Trivago (TRVG 19.19, +1.36) has spiked 7.6% in pre-market after reporting in-line earnings on better than expected revenue. The early advance puts the stock on track to hit a fresh all-time high.
The global hotel search platform reported in-line first quarter earnings of EUR0.02 per share on a 67.9% year-over-year spike in revenue to EUR267.60 million, which exceeded expectations.
The company generates its revenue from hotel partners, which advertise on its site. These hotel advertisers—including online travel agencies, hotel chains, and independent hotels—advertise their supply on its marketplace on a "cost-per-click" basis. The advertiser is charged when a user clicks on an advertised rate for a hotel and is referred to that advertiser's website where the user can complete the booking.
Qualified referrals, or unique visitors per day that generated at least one referral, jumped 60.0% year-over-year to 177.20 million. Solid growth was realized across all geographies with qualified referrals in the Americas jumping 65.2% to 55.5 million while qualified referrals in Developed Europe grew 35.1% to 73.6 million. Rest of World qualified referrals surged 115.2% to 48.2 million.
Overall return on advertising expenses increased to 120.7% from 119.6% while revenue per qualified referral increased 4.2% year-over-year to EUR1.49. The company's revenue per qualified referral (RPQR) improved across the board. In the Americas, RPQR rose 7.0% to EUR1.84 while Developed Europe RPQR improved 6.2% to EUR1.54 and Rest of World RPQR increased 6.3% to EUR1.01.
Trivago boosted its full year guidance on April 27 in response to first quarter earnings from Expedia, who owns 87.4% of Trivago. Trivago expects to generate full-year revenue growth of 50.0% after previous estimates called for year-over-year sales growth of 45.2%.