What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-08 · 160 added, 335 removed, 403 unchanged (55% of the section changed)

2 unchanged sentences

(In thousands, except par value)

September 30,

2025 December 31,

1 unchanged sentence

Cash and cash equivalents $ 11,474 $ 17,064

Accounts receivable, less allowance for doubtful accounts of $ 1,719 and $ 1,484 as of September 30, 2024 and December 31, 2023, respectively

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

12,387 12,825

18 unchanged sentences

Operating lease liabilities 2,690 2,472

Liabilities from discontinued operations 24 24

Total current liabilities 36,588 36,496

3 unchanged sentences

Total liabilities 50,347 50,369

Commitments and contingencies — —

Stockholders’ equity:

Stockholders’ equity (deficit):

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

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

11,880 shares issued and outstanding as of September 30, 2024, 13,575 shares issued and outstanding as of December 31, 2023)

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

Additional paid in capital — —

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

Note receivable and account receivable from shareholder ( 1,929 ) ( 1,753 )

Retained earnings 8,819 14,284

2 unchanged sentences

Non-controlling interest 4,908 4,815

Total stockholders’ equity 2,520 8,883

Total liabilities and stockholders’ equity $ 50,530 $ 55,382

Total stockholders’ equity (deficit) ( 1,145 ) 4,353

Total liabilities and stockholders’ equity (deficit) $ 49,202 $ 54,722

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Revenues $ 23,140 $ 21,985

8 unchanged sentences

Other income, net 629 139

Income from continuing operations before income taxes 4,404 3,423 14,321 12,236

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

Income tax expense 1,173 1,505

Income from continuing operations 3,256 2,405 10,401 8,749

Loss from discontinued operations, net of taxes — ( 5 ) — ( 5 )

Net income 3,260 4,225

Net income attributable to non-controlling interest 72 52 54 97

Net income (loss) attributable to non-controlling interest 93 ( 11 )

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

Net income attributable to Travelzoo—continuing operations $ 3,184 $ 2,353 $ 10,347 $ 8,652

Net loss attributable to Travelzoo—discontinued operations $ — $ ( 5 ) $ — $ ( 5 )

Income per share—basic

Continuing operations $ 0.26 $ 0.16 $ 0.81 $ 0.57

Discontinued operations $ — $ — $ — $ —

Net income per share —basic $ 0.27 $ 0.31

Income per share—diluted

Continuing operations $ 0.26 $ 0.16 $ 0.79 $ 0.57

Discontinued operations $ — $ — $ — $ —

Income per share—diluted $ 0.26 $ 0.16 $ 0.79 $ 0.56

Shares used in per share calculation from continuing operations—basic 12,176 14,769 12,851 15,242

Shares used in per share calculation from discontinued operations—basic 12,176 14,769 12,851 15,242

Shares used in per share calculation from continuing operations—diluted 12,386 14,821 13,035 15,307

Shares used in per share calculation from discontinued operations—diluted 12,386 14,821 13,035 15,307

Net Income per share—diluted $ 0.26 $ 0.31

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Net income $ 3,260 $ 4,225

5 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

4 unchanged sentences

Deferred income tax 4 ( 15 )

Loss on long-lived assets — 10

Net foreign currency effect ( 106 ) 3

12 unchanged sentences

Cash flows from investing activities:

Proceeds from repayment of note receivable — 113

Purchases of property and equipment ( 21 ) ( 35 )

2 unchanged sentences

Repurchase of common stock ( 8,918 ) ( 3,872 )

Exercise of stock options, net of taxes paid for net share settlement ( 592 ) ( 299 )

Net cash used in financing activities ( 8,918 ) ( 3,872 )

10 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Deficit)

(In thousands)

Common Stock Treasury Stock Additional

Capital Tax Indemnification Note Receivable from Shareholder Retained

Earnings Accumulated

Comprehensive

Travelzoo Stockholders’

Equity (Deficit) Non-controlling interest Total

Stockholders’

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 (1)

— — ( 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

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

Common Stock Treasury Stock Additional

Capital Tax Indemnification Note Receivable from Shareholder Retained

Earnings Accumulated

Comprehensive

Travelzoo Stockholders’

Equity Non-controlling interest Total

Stockholders’

Shares Amount

Balances, June 30, 2023 15,170 $ 152 $ — $ 11,816 $ ( 9,537 ) $ ( 4,753 ) $ 13,441 $ ( 4,690 ) $ 6,429 $ 4,640 $ 11,069

Stock-based compensation expense — — — 359 — — — — 359 — 359

Repurchase of common stock — — ( 6,999 ) — — — — ( 6,999 ) — ( 6,999 )

Retirement of treasury stock ( 1,000 ) ( 10 ) 6,999 ( 6,989 ) — — — — — — —

Exercise of stock options and taxes paid for net share settlement ( 4 ) — — — — — — — — — —

Foreign currency translation adjustment — — — — — — — ( 113 ) ( 113 ) — ( 113 )

Net income — — — — — — 2,348 — 2,348 52 2,400

Balances, September 30, 2023 14,166 $ 142 $ — $ 5,186 $ ( 9,537 ) $ ( 4,753 ) $ 15,789 $ ( 4,803 ) $ 2,024 $ 4,692 $ 6,716

Common Stock Treasury Stock Additional

Capital Tax Indemnification Note Receivable from Shareholder Retained

Capital Tax Indemnification Retained

Earnings Accumulated

3 unchanged sentences

Stockholders’

Equity (Deficit)

Shares Amount

2 unchanged sentences

Repurchase of common stock (1) — — ( 9,007 ) — — — — ( 9,007 ) — ( 9,007 )

— — ( 16,764 ) — — — — — ( 16,764 ) — ( 16,764 )

Retirement of treasury stock ( 591 ) ( 6 ) 9,007 ( 369 ) — ( 8,632 ) — — — —

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 — — — — — — ( 120 ) ( 120 ) — ( 120 )

Net income — — — — — 3,167 — 3,167 93 3,260

Balances, September 30, 2024 11,880 $ 119 $ — $ — $ ( 9,537 ) $ ( 1,929 ) $ 14,195 $ ( 5,079 ) $ ( 2,231 ) $ 4,751 $ 2,520

Balances, March 31, 2025 11,245 $ 112 $ — $ — $ ( 9,537 ) $ 8,819 $ ( 5,447 ) $ ( 6,053 ) $ 4,908 $ ( 1,145 )

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

Common Stock Treasury Stock Additional

Capital Tax Indemnification Note Receivable from Shareholder Retained

Capital Tax Indemnification Retained

Earnings Accumulated

11 unchanged sentences

Net income — — — — 4,236 — 4,236 ( 11 ) 4,225

Balances, September 30, 2023 14,166 $ 142 $ — $ 5,186 $ ( 9,537 ) $ ( 4,753 ) $ 15,789 $ ( 4,803 ) $ 2,024 $ 4,692 $ 6,716

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

See accompanying notes to unaudited condensed consolidated financial statements.

4 unchanged sentences

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

Travelzoo has more than 30 million members.

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

Travelzoo reaches 30 million travelers.

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

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

3 unchanged sentences

APAC Exit and Piv ot 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 as of March 31, 2020.

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

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

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 Capital Inc.

is the Company’s largest shareholder, and as of September 30, 2024, holds approximately 40.8 % of the Company's outstanding shares.

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

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

Financial Statements

11 unchanged sentences

Actual results could differ materially from those estimates.

The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other future period, and the Company makes no representations related thereto.

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

(b) Recent 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.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued 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 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.

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

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

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):

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.

6 unchanged sentences

Advertising Revenues and Commissions

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 .

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

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

6 unchanged sentences

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

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

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

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

1 unchanged sentence

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

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

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.

7 unchanged sentences

Membership Fee Revenues

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

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

We recognize subscription revenues ratably over the subscription periods.

1 unchanged sentence

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 fees generated from the existing retail business acquired by the Company when it acquired 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, 2023, $ 1.5 million was recorded as deferred revenue for Jack's Flight Club, of which $ 1.4 million was recognized in the nine months ended September 30, 2024 , $ 569,000 was recorded as deferred revenue for Travelzoo North America and Travelzoo Europe, of which $ 559,000 was recognized as revenue in the nine months ended September 30, 2024 .

As of September 30, 2024, the deferred revenue balance was $ 3.9 million, of which $ 2.3 million was for Jack's Flight Club and the remaining $ 1.5 million was for Travelzoo North America and Travelzoo Europe.

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

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

Reserve for Refunds to Members

3 unchanged sentences

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.

The Company's refund policy is a 14-day refund period from date of purchase, with an option to extend refund eligibility until voucher redemption or expiration, for a surcharge.

As of September 30, 2024, the expiration dates of unexpired vouchers ranged from October 2024 through December 2025;

provided, that expiration dates may sometimes be extended on a case-by-case basis and final payments to merchants upon expiration may not be due for up to a year later.

As of September 30, 2024, the Company had approximately $ 4.3 million of unredeemed vouchers that had been sold, representing the Company’s commission earned.

The Company estimated and recorded a refund reserve of $ 142,000 for these unredeemed vouchers as of September 30, 2024, 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 March 31, 2025, the Company had approximately $ 3.7 million of unredeemed vouchers that had been sold, representing the Company’s commission earned.

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

As of 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 $ 17.3 million as of September 30, 2024 is recorded on the consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed.

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

Identifiable intangible assets

6 unchanged sentences

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, 2024.

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

Operating Leases

10 unchanged sentences

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

The Company’s business is 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.

2 unchanged sentences

and internationally.

As of September 30, 2024 and December 31, 2023, the Company did not have any customers that accounted for 10% or more of accounts receivable.

As of September 30, 2024, the Company had merchant payables of $ 17.3 million related to the sale of vouchers.

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

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

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

As such, the consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 7.0 million at September 30, 2024.

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

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

As of September 30, 2024, unredeemed vouchers have maturities ranging from October 2024 through December 2025 ;

As of March 31, 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, 2024 will be sufficient to provide for working capital needs for at least the next twelve months.

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

Cash, Cash Equivalents and Restricted Cash

1 unchanged sentence

Restricted cash includes cash and cash equivalents that is restricted through legal contracts, regulations or our intention to use the cash for a specific purpose.

Our restricted cash primarily relates to refundable for leases.

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,

March 31, December 31,

Cash and cash equivalents $ 11,474 $ 17,064

Restricted cash 753 676

Cash, cash equivalents and restricted cash–discontinued operations 2 1

Total cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows $ 12,227 $ 17,740

The Company’s restricted cash was included in noncurrent assets as of September 30, 2024 and December 31, 2023.

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

Net Income Per Share

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding for the period.

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.

1 unchanged sentence

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,

2024 2023 2024 2023

Net income attributable to Travelzoo—continuing operations $ 3,184 $ 2,353 $ 10,347 $ 8,652

Net loss attributable to Travelzoo—discontinued operations $ — $ ( 5 ) $ — $ ( 5 )

Three Months Ended

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

Weighted average common shares—basic 11,670 13,489

2 unchanged sentences

Weighted average common shares—diluted 12,249 13,625

Income per share—basic

Continuing operations $ 0.26 $ 0.16 $ 0.81 $ 0.57

Discontinued operations — — — —

Net income per share —basic $ 0.27 $ 0.31

Income per share—diluted

Continuing operations $ 0.26 $ 0.16 $ 0.79 $ 0.57

Discontinued operations — — — —

Net income per share—diluted $ 0.26 $ 0.31

For the three and nine 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.

For the three and nine months ended September 30, 2023, options to purchas e 950,000 and 750,000 shares of common stock, respectively, were not included in the computation of diluted net income per share because the effect would have been anti-dilutive.

Jack’s Flight Club

In January 2020, the Company acquired a 60 % interest in JFC Travel Group Co.

(“Jack’s Flight Club”), which operates Jack’s Flight Club , a subscription service that provides members with information about exceptional airfares.

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

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

2 unchanged sentences

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.

3 unchanged sentences

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 $ 3.0 million of principal.

Azzurro paid interest of $ 70,000 and $ 190,000 in the three months ended September 30, 2024 and 2023 , respectively.

Azzurro paid interest of $ 210,000 and

$ 475,000 in the nine months ended September 30, 2024 and 2023, respectively.

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

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

Intangible Assets

5 unchanged sentences

Secret Escapes Spain member database 445 3.0

Secret Escapes U.S.

member database 1,751 2.3

Assets Measured at Fair Value on a Non-recurring Basis

4 unchanged sentences

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 in October 2023 and did not identify any indicators of impairment for the year ended December 31, 2023 .

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 .

Amortization of Acquired Intangible Assets

The following table represents the activities of intangible assets for the three months ended September 30, 2024 and 2023 (in thousands):

Jack’s Flight Club Secret Escape Spain Secret Escape U.S.

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

Jack’s Flight Club Secret Escape Spain

Intangible assets—December 31, 2023 1,710 186

9 unchanged sentences

Intangible assets—March 31, 2025 $ 1,457 $ 14

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 expense for acquired intangibles was $ 95,000 and $ 381,000 for the three months ended September 30, 2024 and 2023, respectively.

Amortization expense for acquired intangibles was $ 500,000 and $ 1.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Expected future amortization expense of acquired intangible assets as of September 30, 2024 is as follows (in thousands):

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

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

Years ending December 31,

2024 (excluding the nine months ended September 30, 2024) 94

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

No impairment was identified in 2024.

As of September 30, 2024, 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, 2024.

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

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

Commitments and Contingencies

1 unchanged sentence

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, 2024 and December 31, 2023.

Accruals for legal contingencies were not material as of March 31, 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.

4 unchanged sentences

under operating leases.

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

The Company maintained standby letters of credit (“LOC”) serve as collateral issued to the landlords.

The LOCs are collateralized with cash which is included in the line item “Restricted cash” in the condensed consolidated balance sheets.

The Company has purchase commitments aggregating approximately $ 112,000 as of September 30, 2024, which represent the minimum obligations the Company has under agreements with certain suppliers.

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

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

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

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

Se e Note 10– Leases for more information.

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

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

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

In January 2022, July 2022 and May 2023, the German branch of Travelzoo (Europe) Limited, a wholly-owned subsidiary of the Company (“Travelzoo Germany”), received notification and payments of $ 1.2 million, $ 494,000 and $ 205,000 from the German Federal Government under its Bridging Aid III plan, Bridging Aid III+ and Bridging Aid IV programs, respectively.

These programs were for companies that suffered a decrease in sales of at least 30% in one month compared to the reference month in 2019 because of the COVID-19 pandemic.

Travelzoo Germany applied for the funding in 2021 and 2022, respectively, and was approved by the German government in January 2022, July 2022, and May 2023.

The Company is required to submit a final declaration in connection with the grants received by September 30, 2024.

The Company believes it was eligible to participate in the programs and is entitled to the funding received and does not expect significant changes to the amounts already received to arise from the final submission.

The Company recorded $ 1.2 million, $ 494,000 and $ 205,000 gains in Other income, net in the first and third quarters of 2022 and second quarter of 2023, respectively.

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

The Company’s effective tax rate from continuing operations was 26 % and 30 % for the three months ended September 30, 2024 and 2023, respectively.

The Company’s effective tax rate for the three months ended September 30, 2024 changed from the three months ended September 30, 2023 primarily due to a decrease of non-deductible expenses in certain jurisdictions in the three months ended September 30, 2024.

The Company’s effective tax rate from continuing operations was 27 % and 28 % for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s effective tax rate for the nine months ended September 30, 2024 changed from the nine months ended September 30, 2023 primarily due to a decrease of non-deductible expenses in certain jurisdictions in the nine months ended September 30, 2024.

As of September 30, 2024, the Company is permanently reinvested in certain of its non-U.S.

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

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

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

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

2 unchanged sentences

The Company maintains liabilities for uncertain tax positions.

As of September 30, 2024, the Company had approximately $ 23.9 million in total unrecognized tax benefits, of which up to $ 16.6 million would favorably affect the Company’s effective income tax rate if realized.

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

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

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, 2024 and December 31, 2023, the Company had approximately $ 989,000 and $ 803,000 in accrued interest and penalties, respectively.

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

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

5 unchanged sentences

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

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

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

Other comprehensive income (loss) due to foreign currency translation, net of tax ( 128 ) ( 113 ) ( 472 ) 102

Other comprehensive loss due to foreign currency translation, net of tax ( 120 ) ( 254 )

Ending balance $ ( 5,447 ) $ ( 4,861 )

There were no amounts reclassified from accumulated other comprehensive loss for the three and nine months ended September 30, 2024 and 2023.

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

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

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

Stock-Based Compensation and Stock Options

1 unchanged sentence

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

In September 2019, pursuant to executed Option Agreements, the Company granted six employees stock options to purchase 50,000 shares of common stock each ( 300,000 in the aggregate) with an exercise price of $ 10.79 , of which 75,000 options vest and become exercisable annually starting on September 5, 2020 and ending on December 31, 2023.

The options expire in September 2024.

On May 29, 2020, the shareholders of the Company approved the grants, as well as certain amendments to the Option Agreements, which increased and repriced all outstanding, unexercised options granted to such employees.

Pursuant to the applicable amendments, the exercise price for the options was repriced to the official NASDAQ closing share price on March 30, 2020 (the date of execution of the amendments to the Option Agreements, which immediately followed the date of approval of the grants from the Board of Directors of the Company), which was $ 3.49 , the option grants were each increased to 100,000 each, resulting in 300,000 additional options in the aggregate.

In 2020, 100,000 unvested options were forfeited upo n an employee’s departure, 75,000 options were exercised and 54,258 shares of common stock were issued as the result of a cashless exercise which was approved by Travelzoo ’ s Board of Directors.

In 2021, 125,000 unvested options were forfeited upon employees’ departure, 150,000 options were exercised and 88,917 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.

No option was exercised in 2022.

In 2023, 50,000 options were exercised and 18,098 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, 2023, stock-based compensation related to these Option Agreements and applicable Option Agreement Amendments were fully expensed.

During the nine months ended September 30, 2024, 75,000 options were exercised and 26,871 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 September 30, 2024, all options granted under these Option Agreements have been exercised or forfeited.

On May 29, 2020, pursu ant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 800,000 shares of common stock to Mr.

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.

In 2021, 600,000 options were exercised and 390,809 shares of common stock were issued as the result of the cashless exercises which was approved by Travelzoo’s Board of Directors.

S tock-based compensation related to this grant was fully expensed in 2022.

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

On May 29, 2020, pursuant to an execut ed 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 and ending on March 31, 2024.

The options expire in March 2025.

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

In 2022, 50,000 unvested options were forfeited upon one employee’s departure, 25,000 options were exercised and 4,676 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 2023 , 50,000 options were exercised and 16,619 shares of common stock were issued as the result of the cashless exercises which was approved by Travelzoo’s Board of Directors.

During the three months ended September 30, 2024, 25,000 options were exercised and 8,420 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.

Total stock-based compensation related to this option grant of $ 25,000 was recorded in general and administrative expenses for the nine months ended September 30, 2024.

S tock-based compensation related to this grant was fully expensed as of March 31, 2023.

Total stock-based compensation related to this option grant of $ 25,000 and $ 74,000 was recorded in general and administrative expenses for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, all options granted under this Option Agreement have been exercised or forfeited.

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

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

The options expire in January 2026.

During the three months ended September 30, 2024, 37,500 options were exercised and 3,358 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of September 30, 2024, 12,500 options were outstanding and none of these options was vested.

Total stock-based compensation related to this option grant of $ 36,000 was recorded in general and administrative expenses for each of the three months ended September 30, 2024 and 2023, respectively.

Total stock-based compensation related to this option grant of $ 108,000 was recorded in general and administrative expenses for each of the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was approximately $ 36,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over the next 0.3 years.

In March 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.

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

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

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

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.

As of September 30, 2024, 600,000 options were vested and outstanding.

During the three and nine months ended September 30, 2023, $ 216,000 and $ 649,000 , respectively, was recorded in general and administrative expenses.

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

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

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

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 a time-based service condition and performance conditions.

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

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.

The Company did not recognize stock-based compensation expense for this grant as the performance targets were not achieved and thus no shares were vested in 2022.

Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for the three and nine months ended September 30, 2024 and thus 25,000 shares were vested.

The Company did not record stock-based compensation expense for the three months ended September 30, 2023.

Total stock-based compensation related to this option grant of $ 60,000 was recorded in sales and marketing expenses for the nine months ended September 30, 2023 and thus 16,666 shares were vested.

As of September 30, 2024, 100,000 options were outstanding and 58,333 of these options were vested.

As of September 30, 2024, there was approximately $ 149,000 of unrecognized stock-based compensation expense relating to these options.

This amount is expected to be recognized over 1.0 year.

In March 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.

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

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

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

This amount is expected to be recognized over 0.5 years.

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.

During the three months ended September 30, 2024, 75,000 options were exercised and 19,584 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors.

As of September 30, 2024, 125,000 options were outstanding and none of these options was 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, 2024 and 2023, respectively.

Total stock-based compensation related to this option grant of $ 104,000 was recorded in general and administrative expenses for each of the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was approximately $ 313,000 of unrecognized stock-based compensation expense relating to these options.

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

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

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

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

This amount is expected to be recognized over 1.8 years.

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

On April 26, 2024, pursuant to an executed Option Agreement, the shareholders of the Company approved to grant 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.

On March 28, 2024, pursuant to an executed Option Agreement, the Company granted its 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.

As of September 30, 2024, 600,000 options were outstanding and 150,000 of these options were vested.

Total stock-based compensation related to this option grant of $ 305,000 and $ 914,000 was recorded in general and administrative expenses for the three and nine months ended September 30, 2024.

As of September 30, 2024, there was approximately $ 1.5 million of unrecognized stock-based compensation expense relating to these options.

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

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

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

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

This amount is expected to be recognized over 0.8 years .

In June 2024, the Company granted 100,000 stock options as inducement awards to an employee , with an exercise price of $ 7.87 , with annual vesting starting June 12, 2024 and ending on June 12, 2028.

The options expire in June 2029.

Upon management’s strategic decision to terminate the employee's employment in the three months ended September 30, 2024, 100,000 unvested options were forfeited.

Stock Repurchase Program

1 unchanged sentence

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 were recorded as part of treasury stock as of December 31, 2022.

The Company repurchased 34,687 shares of common stock in the first quarter of 2023 for $ 186,000 and repurchased 658,938 shares of common stock in the second quarter of 2023 for $ 4.7 million.

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

This stock repurchase program was completed in 2023.

On July 26, 2023, Travelzoo announced that its board of directors has authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock.

The Company repurchased 1,000,000 shares of common stock for an aggregate purchase price of $ 6.9 million which were 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.

2 unchanged sentences

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, Travelzoo announced that its board of directors has authorized the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock.

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

As of September 30, 2024, there were 47,321 shares remaining to be repurchased under this program.

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 September 5, 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 $ 2.4 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.

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.

Segment Reporting and Significant Customer Information

6 unchanged sentences

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

Management relies on an internal management reporting process that provides revenue and segment operating profit (loss) for making financial decisions and allocating resources.

Management believes that segment revenues and operating profit (loss) are appropriate measures for evaluating the operational performance of the Company’s segments.

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

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

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

Operating profit (loss) $ 3,150 $ 1,028 $ 27 $ ( 160 ) $ 4,045

Three Months Ended September 30, 2023 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

Revenues from unaffiliated customers $ 13,094 $ 6,397 $ 1,080 $ 28 $ 20,599

Intersegment revenues 314 ( 414 ) 100 — —

Total net revenues 13,408 5,983 1,180 28 20,599

Operating profit (loss) $ 3,015 $ 267 $ 144 $ ( 317 ) $ 3,109

Nine Months Ended September 30, 2024 Travelzoo North

Three Months Ended March 31, 2025 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

2 unchanged sentences

Total net revenues 15,128 6,712 1,283 17 23,140

Sales and marketing (1) 5,700 3,902 623 — 10,225

Other costs and expenses (2) 5,834 2,582 648 47 9,111

Operating profit (loss) $ 3,594 $ 228 $ 12 $ ( 30 ) $ 3,804

Nine Months Ended September 30, 2023 Travelzoo North

Other income, net $ 629

Income from continuing operations before income taxes $ 4,433

(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.

Three Months Ended March 31, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Consolidated

2 unchanged sentences

Total net revenues 14,228 6,662 1,063 32 21,985

Sales and marketing 5,107 3,061 405 — 8,573

Other costs and expenses 4,683 2,219 757 162 7,821

Operating profit (loss) $ 4,438 $ 1,382 $ ( 99 ) $ ( 130 ) $ 5,591

Property and equipment are attributed to the geographic region in which the assets are located.

Revenues from unaffiliated customers excludes intersegment revenues and represents revenue with parties unaffiliated with the Company and its wholly owned subsidiaries.

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

As of September 30, 2024 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Elimination Consolidated

Long-lived assets $ 90 $ 151 $ — $ 229 $ — $ 470

Total assets excluding discontinued operations $ 98,754 $ 24,052 $ 20,303 $ 3,405 $ ( 95,986 ) $ 50,528

As of December 31, 2023 Travelzoo North

America Travelzoo Europe Jack’s Flight Club New Initiatives Elimination Consolidated

Long-lived assets $ 152 $ 106 $ — $ 320 $ — $ 578

Total assets excluding discontinued operations $ 96,865 $ 22,655 $ 19,472 $ 3,570 $ ( 87,181 ) $ 55,381

For the three and nine months ended September 30, 2024 and 2023, the Company did not have any customers that accounted for 10% or more of revenue.

As of September 30, 2024 and December 31, 2023, the Company did not have any customers that accounted for 10% or more of accounts receivable.

Other income, net $ 139

Income from continuing operations before income taxes $ 5,730

(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 $ 95,000 and $ 0 , respectively.

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

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

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

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

1 unchanged sentence

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).

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

Travelzoo and Jack's Flight Club members.

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,

2024 2023 2024 2023

Three Months Ended

Advertising $ 20,680 $ 20,850

Membership Fees 2,443 1,104

Other 33 18 87 39

Total revenues $ 23,140 $ 21,985

Revenue by geography is based on the billing address of the advertiser.

Long-lived assets attributed to the U.S.

and international geographies are based upon the country in which the asset is located or owned.

The following table sets forth revenue for countries that exceed 10% of total revenue (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

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

Three Months Ended

United States $ 13,576 $ 12,771

United Kingdom 5,643 5,514

Germany 1,744 1,992 5,411 5,225

Rest of the world 3,921 3,700

Total revenues $ 23,140 $ 21,985

The following table sets forth property and equipment by geographic area (in thousands):

September 30, December 31,

United States $ 78 $ 115

China (Hong Kong) 221 308

Rest of the world 171 155

Total long-lived assets $ 470 $ 578

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.

The Company leases office space in Canada, Germany, Spain, the U.K.

under operating leases.

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

Our leases have remaining lease terms ranging from less than one year to up to seven 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, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

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

Three Months Ended

Operating lease cost $ 552 $ 532

1 unchanged sentence

Variable lease cost 114 120

Sublease income — ( 90 ) — ( 270 )

Total lease cost $ 806 $ 789

Cash payments against the operating lease liabilities total ed $ 2.5 million for each of the nine months ended September 30, 2024 and 2023.

ROU assets obtained in exchange for lease obligations was $ 1.3 million for the nine months ended September 30, 2024.

ROU assets obtained in exchange for lease obligations was $ 512,000 for the nine months ended September 30, 2023.

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

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

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Operating lease right-of-use assets $ 5,605 $ 5,655

6 unchanged sentences

Years ending December 31,

2024 (excluding the nine months ended September 30, 2024) $ 713

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

Thereafter 225

4 unchanged sentences

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

The non-controlling interest for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands):

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

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

9 unchanged sentences

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

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

Related Party Transactions

1 unchanged sentence

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 December 31, 2022, Azzurro Capital Inc.

As of March 31, 2025, Azzurro Capital Inc.

and Ralph Bartel owned approximately 38.2 % of the Company’s outstanding shares.

3 unchanged sentences

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

Stock Repurchase Agreements

Travelzoo, from time to time, engages in share repurchases.

On June 15, 2024, the Company entered into a Stock Repurchase Agreement (the “First 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.

The Compensation Committee of the Board of Directors 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 second quarter of 2024, following the execution of the First SRA.

On September 5, 2024, the Company entered into a Stock Repurchase Agreement (the “Second 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 $ 11.44 per share.

The Compensation Committee of the Board of Directors negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser.

The aggregate purchase price of $ 2.4 million was paid during the three months ended September 30, 2024, following the execution of the Second SRA.

Subsequent Event

On October 23, 2024, Travelz oo announced that its board of directors has authorized the repurchase of up to 1,000,000 shares of the Company’s outstanding common stock.

Purchases may be made, from time to time, in the open market and will be funded from available cash.

The number of shares to be purchased and the timing of purchases will be based on the level of Travelzoo’s cash balances, general business and market conditions, and other factors, including alternative investment opportunities.

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

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 January 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, performance management consulting, strategic advisory to IT and brand strategy and public relations support.

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

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

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

What changed 10-Q

Item 1. Financial Statements