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Published: 2021-07-29 00:00:00 ET
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trvg-20210630
Three months ended June 30,Six months ended June 30,
2021202020212020
(1) Includes share-based compensation as follows:
Cost of revenue€71 €70 €121 €120 
Selling and marketing299 345 525 677 
Technology and content1,065 1,146 1,729 2,181 
General and administrative3,461 2,625 5,640 4,709 
Three months ended June 30,Six months ended June 30,
2021202020212020
(2) Includes amortization as follows:
Amortization of internal use software costs included in selling and marketing€31 €50 €63 €100 
Amortization of internal use software and website development costs included in technology and content1,167 992 2,320 1,922 
Amortization of internal use software costs included in general and administrative86 161 171 325 
Amortization of acquired technology included in amortization of intangible assets68 36 68 72 
Three months ended June 30,Six months ended June 30,
2021202020212020
(3) Includes related party expense as follows:
Cost of revenue€— €— €— €— 
Selling and marketing52 31 73 88 
Technology and content13 13 27 85 
General and administrative— (204)— 22 
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Exhibit 99.3

trivago N.V.
Unaudited Condensed Consolidated Interim Financial Statements as of June 30, 2021

1


trivago N.V.
Condensed consolidated statements of operations
(€ thousands, except per share amounts, unaudited)
Three months ended June 30,Six months ended June 30,
2021202020212020
 Revenue€75,337 €13,591 €105,946 €106,880 
 Revenue from related party20,137 2,541 27,754 49,055 
 Total revenue95,474 16,132 133,700 155,935 
 Costs and expenses:
Cost of revenue, including related party, excluding amortization (1)
2,961 2,654 5,547 5,468 
Selling and marketing, including related party (1)(2)(3)
71,366 12,847 94,703 124,224 
Technology and content, including related party (1)(2)(3)
13,753 18,293 26,393 35,909 
General and administrative, including related party (1)(2)(3)
10,189 9,019 18,704 24,324 
Amortization of intangible assets (2)
68 36 68 361 
Impairment of goodwill— — — 207,618 
Operating loss(2,863)(26,717)(11,715)(241,969)
Other income/(expense)
Interest expense (146)(59)(202)(105)
Other, net (274)(274)632 (598)
Total other income/(expense), net (420)(333)430 (703)
Loss before income taxes (3,283)(27,050)(11,285)(242,672)
Expense/(benefit) for income taxes 6 (6,913)(1,256)(8,035)
Loss before equity method investment(3,289)(20,137)(10,029)(234,637)
Income/(loss) from equity method investment— (21)— 213 
Net loss€(3,289)€(20,158)€(10,029)€(234,424)
Earnings per share available to common stockholders:
Basic€(0.01)€(0.06)€(0.03)€(0.66)
Diluted(0.01)(0.06)(0.03)(0.66)
Shares used in computing earnings per share:
Basic357,582 353,133 356,726 352,953 
Diluted357,582 353,133 356,726 352,953 
2


Three months ended June 30,Six months ended June 30,
2021202020212020
(1) Includes share-based compensation as follows:
Cost of revenue€71 €70 €121 €120 
Selling and marketing299 345 525 677 
Technology and content1,065 1,146 1,729 2,181 
General and administrative3,461 2,625 5,640 4,709 
(2) Includes amortization as follows:
Amortization of internal use software costs included in selling and marketing€31 €50 €63 €100 
Amortization of internal use software and website development costs included in technology and content1,167 992 2,320 1,922 
Amortization of internal use software costs included in general and administrative86 161 171 325 
Amortization of acquired technology included in amortization of intangible assets68 36 68 72 
(3) Includes related party expense as follows:
Selling and marketing€52 €31 €73 €88 
Technology and content13 13 27 85 
General and administrative— (204)— 22 
See accompanying notes
3


trivago N.V.
Condensed consolidated statements of comprehensive income/(loss)
(€ thousands, unaudited)
Three months ended June 30,Six months ended June 30,
2021202020212020
Net loss€(3,289)€(20,158)€(10,029)€(234,424)
Other comprehensive income/(loss):
Currency translation adjustments7 (5)(8)29 
Total other comprehensive income/(loss)7 (5)(8)29 
Comprehensive loss€(3,282)€(20,163)€(10,037)€(234,395)
See accompanying notes


4


trivago N.V.
Condensed consolidated balance sheets
(€ thousands, except share and per share data, unaudited)
ASSETSAs of
June 30, 2021		As of
December 31, 2020
Current assets:
Cash and cash equivalents€193,659 €208,353 
Restricted cash— 103 
Accounts receivable, net of allowance for credit losses of €404 and €348 at June 30, 2021 and December 31, 2020, respectively
38,181 11,642 
Accounts receivable, related party15,188 2,969 
Short-term investments9,487 19,448 
Tax receivable8,790 7,839 
Prepaid expenses and other current assets16,456 10,438 
Total current assets281,761 260,792 
Property and equipment, net17,994 26,682 
Operating lease right-of-use assets49,953 86,810 
Deferred income taxes1 1 
Other long-term assets3,445 4,399 
Intangible assets, net170,153 169,550 
Goodwill287,736 282,664 
TOTAL ASSETS€811,043 €830,898 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable€32,329 €6,755 
Income taxes payable106 102 
Deferred revenue1,814 2,750 
Payroll liabilities3,162 2,983 
Accrued expenses and other current liabilities16,360 14,934 
Operating lease liability2,247 7,188 
Total current liabilities56,018 34,712 
Operating lease liability46,405 85,979 
Deferred income taxes41,663 42,176 
Other long-term liabilities3,232 3,514 
Stockholders’ equity:
Class A common stock, €0.06 par value - 700,000,000 shares authorized, 69,259,299 and 55,967,976 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
4,155 3,358 
Class B common stock, €0.60 par value - 320,000,000 shares authorized, 288,562,967 and 298,187,967 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
173,138 178,913 
Reserves812,240 798,017 
Contribution from Parent122,307 122,307 
Accumulated other comprehensive income/(loss)(4)4 
Accumulated deficit(448,111)(438,082)
Total stockholders' equity 663,725 664,517 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY€811,043 €830,898 
See accompanying notes
5


trivago N.V.
Condensed consolidated statements of changes in equity
(€ thousands, unaudited)
Three Months Ended June 30, 2021Class A common stockClass B common stockReservesRetained earnings
(accumulated
deficit)		Accumulated other
comprehensive
income/(loss)		Contribution from
Parent		Total stockholders' equity
Balance at Balance at April 1, 2021€3,884 €175,238 €805,457 €(444,822)€(11)€122,307 €662,053 
Net loss(3,289)(3,289)
Other comprehensive income (net of tax)7 7 
Share-based compensation expense4,896 4,896 
Conversion of Class B shares209 (2,100)1,891 — 
Issued capital, options exercised62 (4)58 
Balance at June 30, 2021€4,155 €173,138 €812,240 €(448,111)€(4)€122,307 €663,725 

Six months ended June 30, 2021Class A common stockClass B common stockReservesRetained earnings
(accumulated
deficit)		Accumulated other
comprehensive
income/(loss)		Contribution from
Parent		Total stockholders' equity
Balance at Balance at January 1, 2021€3,358 €178,913 €798,017 €(438,082)€4 €122,307 €664,517 
Net loss(10,029)(10,029)
Other comprehensive loss (net of tax)(8)(8)
Share-based compensation expense8,015 8,015 
Conversion of Class B shares577 (5,775)5,198 — 
Issued capital, options exercised220 1,010 1,230 
Balance at June 30, 2021€4,155 €173,138 €812,240 €(448,111)€(4)€122,307 €663,725 

6


Three months ended June 30, 2020Class A common stockClass B common stockReservesRetained earnings
(accumulated
deficit)		Accumulated other
comprehensive
income/(loss)		Contribution from
Parent		Total stockholders' equity
Balance at Balance at April 1, 2020€3,080 €181,013 €784,556 €(406,970)€96 €122,307 €684,082 
Net loss(20,158)(20,158)
Other comprehensive loss (net of tax)(5)(5)
Share-based compensation expense4,186 4,186 
Conversion of Class B shares210 (2,100)1,890 — 
Issued capital, options exercised17 (3)14 
Balance at June 30, 2020€3,307 €178,913 €790,629 €(427,128)€91 €122,307 €668,119 

Six months ended June 30, 2020Class A common stockClass B common stockReservesRetained earnings
(accumulated
deficit)		Accumulated other
comprehensive
income/(loss)		Contribution from
Parent		Total stockholders' equity
Balance at Balance at January 1, 2020€3,049 €181,013 €781,060 €(192,704)€62 €122,307 €894,787 
Net loss(234,424)(234,424)
Other comprehensive income (net of tax)29 29 
Share-based compensation expense7,687 7,687 
Conversion of Class B shares210 (2,100)1,890 — 
Issued capital, options exercised48 (8)40 
Balance at June 30, 2020€3,307 €178,913 €790,629 €(427,128)€91 €122,307 €668,119 
See accompanying notes
7


trivago N.V.
Condensed consolidated statements of cash flows
(€ thousands, unaudited)
Three months ended June 30,Six months ended June 30,
2021202020212020
Operating activities:
Net loss€(3,289)€(20,158)€(10,029)€(234,424)
Adjustments to reconcile net loss to net cash provided by/(used in):
Depreciation (property and equipment and internal-use software and website development) 2,168 3,044 4,408 5,626 
Amortization of intangible assets 68 36 68 361 
Goodwill impairment loss— — — 207,618 
Share-based compensation 4,896 4,186 8,015 7,687 
Deferred income taxes 39 (6,281)(513)(7,422)
Foreign exchange loss/(gain)127 286 (664)(357)
Expected credit losses, net(40)(2,390)37 2,386 
(Gain)/loss on disposal of fixed assets203 83 104 84 
Gain from settlement of asset retirement obligation— (35)(5)(35)
Gain from lease termination and modification, net(128)(35)(1,311)(35)
(Income)/loss from equity method investment21 (213)
Changes in operating assets and liabilities:
Accounts receivable, including related party(31,722)51,556 (38,798)55,490 
Prepaid expenses and other assets (4,653)157 (8,802)(6,143)
Accounts payable 22,099 (17,983)25,456 (28,546)
Payroll liabilities(1,307)(1,034)170 (585)
Accrued expenses and other liabilities 1,280 5,094 2,353 5,032 
Deferred revenue(502)(1,140)(936)(1,560)
Taxes payable/receivable, net 3,371 5,962 (947)264 
Net cash provided by/(used in) operating activities €(7,390)€21,369 €(21,394)€5,228 
Investing activities:
Purchase of investments(1,351)— (1,351)(8,850)
Proceeds from sales of investments10,000 — 10,000 — 
Business acquisition, net of cash acquired— — (4,302)— 
Capital expenditures, including internal-use software and website development (734)(1,410)(1,798)(3,175)
Proceeds from sale of fixed assets12 37 72 37 
Net cash provided by/(used in) investing activities €7,927 €(1,373)€2,621 €(11,988)
Financing activities:
Proceeds from exercise of option awards58 15 1,230 40 
Repayment of other non-current liabilities(66)(68)(132)(135)
Net cash provided by/(used in) financing activities€(8)€(53)€1,098 €(95)
Effect of exchange rate changes on cash55 (124)905 (9)
Net increase/(decrease) in cash, cash equivalents and restricted cash€584 €19,819 €(16,770)€(6,864)
Cash, cash equivalents and restricted cash at beginning of the period193,417 193,860 210,771 220,543 
Cash, cash equivalents and restricted cash at end of the period€194,001 €213,679 €194,001 €213,679 
8


Three months ended June 30,Six months ended June 30,
2021202020212020
Supplemental cash flow information:
Cash paid for interest €146 €59 €196 €105 
Cash paid for taxes, net of (refunds)(3,447)(6,595)160 (889)
Non-cash investing and financing activities:
Fixed assets-related payable €— €114 €— €114 
See accompanying notes
9


trivago N.V.
Notes to the condensed consolidated financial statements (unaudited)
Note 1: Organization and basis of presentation
Description of business
trivago N.V., (“trivago” the “Company,” “us,” “we” and “our”) and its subsidiaries offer online meta-search for hotel and accommodation through online travel agencies (“OTAs”), hotel chains and independent hotels. Our search-driven marketplace, delivered on websites and apps, provides users with a tailored search experience via our proprietary matching algorithms. We generally employ a ‘cost-per-click’ (or “CPC”) pricing structure, allowing advertisers to control their own return on investment and the volume of lead traffic we generate for them. During 2013, the Expedia Group, Inc. (formerly Expedia, Inc., the "Parent" or "Expedia Group") completed the purchase of a controlling interest in the Company.
As of June 30, 2021, Expedia Group’s ownership interest and voting interest in trivago N.V. is 58.4% and 70.7%, respectively. The Class B shares of trivago N.V. held by Messrs. Schrömgens, Vinnemeier and Siewert (whom we collectively refer to as our Founders) as of June 30, 2021, had an ownership interest and voting interest of 22.2% and 26.9%, respectively.

COVID-19
Our business and operating results for 2021 continue to be negatively impacted by the COVID-19 pandemic. Our ultimate financial performance will depend on a number of factors relating to the world’s emergence from the COVID-19 pandemic, including rates of vaccination and the effectiveness of vaccinations against various mutations of the COVID-19 virus.

Basis of presentation
We have prepared the accompanying interim unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year.
Certain information and note disclosures normally included in the audited annual consolidated financial statements have been condensed or omitted in accordance with SEC rules. The condensed consolidated balance sheet as of December 31, 2020 was derived from our audited consolidated financial statements as of that date but does not contain all of the footnote disclosures from the annual financial statements. As such, these interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 20-F for the year ended December 31, 2020, previously filed with the Securities and Exchange Commission (“SEC”).

Seasonality
We experience seasonal fluctuations in the demand for our services as a result of seasonal patterns in travel. For example, absent the effect of the COVID-19 pandemic in 2020 and 2021, which has disrupted our usual seasonality trends, searches and consequently our revenue, are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. Our revenue typically decreases in the fourth quarter. We generally expect to experience higher return on advertising spend in the first and fourth quarter of the year as we typically expect to advertise less in the periods
10


outside of high travel seasons. Seasonal fluctuations affecting our revenue also affect the timing of our cash flows. We typically invoice once per month, with customary payment terms. Therefore, our cash flow varies seasonally with a slight delay to our revenue, and is significantly affected by the timing of our advertising spending. Changes in the relative revenue share of our offerings in countries and areas where seasonal travel patterns vary from those described above may influence the typical trend of our seasonal patterns in the future. It is difficult to forecast the seasonality for future periods, given the uncertainty around the duration of the impact from COVID-19 and the nature and timing of any sustained recovery.

Accounting estimates
We use estimates and assumptions in the preparation of our interim unaudited condensed consolidated financial statements in accordance with GAAP. Preparation of the interim unaudited condensed consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses during the periods reported. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our interim unaudited condensed consolidated financial statements include: leases, recoverability of goodwill, intangible assets and other long-lived assets, income taxes, legal and tax contingencies, business combinations and share-based compensation.
The COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the travel industry, which may continue to have a significant adverse effect on our business and results of operations. The uncertainty associated with COVID-19 increased the level of judgement applied in our estimates and assumptions. Our estimates may change in future periods as a result of new events arising from the COVID-19 pandemic.

Note 2: Significant accounting policies
The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements for the three and six months ended June 30, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements in our Annual Report on Form 20-F for the year ended December 31, 2020, except as updated below.

Advertising expense
We incur advertising expense consisting of offline costs, including television and radio advertising expense, online advertising expense, as well as sponsorship and endorsement expense, in order to promote our brands. A significant portion of traffic from users is directed to our websites through our participation in display advertising campaigns on search engines, advertising networks, affiliate websites and social networking sites. We consider traffic acquisition costs to be indirect advertising fees. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of communicating the advertisement (e.g., television airtime) as incurred each time the advertisement is shown. These costs are included in selling and marketing expense in our condensed consolidated statements of operations.

Adoption of new accounting pronouncements
Income Taxes. As of January 1, 2021, we have prospectively adopted ASU 2019-12, which eliminates certain exceptions in current guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for
11


income taxes. The adoption of this new guidance did not have a material impact to our unaudited condensed consolidated financial statements.
Equity Method Investments. As of January 1, 2021, we have prospectively adopted ASU 2020-01, which clarifies the interaction between the accounting for investments in equity securities, equity method investments and certain derivative instruments. The adoption of this new guidance did not have a material impact to our unaudited condensed consolidated financial statements.

Certain risks and concentration of credit risk
Our business is subject to certain risks and concentrations including dependence on relationships with our advertisers, dependence on third-party technology providers, and exposure to risks associated with online commerce security. Our concentration of credit risk relates to depositors holding our cash and customers with significant accounts receivable balances.
Our customer base includes primarily OTAs, hotel chains and independent hotels. We perform ongoing credit evaluations of our customers and maintain allowances for potential credit losses. We generally do not require collateral or other security from our customers.
Expedia Group, our controlling shareholder, and its affiliates represent 21% and 21% respectively, of total revenues for the three and six months ended June 30, 2021, compared to 15% and 31%, respectively, in the same periods in 2020. The Expedia Group represent 28% and 20% of total accounts receivable as of June 30, 2021 and December 31, 2020, respectively.
Booking Holdings and its affiliates represent 59% and 57%, respectively of total revenues for the three and six months ended June 30, 2021, compared to 46% and 39%, respectively, in the same periods in 2020. Booking Holdings and its affiliates represent 47% and 47% of total accounts receivable as of June 30, 2021 and December 31, 2020, respectively.

Restricted cash
As of June 30, 2021 and December 31, 2020, restricted cash was €0.3 million and €2.4 million, respectively. From the total balance as of June 30, 2021 and December 31, 2020, €0.3 million and €2.3 million, respectively, is classified as other long-term assets based on the expected dates the restricted cash will be refunded or made available to the Company.

Deferred revenue
As of December 31, 2020, the deferred revenue balance was €2.8 million, €2.6 million of which was recognized as revenue during the six months ended June 30, 2021.

Note 3: Acquisitions and divestitures
Acquisitions
Effective on January 12, 2021, we acquired 100% of weekengo GmbH ("Weekengo") shares for €6.7 million from former shareholders and the domain and related trademark for €0.7 million from a former shareholder, for an aggregate cash purchase price of €7.4 million of which €0.5 million are held in escrow to be released to the former shareholders one year after closing. Weekengo is a company based in Germany that operates the online travel search website “weekend.com”, which specializes in optimizing the delivery of search results for direct flights and hotel packages with a short-trip focus. A portion of the purchase consideration was paid in December 2020 as partial fulfillment of closing conditions amounting to €3.0 million. This amount was included in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2020.
12


The acquisition was accounted for as a business combination using the acquisition method of accounting. Accordingly, we have allocated the consideration paid for Weekengo to the net tangible and identifiable intangible assets based on their estimated fair values. Our preliminary valuation of assets acquired and liabilities assumed, and the fair value of such amounts are included in the table below. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets.
The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed:
(in thousands)January 12, 2021
Cash and cash equivalents€85 
Prepaid expenses and other current assets54 
Property and equipment, net1,662 
Goodwill5,085 
Intangible assets, net675 
Total Assets7,561 
Accounts payable(121)
Other liabilities(15)
Net assets acquired€7,425 

The Company applied variations of the cost approach to estimate the fair values of the acquired trademark and domain “WEEKEND.com”, recognized within intangible assets, of €0.7 million with an estimated useful life of 5 years, and capitalized software and software development costs, recognized within property and equipment, of €1.6 million with an estimated useful life of 3 years. The Company additionally recognized €0.3 million of deferred tax liabilities attributable to the fair value adjustment on capitalized software and software development costs, which are offset by acquired deferred tax assets.
The preliminary estimated fair values of the assets acquired and the liabilities assumed are determined based on currently available information. We are continuing to evaluate the underlying inputs and assumptions used in the valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the date of the acquisition. A change in fair values of the assets acquired and the liabilities assumed would result in a corresponding change in the amount of goodwill resulting from the acquisition.
The goodwill balance of €5.1 million has been assigned to the Developed Europe and Americas segments in the amounts of €3.2 million and €1.9 million, respectively. The goodwill largely reflects our access to Weekengo’s development team and know-how, and expected synergies to strengthen our presence in the weekend getaway market. Goodwill is not expected to be deductible for tax purposes.
Revenues from Weekengo included in the Company's condensed consolidated statements of operations for the three and six months ended June 30, 2021 were €0.0 million and €0.0 million, respectively. Net loss from Weekengo included in the Company's condensed consolidated statements of operations for the same periods were €0.6 million and €1.2 million respectively. The Company did not incur material transaction costs with respect to the Weekengo acquisition during the three and six months ended June 30, 2021.
The following unaudited pro forma information reflects our consolidated results of operations as if the acquisition had occurred on January 1, 2020. The unaudited pro forma information is not necessarily indicative of the results of operations that we would have reported had the transaction actually occurred at the beginning of the period nor is it necessarily indicative of future results. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated costs savings from synergies or other operational improvements.
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(in thousands, unaudited)
Three months ended June 30, 2020Six months ended
June 30, 2020
Revenue€16,133 €156,263 
Net loss(20,639)(235,340)

The unaudited pro forma financial information in the table above includes adjustments that are directly attributable to the business combination and are factually supportable. The pro forma financial information include adjustments of €0.1 million and €0.3 million for the three and six months ended June 30, 2021 related to application of the Company’s accounting policies, depreciation and amortization related to fair value adjustment on capitalized software and software development costs and recognition of the trademark and domain, and acquisition related transaction costs.

Divestitures
In December 2020, the Company entered into an agreement to sell its minority interest (49%) in myhotelshop GmbH ("myhotelshop") for a cash consideration of €70 thousand to the majority shareholder, who is not a related party to trivago. The transaction had not closed as of December 31, 2020 as there were still some outstanding closing conditions. However, due to imminent closing of the transaction, the Company recognized an impairment loss in 2020 to write down the equity method investment as of December 31, 2020 to the cash consideration value of €70 thousand. As a result of the closing of the sale on January 28, 2021, the remaining equity method investment of €70 thousand was derecognized on our condensed consolidated balance sheet with no further gain or loss recognized between the consideration and the carrying amount. As of the closing date, myhotelshop is no longer considered a related party.

Note 4: Fair value measurement
Financial assets measured at fair value on a recurring basis are classified using the fair value hierarchy in the tables below:
As of June 30, 2021TotalLevel 1Level 2
(in thousands)
Assets
Cash equivalents:
Money market funds€19,986 €19,986 €— 
Short-term investments:
Term deposits9,487 — 9,487 
Other long-term assets:
Term deposits1,351 — 1,351 
Total€30,824 €19,986 €10,838 

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As of December 31, 2020TotalLevel 1Level 2
(in thousands)
Assets
Cash equivalents:
Money market funds€65,111 €65,111 €— 
Short-term investments:
Term deposits9,448 — 9,448 
Total€74,559 €65,111 €9,448 

We value our financial assets using quoted market prices or alternative pricing sources and models utilizing market observable inputs.
Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. This is included within cash equivalents as Level 1 measurements.
We hold term deposit investments with financial institutions. We classify our term deposits within Level 2 in the fair value hierarchy because they are valued at amortized cost, which approximates fair value. Term deposits with original maturity of more than three months but less than one year are classified as short-term investments and those with original maturity of more than one year are classified as other long-term assets.
Investments in term deposits with original maturity of more than one year are restricted by long-term obligations related to the new campus building.

Assets measured at fair value on a non-recurring basis
Our non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity method investments, are adjusted to fair value when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs.

Goodwill
During the first quarter of 2020, we recognized goodwill impairment charges of €17.6 million, €107.5 million and €82.5 million in the Developed Europe, Americas and Rest of World reporting units, respectively. These impairment charges resulted from the significant negative impact of the COVID-19 pandemic on our business, which presented sufficient indicators to require us to perform an interim quantitative assessment as of March 31, 2020 in which we compared the fair value of the reporting units to their carrying value. Further details may be found in our Annual Report on Form 20-F for the year ended December 31, 2020 previously filed with the SEC.
The full duration and total impact of the COVID-19 pandemic remains uncertain and it is difficult to predict how the recovery will unfold for global economies, the travel industry or our business. As a result, we may continue to record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts.

15


Note 5: Prepaid expenses and other current assets
(in thousands)June 30, 2021December 31, 2020
Prepaid advertising€12,393 €2,297 
Other prepaid expenses3,056 4,132 
Other assets1,007 4,009 
Total€16,456 €10,438 

In January 2021, we entered into a long-term marketing sponsorship agreement for various marketing rights beginning July 1, 2021. The first two contractual installment payments under this agreement have been paid and as of June 30, 2021, €7.5 million has been included within prepaid advertising in the above table.
As of December 31, 2020, €3.0 million in other assets related to a portion of the purchase consideration for the Weekengo acquisition. The transaction closed on January 12, 2021, at which time, the total consideration, inclusive of the €3.0 million paid prior to the closing of the acquisition, was allocated to the acquired assets as discussed in Note 3: Acquisitions and divestitures.

Note 6: Property and equipment, net
June 30, 2021December 31, 2020
(in thousands)
Building and leasehold improvements€6,932 €15,295 
Capitalized software and software development costs25,325 22,702 
Computer equipment17,619 17,248 
Furniture and fixtures3,640 5,480 
Subtotal53,516 60,725 
Less: accumulated depreciation36,339 34,352 
Construction in process817 309 
Property and equipment, net€17,994 €26,682 

As part of the amendment to the campus operating lease agreement on January 29, 2021 which is further discussed in Note 7: Leases, we transferred long-lived assets with a net book value of €7.5 million related to the terminated floor space to the landlord. This transaction is partially offset in the condensed consolidated balance sheet by the lease termination penalty. The net amount is recorded in accounts receivable as of June 30, 2021. We recognized a gain of €0.1 million on the sale of these fixed assets.

Note 7: Leases
On January 29, 2021, we entered into an amendment to the operating lease agreement for office space in our corporate headquarters, whereby the landlord agreed to grant us partial termination of the lease related to certain floor spaces from January 1, 2021 for a penalty of €6.7 million, and from May 31, 2023 for a penalty of €2.3 million. The amendment was treated as a modification to the existing lease agreement with an effective date of January 29, 2021 and the termination penalties will be expensed over the remaining lease term. As part of the amendment, the landlord agreed to pay trivago €2.6 million as a settlement of prior claims for defects in the leased office space, which has been treated as a lease incentive and will reduce lease expense over the lease term. As a result of this lease modification, we
16


recognized a gain of €1.2 million on the lease modification, agreed to pay €0.5 million as a settlement of prior claims for defects that had previously been accrued for and reduced our operating lease right-of-use assets and operating lease liability by €34.7 million and €36.4 million, respectively.

Note 8: Share-based awards and other equity instruments
Amendments to the 2016 Omnibus Incentive Plan
On March 2, 2021, our supervisory board amended the trivago N.V. 2016 Omnibus Incentive Plan to increase the maximum number of Class A shares available for issuance. As of June 30, 2021 the maximum number of Class A shares available for issuance are 59,635,698 Class A shares (34,711,009 as of December 31, 2020), which does not include any Class B share conversions. Class A shares issuable under 2016 Plan are represented by ADSs for such Class A shares.

Share-based compensation expense
The following table presents the amount of share-based compensation expense included in our condensed consolidated statements of operations during the periods presented:
Three months ended June 30,Six months ended June 30,
(in thousands)2021202020212020
Cost of revenue€71 €70 €121 €120 
Selling and marketing299 345 525 677 
Technology and content1,065 1,146 1,729 2,181 
General and administrative3,461 2,625 5,640 4,709 
Total share-based compensation expense€4,896 €4,186 €8,015 €7,687 

Share-based award activity
The following table presents a summary of our share option activity for the six months ended June 30, 2021:
OptionsWeighted
average
exercise
price		Remaining
contractual
life		Aggregate
intrinsic
value
(in €)(In years)(€ in thousands)
Balance as of December 31, 202026,347,149 3.29 1228,356 
Granted5,308,986 0.06 
Exercised3,318,061 0.37 
Cancelled2,163,914 5.57 
Balance as of June 30, 202126,174,160 2.90 1145,917 
Exercisable as of June 30, 202113,954,858 5.02 1514,844 
Vested and expected to vest after June 30, 202126,174,160 2.90 1145,917 

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The following table presents a summary of our restricted stock units (RSUs) for the six months ended June 30, 2021:
RSUsWeighted Average Grant Date Fair ValueRemaining contractual life
(in €)(in years)
Balance as of December 31, 20201,624,461 1.39 5
Granted989,236 3.86 
Vested350,262 1.99 
Cancelled6,782 2.97 
Balance as of June 30, 20212,256,653 2.38 5

Note 9: Income taxes
We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs, including discrete items.
Income tax expense was €6 thousand in the second quarter ended June 30, 2021, compared to an income tax benefit of €6.9 million in the second quarter ended June 30, 2020. The total weighted average tax rate was 39.9%, which was mainly driven by the German statutory tax rate of approximately 31%. Our effective tax rate was -0.2% compared to 25.6% in the second quarter in 2020. The difference between the weighted average tax rate of 39.9% and the effective tax rate of -0.2% in the second quarter of 2021 is primarily attributable to share-based compensation expense, which is non-deductible for tax purposes.
Income tax benefit was €1.3 million in the half year ended June 30, 2021, compared to an income tax benefit of €8.0 million in the half year ended June 30, 2020. Our effective tax rate was 11.1% compared to 3.3% for the half year ended June 30, 2020. The difference between the weighted average tax rate and the effective tax rate for the six months ended June 30, 2021 is primarily attributable to the impact of share-based compensation expense, which is non-deductible for tax purposes.
An uncertain tax position in connection with unrecognized tax benefits relating to the deductibility of expenses amounted to €2.9 million as of June 30, 2021. A liability for these tax benefits was included under other long-term liabilities in the unaudited condensed consolidated financial statements.

Note 10: Stockholders' equity
Each Class B share is convertible into one Class A share at any time by the holder. Share premium derived from the conversion of Class A into Class B shares, is recognized within reserves.
During the six months ended June 30, 2021 9,625,000 Class B shares were converted into Class A shares. During the six months ended June 30, 2020, 3,500,000 Class B shares were converted into Class A shares.

Note 11: Earnings per share
Basic and diluted earnings per share of Class A and Class B common stock is computed by dividing net income/(loss) by the weighted average number of Class A and Class B common stock outstanding during the same period. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method.
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The following table presents our basic and diluted earnings per share:
Three months ended
June 30,		Six months ended
June 30,
(€ thousands, except per share data)2021202020212020
Numerator:
Net income/(loss)€(3,289)€(20,158)€(10,029)€(234,424)
Denominator:
Weighted average shares of Class A and Class B common stock outstanding:
Basic357,582 353,133 356,726 352,953 
Diluted357,582 353,133 356,726 352,953 
Net income/(loss) per share:
Basic€(0.01)€(0.06)€(0.03)€(0.66)
Diluted€(0.01)€(0.06)€(0.03)€(0.66)

For the three and six months ended June 30, 2021 and 2020, diluted weighted average common shares outstanding does not include the effects of the exercise of outstanding stock options and RSUs as the inclusion of these instruments would have been anti-dilutive.

Note 12: Commitments and contingencies
In January 2021 we entered into a marketing sponsorship agreement in return for various marketing rights. Based on the terms of the agreement and payments made, we have an outstanding commitment value of approximately €16.3 million as of June 30, 2021.

Legal proceedings
On August 23, 2018, the Australian Competition and Consumer Commission, or ACCC, instituted proceedings in the Australian Federal Court against us. The ACCC alleged a number of breaches of the Australian Consumer Law, or ACL, relating to certain advertisements in Australia concerning the hotel prices available on our Australian site, our Australian strike-through pricing practice and other aspects of the way offers for accommodation were displayed on our Australian website. The matter went to trial in September 2019 and, on January 20, 2020, the Australian Federal Court issued a judgment finding that we had engaged in conduct in breach of the ACL. On March 4, 2020, we filed a notice of appeal at the Australian Federal Court appealing part of that judgment. On November 4, 2020, the Australian Federal Court dismissed trivago’s appeal. On May 27, 2021, the court scheduled a separate trial regarding penalties and other orders for October 18, 2021, after vacating the prior June 2021 trial date. Management recorded an estimate of the probable loss in connection with these proceedings within current other liabilities. Any penalty amount could substantially exceed the level of provision that we established for this litigation.
In establishing a provision in respect of the ACCC matter, management took into account the information currently available, including judicial precedents. However, there is considerable uncertainty regarding how the Australian Federal Court would calculate the penalties that will be ultimately assessed on us. In particular, the Australian Federal Court determined that we engaged in certain conduct after September 1, 2018 that will result in the applicability of the new penalty regime under the ACL, which significantly increased the maximum penalty applicable to parts of our conduct. Only a few cases have been decided
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so far assessing penalties for contraventions of the ACL under the new regime. In cases involving conduct before and after September 1, 2018, the Australian Federal Court in each case did not allocate the total penalty imposed between the old and new penalty regime. As a result, an estimate of the reasonable possible loss or range of loss in excess of the amount reserved cannot be made.

Note 13: Related party transactions
Relationships with Expedia
We have commercial relationships with Expedia Group, Inc. and many of its affiliated brands, including Brand Expedia, Hotels.com, Orbitz, Travelocity, Hotwire, Wotif, Vrbo and ebookers. These are arrangements terminable at will or upon three to seven days prior notice by either party and on customary commercial terms that enable Expedia Group’s brands to advertise on our platform, and we receive payment for users we refer to them. We are also party to a letter agreement pursuant to which Expedia Group refers traffic to us when a particular hotel or region is unavailable on the applicable Expedia Group website. Related-party revenue from Expedia Group primarily consists of click-through fees and other advertising services provided to Expedia Group and its affiliates.
Related-party revenue from Expedia Group and its affiliates was €20.1 million and €27.7 million for the three and six months ended June 30, 2021, compared to €2.5 million and €48.3 million, respectively, in the same periods in 2020. These amounts are recorded at contract value, which we believe is a reasonable reflection of the value of the services provided. Related-party revenue represented 21% and 21% of our total revenue for the three and six months ended June 30, 2021, compared to 15% and 31%, respectively, in the same periods in 2020.
For the three and six months ended June 30, 2020 and 2021, we did not incur significant operating expenses of related-party services and support agreements with Expedia Group.
The related party trade receivable balances with Expedia Group and its affiliates as of December 31, 2020 and June 30, 2021 was €2.9 million and €15.1 million.

Guarantee
As of December 31, 2020, we had an uncommitted credit facility with Bank of America Merrill Lynch International Ltd., one of the underwriters of our initial public offering, with a maximum principal amount of €50.0 million. Advances under this facility bear interest at a rate of LIBOR, floored at zero, plus 1.0% per annum. Our obligations under this facility were guaranteed by Expedia Group. We did not utilize the credit facility during the year ended December 31, 2020. On January 7, 2021 the uncommitted credit facility was cancelled by the lender.

myhotelshop
Subsequent to the deconsolidation of myhotelshop in December 2017, myhotelshop remained a related party to trivago until January 28, 2021, when we sold our minority interest. Related-party revenue from myhotelshop for the six months ended June 30, 2021 was not significant. Related-party revenue of €0.1 million and €0.7 million for the three and six months ended June 30, 2020 primarily consists of referral revenue. As a result of the sale, we derecognized the remaining equity method investment of €70 thousand on our condensed consolidated balance sheet and no longer consider myhotelshop a related party.

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Note 14: Segment information
Management has identified three reportable segments, which correspond to our three operating segments: the Americas, Developed Europe and Rest of World (RoW). Our Americas segment is comprised of Argentina, Barbados, Brazil, Canada, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Peru, Puerto Rico, the United States and Uruguay. Our Developed Europe segment is comprised of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Malta, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Our Rest of World segment is comprised of all other countries where trivago operates .
We determined our operating segments based on how our chief operating decision makers manage our business, make operating decisions and evaluate operating performance. Our primary operating metric is Return on Advertising Spend, or ROAS, for each of our segments, which compares Referral Revenue to Advertising Spend. ROAS includes the allocation of revenue by segment which is based on the location of the website, or domain name, regardless of where the consumer resides. This is consistent with how management monitors and runs the business.
Corporate and Eliminations also includes all corporate functions and expenses except for direct advertising. In addition, we record amortization of intangible assets and any related impairment, share-based compensation expense, restructuring and related reorganization charges, legal reserves, occupancy tax and other taxes, and other items excluded from segment operating performance in Corporate and Eliminations. Such amounts are detailed in our segment reconciliations below. The following tables present our segment information for the three and six months ended June 30, 2021 and 2020. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision makers.
  Three months ended June 30, 2021
(€ thousands)Developed EuropeAmericasRest of WorldCorporate & EliminationsTotal
Referral revenue€43,728 €37,572 €12,148 €— €93,448 
Subscription revenue— — — 1,214 1,214 
Other revenue— — — 812 812 
Total revenue€43,728 €37,572 €12,148 €2,026 €95,474 
Advertising spend29,771 28,564 6,278 — 64,613 
ROAS contribution€13,957 €9,008 €5,870 €2,026 €30,861 
Costs and expenses:
Cost of revenue, including related party, excluding amortization2,961 
Other selling and marketing, including related party (1)6,753 
Technology and content, including related party13,753 
General and administrative, including related party10,189 
Amortization of intangible assets68 
Operating loss€(2,863)
Other income/(expense)
Interest expense(146)
Other, net(274)
Total other income/(expense), net€(420)
Loss before income taxes€(3,283)
Expense/(benefit) for income taxes6 
Net loss€(3,289)
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(1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment.
  Three months ended June 30, 2020
(€ thousands)Developed EuropeAmericasRest of WorldCorporate & EliminationsTotal
Referral revenue€4,891 €6,533 €2,457 €— €13,881 
Subscription revenue— — — 1,958 1,958 
Other revenue— — — 293 293 
Total revenue€4,891 €6,533 €2,457 €2,251 €16,132 
Advertising spend1,372 2,097 1,996 — 5,465 
ROAS contribution€3,519 €4,436 €461 €2,251 €10,667 
Costs and expenses:
Cost of revenue, including related party, excluding amortization2,654 
Other selling and marketing, including related party (1)7,382 
Technology and content, including related party18,293 
General and administrative, including related party9,019 
Amortization of intangible assets36 
Operating loss€(26,717)
Other income/(expense)
Interest expense(59)
Other, net(274)
Total other income/(expense), net€(333)
Loss before income taxes€(27,050)
Expense/(benefit) for income taxes(6,913)
Loss before equity method investment€(20,137)
Income/(loss) from equity method investment(21)
Net loss€(20,158)
(1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment.

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  Six months ended June 30, 2021
(€ thousands)Developed EuropeAmericasRest of WorldCorporate & EliminationsTotal
Referral revenue€53,262 €55,861 €20,492 €— €129,615 
Subscription revenue— — — 2,563 2,563 
Other revenue— — — 1,522 1,522 
Total revenue€53,262 €55,861 €20,492 €4,085 €133,700 
Advertising spend34,665 38,553 10,036 — 83,254 
ROAS contribution€18,597 €17,308 €10,456 €4,085 €50,446 
Costs and expenses:
Cost of revenue, including related party, excluding amortization5,547 
Other selling and marketing, including related party (1)11,449 
Technology and content, including related party26,393 
General and administrative, including related party18,704 
Amortization of intangible assets68 
Operating loss€(11,715)
Other income/(expense)
Interest expense(202)
Other, net632 
Total other income/(expense), net€430 
Loss before income taxes€(11,285)
Expense/(benefit) for income taxes(1,256)
Net loss€(10,029)
(1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment.
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  Six months ended June 30, 2020
(€ thousands)Developed EuropeAmericasRest of WorldCorporate & EliminationsTotal
Referral revenue€62,195 €61,171 €27,231 €— €150,597 
Subscription revenue— — — 4,368 4,368 
Other revenue— — — 970 970 
Total revenue€62,195 €61,171 €27,231 €5,338 €155,935 
Advertising spend37,620 45,995 24,405 — 108,020 
ROAS contribution€24,575 €15,176 €2,826 €5,338 €47,915 
Costs and expenses:
Cost of revenue, including related party, excluding amortization5,468 
Other selling and marketing, including related party (1)16,204 
Technology and content, including related party35,909 
General and administrative, including related party24,324 
Amortization of intangible assets361 
Impairment of goodwill207,618 
Operating loss€(241,969)
Other income/(expense)
Interest expense(105)
Other, net(598)
Total other income/(expense), net€(703)
Loss before income taxes€(242,672)
Expense/(benefit) for income taxes(8,035)
Loss before equity method investment€(234,637)
Income/(loss) from equity method investment213 
Net loss€(234,424)
(1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment.

Note 15: Subsequent events
After the date of the balance sheet through the date of issuance of these unaudited condensed consolidated financial statements, 151,944 Class A shares were issued as a result of options exercised and RSUs released. Additionally, Mr. Schrömgens converted 25,628,205 Class B shares into Class A shares with the resulting share premium recognized within reserves. Following the conversions, our Founders held Class B shares of trivago N.V. with an ownership interest and voting interest of 15.1% and 19.8%, respectively.
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