trivago soars as it delivers record first quarter growth

Trivago GmbH (NASDAQ:TRVG) soared in early deals on Monday after the hotel comparison website posted record revenues in the first quarter of 2017.

The company – which counts travel giant Expedia Inc (NASDAQ:EXPE) as its largest shareholder – has told investors that the recent investment in its branding and user experience has started to pay off.

READ: Q1 results in full

Total revenues jumped 68% to €267.6mln (Q1 2016: €159.4mln), which helped trivago swing to a net profit of €7.7mln from a €0.1mln loss a year earlier.

The firm has ploughed lots of time and money into further developing its website and operations as a whole in recent months, which it is now starting to benefit from.

It now has almost 300,000 hotels using its Hotel Manager platform, and more than 10% of those pay an additional subscription for the Hotel Manager Pro offering.

The number of travellers using the site also soared in the first three months of the year.

Upgraded guidance reaffirmed

The Germany-based group recently upgraded its full-year guidance following the strong start to the year following the strong start to the year.

 It expects revenue growth of around 50% in 2017 with adjusted underlying earnings (EBITDA) “up slightly” from last year, both of which it reiterated again today.

“The investments we have made in the business are paying off. In the first quarter, we generated record revenue at a growth rate of 68% while boosting profitability with a strong net income and significant gains in adjusted EBITDA,” said chief financial officer Axel Hefer.

“The improvements in profitability were principally driven by the scaling of the business and our continuous improvements of our technology and algorithms, which we expect to continue to benefit from in the future.”

Shares were up 16% to US$20.64 in pre-market trading.

Story by ProactiveInvestors