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Published: 2022-09-22 06:05:08 ET
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EX-99.1 2 d395109dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

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

Shanghai, China, September 22, 2022—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 second quarter and first half of 2022.

Key Highlights for the Second Quarter of 2022

The Company delivered resilient results in the second quarter despite the continued disruptions resulting from the COVID-19 resurgence in China.

 

   

Net income for the second quarter was RMB43 million (US$6 million), which improved from net loss of RMB1.0 billion for the previous quarter.

 

   

Adjusted EBITDA for the second quarter was RMB355 million (US$53 million), representing a 290% increase from RMB91 million for the previous quarter,

 

   

Staycation travel continued to serve as a major contributor to the recovery of the Chinese domestic market, with local hotel bookings increasing by over 30% compared to the same period in 2019.

 

   

Both air-ticket and hotel bookings on global platforms increased over 100% year over year in the second quarter.

“In the second quarter, the global travel industry has made continued progress towards full recovery. The recovery momentum in Europe and the United States remained robust, and the rebound of travel activities in the Asia-Pacific region also sped up due to further relaxation of travel restrictions,” said James Liang, Executive Chairman. “With our product innovation and service enhancement, we are confident in further strengthening our competitive position and capturing the pent-up demand. “

“Despite the challenges in the China domestic market in the first two months of the second quarter, the fundamental demand for travel remained solid. We are delighted to see the domestic hotel bookings quickly bouncing back to the pre-pandemic level at the end of the second quarter with such momentum extended into the following months.” said Jane Sun, Chief Executive Officer. “We will continue to improve our operating efficiency and conduct prudent cost control in the face of the changing environment. All these efforts will enable us to remain flexible and pave the way for long-term growth.”

Second Quarter of 2022 Financial Results and Business Updates

In the second 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 second quarter of 2022 were materially and adversely affected.

For the second quarter of 2022, Trip.com Group reported net revenue of RMB4.0 billion (US$598 million), representing a 32% decrease from the same period in 2021 and a 2% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.


Accommodation reservation revenue for the second quarter of 2022 was RMB1.4 billion (US$203 million), representing a 45% decrease from the same period in 2021 and a 6% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

Transportation ticketing revenue for the second quarter of 2022 was RMB1.8 billion (US$263 million), representing a 15% decrease from the same period in 2021, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China. Transportation ticketing revenue increased by 6% from the previous quarter, primarily driven by strong recovery of air travel in the overseas market.

Packaged-tour revenue for the second quarter of 2022 was RMB122 million (US$18 million), representing a 67% decrease from the same period in 2021 and a 2% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

Corporate travel revenue for the second quarter of 2022 was RMB210 million (US$31 million), representing a 46% decrease from the same period in 2021 and a 5% decrease from the previous quarter, primarily due to the continued disruptions resulting from the COVID-19 resurgence in China.

Cost of revenue for the second quarter of 2022 was RMB976 million (US$146 million), representing a 20% decrease from the same period in 2021, which was in line with the decrease in net revenue. Cost of revenue decreased by 9% from the previous quarter. Cost of revenue as a percentage of net revenue was 24% for the second quarter of 2022.

Product development expenses for the second quarter of 2022 decreased by 20% to RMB1.8 billion (US$264 million) from the same period in 2021 and decreased by 10% 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 44% for the second quarter of 2022.

Sales and marketing expenses for the second quarter of 2022 decreased by 41% to RMB826 million (US$123 million) from the same period in 2021 and decreased by 2% 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 second quarter of 2022.

General and administrative expenses for the second quarter of 2022 decreased by 15% to RMB604 million (US$90 million) from the same period in 2021, primarily due to a decrease in general and administrative personnel related expenses. General and administrative expenses increased by 3% from the previous quarter. General and administrative expenses as a percentage of net revenue was 15% for the second quarter of 2022.

Income tax expense for the second quarter of 2022 was RMB173 million (US$26 million), compared to income tax expense of RMB97 million for the same period in 2021 and income tax benefit of RMB14 million in the previous quarter. The change in Trip.com Group’s effective tax rate was primarily due to the combined impacts of changes in respective profitability of its 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 income for the second quarter of 2022 was RMB43 million (US$6 million), compared to net loss of RMB659 million for the same period in 2021 and net loss of RMB1 billion for the previous quarter. Adjusted EBITDA for the second quarter of 2022 was RMB355 million (US$53 million), compared to RMB916 million for the same period in 2021 and RMB91 million for the previous quarter. Adjusted EBITDA margin was 9% for the second quarter of 2022, compared to 16% for the same period in 2021 and 2% for the previous quarter.

Net income attributable to Trip.com Group’s shareholders for the second quarter of 2022 was RMB69 million (US$10 million), compared to net loss attributable to Trip.com Group’s shareholders of RMB647 million for the same period in 2021 and net loss attributable to Trip.com Group’s shareholders of RMB989 million for the previous quarter. Excluding share-based compensation charges, fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense) and their tax effects, non-GAAP net loss attributable to Trip.com Group’s shareholders was RMB203 million (US$31 million), compared to non-GAAP net income attributable to Trip.com Group’s shareholders of RMB728 million in the same period in 2021 and non-GAAP net loss attributable to Trip.com Group’s shareholders of RMB36 million for the previous quarter.

Diluted income per ordinary share and per ADS was RMB0.10 (US$0.01) for the second quarter of 2022. Excluding share-based compensation charges, fair value changes of equity securities investments and exchangeable senior notes and their tax effects, non-GAAP diluted loss per ordinary share and per ADS was RMB0.31 (US$0.05) for the second quarter of 2022. Each ADS currently represents one ordinary share of the Company.

As of June 30, 2022, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB65.6 billion (US$9.8 billion).

Conference Call

Trip.com Group’s management team will host a conference call at 8:00 PM EST on September 21, 2022 (or 8:00 AM CST on September 22, 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://register.vevent.com/register/BIe6a1088f8c3f4a77a18a7d5b03d2bc2e

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


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, fair value changes of equity securities investments and exchangeable senior notes and their tax effects 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      June 30, 2022      June 30, 2022  
   RMB (million)      RMB (million)      USD (million)  

ASSETS

        

Current assets:

        

Cash, cash equivalents and restricted cash

     21,196        22,959        3,427  

Short-term investments

     29,566        30,721        4,587  

Accounts receivable, net

     4,649        5,445        813  

Prepayments and other current assets

     10,697        10,778        1,609  

Total current assets

     66,108        69,903        10,436  

Property, equipment and software

     5,534        5,307        792  

Intangible assets and land use rights

     13,046        12,929        1,931  

Right-of-use assets

     777        925        138  

Investments (Includes held to maturity time deposit and financial products of RMB13,112 million and RMB11,891 million as of December 31,2021 and June 30, 2022, respectively)

     44,961        44,075        6,580  

Goodwill

     59,353        59,326        8,857  

Other long-term assets

     396        398        60  

Deferred tax asset

     1,684        1,765        263  

Total assets

     191,859        194,628        29,057  

LIABILITIES

        

Current liabilities:

        

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

     39,866        36,203        5,405  

Accounts payable

     6,019        6,745        1,007  

Advances from customers

     7,535        7,822        1,168  

Other current liabilities

     12,798        11,926        1,781  

Total current liabilities

     66,218        62,696        9,361  

Deferred tax liability

     3,527        3,491        521  

Long-term debt

     11,093        17,402        2,598  

Long-term lease liability

     400        591        88  

Other long-term liabilities

     165        170        25  

Total liabilities

     81,403        84,350        12,593  

SHAREHOLDERS’ EQUITY

        

Total Trip.com Group Limited shareholders’ equity

     109,677        109,542        16,354  

Non-controlling interests

     779        736        110  

Total shareholders’ equity

     110,456        110,278        16,464  

Total liabilities and shareholders’ equity

     191,859        194,628        29,057  

 

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Trip.com Group Limited

Unaudited Consolidated Statements of Income/(Loss)

(In millions, except share and per share data)

 

     Three Months Ended     Six Months Ended  
   June 30, 2021     March 31, 2022     June 30, 2022     June 30, 2022     June 30, 2021     June 30, 2022     June 30, 2022  
   RMB (million)     RMB (million)     RMB (million)     USD (million)     RMB (million)     RMB (million)     USD (million)  

Revenue:

              

Accommodation reservation

     2,455       1,450       1,357       203       4,035       2,807       419  

Transportation ticketing

     2,066       1,663       1,763       263       3,572       3,426       512  

Packaged-tour

     367       124       122       18       536       246       37  

Corporate travel

     390       222       210       31       642       432       64  

Others

     614       652       564       84       1,216       1,216       181  

Total revenue

     5,892       4,111       4,016       599       10,001       8,127       1,213  

Less: Sales tax and surcharges

     (2     (2     (5     (1     (3     (7     (1

Net revenue

     5,890       4,109       4,011       598       9,998       8,120       1,212  

Cost of revenue

     (1,223     (1,067     (976     (146     (2,257     (2,043     (305

Gross profit

     4,667       3,042       3,035       452       7,741       6,077       907  

Operating expenses:

              

Product development *

     (2,226     (1,974     (1,772     (264     (4,451     (3,746     (559

Sales and marketing *

     (1,402     (843     (826     (123     (2,354     (1,669     (249

General and administrative *

     (713     (584     (604     (90     (1,397     (1,188     (178

Total operating expenses

     (4,341     (3,401     (3,202     (477     (8,202     (6,603     (986

Income/(Loss) from operations

     326       (359     (167     (25     (461     (526     (79

Interest income

     472       591       544       81       890       1,135       169  

Interest expense

     (418     (341     (351     (52     (825     (692     (103

Other (expense)/income

     (848     (707     469       70       1,660       (238     (35

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

     (468     (816     495       74       1,264       (321     (48

Income tax (expense)/benefit

     (97     14       (173     (26     (138     (159     (24

Equity in loss of affiliates

     (94     (199     (279     (42     (20     (478     (71

Net (loss)/income

     (659     (1,001     43       6       1,106       (958     (143

Net loss attributable to non-controlling interests

     12       12       26       4       27       38       6  

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

     (647     (989     69       10       1,133       (920     (137

(Losses)/Earnings per ordinary share

              

- Basic

     (1.02     (1.52     0.10       0.01       1.76       (1.42     (0.21

- Diluted

     (1.02     (1.52     0.10       0.01       1.73       (1.42     (0.21

(Losses)/Earnings per ADS

              

- Basic

     (1.02     (1.52     0.10       0.01       1.76       (1.42     (0.21

- Diluted

     (1.02     (1.52     0.10       0.01       1.73       (1.42     (0.21

Weighted average ordinary shares outstanding

              

- Basic

     635,476,056       647,812,835       647,866,001       647,866,001       644,666,248       647,843,829       647,843,829  

- Diluted

     635,476,056       647,812,835       650,906,465       650,906,465       656,483,984       647,843,829       647,843,829  

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

 

       

Product development

     181       107       146       22       332       253       38  

Sales and marketing

     34       18       28       4       56       46       7  

General and administrative

     151       98       130       19       272       228       34  

 

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Trip.com Group Limited

Unaudited reconciliation of GAAP and Non-GAAP Results

(In millions, except % and per share data)

 

     Three Months Ended     Six Months Ended  
     June 30, 2021     March 31, 2022     June 30, 2022     June 30, 2022     June 30, 2021     June 30, 2022     June 30, 2022  
     RMB (million)     RMB (million)     RMB (million)     USD (million)     RMB (million)     RMB (million)     USD (million)  

Net (loss)/income

     (659     (1,001     43       6       1,106       (958     (143

Less: Interest income

     (472     (591     (544     (81     (890     (1,135     (169

Add: Interest expense

     418       341       351       52       825       692       103  

Add: Other expense/(income)

     848       707       (469     (70     (1,660     238       35  

Add: Income tax expense/(benefit)

     97       (14     173       26       138       159       24  

Add: Equity in loss of affiliates

     94       199       279       42       20       478       71  

Income/(Loss) from operations

     326       (359     (167     (25     (461     (526     (79

Add: Share-based compensation

     366       223       304       45       660       527       79  

Add: Depreciation and amortization

     224       227       218       33       501       445       66  

Adjusted EBITDA

     916       91       355       53       700       446       66  

Adjusted EBITDA margin

     16     2     9     9     7     5     5

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

     (647     (989     69       10       1,133       (920     (137

Add: Share-based compensation

     366       223       304       45       660       527       79  

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

     1,053       785       (668     (100     (1,314     117       17  

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

     (44     (55     92       14       45       37       6  

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

     728       (36     (203     (31     524       (239     (35

Weighted average ordinary shares outstanding- Diluted-non GAAP

     645,021,131       647,812,835       647,866,001       647,866,001       656,483,984       647,843,829       647,843,829  

Non-GAAP Diluted income/(losses) per share

     1.13       (0.06     (0.31     (0.05     0.80       (0.37     (0.06

Non-GAAP Diluted income/(losses) per ADS

     1.13       (0.06     (0.31     (0.05     0.80       (0.37     (0.06

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=RMB6.6981 on June 30, 2022 published by the Federal Reserve Board.

 

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