Trip.com Group Ltd. Sponsored ADR ((TCOM)) has held its Q4 earnings call. Read on for the main highlights of the call.
Trip.com Group Ltd. Reports Strong Growth Amidst Operational Challenges
The recent earnings call for Trip.com Group Ltd. reflected a generally positive sentiment, highlighting strong revenue growth and successful international expansion. The company demonstrated strategic capital return initiatives, although concerns were raised regarding a quarter-over-quarter revenue decline and increased operational expenses.
Record GMV Achievement
Trip.com Group’s core OTA businesses achieved a remarkable GMV of over RMB 1.2 trillion or USD 169 billion in 2024, showcasing the company’s robust market presence and operational efficiency.
AI Innovation and User Engagement
The company reported a significant surge in traffic for TripGenie, with browsing time nearly doubling and the total number of conversations rising by 200% in 2024, underscoring the successful integration of AI in enhancing user engagement.
International Business Growth
International business accounted for 14% of group revenue in Q4 2024, with air ticket and hotel bookings on the international platform growing by over 70% year-over-year, reflecting the company’s successful global expansion strategy.
Strong Financial Performance
Trip.com Group’s net revenue for Q4 2024 grew by 23% year-over-year, with total net revenue for 2024 seeing a 20% increase, highlighting the company’s strong financial health and growth trajectory.
Robust Inbound and Outbound Travel
Inbound travel bookings increased by over 100% year-over-year, while outbound hotel and air ticket bookings surpassed 120% compared to 2019 levels, indicating a strong recovery in travel demand.
Strategic Capital Return Initiatives
The Board authorized a share repurchase program of up to USD 400 million and a cash dividend totaling approximately USD 200 million for 2025, demonstrating the company’s commitment to returning value to shareholders.
Sustainability and Employee Initiatives
Trip.com Group emphasized its commitment to rural revitalization and employee support, including allowing call center staff to work from home during Chinese New Year, highlighting its focus on sustainability and employee well-being.
Quarter-over-Quarter Revenue Decline
Despite the overall positive performance, net revenue decreased by 20% from the previous quarter, with accommodation reservation revenue down by 24% and transportation ticketing revenue decreasing by 15% quarter-over-quarter.
Increased Expenses
Adjusted G&A expenses for Q4 2024 increased by 24% year-over-year, primarily due to personnel-related expenses, indicating rising operational costs.
Challenges in Major Destinations
Despite headwinds in certain major destinations, outbound bookings grew by only 20% to 30% during the Chinese New Year holiday, highlighting ongoing challenges in key markets.
Forward-Looking Guidance
Trip.com Group provided a strong forward-looking guidance, with expectations of continued growth across various segments. The company anticipates further increases in accommodation reservation and transportation ticketing revenues, supported by the robust performance of its international business and AI tools like TripGenie. The capital return program for 2025, including a USD 400 million share repurchase and a USD 200 million cash dividend, underscores the company’s commitment to shareholder value.
In summary, Trip.com Group Ltd.’s earnings call painted a picture of strong growth and strategic initiatives, despite facing some operational challenges. The company’s robust financial performance, international expansion, and commitment to innovation and shareholder value position it well for future success.