Cover
Cover | 12 Months Ended |
Dec. 31, 2020shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2020 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-37959 |
Entity Registrant Name | trivago N.V. |
Entity Incorporation, State or Country Code | P7 |
Entity Address, Address Line One | Kesselstraße 5 - 7 |
Entity Address, Postal Zip Code | 40221 |
Entity Address, City or Town | Düsseldorf |
Entity Address, Country | DE |
Title of 12(b) Security | American Depositary Shares, each representing oneClass A share, nominal value €0.06 per share |
Trading Symbol | TRVG |
Security Exchange Name | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001683825 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, Address Line One | Kesselstraße 5 - 7 |
Entity Address, Postal Zip Code | 40221 |
Entity Address, City or Town | Düsseldorf |
Entity Address, Country | DE |
Contact Personnel Name | Axel Hefer |
City Area Code | 211 |
Local Phone Number | 3876840000 |
Common Class A | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 55,967,976 |
Common Class B | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 298,187,967 |
Consolidated statements of oper
Consolidated statements of operations - EUR (€) € in Thousands, shares in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Income Statement [Abstract] | ||||
Revenue | € 181,491 | € 554,046 | € 583,395 | |
Revenue from related party | 67,430 | 284,571 | 331,421 | |
Total revenue | 248,921 | 838,617 | 914,816 | |
Costs and expenses: | ||||
Cost of revenue, including related party, excluding amortization | [1],[2] | 10,133 | 9,159 | 5,435 |
Selling and marketing, including related party | [1],[2],[3] | 178,255 | 664,155 | 805,633 |
Technology and content, including related party | [1],[2],[3] | 64,258 | 69,924 | 66,904 |
General and administrative, including related party | [1],[2],[3] | 40,935 | 55,543 | 54,326 |
Amortization of intangible assets | [3] | 373 | 1,685 | 1,684 |
Goodwill impairment loss | 207,618 | 0 | 0 | |
Operating income/(loss) | (252,651) | 38,151 | (19,166) | |
Other income/(expense) | ||||
Interest expense | (270) | (33) | (1,839) | |
Other, net | (212) | (428) | 539 | |
Total other income/(expense), net | (482) | (461) | (1,300) | |
Income/(loss) before income taxes | (253,133) | 37,690 | (20,466) | |
Expense/(benefit) for income taxes | (8,494) | 20,982 | 1,086 | |
Income/(loss) before equity method investment | (244,639) | 16,708 | (21,552) | |
Income/(loss) from equity method investment | (739) | 453 | 63 | |
Net income/(loss) | € (245,378) | € 17,161 | € (21,489) | |
Earnings per share attributable to trivago N.V. available to common stockholders: | ||||
Basic (in Euro per share) | € (0.69) | € 0.05 | € (0.06) | |
Diluted (in Euro per share) | € (0.69) | € 0.05 | € (0.06) | |
Shares used in computing earnings per share: | ||||
Basic (in shares) | 353,338 | 351,991 | 350,852 | |
Diluted (in shares) | 353,338 | 356,738 | 350,852 | |
[1] | Includes related party expense as follows: Year ended December 31, 2018 2019 2020 Cost of revenue 59 € 44 (32) Selling and marketing 42 263 133 Technology and content 700 465 97 General and administrative 9 43 31 | |||
[2] | Includes share-based compensation as follows: Year ended December 31, 2018 2019 2020 Cost of revenue 184 269 243 Selling and marketing 3,273 2,359 1,169 Technology and content 5,260 5,978 3,808 General and administrative 11,985 11,285 9,859 | |||
[3] | Includes depreciation and amortization as follows: Year ended December 31, 2018 2019 2020 Amortization of internal use software costs included in — 360 188 Amortization of acquired technology included in amortization of intangible assets 278 143 84 Amortization of internal use software and website development costs included in technology and content 2,214 3,239 3,926 Amortization of internal use software costs included in general and administrative 785 656 491 |
Consolidated statements of op_2
Consolidated statements of operations (Parenthetical) - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Share-based compensation | € 15,100 | € 19,900 | € 20,700 | |
Amortization of intangible assets | [1] | 373 | 1,685 | 1,684 |
Cost of revenue | ||||
Share-based compensation | 243 | 269 | 184 | |
Related party expense | (32) | 44 | 59 | |
Selling and marketing | ||||
Share-based compensation | 1,169 | 2,359 | 3,273 | |
Related party expense | 133 | 263 | 42 | |
Technology and content | ||||
Share-based compensation | 3,808 | 5,978 | 5,260 | |
Related party expense | 97 | 465 | 700 | |
General and administrative | ||||
Share-based compensation | 9,859 | 11,285 | 11,985 | |
Related party expense | 31 | 43 | 9 | |
Internal use software costs | ||||
Amortization of intangible assets | 4,600 | 4,300 | 3,000 | |
Internal use software costs | Selling and marketing | ||||
Amortization of intangible assets | 188 | 360 | 0 | |
Internal use software costs | Technology and content | ||||
Amortization of intangible assets | 3,926 | 3,239 | 2,214 | |
Internal use software costs | General and administrative | ||||
Amortization of intangible assets | 491 | 656 | 785 | |
Acquired technology | ||||
Amortization of intangible assets | € 84 | € 143 | € 278 | |
[1] | Includes depreciation and amortization as follows: Year ended December 31, 2018 2019 2020 Amortization of internal use software costs included in — 360 188 Amortization of acquired technology included in amortization of intangible assets 278 143 84 Amortization of internal use software and website development costs included in technology and content 2,214 3,239 3,926 Amortization of internal use software costs included in general and administrative 785 656 491 |
Consolidated statements of comp
Consolidated statements of comprehensive income/(loss) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income/(loss) | € (245,378) | € 17,161 | € (21,489) |
Other comprehensive income/(loss): | |||
Currency translation adjustments | (58) | 151 | 91 |
Total other comprehensive income/(loss) | (58) | 151 | 91 |
Comprehensive income/(loss) | € (245,436) | € 17,312 | € (21,398) |
Consolidated balance sheets
Consolidated balance sheets - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | € 208,353 | € 218,106 |
Restricted cash | 103 | 122 |
Accounts receivable, net of allowance for credit losses of €74 and €348 at December 31, 2019 and December 31, 2020, respectively | 11,642 | 37,747 |
Accounts receivable, related party | 2,969 | 31,139 |
Short-term investments | 19,448 | 10,000 |
Tax receivable | 7,839 | 8,565 |
Prepaid expenses and other current assets | 10,438 | 4,607 |
Total Current Assets | 260,792 | 310,286 |
Property and equipment, net | 26,682 | 33,172 |
Operating lease right-of-use assets | 86,810 | 96,030 |
Deferred income taxes | 1 | 735 |
Other long-term assets | 4,399 | 7,274 |
Intangible assets, net | 169,550 | 169,924 |
Goodwill | 282,664 | 490,590 |
TOTAL ASSETS | 830,898 | 1,108,011 |
Current liabilities: | ||
Accounts payable | 6,755 | 33,391 |
Income taxes payable | 102 | 549 |
Deferred revenue | 2,750 | 5,553 |
Payroll liabilities | 2,983 | 4,055 |
Accrued expenses and other current liabilities | 14,934 | 14,763 |
Operating lease liability | 7,188 | 5,037 |
Total Current Liabilities | 34,712 | 63,348 |
Operating lease liability | 85,979 | 94,660 |
Deferred income taxes | 42,176 | 50,927 |
Other long-term liabilities | 3,514 | 4,289 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Reserves | 798,017 | 781,060 |
Contribution from Parent | 122,307 | 122,307 |
Accumulated other comprehensive income | 4 | 62 |
Accumulated deficit | (438,082) | (192,704) |
Total stockholders' equity | 664,517 | 894,787 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 830,898 | 1,108,011 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 3,358 | 3,049 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | € 178,913 | € 181,013 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for credit loss | € 348 | € 74 |
Common Class A | ||
Class common stock, par value (Euro per share) | € 0.06 | € 0.06 |
Class common stock, shared authorized (in shares) | 700,000,000 | 700,000,000 |
Class common stock, shares issued (in shares) | 55,967,976 | 50,816,706 |
Common stock, shares outstanding (in shares) | 55,967,976 | 50,816,706 |
Common Class B | ||
Class common stock, par value (Euro per share) | € 0.60 | € 0.60 |
Class common stock, shared authorized (in shares) | 320,000,000 | 320,000,000 |
Class common stock, shares issued (in shares) | 298,187,967 | 301,687,967 |
Common stock, shares outstanding (in shares) | 298,187,967 | 301,687,967 |
Consolidated statements of chan
Consolidated statements of changes in equity - EUR (€) € in Thousands | Total | Common StockCommon Class A | Common StockCommon Class B | Reserves | Retained earnings (accumulated deficit) | Accumulated other comprehensive income/(loss) | Contribution from Parent |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Impact of adoption of new accounting guidance | € 143 | € 143 | |||||
Beginning balance at Dec. 31, 2017 | 853,975 | € 1,855 | € 191,880 | € 730,431 | (192,318) | € (180) | € 122,307 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (21,489) | (21,489) | |||||
Other comprehensive income (net of tax) | 91 | 91 | |||||
Share-based compensation expense | 20,702 | 20,702 | |||||
Conversion of Class B shares | 0 | 667 | (6,667) | 6,000 | |||
Issued capital, options exercised | 161 | 32 | 129 | ||||
Ending balance at Dec. 31, 2018 | 853,583 | 2,554 | 185,213 | 757,262 | (213,664) | (89) | 122,307 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Impact of adoption of new accounting guidance | 3,799 | 3,799 | |||||
Net loss | 17,161 | 17,161 | |||||
Other comprehensive income (net of tax) | 151 | 151 | |||||
Share-based compensation expense | 19,891 | 19,891 | |||||
Conversion of Class B shares | 0 | 420 | (4,200) | 3,780 | |||
Issued capital, options exercised | 202 | 75 | 127 | ||||
Ending balance at Dec. 31, 2019 | 894,787 | 3,049 | 181,013 | 781,060 | (192,704) | 62 | 122,307 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (245,378) | (245,378) | |||||
Other comprehensive income (net of tax) | (58) | (58) | |||||
Share-based compensation expense | 15,079 | 15,079 | |||||
Conversion of Class B shares | 0 | 210 | (2,100) | 1,890 | |||
Issued capital, options exercised | 87 | 99 | (12) | ||||
Ending balance at Dec. 31, 2020 | € 664,517 | € 3,358 | € 178,913 | € 798,017 | € (438,082) | € 4 | € 122,307 |
Consolidated statements of cash
Consolidated statements of cash flows - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Operating activities: | ||||
Net income/(loss) | € (245,378) | € 17,161 | € (21,489) | |
Adjustments to reconcile net income/(loss) to net cash provided by/(used in): | ||||
Depreciation (property and equipment, internal-use software and website development) | 10,479 | 10,298 | 11,370 | |
Amortization of intangible assets | [1] | 373 | 1,685 | 1,684 |
Goodwill impairment loss | 207,618 | 0 | 0 | |
Impairment of long-lived assets including internal-use software and website development | 549 | 96 | 1,437 | |
Share-based compensation (see Note 11) | 15,079 | 19,891 | 20,702 | |
Deferred income taxes | (8,248) | 1,904 | (1,755) | |
Foreign exchange losses | 795 | 429 | 587 | |
Expected credit losses, net | 656 | 754 | 630 | |
Loss on disposal of fixed assets | 185 | 2 | 605 | |
Gain from settlement of asset retirement obligation | (137) | (209) | 0 | |
Gain from lease termination | (179) | 0 | 0 | |
(Income)/loss from equity method investment | 739 | (453) | (19) | |
Gain on divestitures | (393) | 0 | 0 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable, including related party | 53,732 | 24,926 | (13,432) | |
Prepaid expenses and other assets | (773) | 3,696 | 11,127 | |
Accounts payable | (26,620) | (665) | (18,012) | |
Payroll liabilities | (891) | (4,476) | 2,951 | |
Accrued expenses and other liabilities | 2,594 | 7,591 | 199 | |
Deferred revenue | (2,550) | (2,310) | (773) | |
Taxes payable/receivable, net | 242 | (6,099) | (396) | |
Net cash provided by/(used in) operating activities | 7,872 | 74,221 | (4,584) | |
Investing activities: | ||||
Purchase of investments | (8,850) | (10,000) | 0 | |
Proceeds from divestitures, net of cash divested | 556 | 0 | 0 | |
Prepayment of pending business acquisition | (3,038) | 0 | 0 | |
Capital expenditures, including internal-use software and website development | (5,501) | (8,017) | (24,779) | |
Proceeds from sale of fixed assets | 644 | 36 | 634 | |
Net cash used in investing activities | (16,189) | (17,981) | (24,145) | |
Financing activities: | ||||
Proceeds from exercise of option awards | 87 | 202 | 161 | |
Repayment of other non-current liabilities | (267) | (301) | 0 | |
Net cash provided by/(used in) financing activities | (180) | (99) | 161 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,275) | 94 | (24) | |
Net increase/(decrease) in cash, cash equivalents and restricted cash | (9,772) | 56,235 | (28,592) | |
Cash, cash equivalents and restricted cash at beginning of year | 220,543 | 164,308 | 192,900 | |
Cash, cash equivalents and restricted cash at end of year | 210,771 | 220,543 | 164,308 | |
Supplemental cash flow information: | ||||
Cash paid for interest | 217 | 51 | 223 | |
Cash paid for taxes, net of (refunds) | (484) | 25,171 | 3,325 | |
Non-cash investing and financing activities: | ||||
Fixed assets-related payable | 5 | 202 | 992 | |
Capitalization of construction in process related to build-to-suit lease | € 0 | € 0 | € 36,979 | |
[1] | Includes depreciation and amortization as follows: Year ended December 31, 2018 2019 2020 Amortization of internal use software costs included in — 360 188 Amortization of acquired technology included in amortization of intangible assets 278 143 84 Amortization of internal use software and website development costs included in technology and content 2,214 3,239 3,926 Amortization of internal use software costs included in general and administrative 785 656 491 |
Organization and basis of prese
Organization and basis of presentation | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and basis of presentation | 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 December 31, 2020, Expedia Group’s ownership interest and voting interest in trivago N.V. is 59.0% and 68.8%, 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 December 31, 2020, had an ownership interest and voting interest of 25.2% and 29.4%, respectively. Basis of presentation Unless otherwise specified, “the Company” refers to trivago N.V. and its respective subsidiaries throughout the remainder of these notes. These consolidated financial statements reflect Expedia Group’s basis of accounting due to the change in control in 2013 when Expedia Group acquired a controlling ownership in trivago, as we elected the option to apply pushdown accounting in the period in which the change in control event occurred. Seasonality We experience seasonal fluctuations in the demand for our services as a result of seasonal patterns in travel. For example, 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 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 related to the duration of the impact from COVID-19 and the shape and timing of any sustained recovery. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Significant accounting policies Consolidation Our consolidated financial statements include the accounts of trivago and entities we control. Intercompany balances and transactions have been eliminated in consolidation. We deconsolidate entities from our results of operations on the day when we lose control. Further, the equity method of accounting is used for investments in associated companies in which we have a financial interest but do not have control over. As of December 31, 2019 and December 31, 2020, there are no noncontrolling interest balances, as all subsidiaries of the Company are wholly-owned. Accounting estimates We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). Preparation of the 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 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 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 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. Revenue recognition We recognize revenues when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We derive our revenues from the following streams: Referral Revenue We earn referral revenue using cost-per-click ("CPC") and cost-per-acquisition ("CPA") models. Both relate to fees earned on the display of a customer's (advertiser's) link on the trivago website. CPC revenue is recognized after the traveler makes the click-through to the related advertiser’s website. Control is deemed to have transferred at a point in time, being when the link or advertisement has been displayed and the click-through to the customer's website has occurred. CPA revenue is recognized when the click-through to the related advertiser's website results in a booking, as control is deemed to have transferred at that point in time. We consider the performance obligation to be satisfied when the booking has occurred. The price that an advertiser pays for a click that results in a booking is based on a percentage of the booking revenue. The prices per click for CPC and CPA advertising campaigns are negotiated in advance, thus, the amount to be recognized as revenue for the respective click is fixed and determinable when the performance obligation has been satisfied. Most of our revenue is invoiced on a monthly basis after the performance obligation has been satisfied with payment terms between 10 to 90 days. For some advertisers we require prepayments. Subscription Revenue Revenue from subscription services is recognized ratably over the contract term, which is generally 12 months or less from the subscription commencement date. Customers may choose to be billed annually or monthly via SEPA or credit card. The price per subscription is fixed and determinable when the contract commences. Deferred revenue Deferred revenue relates to advanced payments received for services provided in future periods, primarily related to subscription services. At December 31, 2018, €7.9 million was recorded as deferred revenue, €7.6 million of which was recognized as revenue during the year ended December 31, 2019. At December 31, 2019, the deferred revenue balance was €5.6 million, €5.2 million of which was recognized as revenue during the year ended December 31, 2020. At December 31, 2020, the deferred revenue balance was €2.8 million. Cost of revenue Cost of revenue consists of expenses that are directly or closely correlated to revenue generation, including data center costs, third-party cloud-related service providers, salaries and share-based compensation for our data center operations staff and our customer service team who are directly involved in revenue generation. For the years ended December 31, 2018, 2019 and 2020 cost of revenue excludes €0.3 million, €0.1 million and €0.1 million, respectively, of amortization expense of acquired technology. For the years ended December 31, 2018, 2019 and 2020 cost of revenue excludes €3.0 million, €4.3 million and €4.6 million, respectively, of amortization expense related to internal use software and website development. Cash and Cash Equivalents Our cash and cash equivalents include cash and liquid financial instruments, consisting of money market funds, which are readily accessible mutual funds that invest in high-quality, short-term debt, and time deposit investments, with original maturities of three months or less when purchased. Restricted cash Restricted cash primarily consists of funds held as guarantees in connection with corporate leases and funds held in escrow accounts in the event of default on corporate credit card statements. The carrying value of restricted cash approximates its fair value. As of December 31, 2019 and December 31, 2020, restricted cash was €2.4 million and €2.4 million, respectively. From the total balance as of December 31, 2020, €2.3 million is classified as other long-term assets based on the expected dates the restricted cash will be refunded or made available to the Company. Accounts receivable Accounts receivable are generally due within 10 to 90 days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the type of receivable, collection terms and historical or expected credit loss patterns. For each pool, we make estimates for the allowance based on the current expected credit loss ("CECL") methodology by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as general and administrative in our consolidated statement of operations. As disclosed in Note 18: Valuation and qualifying accounts , for the year ended December 31, 2020, we recorded approximately €0.7 million of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company, partially offset by €0.4 million of write-offs. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic. Short-term investments Our short-term investments consist of time deposit and term deposit accounts with original maturities of more than three but fewer than 12 months. Property and equipment, net including software and website capitalization We record property and equipment at cost, net of accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is generally three Certain direct development costs associated with website and internal-use software are capitalized during the application development stage. Capitalized costs include external direct costs of services and payroll costs (including share-based compensation). The payroll costs are for employees devoting time to the software development projects principally related to website and mobile app development, including support systems, software coding, designing system interfaces and installation and testing of the software. These costs are recorded as property and equipment and are generally amortized over a period of three years beginning when the asset is ready for use. Costs incurred that are expected to result in additional features or functionality are capitalized and amortized over the estimated useful life of the enhancements, which is generally a period of three years. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred. Certain acquired software licenses and implementation costs are capitalized during the implementation stage. Capitalized costs include the license fee, external direct costs of services provided in regards to the implementation and customization of the software, and internal payroll costs for employees involved with the implementation process. These costs are recorded as property and equipment and are amortized over the license term when the asset is ready for use. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred. Leases - prior to adoption of new accounting guidance Prior to our adoption of the new accounting guidance for leasing arrangements at January 1, 2019, we recognized rent expense on a straight-line basis over the lease period of our operating leases. Any lease incentives were recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term began on the date we become legally obligated for the rent payments or when we take possession of the office space, whichever is earlier. Additionally, payments received for our subleases for unoccupied leased office space were recognized on a straight-line basis over the term of the sublease. We were deemed to be the accounting owner of our corporate headquarters during the construction period under build-to-suit lease accounting guidance and established assets and liabilities for the estimated construction costs incurred. At date of our move-in in June 2018, it was determined that the sale-leaseback guidance was not met, resulting in our accounting for the lease as a financing obligation until December 31, 2018. During 2018, we bifurcated our lease payments relating to the premises into a portion allocated to the building (a reduction of the financing obligation) and a portion allocated to the land on which the building was constructed, which was treated as an operating lease that commenced in July 2015. For the year ended December 31, 2018, we recorded €1.8 million of land rent expense in connection with this lease. Before move-in, the non-cash land expense was classified entirely as general and administrative expense, and afterwards, it was allocated to all of our operating costs. Depreciation on the building commenced upon construction completion, resulting in €1.6 million of depreciation expense for the year ended December 31, 2018, of which the majority was recorded as technology and content expense. Leases - subsequent to adoption of new accounting guidance We determine if an arrangement is a lease at inception. Operating leases are primarily for office space and, as of January 1, 2019 with the adoption of the new guidance for leasing arrangements, are included in Operating lease right-of-use ("ROU") assets and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate as the discount rate in measuring the present value of lease payments given the rate implicit in our leases is not typically readily determinable. Estimating the incremental borrowing rate requires assessing a number of inputs including an estimated synthetic credit rating, collateral adjustments and interest rates. The operating lease ROU asset is comprised of the initial operating lease liability, adjusted for any prepaid or deferred rent payments, unamortized initial direct costs, and lease incentives received. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Payments under our operating leases are primarily fixed, however, certain of our operating lease agreements include rental payments which are adjusted periodically for inflation. We recognize these costs as variable lease costs on our consolidated statement of operations, which were not material during the years ended December 31, 2019 and 2020. For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows. We have lease agreements with insignificant non-lease components and have elected the practical expedient to combine and account for lease and non-lease components as a single lease component. Additionally, we have entered into subleases for unoccupied leased office space. We recognize sublease payments on a straight-line basis over the term of the sublease. Upon adoption of the new accounting guidance for leasing arrangements at January 1, 2019, our campus building lease is classified as an operating lease and treated the same as all other such leases. Business combinations We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Recoverability of goodwill and indefinite-lived intangible assets Goodwill: Goodwill is assigned to our three reporting units, which correspond to our three operating segments, on the basis of their relative fair values. We assess goodwill for impairment annually as of September 30, or more frequently, if events and circumstances indicate that an impairment may have occurred. In the evaluation of goodwill for impairment, we typically first perform a qualitative assessment to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount, followed by performing a quantitative assessment by comparing the fair value of the reporting unit to the carrying value, if necessary. Periodically, we may elect to bypass the initial qualitative assessment and proceed directly to the quantitative goodwill impairment test. An impairment charge is recorded based on the excess of the reporting unit's carrying amount over its fair value. We generally base the measurement of fair value of our three reporting units on a blended analysis of the present value of future discounted cash flows and market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that we expect the reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include our weighted average cost of capital, revenue growth rates, profitability of our business and long-term rate of growth. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors, such as size, growth, profitability, risk and return on investment, assessing comparable revenue and operating income multiples and the control premium applied in estimating the fair value of the reporting unit. We believe the weighted use of discounted cash flows and market approach is the best method for determining the fair value of our reporting units because these are the most common valuation methodologies used within the travel and Internet industries; and the blended use of both models compensates for the inherent risks associated with either model if used on a stand-alone basis. In addition to measuring the fair value of our reporting units as described above, we consider the combined fair values of our reporting units and corporate-level assets and liabilities in relation to the Company’s total fair value of equity as of the assessment date, which assumes our fully diluted market capitalization, using either the stock price on the valuation date or the average stock price over a range of dates around the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies. Indefinite-lived intangible assets: In our evaluation of our indefinite-lived intangible assets, we typically first perform a qualitative assessment to determine whether the fair value of the indefinite-lived intangible assets is more likely than not impaired. If so, we perform a quantitative assessment and an impairment charge is recorded for the excess of the carrying value of the indefinite-lived intangible assets over the fair value. Periodically, we may elect to bypass the initial qualitative assessment and proceed directly to the quantitative impairment test of indefinite-lived intangible assets. We base our measurement of the fair value of our indefinite-lived intangible assets, which consist of trade name, trademarks and domain names, on the relief-from-royalty method. This method assumes that the trade name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. Recoverability of intangible assets with definite lives and other long-lived assets Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a straight-line basis over their estimated useful lives of generally less than seven years. We review the carrying value of long-lived assets or asset groups, including property and equipment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value. Income taxes We record income taxes under the liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as other relevant factors. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated results of operations, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. We account for uncertain tax positions based on a two-step process of evaluating recognition and measurement criteria. The first step assesses whether the tax position is more likely than not to be sustained upon examination by the tax authority, including resolution of any appeals or litigation, based on the technical merits of the position. If the tax position meets the more likely than not criteria, the portion of the tax benefit greater than 50% likely to be realized upon settlement with the tax authority is recognized in the financial statements. Interest and penalties related to uncertain tax positions are classified in the financial statements as a component of income tax expense. Presentation of taxes in the statements of operations We present taxes that we collect from advertisers and remit to government authorities on a net basis in our consolidated statements of operations. Foreign currency translation and transaction gains and losses The consolidated financial statements have been prepared in euros, the reporting currency. Certain of our operations outside of the Eurozone use the local currency as their functional currency. We translate revenue and expense at average exchange rates during the period and assets and liabilities at the exchange rates as of the consolidated balance sheet dates and include such foreign currency translation gains and losses as a component of other comprehensive income. Due to the nature of our operations and our corporate structure, we also have subsidiaries that have transactions in foreign currencies other than their functional currency. We record transaction gains and losses in our consolidated statements of operations related to the recurring remeasurement and settlement of such transactions. Advertising expense We incur advertising expense consisting of offline costs, including television and radio advertising, as well as online advertising expense 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 consolidated statements of operations. Share-based compensation Share-based compensation expense relates to stock awards granted in connection with the Omnibus Incentive Plan, as further discussed in Note 11 - Share-based awards and other equity instruments . For the years ended December 31, 2019 and 2020, we had no awards classified as liabilities. Forfeitures are accounted for in the period that the award is forfeited. Share Options. The majority of our share options are service-based awards. We also grant awards that contain performance conditions which vest upon achievement of certain company-based targets and awards which contain market conditions which vest upon achievement of certain market-based targets, in addition to containing service conditions. The fair value of share options accounted for as equity settled transactions is measured at the grant date (or modification date, if applicable) using an appropriate valuation model, including the Black-Scholes option pricing model and, for awards that contain market-based vesting conditions, the Monte Carlo simulation pricing model. The majority of our share options vest between one Restricted Stock Units. We grant Restricted Stock Units ("RSUs"), which are stock awards entitling the holder to shares of common stock as the award vests. For RSU awards with only service-based vesting conditions, we measure the value of RSUs at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. For RSU awards which contain market conditions, we estimate the fair value using the Monte Carlo simulation model. The majority of our RSUs vest between one We amortize the fair value of service-based awards, net of actual forfeitures, as share-based compensation expense over the vesting term on a straight-line basis. Performance-Based Awards. Awards with company-based performance conditions are assessed to determine the probability of the award vesting. If assessed as probable, we record compensation expense for these awards over the total performance and service period using the accelerated method. At each reporting period, we reassess the probability of achieving the performance targets, which requires judgment. In the event that actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period in which estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized. The ultimate number of shares issued and the related compensation expense recognized will be based on a comparison of the final performance metrics to the specified targets. For awards with market conditions, the probabilities of the actual number of awards expected to vest is reflected in the grant date fair values. Compensation expense for these awards is recognized over the service period using the accelerated method. The valuation models used incorporate various assumptions including expected volatility of equity, expected term and risk-free interest rates. The expected volatility is based on historical volatility of our common stock. We use the simplified method in determining the term by using the midpoint between the vesting date and the end of the contractual term. The simplified method was used as we do not have sufficient relatable historical term data available. The share price assumption used in the model is based on our publicly traded share price on the date of grant. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value. Reserves available for dividend distribution We do not at present plan to pay cash dividends on our Class A shares. Under Dutch law, we may only pay dividends to the extent that our shareholders’ equity ( eigen vermogen ) exceeds the sum of the paid-up and called-up share capital plus the reserves required to be maintained under Dutch law or by our articles of association (although we note that, presently, we are not required by our articles of association to maintain reserves in addition to those which we must maintain under Dutch law). Subject only to such restrictions, any future determination to pay dividends will be at the discretion of our management board (in some instances, subject to approval by a Founder). In making a determination to pay dividends, the management board must act in the interests of our company and its business, taking into account relevant interests of our shareholders and other factors that our management board considers relevant, including our results of operations, financial condition, and future prospects. For the years ended December 31, 2019 and 2020, our reserves restricted for dividend distribution were €190.7 million and €188.7 million, respectively. Fair value recognition, measurement and disclosure The carrying amounts of cash and cash equivalents, restricted cash and short-term investments reported on our consolidated balance sheets approximate fair value as we maintain them with various high-quality financial institutions. Our accounts receivable are short-term in nature and their carrying value generally approximates fair value. We disclose the fair value of our financial instruments based on the fair value hierarchy using the following three categories: Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 - Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. 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 36%, 34% and 27% respectively, of revenues for the year ended December 31, 2018, 2019 and 2020 and 45% and 20% of total accounts receivable as of December 31, 2019 and 2020. Booking Holdings and its affiliates represent 39%, 40% and 44%, respectively, of revenues for the years ended December 31, 2018, 2019 and 2020 and 28% and 47%, respectively, of total accounts receivable as of December 31, 2019 and 2020. Contingent liabilities From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations, as discussed further in Note 15: Commitments and contingencies. Periodically, and at year end, we review the status of all significant outstanding matters to assess the potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss |
Acquisitions and divestitures
Acquisitions and divestitures | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and divestitures | Acquisitions and divestitures trivago Spain S.L.U. ("Palma") was a wholly-owned subsidiary of trivago. In the third quarter of 2020, we entered into an agreement to sell 100% of our shares in Palma to a third-party buyer for cash consideration of €1.3 million. The transaction closed in September 2020. As a result of the sale, we also recorded an impairment loss of €0.5 million on property and equipment for the year ended December 31, 2020, which was recognized within our operating expenses on our consolidated statements of operations. base7booking.com Sarl ("base7") is a wholly-owned subsidiary of trivago. In the fourth quarter of 2020, we entered into an agreement to sell substantially all assets of base7 to a third-party buyer for cash consideration of €0.8 million, subject to subsequent net working capital and subscription revenue adjustments. The transaction closed in November 2020. We recognized a gain on sale of €0.5 million and derecognized €0.3 million of goodwill associated with the disposal group for the year ended December 31, 2020. trivago owns 49.0% of myhotelshop GmbH ("myhotelshop"). This minority interest is recorded on the consolidated balance sheets as an equity method investment. In December 2020, we entered into an agreement to sell our minority interest in myhotelshop for a cash consideration of €70 thousand to its majority shareholder, who is not a related party to trivago. One of the closing conditions of the agreement was for myhotelshop to repay the outstanding shareholder loan to us. As of December 31, 2020, the outstanding loan and accrued interest of €1.0 million with myhotelshop had been fully repaid. The transaction had not closed as of December 31, 2020 as there were remaining closing conditions outstanding. Due to the imminent closing of the transaction, we recognized an impairment loss of €1.1 million based on the difference between the consideration and the carrying amount of the minority interest, and this amount has been included in Income from equity method investment for the year ended December 31, 2020. We consider myhotelshop a related party for the years ended December 31, 2018, 2019 and 2020. |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement Financial assets measured at fair value on a recurring basis as of December 31, 2020 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (in thousands) Assets Cash equivalents: Money market funds € 65,111 € 65,111 € — Short-term investments: Term deposits 9,448 — 9,448 Total € 74,559 € 65,111 € 9,448 There were no financial assets measured at fair value on a recurring basis as of December 31, 2019. 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. These are included within cash equivalents as Level 1 measurements. Term deposits with original maturity of more than three months but less than one year are valued at amortized cost, which approximates fair value. These are included within short-term investments as Level 2 measurements. |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets As of December 31, (in thousands) 2019 2020 Prepaid advertising € 2,148 € 2,297 Other prepaid expenses 2,076 4,132 Other assets 383 4,009 Total € 4,607 € 10,438 |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment, net As of December 31, (in thousands) 2019 2020 Building and leasehold improvements € 17,844 € 15,295 Capitalized software and software development costs 22,713 22,702 Computer equipment 18,215 17,248 Furniture and fixtures 8,361 5,480 Subtotal 67,133 60,725 Less: accumulated depreciation 33,995 34,352 Construction in process 34 309 Property and equipment, net € 33,172 € 26,682 As of January 1, 2019, upon adoption of the new leasing standard ASC 842, our headquarters in Düsseldorf, Germany is accounted for as an operating lease, and consequently the Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized on our consolidated balance sheet (see Note 2 - Significant accounting policies - Leases - subsequent to adoption of new accounting guidance and Note 7 - Leases for further information). We establish assets and liabilities for the present value of estimated future costs to return our new headquarters and certain other leased facilities to their original condition under the authoritative accounting guidance for asset retirement obligations. Such assets are depreciated over the useful live of the underlying asset or the lease period and the recorded liabilities are accreted to the future value of the estimated restoration costs. As of December 31, 2019 and 2020, an asset retirement obligation asset and liability of €0.6 million and €0.3 million, respectively, is included within building and leasehold improvements, gross of accumulated depreciation of €0.1 million and €0.04 million, respectively, for the cost to decommission the physical space of our headquarters and our leased facilities. We have certain operating lease agreements that require us to decommission physical space for which we have not yet recorded an asset retirement obligation. Due to the uncertainty of specific decommissioning obligations and related costs, we cannot reasonably estimate an asset retirement obligation for these properties and we have not recorded a liability at this time for such properties. As of December 31, 2019 and 2020, our internally developed capitalized software and acquired software development costs, net of accumulated amortization, were €8.0 million and €7.2 million, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We have operating leases for office space and office equipment. Our leases have remaining lease terms of less than one year to 17 years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one year. Operating lease costs were €10.0 million and €8.2 million for the years ended December 31, 2019 and 2020. Under the lease accounting guidance in effect for the year ended December 31, 2018, rent expense was €4.7 million. The Company also subleases office space under agreements which expire on various dates through 2022. Sublease income from such agreements was €0.1 million, €1.0 million and €0.9 million for the years ended December 31, 2018, 2019 and 2020. Refer to Note 19 - Subsequent events for details of an event subsequent to December 31, 2020 that impacts trivago's operating lease agreement for office space at the Company's headquarters in Düsseldorf, Germany. Supplemental information related to operating leases was as follows: As of December 31, (in thousands) 2019 2020 Cash payments for operating leases € 10,200 € 5,225 New operating lease assets obtained in exchange for operating lease liabilities € 103,498 € 417 Supplemental consolidated balance sheet information related to leases were as follows: As of December 31, (in thousands) 2019 2020 Operating lease right-of-use assets € 96,030 € 86,810 Current operating lease liabilities 5,037 7,188 Long-term operating lease liabilities 94,660 85,979 Total operating lease liabilities € 99,697 € 93,167 Weighted average remaining lease term 17.6 years 17.3 years Weighted average discount rate 3.8 % 3.9 % Maturities of operating lease liabilities are as follows: Year ended December 31, (in thousands) 2020 2021 € 10,583 2022 7,413 2023 7,114 2024 7,114 2025 7,098 2026 and thereafter 87,252 Total lease payments 126,574 Less: imputed interest (33,407) Total € 93,167 |
Goodwill and intangible assets,
Goodwill and intangible assets, net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets, net | Goodwill and intangible assets, net The following table presents our goodwill and intangible assets as of December 31, 2019 and 2020: As of December 31, (in thousands) 2019 2020 Goodwill € 490,590 € 282,664 Intangible assets with definite lives, net 379 5 Intangible assets with indefinite lives 169,545 169,545 Total € 660,514 € 452,214 Impairment Assessments As a reaction to the continued deterioration of our business due to the COVID-19 pandemic, we performed quantitative goodwill impairment assessments in the first quarter 2020 interim period and for our annual impairment test as of September 30, 2020 in order to analyze the expected economic and financial impacts on our business. During the assessments, we compared the fair value of our reporting units to their carrying value. The fair value estimates for all reporting units were based on a blended analysis of the present value of future discounted cash flows and market value approach. The significant estimates used in the discounted cash flows model included our weighted average cost of capital, revenue growth rates, profitability of our business and long-term rate of growth. Our assumptions were based on the anticipated duration of COVID-19 impacts and rates of recovery, and implied risk premiums based on our market capitalization and factors specific to each reporting unit as of the assessment dates. Our significant estimates in the market approach model included identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, assessing comparable revenue and earnings multiples and the control premium applied in estimating the fair values of the reporting units. As a result of our interim quantitative goodwill impairment assessment in the first quarter of 2020, we recorded 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. We did not record any impairment charge as a result of the annual assessment as the fair value of the reporting units were assessed to be higher than their carrying values. A longer than expected COVID-19 recovery period or slower than anticipated recovery rates could result in an impairment or, in the period in which an impairment is recognized, could result in a materially different impairment charge. Goodwill The following table presents the changes in goodwill by reporting segment: (in thousands) Developed Europe Americas Rest of World Total Balance as of January 1, 2019 € 215,283 € 192,729 € 82,517 € 490,529 Foreign exchange translation 27 24 10 61 Balance as of December 31, 2019 € 215,310 € 192,753 € 82,527 € 490,590 Balance as of January 1, 2020 € 215,310 € 192,753 € 82,527 € 490,590 Foreign exchange translation (4) 6 7 9 Impairment charge (17,568) (107,516) (82,534) (207,618) Disposals (222) (95) — (317) Balance as of December 31, 2020 € 197,516 € 85,148 € 0 € 282,664 As of December 31, 2019, we had no accumulated impairment losses for goodwill. As of December 31, 2020, we had accumulated impairment losses for goodwill of €207.6 million. Indefinite-lived Intangible Assets Our indefinite-lived intangible assets relate principally to trade names, trademarks and domain names. Concurrently with our goodwill impairment assessments, we also performed quantitative impairment assessments for our indefinite-lived intangible assets. We did not record any impairment losses as a result of these assessments. As of December 31, 2019 and December 31, 2020, we had no accumulated impairment losses for indefinite-lived intangible assets. Intangible Assets with Definite Lives The following table presents the components of our intangible assets with definite lives as of December 31, 2019 and 2020: December 31, 2019 December 31, 2020 (in thousands) Cost (Accumulated Amortization) Net Cost (Accumulated Amortization) Net Customer relationships € 34 € (27) € 7 € — € — € — Partner relationships 34,254 (34,246) 8 34,220 (34,220) — Technology 60,145 (60,071) 74 59,789 (59,784) 5 Non-compete agreement 10,800 (10,510) 290 10,800 (10,800) — Total € 105,233 € (104,854) € 379 € 104,809 € (104,804) € 5 Amortization expense was €1.7 million for the year ended December 31, 2018, €1.7 million for the year ended December 31, 2019 and €0.4 million for the year ended December 31, 2020. The estimated future amortization expense related to intangible assets with definite lives as of December 31, 2020, assuming no subsequent impairment of the underlying assets, is €1 thousand for each of the five succeeding fiscal years. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the second quarter of 2020, we announced a restructuring of our organization in order to adjust to the new economic situation due to the COVID-19 pandemic. We decided to consolidate our office locations and to reduce our headcount significantly, in order to shape a leaner organization, enabling us to prepare for the expected market recovery and achieve our long-term profit recovery plan. During 2020, the Company recorded €6.2 million of charges associated with the restructuring activity. The charges were comprised of €1.8 million being recorded in selling and marketing expense, €2.9 million in technology and content expense and €1.5 million in general and administrative expense. Charges recorded in cost of revenue were insignificant. As of December 31, 2020, €0.2 million of total restructuring charges related to employee related costs remain in accrued expenses and other liabilities in the consolidated balance sheets. We expect these costs to be fully paid, and no further charges to be incurred, during 2021. The following table presents the development of our restructuring liability for the year ended December 31, 2020. (in thousands) Employee related costs Liability as of January 1, 2020 € — 2020 restructuring charges 6,235 Cash payments (6,063) Non-cash charges — Liability as of December 31, 2020 € 172 The charges incurred in connection with the restructuring activity mainly consists of severance and benefit charges. |
Debt - credit facility
Debt - credit facility | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt - credit facility | Debt-credit facility We maintain a €50.0 million uncommitted credit facility with an interest rate of LIBOR, floored at zero, plus 1% per annum, which is guaranteed by Expedia Group, that may be terminated at any time by the lender. As of December 31, 2020, we had no borrowings outstanding on the consolidated balance sheet. Refer to Note 19 - Subsequent events for details of an event subsequent to December 31, 2020 that impacts the uncommitted credit facility. |
Share-based awards and other eq
Share-based awards and other equity instruments | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based awards and other equity instruments | Share-based awards and other equity instruments 2016 Omnibus Incentive Plan In connection with our IPO, we established the trivago N.V. 2016 Omnibus Incentive Plan, which we refer to as the 2016 Plan, with the purpose of giving us a competitive advantage in attracting, retaining and motivating officers, employees, management board members, supervisory board members, and/or consultants by providing them incentives directly linked to shareholder value. The maximum number of Class A shares available for issuance under the 2016 Plan as of December 31, 2020 are 34,711,009 Class A shares, which does not include any Class B share conversions. Class A shares issuable under the 2016 Plan are represented by ADSs for such Class A shares. The 2016 Plan is administered by a committee of at least two members of our supervisory board, which we refer to as the plan committee. The plan committee must approve all awards to directors. Our management board may approve awards to eligible recipients other than directors, subject to annual aggregate and individual limits as may be agreed by the supervisory board. Subject to applicable law or the listing standards of the applicable exchange, the plan committee may delegate to other appropriate persons the authority to grant equity awards under the 2016 Plan to eligible award recipients. Management board members, supervisory board members, officers, employees and consultants of the company or any of our subsidiaries or affiliates, and any prospective directors, officers, employees and consultants of the company who have accepted offers of employment or consultancy from the company or our subsidiaries or affiliates are eligible for awards under the 2016 Plan. Awards include options, performance-based stock options share appreciation rights, restricted stock units, performance-based stock units and other share-based and cash-based awards. Awards may be settled in stock or cash. The option exercise price for options under the 2016 Plan can be less than the fair market value of a Class A share as defined in the 2016 Plan on the relevant grant date. To the extent that listing standards of the applicable exchange require the company’s shareholders to approve any repricing of options, options may not be repriced without shareholder approval. Options and share appreciation rights shall vest and become exercisable at such time and pursuant to such conditions as determined by the plan committee and as may be specified in an individual grant agreement. The plan committee may at any time accelerate the exercisability of any option or share appreciation right. Restricted shares may vest based on continued service, attainment of performance goals or both continued service and performance goals. The plan committee at any time may waive any of these vesting conditions. Options and share appreciation rights will have a term of not more than ten years. The 2016 Plan has a ten year term, although awards outstanding on the date the 2016 Plan terminates will not be affected by the termination of the 2016 Plan. During the years ended December 31, 2019 and 2020, 4,406,619 and 10,156,893 awards, respectively, were granted under the 2016 Plan. We issue new shares to satisfy the exercise or settlement of share-based awards. The following table presents a summary of our share option activity: Options Weighted Remaining Aggregate (in €) (In years) (€ in thousands) Balance as of January 1, 2018 17,108,574 5.66 21 32,178 Granted 4,944,430 3.99 12,573 Exercised 531,410 0.30 2,855 Cancelled 828,196 6.23 1,182 Balance as of December 31, 2018 20,693,398 5.54 17 32,050 Granted 3,932,498 0.06 17,412 Exercised 1,218,560 0.17 5,034 Cancelled 2,233,623 6.93 1,572 Balance as of December 31, 2019 21,173,713 4.79 15 19,556 Granted 8,550,753 0.06 12,359 Exercised 1,405,583 0.06 2,168 Cancelled 1,971,734 4.28 1,214 Balance as of December 31, 2020 26,347,149 3.29 12 28,356 Exercisable as of December 31, 2020 14,204,833 5.01 17 10,018 Vested and expected to vest after December 31, 2020 26,347,149 3.29 12 28,356 The following table presents a summary of our restricted stock units (RSUs): RSUs Weighted Average Grant Date Fair Value Remaining (in €) (in years) Balance as of January 1, 2018 — — Granted 57,806 3.88 Vested — — Cancelled — — Balance as of December 31, 2018 57,806 3.88 7 Granted 474,121 4.25 Vested 38,262 3.88 Cancelled 8,000 5.29 Balance as of December 31, 2019 485,665 4.22 6 Granted 1,606,140 1.13 Vested 245,687 4.30 Cancelled 221,657 2.43 Balance as of December 31, 2020 1,624,461 1.39 5 The fair value of share awards granted during the years ended December 31, 2018, 2019 and 2020 were estimated at the date of grant using appropriate valuation techniques, including the Black-Scholes and Monte Carlo simulation pricing models, assuming the following weighted average assumptions: Year ended December 31, 2018 2019 2020 Risk-free interest rate 1.74 % (0.56) % (0.20) % Expected volatility 33 % 50 % 60 % Expected life (in years) 4.42 4.50 4.12 Dividend yield — % — % — % Weighted-average estimated fair value of options granted during the year € 3 € 4 € 1 The Monte Carlo simulation model, which simulated the probabilities of the potential outcomes of future stock prices of the Company over the performance period, was used to calculate the grant-date fair value for awards with market conditions. On October 22, 2020, a modification was made to the vesting conditions for market-based awards, which impacted 3,580,049 awards granted to three grantees on March 11, 2020. As a result of the modification, additional incremental compensation expense of €1.0 million will be amortized over the remaining service period using the accelerated method. During the years ended December 31, 2018, 2019 and 2020, we recognized total share-based compensation expense of €20.7 million, €19.9 million and €15.1 million, respectively, which had no related income tax benefit. Cash received from share-based award exercises for the years ended December 31, 2018, 2019 and 2020 was €161 thousand, €202 thousand and €87 thousand, respectively. As of December 31, 2020, there was approximately €14.5 million in unrecognized share-based compensation expense related to unvested share-based awards subject to equity treatment, which is expected to be recognized in expense over the weighted average period of 1.7 years. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The following table summarizes our income tax expense/(benefit): Year ended December 31, (€ thousands) 2018 2019 2020 Current income tax expense/(benefit): Germany € 2,225 € 18,769 € (362) Other countries 125 309 117 Current income tax expense/(benefit) 2,350 19,078 (245) Deferred income tax expense/(benefit): Germany (1,264) 2,020 (8,165) Other countries — (116) (84) Deferred income tax expense/(benefit) (1,264) 1,904 (8,249) Income tax expense/(benefit) € 1,086 € 20,982 € (8,494) Reconciliation of German statutory income tax rate to effective income tax rate The following table summarizes our income/(loss) before income taxes allocated to Germany and to other countries: Year ended December 31, (€ thousands) 2018 2019 2020 Germany € (20,574) € 36,750 € (252,859) Other countries 108 940 (274) Income/(loss) before income taxes € (20,466) € 37,690 € (253,133) A reconciliation of amounts computed by applying the German statutory income tax rate of 31.23% to income/(loss) before income taxes to total income tax expense/(benefit) is as follows: Year ended December 31, (€ thousands) 2018 2019 2020 Income/(loss) before income taxes € (20,466) € 37,690 € (253,133) Income tax expense at German tax rate (6,391) 11,769 (79,041) Foreign rate differential (5) 100 40 Expected tax expense/(benefit) (6,396) 11,869 (79,001) Tax effect from: Non-deductible share-based compensation 6,465 6,211 4,708 Goodwill impairment — — 64,829 Prior period taxes 96 66 9 Movement in valuation allowance (184) 19 454 Foreign withholding taxes 813 — 305 Movement in uncertain tax positions — 2,857 14 Other differences 292 (40) 188 Income tax expense/(benefit) € 1,086 € 20,982 € (8,494) The income tax expense/(benefit) is mainly driven by income/(loss) before income taxes of €(20.5) million, €37.7 million and €(253.1) million for the years ended December 31, 2018, 2019 and 2020, respectively. Our effective tax rate was (5.3)%, 55.7% and 3.4% in the years ended December 31, 2018, 2019 and 2020, respectively. Non-deductible share-based compensation of (pre-tax) €20.7 million, €19.9 million and €15.1 million had an impact on the effective tax rates of (31.6)%, 16.5% and (1.9)% in the years ended December 31, 2018, 2019 and 2020, respectively. In 2020, non-deductible impairment expenses on goodwill of €207.6 million had an impact on the effective tax rate of (25.6)%. Additional details on the movement in valuation allowance are included in the deferred income tax section below. Other differences relate to one-off items during the year, such as non-deductible expenses which are individually insignificant. Uncertain tax positions Uncertain tax positions as of December 31, 2019 and 2020 were as follows: Year Ended December 31, (€ thousands) 2019 2020 Balance, beginning of year € — € 2,857 Increases to tax positions related to the current year 2,133 — Increases to tax positions related to prior years 720 — Interest and penalties 4 14 Balance, end of year € 2,857 € 2,871 Tax audits The Company is subject to audit by federal, state, local and foreign income tax authorities. As of December 31, 2020, the audit of tax returns from 2013 through 2015 for corporate and trade income tax as well as value-added tax for trivago N.V. had been finalized. According to the statute of limitation, the German tax authorities may initiate additional audits of tax returns for 2016 through 2020 . Deferred income taxes At December 31, 2019 and 2020, the significant components of our deferred tax assets and deferred tax liabilities were as follows: Year Ended December 31, (€ thousands) 2019 2020 Deferred tax assets: Net operating loss and tax credit carryforwards € 429 € 11,840 Prepaid expense and other current assets 3,723 1,335 Deferred rent 1 — Property and equipment 116 1 Accrued expenses and other current liabilities 147 26 Intangible assets, net 253 — Operating lease liability 31,130 28,132 Other long-term liabilities 311 115 Deferred tax assets (gross) 36,110 41,449 Less valuation allowance (81) (536) Subtotal 36,029 40,913 Offsetting (35,294) (40,912) Deferred tax assets 735 1 Deferred tax liabilities: Intangible assets, net 53,021 52,928 Property and equipment 2,980 2,875 Operating lease right-of-use assets 29,985 27,106 Other 235 179 Subtotal 86,221 83,088 Offsetting (35,294) (40,912) Deferred tax liabilities € 50,927 € 42,176 At December 31, 2020, we had net operating loss carryforwards (“NOLs”) for a tax-effected amount of approximately €11.8 million (in 2019: €0.4 million). The tax-effected NOL carryforwards increased by €11.4 million from the amount recorded at December 31, 2019, primarily due to the current year losses at the level of the trivago N.V. trivago N.V. is a Dutch listed entity, however has its tax residency in Germany. In 2017, trivago N.V. and trivago GmbH merged for tax purposes. This merger enabled trivago N.V. to offset its NOLs with any future taxable profits. As a result, the €3.2 million previously unrecognized losses of trivago N.V. have been recognized in 2017. All of this €3.2 million were utilized in 2017, 2018 and 2019. As of December 31, 2020, €11.3 million tax-effected NOLs are recognized for tax losses of trivago N.V., which also may be carried forward indefinitely. As of December 31, 2020, deferred tax assets for €0.5 million of accumulated tax loss carryforwards of domestic and foreign subsidiaries were not recognized as we have considered these tax loss carryforwards as not realizable. Accordingly the valuation allowance increased by €0.5 million from the amount recorded as of December 31, 2019 primarily due to the absence of potential future taxable profits necessary to use tax loss carryforwards. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period change, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. The total cumulative amount of undistributed earnings related to investments in certain foreign subsidiaries where the foreign subsidiary has or will invest undistributed earnings indefinitely was €0.01 million at December 31, 2020 (in 2019: €0.1 million). In terms of undistributed earnings of domestic investments, we have recognized deferred income taxes on taxable temporary difference of €0.01 million, as only 5% refer to a taxable temporary difference under German tax law. Any capital gains on the sale of participations would be 95% exempt under German tax law. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders' equity As of December 31, 2020, we had ADSs representing 55,967,976 Class A shares and 298,187,967 Class B shares outstanding. Each Class B share is convertible into one Class A share at any time by the holder. During the years ended December 31, 2018, 2019 and 2020, 11,112,001, 7,000,000 and 3,500,000 Class B shares were converted into Class A shares, respectively. Class A and Class B common stock has a par value of €0.06 and €0.60, respectively. The holders of our Class B shares, Expedia Group and Founders, are entitled to ten votes per share, and holders of our Class A shares are entitled to one vote per share. All other terms and preferences of Class A and Class B common stock are the same. Reserves Reserves primarily represents the effects of pushdown accounting applied due to the change in control in 2013 in addition to share premium as result of the corporate reorganization and IPO. See Note 1 - Organization and basis of presentation . Further effects to the Reserves are due to the merger of trivago GmbH with and into trivago N.V. in 2017, exercises of employee stock options, and the effect of the Founders' conversion of Class B shares to Class A shares in 2018, 2019 and 2020. Accumulated other comprehensive income/(loss) Accumulated other comprehensive income/(loss) represents foreign currency translation adjustments for our subsidiaries in foreign locations. As of December 31, 2020 we do not expect to reclassify any amounts included in accumulated other comprehensive income/(loss) into earnings during the next 12 months. Contribution from Parent The beginning contribution from Parent balance represents the pushdown of share-based compensation expense from Expedia Group. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per shareBasic 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. The following table presents our basic and diluted earnings per share: Year Ended December 31, (€ thousands, except per share data) 2018 2019 2020 Numerator: Net income/(loss) € (21,489) € 17,161 € (245,378) Denominator: Weighted average shares of Class A and Class B common stock outstanding: Basic 350,852 351,991 353,338 Diluted 350,852 356,738 353,338 Net income/(loss) per share: Basic € (0.06) € 0.05 € (0.69) Diluted € (0.06) € 0.05 € (0.69) Diluted weighted average common shares outstanding in 2018 and 2020 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. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Purchase obligations We have commitments and obligations which include purchase commitments, which could potentially require our payment in the event of demands by third parties or contingent events. Commitments and obligations as of December 31, 2020 were as follows: By Period (in thousands) Total Less than 1 to 3 years 3 to 5 years More than Purchase obligations € 17,765 € 12,223 € 5,542 € — € — Our purchase obligations represent the minimum obligations we have under agreements with certain of our vendors. These minimum obligations are less than our projected use for those periods. Payments may be more than the minimum obligations based on actual use. 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. A separate trial regarding penalties and other orders is scheduled for June 7, 2021. Management recorded an estimate of the probable loss in connection with these proceedings. 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 so far assessing penalties for contraventions of the ACL under the new regime. The penalties imposed in those cases were jointly agreed by the parties and were not the subject of a contested penalty hearing. In addition, 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. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related party transactions | 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 For the years ended December 31, 2018, 2019 and 2020, our operating expenses include €0.8 million, €0.8 million and €0.2 million, respectively, of related-party shared services fees and amounts related to the services and support agreements detailed below. The related party trade receivable balances with Expedia Group and its subsidiaries reflected in our consolidated balance sheets as of December 31, 2019 and 2020 were €30.9 million and €2.9 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. This facility may be terminated at any time by the lender. Our obligations under this facility are guaranteed by Expedia Group. We did not utilize the credit facility during the years ended December 31, 2019 and 2020. Refer to Note 19 - Subsequent events for details on an event subsequent to December 31, 2020 that impacts the uncommitted credit facility. Services agreement On May 1, 2013, we entered into an Assets Purchase Agreement, pursuant to which Expedia Group purchased certain computer hardware and software from us, and a Data Hosting Services Agreement, pursuant to which Expedia Group provides us with certain data hosting services relating to all of the servers we use that are located within the United States. Either party may terminate the Data Hosting Services Agreement upon 30 days’ prior written notice. For each of the years ended December 31, 2018 and 2019, we paid Expedia Group €59 thousand and €45 thousand, respectively, for these data hosting services. During the year ended December 31, 2020, we did not utilize this service agreement. Services and support agreement On September 1, 2016, we entered into a Services and Support Agreement, pursuant to which Expedia Group agreed to provide us with certain services in connection with localizing content on our websites, such as translation services. Either party may terminate the Services and Support Agreement upon 90 days’ prior notice. For each of the years ended December 31, 2018, 2019 and 2020, we incurred €0.7 million, €0.8 million and €0.3 million, respectively, for these services and support services. myhotelshop Subsequent to the deconsolidation of myhotelshop in December 2017, myhotelshop remains a related party to trivago. Related-party revenue from myhotelshop of €2.3 million, €2.8 million and €1.1 million for the years ended December 31, 2018, 2019 and 2020, respectively, primarily consists of referral revenue. Refer to Note 19 - Subsequent events for details on an event subsequent to December 31, 2020 that impacts myhotelshop as a related party to trivago. |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment information | Segment information Management has identified three reportable segments, which correspond to our three operating segments: the Americas, Developed Europe and Rest of World. 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, the most significant by revenue of which are Australia, Japan, Turkey, India and New Zealand. 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 years ended December 31, 2018, 2019 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. Year Ended December 31, 2018 (€ thousands) Developed Europe Americas Rest of World Corporate & Eliminations Total Referral revenue € 378,919 € 315,966 € 204,937 € — € 899,822 Subscription revenue — — — 13,863 13,863 Other revenue — — — 1,131 1,131 Total revenue € 378,919 € 315,966 € 204,937 € 14,994 € 914,816 Advertising spend 265,004 261,620 205,834 — 732,458 ROAS contribution € 113,915 € 54,346 € (897) € 14,994 € 182,358 Costs and expenses: Cost of revenue, including related party, excluding amortization 5,435 Other selling and marketing, including related party (1) 73,175 Technology and content, including related party 66,904 General and administrative, including related party 54,326 Amortization of intangible assets 1,684 Operating loss € (19,166) Other income/(expense) Interest expense (1,839) Other, net 539 Total other income/(expense), net € (1,300) Loss before income taxes € (20,466) Expense/(benefit) for income taxes 1,086 Loss before equity method investment € (21,552) Income from equity method investment 63 Net loss € (21,489) (1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment. Year Ended December 31, 2019 (€ thousands) Developed Europe Americas Rest of World Corporate & Eliminations Total Referral revenue € 347,094 € 305,061 € 171,469 € — € 823,624 Subscription revenue — — — 12,152 12,152 Other revenue — — — 2,841 2,841 Total revenue € 347,094 € 305,061 € 171,469 € 14,993 € 838,617 Advertising spend 230,291 233,949 152,465 — 616,705 ROAS contribution € 116,803 € 71,112 € 19,004 € 14,993 € 221,912 Costs and expenses: Cost of revenue, including related party, excluding amortization 9,159 Other selling and marketing, including related party (1) 47,450 Technology and content, including related party 69,924 General and administrative, including related party 55,543 Amortization of intangible assets 1,685 Operating income € 38,151 Other income/(expense) Interest expense (33) Other, net (428) Total other income/(expense), net € (461) Income before income taxes € 37,690 Expense/(benefit) for income taxes 20,982 Income before equity method investment € 16,708 Income from equity method investment 453 Net income € 17,161 (1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment. Year Ended December 31, 2020 (€ thousands) Developed Europe Americas Rest of World Corporate & Eliminations Total Referral revenue € 102,899 € 89,341 € 46,125 € — € 238,365 Subscription revenue — — — 7,657 7,657 Other revenue — — — 2,899 2,899 Total revenue € 102,899 € 89,341 € 46,125 € 10,556 € 248,921 Advertising spend 60,784 56,979 32,211 — 149,974 ROAS contribution € 42,115 € 32,362 € 13,914 € 10,556 € 98,947 Costs and expenses: Cost of revenue, including related party, excluding amortization 10,133 Other selling and marketing, including related party (1) 28,281 Technology and content, including related party 64,258 General and administrative, including related party 40,935 Amortization of intangible assets 373 Impairment of goodwill 207,618 Operating loss € (252,651) Other income/(expense) Interest expense (270) Other, net (212) Total other income/(expense), net € (482) Loss before income taxes € (253,133) Expense/(benefit) for income taxes (8,494) Loss before equity method investment € (244,639) Loss from equity method investment (739) Net loss € (245,378) (1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment. Geographic information The following table presents revenue by geographic area for the years ended December 31, 2018, 2019 and 2020. Referral revenue was allocated by country using the same methodology as the allocation of segment revenue, while non-referral revenue was allocated based upon the location of the customer using the service. Year ended December 31, (in thousands) 2018 2019 2020 Total revenues United States € 194,416 € 192,526 € 57,406 Germany 73,143 68,491 27,491 United Kingdom 95,893 85,284 26,637 Brazil 41,097 35,387 12,440 All other countries (1) 510,267 456,929 124,947 € 914,816 € 838,617 € 248,921 (1) Includes a portion of Corporate & Eliminations The following table presents property and equipment, net for Germany and all other countries, as of December 31, 2019 and 2020: (€ thousands) Years ended December 31, 2019 2020 Property and equipment, net: Germany € 30,681 € 26,289 All other countries 2,491 393 € 33,172 € 26,682 |
Valuation and qualifying accoun
Valuation and qualifying accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and qualifying accounts | Valuation and qualifying accounts The following table presents the changes in our valuation and qualifying accounts not disclosed elsewhere in these financial statements. (€ thousands) Balance at Beginning of Period Charges to Earnings Deductions Balance at End of Period 2018 Allowance for doubtful accounts € 231 € 580 € (561) € 250 2019 Allowance for doubtful accounts 250 754 (930) 74 2020 Allowance for expected credit losses 74 656 (382) 348 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events After the date of the balance sheet through the date of issuance of these consolidated financial statements, 3,625,000 Class B shares were converted into 3,625,000 Class A shares consistent with the conversion ratio discussed in Note 13 - Stockholders' equity . Furthermore, 2,614,550 Class A shares were issued as a result of options exercised and RSUs released. On January 7, 2021, our €50.0 million uncommitted credit facility with Bank of America Merrill Lynch International Ltd. was cancelled by the lender. On January 12, 2021, we acquired 100% of weekengo GmbH ("Weekengo") shares and the related domain for €7.4 million cash consideration pursuant to an agreement dated December 23, 2020. 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 amounting to €3.0 million was paid in December 2020 as partial fulfillment of closing conditions, and this amount has been included in prepaid expenses and other current assets on the consolidated balance sheets as of December 31, 2020. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting. Due to the close proximity of the acquisition date and the filing of our annual report on Form 20-F for the year ended December 31, 2020, the initial accounting for the business combination is incomplete, and therefore it is impracticable for us to provide the amounts recognized as of the acquisition date for assets acquired, liabilities assumed and goodwill. If Weekengo had been included in the consolidated results of the Company for the entire years ended December 31, 2019 and December 31, 2020, the unaudited proforma consolidated revenue of the combined entity would have increased by €0.5 million and €0.4 million, respectively. It is impracticable for us to provide pro forma earnings of the combined entity at this time. The sale of our minority interest in myhotelshop closed on January 28, 2021. As a result of the conclusion of the sale, we derecognized the remaining equity method investment of €70 thousand on our consolidated balance sheet and we will no longer consider myhotelshop a related party. 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 will be 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, we will receive €7.6 million from the landlord as compensation for the transfer of long-lived assets related to the terminated floor space and €2.6 million as settlement of prior claims for defects in the leased office space. As a result of this lease modification, we will record a significant decrease in the carrying amounts of right-of-use assets and related operating lease liabilities that is expected to result in a gain or loss. In January 2021, we entered into a marketing sponsorship agreement, which includes a commitment of approximately €23.2 million for the next three years in return for various marketing rights beginning July 1, 2021. The first contractual installment of €4.0 million was paid in January 2021. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation Unless otherwise specified, “the Company” refers to trivago N.V. and its respective subsidiaries throughout the remainder of these notes. These consolidated financial statements reflect Expedia Group’s basis of accounting due to the change in control in 2013 when Expedia Group acquired a controlling ownership in trivago, as we elected the option to apply pushdown accounting in the period in which the change in control event occurred. |
Seasonality/Revenue recognition | Seasonality We experience seasonal fluctuations in the demand for our services as a result of seasonal patterns in travel. For example, 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 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 related to the duration of the impact from COVID-19 and the shape and timing of any sustained recovery. Revenue recognition We recognize revenues when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We derive our revenues from the following streams: Referral Revenue We earn referral revenue using cost-per-click ("CPC") and cost-per-acquisition ("CPA") models. Both relate to fees earned on the display of a customer's (advertiser's) link on the trivago website. CPC revenue is recognized after the traveler makes the click-through to the related advertiser’s website. Control is deemed to have transferred at a point in time, being when the link or advertisement has been displayed and the click-through to the customer's website has occurred. CPA revenue is recognized when the click-through to the related advertiser's website results in a booking, as control is deemed to have transferred at that point in time. We consider the performance obligation to be satisfied when the booking has occurred. The price that an advertiser pays for a click that results in a booking is based on a percentage of the booking revenue. The prices per click for CPC and CPA advertising campaigns are negotiated in advance, thus, the amount to be recognized as revenue for the respective click is fixed and determinable when the performance obligation has been satisfied. Most of our revenue is invoiced on a monthly basis after the performance obligation has been satisfied with payment terms between 10 to 90 days. For some advertisers we require prepayments. Subscription Revenue Revenue from subscription services is recognized ratably over the contract term, which is generally 12 months or less from the subscription commencement date. Customers may choose to be billed annually or monthly via SEPA or credit card. The price per subscription is fixed and determinable when the contract commences. |
Consolidation | Consolidation Our consolidated financial statements include the accounts of trivago and entities we control. Intercompany balances and transactions have been eliminated in consolidation. We deconsolidate entities from our results of operations on the day when we lose control. Further, the equity method of accounting is used for investments in associated companies in which we have a financial interest but do not have control over. As of December 31, 2019 and December 31, 2020, there are no noncontrolling interest balances, as all subsidiaries of the Company are wholly-owned. |
Accounting estimates | Accounting estimates We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). Preparation of the 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 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 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 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. |
Cost of revenue | Cost of revenueCost of revenue consists of expenses that are directly or closely correlated to revenue generation, including data center costs, third-party cloud-related service providers, salaries and share-based compensation for our data center operations staff and our customer service team who are directly involved in revenue generation. For the years ended December 31, 2018, 2019 and 2020 cost of revenue excludes €0.3 million, €0.1 million and €0.1 million, respectively, of amortization expense of acquired technology. For the years ended December 31, 2018, 2019 and 2020 cost of revenue excludes €3.0 million, €4.3 million and €4.6 million, respectively, of amortization expense related to internal use software and website development. |
Cash, cash equivalents and restricted cash | Cash and Cash Equivalents Our cash and cash equivalents include cash and liquid financial instruments, consisting of money market funds, which are readily accessible mutual funds that invest in high-quality, short-term debt, and time deposit investments, with original maturities of three months or less when purchased. Restricted cash Restricted cash primarily consists of funds held as guarantees in connection with corporate leases and funds held in escrow accounts in the event of default on corporate credit card statements. The carrying value of restricted cash approximates its fair value. As of December 31, 2019 and December 31, 2020, restricted cash was €2.4 million and €2.4 million, respectively. From the total balance as of December 31, 2020, €2.3 million is classified as other long-term assets based on the expected dates the restricted cash will be refunded or made available to the Company. |
Accounts receivable | Accounts receivable Accounts receivable are generally due within 10 to 90 days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the type of receivable, collection terms and historical or expected credit loss patterns. For each pool, we make estimates for the allowance based on the current expected credit loss ("CECL") methodology by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as general and administrative in our consolidated statement of operations. As disclosed in Note 18: Valuation and qualifying accounts , for the year ended December 31, 2020, we recorded approximately €0.7 million of incremental allowance for expected uncollectible amounts, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company, partially offset by €0.4 million of write-offs. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic. Short-term investments Our short-term investments consist of time deposit and term deposit accounts with original maturities of more than three but fewer than 12 months. |
Property and equipment, net including software and website capitalization | Property and equipment, net including software and website capitalization We record property and equipment at cost, net of accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is generally three Certain direct development costs associated with website and internal-use software are capitalized during the application development stage. Capitalized costs include external direct costs of services and payroll costs (including share-based compensation). The payroll costs are for employees devoting time to the software development projects principally related to website and mobile app development, including support systems, software coding, designing system interfaces and installation and testing of the software. These costs are recorded as property and equipment and are generally amortized over a period of three years beginning when the asset is ready for use. Costs incurred that are expected to result in additional features or functionality are capitalized and amortized over the estimated useful life of the enhancements, which is generally a period of three years. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred. Certain acquired software licenses and implementation costs are capitalized during the implementation stage. Capitalized costs include the license fee, external direct costs of services provided in regards to the implementation and customization of the software, and internal payroll costs for employees involved with the implementation process. These costs are recorded as property and equipment and are amortized over the license term when the asset is ready for use. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred. |
Leases | Leases - prior to adoption of new accounting guidance Prior to our adoption of the new accounting guidance for leasing arrangements at January 1, 2019, we recognized rent expense on a straight-line basis over the lease period of our operating leases. Any lease incentives were recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term began on the date we become legally obligated for the rent payments or when we take possession of the office space, whichever is earlier. Additionally, payments received for our subleases for unoccupied leased office space were recognized on a straight-line basis over the term of the sublease. We were deemed to be the accounting owner of our corporate headquarters during the construction period under build-to-suit lease accounting guidance and established assets and liabilities for the estimated construction costs incurred. At date of our move-in in June 2018, it was determined that the sale-leaseback guidance was not met, resulting in our accounting for the lease as a financing obligation until December 31, 2018. During 2018, we bifurcated our lease payments relating to the premises into a portion allocated to the building (a reduction of the financing obligation) and a portion allocated to the land on which the building was constructed, which was treated as an operating lease that commenced in July 2015. For the year ended December 31, 2018, we recorded €1.8 million of land rent expense in connection with this lease. Before move-in, the non-cash land expense was classified entirely as general and administrative expense, and afterwards, it was allocated to all of our operating costs. Depreciation on the building commenced upon construction completion, resulting in €1.6 million of depreciation expense for the year ended December 31, 2018, of which the majority was recorded as technology and content expense. Leases - subsequent to adoption of new accounting guidance We determine if an arrangement is a lease at inception. Operating leases are primarily for office space and, as of January 1, 2019 with the adoption of the new guidance for leasing arrangements, are included in Operating lease right-of-use ("ROU") assets and operating lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate as the discount rate in measuring the present value of lease payments given the rate implicit in our leases is not typically readily determinable. Estimating the incremental borrowing rate requires assessing a number of inputs including an estimated synthetic credit rating, collateral adjustments and interest rates. The operating lease ROU asset is comprised of the initial operating lease liability, adjusted for any prepaid or deferred rent payments, unamortized initial direct costs, and lease incentives received. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Payments under our operating leases are primarily fixed, however, certain of our operating lease agreements include rental payments which are adjusted periodically for inflation. We recognize these costs as variable lease costs on our consolidated statement of operations, which were not material during the years ended December 31, 2019 and 2020. For operating leases with a term of one year or less, we have elected to not recognize a lease liability or ROU asset on our consolidated balance sheet. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to our consolidated statements of operations and cash flows. We have lease agreements with insignificant non-lease components and have elected the practical expedient to combine and account for lease and non-lease components as a single lease component. Additionally, we have entered into subleases for unoccupied leased office space. We recognize sublease payments on a straight-line basis over the term of the sublease. |
Business combinations | Business combinations We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer relationships and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. |
Recoverability of goodwill and indefinite-lived intangible assets | Recoverability of goodwill and indefinite-lived intangible assets Goodwill: Goodwill is assigned to our three reporting units, which correspond to our three operating segments, on the basis of their relative fair values. We assess goodwill for impairment annually as of September 30, or more frequently, if events and circumstances indicate that an impairment may have occurred. In the evaluation of goodwill for impairment, we typically first perform a qualitative assessment to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount, followed by performing a quantitative assessment by comparing the fair value of the reporting unit to the carrying value, if necessary. Periodically, we may elect to bypass the initial qualitative assessment and proceed directly to the quantitative goodwill impairment test. An impairment charge is recorded based on the excess of the reporting unit's carrying amount over its fair value. We generally base the measurement of fair value of our three reporting units on a blended analysis of the present value of future discounted cash flows and market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that we expect the reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include our weighted average cost of capital, revenue growth rates, profitability of our business and long-term rate of growth. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors, such as size, growth, profitability, risk and return on investment, assessing comparable revenue and operating income multiples and the control premium applied in estimating the fair value of the reporting unit. We believe the weighted use of discounted cash flows and market approach is the best method for determining the fair value of our reporting units because these are the most common valuation methodologies used within the travel and Internet industries; and the blended use of both models compensates for the inherent risks associated with either model if used on a stand-alone basis. In addition to measuring the fair value of our reporting units as described above, we consider the combined fair values of our reporting units and corporate-level assets and liabilities in relation to the Company’s total fair value of equity as of the assessment date, which assumes our fully diluted market capitalization, using either the stock price on the valuation date or the average stock price over a range of dates around the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies. |
Recoverability of intangible assets with definite lives and other long-lived assets | Recoverability of intangible assets with definite lives and other long-lived assets Intangible assets with definite lives and other long-lived assets are carried at cost and are amortized on a straight-line basis over their estimated useful lives of generally less than seven years. We review the carrying value of long-lived assets or asset groups, including property and equipment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash |
Income taxes | Income taxes We record income taxes under the liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as other relevant factors. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated results of operations, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. We account for uncertain tax positions based on a two-step process of evaluating recognition and measurement criteria. The first step assesses whether the tax position is more likely than not to be sustained upon examination by the tax authority, including resolution of any appeals or litigation, based on the technical merits of the position. If the tax position meets the more likely than not criteria, the portion of the tax benefit greater than 50% likely to be realized upon settlement with the tax authority is recognized in the financial statements. Interest and penalties related to uncertain tax positions are classified in the financial statements as a component of income tax expense. Presentation of taxes in the statements of operations We present taxes that we collect from advertisers and remit to government authorities on a net basis in our consolidated statements of operations. |
Foreign currency translation and transaction gains and losses | Foreign currency translation and transaction gains and losses The consolidated financial statements have been prepared in euros, the reporting currency. Certain of our operations outside of the Eurozone use the local currency as their functional currency. We translate revenue and expense at average exchange rates during the period and assets and liabilities at the exchange rates as of the consolidated balance sheet dates and include such foreign currency translation gains and losses as a component of other comprehensive income. Due to the nature of our operations and our corporate structure, we also have subsidiaries that have transactions in foreign currencies other than their functional currency. We record transaction gains and losses in our consolidated statements of operations related to the recurring remeasurement and settlement of such transactions. |
Advertising expense | Advertising expense We incur advertising expense consisting of offline costs, including television and radio advertising, as well as online advertising expense 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., |
Share-based compensation | Share-based compensation Share-based compensation expense relates to stock awards granted in connection with the Omnibus Incentive Plan, as further discussed in Note 11 - Share-based awards and other equity instruments . For the years ended December 31, 2019 and 2020, we had no awards classified as liabilities. Forfeitures are accounted for in the period that the award is forfeited. Share Options. The majority of our share options are service-based awards. We also grant awards that contain performance conditions which vest upon achievement of certain company-based targets and awards which contain market conditions which vest upon achievement of certain market-based targets, in addition to containing service conditions. The fair value of share options accounted for as equity settled transactions is measured at the grant date (or modification date, if applicable) using an appropriate valuation model, including the Black-Scholes option pricing model and, for awards that contain market-based vesting conditions, the Monte Carlo simulation pricing model. The majority of our share options vest between one Restricted Stock Units. We grant Restricted Stock Units ("RSUs"), which are stock awards entitling the holder to shares of common stock as the award vests. For RSU awards with only service-based vesting conditions, we measure the value of RSUs at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. For RSU awards which contain market conditions, we estimate the fair value using the Monte Carlo simulation model. The majority of our RSUs vest between one We amortize the fair value of service-based awards, net of actual forfeitures, as share-based compensation expense over the vesting term on a straight-line basis. Performance-Based Awards. Awards with company-based performance conditions are assessed to determine the probability of the award vesting. If assessed as probable, we record compensation expense for these awards over the total performance and service period using the accelerated method. At each reporting period, we reassess the probability of achieving the performance targets, which requires judgment. In the event that actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period in which estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized. The ultimate number of shares issued and the related compensation expense recognized will be based on a comparison of the final performance metrics to the specified targets. For awards with market conditions, the probabilities of the actual number of awards expected to vest is reflected in the grant date fair values. Compensation expense for these awards is recognized over the service period using the accelerated method. The valuation models used incorporate various assumptions including expected volatility of equity, expected term and risk-free interest rates. The expected volatility is based on historical volatility of our common stock. We use the simplified method in determining the term by using the midpoint between the vesting date and the end of the contractual term. The simplified method was used as we do not have sufficient relatable historical term data available. The share price assumption used in the model is based on our publicly traded share price on the date of grant. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value. |
Reserves available for dividend distribution | Reserves available for dividend distribution We do not at present plan to pay cash dividends on our Class A shares. Under Dutch law, we may only pay dividends to the extent that our shareholders’ equity ( eigen vermogen ) exceeds the sum of the paid-up and called-up share capital plus the reserves required to be maintained under Dutch law or by our articles of association (although we note that, presently, we are not required by our articles of association to maintain reserves in addition to those which we must maintain under Dutch law). Subject only to such restrictions, any future determination to pay dividends will be at the discretion of our management board (in some instances, subject to approval by a Founder). In making a determination to pay dividends, the management board must act in the interests of our company and its business, taking into account relevant interests of our shareholders and other factors that our management board considers relevant, including our results of operations, financial condition, and future prospects. For the years ended December 31, 2019 and 2020, our reserves restricted for dividend distribution were €190.7 million and €188.7 million, respectively. |
Fair value recognition, measurement and disclosure | Fair value recognition, measurement and disclosure The carrying amounts of cash and cash equivalents, restricted cash and short-term investments reported on our consolidated balance sheets approximate fair value as we maintain them with various high-quality financial institutions. Our accounts receivable are short-term in nature and their carrying value generally approximates fair value. We disclose the fair value of our financial instruments based on the fair value hierarchy using the following three categories: Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 - Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. |
Certain risks and concentration of credit risk | 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 36%, 34% and 27% respectively, of revenues for the year ended December 31, 2018, 2019 and 2020 and 45% and 20% of total accounts receivable as of December 31, 2019 and 2020. Booking Holdings and its affiliates represent 39%, 40% and 44%, respectively, of revenues for the years ended December 31, 2018, 2019 and 2020 and 28% and 47%, respectively, of total accounts receivable as of December 31, 2019 and 2020. |
Contingent liabilities | Contingent liabilities From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations, as discussed further in Note 15: Commitments and contingencies. Periodically, and at year end, we review the status of all significant outstanding matters to assess the potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time, which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. |
Adoption of new accounting pronouncements and Recent accounting policies not yet adopted | Adoption of new accounting pronouncements Measurement of Credit Losses on Financial Instruments. In June 2016, the Financial Accounting Standards Board Accounting ("FASB") issued Accounting Standards Update ("ASU") 2016-13 which created Accounting Standard Codification ("ASC") Topic 326 Financial Instruments—Credit Losses . Along with subsequent updates and improvements, the ASU changes the guidance related to the measurement of credit losses for financial assets measured at amortized cost, including accounts receivable and available-for-sale debt securities. The new guidance replaces the existing incurred loss impairment model with the current expected credit loss methodology, which will result in more timely recognition of credit losses. We adopted ASC 326 using a modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning on January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The adoption of this new guidance did not have a material impact on our consolidated financial statements and no cumulative-effect adjustment to retained earnings was made. Fair Value Measurements. As of January 1, 2020, we have adopted ASU 2018-13, which is applicable to all entities that are required under existing GAAP to make disclosures about recurring or nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements in ASC 820, Fair Value Measurement. The adoption of this new guidance did not have a material impact to our consolidated financial statements. Cloud Computing Arrangements. As of January 1, 2020, we have prospectively adopted ASU 2018-15, which provides additional guidance on the accounting for implementation costs incurred for a cloud computing arrangement that is a service contract. The amendments in the standard align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post implementation stages are expensed as the activities are performed. The adoption of this new guidance did not have a material impact to our consolidated financial statements. Codification Improvements. In April 2019 and March 2020, the FASB issued ASU 2019-04 and ASU 2020-03, respectively, which did not prescribe any new accounting guidance, but instead made minor improvements and clarifications on several different FASB ASC topics based on comments and suggestions made by various stakeholders. The codification improvements applicable to us were adopted effective immediately. The adoption of the new guidance did not have a material impact to our consolidated financial statements. Recent accounting pronouncements not yet adopted Income Taxes. In December 2019, the FASB issued 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 income taxes. The new standard is effective for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. Early adoption is permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements; however, we currently do not expect a material impact. Equity Method Investments . In January 2020, the FASB issued ASU 2020-01 which clarifies the accounting for certain equity method investments. The new standard is effective for fiscal years beginning after December 15, 2020, including interim periods within those annual periods. Early adoption is permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements; however, we currently do not expect a material impact. |
Fair value measurement (Tables)
Fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | Financial assets measured at fair value on a recurring basis as of December 31, 2020 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (in thousands) Assets Cash equivalents: Money market funds € 65,111 € 65,111 € — Short-term investments: Term deposits 9,448 — 9,448 Total € 74,559 € 65,111 € 9,448 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other current assets | As of December 31, (in thousands) 2019 2020 Prepaid advertising € 2,148 € 2,297 Other prepaid expenses 2,076 4,132 Other assets 383 4,009 Total € 4,607 € 10,438 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | As of December 31, (in thousands) 2019 2020 Building and leasehold improvements € 17,844 € 15,295 Capitalized software and software development costs 22,713 22,702 Computer equipment 18,215 17,248 Furniture and fixtures 8,361 5,480 Subtotal 67,133 60,725 Less: accumulated depreciation 33,995 34,352 Construction in process 34 309 Property and equipment, net € 33,172 € 26,682 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of supplemental information, operating lease | Supplemental information related to operating leases was as follows: As of December 31, (in thousands) 2019 2020 Cash payments for operating leases € 10,200 € 5,225 New operating lease assets obtained in exchange for operating lease liabilities € 103,498 € 417 |
Schedule of supplemental consolidated balance sheet information, operating lease | Supplemental consolidated balance sheet information related to leases were as follows: As of December 31, (in thousands) 2019 2020 Operating lease right-of-use assets € 96,030 € 86,810 Current operating lease liabilities 5,037 7,188 Long-term operating lease liabilities 94,660 85,979 Total operating lease liabilities € 99,697 € 93,167 Weighted average remaining lease term 17.6 years 17.3 years Weighted average discount rate 3.8 % 3.9 % |
Lessee, operating lease, liability, maturity | Maturities of operating lease liabilities are as follows: Year ended December 31, (in thousands) 2020 2021 € 10,583 2022 7,413 2023 7,114 2024 7,114 2025 7,098 2026 and thereafter 87,252 Total lease payments 126,574 Less: imputed interest (33,407) Total € 93,167 |
Goodwill and intangible asset_2
Goodwill and intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and intangible assets | The following table presents our goodwill and intangible assets as of December 31, 2019 and 2020: As of December 31, (in thousands) 2019 2020 Goodwill € 490,590 € 282,664 Intangible assets with definite lives, net 379 5 Intangible assets with indefinite lives 169,545 169,545 Total € 660,514 € 452,214 |
Schedule of goodwill | The following table presents the changes in goodwill by reporting segment: (in thousands) Developed Europe Americas Rest of World Total Balance as of January 1, 2019 € 215,283 € 192,729 € 82,517 € 490,529 Foreign exchange translation 27 24 10 61 Balance as of December 31, 2019 € 215,310 € 192,753 € 82,527 € 490,590 Balance as of January 1, 2020 € 215,310 € 192,753 € 82,527 € 490,590 Foreign exchange translation (4) 6 7 9 Impairment charge (17,568) (107,516) (82,534) (207,618) Disposals (222) (95) — (317) Balance as of December 31, 2020 € 197,516 € 85,148 € 0 € 282,664 |
Components of intangible assets with definite lives | The following table presents the components of our intangible assets with definite lives as of December 31, 2019 and 2020: December 31, 2019 December 31, 2020 (in thousands) Cost (Accumulated Amortization) Net Cost (Accumulated Amortization) Net Customer relationships € 34 € (27) € 7 € — € — € — Partner relationships 34,254 (34,246) 8 34,220 (34,220) — Technology 60,145 (60,071) 74 59,789 (59,784) 5 Non-compete agreement 10,800 (10,510) 290 10,800 (10,800) — Total € 105,233 € (104,854) € 379 € 104,809 € (104,804) € 5 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring reserve rollforward | The following table presents the development of our restructuring liability for the year ended December 31, 2020. (in thousands) Employee related costs Liability as of January 1, 2020 € — 2020 restructuring charges 6,235 Cash payments (6,063) Non-cash charges — Liability as of December 31, 2020 € 172 |
Share-based awards and other _2
Share-based awards and other equity instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock options activity | The following table presents a summary of our share option activity: Options Weighted Remaining Aggregate (in €) (In years) (€ in thousands) Balance as of January 1, 2018 17,108,574 5.66 21 32,178 Granted 4,944,430 3.99 12,573 Exercised 531,410 0.30 2,855 Cancelled 828,196 6.23 1,182 Balance as of December 31, 2018 20,693,398 5.54 17 32,050 Granted 3,932,498 0.06 17,412 Exercised 1,218,560 0.17 5,034 Cancelled 2,233,623 6.93 1,572 Balance as of December 31, 2019 21,173,713 4.79 15 19,556 Granted 8,550,753 0.06 12,359 Exercised 1,405,583 0.06 2,168 Cancelled 1,971,734 4.28 1,214 Balance as of December 31, 2020 26,347,149 3.29 12 28,356 Exercisable as of December 31, 2020 14,204,833 5.01 17 10,018 Vested and expected to vest after December 31, 2020 26,347,149 3.29 12 28,356 |
Schedule of RSU activity | The following table presents a summary of our restricted stock units (RSUs): RSUs Weighted Average Grant Date Fair Value Remaining (in €) (in years) Balance as of January 1, 2018 — — Granted 57,806 3.88 Vested — — Cancelled — — Balance as of December 31, 2018 57,806 3.88 7 Granted 474,121 4.25 Vested 38,262 3.88 Cancelled 8,000 5.29 Balance as of December 31, 2019 485,665 4.22 6 Granted 1,606,140 1.13 Vested 245,687 4.30 Cancelled 221,657 2.43 Balance as of December 31, 2020 1,624,461 1.39 5 |
Schedule of stock options valuation assumptions | The fair value of share awards granted during the years ended December 31, 2018, 2019 and 2020 were estimated at the date of grant using appropriate valuation techniques, including the Black-Scholes and Monte Carlo simulation pricing models, assuming the following weighted average assumptions: Year ended December 31, 2018 2019 2020 Risk-free interest rate 1.74 % (0.56) % (0.20) % Expected volatility 33 % 50 % 60 % Expected life (in years) 4.42 4.50 4.12 Dividend yield — % — % — % Weighted-average estimated fair value of options granted during the year € 3 € 4 € 1 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense/(benefit) | The following table summarizes our income tax expense/(benefit): Year ended December 31, (€ thousands) 2018 2019 2020 Current income tax expense/(benefit): Germany € 2,225 € 18,769 € (362) Other countries 125 309 117 Current income tax expense/(benefit) 2,350 19,078 (245) Deferred income tax expense/(benefit): Germany (1,264) 2,020 (8,165) Other countries — (116) (84) Deferred income tax expense/(benefit) (1,264) 1,904 (8,249) Income tax expense/(benefit) € 1,086 € 20,982 € (8,494) |
Schedule of income (loss) before income tax, domestic and foreign | The following table summarizes our income/(loss) before income taxes allocated to Germany and to other countries: Year ended December 31, (€ thousands) 2018 2019 2020 Germany € (20,574) € 36,750 € (252,859) Other countries 108 940 (274) Income/(loss) before income taxes € (20,466) € 37,690 € (253,133) |
Schedule of effective income tax rate reconciliation | A reconciliation of amounts computed by applying the German statutory income tax rate of 31.23% to income/(loss) before income taxes to total income tax expense/(benefit) is as follows: Year ended December 31, (€ thousands) 2018 2019 2020 Income/(loss) before income taxes € (20,466) € 37,690 € (253,133) Income tax expense at German tax rate (6,391) 11,769 (79,041) Foreign rate differential (5) 100 40 Expected tax expense/(benefit) (6,396) 11,869 (79,001) Tax effect from: Non-deductible share-based compensation 6,465 6,211 4,708 Goodwill impairment — — 64,829 Prior period taxes 96 66 9 Movement in valuation allowance (184) 19 454 Foreign withholding taxes 813 — 305 Movement in uncertain tax positions — 2,857 14 Other differences 292 (40) 188 Income tax expense/(benefit) € 1,086 € 20,982 € (8,494) |
Schedule of uncertain tax positions | Uncertain tax positions as of December 31, 2019 and 2020 were as follows: Year Ended December 31, (€ thousands) 2019 2020 Balance, beginning of year € — € 2,857 Increases to tax positions related to the current year 2,133 — Increases to tax positions related to prior years 720 — Interest and penalties 4 14 Balance, end of year € 2,857 € 2,871 |
Schedule of deferred tax assets and liabilities | At December 31, 2019 and 2020, the significant components of our deferred tax assets and deferred tax liabilities were as follows: Year Ended December 31, (€ thousands) 2019 2020 Deferred tax assets: Net operating loss and tax credit carryforwards € 429 € 11,840 Prepaid expense and other current assets 3,723 1,335 Deferred rent 1 — Property and equipment 116 1 Accrued expenses and other current liabilities 147 26 Intangible assets, net 253 — Operating lease liability 31,130 28,132 Other long-term liabilities 311 115 Deferred tax assets (gross) 36,110 41,449 Less valuation allowance (81) (536) Subtotal 36,029 40,913 Offsetting (35,294) (40,912) Deferred tax assets 735 1 Deferred tax liabilities: Intangible assets, net 53,021 52,928 Property and equipment 2,980 2,875 Operating lease right-of-use assets 29,985 27,106 Other 235 179 Subtotal 86,221 83,088 Offsetting (35,294) (40,912) Deferred tax liabilities € 50,927 € 42,176 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The following table presents our basic and diluted earnings per share: Year Ended December 31, (€ thousands, except per share data) 2018 2019 2020 Numerator: Net income/(loss) € (21,489) € 17,161 € (245,378) Denominator: Weighted average shares of Class A and Class B common stock outstanding: Basic 350,852 351,991 353,338 Diluted 350,852 356,738 353,338 Net income/(loss) per share: Basic € (0.06) € 0.05 € (0.69) Diluted € (0.06) € 0.05 € (0.69) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term purchase commitment | Commitments and obligations as of December 31, 2020 were as follows: By Period (in thousands) Total Less than 1 to 3 years 3 to 5 years More than Purchase obligations € 17,765 € 12,223 € 5,542 € — € — |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following tables present our segment information for the years ended December 31, 2018, 2019 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. Year Ended December 31, 2018 (€ thousands) Developed Europe Americas Rest of World Corporate & Eliminations Total Referral revenue € 378,919 € 315,966 € 204,937 € — € 899,822 Subscription revenue — — — 13,863 13,863 Other revenue — — — 1,131 1,131 Total revenue € 378,919 € 315,966 € 204,937 € 14,994 € 914,816 Advertising spend 265,004 261,620 205,834 — 732,458 ROAS contribution € 113,915 € 54,346 € (897) € 14,994 € 182,358 Costs and expenses: Cost of revenue, including related party, excluding amortization 5,435 Other selling and marketing, including related party (1) 73,175 Technology and content, including related party 66,904 General and administrative, including related party 54,326 Amortization of intangible assets 1,684 Operating loss € (19,166) Other income/(expense) Interest expense (1,839) Other, net 539 Total other income/(expense), net € (1,300) Loss before income taxes € (20,466) Expense/(benefit) for income taxes 1,086 Loss before equity method investment € (21,552) Income from equity method investment 63 Net loss € (21,489) (1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment. Year Ended December 31, 2019 (€ thousands) Developed Europe Americas Rest of World Corporate & Eliminations Total Referral revenue € 347,094 € 305,061 € 171,469 € — € 823,624 Subscription revenue — — — 12,152 12,152 Other revenue — — — 2,841 2,841 Total revenue € 347,094 € 305,061 € 171,469 € 14,993 € 838,617 Advertising spend 230,291 233,949 152,465 — 616,705 ROAS contribution € 116,803 € 71,112 € 19,004 € 14,993 € 221,912 Costs and expenses: Cost of revenue, including related party, excluding amortization 9,159 Other selling and marketing, including related party (1) 47,450 Technology and content, including related party 69,924 General and administrative, including related party 55,543 Amortization of intangible assets 1,685 Operating income € 38,151 Other income/(expense) Interest expense (33) Other, net (428) Total other income/(expense), net € (461) Income before income taxes € 37,690 Expense/(benefit) for income taxes 20,982 Income before equity method investment € 16,708 Income from equity method investment 453 Net income € 17,161 (1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment. Year Ended December 31, 2020 (€ thousands) Developed Europe Americas Rest of World Corporate & Eliminations Total Referral revenue € 102,899 € 89,341 € 46,125 € — € 238,365 Subscription revenue — — — 7,657 7,657 Other revenue — — — 2,899 2,899 Total revenue € 102,899 € 89,341 € 46,125 € 10,556 € 248,921 Advertising spend 60,784 56,979 32,211 — 149,974 ROAS contribution € 42,115 € 32,362 € 13,914 € 10,556 € 98,947 Costs and expenses: Cost of revenue, including related party, excluding amortization 10,133 Other selling and marketing, including related party (1) 28,281 Technology and content, including related party 64,258 General and administrative, including related party 40,935 Amortization of intangible assets 373 Impairment of goodwill 207,618 Operating loss € (252,651) Other income/(expense) Interest expense (270) Other, net (212) Total other income/(expense), net € (482) Loss before income taxes € (253,133) Expense/(benefit) for income taxes (8,494) Loss before equity method investment € (244,639) Loss from equity method investment (739) Net loss € (245,378) (1) Represents all other sales and marketing, excluding Advertising Spend, as Advertising Spend is tracked by reporting segment. |
Schedule of revenue from external customers and long-lived assets, by geographical areas | The following table presents revenue by geographic area for the years ended December 31, 2018, 2019 and 2020. Referral revenue was allocated by country using the same methodology as the allocation of segment revenue, while non-referral revenue was allocated based upon the location of the customer using the service. Year ended December 31, (in thousands) 2018 2019 2020 Total revenues United States € 194,416 € 192,526 € 57,406 Germany 73,143 68,491 27,491 United Kingdom 95,893 85,284 26,637 Brazil 41,097 35,387 12,440 All other countries (1) 510,267 456,929 124,947 € 914,816 € 838,617 € 248,921 (1) Includes a portion of Corporate & Eliminations The following table presents property and equipment, net for Germany and all other countries, as of December 31, 2019 and 2020: (€ thousands) Years ended December 31, 2019 2020 Property and equipment, net: Germany € 30,681 € 26,289 All other countries 2,491 393 € 33,172 € 26,682 |
Valuation and qualifying acco_2
Valuation and qualifying accounts (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and qualifying accounts | The following table presents the changes in our valuation and qualifying accounts not disclosed elsewhere in these financial statements. (€ thousands) Balance at Beginning of Period Charges to Earnings Deductions Balance at End of Period 2018 Allowance for doubtful accounts € 231 € 580 € (561) € 250 2019 Allowance for doubtful accounts 250 754 (930) 74 2020 Allowance for expected credit losses 74 656 (382) 348 |
Organization and basis of pre_2
Organization and basis of presentation (Details) - Trivago N.V. | Dec. 31, 2020 |
Expedia | |
Subsidiary, Sale of Stock [Line Items] | |
Ownership percentage by parent | 59.00% |
Parent voting interest, percentage | 68.80% |
Messrs. Schrömgens, Vinnemeier and Siewert | |
Subsidiary, Sale of Stock [Line Items] | |
Ownership percentage by noncontrolling owners | 25.20% |
Non-controlling interest, voting percentage | 29.40% |
Significant accounting polici_3
Significant accounting policies (Details) € in Thousands | 12 Months Ended | |||
Dec. 31, 2020EUR (€)segmentdreporting_unit | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | ||
Significant Accounting Policies [Line Items] | ||||
Deferred revenue | € 2,750 | € 5,553 | € 7,900 | |
Revenue recognized that was included in beginning deferred revenue balance | 5,200 | 7,600 | ||
Amortization of intangible assets | [1] | 373 | 1,685 | 1,684 |
Restricted cash | 2,400 | 2,400 | ||
Restricted cash, noncurrent | 2,300 | |||
Incremental allowance for uncollectible amounts | 656 | 754 | 630 | |
Allowance for uncollectible amount, write-offs | 400 | |||
Land rent expense | 1,800 | |||
Depreciation | € 10,479 | 10,298 | 11,370 | |
Number of reporting units | reporting_unit | 3 | |||
Number of operating segments | segment | 3 | |||
Reserves restricted for dividend distribution | € 188,700 | € 190,700 | ||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Performance obligation payment terms | 10 days | |||
Accounts receivable due, number of days | d | 10 | |||
Minimum | Stock Option | ||||
Significant Accounting Policies [Line Items] | ||||
Award vesting period (in years) | 1 year | |||
Minimum | RSUs | ||||
Significant Accounting Policies [Line Items] | ||||
Award vesting period (in years) | 1 year | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Performance obligation payment terms | 90 days | |||
Accounts receivable due, number of days | d | 90 | |||
Intangible asset, useful life | 7 years | |||
Maximum | Stock Option | ||||
Significant Accounting Policies [Line Items] | ||||
Award vesting period (in years) | 3 years | |||
Maximum | RSUs | ||||
Significant Accounting Policies [Line Items] | ||||
Award vesting period (in years) | 3 years | |||
Computer equipment, capitalized software and software development cost and furniture and other equipment | Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Property and equipment useful life | 3 years | |||
Computer equipment, capitalized software and software development cost and furniture and other equipment | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Property and equipment useful life | 8 years | |||
Software Development Costs | ||||
Significant Accounting Policies [Line Items] | ||||
Property and equipment useful life | 3 years | |||
Software Enhancement Costs | ||||
Significant Accounting Policies [Line Items] | ||||
Property and equipment useful life | 3 years | |||
Buildings | ||||
Significant Accounting Policies [Line Items] | ||||
Depreciation | € 1,600 | |||
Expedia | Customer Concentration Risk | Revenue | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 27.00% | 34.00% | 36.00% | |
Expedia | Customer Concentration Risk | Accounts Receivable | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 20.00% | 45.00% | ||
Booking Holdings | Customer Concentration Risk | Revenue | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 44.00% | 40.00% | 39.00% | |
Booking Holdings | Customer Concentration Risk | Accounts Receivable | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 47.00% | 28.00% | ||
Acquired technology | ||||
Significant Accounting Policies [Line Items] | ||||
Amortization of intangible assets | € 84 | € 143 | € 278 | |
Internal use software and website development costs | ||||
Significant Accounting Policies [Line Items] | ||||
Amortization of intangible assets | € 4,600 | € 4,300 | € 3,000 | |
[1] | Includes depreciation and amortization as follows: Year ended December 31, 2018 2019 2020 Amortization of internal use software costs included in — 360 188 Amortization of acquired technology included in amortization of intangible assets 278 143 84 Amortization of internal use software and website development costs included in technology and content 2,214 3,239 3,926 Amortization of internal use software costs included in general and administrative 785 656 491 |
Acquisitions and divestitures -
Acquisitions and divestitures - Divestitures (Details) - EUR (€) € in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2020 | Nov. 30, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Derecognised goodwill | € 317 | ||
myhotelshop | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Ownership percentage by noncontrolling owners | 49.00% | ||
Palma | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Ownership interest sold | 100.00% | ||
Consideration amount for sale | € 1,300 | ||
Impairment loss | € 500 | ||
base7 | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration amount for sale | 800 | ||
Gain (loss) on disposal | 500 | ||
Derecognised goodwill | 300 | ||
myhotelshop | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration amount for sale | 70 | ||
Gain (loss) on disposal | (1,100) | ||
Due from related parties | € 1,000 |
Fair value measurement (Details
Fair value measurement (Details) - Recurring - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cash equivalents: | ||
Money market funds | € 65,111 | |
Short-term investments: | ||
Term deposits | 9,448 | |
Total | 74,559 | € 0 |
Level 1 | ||
Cash equivalents: | ||
Money market funds | 65,111 | |
Short-term investments: | ||
Term deposits | 0 | |
Total | 65,111 | |
Level 2 | ||
Cash equivalents: | ||
Money market funds | 0 | |
Short-term investments: | ||
Term deposits | 9,448 | |
Total | € 9,448 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid advertising | € 2,297 | € 2,148 |
Other prepaid expenses | 4,132 | 2,076 |
Other assets | 4,009 | 383 |
Total | € 10,438 | € 4,607 |
Property and equipment, net (De
Property and equipment, net (Details) - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | € 34,352 | € 33,995 |
Property and equipment, net | 26,682 | 33,172 |
Depreciable Property, Plant And Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 60,725 | 67,133 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,295 | 17,844 |
Capitalized software and software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 22,702 | 22,713 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,248 | 18,215 |
Property and equipment, net | 3,300 | 5,300 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,480 | 8,361 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 309 | 34 |
Building and leasehold improvements with asset retirement obligations | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 300 | 600 |
Less: accumulated depreciation | 40 | 100 |
Software Development Costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | € 7,200 | € 8,000 |
Leases (Details)
Leases (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Option to extend term | ten years | ||
Option to terminate period | 1 year | ||
Operating lease cost | € 8,200 | € 10,000 | |
Operating leases, rent expense | € 4,700 | ||
Sublease income | € 100 | ||
Sublease income | 900 | 1,000 | |
Cash payments for operating leases | 5,225 | 10,200 | |
New operating lease assets obtained in exchange for operating lease liabilities | 417 | 103,498 | |
Operating lease right-of-use assets | 86,810 | 96,030 | |
Current operating lease liabilities | 7,188 | 5,037 | |
Long-term operating lease liabilities | 85,979 | 94,660 | |
Total operating lease liabilities | € 93,167 | € 99,697 | |
Weighted average remaining lease term | 17 years 3 months 18 days | 17 years 7 months 6 days | |
Weighted average discount rate | 3.90% | 3.80% | |
2021 | € 10,583 | ||
2022 | 7,413 | ||
2023 | 7,114 | ||
2024 | 7,114 | ||
2025 | 7,098 | ||
2026 and thereafter | 87,252 | ||
Lessee, Operating Lease, Liability, Payments, Due, Total | 126,574 | ||
Less: imputed interest | € (33,407) | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 17 years |
Goodwill and intangible asset_3
Goodwill and intangible assets, net - Summary (Details) - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | € 282,664 | € 490,590 | € 490,529 |
Finite-Lived Intangible Assets, Net | 5 | 379 | |
Intangible assets with indefinite lives | 169,545 | 169,545 | |
Total | € 452,214 | € 660,514 |
Goodwill and intangible asset_4
Goodwill and intangible assets, net - Narrative (Details) - EUR (€) € in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Goodwill [Line Items] | |||||
Goodwill impairment loss | € 207,618 | € 0 | € 0 | ||
Accumulated impairment losses of goodwill | 207,600 | 0 | |||
Accumulated impairment losses of indefinite-lived intangible assets | 0 | 0 | |||
Amortization of intangible assets | [1] | € 373 | € 1,685 | € 1,684 | |
Developed Europe | |||||
Goodwill [Line Items] | |||||
Goodwill impairment loss | € 17,600 | ||||
Americas | |||||
Goodwill [Line Items] | |||||
Goodwill impairment loss | 107,500 | ||||
Rest of World | |||||
Goodwill [Line Items] | |||||
Goodwill impairment loss | € 82,500 | ||||
[1] | Includes depreciation and amortization as follows: Year ended December 31, 2018 2019 2020 Amortization of internal use software costs included in — 360 188 Amortization of acquired technology included in amortization of intangible assets 278 143 84 Amortization of internal use software and website development costs included in technology and content 2,214 3,239 3,926 Amortization of internal use software costs included in general and administrative 785 656 491 |
Goodwill and intangible asset_5
Goodwill and intangible assets, net - Goodwill rollforward (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | € 490,590 | € 490,529 | |
Foreign exchange translation | 9 | 61 | |
Impairment charge | (207,618) | 0 | € 0 |
Disposals | (317) | ||
Goodwill, Ending Balance | 282,664 | 490,590 | 490,529 |
Developed Europe | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 215,310 | 215,283 | |
Foreign exchange translation | (4) | 27 | |
Impairment charge | (17,568) | ||
Disposals | (222) | ||
Goodwill, Ending Balance | 197,516 | 215,310 | 215,283 |
Americas | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 192,753 | 192,729 | |
Foreign exchange translation | 6 | 24 | |
Impairment charge | (107,516) | ||
Disposals | (95) | ||
Goodwill, Ending Balance | 85,148 | 192,753 | 192,729 |
Rest of World | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 82,527 | 82,517 | |
Foreign exchange translation | 7 | 10 | |
Impairment charge | (82,534) | ||
Disposals | 0 | ||
Goodwill, Ending Balance | € 0 | € 82,527 | € 82,517 |
Goodwill and intangible asset_6
Goodwill and intangible assets, net - Definite lived intangible assets (Details) - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | € 104,809 | € 105,233 |
(Accumulated Amortization) | (104,804) | (104,854) |
Intangible assets with definite lives, net | 5 | 379 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 0 | 34 |
(Accumulated Amortization) | 0 | (27) |
Intangible assets with definite lives, net | 0 | 7 |
Partner relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 34,220 | 34,254 |
(Accumulated Amortization) | (34,220) | (34,246) |
Intangible assets with definite lives, net | 0 | 8 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 59,789 | 60,145 |
(Accumulated Amortization) | (59,784) | (60,071) |
Intangible assets with definite lives, net | 5 | 74 |
Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 10,800 | 10,800 |
(Accumulated Amortization) | (10,800) | (10,510) |
Intangible assets with definite lives, net | € 0 | € 290 |
Goodwill and intangible asset_7
Goodwill and intangible assets, net - Future amortization (Details) € in Thousands | Dec. 31, 2020EUR (€) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | € 1 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 1 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | € 1 |
Restructuring - Narratives (Det
Restructuring - Narratives (Details) € in Millions | 12 Months Ended |
Dec. 31, 2020EUR (€) | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | € 6.2 |
Restructuring charges, included in accrued expenses and other liabilities | 0.2 |
Selling and marketing | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 1.8 |
Technology And Content Expense | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 2.9 |
General and administrative | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | € 1.5 |
Restructuring - Roll forward (D
Restructuring - Roll forward (Details) € in Thousands | 12 Months Ended |
Dec. 31, 2020EUR (€) | |
Restructuring Reserve [Roll Forward] | |
2020 restructuring charges | € 6,200 |
Employee Severance | |
Restructuring Reserve [Roll Forward] | |
Liability as of January 1, 2020 | 0 |
2020 restructuring charges | 6,235 |
Cash payments | (6,063) |
Non-cash charges | 0 |
Liability as of December 31, 2020 | € 172 |
Debt - credit facility (Details
Debt - credit facility (Details) | 12 Months Ended |
Dec. 31, 2020EUR (€) | |
Uncommitted Credit Facility | |
Line of Credit Facility [Line Items] | |
Uncommitted credit facility principle amount | € 50,000,000 |
Borrowings outstanding | € 0 |
LIBOR | |
Line of Credit Facility [Line Items] | |
Debt basis spread on variable rate | 1.00% |
Share-based awards and other _3
Share-based awards and other equity instruments - Narrative (Details) | Oct. 22, 2020EUR (€)granteeshares | Dec. 31, 2020EUR (€)shares | Dec. 31, 2019EUR (€)shares | Dec. 31, 2018EUR (€) | Dec. 31, 2017 | Dec. 31, 2016member |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of awards affected, plan modification | shares | 3,580,049 | |||||
Number of grantees affected, plan modification | grantee | 3 | |||||
Incremental compensation expense, plan modification | € 1,000,000 | |||||
Share-based compensation | € 15,100,000 | € 19,900,000 | € 20,700,000 | |||
Income tax benefit related to share-based compensation expense | 0 | 0 | 0 | |||
Proceeds from exercise of option awards | 87,000 | € 202,000 | € 161,000 | |||
Unrecognized share-based compensation expense | € 14,500,000 | |||||
Unrecognized share-based compensation expense, period for recognition | 1 year 8 months 12 days | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based payment award, term | 10 years | |||||
2016 Omnibus Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | shares | 34,711,009 | |||||
Number of supervisory board in plan administration committee | member | 2 | |||||
Share-based payment award, term | 10 years | |||||
Number of shares awarded (in shares) | shares | 10,156,893 | 4,406,619 |
Share-based awards and other _4
Share-based awards and other equity instruments - Stock options activities (Details) - EUR (€) € / shares in Units, € in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Options | ||||
Beginning balance (in shares) | 21,173,713 | 20,693,398 | 17,108,574 | |
Granted (in shares) | 8,550,753 | 3,932,498 | 4,944,430 | |
Exercised (in share) | 1,405,583 | 1,218,560 | 531,410 | |
Canceled (in shares) | 1,971,734 | 2,233,623 | 828,196 | |
Ending balance (in shares) | 26,347,149 | 21,173,713 | 20,693,398 | 17,108,574 |
Exercisable (in shares) | 14,204,833 | |||
Vested and expected to vest (in shares) | 26,347,149 | |||
Weighted average exercise price | ||||
Beginning balance, Weighted average exercise price (in EUR per share) | € 4.79 | € 5.54 | € 5.66 | |
Granted, Weighted average exercise price (in EUR per share) | 0.06 | 0.06 | 3.99 | |
Exercised, Weighted average exercise price (in EUR per share) | 0.06 | 0.17 | 0.30 | |
Canceled, Weighted average exercise price (in EUR per share) | 4.28 | 6.93 | 6.23 | |
Ending balance, Weighted average exercise price (in EUR per share) | 3.29 | € 4.79 | € 5.54 | € 5.66 |
Exercisable, Weighted average exercise price (in EUR per share) | 5.01 | |||
Vested and expected to vest, Weighted average exercise price (in EUR per share) | € 3.29 | |||
Outstanding, Remaining contractual term (in years) | 12 years | 15 years | 17 years | 21 years |
Exercisable, Remaining contractual term (in years) | 17 years | |||
Vested and expected to vest after, Remaining contractual life (in years) | 12 years | |||
Outstanding, Aggregate intrinsic value | € 28,356 | € 19,556 | € 32,050 | € 32,178 |
Granted, Aggregate intrinsic value | 12,359 | 17,412 | 12,573 | |
Exercised, Aggregate intrinsic value | 2,168 | 5,034 | 2,855 | |
Canceled, Aggregate intrinsic value | 1,214 | 1,572 | 1,182 | |
Outstanding, Aggregate intrinsic value | 19,556 | € 32,050 | € 32,178 | |
Exercisable, Aggregate intrinsic value | 10,018 | |||
Vested and expected to vest, Aggregate intrinsic value | € 28,356 |
Share-based awards and other _5
Share-based awards and other equity instruments - RSUs activity (Details) - RSUs - € / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
RSUs | |||
Beginning balance (in shares) | 485,665 | 57,806 | 0 |
Granted (in shares) | 1,606,140 | 474,121 | 57,806 |
Vested (in shares) | 245,687 | 38,262 | 0 |
Cancelled (in shares) | 221,657 | 8,000 | 0 |
Ending balance (in shares) | 1,624,461 | 485,665 | 57,806 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Beginning balance (in EUR per share) | € 4.22 | € 3.88 | € 0 |
Granted (in EUR per share) | 1.13 | 4.25 | 3.88 |
Vested (in EUR per share) | 4.30 | 3.88 | 0 |
Cancelled (in EUR per share) | 2.43 | 5.29 | 0 |
Ending balance (in EUR per share) | € 1.39 | € 4.22 | € 3.88 |
Ending balance, remaining contractual life | 5 years | 6 years | 7 years |
Share-based awards and other _6
Share-based awards and other equity instruments - Stock options fair value assumptions (Details) - € / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Risk-free interest rate | (0.20%) | (0.56%) | 1.74% |
Expected volatility | 60.00% | 50.00% | 33.00% |
Expected life (in years) | 4 years 1 month 13 days | 4 years 6 months | 4 years 5 months 1 day |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average estimated fair value of options granted during the year (in EUR per share) | € 1 | € 4 | € 3 |
Income taxes - Schedule of inco
Income taxes - Schedule of income tax expenses/(benefit) (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current income tax expense/(benefit): | |||
Germany | € (362) | € 18,769 | € 2,225 |
Other countries | 117 | 309 | 125 |
Current income tax expense/(benefit) | (245) | 19,078 | 2,350 |
Deferred income tax expense/(benefit): | |||
Germany | (8,165) | 2,020 | (1,264) |
Other countries | (84) | (116) | 0 |
Deferred income tax expense/(benefit) | (8,249) | 1,904 | (1,264) |
Income tax expense/(benefit) | € (8,494) | € 20,982 | € 1,086 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of German statutory income tax rate to effective income tax rate (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Germany | € (252,859) | € 36,750 | € (20,574) |
Other countries | (274) | 940 | 108 |
Income/(loss) before income taxes | (253,133) | 37,690 | (20,466) |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income tax expense at German tax rate | (79,041) | 11,769 | (6,391) |
Foreign rate differential | 40 | 100 | (5) |
Expected tax expense/(benefit) | (79,001) | 11,869 | (6,396) |
Tax effect from: | |||
Non-deductible share-based compensation | 4,708 | 6,211 | 6,465 |
Goodwill impairment | 64,829 | 0 | 0 |
Prior period taxes | 9 | 66 | 96 |
Movement in valuation allowance | 454 | 19 | (184) |
Foreign withholding taxes | 305 | 0 | 813 |
Movement in uncertain tax positions | 14 | 2,857 | 0 |
Other differences | 188 | (40) | 292 |
Income tax expense/(benefit) | € (8,494) | € 20,982 | € 1,086 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) € in Thousands | 12 Months Ended | |||
Dec. 31, 2020EUR (€) | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | |
Operating Loss Carryforwards [Line Items] | ||||
Income (loss) before income taxes | € (253,133) | € 37,690 | € (20,466) | |
Effective tax rate | 3.40% | 55.70% | (5.30%) | |
Share-based compensation | € 15,100 | € 19,900 | € 20,700 | |
Impact of non-deductible share-based compensation on effective tax rate | (1.90%) | 16.50% | (31.60%) | |
Goodwill impairment loss | € 207,600 | |||
Impact of non-deductible impairment expense on goodwill on effective tax rate | (25.60%) | |||
NOLs carryforwards | € 11,840 | € 429 | ||
Increase in NOL | 11,400 | |||
Net operating loss carryforwards | 500 | € 3,200 | ||
NOLs utilized | 3,200 | € 3,200 | € 3,200 | |
Tax-effected NOLs recognized for tax losses that can be carried forward indefinitely | 11,300 | |||
Increase in valuation allowance | 500 | |||
Undistributed earnings of foreign subsidiaries (less than) | 10 | € 100 | ||
Undistributed earnings in domestic subsidiaries | € 10 | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 31.23% | 31.23% | 31.23% | |
German | ||||
Operating Loss Carryforwards [Line Items] | ||||
Undistributed earnings in domestic subsidiaries percentage | 0.05 | |||
Percentage of tax exempt capital gains on sale of participations | 0.95 |
Income taxes - Uncertain tax po
Income taxes - Uncertain tax positions (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | € 2,857 | € 0 |
Increases to tax positions related to the current year | 0 | 2,133 |
Increases to tax positions related to prior years | 0 | 720 |
Interest and penalties | 14 | 4 |
Balance, end of year | € 2,871 | € 2,857 |
Income taxes - Deferred income
Income taxes - Deferred income taxes (Details) - EUR (€) € in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss and tax credit carryforwards | € 11,840 | € 429 |
Prepaid expense and other current assets | 1,335 | 3,723 |
Deferred rent | 0 | 1 |
Property and equipment | 1 | 116 |
Accrued expenses and other current liabilities | 26 | 147 |
Intangible assets, net | 0 | 253 |
Operating lease liability | 28,132 | 31,130 |
Other long-term liabilities | 115 | 311 |
Deferred tax assets (gross) | 41,449 | 36,110 |
Less valuation allowance | (536) | (81) |
Subtotal | 40,913 | 36,029 |
Offsetting | (40,912) | (35,294) |
Deferred tax assets | 1 | 735 |
Deferred tax liabilities: | ||
Intangible assets, net | 52,928 | 53,021 |
Property and equipment | 2,875 | 2,980 |
Operating lease right-of-use assets | 27,106 | 29,985 |
Other | 179 | 235 |
Subtotal | 83,088 | 86,221 |
Offsetting | (40,912) | (35,294) |
Deferred tax liabilities | € (42,176) | € (50,927) |
Stockholders' equity (Details)
Stockholders' equity (Details) | 12 Months Ended | ||
Dec. 31, 2020voting_right€ / sharesshares | Dec. 31, 2019€ / sharesshares | Dec. 31, 2018shares | |
Common Class A | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 55,967,976 | 50,816,706 | |
Common stock, conversion ratio | 1 | ||
Class common stock, par value (in EUR per ADS) | € / shares | € 0.06 | € 0.06 | |
Common Class B | |||
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 298,187,967 | 301,687,967 | |
Common stock, conversion ratio | 1 | 1 | |
Shares converted (in shares) | 3,500,000 | 7,000,000 | 11,112,001 |
Class common stock, par value (in EUR per ADS) | € / shares | € 0.60 | € 0.60 | |
Common stock, voting rights per share | voting_right | 10 |
Earnings per share (Details)
Earnings per share (Details) - EUR (€) € / shares in Units, € in Thousands, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||
Net income/(loss) | € (245,378) | € 17,161 | € (21,489) |
Denominator: | |||
Weighted average shares of Class A and Class B common stock outstanding - basic (in shares) | 353,338 | 351,991 | 350,852 |
Weighted average shares of Class A and Class B common stock outstanding - diluted (in shares) | 353,338 | 356,738 | 350,852 |
Net income/(loss) per share, Basic (in EUR per share) | € (0.69) | € 0.05 | € (0.06) |
Net income/(loss) per share, Diluted (in EUR per share) | € (0.69) | € 0.05 | € (0.06) |
Commitments and contingencies_2
Commitments and contingencies (Details) € in Thousands | Dec. 31, 2020EUR (€) |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |
Total | € 17,765 |
Less than 1 year | 12,223 |
1 to 3 years | 5,542 |
3 to 5 years | 0 |
More than 5 years | € 0 |
Related party transactions (Det
Related party transactions (Details) - EUR (€) | Sep. 05, 2014 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||||
Revenue from related party | € 67,430,000 | € 284,571,000 | € 331,421,000 | |
Accounts receivable, related party | € 2,969,000 | € 31,139,000 | ||
Revenue | Customer Concentration Risk | Expedia | ||||
Related Party Transaction [Line Items] | ||||
Concentration risk, percentage | 27.00% | 34.00% | 36.00% | |
LIBOR | ||||
Related Party Transaction [Line Items] | ||||
Debt basis spread on variable rate | 1.00% | |||
Uncommitted Credit Facility | ||||
Related Party Transaction [Line Items] | ||||
Uncommitted credit facility principle amount | € 50,000,000 | |||
Bank of America Merrill Lynch International Ltd. | Uncommitted Credit Facility | LIBOR | ||||
Related Party Transaction [Line Items] | ||||
Debt basis spread on variable rate | 1.00% | |||
Myhotelshop N.V. | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 1,100,000 | € 2,800,000 | € 2,300,000 | |
Principal owner | Expedia | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 66,400,000 | 281,800,000 | 331,400,000 | |
Other operating expenses from related party | 200,000 | 800,000 | 800,000 | |
Accounts receivable, related party | € 2,900,000 | 30,900,000 | ||
Principal owner | Expedia | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Prior notice period on customary commercial terms | 3 days | |||
Principal owner | Expedia | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Prior notice period on customary commercial terms | 7 days | |||
Principal owner | Data Hosting Services Agreement | Expedia | ||||
Related Party Transaction [Line Items] | ||||
Termination notice period | 30 days | |||
Expenses to related party | 45,000 | 59,000 | ||
Principal owner | Services and Support Agreement | Expedia | ||||
Related Party Transaction [Line Items] | ||||
Termination notice period | 90 days | |||
Expenses to related party | € 300,000 | € 800,000 | € 700,000 |
Segment information - Narrative
Segment information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 3 |
Segment information - Schedule
Segment information - Schedule of segment information (Details) - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | ||||
Revenue | € 248,921 | € 838,617 | € 914,816 | |
Other revenue | 2,899 | 2,841 | 1,131 | |
Advertising spend | 149,974 | 616,705 | 732,458 | |
ROAS contribution | 98,947 | 221,912 | 182,358 | |
Costs and expenses: | ||||
Cost of revenue, including related party, excluding amortization | [1],[2] | 10,133 | 9,159 | 5,435 |
Other selling and marketing, including related party | 28,281 | 47,450 | 73,175 | |
Technology and content, including related party | [1],[2],[3] | 64,258 | 69,924 | 66,904 |
General and administrative, including related party | [1],[2],[3] | 40,935 | 55,543 | 54,326 |
Amortization of intangible assets | [3] | 373 | 1,685 | 1,684 |
Operating income/(loss) | (252,651) | 38,151 | (19,166) | |
Other income/(expense) | ||||
Interest expense | (270) | (33) | (1,839) | |
Other, net | (212) | (428) | 539 | |
Total other income/(expense), net | (482) | (461) | (1,300) | |
Income/(loss) before income taxes | (253,133) | 37,690 | (20,466) | |
Expense/(benefit) for income taxes | (8,494) | 20,982 | 1,086 | |
Income/(loss) before equity method investment | (244,639) | 16,708 | (21,552) | |
Income from equity method investment | (739) | 453 | 63 | |
Net income/(loss) | (245,378) | 17,161 | (21,489) | |
Operating Segments | Developed Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 102,899 | 347,094 | 378,919 | |
Other revenue | 0 | 0 | 0 | |
Advertising spend | 60,784 | 230,291 | 265,004 | |
ROAS contribution | 42,115 | 116,803 | 113,915 | |
Operating Segments | Americas | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 89,341 | 305,061 | 315,966 | |
Other revenue | 0 | 0 | 0 | |
Advertising spend | 56,979 | 233,949 | 261,620 | |
ROAS contribution | 32,362 | 71,112 | 54,346 | |
Operating Segments | Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 46,125 | 171,469 | 204,937 | |
Other revenue | 0 | 0 | 0 | |
Advertising spend | 32,211 | 152,465 | 205,834 | |
ROAS contribution | 13,914 | 19,004 | (897) | |
Corporate & Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 10,556 | 14,993 | 14,994 | |
Other revenue | 2,899 | 2,841 | 1,131 | |
Advertising spend | 0 | 0 | 0 | |
ROAS contribution | 10,556 | 14,993 | 14,994 | |
Referral revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 238,365 | 823,624 | 899,822 | |
Referral revenue | Operating Segments | Developed Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 102,899 | 347,094 | 378,919 | |
Referral revenue | Operating Segments | Americas | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 89,341 | 305,061 | 315,966 | |
Referral revenue | Operating Segments | Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 46,125 | 171,469 | 204,937 | |
Referral revenue | Corporate & Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Subscription revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 7,657 | 12,152 | 13,863 | |
Subscription revenue | Operating Segments | Developed Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Subscription revenue | Operating Segments | Americas | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Subscription revenue | Operating Segments | Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | |
Subscription revenue | Corporate & Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | € 7,657 | € 12,152 | € 13,863 | |
[1] | Includes related party expense as follows: Year ended December 31, 2018 2019 2020 Cost of revenue 59 € 44 (32) Selling and marketing 42 263 133 Technology and content 700 465 97 General and administrative 9 43 31 | |||
[2] | Includes share-based compensation as follows: Year ended December 31, 2018 2019 2020 Cost of revenue 184 269 243 Selling and marketing 3,273 2,359 1,169 Technology and content 5,260 5,978 3,808 General and administrative 11,985 11,285 9,859 | |||
[3] | Includes depreciation and amortization as follows: Year ended December 31, 2018 2019 2020 Amortization of internal use software costs included in — 360 188 Amortization of acquired technology included in amortization of intangible assets 278 143 84 Amortization of internal use software and website development costs included in technology and content 2,214 3,239 3,926 Amortization of internal use software costs included in general and administrative 785 656 491 |
Segment information - Geographi
Segment information - Geographic information (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | € 248,921 | € 838,617 | € 914,816 |
Property and equipment, net | 26,682 | 33,172 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 57,406 | 192,526 | 194,416 |
Germany | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 27,491 | 68,491 | 73,143 |
Property and equipment, net | 26,289 | 30,681 | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 26,637 | 85,284 | 95,893 |
Brazil | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 12,440 | 35,387 | 41,097 |
All other countries | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 124,947 | 456,929 | € 510,267 |
Property and equipment, net | € 393 | € 2,491 |
Valuation and qualifying acco_3
Valuation and qualifying accounts (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | € 74 | € 250 | € 231 |
Charges to Earnings | 656 | 754 | 580 |
Deductions | (382) | (930) | (561) |
Balance at End of Period | € 348 | € 74 | € 250 |
Subsequent events (Details)
Subsequent events (Details) - EUR (€) € in Thousands | May 31, 2023 | Jan. 29, 2021 | Jan. 28, 2021 | Jan. 12, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Mar. 05, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 02, 2021 | Jan. 07, 2021 | Jan. 01, 2021 |
Subsequent Event [Line Items] | |||||||||||||
Loss on termination of lease | € (179) | € 0 | € 0 | ||||||||||
2016 Omnibus Incentive Plan | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of shares available for grant | 34,711,009 | 34,711,009 | |||||||||||
weekengo Gmbh | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Payments to acquire businesses | € 3,000 | ||||||||||||
Pro forma revenue | € 500 | € 400 | |||||||||||
Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Derecognition of equity method investment | € 70 | ||||||||||||
Loss on termination of lease | € 2,300 | € 6,700 | |||||||||||
Compensation received for transfer of long-lived assets | 7,600 | ||||||||||||
Settlement of claims for defects | € 2,600 | ||||||||||||
Subsequent Event | Marketing Sponsorship Agreement | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Commitment | € 23,200 | ||||||||||||
Commitment period | 3 years | ||||||||||||
Commitment first contractual installment | € 4,000 | ||||||||||||
Subsequent Event | 2016 Omnibus Incentive Plan | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of shares available for grant | 59,635,698 | ||||||||||||
Subsequent Event | weekengo Gmbh | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Percentage of equity interest acquired | 100.00% | ||||||||||||
Payments to acquire businesses | € 7,400 | ||||||||||||
Subsequent Event | Uncommitted Credit Facility | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Uncommitted credit facility principle amount cancelled | € 50,000 | ||||||||||||
Common Class B | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Shares converted (in shares) | 3,500,000 | 7,000,000 | 11,112,001 | ||||||||||
Common Class B | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Shares converted (in shares) | 3,625,000 | ||||||||||||
Common Class A | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Shares converted (in shares) | 3,625,000 | ||||||||||||
Share-based awards, shares issued upon exercise (in shares) | 2,614,550 |