Trip.com Group Limited Reports Unaudited First Quarter of 2022 Financial Results


    SHANGHAI, June 28, 2022 /PRNewswire/ -- Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) ("Trip.com Group" or the "Company"), a leading one-stop travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management, today announced its unaudited financial results for the first quarter of 2022.

    Key Highlights for the First Quarter of 2022

    The Company delivered resilient results in the first quarter despite the disruptions of the COVID-19 resurgence in China.

    • Net revenue for the first quarter remained stable year-over-year and decreased by 12% quarter-over-quarter, mainly due to the impact from the latest wave of COVID-19 resurgence in China.
    • Staycation travel continued to serve as a major contributor to the recovery of the Chinese domestic market, with local hotel bookings increased by over 20% year-over-year.
    • Air-ticket bookings on global platforms increased by over 270% year-over-year, mainly driven by the recovery of European and Asian Pacific markets. Hotel bookings on our global platforms also outgrew the pre-pandemic level.

    "In the first quarter, we are encouraged to see solid growth of travel demand in the global markets, especially across Europe and the Asia Pacific, as more countries started to ease travel restrictions," said James Liang, Executive Chairman. "We are keen to build on these positive signals to further strengthen our market position and fortify our globalization footprints."

    "Though it was challenging for domestic travel due to the COVID-19 resurgence in China during the first quarter, our results demonstrated our resilience amidst a confluence of challenges and uncertainties," said Jane Sun, Chief Executive Officer. "While we may continue to see short-term fluctuations, demand for travel is still strong and shows a bright outlook in the long-term. We will remain adaptive to embrace the changing environment and be flexible with our strategies to swiftly seize growth opportunities."

    First Quarter of 2022 Financial Results and Business Updates

    In the first quarter of 2022, the COVID-19 resurgence continued to disrupt the travel industry in China, which discouraged user demand for the Company's services. As a result, the Company's results of operations for the first quarter of 2022 were materially and adversely affected.

    For the first quarter of 2022, Trip.com Group reported net revenue of RMB4.1 billion (US$649 million), which was flat comparing to the same period in 2021. Net revenue for the first quarter of 2022 decreased by 12% from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

    Accommodation reservation revenue for the first quarter of 2022 was RMB1.5 billion (US$229 million), representing an 8% decrease from the same period in 2021, and a 24% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

    Transportation ticketing revenue for the first quarter of 2022 was RMB1.7 billion (US$262 million), representing a 10% increase from the same period in 2021 and a 10% increase from the previous quarter, primarily driven by strong recovery of air travel in the oversea market.

    Packaged-tour revenue for the first quarter of 2022 was RMB124 million (US$20 million), representing a 27% decrease from the same period in 2021 and a 30% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

    Corporate travel revenue for the first quarter of 2022 was RMB222 million (US$35 million), representing a 12% decrease from the same period in 2021 and a 40% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

    Cost of revenue for the first quarter of 2022 was relatively stable at RMB1.1 billion (US$168 million) comparing to the same period in 2021. Cost of revenue decreased by 5% from the previous quarter. Cost of revenue as a percentage of net revenue was 26% for the first quarter of 2022.

    Product development expenses for the first quarter of 2022 decreased by 11% to RMB2.0 billion (US$311 million) from the same period in 2021 and decreased by 12% from the previous quarter, primarily due to a decrease in product development personnel related expenses. Product development expenses as a percentage of net revenue was 48% for the first quarter of 2022.

    Sales and marketing expenses for the first quarter of 2022 decreased by 11% to RMB843 million (US$133 million) from the same period in 2021 and decreased by 35% from the previous quarter, primarily due to a decrease in expenses relating to sales and marketing promotion activities. Sales and marketing expenses as a percentage of net revenue was 21% for the first quarter of 2022.

    General and administrative expenses for the first quarter of 2022 decreased by 15% to RMB584 million (US$92 million) from the same period in 2021 and decreased by 20% from the previous quarter, primarily due to a decrease in general and administrative personnel related expenses. General and administrative expenses as a percentage of net revenue was 14% for the first quarter of 2022.

    Loss from operations for the first quarter of 2022 was RMB359 million (US$55 million), compared to loss from operations of RMB787 million for the same period in 2021 and loss from operations of RMB704 million for the previous quarter. Adjusted EBITDA for the first quarter of 2022 was RMB91 million (US$16 million), compared to RMB-216 million for the same period in 2021 and RMB54 million for the previous quarter. Adjusted EBITDA margin was 2% for the first quarter of 2022, compared to -5% for the same period in 2021 and 1% for the previous quarter.

    Income tax benefit for the first quarter of 2022 was RMB14 million (US$2 million), compared to income tax expense of RMB41 million for the same period in 2021 and income tax expense of RMB37 million in the previous quarter. The change in our effective tax rate was primarily due to the combined impacts of changes in respective profitability of our subsidiaries with different tax rates, certain non-taxable income or loss resulting from the fair value changes in equity securities investments and exchangeable senior notes, and changes in valuation allowance provided for deferred tax assets.

    Net loss attributable to Trip.com Group's shareholders for the first quarter of 2022 was RMB989 million (US$155 million), compared to net income attributable to Trip.com Group's shareholders of RMB1.8 billion for the same period in 2021 and net loss attributable to Trip.com Group's shareholders of RMB834 million for the previous quarter. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), non-GAAP net loss attributable to Trip.com Group's shareholders was RMB36 million (US$5 million), compared to non-GAAP net loss attributable to Trip.com Group's shareholders of RMB204 million in the same period in 2021 and non-GAAP net income attributable to Trip.com Group's shareholders of RMB309 million for the previous quarter.

    Diluted loss per ordinary share and per ADS was RMB1.52 (US$0.24) for the first quarter of 2022. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes, non-GAAP diluted loss per ordinary share and per ADS was RMB0.06 (US$0.01) for the first quarter of 2022. Each ADS currently represents one ordinary share of the Company.

    As of March 31, 2022, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB63.3 billion (US$10.0 billion).

    Conference Call

    Trip.com Group's management team will host a conference call at 8:00PM EST on June 27, 2022 (or 8:00AM CST on June 28, 2022) following this announcement.

    The conference call will be available live on Webcast and for replay at: https://investors.trip.com. The call will be archived for twelve months on our website.

    All participants must pre-register to join this conference call using the Participant Registration link below:
    https://s1.c-conf.com/diamondpass/10022620-VWCVi9.html

    Upon registration, each participant will receive details for this conference call, including dial-in numbers, passcode and a unique access PIN. To join the conference, please dial the number provided, enter the passcode, followed by your PIN.

    A telephone replay of the call will be available after the conclusion of the conference call until July 5, 2022.

    The dial-in details for the replay:
    International dial-in number: +61-7-3107-6325
    Passcode: 10022620

    Safe Harbor Statement

    This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management in this press release, as well as Trip.com Group's strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, the impact of COVID-19 pandemic to Trip.com Group's business operations, volatility in the trading price of Trip.com Group's ADSs or shares, Trip.com Group's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Trip.com Group operates, failure to successfully develop Trip.com Group's existing or future business lines, damage to or failure of Trip.com Group's infrastructure and technology, loss of services of Trip.com Group's key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Trip.com Group's affiliated Chinese entities and the contractual arrangements among Trip.com Group, its affiliated Chinese entities and their shareholders, and other risks outlined in Trip.com Group's filings with the U.S. Securities and Exchange Commission or the Stock Exchange of Hong Kong Limited. All information provided in this press release and in the attachments is as of the date of the issuance, and Trip.com Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

    About Non-GAAP Financial Measures

    To supplement Trip.com Group's unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Trip.com Group uses non-GAAP financial information related to adjusted net income attributable to Trip.com Group Limited, adjusted EBITDA, adjusted EBITDA margin and adjusted diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges that are not tax deductible and fair value changes of equity securities investments and exchangeable senior notes, net of tax. Trip.com Group's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

    Non-GAAP information is not prepared in accordance with GAAP, does not have a standardized meaning under GAAP, and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes that have been and will continue to be significant recurring expenses in Trip.com Group's business for the foreseeable future.

    Reconciliations of Trip.com Group's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

    About Trip.com Group Limited

    Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) is a leading global one-stop travel platform, integrating a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in China, and increasingly for travelers around the world, to explore travel, get inspired, make informed and cost-effective travel bookings, enjoy hassle-free on-the-go support, and share travel experience. Founded in 1999 and listed on Nasdaq in 2003 and HKEX in 2021, the Company currently operates under a portfolio of brands, including Ctrip, Qunar, Trip.com and Skyscanner, with the mission "to pursue the perfect trip for a better world."

    For further information, please contact:

    Investor Relations
    Trip.com Group Limited
    Tel: +86 (21) 3406-4880 X 12229
    Email: iremail@trip.com

     

    Trip.com Group Limited


    Unaudited Consolidated Balance Sheets


    (In millions, except share and per share data)














    December 31, 2021


    March 31, 2022


    March 31, 2022



    RMB (million)

    RMB (million)

    USD (million)















    (unaudited)


    (unaudited)


    (unaudited)




    ASSETS









    Current assets:









    Cash, cash equivalents and restricted cash


    21,196


    20,861


    3,291



    Short-term investments


    29,566


    30,369


    4,791



    Accounts receivable, net 


    4,649


    3,979


    628



    Prepayments and other current assets 


    10,697


    9,274


    1,463












    Total current assets


    66,108


    64,483


    10,173












    Property, equipment and software


    5,534


    5,407


    853



    Intangible assets and land use rights


    13,046


    12,991


    2,049



    Right-of-use assets


    777


    689


    109



    Investments (Includes held to maturity time deposit and
    financial products of RMB13,112 million and RMB12,022
    million as of December 31,2021 and March 31, 2022, respectively)


    44,961


    42,668


    6,731



    Goodwill


    59,353


    59,353


    9,363



    Other long-term assets


    396


    399


    63



    Deferred tax asset


    1,684


    1,828


    288












    Total assets


    191,859


    187,818


    29,629












    LIABILITIES









    Current liabilities:









    Short-term debt and current portion of long-term debt


    39,866


    30,870


    4,870



    Accounts payable


    6,019


    4,201


    663



    Advances from customers


    7,535


    6,857


    1,082



    Other current liabilities


    12,798


    11,888


    1,875



    Total current liabilities


    66,218


    53,816


    8,490












    Deferred tax liability


    3,527


    3,504


    553



    Long-term debt


    11,093


    20,302


    3,203



    Long-term lease liability


    400


    367


    58



    Other long-term liabilities


    165


    154


    24












    Total liabilities


    81,403


    78,143


    12,328












    SHAREHOLDERS' EQUITY


















    Total Trip.com Group Limited shareholders' equity


    109,677


    108,913


    17,181












    Non-controlling interests


    779


    762


    120












    Total shareholders' equity


    110,456


    109,675


    17,301












    Total liabilities and shareholders' equity


    191,859


    187,818


    29,629











     

    Trip.com Group Limited

    Unaudited Consolidated Statements of Income/(Loss)

    (In millions, except share and per share data)















    Quarter ended


    Quarter ended


    Quarter ended


    Quarter ended



    March 31, 2021


    December 31, 2021


    March 31, 2022


    March 31, 2022



    RMB (million)


    RMB (million)


    RMB (million)


    USD (million)























    (unaudited)


    (unaudited)


    (unaudited)


    (unaudited)




    Revenue:











    Accommodation reservation 


    1,580


    1,919


    1,450


    229



    Transportation ticketing 


    1,506


    1,516


    1,663


    262



    Packaged-tour 


    169


    177


    124


    20



    Corporate travel


    252


    367


    222


    35



    Others


    602


    703


    652


    103














    Total revenue


    4,109


    4,682


    4,111


    649














    Less: Sales tax and surcharges


    (1)


    (1)


    (2)


    (0)














    Net revenue


    4,108


    4,681


    4,109


    649














    Cost of revenue


    (1,034)


    (1,118)


    (1,067)


    (168)














    Gross profit


    3,074


    3,563


    3,042


    481














    Operating expenses:











    Product development *


    (2,225)


    (2,236)


    (1,974)


    (311)



    Sales and marketing *


    (952)


    (1,298)


    (843)


    (133)



    General and administrative *


    (684)


    (733)


    (584)


    (92)














    Total operating expenses


    (3,861)


    (4,267)


    (3,401)


    (536)














    Loss from operations


    (787)


    (704)


    (359)


    (55)














    Interest income 


    418


    757


    591


    93



    Interest expense


    (407)


    (358)


    (341)


    (54)



    Other income/(expense)


    2,508


    (433)


    (707)


    (112)














    Income/(Loss) before income tax expense and
    equity in income of affiliates


    1,732


    (738)


    (816)


    (128)














    Income tax (expense)/benefit


    (41)


    (37)


    14


    2



    Equity in income/(loss) of affiliates


    74


    (108)


    (199)


    (31)














    Net income/(loss)


    1,765


    (883)


    (1,001)


    (157)














    Net loss attributable to non-controlling interests


    15


    49


    12


    2














    Net income/(loss) attributable to Trip.com
    Group Limited


    1,780


    (834)


    (989)


    (155)














    Earnings/(Losses) per ordinary share











    - Basic


    2.95


    (1.29)


    (1.52)


    (0.24)



    - Diluted


    2.88


    (1.29)


    (1.52)


    (0.24)














    Earnings/(Losses) per ADS











    - Basic


    2.95


    (1.29)


    (1.52)


    (0.24)



    - Diluted


    2.88


    (1.29)


    (1.52)


    (0.24)














    Weighted average ordinary shares outstanding











    - Basic


    604,596,792


    646,213,517


    647,812,835


    647,812,835



    - Diluted


    629,540,722


    646,213,517


    647,812,835


    647,812,835














    * Share-based compensation included in Operating expenses above is as follows:







      Product development 


    151


    249


    107


    17



      Sales and marketing 


    22


    58


    18


    3



      General and administrative 


    121


    200


    98


    15
























     

    Trip.com Group Limited

    Reconciliation of  GAAP and Non-GAAP Results

    (In millions, except % and per share data)















    Quarter ended


    Quarter ended


    Quarter ended


    Quarter ended



    March 31, 2021


    December 31, 2021


    March 31, 2022


    March 31, 2022



    RMB (million)


    RMB (million)


    RMB (million)


    USD (million)























    (unaudited)


    (unaudited)


    (unaudited)


    (unaudited)




    Net income/(loss)


    1,765


    (883)


    (1,001)


    (157)



    Less: Interest income


    (418)


    (757)


    (591)


    (93)



    Add: Interest expense


    407


    358


    341


    54



    Add: Other (income)/expense


    (2,508)


    433


    707


    112



    Add: Income tax expense/(benefit)


    41


    37


    (14)


    (2)



    Add: Equity in (income)/loss of affiliates


    (74)


    108


    199


    31



    Loss from operations


    (787)


    (704)


    (359)


    (55)



    Add: Share-based compensation


    294


    507


    223


    35



    Add: Depreciation and amortization


    277


    251


    227


    36



    Adjusted EBITDA


    (216)


    54


    91


    16



    Adjusted EBITDA margin


    -5 %


    1 %


    2 %


    2 %














    Net income/(loss) attributable to Trip.com Group Limited


    1,780


    (834)


    (989)


    (155)



    Add: Share-based compensation


    294


    507


    223


    35



    Add: (Gain)/loss from fair value changes of equity securities
    investments and exchangeable senior notes


    (2,367)


    581


    785


    124



    Add: Tax effects on fair value changes of equity securities
    investments and exchangeable senior notes


    89


    55


    (55)


    (9)



    Non-GAAP net (loss)/income attributable to Trip.com Group Limited


    (204)


    309


    (36)


    (5)



    Weighted average ordinary shares outstanding- Diluted-non GAAP 


    604,596,792


    648,139,290


    647,812,835


    647,812,835



    Non-GAAP Diluted (losses)/income per share


    (0.34)


    0.48


    (0.06)


    (0.01)



    Non-GAAP Diluted (losses)/income per ADS


    (0.34)


    0.48


    (0.06)


    (0.01)














    Notes for all the condensed consolidated financial schedules presented:






















    Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.3393 on March 31, 2022 published by the Federal Reserve Board.













     

     

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