What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-13 · 236 added, 145 removed, 418 unchanged (48% of the section changed)

5 unchanged sentences

Cash and cash equivalents $ 10,441 $ 17,064

Accounts receivable, less allowance for doubtful accounts of $ 1,754 and $ 1,612 as of March 31, 2025 and December 31, 2024, respectively

Accounts receivable, less allowance for doubtful accounts of $ 1,691 and $ 1,612 as of June 30, 2025 and December 31, 2024, respectively

11,500 12,825

Prepaid income taxes 503 736

Income taxes receivable 324 —

Prepaid expenses and other 1,392 1,148

23 unchanged sentences

Preferred stock, $ 0.01 par value per share ( 5,000 shares authorized;

Common stock, $ 0.01 par value ( 20,000 shares authorize d;

11,245 shares issued and outstanding as of March 31, 2025, 11,836 shares issued and outstanding as of December 31, 2024)

Common stock, $ 0.01 par value ( 20,000 shares authorized;

11,081 shares issued and outstanding as of June 30, 2025, 11,836 shares issued and outstanding as of December 31, 2024)

Additional paid in capital — —

9 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Revenues $ 23,906 $ 21,141 $ 47,046 $ 43,126

8 unchanged sentences

Other income, net 161 176 790 315

Income from operations before income taxes 4,433 5,730

Income before income taxes 2,221 4,187 6,654 9,917

Income tax expense 740 1,267 1,912 2,772

4 unchanged sentences

Net Income per share—diluted $ 0.12 $ 0.23 $ 0.38 $ 0.54

Shares used in per share calculation from operations—basic 11,670 13,489

Shares used in per share calculation from operations—diluted 12,249 13,625

Shares used in per share calculation—basic 11,139 12,895 11,617 13,191

Shares used in per share calculation—diluted 11,505 12,976 12,088 13,300

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

(In thousands)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net income $ 1,481 $ 2,920 $ 4,742 $ 7,145

5 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

5 unchanged sentences

Net foreign currency effect ( 295 ) ( 11 )

Recoveries of (loss on) accounts receivable and refund reserves 206 ( 33 )

Changes in operating assets and liabilities, net of acquisitions:

Provision of loss (net recoveries) on accounts receivable and refund reserve 124 ( 7 )

Changes in operating assets and liabilities:

Accounts receivable 1,743 ( 385 )

Prepaid income taxes 238 ( 327 )

Prepaid expenses and other ( 418 ) 582

Prepaid expenses, deposits and other ( 144 ) 533

Accounts payable ( 180 ) 714

3 unchanged sentences

Income tax payable ( 2,007 ) 278

Other liabilities, net 158 197

Other liabilities 345 753

Net cash provided by operating activities 4,582 7,927

4 unchanged sentences

Repurchase of common stock ( 11,418 ) ( 10,422 )

Exercise of stock options and taxes paid for net share settlement of equity awards ( 104 ) ( 257 )

Net cash used in financing activities ( 11,522 ) ( 10,679 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 432 ( 311 )

Net decrease in cash, cash equivalents and restricted cash ( 5,513 ) 476

Net increase (decrease) in cash, cash equivalents and restricted cash ( 6,542 ) ( 3,146 )

Cash, cash equivalents and restricted cash at beginning of period 17,740 16,389

18 unchanged sentences

Shares Amount

Balances, December 31, 2024 11,836 118 — — ( 9,537 ) 14,284 ( 5,327 ) ( 462 ) 4,815 4,353

Balances, March 31, 2025 11,245 112 — — ( 9,537 ) 8,820 ( 5,447 ) ( 6,052 ) 4,908 ( 1,144 )

Stock-based compensation expense — — 339 — — — 339 — 339

1 unchanged sentence

Retirement of treasury stock ( 172 ) ( 1 ) 2,524 ( 235 ) — ( 2,288 ) — — — —

Exercise of stock options and taxes paid for net share settlement 8 — ( 104 ) — — — ( 104 ) — ( 104 )

Foreign currency translation adjustment — — — — — ( 129 ) ( 129 ) — ( 129 )

Net income — — — — 1,402 — 1,402 79 1,481

Balances, June 30, 2025 11,081 $ 111 $ — $ — $ ( 9,537 ) $ 7,934 $ ( 5,576 ) $ ( 7,068 ) $ 4,987 $ ( 2,081 )

(1) Includes a 1 % excise tax applicable to share repurchases.

Common Stock Treasury Stock Additional

Capital Tax Indemnification Retained

Earnings Accumulated

Comprehensive

Travelzoo Stockholders’

Equity Non-controlling interest Total

Stockholders’

Shares Amount

Balances, March 31, 2024 13,202 132 — — ( 9,537 ) 20,125 ( 4,861 ) 4,106 4,686 8,792

Stock-based compensation expense — — 688 — — — 688 — 688

Repurchase of common stock — — ( 6,658 ) — — — ( 6,658 ) — ( 6,658 )

Retirement of treasury stock ( 800 ) ( 8 ) 6,658 ( 681 ) — ( 5,969 ) — — — —

Exercise of stock options and taxes paid for net share settlement — — ( 7 ) — — — ( 7 ) — ( 7 )

Foreign currency translation adjustment — — — — — ( 90 ) ( 90 ) — ( 90 )

Net income — — — — 2,927 — 2,927 ( 7 ) 2,920

Balances, June 30, 2024 12,402 $ 124 $ — $ — $ ( 9,537 ) $ 17,083 $ ( 4,951 ) $ 966 $ 4,679 $ 5,645

See accompanying notes to unaudited condensed consolidated financial statements.

Common Stock Treasury Stock Additional

Capital Tax Indemnification Retained

Earnings Accumulated

Comprehensive

Travelzoo Stockholders’

Equity (Deficit) Non-controlling interest Total

Stockholders’

Equity (Deficit)

Shares Amount

Balances, December 31, 2024 11,836 118 — — ( 9,537 ) 14,284 ( 5,327 ) ( 462 ) 4,815 4,353

Stock-based compensation expense — — — 708 — — — 708 — 708

Repurchase of common stock (1)

— ( 11,531 ) — — — — ( 11,531 ) — ( 11,531 )

Retirement of treasury stock ( 763 ) ( 7 ) 11,531 ( 604 ) — ( 10,920 ) — — — —

Exercise of stock options and taxes paid for net share settlement 8 — — ( 104 ) — — — ( 104 ) — ( 104 )

Foreign currency translation adjustment — — — — — — ( 249 ) ( 249 ) — ( 249 )

Net income — — — — — 4,570 — 4,570 172 4,742

Balances, June 30, 2025 11,081 $ 111 $ — $ — $ ( 9,537 ) $ 7,934 $ ( 5,576 ) $ ( 7,068 ) $ 4,987 $ ( 2,081 )

(1) Includes a 1 % excise tax applicable to share repurchases.

14 unchanged sentences

Net income — — — — — 7,163 — 7,163 ( 18 ) 7,145

Balances, March 31, 2024 13,202 132 — — ( 9,537 ) 20,125 ( 4,861 ) 4,106 4,686 8,792

Balances, June 30, 2024 12,402 $ 124 $ — $ — $ ( 9,537 ) $ 17,083 $ ( 4,951 ) $ 966 $ 4,679 $ 5,645

See accompanying notes to unaudited condensed consolidated financial statements.

4 unchanged sentences

It operates Travelzoo ®, the club for travel enthusiasts, and Jack’s Flight Club ®, a subscription service that provides information about exceptional airfares.

Travelzoo reaches 30 million travelers.

Through its websites, e-mail newsletters, iOS and Android apps, and social media channels, Travelzoo provides members information and access to exclusive discounted travel, entertainment, and local offers and experiences.

Offers are researched, negotiated, and personally selected by Travelzoo’s deal experts around the globe.

Offers are sourced from more than 5,000 top travel and entertainment partners.

The Company generates revenues from advertising, membership fees, and other sources.

In March 2022, the Company began the development of Travelzoo META, a subscription service that is intended to provide Metaverse travel experiences.

APAC Exit and Piv ot to Licensing Model

Travelzoo currently has license agreements covering Australia, Japan, New Zealand, Singapore, and South Korea.

The license agreements provide the licensees exclusive rights to use Travelzoo products, services and intellectual property in each jurisdiction in exchange for quarterly royalty payments based upon net revenue over a five- year term, with an option to renew.

Travelzoo reaches 30 million travelers in the United States, Canada, United Kingdom, Germany, France and Spain and through licensing arrangements in Australia, Japan, New Zealand, Singapore and South Korea.

Through our website, e-mails, iOS and Android apps, and social media channels, we provide our members Club Offers that represent outstanding travel, entertainment, and lifestyle experiences.

Offers are rigorously vetted and negotiated for travel enthusiasts by Travelzoo’s deal experts around the globe.

We work in partnership with thousands of top travel suppliers—our long-standing relationships give us access to irresistible deals.

Our reported revenue consists of advertising and commerce revenues, derived from and generated in connection with purchases made by Travelzoo members, and membership fees.

We are developing Travelzoo META , a subscription service that is intended to provide Metaverse travel experiences, with discipline.

Ralph Bartel, who founded Travelzoo, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro Capital Inc ("Azzurro").

Azzurro is the Company’s largest shareholder, and as of March 31, 2025, holds approximately 38.2 % of the Company's outstanding shares.

Azzurro is the Company’s largest shareholder, and as of June 30, 2025, holds approximately 36.7 % of the Company's outstanding shares.

Financial Statements

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Securities and Exchange Commission (SEC).

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted in accordance with such rules and regulations.

Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted in accordance with such rules and regulations.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the year ended December 31, 2024, included in the Company’s Form 10-K filed with the SEC on March 19, 2025.

These statements should be read in conjunction with the Company’s audited condensed consolidated financial statements and related notes as of and for the year ended December 31, 2024, included in the Company’s Form 10-K filed with the SEC on March 19, 2025.

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

Investments in entities where the Company does not have control, but does have significant influence, are accounted for as equity method investments.

We have reclassified prior period financial statements to conform to the current period presentation.

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with accounting principles generally accepted in the U.S.

Significant estimates included in the consolidated financial statements and related notes include revenue recognition, refund liability, income taxes, stock-based compensation, loss contingencies, useful lives of property and equipment, purchase price allocation for the business combination and related impairment assessment, relating to the projections and assumptions used.

Significant estimates included in the financial statements and related notes include revenue recognition, refund liability, income taxes, stock-based compensation, loss contingencies, useful lives of property and equipment, purchase price allocation for the business combination and related impairment assessment, relating to the projections and assumptions used.

Actual results could differ materially from those estimates.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and the Company makes no representations related thereto.

The results of operations for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and the Company makes no representations related thereto.

(b) Recent Accounting Pronouncements

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Improvements to Income Tax Disclosures", to expand the disclosure requirements for income taxes, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and applies to our FY25 year-end reporting.

ASU 2023-09 is effective for fiscal years beginning after December 15,

2024, and applies to our FY25 year-end reporting.

We are currently evaluating the impact of this standard and will include the required income tax disclosures in our Annual Report on Form 10-K for the year ended December 31, 2025.

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2014-09, “Revenue from Contracts with Customers” (Topic 606), under which revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The Company's revenues consist of (1) advertising revenues and commissions, derived from and generated in connection with purchases made by Travelzoo members, (2) membership fees and (3) other.

Advertising Revenues and Commissions

Advertising revenues are generated from the publishing of travel and entertainment offers on the Travelzoo website, in Top 20 email newsletters, in Standalone email newsletters and through the Travelzoo Network .

The Company also generates transaction-based commission revenues from the sale of vouchers (our Local Deals and Getaways offerings), operation of our hotel booking platform and limited offerings of vacation packages.

The Company's revenue consists of (1) advertising and commerce revenues, derived from and generated in connection with purchases made by Travelzoo members, (2) membership fees and (3) other.

Advertising and Commerce Revenues

Advertising revenues are generated from the publishing of travel and entertainment offers on the Travelzoo website, in emails, on social media platforms and through the Travelzoo Network .

The Company also generates transaction-based commerce revenues in the form of commissions from sales of vouchers (our Local Deals and Getaways offerings), operation of our hotel booking platform, and sales of pre-purchased vouchers or hotel inventory as principal.

Specifically, for fixed-fee website advertising, the Company recognizes revenues ratably over the contracted placement period.

For Top 20 email newsletters and other email products, the Company recognizes revenues when the emails are delivered to its members.

For cost-per-click advertising, whereby an advertiser pays the Company when a user clicks on an ad (typically served on Travelzoo properties or Travelzoo Network partner properties), the Company recognizes revenues each time a user clicks on the ad.

The Company also offers clients other advertising models whereby an advertiser pays the Company based on the number of times their advertisement is displayed (whether on Travelzoo properties, email advertisements, Travelzoo Network properties, social platforms or other media properties).

For cost-per-click advertising, whereby an advertiser pays the Company when a user clicks on an ad (typically served on the Company's media properties or Travelzoo Network partner properties), the Company recognizes revenues each time a user clicks on the ad.

The Company also offers advertisers other advertising models whereby an advertiser pays the Company based on the number of times their advertisement is displayed (whether on the Company's media properties, in emails, on social media platforms or other media properties).

For these instances, the Company recognizes revenues each time an ad is displayed.

1 unchanged sentence

Accordingly, the Company reports transaction-based advertising revenues on a net basis, as third-party suppliers are primarily responsible for fulfilling the underlying good or service, which the Company does not control prior to its transfer to the customer.

For Local Deals and Getaways prepaid voucher sales, the Company typically earns a fee for acting as an agent on the sale, while vouchers can subsequently be redeemed for goods or services with third-party merchants.

For Local Deals and Getaways voucher sales, the Company typically earns a fee for acting as an agent on the sale, while vouchers can subsequently be redeemed for goods or services with third-party merchants.

Commission revenues are, accordingly, presented net of amounts due to third-party merchants for fulfilling the underlying goods and services, and net of estimated future refunds to consumers, as the terms of the vouchers permit.

1 unchanged sentence

With these contracts, the Company estimates the value of vouchers that will ultimately not be redeemed and records the estimate as revenues in the same period.

In certain scenarios, the Company will pre-purchase vouchers or hotel inventory (in the form of credit amounts,vouchers or gift cards) in bulk from clients and partners (e.g.

In certain scenarios, the Company will pre-purchase vouchers or hotel inventory (in the form of credit amounts, vouchers or gift cards) in bulk from suppliers (e.g.

hotel or spa partners).

In those scenarios, the Company is not acting as the agent, but rather as the principal.

which the vouchers were sold to Travelzoo members is recognized fully as revenue and the amount for which the vouchers were purchased from the hotel or spa partners is recognized as cost of revenues.

The pre-purchased vouchers are recorded as inventory, within prepaid expenses and other on the condensed consolidated balance sheet, until sold to and purchased by Travelzoo members, at which point, the amount for which the vouchers were sold to Travelzoo members is recognized fully as revenue and the amount for which the vouchers were purchased from the hotel or spa partners is recognized as cost of revenues.

Commission revenues generated from bookings on our hotel platform are recognized ratably over the periods of guest stays, net of an allowance for estimated cancellations, based upon historical patterns.

For bookings of non-cancelable reservations, where the Company’s performance obligation is deemed to be completed upon the successful booking, the Company records commission revenue at such time.

For bookings of non-cancelable

reservations, where the Company’s performance obligation is deemed to be completed upon the successful booking, the Company records commission revenue at such time.

In certain instances, the Company’s contracts with customers may include multiple performance obligations, whereby the Company allocates revenues to each performance obligation based on its standalone selling price.

4 unchanged sentences

In addition, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, and contracts for which it recognizes revenues at the amount to which it has the right to invoice for services performed.

Membership Fee Revenues

Membership fee revenues are generated from subscription fees paid by Travelzoo and Jack's Flight Club.

We recognize subscription revenues ratably over the subscription periods.

Travelzoo membership has historically been free, however, on January 1, 2024, Travelzoo introduced an annual membership fee of $ 40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany, with the 2024 annual fee waived for existing members as of December 31, 2023.

Other Revenues

Other revenues include licensing fees and fees generated from the existing retail business acquired by the Company when it acquired MTE.

Membership Fees

Membership fee revenues are generated from subscription fees paid by Travelzoo Club Members and Jack's Flight Club Premium members.

We recognize subscription revenues ratably over the applicable subscription periods.

Travelzoo membership has historically been free, however, on January 1, 2024, we introduced an annual membership fee of $ 40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany.

The 2024 annual fee was waived for existing members.

Other revenues include licensing fees and revenues generated from Metaverse Travel Experiences, LLC ("MTE"), including but not limited to sales from the existing retail business of MTE.

Deferred Revenues

Deferred revenue primarily consists of deferred membership fees, customer prepayments and undelivered Company performance obligations related to contracts comprising multiple performance obligations.

As of December 31, 2024, $ 2 million was recorded as deferred revenue for Jack's Flight Club, of which $ 1.0 million was recognized in the three months ended March 31, 2025, and $ 4.5 million was recorded as deferred revenue for Travelzoo North America and Travelzoo Europe, of which $ 2.1 million was recognized as revenue in the three months ended March 31, 2025.

At March 31, 2025, deferred revenue was $ 7.8 million, of which $ 2.6 million was for Jack's Flight Club, and $ 5.2 million was for Travelzoo North America and Travelzoo Europe.

As of December 31, 2024, $ 2 million was recorded as deferred revenue for Jack's Flight Club, of which $ 1.6 million was recognized in the six months ended June 30, 2025, and $ 4.5 million was recorded as deferred revenue for Travelzoo North America and Travelzoo Europe, of which $ 3.3 million was recognized as revenue in the six months ended June 30, 2025.

As of June 30, 2025 , deferred revenue was $ 8.5 million, of which $ 2.4 million was for Jack's Flight Club, and $ 6 million was for Travelzoo North America and Travelzoo Europe.

Reserve for Refunds to Members

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Specifically, if the financial condition of our merchant partners, on behalf of whom vouchers are sold, were to deteriorate, affecting their ability to provide the goods or services to our members, additional reserves for refunds to members may be required and may adversely affect future revenues as the liability is recorded against revenue.

As of March 31, 2025, the Company had approximately $ 3.7 million of unredeemed vouchers that had been sold, representing the Company’s commission earned.

The Company estimated and recorded a refund reserve of $ 214,000 for these unredeemed vouchers as of March 31, 2025, which is recorded as a reduction of revenues on the condensed consolidated statements of operations and accrued expenses and other on the condensed consolidated balance sheet.

As of June 30, 2025, the Company had approximately $ 3.1 million of unredeemed vouchers that had been sold, representing the Company’s commission earned.

The Company estimated and recorded a refund reserve of $ 215,000 for these unredeemed vouchers as of June 30, 2025, which is recorded as a reduction of revenues on the condensed consolidated statements of operations and accrued expenses and other on the condensed consolidated balance sheet.

As of December 31, 2024, the Company had approximately $ 4.1 million of unredeemed vouchers that had been sold representing the Company’s commission earned from the sale and estimated a refund reserve of $ 144,000 for these unredeemed vouchers as of December 31, 2024, as a reduction of revenues on the condensed consolidated statements of operations and accrued expenses and other on the condensed consolidated balance sheet.

If our judgments regarding estimated member refunds are inaccurate, reported results of operations could differ from amounts previously accrued.

Merchant payables of $ 14.8 million as of March 31, 2025 is recorded on the consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed.

Merchant payables of $ 12.4 million as of June 30, 2025 is recorded on the condensed consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed.

Identifiable intangible assets

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The Company performed its annual impairment testing as of October 31, 2024 and no impairment charge was identified in connection with the annual impairment test .

The Company did no t identify any indicators of impairment during the three months ended March 31, 2025.

The Company did no t identify any indicators of impairment during the six months ended June 30, 2025.

Operating Leases

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Certain Risks and Uncertainties

The Company’s business is subject to risks associated with its ability to attract and retain advertisers and offer goods or services on compelling terms to our members.

The Company’s business is subject to risks associated with its ability to attract and retain advertisers, offer goods or services on compelling terms to our members and attract and retain paying members.

The Company’s business is also subject to risks associated with the travel industry generally, including the changing economic and political situation of countries around the world (e.g., decreases in discretionary spending due to recession or increased prices due to tariffs, changes in international trade policies and immigration and decreases in demand for travel generally and for certain destinations specifically).

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and internationally.

As of March 31, 2025 and December 31, 2024, the Company did not have any customers that accounted for 10% or more of accounts receivable.

As of March 31, 2025, the Company had merchant payables of $ 14.8 million related to the sale of vouchers.

As of June 30, 2025 and December 31, 2024, the Company did not have any customers that accounted for 10% or more of accounts receivable.

As of June 30, 2025, the Company had merchant payables of $ 12.4 million related to the sale of vouchers.

In the Company’s financial statements presented in this 10-Q report, following GAAP accounting principles, we classified all merchant payables as current.

As such, the consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 10.3 million at March 31, 2025.

As such, the condensed consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 11.0 million at June 30, 2025.

Payables to merchants are generally due upon redemption of vouchers by members who purchased them from the Company.

As of March 31, 2025, unredeemed vouchers have maturities through March 2026;

As of June 30, 2025, unredeemed vouchers have maturities through March 2026;

however, expiration dates may be extended on a case-by-case basis and final payment to merchants upon expiration may not be due for up to a year after.

Based on current projections of future redemption activity, management expects that cash on hand as of March 31, 2025 will be sufficient to provide for working capital needs for at least the next twelve months.

Based on current projections of future redemption activity, management expects that cash on hand as of June 30, 2025 will be sufficient to provide for working capital needs for at least the next twelve months.

Cash, Cash Equivalents and Restricted Cash

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The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets to the total amounts shown in the unaudited condensed consolidated statements of cash flows:

March 31, December 31,

June 30, December 31,

Cash and cash equivalents $ 10,441 $ 17,064

1 unchanged sentence

Total cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 11,198 $ 17,740

The Company’s restricted cash was included in noncurrent assets as of March 31, 2025 and December 31, 2024.

The Company’s restricted cash was included in noncurrent assets as of June 30, 2025 and December 31, 2024.

Net Income Per Share

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The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share amounts):

Three Months Ended

Net income attributable to Travelzoo from operations $ 3,167 $ 4,236

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net income attributable to Travelzoo $ 1,402 $ 2,927 $ 4,570 $ 7,163

Weighted average common shares—basic 11,139 12,895 11,617 13,191

4 unchanged sentences

Net income per share—diluted $ 0.12 $ 0.23 $ 0.38 $ 0.54

For the three months ended March 31, 2025 and 2024, options to purchas e 0 and 50,000 shares of common stock, respectively, were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

For the three months ended June 30, 2025 and 2024, options to purchas e 25,000 and 850,000 shares of common stock, respectively, were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

Stock Purchase Agreement (“SPA”) between Travelzoo and Azzurro

In connection with the acquisition of Metaverse Travel Experiences (“MTE”), formerly a wholly-owned subsidiary of Azzurro, the Company completed a private placement of newly issued shares with Azzurro.

In connection with the acquisition of Metaverse Travel Experiences, LLC (“MTE”), formerly a wholly-owned subsidiary of Azzurro, the Company completed a private placement of newly issued shares with Azzurro.

Ralph Bartel, who founded the Company, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro.

Azzurro was the Company’s largest shareholder at the time of the MTE acquisition and, as of December 31, 2022, Azzurro and Ralph Bartel, in his individual capacity, owned approximately 50.3 % of the Company’s outstanding shares.

On December 28, 2022, the stockholders of Travelzoo approved the issuance and sale of 3.4 million shares of common stock (the “Shares”) of Travelzoo to Azzurro, in exchange for certain consideration, and on December 30, 2022 (the “Closing Date”), the transaction was

On December 28, 2022, the Company's stockholders approved the issuance and sale of 3.4 million shares of common stock of Travelzoo (the “Shares”) to Azzurro, in exchange for certain consideration, and on December 30, 2022 (the “Closing Date”), the transaction was consummated.

The closing price of Travelzoo’s common stock on December 30, 2022 was $ 4.45 per share, resulting in an aggregate fair value of the Shares of $ 15.2 million.

The consideration for the Shares consisted of the following:

(a ) $ 1.0 million in cash paid on the Closing Date;

(b) $ 4.8 million paid in the form of a promissory note, carrying a 12 % interest rate per annum, issued on the Closing Date and payable by June 30, 2023;

and (c) the transfer to the Company of all outstanding capital stock of MTE, which was effected pursuant to a merger of MTE with a wholly-owned subsidiary of the Company on the Closing Date.

In October 2023, the Company and Azzurro agreed to a payment plan for payment of the promissory note in five installments, ending in February 2024, with interest on the outstanding principal accruing at 16 % per annum beginning on July 1, 202 3.

During the year ended December 31, 2023, Azzurro paid $ 3.0 million of principal.

The remaining principal amount of $ 1.8 million together with interest of $ 19,000 , was paid off in October 2024.

Azzurro paid interest of $ 0 and $ 70,000 in the three months ended March 31, 2025 and 2024 , respectively.

The consideration for the Shares consisted of cash paid on the Closing Date;

a promissory note, which was repaid in full during 2024;

and the transfer to the Company of all outstanding capital stock of MTE, which was effected pursuant to a merger of MTE with a wholly-owned subsidiary of the Company on the Closing Date.

Intangible Assets

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Trade name (Jack’s Flight Club) 2,460 indefinite

Non-compete agreements (Jack’s Flight Club) 660 4.0

Secret Escapes Spain member database 445 3.0

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Amortization of Acquired Intangible Assets

The following table represents the activities of intangible assets for the three months ended March 31, 2025 and 2024 (in thousands):

The following table represents the activities of intangible assets for the three months ended June 30, 2025 and 2024 (in thousands):

Jack’s Flight Club Secret Escape Spain

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Intangible assets—March 31, 2025 1,457 14

Amortization expense for acquired intangibles was $ 26,000 and $ 318,000 for the three months ended March 31, 2025 and 2024, respectively.

Expected future amortization expense of acquired intangible assets as of March 31, 2025 is as follows (in thousands):

Amortization of intangible assets with definite lives ( 2 ) ( 14 )

Intangible assets—June 30, 2025 $ 1,455 $ —

Amortization expense for acquired intangibles was $ 16,000 and $ 87,000 for the three months ended June 30, 2025 and 2024, respectively.

Amortization expense for acquired intangibles was $ 43,000 and $ 405,000 for the six months ended June 30, 2024 and 2023, respectively.

Expected future amortization expense of acquired intangible assets as of June 30, 2025 is as follows (in thousands):

Years ending December 31,

The Company performed its annual impairment testing of Trade name as of October 31, 2024 using a relief from royalty method.

The Company performed its annual impairment testing of the Jack's Flight Club trade name as of October 31, 2024 using a relief from royalty method.

No impairment was identified in 2024.

As of March 31, 2025, the carrying value of the Trade name was $ 1.5 million.

The Company did not identify any indicators of impairment during the three months ended March 31, 2025.

As of June 30, 2025, the carrying value of the trade name was $ 1.5 million.

The Company did not identify any indicators of impairment during the six months ended June 30, 2025.

Commitments and Contingencies

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The Company accrues for legal contingencies if the Company can estimate the potential liability and believes it is probable that the matter will be ruled on adversely.

Accruals for legal contingencies were not material as of March 31, 2025 and December 31, 2024.

Accruals for legal contingencies were not material as of June 30, 2025 and December 31, 2024.

If a legal claim for which the Company did not accrue is resolved against it, the Company would record the expense in the period in which the ruling was made.

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The C ompany maintains standby letters of credit (“LOC”) to serve as collateral issued to the landlords.

The LOCs are collateralized with cash which is included in the line item “Restricted cash” in the Consolidated Balance Sheets.

Rent expense was $ 687,000 and $ 670,000 for the three months ended March 31, 2025 and 2024, respectively.

The LOCs are collateralized with cash which is included in the line item “Restricted cash” in the Condensed Consolidated Balance Sheets.

Rent expense was $ 734,000 and $ 686,000 for the three months ended June 30, 2025 and 2024, respectively.

Se e Note 10– Leases for more information.

The Company has purchase commitments aggregating approximately $ 1.1 million as of March 31, 2025, which represent the minimum obligations the Company has under agreements with certain third-party service providers.

The Company has purchase commitments aggregating approximately $ 1.0 million as of June 30, 2025, which represent the minimum obligations the Company has under agreements with certain third-party service providers.

These minimum obligations are less than the Company's projected use for those periods.

Payments may be more than the minimum obligations based on actual use.

In determining the quarterly provisions for income taxes, the Company uses an estimated annual effective tax rate, which is generally based on our expected annual income and statutory tax rates in the U.S., Canada, and the U.K.

The Company’s effective tax rate from operations was 26 % and 26 % for the three months ended March 31, 2025 and 2024, respectively.

The Company’s effective tax rate for the three months ended March 31, 2025 changed from the three months ended March 31, 2024 primarily due to a higher interest expense related to unrecognized tax positions in the three months ended March 31, 2025.

As of March 31, 2025, the Company is permanently reinvested in certain of its non-U.S.

For the three months ended June 30, 2025 and 2024, the Company’s reported effective income tax rate was 33 % and 30 %, respectively.

This increase of the Company’s reported effective income tax rate is primarily due to a provision for higher interest expense related to uncertain tax positions.

For the six months ended June 30, 2025 and 2024, the Company’s reported effective income tax rate was 29 % and 28 %, respectively .

As of June 30, 2025, the Company is permanently reinvested in certain of its non-U.S.

subsidiaries and does not have a deferred tax liability related to its undistributed foreign earnings.

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subsidiaries, which the Company intends to reinvest the related earnings indefinitely in its operations outside the U.S., is approximately $ 930,000 .

The Company maintains liabilities for uncertain tax positions.

As of March 31, 2025, the Company had approximately $ 23.9 million in total unrecognized tax benefits, of which up to $ 16.6 million would favorably affect the Company’s effective income tax rate if realized.

The Company’s policy is to include interest and penalties related to unrecognized tax positions in income tax expense.

The Company maintains a reserve for potential liabilities for uncertain tax positions.

As of June 30, 2025, the Company had approximately $ 23.9 million in total unrecognized tax benefits, of which up to $ 16.6 million would favorably affect the Company’s reported income if realized and recognized.

The Company’s policy is to include provisions for interest and penalties related to uncertain and unrecognized tax positions in income tax expense.

To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in the overall income tax provision in the period that such determination is made.

As of March 31, 2025 and December 31, 2024, the Company had approximately $ 1.2 million and $ 1.1 million in accrued interest, respectively.

As of June 30, 2025 and December 31, 2024, the Company had approximately $ 1.3 million and $ 1.1 million in accrued interest, respectively.

The Company files income tax returns in the U.S.

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federal and certain state tax examinations for certain years after 2020 and forward and is subject to California tax examinations for years after 2019.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law.

This legislation includes changes to U.S.

federal tax law, which may be subject to further clarification and the issuance of interpretive guidance.

We are assessing the

legislation and its effect on our consolidated financial statements, which we expect to begin reflecting in the three month period ended September 30, 2025.

Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive loss (in thousands):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Beginning balance $ ( 5,447 ) $ ( 4,861 ) $ ( 5,327 ) $ ( 4,607 )

1 unchanged sentence

Ending balance $ ( 5,576 ) $ ( 4,951 ) $ ( 5,576 ) $ ( 4,951 )

There were no amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, 2025 and 2024.

There were no amounts reclassified from accumulated other comprehensive loss for the three and six months ended June 30, 2025 and 2024.

Accumulated other comprehensive loss consists of foreign currency translation gain or loss.

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The Company accounts for its employee stock options under the fair value method, which requires stock-based compensation to be estimated using the fair value on the date of grant, employing an option-pricing model.

The value of the portion of awards expected to vest is recognized on a straight-line basis as expense over the related employees’ requisite service periods in the Company’s consolidated statements of operations.

On January 1, 2021, pursuant t o an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 50,000 shares of common stock to one employee, with an exercise price of $ 9.44 , with annual vesting starting January 1, 2022 and ending on January 1, 2025.

The value of the portion of awards expected to vest is recognized on a straight-line basis as expense over the related employees’ requisite service periods in the Company’s condensed consolidated statements of operations.

On January 1, 2021, pursuant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 50,000 shares of common stock to one employee, with an exercise price of $ 9.44 , with annual vesting starting January 1, 2022 and ending on January 1, 2025.

The options expire in January 2026.

In 2024 , 37,500 options were exercised and 3,358 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of March 31, 2025, 12,500 options were vested and outstanding.

Total stock-based compensation related to this option grant of $ 0 and $ 36,000 was recorded in general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively.

In 2024, 37,500 options were exercised and 3,358 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by the Company’s Board of Directors.

As of June 30, 2025, 12,500 options were vested and outstanding.

Total stock-based compensation related to this option grant of $ 0 and $ 36,000 was recorded in general and administrative expenses for the three months ended June 30, 2025 and 2024, respectively.

Stock-based compensation related to this grant was fully expensed in 2024.

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This grant was approved at the 2022 Annual Meeting of the shareholders.

In 2024, 200,000 options were exercised and 53,753 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of March 31, 2025, 400,000 options were vested and outstanding.

S tock-based compensation related to this grant was fully expensed in 2023.

On June 1, 2022, the Company granted an employee options to purchase 100,000 shares of common stock with an exercise price of $ 6.78 and quarterly vesting beginning on September 30, 2022 and ending on June 30, 2025 with vesting based on both a time-based service condition and performance conditions.

As of June 30, 2025, 400,000 options were vested and outstanding.

Stock-based compensation related to this grant was fully expensed in 2023.

On June 1, 2022, the Company granted an employee options to purchase 100,000 shares of common stock with an exercise price of $ 6.78 and quarterly vesting beginning on September 30, 2022 and ending on September 30, 2025 with vesting based on both time-based service condition and performance conditions.

However, if the performance targets are not met as of the first date on which the time condition is met, the time condition may be extended by one quarter up to three times.

The options expire in June 2027.

Total stock-based compensation related to this option grant of $ 30,000 and $ 0 was recorded in sales and marketing expenses for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, 41,667 options were outstanding and 25,000 of these options were vested.

As of March 31, 2025, there was approximately $ 60,000 of unrecognized stock-based compensation expense relating to these options.

Total stock-based compensation related to this option grant of $ 30,000 was recorded in sales and marketing expenses for each of the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, 41,667 options were outstanding and 25,000 of these options were vested.

As of June 30, 2025, there was approximately $ 60,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 0.3 years.

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The options expire in March 2028.

In 2024, 75,000 options were exercised and 19,584 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of March 31, 2025, 125,000 options were outstanding and 25,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 35,000 was recorded in general and administrative expenses for each the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was approximately $ 243,000 of unrecognized stock-based compensation expense relating to these options.

In 2025, 25,000 options were exercised and 7,890 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by the Company’s Board of Directors.

As of June 30, 2025, 100,000 options were outstanding and 25,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 35,000 was recorded in general and administrative expenses for each the three months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, there was approximately $ 209,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 1.5 years.

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This grant was approved at the 2024 Annual Meeting of the shareholders.

As of March 31, 2025, 600,000 options were outstanding and 300,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 305,000 and $ 0 was recorded in general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively .

As of March 31, 2025, there was approximately $ 914,000 of unrecognized stock-based compensation expense relating to these options.

As of June 30, 2025, 600,000 options were outstanding and 450,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 305,000 and $ 609,000 was recorded in general and administrative expenses for the three months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, there was approximately $ 609,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 0.5 years.

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During the three months ended March 31, 2024, the Company repurchased 400,000 shares of common stock for an aggregate purchase price of $ 3.9 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

On April 29, 2024, the Company announced that its Board of Directors has authorized the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock.

The Company repurchased 600,000 shares and 352,679 shares of common stock for an aggregate purchase price of $ 5.0 million and $ 3.8 million, respectively, for the second and third quarter of 2024, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

On June 15, 2024, the Company entered into a Stock Repurchase Agreement with Mr.

Holger Bartel to privately repurchase an aggregate of 200,000 shares of the Company’s common stock for an aggregate purchase price of $ 1.5 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

This transaction was approved by the Compensation Committee of the Board of Directors.

Related Party Transactions for further information.

On October 23, 2024, the Company announced that its Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock.

2 unchanged sentences

As of March 31, 2025, there were 320,690 shares remaining to be repurchased under this program.

During the three months ended June 30, 2025, the Company repurchased 172,088 shares of common stock for an aggregate purchase price of $ 2.5 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings.

As of June 30, 2025, there were 148,602 shares remaining to be repurchased under this program.

Segment Reporting and Significant Customer Information

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Travelzoo Europe consists of the Company’s operations in France, Germany, Spain and the U.K.

Jack’s Flight Club consists of subscription revenues from premium members to access and receive flight deals from Jack’s Flight Club via email or mobile applications.

New Initiatives consists of Travelzoo’s licensing activities in certain Asia Pacific territories, the Travelzoo META subscription service and MTE.

Jack’s Flight Club consists of subscription revenues from Premium members.

New Initiatives consists of Travelzoo’s licensing activities in certain Asia Pacific territories, Travelzoo META and MTE.

Our chief operating decision maker ("CODM") is our Global Chief Executive Officer.

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Financial information is utilized along with forecasts to enable the CODM to manage our business across all operating segments.

For the three months ended March 31, 2025, Travelzoo North America operations comprised 65 % of revenues, Travelzoo Europe operations comprised 29 % of revenues and Jack's Flight Club comprised 6 % of revenues.

For the three months ended June 30, 2025, Travelzoo North America operations comprised 67 % of revenues, Travelzoo Europe operations comprised 27 % of revenues and Jack's Flight Club comprised 6 % of revenues.

The following is a summary of operating results by business segment (in thousands):

Three Months Ended March 31, 2025 Travelzoo North

Three Months Ended June 30, 2025 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

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Travelzoo North America and Travelzoo Europe general and administrative expenses include stock based compensation of $ 339,000 and $ 0 , respectively.

Three Months Ended March 31, 2024 Travelzoo North

Three Months Ended June 30, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

10 unchanged sentences

Travelzoo North America and Travelzoo Europe general and administrative expenses include stock based compensation of $ 688,000 and $ 0 , respectively.

Six Months Ended June 30, 2025 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

Revenues from unaffiliated customers $ 30,567 $ 13,710 $ 2,733 $ 36 $ 47,046

Intersegment revenues 693 ( 613 ) ( 80 ) — —

Total net revenues 31,260 13,097 2,653 36 47,046

Sales and marketing (1) 12,153 8,329 1,226 — 21,708

Other costs and expenses (2) 12,695 5,423 1,259 97 19,474

Operating profit (loss) $ 6,412 $ ( 655 ) $ 168 $ ( 61 ) $ 5,864

Other income, net 790

Income from continuing operations before income taxes 6,654

(1) Includes advertising and promotional costs, employee-related expenses for sales, marketing, and production teams, conference participation costs, professional services, public relations expenses, and facilities costs.

(2) Includes costs and expenses related to cost of revenues, product development, and general and administrative.

Travelzoo North America and Travelzoo Europe general and administrative expenses include stock based compensation of $ 679,000 and $ 0 , respectively.

Six Months Ended June 30, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

Revenues from unaffiliated customers $ 28,288 $ 12,584 $ 2,199 55 $ 43,126

Intersegment revenues 74 29 ( 103 ) — —

Total net revenues 28,362 12,613 2,096 55 43,126

Sales and marketing (1) $ 10,551 $ 6,391 $ 882 $ 135 17,959

Other costs and expenses (2) $ 9,657 $ 4,328 $ 1,347 $ 234 15,566

Operating profit (loss) $ 8,155 $ 1,894 $ ( 133 ) $ ( 314 ) $ 9,602

Other income, net 315

Income from continuing operations before income taxes 9,917

(2) Includes costs and expenses related to cost of revenues, product development, and general and administrative.

Travelzoo North America and Travelzoo Europe general and administrative expenses include stock based compensation of $ 783,000 and $ 0 , respectively.

A measure of segment assets is not currently provided to the Chief Operating Decision Maker and has therefore not been provided.

For the three months ended March 31, 2025 and 2024, the Company did not have any customers that accounted for 10% or more of revenue.

As of March 31, 2025 and December 31, 2024, the Company did not have any customers that accounted for 10% or more of accounts receivable.

For the three months ended June 30, 2025 and 2024, the Company did not have any customers that accounted for 10% or more of revenue.

As of June 30, 2025 and December 31, 2024, the Company did not have any customers that accounted for 10% or more of accounts receivable.

The following table sets forth the breakdown of revenues (in thousands) by category:

Advertising, Membership Fees, and Other.

Advertising includes travel publications ( Top 20 , Travelzoo website, Standalone email newsletters, Travelzoo Network ), Getaways vouchers, hotel platform, vacation packages, Local Deals vouchers and entertainment offers (vouchers and direct bookings).

Advertising and Commerce, Membership Fees, and Other.

Advertising and Commerce includes travel publications ( Top 20 , Travelzoo website, Standalone email newsletters, Travelzoo Network ), Getaways vouchers, hotel platform, vacation packages, Local Deals vouchers and entertainment offers (vouchers and direct bookings).

Membership Fees includes subscription fees paid by Travelzoo and Jack's Flight Club members.

Other includes licensing fees from license agreements and the existing retail business acquired by the Company in the MTE transaction.

Three Months Ended

Advertising $ 20,680 $ 20,850

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Advertising and Commerce $ 20,874 $ 19,957 $ 41,554 $ 40,807

Membership Fees 3,013 1,161 5,456 2,265

Other 19 23 36 54

Total revenues $ 23,906 $ 21,141 $ 47,046 $ 43,126

The following table sets forth revenues for individual countries that comprised 10% or more of total revenue (in thousands):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

United States $ 15,129 $ 13,577 $ 29,455 $ 27,178

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All of our leases qualify as operating leases.

The following table summarizes the components of lease expense for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended

The following table summarizes the components of lease expense for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Operating lease cost $ 577 $ 529 $ 1,130 $ 1,061

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Total lease cost $ 831 $ 759 $ 1,638 $ 1,548

Cash payments against the operating lease liabilities totaled $ 861,000 and $ 857,000 for the three months ended March 31, 2025 and 2024.

ROU assets obtained in exchange for lease obligations was $ 321,000 and $ 235,000 for the three months ended March 31, 2025 and 2024, respectively.

Cash payments against the operating lease liabilities totaled $ 897,000 and $ 1.7 million for the six months ended June 30, 2025 and 2024.

ROU assets obtained in exchange for lease obligations was $ 438,000 and $ 646,000 for the six months ended June 30, 2025 and 2024, respectively.

The following table s ummarizes the presentation in our condensed consolidated balance sheets of our operating leases (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Operating lease right-of-use assets $ 5,204 $ 5,655

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Years ending December 31,

2025 (excluding the three months ended March 31, 2025) $ 2,246

2025 (excluding the six months ended June 30, 2025) $ 1,571

Thereafter 225

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Non-Controlling Interest

The Company’s consolidated financial statements include Jack’s Flight Club where the Company has operating control but owns 60 % of the equity interest.

The non-controlling interest for the three months ended March 31, 2025 and 2024 was as follows (in thousands):

The Company’s condensed consolidated financial statements include Jack’s Flight Club where the Company has operating control but owns 60 % of the equity interest.

The non-controlling interest for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):

Non-controlling interest—December 31, 2023 4,697

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Non-controlling interest—March 31, 2025 4,908

Net income attributable to non-controlling interest 79

Non-controlling interest—June 30, 2025 $ 4,987

Related Party Transactions

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In connection with the development of Travelzoo META, on December 28, 2022, the Company acquired MTE, a wholly owned subsidiary of Azzurro Capital Inc., and also completed a private placement of newly issued shares.

As of March 31, 2025, Azzurro Capital Inc.

As of June 30, 2025, Azzurro Capital Inc.

and Ralph Bartel owned approximately 36.7 % of the Company’s outstanding shares.

Acquisitions in the condensed consolidated financial statements for further information.

Sale and Purchase of Travelzoo Common Stock within Six Month Period

On May 23, 2023, Travelzoo was named as a nominal defendant in a complaint for recovery of short swing profits filed in the Southern District of New York under Section 16(b) of the Securities Exchange Act, by Dennis J.

Donoghue and Mark Rubenstein, against Ralph Bartel, the Ralph Bartel 2005 Trust and Azzurro Capital Inc.

The Southern District of New York found in favor of the defendant and although the plaintiff appealed, the Second Circuit reaffirmed the District Court’s ruling on March 28, 2025, resulting in dismissal of the action.

Stock Repurchase Agreement

Travelzoo, from time to time, engages in share repurchases, and on June 15, 2024, the Company entered into a Stock Repurchase Agreement (the “SRA”) with Holger Bartel, the Company's Global Chief Executive Officer, to repurchase an aggregate of 200,000 shares of the Company’s common stock at a price of $ 7.66 per share.

Travelzoo's compensation committee negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser.

The aggregate purchase price of $ 1.5 million was paid during the three months ended June 30, 2024, following the execution of the SRA.

Consulting Agreement with Ralph Bartel

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Pursuant to the Consulting Agreement, Mr.

Bartel provides strategic advisory for Travelzoo META, advisory on talent search, performance management consulting, strategic advisory to IT and brand strategy and public relations support.

For the three months ended March 31, 2025, the fee payable to Mr.

Bartel pursuant to the Consulting Agreement was $ 78,000 , included within General and Administrative expenses.

Bartel provides strategic advisory for Travelzoo META, advisory on talent search, strategic advisory to IT and brand strategy and public relations support.

For the three months ended June 30, 2025, the fee payable to Mr.

Bartel, including the reimbursement of travel expenses, pursuant to the Consulting Agreement totaled $ 73,000 , included within General and administrative expenses.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements