Q2 2021 Trivago NV Earnings Call

1 of them.

[music].

Good day, ladies and gentlemen, and thank you for standing by and welcome to the 2 of Vogl of Q2 earnings call of 'twenty 'twenty 1.

I must advise you of the call is being recorded today Friday, the 13th of July 2021.

The <unk> pleased to be joined on the call today by accident.

FIFA, 2 Voc with C O and managing director and much of 2 months <unk> CFO and managing director.

The following discussion including responses to your questions reflect management's views as of today Friday the search as of July 20.

2021 only.

<unk> does not undertake any obligation.

The update or revise this information as always some of the statements made on today's call are forward looking typically preceded by words such as the.

We expect the belief.

Actually anticipate or similar statements.

Please refer to the Q2.2021 operating and financial review and the company's other filings with the S. E. C for information about factors, which could cause <unk> actual results to differ materially.

<unk>.

From these forward looking statements.

You will find we consolidations of non-GAAP measures to the most comparable GAAP measures discussed today in <unk> operating and financial review.

Which is posted on the company's.

Our website at.

At <unk> Dot 3 vogl dot com.

You are encouraged to patriotically visit to voice investor relationship site for important content.

Given the drastic and unprecedented impact of the COVID-19 pandemic on our operating results and 2020.

Management beliefs that comparisons of 2020 of unresolved against those for the comparable period of 2019 allow for a better understanding of the progress of our recovery from the pandemic.

<unk> 2020 facades.

Included in our appendix 4 hour presentation is thought of as in our financial and operating of review filed as exhibit 99 Dot 1.

To the current report on form 6K filed on the 29th of July 2021.

With that let me turn the call over to acts of please go ahead Sir.

Thank you everyone for joining us today for our Q2.2021 earnings call.

Hope everyone is enjoying the summer and getting to travel a bit.

After months of Lockdown at almost full of isolation at home our.

Our teams of being very relieved when our lives opened up and travel restarted.

Since then.

Sentiment of the company has improved a lot of the travel market has returned to some extent and colleagues from family members have reunited.

More recently, we have started to offer on campus vaccination to our staff 1 to 1 to allow.

The us to move towards a hybrid setup by end of the quarter.

We are happy to take note that all of the hard work that we've put into our product and marketing initiatives have shown positive results in the.

The UK, we have launched a new version of our local travel product offering inspiration for weekend activities.

All of alternative.

Turn of revenue streams have gained momentum and the significant number of new customers have been signed up.

Our collaborative approach with our advertisers has facilitated a rapid recovery of the auction across multiple markets.

While we are enjoying this return to travel we also very realistic with the current situation.

Vaccination levels of still too low in many countries and the fall is coming.

We know that cases will increase again, new variants will emerge and restrictions might be reimposed to some extent.

In either case, we are staying optimistic in this difficult time and see through the ups and downs of sustainable recovery has started.

And we will continue to make progress with that I now hand over to materials.

Thank you Arthur and good morning, everyone.

The positive trend in April that we highlighted during our Q1 call continued throughout the second quarter and in particular in our segment developed Europe, we have seen a lot of pent up demand.

Globally, our qualified referrals improved to 56% of 2019 levels compared from 33% in the first quarter and our referral revenue improved from 18% of 2019 levels in the first quarter to 42% in the second quarter.

Our net loss also improved sequentially.

The 2 of $3.3 million euros compared to a net loss of $6.7 million in the first quarter.

While the adjusted EBITDA turned positive to $4.3 million from minus $4.8 million euros in the first quarter exceeding our guidance.

And most of our core markets in Europe.

Some of the demand started to recover in April of qualified referrals and that segment, we're around 35% of 2019 levels in April.

Which improved to around 65% for the fourth quarter.

In some European markets qualified refers even exceeded 2019 levels at the end of the quarter for example.

In Germany.

With the increase in qualified referrals, we have seen of greater improvement in our revenue per qualified of.

Referral as well.

In particular in Americas in developed Europe.

The type of started to increase the bids following the increase in referrals and bookings.

In our segment rest.

The world in particular in APAC mini markets still have to deal with shutdowns and travel restrictions and the recovery of there was much more muted.

Our return on advertising spend overall continued to improve year over 2 year, however, less than in the first quarter as we ramped up our investments.

And Brent marketing incentives in many markets and.

In addition to performance marketing incentives.

Excluding advertising expenses or operational expenses decreased 10% compared to the second quarter last year.

The decline was less pronounced than in prior quarters as we started to lap our cost saving initiatives that we.

We announced last year in May.

The main drivers for the decrease in cost a reduction in headcount and office related savings in.

And G&A costs slightly increased the.

Head count and office related savings were offset by a reduction of expected credit losses in the second quarter last year.

Which was the 1 of decrease.

Spencer that did not repeat this quarter.

In selling and marketing the decrease was partly offset by an increase in TV production and related costs as we started to advertise on television in multiple markets again.

We remain well capitalized with the cash position of 194 million at the.

The end of the second quarter, which is stable compared to the beginning of the quarter.

We mentioned the launch of an at the market equity program last quarter, but we have not utilize the sofa and we will remain opportunistic with this program.

We are now in the middle of the peak summer travel season, and significant and the significant.

An increase in travel demand, we have seen in the second quarter in most European countries continued in July.

Having said that the number of new Covid infections in some countries as the rising very sharply again due to the new data variant and the overall uncertainty remains high with changing rules and restrictions either still in place.

While having been put in place on a short notice.

Germany for example, put Spain, and the Netherlands on the list of high risk countries last week.

Which means the travelers' need to quarantine for 10 days when they come back.

The other examples and whenever new restrictions are being introduced we can observe of corresponding drop in traffic.

<unk>, Inc side and on the other hand of pickup in demand when restrictions are being lifted.

Consequently, the volatility of our traffic remains at elevated levels.

In the following I will share a few more data points on trends in July.

All metrics refer to the period from July 1 to July 2016.

In developed Europe qualified referrals were at approximately 80% of 2019 levels and revenue per qualified.

Revenue per qualified referrals above 80%.

I call out, Germany already where we have seen huge pent up demand and quantified results continued to be above 2019 levels. During the first 2.

<unk> in July.

And Americas qualified referrals year over 2 year growth rates in the first half of July.

The similar to what we reported for the second quarter.

While revenue per qualified referral improved slightly.

And the rest of world year over 2 year qualified referral growth rate slightly improved in.

In the first half of July while revenue per qualified referral remained around 60% of 2019 levels.

In Australia volumes dropped significantly again in July of net new travel restrictions. The situation remains also challenging in countries like.

India, Japan, and Russia, which are normally amongst our largest.

The market in that segment.

On the other hand, we see positive trends in our central Eastern European markets, where the performance of similar to what we observed in developed Europe.

That brings me to our guidance.

We believe the travel demand seasonality might be even more centered around the summer months this year compared to our pre pandemic hits.

Historical seasonality.

As we are increasing our brand marketing investments during the peak travel period, we expect our return on advertising spend to be lower in Q3 compared to Q2.

And for the full year, we expect our adjusted EBITDA to be positive.

With that let's open the.

Line for questions. Please.

Thank you.

To ask a question. Please press star 1 on your telephone keypad.

To withdraw your question press the hash key please from 5 IV compile the Q&A roster.

And the first question comes from the line of Naveed Khan from Trust.

The Securities. Please ask your question. Your line is now open.

Yeah, Thanks, a lot.

A quick question on just the outlook for <unk>.

For August and September wishes wish the June and July you said you expect.

You actually demand to be.

Not as strong as Walgreens around July.

I'm just wondering if.

It's just the drops in traffic you are seeing at the restriction comes up.

Is that the resources of the demand for like the local book, England is the demand of simply disappears how much of this is.

<unk> been cautious vs.

The real risk maybe.

In terms of booking trends for the next 2 months.

So none of it thanks a lot.

So the first of all of everything we say regarding future months and second half is obviously based.

Based on what we what we believe.

And see as of today I think is reasonable, but there is as I said.

A lot of uncertainty in any predictions that we make as there continues to be.

High volatility so meaning all of these changes, particularly in Europe that are still happening.

Have an impact and we do see in some cases that when.

When whenever countries.

Ill put on restricted list of whatever that.

Travel demand ex dropping and you cannot necessarily see an immediate shift right away, meaning people then.

Book domestic instead.

I think for that.

It's too too much noise and.

And to say that but overall, we do see a decrease when that happens.

Uh huh.

So I mean.

We have seen from travel restrictions on short notice that increases obviously the uncertainty for travelers.

And let.

Let me give you 1 specific example.

As I mentioned before.

Germany announced last week that we won.

Sure.

But when you are coming back from from Spain, The Netherlands that you have 2 current time for.

10 days and you can shorten that actually 2.5 days when when youre negatively tested after 5 days, but when when they announced that we thought traffic.

Perfect.

It's been dropping on our platform.

Which obviously was also a result of the increase in new infections in the country. So as we are approaching the end of summer travel period.

We expect that the seasonal decline in traffic on our platform will be more pronounced than what we have seen historically pre pandemic as people have to.

To go.

Through more hassle to do the extra travel and we believe there will be less.

Inclined to do so after the peak summer travel season.

Understood maybe maybe.

Maybe just a.

A follow up on some of the commentary you provided.

I think in the past so length of stay are you continuing to see that.

Being longer than that.

Also when I look at the 2 or 1 of the qualified referral volume for Europe, and compare that to where it was in the Americas.

It was nicely above and I'm wondering if that sort of protection of European demand now exceeding in the Americas or is it.

The allocation of your own ad dollars.

Ultimately translating into the Q1 volumes.

Sure Yeah, Let me let me start with your second question first I think it's the combination and so we have clearly seen.

That the U S started first of all recover we mentioned that before.

And that obviously the.

Sockets in the segment Americas.

And that was already the case in March.

Whereas the beginning of April pretty much all countries in Europe, we're still in Lockdown, and then with more and more countries in Europe opening up in lifting restrictions and the public.

Look for some of it became more positive we have seen.

The biggest steep increase in travel demand and activity.

So then going into May we saw that because of that increase in demand.

Europe started to overtake Americas for ethanol platform as the segment and obviously.

We have plans already before to invest into.

The recovery of <unk>.

As I mentioned before and.

With the seeing that positive trend, we are more confident to do it and to do it at the more aggressive levels, maybe that we anticipated and then.

The reinforce what Youll see in particular on the on the brand side.

Every investor.

Yes.

According to our plan.

So, yes, I would say, it's the culmination, but first driven by by the pickup in demand that we saw in most of European market.

On your second question length of stay.

So it has slightly increased in all the segments Americas and developed.

Compared to 2019.

Average booking value of has also increased in both segments, but not as much.

But I think there are a lot of mix affecting the most notably destination and trip type shifts.

Any of the hard to predict how this could look like in the post pandemic world.

And.

In the end I believe the supply and pricing will be relative relevant once travel has normalized and there I do not expect tectonic shifts.

It will be interesting to see how people change the trove of behavior of outside of the peak summer travel season.

That's something to be seen.

And I don't know top of gas came.

Up with more flexible work conditions it could be the people traveling more frequently and combine it with look but again I think it's too early to see of meaningful meaningful shift there yet.

Makes sense. Thanks.

Yes.

Thanks to all of it.

Thank you and the next question comes from the line of.

Brian Fitzgerald from Wells Fargo. Please ask your question. Your line is now open.

I just wanted to ask a little bit about something on.

Local activities.

Because they're the kind of show rather than kind of corporate operations and end with the release of the new U K version wondering if you could talk a little bit of.

Now you may be able to get the cause consumers to come back to Drago. After the initial lodging booking either when they're closer to the travel dates or in destination or choosing activities while there.

And then what level of cross seller penetration are you seeing now.

<unk> had in terms of activities and where do you want that to get to.

Longer term.

Yeah.

Thanks for the question. So I think the first of all of it is important to say that we are and we've just launched yes. So we have limited insight.

But strategically.

And also from a use of value proposition, we think the product is very exciting because it allows you.

And the local travel product to have more reasons to travel.

So what are the reasons to travel static late to the go to a certain place, but then also looking forward what our time.

Sensitive reasons of travel what are sort of concerts exhibitions et cetera out of certain destinations that are very.

Very good reasons to travel to a certain place at a certain point in time and with our local travel product, we want to inspire travel as well as generate the booking and so that's why we.

Time of very important feature.

But you can also use the same feature of without even traveling and they are from from a user value proposition, but also for us the.

Baked benefit is obviously that you can use the product a lot more often it is basically relevant every week.

To be.

To be fair I mean, we we don't have a complete catalog of activities yet it is the starting point and we will continuously at activities that make it more and more relevant.

Therefore, I think it's a better early to tell of what exactly the cross usage well pay but.

But we think it's highly relevant.

It's very useful to.

We think it's us.

Got it and then maybe 1 follow up if I could.

It it's just the.

The the kind of favorable ROE as youre seeing on the 2 year stack.

<unk>.

Wondering if you could share your expectations for how that might trend as the environment normalizes.

As you know in the back half of the year are you seeing any structural changes in the market that would benefit you realize on a sustainable basis.

Any changes to Google.

Google stuff they've done the meta search of anything that is going to give you kind of beneficial.

ROE as a.

Tailwind on a sustainable basis.

Yeah sure so first of all of them.

We said that we will invest into the recovery by ramping up the television online video and other brand campaigns and that is what we started in May and continued in June and July and this naturally leads to lower Ros competitively.

Third to periods, where you significantly reduce your brand marketing investment.

Going into Q4 this year, we would balance of our marketing spend mix again as we have always done historically with the lower sales planned spend.

On the performance marketing side of course the approach.

The approach has not really changed so we continue to invest.

Net long term sustainable ROI targets.

Overall, we expect growth towards the convention the decline in Q3 was Q2 and then to increase again in Q4.

So what that what that means.

For the next day.

I mean on the brand marketing side usually.

Together after the summer season and reflect on the results and.

The plan the next year. So right now it is very interesting to run different campaigns in many markets, we get a ton of learnings and we will incorporate that into our brand marketing strategy for next year.

But again, it's too early to tell if anything.

<unk>.

What I can say already is that we got some some nice learnings and online video in particular in the U S.

So that could potentially be play play a bigger role in our mix.

And on the.

<unk> marketing side.

I think again, the we don't see big.

Changes.

We increased our eye targets already before the pandemic and have seen good results and so far I'm very happy with how we manage through the crisis.

The teams have really done an excellent job there so.

I mean, I wouldn't foresee any big changes at this point.

Got it.

Thanks Axel of expertise.

Thank you.

Thank you and the next question comes from the line of Sean <unk> from <unk>. Please ask your question. Your line is now open.

Hey, guys, it's Ryan on for from.

Just 2 quick ones from me.

First on advanced booking window.

When does all of our booking windows are changing in markets, where travelers coming back, but that sort of an indicator of demand or leading or lagging indicator.

And then secondly on brand marketing.

You just pointed out to be a relatively temporary pickup in 3 here are you planning on sort of validating that.

And just hoping to capture demand I think of.

He needs to come back throughout the next several quarters.

Sure, yes, so on booking windows.

They have not changed significantly in Americas, and Europe going into the peak summer season on our platform at least.

And the rest of the world on the other hand, the booking window has shortened.

Pitt.

But I think that it's more of the result of the overall drop in volumes and travel restriction.

And all compared to 2019.

We have seen in that segment.

On the brand marketing side.

I mean for the rest of the <unk> is as I said we.

Quite a bit in the middle of the peak season right now so that is when we invest we started to gradually increase our investment.

As of early June and.

We'll continue.

Throughout the third quarter and the normally.

What we do when we go into autumn and winter.

We reduced and we will do that this year as well.

The 2 main reasons for that 1 is.

Net overall volumes.

Normally go down and as I said before.

It could be given the restrictions and uncertainty that the.

<unk>.

Even true.

A lot of extent than what we have seen historically and then secondly.

For all of our largest brand trend of the TV normally going into October November December.

Pricing gets more expensive.

For the crisp.

Christmas season a.

And retailer <unk>.

<unk> TB and driving up prices.

At the time when the seasonal demand is at the low so that I wouldn't foresee any change and then.

What we will do.

Getting out of coming out of the year and going into January next year, that's something.

We will discuss.

In the next couple of weeks and months.

Great. Thanks.

Okay. Thank.

Thank you and the next question comes from the line of James Lee from Me to please ask your question. Your line is now open.

Great. Thanks for taking my questions on the.

A lot of toward the latter of you guys talk about a mix shift towards the hotels versus the alternative accommodation can you maybe elaborate or even quantify that mix shift and which region are you seeing the most impact and also secondly, the big picture.

Question as you kind of evaluate your product.

Portfolio, which products do you want to double down and which products do you want to rationalize the part of your long term goal to transition your business into a more more of lots of content discovery.

The business that drive top of the funnel advertising instead of just relying on transaction.

Sure.

Thanks.

So first question on the accommodation of mix at.

Last year, we've seen a very significant shift towards alternative accommodation and I think we've talked about it.

And lengths, while we are seeing this year is.

Average with the market recovering further that that shift towards alternative accommodation is partially.

Reverting not to the starting point that we've seen in 2019, but somewhere in between which also makes sense because hotel capacity can be added much more quickly.

And.

But the with.

The higher level of recovery in many many markets the.

The destination mix is also becoming a bit more normal than pre pandemic levels.

Having said that we do believe that the the longer term trends.

Towards the alternative accommodation will continue even out.

When they make but not to the to the same extent as disruptive at it might've seemed in last summer season.

On your second question on all of our product.

The product strategy on product focus I mean, we've been for many many many years of single product company just.

After the hotel price comparison.

And we've only relatively speaking recently with alternative accommodation in November 2017.

And then with some of the new of products really.

<unk> last year added more and more products.

Our general belief is that.

It is important to really serve all of our customers.

For various different needs that are all centered around travel rather than just 1 very specific which is what we used to do in the past and by doing that providing overall, the better service and being.

On top of everybody's mind and.

Just her engaged with all of our use us throughout the year.

So that doesn't mean that we are strategically moving at a completely and it's completely different direction. So off of pharma more inspiration it's more of.

It's all about our portfolio of products that serve the various needs of our core users.

Maury Thanks Axel.

Yes.

Thank you and the next question comes from the line of Jason Bazinet from Citi. Please ask your question. Your line is now open.

Thanks.

I have sort of an unusual question.

During the earlier this year many buy siders.

Very animated about owning any sort of reopening the stock.

And the thesis was that there would be a quarter or 2 it's sort of an overshoot you want.

Something that was above sort of the 2019 run rate just as all of this sort of pent up demand kind of unleashed.

And more recently I've heard from some clients if they're nervous.

Which of the demand in some markets might be so strong that the hotels themselves.

No need of the Otas and therefore meta search less because of the demand is so strong in some markets. Do you think that thesis has any credence or is that just sort of a little bit not not consistent with what youre seeing them in the real world.

That that is there's a very good question.

The the answer is not that straightforward.

The the.

Demand patterns are.

Still not even yeah. So the as of last summer you've got.

Leisure destinations at the beach in the mountains with significantly greater demand.

Since then.

The city of destinations Big cities.

So.

In the in the leisure destinations the demand is very strong whether that leads overall to a shift in the market dynamics I I would be skeptical of whether that were to be true.

Because it's a very special.

The situation, but I wouldn't rule out that some individual hotels.

Are focusing more on their on their own efforts, but I don't see.

The key Jake shift.

And the and the distribution structure in the market.

Understood. Thank you.

Thank you and the next question comes from the line of Kevin Kopelman from Cowen. Please ask your question. Your line is now open.

Great. Thank you so much.

Just had 1 question could you can you discuss.

What youre seeing from advertisers bid intensity as it relates to what you.

I believe they're seeing in downstream conversion.

Maybe just talk about how that has compared to before the pandemic now that's developed.

Yeah. So.

On the on the auction dynamics.

We've seen this quarter a significant improvement.

And the overall auction dynamics really driven by <unk>.

By of broadly more optimistic you are about the summer and then also obviously about the potential cancellation risk.

So it has really been very broad across all of our long of your partners.

And the result of that hasn't.

This has been a significant improvement in the auction.

How that would compare to pre pandemic.

That's very difficult to answer to be perfectly honest some of what we can say is that the trend in the last couple of months has been very positive and there is generally speaking a lot more optimism in particular for.

For summer of there was a lot of optimism, but as we've also said I mean are all of you is that there is some risk and in the autumn and winter coming.

And I wouldn't be surprised if.

If some of our advertisers would have a similar view.

And just to add to that.

As you know Kevin.

We have no grades of visibility.

On the cancellation rates is that flow.

That would impact or advertisers conversion.

But a good proxy for US is looking at our CPC bids in the auction and unless there's a large shift in conversion a lot of targets all advertisers the other mixes.

The CPC boots are good indicators.

<unk> for current and expected cancellation rate and as I said, we have seen a gradual improvement in CPC bids.

Throughout the second quarter and that is reflected in the optics of you also of the trends I talked about and what you can see from our disclosure the improvement there.

Thanks.

Potentially coming of potentially also related to that.

So just looking at this I would assume that cancellation rates have come down overall sequentially.

Sequentially.

Thanks for the TSA exact so that's very helpful.

Thanks, Kevin.

Thank you and the next question comes from the line.

1 of Duck Amas from Jpmorgan. Please ask your question. Your line is now open.

Hi, This is state of the Ultra day, thanks for taking the questions I have 2 first 1 just talk a bit more about your brand marketing diversification efforts.

But the nurses are you seeing in this new channel then.

Those.

He will approach T moving forward.

And then secondly, the.

You talked about.

The <unk> back on the services that you're piloting with multiple partners. Once the service are you providing.

Non why did you decided to go down.

Ralph.

Yes.

Chip I will take the first question.

So I mean overall.

We do not disclose all of the tenant mix and what we're thinking of there, but on a higher level I mean brand marketing.

As we said in the past very focused on television.

TV is the.

Our largest channel in that segment.

We will continue to invest in that.

At the same time.

We started to not only this year, but last year and the year before side of the smaller test an alternative brand in China.

Obviously, a big 1 being online video.

And then we scale this up.

This year more than last year, and we talked about the before the key reason being that when.

When you when you're in the the first phase of the recovery in the full market is not back yet.

The TV as a mass medium can be quite expensive and then we want to be more targeted and that you can achieve with online video.

And that's what we have done the obviously other interesting aspects as well like.

Different demographics different target groups.

Things you cannot easily do on TV you can do.

Maybe better on other tenants.

On the other hand, obviously you have to look at the pricing as well have to look at conversion and how that translate then longer term into repeat behavior.

That is obviously, something we where we need to get more data and need to do more tests.

We are happy with what we're seeing so far.

Yeah.

Yeah on your on your second question.

I mean like with our <unk> products. We we are we are looking at the market and trying to identify.

<unk> Fi customer needs and on the <unk> side, what we've seen last.

Here is that with the significant drop in volumes there.

We think that of new opportunity arose.

While on the 1 side a lot of travel companies have seen that their volume dropped quite a bit and it was increasingly difficult using own infrastructure to provide a good service to their own use us by.

The <unk> prices.

Fresh fresh content refresh of availabilities available.

Without them.

Private of costs and maintaining the infrastructure on the other hand of lot of advertisers.

We're also increasingly struggling with maintaining marketing.

In channels that were becoming too small because if you drop below a certain volume of data. It is very very difficult to submit the precise bits and bits that are not multi factor random. So we saw that opportunity and thought that we could actually step into into this.

This opportunity and provide a service where everybody.

Body is winning the the <unk>.

<unk> websites that get much more accurate price and much fresher availabilities and rates.

The advertisers by not having to manage multiple platforms that are subscale, but basically leveraging our scale and our infrastructure and our connectivity.

And the us by by providing a service that is an alternative revenue stream.

Is it.

It is.

If it's more diversified from all of our core business and follow the very different logic. So we started to work on that opportunity last year and we now have the first partners.

And testing.

It's like with the with a lot of the other things that we talked about it's a it's very exciting we are very very excited about it but it's a bit too early to tell and to to estimate how big and how successful this new product line could be but it is obviously a great moment to half of product life.

Like at re the customer angry world feedback.

Okay. Thanks, Nick.

So.

Thanks day.

Thank you and our net.

Next question comes from the line of Tom White from Davidson. Please ask your question. Your line is now open.

Oh, great. Thank.

Thank you for taking my questions I guess first off maybe a follow up to the question about auction dynamics and cash.

Insulation grades I remember a couple of quarters ago, you guys talked about exploring kind of of our cost per acquisition per.

Product.

The that's factored in cancellation and I was curious.

And whether that's still the focus in and whether that's giving you any insight into.

Kind of trends in cancellation rates and then a second.

The the different products that you guys have talked about over the last several months in terms of trying to diversify the business of it so sponsored listings display.

Tours and activities maybe this new.

The b to B thing.

Any sense of like what percentage of of revenues you know that that is sort of in total of those might come to represent you know and in 12.18 24 months. Thank.

Thank you.

Yeah.

Sure on the auctions.

The dynamics, we do offer.

Across C. P. I automated bidding feature to all of our partners that is not factoring constellations, but but it's basically invoicing not by click bought by gross bookings and we do have a product for individual hotels that is actually.

Invoicing on a net CPA basis, and so which was recently launched and and is currently basically in testing in terms of scale.

So again, it's it's it's a bit too early to tell what the real impact is on <unk> of the net C. P. A product for individual hotels the cross.

In a product for our larger partners is very popular with and particularly the smaller smaller partners.

Whereas the big partners have their own algorithms and day on bidding teams and preferred to bid on their own but for the out of our of medium size and smaller partners. It is it's a great service and then the feedback is very positive.

Rossi of people on the alternative revenue streams.

It is a way of making making good progress. So we are we are signing up more and more partners as I also mentioned in my opening remarks.

But it it's the new business are there we have to be honest to ourself and and we have a very very sizable.

The bowl of core business. So it will take some time for these new activities to make up a significant share of overall revenue.

But we are certainly excited about it and think that it is important for us to diversify away.

Away from our core revenue streams and and be less.

That's dependent on the pure of CPC auction.

Thank you.

And the next question comes from the line of Brian Nowak from Morgan Stanley. Please ask your question. Your line is now open.

Hi.

Brian Thanks for taking the question.

On the on the revenue stream.

Got it.

Yeah.

The Boston.

Yeah.

On the conferences.

At the end of true.

Part of the progress made here, but think of.

The net.

12 in the.

Yeah.

Right.

Yeah.

Great.

World.

No.

So as the you're breaking up there we can Alex some of it.

You're breaking up the we can barely hear you I mean, I guess you are you asking about the.

The.

The new products display ads and the sponsored listings and but I couldn't understand your question.

Yes.

Okay.

So let me let me I think you were asking about the outlook for the next 12 months so that.

Try to answer that question.

So we are in the way there there are 2 directions in 2 levers 1 is.

Do you have new advertisement.

Blacks for existing partners.

Onboard of the partners to the products get them up the learning curve experiment with the products.

On the bright them that that is what we are doing right now and and we see that the benefit is complementary to our existing core product because of the date the product allows some messaging.

On the web side, which our core product doesn't that that's purely transactional but the the more exciting part in and that's I.

<unk> and correlated to what Youre after them what is the outlook. We are also on boarding completely new partners.

Net are not in the core of travel segment, but more travel related and we've on boarded a.

The significant number of the D M O's.

That is quite exciting because they are going.

More in cycles, where you onboard and secure a bunch of that is then.

Used over the next month and then in some cases, even even over the next year.

And that that is the segment where in the past we of non managed to make significant inroads and end right now.

We actually have signed up a significant number of the EMS already so so that's very exciting and promising again in the current market environment. It is almost impossible to forecast of what would happen in the next 12 months because it's not the only the volume complexity, but also the the mix in destinations.

Some of the restrictions that can have a huge impact.

On on certain campaigns by our partners and then not and not each 1 of our partner is is benefiting and also hit by by a surge in travel and buy a restriction in travel at the same to the same extent.

So.

<unk>, we are we're taking a pragmatic approach there we are working on these initiatives and trying to get better every day and some of them would have a greater impact of it sooner and some of it later.

But I think that that's all we can do in the highly volatile environment.

Okay.

Yeah.

So.

Okay.

Thank you.

You still wish to ask a question. Please press star 1 on your telephone keypad.

And wait for your name to be announced.

Yeah.

There are no further questions at this point of.

<unk> for closing remarks.

Many thanks for taking the time to participate in today's earnings call.

As we look forward I want to reiterate how proud I am of what our company and our employees of achieved in this unprecedented time.

Travelers in the central part of our lives, it's not going away, but it will look different than what.

But we have seen what we have been used to.

We're thinking about our business beyond Covid and remained focus on building a product that would be part of our users' daily lives.

We will emerge from this as a stronger company.

Agile and we'll adapt for the long run.

Before I close I would like to say a few words about the catastrophic floods that have hit us in the past few weeks.

My hometown has been completely flooded many villages and whole regions have been wiped out.

Despite all of the tragedy.

D and the suffering from this disaster, we should also see this as a warning sign.

What are our future will look like if we individually as businesses and the societies don't change our behavior.

I wish you the safe and enjoyable rest of the summer and look forward to speaking you next quarter.

Thank you. This concludes today's conference call. Thank you for participating you may all disconnect speakers. Please standby.

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