What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-11 compared with 2025-03-19 · 155 added, 169 removed, 723 unchanged (31% of the section changed)

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Consolidated Statements of Comprehensive Income 43

Consolidated Statement of Stockholders' Equity 45

Consolidated Statement of Stockholders' Equity (Deficit) 45

Consolidated Statements of Cash Flows 45

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Travelzoo and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of Travelzoo and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with U.S.

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Advertising revenue is recognized by the Company upon the delivery of the emails to its members or each time a user clicks on the respective advertisements.

For the year ended December 31, 2024, the Company recorded $78.4 million in advertising revenues, which included advertising fee revenues from email newsletters and cost-per-click advertising.

For the year ended December 31, 2025, the Company recorded $78.4 million in advertising and commerce revenues, which included advertising fee revenues from email newsletters and cost-per-click advertising.

We identified the evaluation of the sufficiency of audit evidence over revenue related to advertising fees for email newsletters and cost-per-click advertising as a critical audit matter.

The Company’s reliance on its information technology (IT) system to capture the number of emails and clicks for revenue recognition required a heightened level of auditor judgment due to the extensive automation of the process.

Our audit procedures required the involvement of IT professionals with specialized skills and knowledge and auditor judgment was required to determine the nature and extent of procedures and to evaluate audit evidence obtained.

Our audit procedures required the involvement of IT professionals with specialized skills

and knowledge and auditor judgment was required to determine the nature and extent of procedures and to evaluate audit evidence obtained.

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

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Income tax payable 279 1,619

Liabilities from discontinued operations 24 24

Total current liabilities 34,170 36,496

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Total liabilities 47,614 50,369

Commitments and contingencies (Note 5)

Stockholders’ equity:

Stockholders’ equity (deficit):

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

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Tax indemnification ( 9,537 ) ( 9,537 )

Note receivable from shareholder — ( 1,753 )

Retained earnings 7,243 14,284

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Non-controlling interest 5,094 4,815

Total stockholders’ equity 4,353 8,883

Total liabilities and stockholders’ equity $ 54,722 $ 55,382

Total stockholders’ equity (deficit) ( 2,422 ) 4,353

Total liabilities and stockholders’ equity (deficit) $ 45,192 $ 54,722

See accompanying notes to consolidated financial statements.

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Other income, net 753 588

Income from continuing operations before income taxes 19,086 17,113

Income before income taxes 7,657 19,086

Income tax expense 2,679 5,404

Income from continuing operations 13,682 12,008

Income from discontinued operations, net of tax — 460

Net income 4,978 13,682

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Net income attributable to Travelzoo $ 4,699 $ 13,564

Net income attributable to Travelzoo—continuing operations $ 13,564 $ 11,906

Net income attributable to Travelzoo—discontinued operations $ — $ 460

Income per share—basic

Continuing operations $ 1.08 $ 0.80

Discontinued operations $ — $ 0.03

Net income per share—basic $ 0.42 $ 1.08

Income per share—diluted

Continuing operations $ 1.06 $ 0.80

Discontinued operations $ — $ 0.03

Net income per share —diluted $ 0.41 $ 1.06

Shares used in per share calculation from continuing operations—basic 12,594 14,897

Shares used in per share calculation from discontinued operations—basic 12,594 14,897

Shares used in per share calculation from continuing operations—diluted 12,852 14,964

Shares used in per share calculation from discontinued operations—diluted 12,852 14,964

Shares used in per share calculation from operations—basic 11,180 12,594

Shares used in per share calculation from operations—diluted 11,477 12,852

See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

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

Proceeds from Note receivable from shareholder — — — — — 1,753 — — — 1,753

Foreign currency translation adjustment — — — — — — — ( 4 ) — ( 4 )

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Deferred income tax ( 558 ) ( 518 )

Loss on sale of long-lived assets — 10

Net foreign currency effect ( 215 ) ( 33 )

Provision for (net recoveries of) accounts receivable and refund reserves 40 ( 1,016 )

Provision for accounts receivable and refund reserves 182 40

Changes in operating assets and liabilities:

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Cash flows from investing activities:

Proceeds from repayment of note receivable — 216

Purchases of property and equipment ( 65 ) ( 177 )

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We reach 30 million travelers.

Club Members receive Club Offers personally reviewed by our deal experts around the globe.

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

Club Members, who pay a membership fee, receive Club Offers negotiated and rigorously vetted by our deal experts around the globe.

Our relationships with thousands of top travel suppliers give us access to irresistible deals.

Our club and its benefits are built around the lifestyle of a modern travel enthusiast.

Our most important products and services are the Travelzoo website (travelzoo.com), the Travelzoo iOS and Android apps, the Top 20® email newsletter, Standalone email newsletters, the Travelzoo Network , and Jack's Flight Club ® .

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Jack's Flight Club is a subscription service that provides members with information about exceptional airfares.

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

For any subscription revenue derived from paid memberships, we recognize revenue monthly pro rata over the subscription periods.

Travelzoo membership has historically been free, however, beginning in 2024, we 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.

On January 1, 2026, we increased the annual membership fee to $ 50 for new members in the United States only.

For existing members, the new pricing will apply from the next renewal of their membership after February 1, 2026.

Jack’s Flight Club subscription options are quarterly, semi-annually, and annually.

We recognize subscription revenues ratably over the respective subscription periods.

We also license Travelzoo products, services and intellectual property to licensees in (a) Australia, New Zealand, and Singapore and (b) Japan and South Korea, in each case, where the Company is entitled to quarterly royalty payments based on a percentage of net revenue.

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Under the licensing agreements, Travelzoo's existing members in the applicable territories continue to be owned by the Company.

In March 2022, we announced the development of, and in May 2023 we launched Travelzoo META to extend the range of experiences we offer consumers to the emerging metaverse.

On December 30, 2022, we acquired Metaverse Travel Experiences, Inc., now Metaverse Travel Experiences, LLC (“MTE”), to support Travelzoo META in sourcing prospective travel experiences.

See Note 3– Acquisitions to th e consolidated financial statements for further information regarding the acquisition of MTE.

Through Travelzoo META, we plan to include Metaverse travel experiences as a benefit of Travelzoo club membership in 2026, allowing us to utilize and leverage all we have learned and developed over the past few years for Travelzoo META for the benefit of our Club Members.

Jack’s Flight Club

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Jack’s Flight Club’s revenues are generated by subscription fees paid by members.

APAC Exit and Pivot to Licensing Model

In March 2020, Travelzoo exited its loss-making Asia Pacific business and pivoted to a licensing model.

The Company’s Asia Pacific business was classified as discontinued operations at March 31, 2020.

APAC Licensing Model

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

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The license agreement for Japan and South Korea provides the licensee exclusive rights to use Travelzoo products, services, and intellectual property in exchange for quarterly royalty payments based on net revenue over a 5 year term, with an option to renew.

The Company recognized royalties of $ 30,000 and $ 36,000 and from the licensee for the years ended December 31, 2024 and 2023, respectively.

The Company recognized royalties of $ 30,000 from the licensee for the both years ended December 31, 2025 and 2024, respectively.

Going Concern

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Azzurro is the Company’s largest shareholder, and as of December 31, 2025, holds approximately 33.5 % of the Company's outstanding shares.

Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and separately holds less than 1 % of the Company's outstanding shares as of December 31, 2024 .

Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and did not hold any of the Company's outstanding shares as of December 31, 2025 .

Basis of Presentation and Consolidation

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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

The Company's revenues consist 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 deals 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 also generates transaction-based commerce revenues in the form of commissions from the sale of vouchers (our Local Deals and Getaways offerings), operation of our hotel booking platform and limited offerings of vacation packages 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 Travelzoo properties or Travelzoo Network partner properties), the Company recognizes revenues each time a user clicks on the ad.

For transaction-based advertising revenues, including from products such as Local Deals and Getaways prepaid 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).

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.

For transaction-based advertising revenues, including from products such as Local Deals and Getaways prepaid voucher sales, hotel platform bookings, vacation package sales and sales of pre-purchased vouchers or hotel inventory, 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.

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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.

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.

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Membership Fee Revenues

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

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.

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

We recognize subscription revenues ratably over the applicable subscription periods.

The 2024 annual fee was waived for existing members as of December 31, 2023.

Other Revenues

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

Other revenues include licensing fees and revenues generated from MTE, including but not limited to sales from the existing retail business of MTE.

Deferred Revenues

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At December 31, 2025, deferred revenue was $ 8.7 million of which $ 2.2 million was for Jack's Flight Club, and $ 6.5 million was for Travelzoo North America and Travelzoo Europe.

At December 31, 2023, deferred revenue was $ 2 million , of which $ 1.5 million was for Jack's Flight Club, and $ 569,000 was for Travelzoo North America and Travelzoo Europe.

At December 31, 2024, deferred revenue was $ 6.5 million , of which $ 2 million was for Jack's Flight Club, and $ 4.5 million was for Travelzoo North America and Travelzoo Europe.

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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

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.

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To the extent a deferred tax asset cannot be recognized under the preceding criteria, valuation allowances are established.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled.

assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled.

Significant judgment is required in evaluating the Company's uncertain tax positions and determining the Company's provision for income taxes.

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Restricted cash 756 676

Cash, cash equivalents and restricted cash–discontinued operations 1 1

Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows $ 10,763 $ 17,740

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(r) Recently Adopted Accounting Pronouncements

In November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2023-07 "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures", which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-07 was adopted for the year ended December 31, 2024 retrospectively to all periods presented in the financial statements.

See Note 11–Segment Reporting and Significant Customer Information.

(s) Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740):

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ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis.

We are currently evaluating the ASU to determine its impact on our income tax disclosures.

We adopted ASU 2023-09 for the year ended December 31, 2025 using a prospective transition method.

See Note 6– Income Taxes .

(s) Recent Accounting Pronouncements Not Yet Adopted

On November 4, 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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Year Ended December 31,

Net income attributable to Travelzoo—continuing operations $ 13,564 $ 11,906

Net income (loss) attributable to Travelzoo—discontinued operations — 460

Net income attributable to Travelzoo operations $ 4,699 $ 13,564

Weighted average common shares—basic 11,180 12,594

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Weighted average common shares—diluted 11,477 12,852

Income (loss) per share—basic

Continuing operations $ 1.08 $ 0.80

Discontinued operations — 0.03

Net income (loss) per share —basic $ 0.42 $ 1.08

Income (loss) per share—diluted

Continuing operations $ 1.06 $ 0.80

Discontinued operations — 0.03

Net income (loss) per share—diluted $ 0.41 $ 1.06

For the years ended December 31, 2024 and 2023, options to purchase 0 and 750,000 shares of common stock were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

Stock Purchase Agreement between Travelzoo and Azzurro Capital Inc., a Related-Party

In conn ection 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.

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 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.

The Company records the $ 4.8 million promissory note as Note receivable from shareholder in the stockholders ’ equity section.

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 interest of $ 604,000 and principal of $ 3.0 million , respectively.

During the year ended December 31, 2024, Azzurro paid interest of $ 229,000 and the remaining principal amount of $ 1.8 million, respectively.

Intangible Assets

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

Non-compete agreement (Jack's Flight Club) 660 4.0

Intangible assets (Secret Escapes Spain member database) 445 3.0

Intangible assets (Secret Escapes U.S.

member database) 1,751 2.3

Assets Measured at Fair Value on a Non-recurring Basis

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Intangible assets, net—December 31, 2025 $ 1,450 $ — $ —

Amortization expense for acquired intangibles was $ 593,000 and $ 1.6 million for the years ended December 31, 2024 and 2023, respectively.

Expected future amortization expense of acquired intangible assets as of December 31, 2024 is as follows (in thousands):

Years ending December 31,

Amortization expense for acquired intangibles was $ 48,000 and $ 593,000 for the years ended December 31, 2025 and 2024, respectively.

The Company performed its annual impairment testing of Trade name as of October 31, 2025 and 2024 using a relief from royalty method, respectively.

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Deposits 259 83

Inventory 124 —

Other current assets 90 144

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under operating leases.

Our leases have remaining terms ranging from less than one year to up to seven years .

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 the landlords.

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Rent expense was $ 2.9 million and $ 2.7 million for the years ended December 31, 2025 and 2024, respectively.

The Company’s rental income from sublease was approximately $ 0 and $ 271,000 for the years ended December 31, 2024 and 2023.

Se e Note 14– Leases for more information.

The Company has purchase commitments aggregating approximately $ 1.3 million as of December 31, 2024, which represent the minimum obligations the Company has under agreements with certain third-party service providers.

The Company has purchase commitments aggregating approximately $ 733,154 as of December 31, 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.

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Total income tax expense $ 5,404

The effective tax rate of the Company's provision (benefit) for income taxes under ASU 2023-09 differs from the federal statutory rate as follows (in thousands):

US Federal Statutory Tax Rate $ 1,608 21.00 %

Domestic federal

Nontaxable and nondeductible Items 124 1.62 %

Effect of Cross-Border Tax Laws ( 71 ) ( 0.92 ) %

Other 26 0.35 %

State and Local Income Taxes, Net of Federal Income Tax Effect 239 3.12 %

Foreign Tax Effects

Statutory rate differential ( 184 ) ( 2.41 ) %

Provincial tax 354 4.62 %

Other ( 10 ) ( 0.13 ) %

Other foreign jurisdictions 72 0.94 %

Worldwide changes in unrecognized tax benefits 521 6.80 %

Tax Expense (Benefit) / Effective Tax Rate 2,679 34.99 %

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company's deferred tax assets and liabilities as of December 31, 2024 and December 31, 2023 are as follows:

Significant components of the Company's deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands):

Deferred tax assets:

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Deferred tax assets valuation allowance

2024 $ 2,878 ( 72 ) — $ 2,806

2023 $ 4,455 ( 1,577 ) — $ 2,878

Year Ended December 31, 2024 $ 2,878 ( 72 ) — $ 2,806

Year Ended December 31, 2025 $ 2,806 — — $ 2,806

(*) Amounts not charged (credited) to expenses are charged (credited) to stockholders' equity or deferred tax assets (liabilities).

As of December 31, 2024, the Company has a valuation allowance of approximately $ 2.4 million related to foreign net operating loss (“NOL”) carryforwards of approximately $ 14.6 million primarily related to the Company's Asia Pacific entities, and 0.4 million related to capital loss carryforwards, for which it is more likely than not that the tax benefit will not be realized.

The amount of the valuation allowance represented an increase of approximately $ 0.1 million over the amount recorded as of December 31, 2023, and was due to the increase of deferred tax assets and related valuation allowance for Travelzoo Asia.

The cash paid for income taxes (net of refunds) during the year ended December 31, 2025 was as follows (in thousands):

Federal $ 228

State and Local

United Kingdom 2,164

Total Tax Paid $ 3,835

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

As of December 31, 2025, the Company has a valuation allowance of approximately $ 2.4 million related to foreign net operating loss (“NOL”) carryforwards of approximately $ 14.6 million primarily related to the Company's Asia Pacific entities for which it is more likely than not that the tax benefit will not be realized.

The amount of the valuation allowance represented an increase of approximately $ 1,000 over the amount recorded as of December 31, 2024, and was due to the increase of deferred tax assets and related valuation allowance for Travelzoo Asia.

If not utilized, $ 14.6 million of the remaining foreign NOL may be carried forward indefinitely.

As of December 31, 2024, the Company has U.S.

federal NOL carryforwards of $ 34.5 million as a result of the acquisition of MTE discussed in Note 3 above.

If not utilized, $ 7.4 million of the remaining NOL may be carried forward indefinitely, and $ 27.1 million will expire at various times between 2032 and 2037.

As of December 31, 2024, the Company had state and local NOL carryforwards of $ 120.6 million, which expire at various times between 2035 and 2044.

As of December 31, 2025, the Company has US federal NOL carryforwards of $ 31.2 million as a result of the transaction with MTE.

If not utilized, $ 7.4 million may be carried forward indefinitely, and $ 23.8 million will expire at various times between 2032 and 2037.

As of December 31, 2025, the Company has state and local NOL carryforwards of $ 119.9 million, which will expire at various times between 2035 and 2044.

The Company has not recorded these net operating losses because an uncertain tax position has been recorded relating to them.

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

The estimated amount of the unrecognized deferred tax liability attributable 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 $ 871,000 at December 31, 2024.

The total amount of gross unrecognized tax benefits w as $ 23.9 million as of December 31, 2024 , of which up to $ 16.6 million would affect the Company’s effective tax rate if realized.

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits in 2023 and 2024 is as follows (in thousands):

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 $ 984.7 thousand at December 31, 2025.

The total amount of gross unrecognized tax benefits was $ 23.9 million as of December 31, 2025, of which up to $ 16.6 million would affect the Company’s effective tax rate if realized.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits in 2024 and 2025 is as follows (in thousands):

Gross unrecognized tax benefits balance at December 31, 2023 23,895

Increase related to prior year tax positions 7,018

Increase related to current year tax positions —

Settlements —

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Gross unrecognized tax benefits balance at December 31, 2025 $ 23,895

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 December 31, 2025, and December 31, 2024, the Company had approximately $ 1.59 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 is subject to California tax examinations for years after 2019.

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

At December 31, 2024, the Company had approximately $ 1.1 million in accrued in terest and penalties.

Although the timing of any initiation, resolution and/or closure of any audits is highly uncertain, it is reasonably possible that the balance of the gross unrecognized tax benefits related to the method of computing income taxes in certain jurisdictions and losses reported on certain income tax returns could significantly change in the next 12 months.

These changes may occur through settlement with taxing authorities or expiration of the statute of limitations on returns filed.

The Company is unable to estimate a range of possible adjustments to the balance of gross unrecognized tax benefits.

Although the timing of initiation, resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of the gross unrecognized tax benefits related to the method of computing income taxes in certain jurisdictions and losses reported on certain income tax returns could significantly change in the next 12 months.

These changes may occur through settlement with the taxing authorities or the expiration of the statute of limitations on the returns filed.

The Company is unable to estimate the range of possible adjustments to the balance of the gross unrecognized tax benefits.

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 for the period ended December 31, 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.

Accumulated Other Comprehensive Loss

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

Other comprehensive income (loss) due to foreign currency translation ( 720 ) 298

Other comprehensive loss due to foreign currency translation, net of tax ( 4 ) ( 720 )

Ending balance $ ( 5,331 ) $ ( 5,327 )

There were no amounts reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2024 and 2023.

Accumulated other comprehensive income (loss) consists of foreign currency translation gain (loss).

There were no amounts reclassified from accumulated other comprehensive loss for the years ended December 31, 2025 and 2024.

Accumulated other comprehensive loss consists of foreign currency translation gain.

Employee Benefit Plan

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The Company’s contributions to these benefit plans were approximately $ 832,000 and $ 730,000 for the years ended December 31, 2025 and 2024, respectively.

Stock-Based C ompensation and Stock Options

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.

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Ralph Bartel, Chairman of the Board of Directors of the Company at the time, with an exercise price of $ 3.49 and quarterly vesting beginning June 30, 2020 and ending on March 31, 2022.

The options expire in March 2025.

This grant was approved at the 2020 Annual Meeting of the shareholders.

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In 2023, 200,000 options were exercised and 121,307 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors.

The options expired in March 2025.

On May 29, 2020, pursuant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 200,000 shares of common stock to two key employees, with an exercise price of $ 3.49 with annual vesting starting March 30, 2021 a nd ending on March 31, 2024.

The options expire in March 2025.

The options expired in March 2025.

In 2021, 50,000 options were exercised and 24,474 shares of common stock were issued as the result of cashless exercises which were approved by Travelzoo’s Board of Directors.

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Stock-based compensation related to this grant was fully expensed in 2024 and all options granted under this Option Agreement have been exercised or forfeited as of December 31, 2025.

On June 1, 2021, pursuant to a n 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.

On June 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 2026.

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

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

The options expired in 2026.

In 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.

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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 December 31, 2025, 400,000 options were vested and outstanding.

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

In June 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

time-based service condition and also 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.

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Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for 2024, with 25,000 shares vesting.

Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for 2025, with 25,000 shares vesting.

Stock-based compensation related to this grant was fully expensed in 2025.

In March 2023, the Com pany 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.

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The options expire in March 2028.

Total stock-based compensation related to this option grant of $ 139,000 was recorded in general and administrative expenses for each the year ended December 31, 2025 and 2024, respectively.

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.

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 Travelzoo’s Board of Directors.

As of December 31, 2025, there was approximately $ 139,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 1.0 year.

In March 2024, the Compensation Committee of the Board of Directors granted Holger Bartel 600,000 stock options that vest through December 31, 2025.

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The options expire in March 2029.

The Company recorded $ 1.5 million of stock-based compensation in general and administrative expenses for each of the years ended December 31, 2024 and 2023 .

Stock-based compensation related to this grant was fully expensed in 2025.

The Company recorded $ 1.4 million of stock-based compensation in general and administrative expenses for the year ended December 31, 2025.

The Company utilizes the Black-Scholes option pricing model to value the stock options, with an expected life as defined under the simplified method, using an average of the contractual term and vesting period of the stock options, and risk-free interest rates based on the U.S.

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The Company accounts for forfeitures as they occur.

The fair value of stock options granted in 2024 and 2023 was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

There were no stock options granted in 2025.

The fair value of stock options granted in 2024 was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

Weighted-average fair value of options granted per share $ — $ 4.06

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$ 8.58 600,000 3.24 years $ 8.58 600,000 3.24 years

$ 9.44 12,500 1.00 year $ 9.44 — 1.00 year

$ 9.44 12,500 0.00 years $ 9.44 12,500 0.00 years

Stock Repurchase Program

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Management is allowed discretion in the execution of repurchase programs, based upon market conditions and consideration of capital allocation.

In June 2022, the Company announced that its Board of Directors approved a stock repurchase program authorizing the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock.

In 2022, the Company repurchased 306,375 shares of common stock for an aggregate purchase price of $ 1.6 million, which was recorded as part of treasury stock as of December 31, 2022.

In 2023, the Company repurchased 693,625 shares of common stock for an aggregate purchase price of $ 4.9 million.

The shares repurchased were retired and recorded as a reduction of additional paid-in capital.

This stock repurchase program was completed in 2023.

On July 26, 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 subsequently repurchased 1,000,000 shares of common stock for an aggregate purchase price of $ 6.9 million, with such shares retired and recorded as a reduction of additional paid-in capital.

This stock repurchase program was completed in 2023.

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.

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In 2024, the Company repurchased the remaining 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.

This stock repurchase program was completed in 2024.

On April 30, 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.

The Company repurchased 1,000,000 shares of common stock for an aggregate purchase price of $ 8.8 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 stock repurchase program was completed in 2024.

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.

The Company repurchased 135,792 shares of common stock for an aggregate purchase price of $ 2.3 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 December 31, 2024, there were 911,529 shares remaining to be repurchased under this program.

In 2024, the Company repurchased 1,000,000 shares of common stock for an aggregate purchase price of $ 8.8 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 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.

In 2024, the Company repurchased 88,471 shares of common stock for an aggregate purchase price of $ 1.50 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 year ended December 31, 2025, the Company repurchased 911,529 shares of common stock for an aggregate purchase price of $ 12.9 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 March 5, 2026, 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.

Segment Reporting and Significant Customer Information

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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 decision maker to manage our business across all operating segments.

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

For the year ended December 31, 2025 , Travelzoo North America operations comprised 66 % of revenues, Travelzoo Europe operations comprised 28 % of revenues and Jack's Flight Club co mprised 6 % of revenues.

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

As of December 31, 2024, the Company had one customer that accounted for more than 10% of revenues at $ 8.8 million across Travelzoo North America and Travelzoo Europe.

For the years ended December 31, 2023, the Company did not have any customers that accounted for 10% or more of revenue.

As of 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).

As of December 31, 2025, the Company did not have any customers that accounted for 10% or more of revenue.

For the year ended December 31, 2024, the Company had one customer that accounted for more than 10% of revenues at $ 8.8 million across Travelzoo North America and Travelzoo Europe.

As of December 31, 2025 and 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 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, Jack’s Flight Club and Travelzoo META members.

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Year Ended December 31,

Advertising $ 78,396 $ 80,128

Advertising and Commerce $ 78,446 $ 78,396

Membership Fees 13,193 5,399

Other 107 204

Total revenues $ 91,719 $ 83,902

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Total revenues $ 91,719 $ 83,902

The Company disaggregates its revenue by geographic region based on the location of the legal entity providing the service.

Related Party Transactions

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, and as of December 31, 2024, holds approximately 37.5 % of the Company's outstanding shares.

Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and separately holds less than 1 % of the Company's outstanding shares as of December 31, 2024 .

Stock Purchase Agreement between Travelzoo and Azzurro Capital Inc.

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

As of December 31, 2022, Azzurro and Ralph Bartel owned approximately 50.3 % of the Company’s outstanding shares.

See Note 3 – Acquisitions in the consolidated financial statements for further information.

Stock Repurchase Agreements

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In 2024, the fee payable to Mr.

Bartel was less than $ 120,000 .

Profits from 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.

This case is ongoing but as Travelzoo is a nominal defendant, it did not accrue any expense as of December 31, 2024.

Bartel was $ 164,000 .

Framework Agreement with Talenti Milanesi S.R.L.

On February 28, 2019, with the unanimous approval of the Audit Committee, the Company entered into a Framework Agreement (the “Framework Agreement”) with Donna Elissa S.R.L.

(“Donna Elissa”), a company controlled by Azzurro.

Azzurro is the Company’s largest shareholder.

Pursuant to the Framework Agreement, Donna Elissa provided certain strategic services to the Company, including the engagement of contractors and provision of office space in Milan.

On January 24, 2025, the Audit Committee unanimously approved the assignment of Donna Elissa’s rights and obligations under the Framework Agreement to Talenti Milanesi S.R.L.

In 2025, the aggregate fee payable to Donna Elissa and Talenti pursuant to the Framework Agreement was $ 208,000 .

Non-Controlling Interest

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Non-controlling interest for the years ended December 31, 2025 and 2024 was as follows (in thousands):

Non-controlling interest—January 1, 2023

Non-controlling interest—December 31, 2023

Net Income attributable to non-controlling interest

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under operating leases.

Our leases have remaining lease terms ranging from less than one year to up to seven years .

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.

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Variable lease cost 428 496

Sublease income — ( 271 )

Total lease cost $ 3,311 $ 3,173

Cash payments against the operating lease liabilities totaled $ 3.4 million for each of the years ended December 31, 2024.

ROU assets obtained in exchange for lease obligations was $ 1.3 million and $ 602,000 for the year ended December 31, 2024 and 2023, respectively.

Cash payments against the operating lease liabilities totaled $ 3.5 million and $ 3.4 million for the years ended December 31, 2025 and 2024.

ROU assets obtained in exchange for lease obligations was and $ 321,000 and $ 1.3 million for the year ended December 31, 2025 and 2024, respectively.

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

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Years ending December 31,

Thereafter 1,674

Total lease payments 7,636

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data