Trip.com Group Limited (NASDAQ: TCOM; HKEX: 9961)

Trip.com Group delivered solid financial performance in Q1 2025, with net revenue increasing 16% year-over-year to RMB13.8 billion (US$1.9 billion), primarily driven by stronger travel demand. Net revenue also increased by 9% compared to the previous quarter, primarily due to seasonality.

Net income for the quarter was RMB4.3 billion (US$596 million), maintaining the same level as Q1 2024 and nearly doubling from the previous quarter's RMB2.2 billion. Non-GAAP net income attributable to shareholders was RMB4.2 billion (US$579 million), a 3% increase from RMB4.1 billion in the same period of 2024.

Adjusted EBITDA for Q1 2025 was RMB4.2 billion (US$586 million), representing a 5% increase from RMB4.0 billion in Q1 2024 and a 42% increase from RMB3.0 billion in the previous quarter. Adjusted EBITDA margin was 31%, compared to 33% in the same period of 2024.

Operating income increased by 7% year-over-year to RMB3.6 billion (US$492 million), though operating margin slightly decreased to 26% from 28% in Q1 2024. Operating expenses increased across all categories, with sales and marketing expenses showing the largest increase of 30% year-over-year, reflecting enhanced promotional activities.

The company maintained a strong balance sheet with RMB92.9 billion (US$12.8 billion) in cash and cash equivalents, restricted cash, short-term investments, and held-to-maturity time deposits and financial products as of March 31, 2025, providing significant financial flexibility for future growth initiatives and returning value to shareholders.

Accommodation Reservation segment led the growth with a 23% year-over-year increase to RMB5.5 billion (US$764 million). This remarkable performance was driven by an increase in accommodation reservations both domestically and internationally. The segment's revenue grew by 7% compared to the previous quarter, reflecting seasonal travel patterns.

Transportation Ticketing segment recorded revenue of RMB5.4 billion (US$747 million), representing an 8% increase from the same period in 2024 and a 13% increase from the previous quarter. The growth was primarily driven by increased transportation reservations across multiple modes, including air, train, and other ground transportation options.

Packaged-Tour revenue reached RMB947 million (US$131 million), a 7% increase year-over-year and a 9% increase quarter-over-quarter. This growth reflects the continued recovery and expansion of group and package tourism, particularly in international travel.

Corporate Travel segment generated RMB573 million (US$79 million), representing a 12% increase from the same period in 2024, though decreasing by 18% from the previous quarter due to seasonality in business travel. The year-over-year growth demonstrates the recovery and expansion of corporate travel budgets.

Other Revenue sources, including advertising and other value-added services, contributed RMB1.4 billion (US$189 million), showing strong growth of 33% year-over-year and 11% quarter-over-quarter. This reflects the company's successful diversification of revenue streams beyond its core travel booking services.

Trip.com Group's international business demonstrated exceptional performance in Q1 2025, reflecting the company's successful globalization strategy:

• Overall Reservations Growth: International OTA platform reservations increased by over 60% year-over-year, demonstrating strong momentum in global markets
• Inbound Travel Surge: Inbound travel bookings surged by around 100% year-over-year, highlighting China's recovery as a global tourism destination
• Outbound Travel Recovery: Outbound hotel and air ticket bookings have grown to more than 120% of pre-COVID level compared to the same period in 2019
• Market Diversification: Expanded presence across multiple international markets, reducing reliance on any single region
• Cross-Border Integration: Enhanced synergies between domestic and international platforms, improving the user experience for global travelers

The company's diversified market presence has strengthened its resilience against regional economic fluctuations. As noted by Executive Chairman James Liang: "With our diversified market presence, we are well positioned to navigate global economic uncertainties and capture growth opportunities."

This international expansion has been supported by localized product offerings, enhanced global service capabilities, and strategic partnerships with international travel suppliers. The robust growth across all segments of the international business positions Trip.com Group favorably for continued global expansion.

Trip.com Group continues to execute on several key strategic initiatives to drive sustainable growth and enhance its competitive position:

Customer-Centric Approach

• Localized Innovations: Developing market-specific features and services to meet diverse regional needs
• Enhanced User Experience: Continuous improvement of mobile apps and platforms to improve customer satisfaction
• Personalization: Leveraging data analytics to provide tailored travel recommendations and offers

Global Expansion Strategy

• Market Diversification: Expanding presence in key international markets to reduce dependency on any single region
• Cross-Border Travel Facilitation: Enhancing services for both inbound and outbound travel between China and global destinations
• Strategic Partnerships: Collaborating with international airlines, hotels, and travel service providers to expand global inventory

Product and Service Innovation

• Content Enrichment: Integrating travel content with booking services to enhance the inspiration phase of travel planning
• Service Quality: Improving customer service capabilities to provide seamless support throughout the travel journey
• Technology Investment: Ongoing development of AI-powered features and services to enhance user experience

As highlighted by CEO Jane Sun: "As travel becomes an increasingly integral part of everyday life, we remain committed to meeting the evolving needs of travelers through innovative, localized, and customer-centric solutions. This positions us well to sustain growth momentum and deliver lasting value to our customers, partners, and shareholders."

These strategic initiatives are designed to strengthen Trip.com Group's position as a leading global one-stop travel platform, capable of serving the needs of diverse travelers across different markets and travel scenarios.

Trip.com Group maintains a disciplined approach to capital allocation, balancing investments in growth with returning value to shareholders:

Share Repurchase Program

• Repurchased 1.6 million ADSs with a total gross consideration of US$84 million as of May 16, 2025
• Continuation of the company's ongoing commitment to delivering value to shareholders and ADS holders
• Executed in line with the company's regular capital return policy

Strong Balance Sheet Management

• Maintained robust cash position of RMB92.9 billion (US$12.8 billion) as of March 31, 2025
• Strategic management of short-term investments and held-to-maturity time deposits to optimize returns
• Prudent liability management with well-structured debt profile

Investment in Growth Initiatives

• Continued investment in product development with 13% year-over-year increase in related expenses to RMB3.5 billion
• Strategic marketing investments with 30% year-over-year increase in sales and marketing expenses
• Focused capital deployment to enhance technological capabilities and platform infrastructure

The company's solid financial position provides flexibility to pursue strategic growth opportunities while continuing to return capital to shareholders. This balanced approach to capital allocation supports Trip.com Group's long-term strategy of sustainable growth while maintaining shareholder returns.