 3: Financial Instruments and Fair Value Measurements ” for additional information on our derivatives. Fair Value Measurements and Disclosures We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We measure assets and liabilities at fair value based on the expected exit price, which is the amount that would be received on the sale of an asset or amount paid to transfer a liability, as the case may be, in an orderly transaction between market participants in the principal or most advantageous market in which we would transact. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability at the measurement date. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. GAAP provides the following hierarchical levels of inputs used to measure fair value: 87 Level 1—Valuations are based on quoted market prices for identical assets and liabilities in active markets. Level 2—Valuations are based on observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations are based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. Debt Issuance Costs We defer costs we incur to issue debt, which are presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, and amortize these costs using the effective interest rate method to interest expense over the term of the debt. We also defer costs we incur to enter into a credit facility or to amend our existing revolving credit facility, which are presented on the consolidated balance sheet as a long-term asset, and amortize these costs using the effective interest rate method to interest expense over the term of the credit facility. Certain Risks and Concentrations Our business is subject to certain risks and concentrations, including a concentration related to dependence on our relationships with our customers. 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. However, no one operator’s inventory resulted in more than 10 % of our revenue on a consolidated basis or at a reportable segment level in any period presented. Refer to “Note 18: Segment and Geographic Information ” for information regarding concentrations related to geographic and product revenues and fixed assets by geographic location. 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. We maintain cash balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits in the U.S. and similar government programs outside the U.S. Our cash and cash equivalents are generally composed of available on demand bank deposits or term deposits with several major global financial institutions, as well as money market funds, primarily denominated in U.S. dollars, and to a lesser extent Euros, British pounds, and Australian dollars. We may invest in highly-rated corporate debt securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. Our credit risk related to corporate debt securities is also mitigated by the relatively short maturity period required by our investment policy. Forward contracts and capped calls are transacted with major international financial institutions with high credit standings. Forward contracts, which, to date, have typically had maturities of less than 90 days , also mitigate risk. Our overall credit risk related to accounts receivable is mitigated by the relatively short collection period. Contingent Liabilities Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred; and (ii) the amount 88 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. Significant judgment may be required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. Treasury Stock Shares of our common stock repurchased, including incremental direct costs to purchase treasury stock, including excise tax, are recorded at cost as t reasury stock and result in the reduction of stockholders' equity on our consolidated balance sheet. We may reissue these treasury shares. When treasury shares are reissued, we use the average cost method for determining the cost of reissued shares. If the issuance price is higher than the cost, the excess of the issuance price over the cost is credited to additional paid-in-capital. If the issuance price is lower than the cost, the difference is first charged against any credit balance in additional paid-in-capital from the previous issuances of treasury stock and any remaining balance is charged to retained earnings. Earnings Per Share (“EPS”) Basic Earnings Per Share Attributable to Common Stockholders We compute basic earnings per share, or Basic EPS, by dividing net income (loss) by the weighted average number of common shares outstanding during the period. We compute the weighted average number of common shares outstanding during the reporting period using the total of common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted average of any additional shares issued and outstanding less the weighted average of any common shares repurchased during the reporting period. Diluted Earnings Per Share Attributable to Common Stockholders Diluted earnings per share, or Diluted EPS, includes the potential dilution of common equivalent shares outstanding that could occur from stock-based awards and other stock-based commitments using the treasury stock method. We compute Diluted EPS by dividing net income (loss) by the sum of the weighted average number of common and common equivalent shares outstanding during the period. 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 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. Under the treasury stock method, the assumed proceeds calculation includes the actual proceeds to be received from the employee upon exercise of outstanding equity awards and the average unrecognized compensation cost during the period. The treasury stock method assumes that a company uses the proceeds from the exercise of an equity award to repurchase common stock at the average market price for the reporting period. In periods of net income, shares of our common stock subject to the potential conversion of the 2026 Senior Notes outstanding during the period is also included in our weighted average number of shares outstanding used to calculate Diluted EPS using the if-converted method under GAAP, as share settlement is presumed. When convertible notes are dilutive, interest expense, net of tax, is added back to net income attributable to common stockholders to calculate Diluted EPS. 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 89 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. Refer to “Note 8: Debt ” for further information regarding our 2026 Senior Notes and Capped Calls. 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, 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 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. This guidance is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, but entities have the option to apply it retrospectively for each period presented. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. 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. 90 NOTE 3: FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Cash, Cash Equivalents and Marketable Securities 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. The following table shows our cash and cash equivalents, which are measured at fair value on a recurring basis and categorized using the fair value hierarchy, as well as their classification on our consolidated balance sheets as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Amortized Cost Fair Value (1) Cash and Cash Equivalents Amortized Cost Fair Value (1) Cash and Cash Equivalents (in millions) Cash $ 742 $ 742 $ 742 $ 685 $ 685 $ 685 Level 1: Money market funds 322 322 322 382 382 382 Total $ 1,064 $ 1,064 $ 1,064 $ 1,067 $ 1,067 $ 1,067 (1) We did not have any unrealized gains and losses related to our cash equivalents. We generally classify cash equivalents and marketable securities, if any, within Level 1 and Level 2 as we value these financial instruments using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we use to measure the fair value of money market funds is derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 investments are considered “Level 2” valuations because they are obtained from independent pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our independent pricing services against fair values obtained from another independent source. Derivative Financial Instruments We generally use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows for the Euro versus the U.S. Dollar. For the periods ended December 31, 2024, 2023 and 2022 , respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days . Our outstanding or unsettled forward contracts were carried at fair value on our consolidated balance sheets at December 31, 2024 and 2023. 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. 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: December 31, 2024 December 31, 2023 (in millions) Foreign currency exchange-forward contracts (1)(2) $ 11 $ 9 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. 91 (2) The fair value of our outstanding derivatives as of December 31, 2024 and 2023 , respectively, was not material. The notional amount of a forward contract is the contracted amount of foreign currency to be exchanged and is not recorded on the consolidated balance sheet. Other Financial Assets and Liabilities 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. Accounts Receivable, net The following table provides information about the opening and closing balances of accounts receivable, including contract assets, net of allowance for expected credit losses, from contracts with customers as of the dates presented: December 31, 2024 December 31, 2023 (in millions) Accounts receivable $ 187 $ 177 Contract assets 20 15 Total $ 207 $ 192 Contract assets are rights to consideration in exchange for services that we have transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. The difference between the opening and closing balances of our contract assets primarily results from the timing difference between when we satisfy our performance obligations and the time when the principal completes the service in the transaction. There were no significant changes in contract assets during the years ended December 31, 2024 and 2023 related to business combinations, impairments, cumulative catch-ups or other material adjustments. Fair Value of Long-Term Debt 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, 2026 Senior Notes, and Term Loan B Facility. December 31, 2024 December 31, 2023 Principal Unamortized Debt Issuance Costs Carrying Value Fair Value (1) Principal Unamortized Debt Issuance Costs Carrying Value Fair Value (1) (in millions) 2026 Senior Notes $ 345 $ ( 2 ) $ 343 $ 323 $ 345 $ ( 3 ) $ 342 $ 304 Term Loan B Facility (2) 499 ( 6 ) 493 504 — — — — 2025 Senior Notes (2) — — — — 500 ( 3 ) 497 502 (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 . 92 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. Assets Measured at Fair Value on a Non-recurring Basis Non-Marketable Investments Equity Securities Accounted for under the Equity Method In November 2019, the Company and Ctrip Investment Holding Ltd, a majority-owned subsidiary of Trip.com Group Limited, entered into an agreement to combine certain assets in China through the creation of a new entity, Chelsea Investment Holding Company PTE, Ltd. Tripadvisor contributed a portion of its business in China, including a long-term exclusive brand and content license and other assets, in return for a 40 % equity investment in Chelsea Investment Holding Company PTE Ltd. This investment resulted in the Company recording an initial equity method investment of $ 41 million and a $ 39 million deferred income liability attributable to the brand and content license in the fourth quarter of 2019. The Company expects to earn the deferred income ratably over a 15-year period, congruent with the initial term of the brand and content license, which is recorded in other income (expense), net on the consolidated statement of operations. The Company accounts for this minority investment under the equity method, given it has the ability to exercise significant influence over, but not control, the investee. 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 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. An impairment loss, based on the excess of the carrying value over the estimated fair value of the investment based on Level 3 inputs, is recognized in earnings when an impairment is deemed to be other than temporary. Due to ongoing operating losses, we performed a qualitative assessment to evaluate whether this equity investment is impaired as of December 31, 2024. 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 $ 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. and/or its subsidiaries. Transactions under these agreements with the equity method investee are considered related-party transactions, and were not material for the years ended December 31, 2024, 2023 and 2022, respectively. Other Equity Investments 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. 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. 93 Other Long-Term Assets 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 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. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether the Notes Receivable are impaired and monitor for changes to our allowance for expected credit losses. Other non-financial assets, such as property and equipment, goodwill, intangible assets, and operating lease right-of-use assets are adjusted to fair value when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements, if necessary, are based predominately on Level 3 inputs. Refer to “Note 4: Property and Equipment, Net, ” “Note 5: Leases ” and “Note 6: Goodwill and Intangibles Assets, Net ” for additional information regarding those assets. NOTE 4: PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following as of the dates presented: December 31, 2024 December 31, 2023 (in millions) Capitalized website development $ 558 $ 510 Finance lease right-of-use asset (Note 5) 114 114 Leasehold improvements 24 37 Computer equipment and purchased software 56 64 Furniture, office equipment and other 15 17 767 742 Less: accumulated depreciation ( 567 ) ( 551 ) Total $ 200 $ 191 As of December 31, 2024 and 2023, the carrying value of our capitalized website development costs, net of accumulated amortization, was $ 115 million and $ 103 million, respectively. For the years ended December 31, 2024, 2023 and 2022, we capitalized $ 73 million, $ 66 million and $ 56 million, respectively, related to website development costs. 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. 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. 94 NOTE 5: LEASES Operating and finance lease assets and liabilities consist of the following as of the dates presented: December 31, December 31, Presentation on Consolidated Balance Sheet 2024 2023 (in millions) Noncurrent Lease Assets: Finance lease Property and equipment, net $ 57 $ 67 Operating lease Operating lease right-of-use-assets 17 15 Total lease assets $ 74 $ 82 Current Lease Liabilities: Finance lease Accrued expenses and other current liabilities $ 7 $ 6 Operating lease Accrued expenses and other current liabilities 6 10 Total current lease liabilities 13 16 Noncurrent Lease Liabilities: Finance lease Finance lease liability, net of current portion 43 51 Operating lease Operating lease liabilities, net of current portion 11 6 Total noncurrent lease liabilities 54 57 Total lease liabilities $ 67 $ 73 As of December 31, 2024, we did not have any additional operating or finance leases that have not yet commenced but that create significant rights and obligations for us. The components of lease expense were as follows for the periods presented: Year ended December 31, 2024 2023 2022 (in millions) Operating lease cost (1) $ 14 $ 17 $ 19 Finance lease cost: Amortization of right-of-use assets (2) $ 10 $ 10 $ 10 Interest on lease liabilities (3) 2 3 3 Total finance lease cost $ 12 $ 13 $ 13 Sublease income (1) ( 3 ) ( 5 ) ( 9 ) Total lease cost, net $ 23 $ 25 $ 23 (1) Operating lease costs, net of sublease income, are included within operating expenses in our consolidated statements of operations. (2) Amount is included in depreciation expense in our consolidated statements of operations. (3) Amount is included in interest expense in our consolidated statements of operations. 95 Additional information related to our leases is as follows for the periods presented: Year ended December 31, 2024 2023 2022 Supplemental Cash Flows Information: (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 12 $ 17 $ 22 Operating cash outflows from finance lease 2 4 3 Financing cash outflows from finance lease 7 8 6 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 13 $ 4 $ 2 Year ended December 31, 2024 2023 Weighted-average remaining lease term: Operating leases 5.1 years 2.0 years Finance lease 6.0 years 7.0 years Weighted-average discount rate: Operating leases 5.5 % 4.1 % Finance lease 4.5 % 4.5 % Future lease payments under non-cancelable leases as of December 31, 2024 were as follows: Year Ending December 31, Operating Leases Finance Lease (in millions) 2025 $ 7 $ 10 2026 4 10 2027 2 10 2028 2 9 2029 1 9 Thereafter 4 9 Total future lease payments 20 57 Less imputed interest ( 3 ) ( 7 ) Total lease liabilities $ 17 $ 50 96 NOTE 6: GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The following table summarizes our goodwill activity by reportable segment for the periods presented: Brand Tripadvisor Viator TheFork Total (in millions) Balance as of December 31, 2022 $ 599 $ 119 $ 104 $ 822 Foreign currency translation adjustments 2 1 4 7 Balance as of December 31, 2023 $ 601 $ 120 $ 108 $ 829 Foreign currency translation adjustments — ( 3 ) ( 12 ) ( 15 ) Balance as of December 31, 2024 $ 601 $ 117 $ 96 $ 814 There were no goodwill impairment charges recognized on our consolidated statements of operations during the years ended December 31, 2024, 2023, or 2022. Refer to “Note 2: Significant Accounting Policies ” for discussion regarding the Company’s 2024 goodwill impairment assessment. As of both December 31, 2024 and 2023 , accumulated goodwill impairment losses totaled $ 3 million, which was associated with the Brand Tripadvisor segment. Intangibles Intangible assets, acquired in business combinations and recorded at fair value on the date of purchase, consisted of the following as of the dates presented: December 31, 2024 2023 (in millions) Intangible assets with definite lives $ 195 $ 221 Less: accumulated amortization ( 189 ) ( 208 ) Intangible assets with definite lives, net 6 13 Intangible assets with indefinite lives (1) 30 30 Total $ 36 $ 43 (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. There were no impairment charges recognized to our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 related to our intangible assets. Refer to “Note 2: Significant Accounting Policies ” for discussion regarding the Company’s 2024 indefinite-lived intangible impairment assessment. 97 The following table presents the components of our intangible assets with definite lives as of the dates presented: December 31, 2024 December 31, 2023 Weighted Average Gross Net Gross Net Remaining Life Carrying Accumulated Carrying Carrying Accumulated Carrying (in years) Amount Amortization Amount Amount Amortization Amount (in millions) (in millions) Trade names and trademarks — $ 44 $ ( 44 ) $ — $ 48 $ ( 45 ) $ 3 Customer lists and supplier relationships 2.9 89 ( 84 ) 5 97 ( 90 ) 7 Subscriber relationships — 22 ( 22 ) — 34 ( 33 ) 1 Technology and other 0.9 40 ( 39 ) 1 42 ( 40 ) 2 Total 2.5 $ 195 $ ( 189 ) $ 6 $ 221 $ ( 208 ) $ 13 Our definite-lived intangible assets are being amortized on a straight-line basis. The straight-line method of amortization is currently our best estimate, or approximates to date, the distribution of the economic use of these intangible assets. The estimated amortization expense for intangible assets with definite lives for each of the next five years, and the expense thereafter, assuming no subsequent impairment of the underlying assets or change in estimate of remaining lives, is expected to be as follows (in millions): 2025 $ 3 2026 2 2027 1 2028 — 2029 — 2030 and thereafter — Total $ 6 NOTE 7: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following as of the dates presented: December 31, 2024 December 31, 2023 (in millions) Accrued salary, bonus, and other employee-related benefits $ 74 $ 70 Accrued marketing costs 67 67 Interest payable (1) 1 17 Finance lease liability - current portion (2) 7 6 Operating lease liabilities - current portion (2) 6 10 Non-income taxes payable (3) 18 16 Accrued legal contingencies (4) 10 — Restructuring and other related reorganization costs (5) 5 13 Other 61 53 Total $ 249 $ 252 (1) Amount for the year ended December 31, 2023 relates primarily to interest accrued on our 2025 Senior Notes. Refer to “Note 8: Debt ” for further information. (2) Refer to “Note 5: Leases ” for further information regarding our lease obligations. (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: 98 Employee Severance and Benefits Other (2) Total (in millions) Accrued liability as of December 31, 2022 $ — $ — $ — Charges (1) 22 — 22 Payments ( 9 ) — ( 9 ) Accrued liability as of December 31, 2023 $ 13 $ — $ 13 Charges (2) 3 18 21 Payments ( 11 ) ( 18 ) ( 29 ) Accrued liability as of December 31, 2024 $ 5 $ — $ 5 (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. NOTE 8: DEBT The Company’s outstanding debt consisted of the following as of the dates presented: December 31, 2024 December 31, 2023 (in millions) Short-term debt: Term Loan B Facility $ 5 $ — Total short-term debt $ 5 $ — Long-term debt: Term Loan B Facility due 2031 $ 494 $ — 0.25 % Convertible 2026 Senior Notes due 2026 345 345 7.00 % 2025 Senior Notes due 2025 — 500 Unamortized Debt Issuance Costs ( 8 ) ( 6 ) Total long-term debt $ 831 $ 839 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 99 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; and • 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 As of December 31, 2024 and 2023 , we had no outstanding borrowings from the Credit Facility. 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. 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. dollars, the EURIBO rate for the interest period in effect for such borrowings in Euro and the Daily Simple SONIA rate for the interest period in effect for such borrowings in Sterling; plus, in each case, an applicable margin ranging from 1.75 % to 2.50 % (“Term Benchmark/RFP Spread”), based on the Company’s total net leverage ratio ; or (ii) the Alternate Base Rate (“ABR”), which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum, and (c) the Adjusted Term SOFR for an interest period of one month as published two US Government Securities Business Days prior to such day (or if such day is not a US Government Securities Business Day, the immediately preceding US Government Securities Business Day) plus 1.00 % plus an applicable margin ranging from 0.75 % to 1.50 %, based on the Company’s total net leverage ratio. 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 100 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 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. Additionally, the Company believes that the likelihood of the lender exercising any subjective acceleration rights, which would permit the lenders to accelerate repayment of any outstanding borrowings, is remote. As such, we intend to classify any future borrowings under this facility as long-term debt. 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 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 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 101 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. As of December 31, 2024 and 2023, unpaid interest on our 2026 Senior Notes was not material. 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. 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 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: • during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $ 1,000 principal amount of 2026 Senior Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or • upon the occurrence of specified corporate events as described in the 2026 Indenture. In addition, holders may convert their 2026 Senior Notes, in multiples of $ 1,000 principal amount, at their option at any time beginning on or after January 1, 2026, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the 2026 Senior Notes, without regard to the foregoing circumstances. The initial conversion rate for the 2026 Senior Notes is 13.5483 shares of common stock per $ 1,000 principal amount of 2026 Senior Notes, which is equivalent to an initial conversion price of approximately $ 73.81 per share of common stock, or approximately 4.7 million shares of common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the 2026 Indenture. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Company accounts for the 2026 Senior Notes as a liability measured at its amortized cost, and no other features of the 2026 Senior Notes are bifurcated and recognized as a derivative . 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. The debt issuance 102 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 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 In connection with the issuance of the 2026 Senior Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain of the initial purchasers of the 2026 Senior Notes and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”) at a cost of approximately $ 35 million. The Capped Calls are separate transactions entered into by the Company with each of the Option Counterparties, and are not part of the terms of the 2026 Senior Notes and therefore will not affect any noteholder’s rights under the 2026 Senior Notes. Noteholders will not have any rights with respect to the Capped Calls. The Capped Calls cover, subject to anti-dilution adjustments, substantially similar to those applicable to the conversion rate of the 2026 Senior Notes, the number of shares of common stock initially underlying the 2026 Senior Notes, or up to approximately 4.7 million shares of our common stock. The Capped Calls are expected generally to reduce potential dilution to the common stock upon any conversion of 2026 Senior Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted 2026 Senior Notes, as the case may be, with such reduction and/or offset subject to a cap. 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 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. In addition, upon entering into the Capped Calls we recorded an associated deferred tax asset of $ 9 million, as we made an income tax election allowable under the IRS regulations in order to recover the cost of the Capped Calls as interest expense for income tax purposes only over the term of the 2026 Senior Notes. NOTE 9: OTHER LONG-TERM LIABILITIES Other long-term liabilities consisted of the following as of the dates presented: December 31, 2024 December 31, 2023 (in millions) Unrecognized tax benefits (1) $ 78 $ 153 Deferred gain on equity method investment (2) 23 25 Long-term income taxes payable (3) — 15 Other 3 4 Total $ 104 $ 197 (1) Refer to “Note 10: Income Taxes ” for information regarding our unrecognized tax benefits. 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. 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 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. 103 NOTE 10: INCOME TAXES The following table presents a summary of our domestic and foreign income (loss) before income taxes for the periods presented: Year Ended December 31, 2024 2023 2022 (in millions) Domestic $ 61 $ 95 $ 37 Foreign 26 30 30 Income (loss) before income taxes $ 87 $ 125 $ 67 The components of our provision (benefit) for income taxes consisted of the following for the periods presented: Year Ended December 31, 2024 2023 2022 (in millions) Current income tax expense (benefit): Federal $ 129 $ 94 $ 37 State 29 25 3 Foreign ( 62 ) 21 26 Current income tax expense (benefit) 96 140 66 Deferred income tax expense (benefit): Federal ( 13 ) ( 9 ) ( 19 ) State 2 6 1 Foreign ( 3 ) ( 22 ) ( 1 ) Deferred income tax expense (benefit) ( 14 ) ( 25 ) ( 19 ) Provision (benefit) for income taxes $ 82 $ 115 $ 47 104 The significant components of our deferred tax assets and deferred tax liabilities consisted of the following as of the dates presented: December 31, 2024 2023 (in millions) Deferred tax assets: Stock-based compensation $ 9 $ 14 Net operating loss carryforwards 93 96 Provision for accrued expenses 10 8 Lease financing obligation 12 13 Foreign advertising spend 13 14 Tax credit carryforward 8 10 Capitalized research expenses 71 52 Interest carryforward 40 32 Other 8 14 Total deferred tax assets $ 264 $ 253 Less: valuation allowance ( 106 ) ( 106 ) Net deferred tax assets $ 158 $ 147 Deferred tax liabilities: Intangible assets $ ( 42 ) $ ( 42 ) Property and equipment ( 2 ) ( 3 ) Prepaid expenses ( 3 ) ( 4 ) Building - corporate headquarters ( 10 ) ( 12 ) Other ( 1 ) ( 1 ) Total deferred tax liabilities $ ( 58 ) $ ( 62 ) Net deferred tax asset (liability) $ 100 $ 85 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. U.S. federal NOLs of $ 2 million expire at various times starting from 2029 . State NOLs of $ 9 million may be carried forward indefinitely, while the remaining state NOLs of $ 40 million expire at various times starting from 2030 . 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, 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. 105 A reconciliation of the provision (benefit) for income taxes to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is as follows for the periods presented: Year Ended December 31, 2024 2023 2022 (in millions) Income tax expense at the federal statutory rate $ 18 $ 26 $ 14 State income taxes, net of effect of federal tax benefit 5 6 5 Unrecognized tax benefits and related interest 4 27 17 IRS audit settlements 42 31 — Additional IRS audit impacts (1) 6 — — Transfer pricing reserve adjustment ( 4 ) 24 — FDII, GILTI and other provisions ( 7 ) ( 9 ) ( 2 ) Research tax credit ( 6 ) ( 4 ) ( 2 ) Stock-based compensation 15 22 11 Change in valuation allowance ( 1 ) ( 6 ) 5 Executive compensation 4 2 1 Other, net 6 ( 4 ) ( 2 ) Provision (benefit) for income taxes $ 82 $ 115 $ 47 (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. federal income tax. To the extent future distributions from these subsidiaries will be taxable, a deferred tax liability has been accrued 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. 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. We are no longer subject to tax examinations by tax authorities for years prior to 2018. 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 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. 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, 106 (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 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. These proposed adjustments are related to certain transfer pricing ar rangements with our foreign subsidiaries and would result in an increase to our worldwide 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. 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. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows during the periods presented: December 31, 2024 2023 2022 (in millions) Balance, beginning of year $ 136 $ 157 $ 144 Increases to tax positions related to the current year 2 8 5 Increases to tax positions related to the prior year 34 17 29 Decreases due to lapsed statute of limitations — — ( 20 ) Decreases due to tax positions related to the prior year ( 3 ) ( 6 ) ( 1 ) Settlements during current year ( 70 ) ( 40 ) — Balance, end of year $ 99 $ 136 $ 157 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 107 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, 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. NOTE 11: COMMITMENTS AND CONTINGENCIES 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. By Period Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years (in millions) Expected interest payments on Term Loan B Facility (1) $ 219 $ 35 $ 68 $ 67 $ 49 Expected interest payments on 2026 Senior Notes (2) 1 1 — — — Expected commitment fee payments on Credit Facility (3) 4 1 2 1 — Purchase obligations and other (4) 106 35 54 17 — Total (5)(6) $ 330 $ 72 $ 124 $ 85 $ 49 (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 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. Refer to “Note 8: Debt ” for additional information on our 2026 Senior Notes. (3) Expected commitment fee payments are based on the daily unused portion of our Credit Facility, issued letters of credit, and the effective commitment fee rate as of December 31, 2024; however, these variables could change significantly in the future. Refer to “Note 8: 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 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 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), 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. We record the estimated loss in our consolidated statements of operations 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 and is material. We provide disclosures in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the consolidated financial statements. 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, except for certain known 108 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. 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. 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. Refer to “Note 10: 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. NOTE 12: EMPLOYEE BENEFIT PLANS Retirement Savings Plan The Tripadvisor Retirement Savings Plan (the “401(k) Plan”), qualifies under Section 401(k) of the Internal Revenue Code. The 401(k) Plan allows participating employees, which includes most of our U.S. employees, to make contributions of a specified percentage of their eligible compensation. Participating employees may contribute up to 50 % of their eligible salary on a pre-tax basis, but not more than statutory limits. Employee-participants age 50 and over may also contribute an additional amount of their salary on a pre-tax tax basis up to the IRS Catch-Up Provision Limit (or “catch-up contributions”). Employees may also contribute into the 401(k) Plan on an after-tax basis up (or “Roth 401(k) contributions”) to an annual maximum of 10 %. The 401(k) Plan has an automatic enrollment feature at 6 % pre-tax. We match 50 % of the first 6 % of employee contributions to the plan for a maximum employer contribution of 3 % of a participant’s eligible earnings. The catch-up contributions are not eligible for employer matching contributions. 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. This additional discretionary matching employer contribution (or “true up”) is limited to match only contributions up to 3% of eligible compensation. We also have various defined contribution plans for our non-U.S. employees. 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, 2024, 2023 and 2022 were $ 12 million, $ 12 million, and $ 11 million, respectively. Deferred Compensation Plan for Non-Employee Directors The Company has a deferred compensation plan for non-employee directors (the “Deferred Compensation Plan”). Under the Deferred Compensation Plan, eligible directors who defer their directors’ fees may elect to have such deferred fees (i) applied to the purchase of share units, representing the number of shares of our common stock that could have been purchased on the date such fees would otherwise be payable, or (ii) credited to a cash fund. The cash fund will be credited with interest at an annual rate equal to the weighted average prime or base lending rate of a financial institution selected in accordance with the terms of the Deferred Compensation Plan and applicable law. Upon termination of service as a director of Tripadvisor, a director will receive (i) with respect to share units, such number of shares of our common stock as the share units represent, and (ii) with respect to the cash fund, a cash payment. Payments upon termination will be made in either one lump sum or up to five annual installments, as elected by the eligible director at the time of the deferral election. 109 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, 2024, a total of 557 shares have been issued for such purpose. Executive Severance Plan and Summary Plan Description 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”). Participants covered by the Severance Plan generally will be eligible to receive severance benefits in the event of a termination by the Company without cause or, under certain circumstances, by the Participant for good reason. The severance benefits differ if there is a termination of employment in connection with a change in control. The severance benefits provided pursuant to the Severance Plan are determined based on the job classification of the Participants (as reflected in internal job profile designations) and, in certain cases, their years of service with the Company. During the years ended December 31, 2024, 2023 and 2022, respectively, we recognized $ 2 million, $ 2 million and $ 1 million of expense under the Severance Plan on our consolidated statements of operations. NOTE 13: STOCK BASED AWARDS AND OTHER EQUITY INSTRUMENTS Stock-based Compensation Expense The following table presents the amount of stock-based compensation expense and the related income tax benefit included in our consolidated statements of operations during the periods presented: Year ended December 31, 2024 2023 2022 (in millions) Total stock-based compensation expense $ 120 $ 96 $ 88 Income tax benefit from stock-based compensation expense ( 23 ) ( 21 ) ( 18 ) Total stock-based compensation expense, net of tax effect $ 97 $ 75 $ 70 We capitalized $ 13 million, $ 10 million and $ 10 million of stock-based compensation expense as website development costs during the years ended December 31, 2024, 2023 and 2022, respectively. Stock and Incentive Plans On December 20, 2011, our 2011 Stock and Annual Incentive Plan (the “2011 Plan”) became effective and we filed a Registration Statement registering a total of 17,500,000 shares of our common stock, of which 17,400,000 shares were issuable in connection with grants of equity-based awards under our 2011 Plan and 100,000 shares were issuable under our Deferred Compensation Plan for Non-Employee Directors (refer to “Note 12: Employee Benefit Plans ” for information on our Deferred Compensation Plan for Non-Employee Directors). At our annual meeting of stockholders held on June 28, 2013, our stockholders approved an amendment to our 2011 Plan to, among other things, increase the aggregate number of shares of common stock authorized for issuance thereunder by 15,000,000 shares. On June 21, 2018, our stockholders approved the 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and we filed a Registration Statement registering 6,000,000 shares plus the number of shares available for issuance (and not subject to outstanding awards) under the 2011 Plan. As of the effective date of the 2018 Plan, the Company ceased granting awards under the 2011 Plan. On June 8, 2021, our stockholders approved an amendment to the Company’s 2018 Plan to, among other things, increase the aggregate number of shares reserved and available for issuance under the 2018 Plan by 10,000,000 shares. The purpose of this amendment was to provide sufficient reserves of shares of our common stock to ensure our ability to continue to provide new hires, employees and management with equity incentives. 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 110 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. As of the effective date of the 2023 Plan, the Company ceased granting awards under the 2018 Plan. As of December 31, 2024 , the total number of shares reserved for future stock-based awards under the 2023 Plan was approximately 16 million shares, calculated as follows: 12 million shares plus the number of shares available for issuance (and not subject to outstanding awards) under the 2018 Plan. All shares of common stock issued to date in respect of the exercise of options, RSUs, or other equity awards have been issued from authorized, but unissued common stock. Stock Based Award Activity and Valuation 2024 Stock Option Activity A summary of our stock option activity, consisting of service-based non-qualified stock options, is presented below: Weighted Weighted Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life Value (in thousands) (in years) (in millions) Options outstanding as of December 31, 2023 3,927 $ 35.56 Granted 45 24.96 Exercised (1) ( 80 ) 24.36 Cancelled or expired ( 1,702 ) 40.93 Options outstanding as of December 31, 2024 2,190 31.57 5.3 $ — Exercisable as of December 31, 2024 1,703 34.42 4.7 $ — Vested and expected to vest after December 31, 2024 (2) 2,190 $ 31.57 5.3 $ — (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. Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on Nasdaq as of December 31, 2024 was $ 14.77 . 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: December 31, 2024 2023 2022 Risk free interest rate 4.07 % 3.70 % 3.07 % Expected term (in years) 5.19 5.16 5.42 Expected volatility 56.69 % 53.43 % 51.63 % Expected dividend yield — % — % — % Weighted-average grant date fair value $ 13.37 $ 10.18 $ 9.93 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, 2024, 2023, and 2022 was no t material . 111 2024 RSU Activity A summary of our RSU activity, consisting of service-based vesting terms, is presented below: Weighted Average Grant- Aggregate RSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested RSUs outstanding as of December 31, 2023 11,520 $ 23.06 Granted 6,314 24.70 Vested and released (1) ( 4,936 ) 23.93 Cancelled ( 1,293 ) 24.02 Unvested RSUs outstanding as of December 31, 2024 (2) 11,605 $ 23.47 $ 171 (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 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. (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. 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: PSUs (1) MSUs (2) Weighted Weighted Average Average Grant- Aggregate Grant- Aggregate Date Fair Intrinsic Date Fair Intrinsic Outstanding Value Per Share Value Outstanding Value Per Share Value (in thousands) (in millions) (in thousands) (in millions) Unvested and outstanding as of December 31, 2023 519 $ 18.45 572 $ 10.35 Granted 616 27.06 — — Cancelled ( 153 ) 22.06 ( 81 ) 9.26 Unvested and outstanding as of December 31, 2024 982 $ 23.28 $ 15 491 $ 10.53 $ 7 (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. Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications, if any. (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 112 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. As of December 31, 2024, total unrecognized compensation cost related to stock-based awards, substantially RSUs, was $ 245 million, which the Company expects to recognize over a weighted-average period of 2.5 years. NOTE 14: STOCKHOLDERS’ EQUITY Preferred Stock In addition to common stock, we are authorized to issue up to 100 million preferred shares, with $ 0.001 par value per share, with terms determined by our Board of Directors, without further action by our stockholders. As of December 31, 2024 , no preferred shares had been issued. Common Stock and Class B Common Stock Our authorized common stock consists of 1.6 billion shares of common stock with par value of $ 0.001 per share, and 400 million shares of Class B common stock with par value of $ 0.001 per share. Both classes of common stock qualify for and share equally in dividends, if declared by our Board of Directors. 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, 2024 . Class B common stockholders may, at any time, convert their shares into common stock, on a one for one share basis. Upon conversion, the Class B common stock is retired and is not available for reissue. In the event of liquidation, dissolution, distribution of assets or winding-up of Tripadvisor the holders of both classes of common stock have equal rights to rece ive all the assets of Tripadvisor after the rights of the holders of the preferred stock have been satisfied. There were 153,655,038 and 127,394,786 shares of com mon stock issued and outstanding, respectively, and 12,799,999 shares of Class B common stock issued and outstanding at December 31, 2024. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) is comprised of accumulated foreign currency translation adjustments, as follows as of the dates presented: December 31, 2024 December 31, 2023 (in millions) Cumulative foreign currency translation adjustments, net of tax (1) $ ( 91 ) $ ( 71 ) Accumulated other comprehensive income (loss) $ ( 91 ) $ ( 71 ) (1) Deferred income tax liabilities related to these amounts are not material. Treasury Stock On November 1, 2019, our Board of Directors authorized the repurchase of an additional $ 100 million in shares of our common stock under an existing share repurchase program, which increased the amount available to the Company under this share repurchase program to $ 250 million. 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 compliance with applicable legal requirements. 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 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 113 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 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. 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 years ended December 31, 2024 and 2023, excise tax on our share repurchases was not material. Dividends 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. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend on our results of operations, earnings, capital requirements, financial condition, future prospects, contractual restrictions and other factors deemed relevant by our Board of Directors. NOTE 15: EARNINGS PER SHARE Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS for the periods presented: Year ended December 31, 2024 2023 2022 (shares in thousands and $ in millions, except per share amounts) Numerator: Net income (loss) used to compute Basic EPS $ 5 $ 10 $ 20 Interest expense on 2026 Senior Notes, net of tax 1 1 1 Net income (loss) used to compute Diluted EPS $ 6 $ 11 $ 21 Denominator: Weighted average shares used to compute Basic EPS 139,079 139,412 139,923 Weighted average effect of dilutive securities: Stock-based awards (Note 13) 1,285 729 1,073 2026 Senior Notes (Note 8) 4,674 4,674 4,674 Weighted average shares used to compute Diluted EPS 145,038 144,815 145,670 Basic EPS $ 0.04 $ 0.07 $ 0.14 Diluted EPS $ 0.04 $ 0.08 $ 0.14 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 1.4 million, 1.1 million, and 0.3 million, for the years ended December 31, 2024, 2023 and 2022, 114 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. In addition, our non-vested RSUs are entitled to dividend equivalents, which are payable to the holder subject to, and only upon vesting of, the underlying awards and are therefore forfeitable. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two‑class method of determining earnings per share. NOTE 16: OTHER INCOME (EXPENSE), NET Other income (expense), net, consists of the following for the periods presented: Year Ended December 31, 2024 2023 2022 (in millions) Foreign currency exchange gains (losses), net (1) $ ( 2 ) $ ( 5 ) $ ( 5 ) Earnings (losses) from equity investment, net ( 2 ) ( 2 ) ( 2 ) Gain (loss) on extinguishment of debt (2) ( 2 ) — — Other, net ( 1 ) 3 2 Total $ ( 7 ) $ ( 4 ) $ ( 5 ) (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. NOTE 17: RELATED PARTY TRANSACTIONS Relationship between Liberty TripAdvisor Holdings, Inc. and Tripadvisor LTRIP is a controlling stockholder of Tripadvisor. We consider LTRIP a related party. Refer to “Note 1: 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. Relationship between Chelsea Investment Holding Company PTE Ltd. and Tripadvisor Refer to the discussion regarding our equity method investment in Chelsea Investment Holding Company PTD Ltd. in the section titled “Non-Marketable Investments” within “Note 3: Financial Instruments and Fair Value Measurements ” for a description of our relationship and existing commercial arrangements with Chelsea Investment Holding Company PTE Ltd and/or its subsidiaries. We had no material related party transactions with Chelsea Investment Holding Company PTE Ltd or its subsidiaries during the years ended December 31, 2024, 2023 and 2022 . NOTE 18: SEGMENT AND GEOGRAPHIC INFORMATION We have three reportable segments: (1) Brand Tripadvisor; (2) Viator; and (3) TheFork. Our Brand Tripadvisor segment includes the following revenue sources: (1) Tripadvisor-branded hotels – consisting of hotel meta revenue, primarily click-based advertising revenue, and also hotel B2B revenue, which includes primarily subscription-based advertising and hotel sponsored placements revenue; (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 115 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 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: (1) (provision) benefit for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (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; (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. We do not allocate certain shared expenses to our reportable segments, such as certain information system costs, technical infrastructure costs, and other costs supporting the Tripadvisor platform and operations, that we do not believe are a material driver of individual segment performance, which is consistent with the financial information used by our CODM. We include these expenses in our Brand Tripadvisor segment. Our allocation methodology is periodically evaluated and may change. 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, 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. Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Brand Tripadvisor segment to both our Viator and TheFork segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within the “Corporate & Eliminations” column in the tables below . 116 Year ended December 31, 2024 Brand Tripadvisor (1) Viator (2) TheFork (3) Corporate & Eliminations Total (in millions) External revenue $ 814 $ 840 $ 181 $ — $ 1,835 Intersegment revenue 135 — — ( 135 ) — Revenue $ 949 $ 840 $ 181 $ ( 135 ) $ 1,835 Less: (4) Cost of sales (5) 33 80 15 — 128 Marketing 251 562 51 ( 135 ) 729 Personnel (exclusive of stock-based compensation as shown separately below) 266 126 83 — 475 Technology 54 25 12 — 91 General and administrative (6) 44 14 15 — 73 Adjusted EBITDA 301 33 5 — 339 Depreciation and amortization ( 85 ) ( 85 ) Stock-based compensation ( 120 ) ( 120 ) Restructuring and other related reorganization costs (7) ( 18 ) ( 2 ) ( 1 ) ( 21 ) Legal reserves, settlements and other (8) ( 18 ) ( 18 ) Transaction related expenses (9) ( 3 ) ( 3 ) Operating income (loss) 92 Other income (expense), net ( 5 ) Income (loss) before income taxes 87 (Provision) benefit for income taxes ( 82 ) Net income (loss) 5 Year ended December 31, 2023 Brand Tripadvisor (1) Viator (2) TheFork (3) Corporate & Eliminations Total (in millions) External revenue $ 897 $ 737 $ 154 $ — $ 1,788 Intersegment revenue 134 — — ( 134 ) — Revenue $ 1,031 $ 737 $ 154 $ ( 134 ) $ 1,788 Less: (4) Cost of sales 31 79 9 — 119 Marketing 279 519 41 ( 134 ) 705 Personnel (exclusive of stock-based compensation as shown separately below) 273 110 91 — 474 Technology 50 18 12 — 80 General and administrative (10) 50 11 15 — 76 Adjusted EBITDA 348 — ( 14 ) — 334 Depreciation and amortization ( 87 ) ( 87 ) Stock-based compensation ( 96 ) ( 96 ) Restructuring and other related reorganization costs (7) ( 10 ) ( 3 ) ( 9 ) — ( 22 ) Transaction related expenses (9) ( 3 ) ( 3 ) Operating income (loss) 126 Other income (expense), net ( 1 ) Income (loss) before income taxes 125 (Provision) benefit for income taxes ( 115 ) Net income (loss) 10 117 Year ended December 31, 2022 Brand Tripadvisor (1) Viator (2) TheFork (3) Corporate & Eliminations Total (in millions) External revenue $ 873 $ 493 $ 126 $ — $ 1,492 Intersegment revenue 93 — — ( 93 ) — Revenue $ 966 $ 493 $ 126 $ ( 93 ) $ 1,492 Less: (4) Cost of sales 20 51 7 — 78 Marketing 260 351 58 ( 93 ) 576 Personnel (exclusive of stock-based compensation as shown separately below) 249 81 85 — 415 Technology 42 9 12 — 63 General and administrative (11) 50 12 3 — 65 Adjusted EBITDA 345 ( 11 ) ( 39 ) — 295 Depreciation and amortization ( 97 ) ( 97 ) Stock-based compensation ( 88 ) ( 88 ) Legal reserves, settlements and other ( 1 ) ( 1 ) Other non-recurring expenses (income) (12) ( 8 ) ( 8 ) Operating income (loss) 101 Other income (expense), net ( 34 ) Income (loss) before income taxes 67 (Provision) benefit for income taxes ( 47 ) Net income (loss) 20 (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. (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. This loss was recorded to general and administrative expenses on the consolidated statement of operations for December 31, 2022. The Company considers such costs to be non-recurring in nature. 118 Product and Geographic Information We disaggregate revenue into major products and revenue sources, as follows, for the periods presented: Year ended December 31, 2024 2023 2022 Major products/revenue sources (1) : (in millions) Brand Tripadvisor Tripadvisor-branded hotels $ 585 $ 659 $ 650 Media and advertising 150 145 130 Tripadvisor experiences and dining (2) 169 176 134 Other 45 51 52 Total Brand Tripadvisor 949 1,031 966 Viator 840 737 493 TheFork 181 154 126 Intersegment eliminations (2) ( 135 ) ( 134 ) ( 93 ) Total Revenue $ 1,835 $ 1,788 $ 1,492 (1) Our revenue is recognized primarily at a point in time for all reported segments. (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. The Company’s revenue based on geographic location consists of the following for the periods presented: Year ended December 31, 2024 2023 2022 (in millions) Revenue United States $ 1,230 $ 1,198 $ 905 United Kingdom 334 349 402 All other countries 271 241 185 Total revenue $ 1,835 $ 1,788 $ 1,492 The Company’s property and equipment, net for the United States and all other countries based on the geographic location of the assets consists of the following as of the dates presented: December 31, 2024 2023 (in millions) Property and equipment, net United States $ 144 $ 147 All other countries 56 44 Total $ 200 $ 191 Customer Concentrations Refer to “Note 2: Significant Accounting Policies ” under the section entitled “Certain Risks and Concentrations” for information regarding our major customer concentrations. 119 Ite m 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.