Earnings call transcript: Trip.com posts robust Q1 2025 growth, eyes AI expansion

Trip.com Group (TCOM) reported robust Q1 2025 financial results, with net revenue increasing 16% year-over-year to RMB 13.8 billion and diluted EPS reaching RMB 6.09 (US$0.84), driven by strong performance in accommodation (up 23%) and transportation (up 8%) segments. The company's strategic integration of AI has significantly boosted user engagement, evidenced by a 50% increase in user session duration for its AI agent, TripGenie, and AI chatbots handling over 80% of inquiries. TCOM also saw a 100% surge in inbound travel bookings, supported by favorable visa policies and expansion into new markets, positioning the stock as potentially undervalued with a strong buy consensus among analysts. Management remains optimistic about continued growth, citing resilient travel demand and ongoing efforts to enhance shareholder value through a share repurchase program.

Analysis

Trip.com Group (TCOM) reported a strong first quarter for 2025, demonstrating robust growth and strategic execution. Net revenue increased 16% year-over-year to 13.8 billion RMB, with diluted EPS at 6.09 RMB, driven by significant outperformance in its core segments. The accommodation division grew 23% YoY, contributing 5.5 billion RMB, while transportation revenue rose 8% to 5.4 billion RMB. A key highlight is the explosive growth in inbound travel, with bookings surging approximately 100% YoY, directly benefiting from China's visa-free policies. Concurrently, the company's international OTA platform bookings grew over 60% YoY, and outbound travel bookings surpassed pre-pandemic levels by over 120%. Management has identified artificial intelligence as a cornerstone of its strategy, evidenced by a 50% increase in user session duration for its TripGenie AI agent and over 80% of customer inquiries being handled by AI chatbots. The company maintains a strong financial position with an 81.06% gross profit margin and has initiated a share repurchase program, buying back US$84 million, signaling confidence in its outlook, which is further supported by a strong buy consensus from analysts.

Key Decisions for Investors

• Given the 16% revenue growth, strong performance in key segments, and a potentially undervalued stock price according to the report's analysis, investors may view the current levels as an attractive entry point.
• Investors should monitor the continued momentum in inbound travel, as its 100% YoY growth rate serves as a primary catalyst fueled by supportive government policies.
• The successful integration of AI, which has already boosted user engagement by 50% and improved operational efficiency, should be considered a key long-term value driver that differentiates the company from competitors.
• The active share repurchase program and management's commitment to capital returns provide a layer of support for the stock and signal strong internal confidence in future performance.