In particular in our Tripadvisor Core segment, which we intend to address head on. I will come back to that shortly. But first let's start with Viator, where the team continued to drive accelerated growth in 2020 to delivering record revenue and scale, with gross bookings value of approximately $2.7 billion, or 186% of 2019 levels. We compete in a large, highly fragmented and under penetrated experiences market, which is estimated to grow to more than $275 billion by 2025. We consider this market highly attractive given that approximately 70% is still offline, but has consistently moved more online each year, with tailwinds from the secular shift in consumer spending preferences away from physical goods in favor of experiences. We're well positioned to take advantage of these secular trends.

And our team is doing this through focus, execution and strategic investments which are paying off. We served a record number of both first time and repeat customers in 2022. And we're improving conversion across mobile web and app, which in the year accounted for more than 50% of bookings volume. Viator's tour operator partners are receiving more value than ever before, thanks to our growing demand footprint and new product features that allow them to drive extra visibility on our platform. We were also pleased with the balance between aggressively growing our market share while making year-over-year improvements in profitability, which highlights the potential to achieve further operating leverage in the business. Next, at TheFork, revenue reached 126 million in 2022, growing 48% year-over-year, and reaching 99% of 2019 levels.

On a constant currency basis. This result exceeded 2019 levels after considering estimated currency headwinds of approximately 6 points. For reference, the overall European restaurants market is still approximately 14% below 2019. The strength of our two-sided marketplace is evidenced on both the diner side and the restaurant side, while the number of bookable restaurants have not yet fully recovered to 2019 levels, total bookings on our platform reached 106% of 2019 levels with sustained performance in diner monetization. TheFork continues to represent a meaningful source of demand for its restaurant partners, connecting them to millions of diners through our app in driving repeat visits over time. Direct bookings from repeat customers on TheFork's platform drove more than 75% of total bookings in 2022.

A result reflects the team's increased focus on key markets, particularly those in Europe, where we've established scale and have confidence we can win. Finally, in our Tripadvisor Core segment, we saw a positive trajectory, with revenue of $966 million growing 45% year-over-year, and reaching 79% of 2019 levels. Prudent cost management contributed to year-over-year expansion of adjusted EBITDA down margin to 36% in 2022, from 27% in the prior year. And while we're pleased with the recovery of our experiences, and our hotel meta offerings in the U.S., both of which have fully recovered to 2019 levels as travelers returned. We're not satisfied with the pace of our overall recovery for the segment, including the slower recovery in our media and B2B offerings.

Although some of this mirrors the cyclical impact of marketing and advertising budgets, it also reflects ongoing factors that you all understand clearly, upstream competition, heightened traveler expectations, shifting advertising budgets, and our own focus and execution challenges to keep pace with the evolving market. The last point highlights the need to chart a durable path forward for growth and profitability in Tripadvisor Core, and provides a good transition to our long-term value creation strategies and specific priorities for 2023. Tripadvisor group represents a family of brands with a unique position in our industry that addresses attractive markets across travel and experiences, digital advertising and emerging marketplaces across multiple categories.

We attract a large global audience who trust our platforms for information, guidance and recommendations when they're making important decisions throughout their travel journey. We have access to a wealth of high intent data to drive value for travelers and our partners. Whether looking for inspiration, planning a trip, considering the next experience or making it happen. Across the group, we're united by a common vision to be the world's most trusted source for traveling experiences, with each segment uniquely serving this vision and reinforcing each other. But we pursue different value creation strategies for each segment, managing priorities and levels of investment appropriately given the stages of growth market opportunities and our competitive positioning.

At Viator, we will invest in growth in 2023 to accelerate our leadership position. This means driving awareness and market share and investing and enhancing our app experience and features for our partners, which we believe will result in greater direct repeat behavior. We expect this to strengthen lifetime value economics, which will extend our market leadership and contribute to longer term sustainable profitability. At TheFork, we plan to leverage our investments of the past few years to deliver strong growth in 2023, while targeting significant improvements in margins. This means continuing to grow both our restaurant and diner base in our priority markets by offering innovative tools and features on our platform, and through continued awareness of our brand.

This brings us to an area where I've spent much of my time since joining Tripadvisor group, aligning the Tripadvisor core segment around a clear, long term strategy and specific priorities for 2023. The Tripadvisor Core segment plays an important role in our portfolio. Over the past 20 plus years, we built some powerful assets, a trusted brand authentic content, a large community of contributors, and one of the largest global travel audiences available anywhere. And we've created a portfolio of offerings that provide value for both travelers and partners. However, it is apparent that as traveler needs and our competitive landscape continue to evolve, our business faces known headwinds. Our leadership team has been working intensively to conduct a robust and objective review of our performance and trajectory and develop a plan to respond.

We have immersed ourselves in a rich, data driven fact base, to deeply understand today's travelers and how we can best meet their needs. We set out specifically to put the traveler first, address both opportunities and challenges and drive steady, profitable growth. Delivering this outcome is not contingent on a speculative bet, a silver bullet or a risky agenda. Instead, we have high conviction in a strategy grounded in deeper traveler engagement, enabled by better products, and stronger execution. This builds on our heritage and the reasons travelers come to us in the first place. Let me articulate the articulate the crux of our strategy. First, we will innovate around world-class guidance products to help travelers make decisions in a world where it's hard to find advice you can trust.

It all starts with differentiated content that gives travelers a compelling reason to come to us directly. We have an enduring foundation with our reviews, forums and other community contributions. We will focus on new immersive formats with fresh authentic perspectives, like itineraries, guides and collections that we can create and curate with technology and data at a global scale. We will deliver this content through essential trip planning tools that are more useful to travelers than anything else offered today. This includes both pre-trip planning when travelers are building the perfect itinerary as well as in destination when travelers are making immediate decisions about what to do next. As we evolve our product experience, we will take a mobile-first approach.

Today, the mobile experience is relatively undifferentiated versus the desktop site. We can enhance our mobile web experience and give travelers more reasons to download and return to our app. Second, we will prioritize deeper engagement with travelers, meeting their decision making needs in a more personalized way. Today, our model is optimized around attracting high volumes of traffic bouncing on and off our platform to verify their travel choices as part of the travel planning process. We will continue to fine tune that but we also have a significant opportunity to do a better job addressing the needs of the majority of our audience, giving them better reasons to engage more deeply and creating even more value for all our partners. This must begin with data and taking full advantage of everything we know about travelers to serve them in a more relevant, curated and contextual way.

Photo by Caleb George on Unsplash

As we develop a more persistent relationship with travelers, we'll be able to offer a clearer path to become a member of our community and earn their loyalty. We see a unique opportunity to recognize and reward travelers for their engagement. And while we will continue to experiment with our paid membership tier, Tripadvisor Plus, we think strengthening the value proposition of a free membership program is the right place to start. Third, we will drive a step change in the value we can deliver to our partners. This engagement model will enable us to accelerate and diversify the monetization of our valuable audience, whether through hotel meta, media advertising solutions or emerging marketplaces across valuable travel categories starting with experiences.

To be clear, we will continue to reinforce our position in hotel meta, having a more engaged audience with better data and clearer signals of intent helps us deliver more high quality traffic to our OTA and hotel partners. We will also focus on two other immediate monetization pads where this strategy can fuel meaningful growth. The first is experiences. We're just beginning to scratch the surface of introducing bookable experiences to our vast audience. And we're going to continue to work to accelerate this opportunity. As we continue to scale the experiences category, we can extend our learnings to other categories where matching supply and demand is valuable for both travelers and our partners. The second is media. We have an opportunity to expand our value proposition with brands, both in travel related and non-endemic categories to engage our audiences in a contextually relevant manner that is additive to the consumer experience.

We can increase the value of our audiences by delivering new ad products and leveraging our data more effectively to improve audience targeting for purchase intent, relevance and attribution. Taken together, these strategic priorities are integrated and reinforcing powered by first party data and signals of intent. With each interaction, we can serve travelers better. An increasingly personalized experience delivers more relevance, greater engagement and more opportunities for monetization. Now, we won't do it all at once. We're going to focus in 2023 on areas where we have the most conviction and iterate our way towards this North Star. A balanced approach to sequencing reflects our commitment to an attractive financial profile. Our plan will enable us to drive margin expansion over the next several years and grow revenue for the long-term.

We believe this approach is the optimal value creation strategy for Tripadvisor Core and it also fuels our ability to continue to invest in experiences and Viator in particular, while preserving the flexibility to pursue inorganic opportunities in our broader portfolio. We know delivering on this plan requires focused execution. Value will be delivered by making it happen in practice. And we recognize that our past execution has not always delivered on our aspirations. So we're changing how we're organized and the way we operate in order to execute more effectively. We've introduced an updated operating model that balances the autonomy and empowerment of P&L ownership with strong functional alignment and collaboration. We've added critical new leadership roles and aligned our teams around product, marketing, technology and data, sales and operations.

This breaks down silos, and already, we're seeing improved efficiency and productivity and increased capacity in areas like engineering to reallocate resources to our top strategic priorities. We are also executing on a road map to enhance our core data and technology capabilities to provide the foundation for our engagement led product experience. And we've already gotten started putting in place a new customer data platform, which will provide a single view of our customers and the ability to leverage data across all of Tripadvisor Group. When I think about this strategy, the distillation of our path forward, I can't underscore enough the opportunity we see ahead. We believe that we are best positioned of anyone in our ecosystem to help travelers make decisions in a world where it's hard to find advice you can trust.

We're excited about our strategy for Tripadvisor Core and the future of Tripadvisor Group. With that, I'll turn the call over to Mike.

Mike Noonan: Thanks, Matt, and good morning, everyone. I will review the results of the fourth quarter, briefly cover our performance for the full year and provide some color on the trends for the first quarter and thoughts on 2023. In summary, we had a strong fourth quarter and full year. We exceeded expectations in Q4 with consolidated revenue of $354 million reflecting year-over-year growth of 47% and reaching 106% of 2019 levels. Recovery rates versus 2019 for reportable segments, Tripadvisor Core, Viator and TheFork were 85%, 208% and 94%, respectively. Let me dive into some top line highlights from Q4 for each of the segments. At Tripadvisor Core, we saw better-than-expected performance in the quarter as revenue reached 85% of 2019 levels, which is a modest step back from third quarter's result of 88%.

Our overall branded hotel revenue was 90% of 2019 levels compared to 95% in Q3. Hotel meta revenue recovered to 93% as we saw consistent performance through the quarter. We continue to see varying degrees of recovery by geography with U.S. remaining well over '19 levels, while EMEA and Rest of the World remain below '19 levels. Our hotel B2B revenue line had a solid quarter improving sequentially. Similarly, revenue from our media and platform offering also saw acceleration in the quarter, reaching 85% of 2019 levels, which is acceleration from third quarter's recovery rate of 80%. Tripadvisor's Core's experience and dining revenue saw strong growth in the quarter, reaching 113% recovery versus 2019. This represents a modest step down from Q3's results of 125%.

Within this revenue line, the experiences recovery rates continue to accelerate sequentially and was well above the overall experiences and dining recovery rate. As an important reminder, other revenue within Tripadvisor Core includes offerings within the crews, flights, vacation rentals and rental cars categories. When considering these offerings in categories with those we have since divested such as SmarterTravel in China, this revenue stream collectively represented over $160 million in annual revenue in 2019. As we sharpen our focus and look to prioritize investments in our highest return opportunities, there are areas that we will continue to invest in as well as other areas where we'd be more prudent in terms of capital allocation. And as such, we do not expect Tripadvisor Core's other revenue line as currently defined to fully recover to 2019 level.

At Viator, we continue to see strong demand in Q4. Revenue recovery versus 2019 reached 208%, which is an increase from third quarter's rate of 179%. We saw strengthening demand towards the back half of the quarter despite major weather disruptions and a subsequent increase in cancellations. Gross bookings grew to over $600 million, which represented 220% versus '19 levels. At TheFork, recovery versus 2019 was 94% for the quarter, which was negatively impacted by estimated currency headwinds of about 9 points. The sequential stepdown is primarily impacted by the timing of an acquisition in the fourth quarter of 2019. Without this, the recovery rate would have been closer to fully recover, a modest step down from last quarter's rate of 103%.

The sequential decline is due in part to a larger-than-expected impact of the World Cup in TheFork's major European markets in October and November as well as European macro conditions, which have impacted both diner demand as well as restaurant supply. Turning now to the full year 2022, we reached nearly $1.5 billion in revenue and consolidated revenue, which is 96% of 2019 levels and represent 65% year-over-year growth rate. Growth in recovery was driven in large part by our Viator segment at 171% of 2019 levels and 168% year-over-year growth, and to a lesser extent, our Tripadvisor Core Hotel meta and experiences revenue and TheFork. Q4 adjusted EBITDA was $43 million on a consolidated basis or 12% of revenue. This is flat with adjusted EBITDA margin of 12% in Q4 2021 and down versus 27% in Q4 of 2019.

On a consolidated basis, adjusted EBITDA margins were down about 15 points as compared to Q4 '19. This is primarily the result of greater investment in our experience offering, both in Viator and Tripadvisor Core through performance marketing spend and experiences becoming a larger part of the overall mix of our business. It's also due, to a lesser extent, to a higher mix of paid traffic in hotel meta within Tripadvisor Core. This has been partially offset by leverage on our fixed and discretionary costs on a consolidated basis. In our Tripadvisor Core segment, the primary drivers of the lower adjusted EBITDA margin versus Q4 2019, or increases in performance marketing to drive experiences as well as hotel meta traffic mix shift. We also witnessed some deleverage in fixed and discretionary costs due to lower revenue recovery despite these costs being lower on an absolute basis.

In Viator, the improvement in adjusted EBITDA margin relative to 2019 in Q4 are due to the significant leverage in our headcount and other fixed costs as a percent of revenue, offsetting increases in performance marketing and recent brand spend. Finally, in TheFork, adjusted EBITDA margin performance relative to Q4 '19 was driven primarily by increases in traffic and other variable costs in headcount and other direct costs. These investments have been in support of driving awareness to consumers and our restaurant partners, which we hope to leverage in 2023. Taking a moment to look at adjusted EBITDA margin sequentially, we saw a reduction of about 13 percentage points from Q3 to Q4 '22 compared to a sequential step down in 2019 of 3 percentage points.

As we discussed on our last earnings call, Q4 '19 benefited from a large step down in television advertising spend at Tripadvisor Core and a reduction in our bonus accrual totaling about 6 percentage points of this difference. Without these factors, the adjusted EBITDA margin in Q4 2019 would have been approximately 6 points lower than the 27% margin reported that quarter. The remaining difference can be attributed to the Q3 to Q4 2022, smaller sequential step down in variable marketing costs in Viator and Tripadvisor Core experiences as well as a sequentially larger increase in fixed discretionary costs as a percent of revenue. Adjusted EBITDA in 2022 was $295 million or 20% of revenue, reflecting a significant improvement from 11% of revenue in 2021, but down from 28% of revenue in 2019.

Our deleverage versus 2019 is largely due to a higher mix of performance marketing expenses and our faster growing experiences business, as we incur the spend in advance of revenue recognition. At Viator, we believe that this investment is supported by growth in new customer bookings and the improvements we've seen in our return customer behavior. Repeat customers who in recent cohorts return more frequently also spend more with us improving our unit economics. Additionally, in Tripadvisor Core, we've invested more in experiences, given the attractiveness of this category. In hotel meta, as you've seen, longer-term shift in search marketing that have impacted our channel mix, we increased performance marketing slightly to drive revenue while maintaining our ROA targets.

To partly offset the increase in variable marketing as a percent of revenue, we've maintained our lower fixed and discretionary costs as a percent of revenue. Now on to our cash and liquidity position. Free cash flow for this year was $344 million, which was up meaningfully versus $54 million in free cash flow in 2021. This year-over-year improvement was due to higher operating cash flow, which includes the benefit of positive working capital movements at Viator related to deferred merchant payables as well as some onetime tax credits we received related to the pandemic. We ended the year with a strong balance sheet with just over $1 billion in cash and $1.5 billion in total liquidity, including our undrawn credit facility. We believe that our strong liquidity and cash flow profile provides us a solid cushion against any potential macro headwinds as well as allows us to pursue capital allocation decisions that will drive long-term value creation.

Additionally, as noted in our shareholder letter, in the first quarter of 2023 as part of the disclosed IRS audit of Expedia for the years 2019 through 2011, we expect to incur an additional income tax charge in an estimated range of $25 million to $35 million during the first quarter of 2023. From a cash flow perspective, a net cash outflow of approximately $70 million to $80 million is expected during 2023. This will have no impact on our adjusted EBITDA. Now on to the recent trends and thoughts for the first quarter. We want to provide a little more color and remind folks of the dynamics of January relative to the first quarter and the first quarter relative to the full year outlook for which we provided last night. While we will not continue to the comparison to 2019 when we move into fiscal '23, I will provide some color on January's performance relative to 2019 as a reference point.

In Tripadvisor Core, January 2023 recovery versus '19 was in the mid-70s percent, a step down from 85% in Q4 2022. We expect the recovery rate versus 2019 will be lower for the quarter due to the tougher compare in the first half of 2019. Revenue versus 2019 for Viator in the fourth in January saw a strong improvement from Q4's recovery levels, and we expect that to continue in Q1. Switching now to year-over-year growth in January, we saw an acceleration in year-over-year growth rates across all segments versus where we exited Q4 2022. As a reminder, January of 2022 was a weaker period for us given the Omicron variant while February and March of '22, recovery accelerated at a very fast pace. Given this dynamic, we expect that February and March growth rates will normalize.

The result will be a small sequential step-down of our consolidated growth rate in Q1 2023. With regard to consolidated EBITDA margin, in Q1, we expect margins to be largely consistent with the same period a year ago. This assumes a flat margin year-over-year in Tripadvisor Core. As a reminder, the Q1 margin trend reflects the seasonality of marketing spend at Viator. In the shareholder letter last night, we noted that for the full year, we expect full year consolidated revenue growth that reflects the diverse growth profiles across our portfolio and is consistent with the broader travel growth trends. And consolidated adjusted EBITDA margin to remain flat year-over-year, which assumes approximately flat year-over-year margins in Tripadvisor Core as well.

I will reiterate how excited we are about our direction. We believe our plan sets us up to drive sustainable, profitable growth and deliver on our near and longer-term strategic priorities. At Tripadvisor Core, we'll be focusing on operational execution to produce stable margins this year while we establish a foundation to deliver long-term sustainable revenue and adjusted EBITDA growth. Viator will continue to invest in growth and market share gains, while driving improving economics that reflect the profit potential in this business. Finally, at TheFork, we'll be aiming for significant margin improvement, in particular in the second half of the year while continuing to drive healthy growth. To this end, we're managing our business to longer-term priorities.

Our goal is to build a business that can deliver attractive durable revenue growth rates that will drive adjusted EBITDA growth as well as expanding margins over time. In the near term, we look forward to keeping you updated. With that, I'll pass the call back over to the operator for Q&A.

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