Trip.com Group Ltd (TCOM) Q4 2024 Earnings Call Highlights: Strong Revenue Growth Amid Travel ...

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Net Revenue (Q4 2024): RMB12.7 billion, a 23% increase year over year.
Net Revenue (Full Year 2024): RMB53.3 billion, a 20% increase year over year.
Accommodation Reservation Revenue (Q4 2024): RMB5.2 billion, a 33% increase year over year.
Accommodation Reservation Revenue (Full Year 2024): RMB21.6 billion, a 25% increase year over year.
Transportation Ticketing Revenue (Q4 2024): RMB4.8 billion, a 16% increase year over year.
Transportation Ticketing Revenue (Full Year 2024): RMB20.3 billion, a 10% increase year over year.
Packaged Tour Revenue (Q4 2024): RMB870 million, a 24% increase year over year.
Packaged Tour Revenue (Full Year 2024): RMB4.3 billion, a 38% increase year over year.
Corporate Travel Revenue (Q4 2024): RMB702 million, an 11% increase year over year.
Corporate Travel Revenue (Full Year 2024): RMB2.5 billion, an 11% increase year over year.
Adjusted EBITDA (Q4 2024): RMB3.0 billion.
Adjusted EBITDA (Full Year 2024): RMB17.1 billion, a 22% growth year over year.
Diluted Earnings per ADS (Q4 2024): RMB3.09 or USD0.42.
Non-GAAP Diluted Earnings per ADS (Q4 2024): RMB4.35 or USD0.6.
Diluted Earnings per ADS (Full Year 2024): RMB24.78 or USD3.39.
Non-GAAP Diluted Earnings per ADS (Full Year 2024): RMB26.20 or USD3.59.
Cash and Cash Equivalents (as of Dec 31, 2024): RMB90 billion or USD12.3 billion.
Share Repurchase Program (2025): Up to USD400 million.
Cash Dividend (2025): Totaling approximately USD200 million, $0.30 per ordinary share and per ADS.

Warning! GuruFocus has detected 4 Warning Sign with TCOM.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Trip.com Group Ltd (NASDAQ:TCOM) reported a 23% year-over-year increase in net revenue for Q4 2024, reflecting strong travel demand.
The company's international business showed robust growth, representing 14% of group revenue in Q4 2024.
TripGenie, an AI tool, saw a 200% surge in traffic and a 100% increase in browsing time in 2024.
Outbound hotel and air ticket bookings exceeded 120% of 2019 levels, outperforming the industry by 30% to 40%.
Trip.com Group Ltd (NASDAQ:TCOM) has been recognized with multiple accolades for customer service, including Contact Center of the Year and Global Support Services of the Year.

Negative Points

Net revenue for Q4 2024 decreased by 20% from the previous quarter.
Accommodation reservation revenue for Q4 2024 decreased by 24% quarter over quarter.
Transportation ticketing revenue for Q4 2024 decreased by 15% quarter over quarter.
Adjusted sales and marketing expenses increased by 45% year over year for Q4 2024.
The company faces headwinds in certain major destinations affecting outbound travel demand.

Q & A Highlights

Q: With the rise of AI agents and new large language models, how do you think these developments could impact OTAs like Trip.com? A: Jianzhang Liang, Co-founder and Executive Chairman of the Board, explained that AI technology enhances services by making travel planning more personalized and efficient. AI agents will complement OTAs rather than replace them, opening new customer acquisition channels. Trip.com provides unique value through real-time travel insights and an end-to-end service model, and they are committed to further investing in AI.

Q: How do you view the current leisure and business travel demands, and what is the growth trajectory for 2025? A: An unidentified company representative noted the resilience of the travel industry post-COVID, with strong demand from domestic travel, the early retired generation, and the opening of borders. Direct flights are expected to recover to 90-95% of pre-COVID levels, and the company plans to invest in providing excellent services globally, particularly in the Asian market.

Q: Your operating margin reached a record high in 2024. How do you expect the margin to trend in 2025 and beyond? A: An unidentified company representative stated that they do not set specific margin targets but focus on operational efficiency and strategic overseas expansion. AI-driven solutions will enhance efficiency and mitigate costs, with no structural limitations to profit margins in the long term.

Q: Could you share updates on your performance during the Chinese New Year and post-holiday trends? A: An unidentified company representative reported healthy travel demand during the Chinese New Year, with travelers expanding their travel radius. Outbound travel bookings increased by over 20% year over year, and hotel prices are gradually approaching last year's levels. The outlook for 2025 anticipates growing travel demand and stabilizing hotel prices.

Q: Could you update on the outlook for outbound flight capacity improvement this year and any impact from recent incidents or FX changes? A: An unidentified company representative mentioned that outbound flight capacity reached over 80% of 2019 levels and is expected to recover to more than 90% by 2025. Despite headwinds, outbound bookings grew by 20-30% during the Chinese New Year. There is no significant correlation between forex rates and international air prices, and the company focuses on enhancing product offerings and service quality.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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