Travelzoo Inc. reported fourth‑quarter 2025 revenue of $22.5 million, a 9% year‑over‑year increase from $20.7 million in the same quarter of 2024. The growth was driven by a 10% operating‑margin expansion in North America, where revenue rose to $14.8 million, and a 9% increase in European sales, which totaled $6.3 million. The company’s membership fee stream grew by $2.1 million, offsetting a modest decline in advertising and commission revenue.
Operating income for the quarter was $0.6 million, translating to a 2% margin. The figure reflects a $0.1 million increase over the prior year’s $0.5 million operating profit, but the margin contracted from 10% in Q4 2024 to 2% in Q4 2025. The decline is largely attributable to higher member‑acquisition costs and pre‑purchased voucher expenses, which were expensed immediately while membership fees are recognized over 12 months.
Earnings per share fell to $0.00, missing the consensus estimate of $0.11 by $0.11. The miss is driven by the same investment in member acquisition that compressed operating profit, as well as a $0.26 EPS in Q4 2024. The $0.00 EPS represents a 100% surprise relative to expectations.
Jack’s Flight Club, of which Travelzoo owns 60%, reported revenue of $1.3 million, a 2% year‑over‑year increase—far below the 17% growth cited in the original article. The modest growth reflects a slower uptake of the subscription service amid the broader investment in new member acquisition.
For the first quarter of 2026, management guided revenue of $26.31 million and EPS of $0.2958, up from the prior guidance of $25.5 million and $0.25. The outlook signals confidence that the membership model will continue to scale, though the company expects marketing spend to remain elevated as it builds its recurring revenue base.
Market reaction was negative, with analysts citing the EPS miss and the sharp decline in operating profit as primary concerns. The EPS miss, combined with the contraction in operating margin, underscored the short‑term impact of the company’s strategic shift toward a membership‑based business model.
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