TRAVELZOO 10-Q

Item 1. Financial Statements 3 TRAVELZOO CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except par value) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 8,491 $ 17,064 Accounts receivable, less allowance for doubtful accounts of $ 1,635 and $ 1,612 as of September 30, 2025 and December 31, 2024, respectively 12,460 12,825 Prepaid income taxes 654 736 Income taxes receivable 887 — Prepaid expenses and other 1,931 1,148 Total current assets 24,423 31,773 Deposits and other 302 374 Deferred tax assets 3,469 3,380 Restricted cash 756 675 Operating lease right-of-use assets 4,540 5,655 Property and equipment, net 278 423 Intangible assets, net 1,452 1,498 Goodwill 10,944 10,944 Total assets $ 46,164 $ 54,722 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 8,405 $ 6,162 Merchant payables 11,767 16,294 Accrued expenses and other 4,557 3,404 Deferred revenue 9,060 6,545 Income tax payable — 1,619 Operating lease liabilities 2,058 2,472 Total current liabilities 35,847 36,496 Long-term tax liabilities 8,906 7,851 Long-term operating lease liabilities 4,494 5,646 Other long-term liabilities — 376 Total liabilities 49,247 50,369 Stockholders’ equity (deficit): Preferred stock, $ 0.01 par value per share ( 5,000 shares authorized; none issued) Common stock, $ 0.01 par value ( 20,000 shares authorized; 10,932 shares issued and outstanding as of September 30, 2025, 11,836 shares issued and outstanding as of December 31, 2024) 109 118 Additional paid in capital — — Tax indemnification ( 9,537 ) ( 9,537 ) Retained earnings 6,925 14,284 Accumulated other comprehensive loss ( 5,596 ) ( 5,327 ) Total Travelzoo stockholders’ equity (deficit) ( 8,099 ) ( 462 ) Non-controlling interest 5,016 4,815 Total stockholders’ equity (deficit) ( 3,083 ) 4,353 Total liabilities and stockholders’ equity (deficit) $ 46,164 $ 54,722 See accompanying notes to unaudited condensed consolidated financial statements. 4 TRAVELZOO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenues $ 22,198 $ 20,098 $ 69,245 $ 63,224 Cost of revenues 4,519 2,548 13,132 7,708 Gross profit 17,679 17,550 56,113 55,516 Operating expenses: Sales and marketing 12,198 8,247 34,378 26,231 Product development 631 594 1,963 1,763 General and administrative 4,362 4,664 13,420 13,875 Total operating expenses 17,191 13,505 49,761 41,869 Operating income 488 4,045 6,352 13,647 Other income (loss), net ( 64 ) 359 727 674 Income before income taxes 424 4,404 7,079 14,321 Income tax expense 245 1,148 2,158 3,920 Net income 179 3,256 4,921 10,401 Net income attributable to non-controlling interest 29 72 201 54 Net income attributable to Travelzoo $ 150 $ 3,184 $ 4,720 $ 10,347 Net income per share —basic $ 0.01 $ 0.26 $ 0.41 $ 0.81 Net Income per share—diluted $ 0.01 $ 0.26 $ 0.39 $ 0.79 Shares used in per share calculation—basic 10,987 12,176 11,585 12,851 Shares used in per share calculation—diluted 11,213 12,386 11,974 13,035 See accompanying notes to unaudited condensed consolidated financial statements. 5 TRAVELZOO CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net income $ 179 $ 3,256 $ 4,921 $ 10,401 Other comprehensive income (loss): Foreign currency translation adjustment ( 20 ) ( 128 ) ( 269 ) ( 472 ) Total comprehensive income $ 159 $ 3,128 $ 4,652 $ 9,929 See accompanying notes to unaudited condensed consolidated financial statements. 6 TRAVELZOO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 4,921 $ 10,401 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 239 737 Stock-based compensation 1,108 1,239 Deferred income tax 4 ( 39 ) Net foreign currency effect ( 224 ) ( 165 ) Provision of loss (net recoveries) on accounts receivable and refund reserve 30 121 Changes in operating assets and liabilities: Accounts receivable 756 ( 258 ) Prepaid income taxes 84 ( 461 ) Prepaid expenses, deposits and other ( 702 ) 464 Accounts payable 2,134 430 Merchant payables ( 5,053 ) ( 3,348 ) Accrued expenses and other 859 372 Deferred revenue 2,363 1,790 Income tax payable ( 2,583 ) 593 Other liabilities 273 1,381 Net cash provided by operating activities 4,209 13,257 Cash flows from investing activities: Purchases of property and equipment ( 49 ) ( 129 ) Net cash used in investing activities ( 49 ) ( 129 ) Cash flows from financing activities: Repurchase of common stock ( 12,964 ) ( 16,605 ) Exercise of stock options and taxes paid for net share settlement of equity awards ( 104 ) ( 592 ) Net cash used in financing activities ( 13,068 ) ( 17,197 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 415 ( 214 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 8,493 ) ( 4,283 ) Cash, cash equivalents and restricted cash at beginning of period 17,740 16,389 Cash, cash equivalents and restricted cash at end of period $ 9,247 $ 12,106 Supplemental disclosure of cash flow information: Cash paid (refund) for income taxes, net $ 3,612 $ 1,472 Right-of-use assets obtained in exchange for lease obligations—operating leases $ 321 $ 1,273 Cash paid for amounts included in the measurement of lease liabilities $ 2,664 $ 2,547 Non-cash investing and financing activities: Accrued excise tax for share repurchases $ 129 $ 160 See accompanying notes to unaudited condensed consolidated financial statements. 7 TRAVELZOO CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) (In thousands) Common Stock Treasury Stock Additional Paid-In Capital Tax Indemnification Note Receivable from Shareholder Retained Earnings Accumulated Other Comprehensive Loss Total Travelzoo Stockholders’ Equity (Deficit) Non-controlling interest Total Stockholders’ Equity (Deficit) Shares Amount Balances, June 30, 2025 11,081 111 — — ( 9,537 ) — 7,934 ( 5,576 ) ( 7,068 ) 4,987 ( 2,081 ) Stock-based compensation expense — — — 399 — — — — 399 — 399 Repurchase of common stock (1) — — ( 1,560 ) — — — — ( 1,560 ) — ( 1,560 ) Retirement of treasury stock ( 149 ) ( 2 ) 1,560 ( 399 ) — — ( 1,159 ) — — — — Exercise of stock options and taxes paid for net share settlement — — — — — — — — — — — Account receivable from shareholder — — — — — — — — — — — Foreign currency translation adjustment — — — — — — — ( 20 ) ( 20 ) — ( 20 ) Net income — — — — — — 150 — 150 29 179 Balances, September 30, 2025 10,932 $ 109 $ — $ — $ ( 9,537 ) $ — $ 6,925 $ ( 5,596 ) $ ( 8,099 ) $ 5,016 $ ( 3,083 ) (1) Includes a 1 % excise tax applicable to share repurchases. Common Stock Treasury Stock Additional Paid-In Capital Tax Indemnification Note Receivable from Shareholder Retained Earnings Accumulated Other Comprehensive Loss Total Travelzoo Stockholders’ Equity Non-controlling interest Total Stockholders’ Equity Shares Amount Balances, June 30, 2024 12,402 124 — — ( 9,537 ) ( 1,753 ) 17,083 ( 4,951 ) 966 4,679 5,645 Stock-based compensation expense — — — 456 — — — — 456 — 456 Repurchase of common stock — — ( 6,198 ) — — — — — ( 6,198 ) — ( 6,198 ) Retirement of treasury stock ( 553 ) ( 5 ) 6,198 ( 121 ) — — ( 6,072 ) — — — — Exercise of stock options and taxes paid for net share settlement 31 — — ( 335 ) — — — — ( 335 ) — ( 335 ) Account receivable from shareholder — — — — — ( 176 ) — — ( 176 ) — ( 176 ) Foreign currency translation adjustment — — — — — — — ( 128 ) ( 128 ) — ( 128 ) Net income — — — — — — 3,184 — 3,184 72 3,256 Balances, September 30, 2024 11,880 $ 119 $ — $ — $ ( 9,537 ) $ ( 1,929 ) $ 14,195 $ ( 5,079 ) $ ( 2,231 ) $ 4,751 $ 2,520 See accompanying notes to unaudited condensed consolidated financial statements. 8 Common Stock Treasury Stock Additional Paid-In Capital Tax Indemnification Note Receivable from Shareholder Retained Earnings Accumulated Other Comprehensive Loss Total 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 — — — 1,108 — — — — 1,108 — 1,108 Repurchase of common stock (1) — ( 13,092 ) — — — — — ( 13,092 ) — ( 13,092 ) Retirement of treasury stock ( 912 ) ( 9 ) 13,092 ( 1,004 ) — — ( 12,079 ) — — — — Exercise of stock options and taxes paid for net share settlement 8 — — ( 104 ) — — — — ( 104 ) — ( 104 ) Foreign currency translation adjustment — — — — — — — ( 269 ) ( 269 ) — ( 269 ) Net income — — — — — — 4,720 — 4,720 201 4,921 Balances, September 30, 2025 10,932 $ 109 $ — $ — $ ( 9,537 ) $ — $ 6,925 $ ( 5,596 ) $ ( 8,099 ) $ 5,016 $ ( 3,083 ) (1) Includes a 1 % excise tax applicable to share repurchases. Common Stock Treasury Stock Additional Paid-In Capital Tax Indemnification Note Receivable from Shareholder Retained Earnings Accumulated Other Comprehensive Loss Total Travelzoo Stockholders’ Equity Non-controlling interest Total Stockholders’ Equity Shares Amount Balances, December 31, 2023 13,575 136 — 439 ( 9,537 ) ( 1,753 ) 19,508 ( 4,607 ) 4,186 4,697 8,883 Stock-based compensation expense — — — 1,239 — — — — 1,239 — 1,239 Repurchase of common stock — — ( 16,764 ) — — — — — ( 16,764 ) — ( 16,764 ) Retirement of treasury stock ( 1,753 ) ( 17 ) 16,764 ( 1,087 ) — — ( 15,660 ) — — — — Exercise of stock options and taxes paid for net share settlement 58 — — ( 591 ) — — — — ( 591 ) — ( 591 ) Account receivable from shareholder — — — — — ( 176 ) — — ( 176 ) — ( 176 ) Foreign currency translation adjustment — — — — — — — ( 472 ) ( 472 ) — ( 472 ) Net income — — — — — — 10,347 — 10,347 54 10,401 Balances, September 30, 2024 11,880 $ 119 $ — $ — $ ( 9,537 ) $ ( 1,929 ) $ 14,195 $ ( 5,079 ) $ ( 2,231 ) $ 4,751 $ 2,520 See accompanying notes to unaudited condensed consolidated financial statements. 9 TRAVELZOO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1: Summary of Significant Accounting Policies (a) The Company and Basis of Presentation Travelzoo (including its subsidiaries and affiliates, the “Company” or “we”) is a global Internet media company. 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 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 on social media platforms, 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. Ownership 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 September 30, 2025, holds approximately 34.7 % of the Company's outstanding shares. Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC). 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 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. 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 GAAP. 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 nine months ended September 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 In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09 "Income Taxes (Topics 740): 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 10 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. On November 4, 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance requires more detailed disclosure for expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the ASU to determine its impact on our disclosures. (c) Significant Accounting Policies Below is a summary of the Company's significant accounting policies. For a comprehensive description of our accounting policies, refer to our Annual Report on Form 10-K for the year ended December 31, 2024. Revenue Recognition The Company follows ASU No. 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 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. 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 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. For transaction-based advertising revenues, including from products such as Local Deals and Getaways voucher sales, hotel platform bookings and vacation package sales, the Company evaluates whether it is acting as principal (thereby reporting revenue on a gross basis) versus agent (thereby reporting revenue on a net basis). 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 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. Certain merchant contracts allow the Company to retain the proceeds from unredeemed vouchers. 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 suppliers (e.g. hotel or spa partners). In those scenarios, the Company is not acting as the agent, but rather as the principal. 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 11 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. The Company determines standalone selling prices based on overall pricing objectives, taking into consideration the type of goods or services, geographical region of the customers, rate card pricing and customary discounts. Standalone selling prices are generally determined based on the prices charged to customers when the good or service is sold separately. The Company relies upon certain practical expedients and exemptions provided for in Topic 606. The Company expenses sales commissions when incurred, as the amortization period would be one year or less, which are recorded in sales and marketing expenses. 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 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 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 $ 2 million was recognized in the nine months ended September 30, 2025, and $ 4.5 million was recorded as deferred revenue for Travelzoo North America and Travelzoo Europe, of which $ 3 million was recognized as revenue in the nine months ended September 30, 2025. As of September 30, 2025 , deferred revenue was $ 9 million, of which $ 2.3 million was for Jack's Flight Club, and $ 6.7 million was for Travelzoo North America and Travelzoo Europe. Reserve for Refunds to Members The Company estimates and records a reserve for future refunds on member purchases of Local Deals and Getaways vouchers, at the time revenue is recorded. We consider various factors such as historical refund timeframes from dates of sale, reasons for refunds, time periods remaining until expiration, changes in refund procedures and estimates of redemptions and breakage. Should any of these factors change, the estimates made by management will also change, which could impact the level of our future reserve for refunds to members. 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 September 30, 2025, the Company had approximately $ 2.9 million of unredeemed vouchers that had been sold, representing the Company’s commission earned. The Company estimated and recorded a refund reserve of $ 173,000 for these unredeemed vouchers as of September 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 $ 11.8 million as of September 30, 2025 is recorded on the condensed consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed. 12 Identifiable intangible assets Upon acquisition, identifiable intangible assets are recorded at fair value and are carried at cost less accumulated amortization. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The carrying values of all intangible assets are reviewed for impairment annually, and whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Goodwill Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is evaluated for impairment annually, and whenever events or changes in circumstances indicate its carrying value may not be recoverable. The Company performs an impairment test by comparing the book value of the reporting unit to the fair value of the reporting unit utilizing a combination of valuation techniques, including an income approach (discounted cash flows) and market approach (guideline company method). 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 nine months ended September 30, 2025. Operating Leases The Company determines if an arrangement contains a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease payments used to determine the operating lease assets may include lease incentives and stated rent increases. The Company does not include options to extend or terminate until it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities, as the Company’s leases generally do not provide an implicit rate. The Company elected not to recognize leases with an initial term of 12 months or less on its unaudited condensed consolidated balance sheets. The Company’s leases are reflected in operating lease ROU assets, operating lease liabilities and long-term operating lease liabilities on our unaudited condensed consolidated balance sheets. The lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Certain Risks and Uncertainties 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). The Company’s cash, cash equivalents and a ccounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents are placed with financial institutions that management believes are of high credit quality. Accounts receivables are derived from revenue earned from customers located in the U.S. and internationally. As of September 30, 2025 and December 31, 2024, the Company did not have any customers that accounted for 10% or more of accounts receivable. As of September 30, 2025, the Company had merchant payables of $ 11.8 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 condensed consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 11.4 million at September 30, 2025. Payables to merchants are generally due upon redemption of vouchers by members who purchased them from the Company. As of September 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 September 30, 2025 will be sufficient to provide for working capital needs for at least the next twelve months. Cash, Cash Equivalents and Restricted Cash Cash equivalents consist of highly liquid investments with maturities of three months or less on the date of purchase. Restricted cash includes cash and cash equivalents that is restricted through legal contracts, regulations or our intention to use 13 the cash for a specific purpose. Our restricted cash primarily relates to refundable security deposits for real estate leases and funds held in escrow. 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: September 30, December 31, 2025 2024 Cash and cash equivalents $ 8,491 $ 17,064 Restricted cash 756 676 Total cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 9,247 $ 17,740 The Company’s restricted cash was included in noncurrent assets as of September 30, 2025 and December 31, 2024. Note 2: Net Income Per Share Basic net income per share is computed using the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed by adjusting the weighted-average number of common shares outstanding for the effect of dilutive potential common shares outstanding during the period. Potential common shares included in the diluted calculation consist of incremental shares issuable upon the exercise of outstanding stock options calculated using the treasury stock method. 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 Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Numerator: Net income attributable to Travelzoo $ 150 $ 3,184 $ 4,720 $ 10,347 Denominator: Weighted average common shares—basic 10,987 12,176 11,585 12,851 Effect of dilutive securities: stock options 226 210 389 184 Weighted average common shares—diluted 11,213 12,386 11,974 13,035 Net income per share —basic $ 0.01 $ 0.26 $ 0.41 $ 0.81 Net income per share—diluted $ 0.01 $ 0.26 $ 0.39 $ 0.79 For the three months ended September 30, 2024, options to purchas e 612,500 shares of common stock were not included in the computation of diluted net income per share because the effect would have been anti-dilutive. No options were excluded for the three months ended September 30, 2025. Note 3: Acquisitions Intangible Assets The following table represents the carrying value and estimated useful lives of intangible assets from acquisitions (in thousands): Carrying Value Estimated Life (Years) Customer relationships (Jack’s Flight Club) $ 3,500 5.0 Trade name (Jack’s Flight Club) 2,460 indefinite Assets Measured at Fair Value on a Non-recurring Basis 14 The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment, are adjusted to fair value if an impairment is recognized during the period. The fair value measurements are based on Level 3 inputs which are unobservable inputs based on management assumptions used to measure assets at fair value. The goodwill assessment was performed by comparing the fair value of the reporting units to their carrying value. The fair value estimates for the reporting units were based on a blended analysis of the present value of future discounted cash flows and the market value approach, using Level 3 inputs. The indefinite-lived intangible assets assessment was performed using the relief-from-royalty method, which includes unobservable inputs, classified as Level 3, including projected revenues and approximately 5 % royalty rate. The Company performed an annual impairment test as of October 31, 2024 and did not identify any indicators of impairment for the year ended December 31, 2024 . As of date, no indicators of impairment have been identified for the period ended September 30, 2025. Amortization of Acquired Intangible Assets The following table represents the activities of intangible assets for the three months ended September 30, 2025 and 2024 (in thousands): Jack’s Flight Club Secret Escape Spain Secret Escape U.S. Intangible assets—December 31, 2023 1,710 186 195 Amortization of intangible assets with definite lives ( 75 ) ( 48 ) ( 195 ) Intangible assets—March 31, 2024 1,635 138 — Amortization of intangible assets with definite lives ( 59 ) ( 28 ) — Intangible assets—June 30, 2024 1,576 110 — Amortization of intangible assets with definite lives ( 58 ) ( 37 ) — Intangible assets—September 30, 2024 1,518 73 — Amortization of intangible assets with definite lives ( 58 ) ( 35 ) — Intangible assets—December 31, 2024 1,460 38 — Amortization of intangible assets with definite lives ( 3 ) ( 24 ) — Intangible assets—March 31, 2025 1,457 14 — Amortization of intangible assets with definite lives ( 2 ) ( 14 ) — Intangible assets—June 30, 2025 $ 1,455 $ — $ — Amortization of intangible assets with definite lives ( 3 ) — — Intangible assets—September 30, 2025 $ 1,452 $ — $ — Amortization expense for acquired intangibles was $ 2,000 and $ 95,000 for the three months ended September 30, 2025 and 2024, respectively. Amortization expense for acquired intangibles was $ 46,000 and $ 500,000 for the nine months ended September 30, 2025 and 2024, respectively. Expected future amortization expense of acquired intangible assets as of September 30, 2025 is as follows (in thousands): Years ending December 31, 2025 2 $ 2 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 September 30, 2025, the carrying value of the trade name was $ 1.5 million. The Company did not identify any indicators of impairment during the nine months ended September 30, 2025. 15 Note 4: Commitments and Contingencies From time to time, the Company is subject to various claims and legal proceedings, either asserted or unasserted, that arise in the ordinary course of business. 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 September 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. The Company believes that the likelihood of an ultimate amount of liability, if any, for any pending claims of any type (alone or combined) that will materially affect the Company’s financial position, results of operations or cash flows is remote. The ultimate outcome of any litigation is uncertain, however, and unfavorable outcomes could have a material negative impact on the Company’s financial condition and operating results. Regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, negative publicity, diversion of management resources and other factors. The Company leases office space in Canada, Germany, Spain, the U.K., and the U.S. under operating leases. Our leases have remaining terms ranging from less than one year to up to five years . The C ompany maintains standby letters of credit (“LOC”) to serve as collateral issued to certain of the landlords. The LOCs are collateralized with cash which is included in the line item “Restricted cash” in the Condensed Consolidated Balance Sheets. Rent expense was $ 746,000 and $ 675,000 for the three months ended September 30, 2025 and 2024, respectively. Se e Note 10– Leases for more information. The Company has purchase commitments aggregating approximately $ 0.9 million as of September 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. Note 5: Income Taxes 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 UK. For the three months ended September 30, 2025 and 2024 , the Company’s reported effective income tax rate was 58 % and 26 %, respectively. This increase of the Company’s reported effective income tax rate is primarily due to a decrease in operating profit. For the nine months ended September 30, 2025 and 2024 , the Company’s reported effective income tax rate was 30 % and 27 %, respectively . As of September 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. The estimated amount of the unrecognized deferred tax liability attributed to future withholding taxes on dividend distributions of undistributed earnings for certain non-U.S. subsidiaries, which the Company intends to reinvest the related earnings indefinitely in its operations outside the U.S., is approximately $ 941,000 . The Company maintains a reserve for potential liabilities for uncertain tax positions. As of September 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 September 30, 2025 and December 31, 2024, the Company had approximately $ 1.4 million and $ 1.1 million in accrued interest, respectively. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. states and foreign jurisdictions. The Company is subject to U.S. 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 have assessed the legislation and its effect on our consolidated financial statements. The enactment of the OBBBA Act did not have a material impact during the three-month period ended September 30, 2025. We will continue to monitor any future guidance or legislative developments related to the OBBBA Act to assess its potential implications on our tax position. 16 Note 6: Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Beginning balance $ ( 5,576 ) $ ( 4,951 ) $ ( 5,327 ) $ ( 4,607 ) Other comprehensive loss due to foreign currency translation, net of tax ( 20 ) ( 128 ) ( 269 ) ( 472 ) Ending balance $ ( 5,596 ) $ ( 5,079 ) $ ( 5,596 ) $ ( 5,079 ) There were no amounts reclassified from accumulated other comprehensive loss for the three and nine months ended September 30, 2025 and 2024. Accumulated other comprehensive loss consists of foreign currency translation gain or loss. Note 7: Stock-Based Compensation and Stock Options 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 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 the Company’s Board of Directors. As of September 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 September 30, 2025 and 2024, respectively. Stock-based compensation related to this grant was fully expensed in 2024. On March 3, 2022, pursuant to an executed Option Agreement, the Company granted its Global Chief Executive Officer, Holger Bartel, options to purchase 600,000 shares of common stock of the Company, with an exercise price of $ 8.14 and vesting 25 % every six months over two years beginning on June 30, 2022 and ending on December 31, 2023. The options expire in March 2027. 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 the Company’s Board of Directors. As of September 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 $ 89,000 and was recorded in sales and marketing expenses for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, 41,667 options were vested and outstanding. As of September 30, 2025, there was approximately $ 0 of unrecognized stock-based compensation expense relating to these options. 17 On March 8, 2023, the Company granted its General Counsel and Head of Global Functions, Christina Sindoni Ciocca, options to purchase 200,000 shares of common stock of the Company, with an exercise price of $ 4.96 and vesting 12.5 % every six months over four years beginning on June 30, 2023 and ending on December 31, 2026. This grant was approved at the Annual Meeting of Stockholders held in June 2023. 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 the Company’s Board of Directors. 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 September 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 September 30, 2025 and 2024, respectively. As of September 30, 2025, there was approximately $ 174,000 of unrecognized stock-based compensation expense relating to these options. This amount is expected to be recognized over 1.3 years. On March 28, 2024, pursuant to an executed Option Agreement, the Company granted its Global Chief Executive Officer, Holger Bartel, options to purchase 600,000 shares of common stock of the Company, with an exercise price of $ 8.58 and vesting 25 % every six months over two years beginning on June 30, 2024 and ending on December 31, 2025. The options expire in March 2029. This grant was approved at the 2024 Annual Meeting of Stockholders. As of September 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 was recorded in general and administrative expenses for the three months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was approximately $ 305,000 of unrecognized stock-based compensation expense relating to these options. This amount is expected to be recognized over 0.3 years. Note 8: Stock Repurchase Program The Company’s stock repurchase programs assist in offsetting the impact of dilution from employee equity compensation and with capital allocation. Management is allowed discretion in the execution of repurchase programs, based upon market conditions and consideration of capital allocation. On October 24, 2023, 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. The Company repurchased 600,000 shares of common stock for an aggregate purchase price of $ 5.0 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. As of December 31, 2023, there were 400,000 shares remaining to be repurchased under this program. 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 had 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. See Note 12: Related Party Transactions for further information. 18 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. For the year ended December 31, 2024, the Company repurchased 88,471 shares of 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. For the three months ended March 31, 2025, the Company repurchased 590,839 shares of common stock for an aggregate purchase price of $ 8.9 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. 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. During the three months ended September 30, 2025, the Company repurchased 148,602 shares of 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 completed the share repurchase program authorized on October 23, 2024. Note 9: Segment Reporting and Significant Customer Information The Company determines its reportable segments based upon the chief operating decision maker’s management of the business. The Company currently has four reportable operating segments: Travelzoo North America, Travelzoo Europe, Jack’s Flight Club and New Initiatives. Travelzoo North America consists of the Company’s operations in the U.S. and Canada. 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. 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. The CODM primarily uses operating income (loss) to evaluate each segment's performance, allocate resources and make capital investments. We allocate certain software and license costs, such as IT and customer support, across all segments but do not allocate expenses such as legal-related costs or income taxes. Financial information is utilized along with forecasts to enable the CODM to manage our business across all operating segments. For the three months ended September 30, 2025, Travelzoo North America operations comprised 64 % of revenues, Travelzoo Europe operations comprised 30 % 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 September 30, 2025 Travelzoo North America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 13,728 $ 7,036 $ 1,407 $ 27 $ 22,198 Intersegment revenues 503 ( 471 ) ( 32 ) — — Total net revenues 14,231 6,565 1,375 27 22,198 Sales and marketing (1) 6,998 4,549 651 — 12,198 Other costs and expenses (2) 6,104 2,655 704 48 9,511 Operating profit (loss) $ 1,128 $ ( 640 ) $ 20 $ ( 20 ) $ 488 Other income, net ( 64 ) Income from continuing operations before income taxes 424 (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 $ 339,000 and $ 0 , respectively. 19 Three Months Ended September 30, 2024 Travelzoo North America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 12,846 $ 6,021 $ 1,198 $ 33 $ 20,098 Intersegment revenues ( 24 ) ( 3 ) 27 — — Total net revenues 12,822 6,018 1,225 33 20,098 Sales and marketing (1) 4,557 3,038 511 145 8,251 Other costs and expenses (2) 5,115 1,952 687 48 7,802 Operating profit (loss) $ 3,150 $ 1,028 $ 27 $ ( 160 ) $ 4,045 Other income, net 359 Income from continuing operations before income taxes 4,404 (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 $ 331,000 and $ 0 , respectively. Nine Months Ended September 30, 2025 Travelzoo North America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 44,296 $ 20,745 $ 4,140 $ 64 $ 69,245 Intersegment revenues 1,196 ( 1,084 ) ( 112 ) — — Total net revenues 45,492 19,661 4,028 64 69,245 Sales and marketing (1) 19,400 13,101 1,877 — 34,378 Other costs and expenses (2) 18,551 7,856 1,963 145 28,515 Operating profit (loss) $ 7,541 $ ( 1,296 ) $ 188 $ ( 81 ) $ 6,352 Other income, net 727 Income from continuing operations before income taxes 7,079 (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 $ 1 million and $ 0 , respectively. Nine Months Ended September 30, 2024 Travelzoo North America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 41,134 $ 18,605 $ 3,397 88 $ 63,224 Intersegment revenues 50 26 ( 76 ) — — Total net revenues 41,184 18,631 3,321 88 63,224 Sales and marketing (1) $ 15,107 $ 9,429 $ 1,393 $ 280 26,209 Other costs and expenses (2) $ 14,772 $ 6,280 $ 2,034 $ 282 23,368 Operating profit (loss) $ 11,305 $ 2,922 $ ( 106 ) $ ( 474 ) $ 13,647 Other income, net 674 Income from continuing operations before income taxes 14,321 20 (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 $ 1 million 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 September 30, 2025 and 2024, the Company did not have any customers that accounted for 10% or more of revenue. The following table sets forth the breakdown of revenues (in thousands) by category: 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 Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Advertising and Commerce $ 18,580 $ 18,619 $ 60,135 $ 59,426 Membership Fees 3,591 1,446 9,047 3,711 Other 27 33 63 87 Total revenues $ 22,198 $ 20,098 $ 69,245 $ 63,224 The following table sets forth revenues for individual countries that comprised 10% or more of total revenue (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenue United States $ 13,282 $ 11,666 $ 42,712 $ 37,242 United Kingdom 4,888 5,199 14,639 15,569 Rest of the world 4,028 3,233 11,894 10,413 Total revenues $ 22,198 $ 20,098 $ 69,245 $ 63,224 Note 10: Leases The Company has operating leases for real estate and certain equipment. The Company leases office space in Canada, Germany, Spain, the U.K. and the U.S. under operating leases. Our leases have remaining lease terms ranging from less than one year to up to five years . Certain leases include one or more options to renew. All of our leases qualify as operating leases. The following table summarizes the components of lease expense for the three and nine months ended September 30, 2025 and 2024 (in thousands): 21 Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Operating lease cost $ 569 $ 536 $ 1,699 $ 1,597 Short-term lease cost 160 137 438 408 Variable lease cost 109 154 339 370 Total lease cost $ 838 $ 827 $ 2,476 $ 2,375 Cash payments against the operating lease liabilities totaled $ 2.7 million and $ 2.5 million for the nine months ended September 30, 2025 and 2024. ROU assets obtained in exchange for lease obligations was $ 321,000 and $ 1.3 million for the nine months ended September 30, 2025 and 2024, respectively. The following table s ummarizes the presentation in our condensed consolidated balance sheets of our operating leases (in thousands): September 30, 2025 December 31, 2024 Assets: Operating lease right-of-use assets $ 4,540 $ 5,655 Liabilities: Operating lease liabilities $ 2,058 $ 2,472 Long-term operating lease liabilities 4,494 5,646 Total operating lease liabilities $ 6,552 $ 8,118 Weighted average remaining lease term (years) 3.91 4.43 Weighted average discount rate 4.4 % 4.8 % Maturities of lease liabilities were as follows (in thousands): Years ending December 31, 2025 (excluding the nine months ended September 30, 2025) $ 918 2026 2,178 2027 1,462 2028 1,462 2029 1,452 Thereafter 225 Total lease payments 7,697 Less interest ( 1,145 ) Present value of operating lease liabilities $ 6,552 Note 11: Non-Controlling Interest 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 nine months ended September 30, 2025 and 2024 was as follows (in thousands): 22 Non-controlling interest—December 31, 2023 4,697 Net income attributable to non-controlling interest ( 11 ) Non-controlling interest—March 31, 2024 4,686 Net income attributable to non-controlling interest ( 7 ) Non-controlling interest—June 30, 2024 4,679 Net income attributable to non-controlling interest 72 Non-controlling interest—September 30, 2024 4,751 Net income attributable to non-controlling interest 64 Non-controlling interest—December 31, 2024 4,815 Net income attributable to non-controlling interest 93 Non-controlling interest—March 31, 2025 4,908 Net income attributable to non-controlling interest 79 Non-controlling interest—June 30, 2025 4,987 Net income attributable to non-controlling interest 29 Non-controlling interest—September 30, 2025 $ 5,016 Note 12: Related Party Transactions Stock Purchase Agreement between Travelzoo and Azzurro 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 September 30, 2025, Azzurro Capital Inc. and Ralph Bartel owned approximately 34.7 % of the Company’s outstanding shares. See Note 3: Acquisitions in the condensed consolidated financial statements for further information. 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 On January 1, 2023, with the unanimous approval of the Audit Committee, the Company entered into a Consulting Agreement with Ralph Bartel (the "Consulting Agreement"). The Consulting Agreement was amended and renewed, effective July 1, 2025. Ralph Bartel, who founded Travelzoo, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro. Azzurro is the Company's largest shareholder. Pursuant to the Consulting Agreement, Mr. 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 September 30, 2025, the fees payable to Mr. Bartel, including the reimbursement of travel expenses, pursuant to the Consulting Agreement totaled $ 72,000 , included within General and administrative expenses. 23