Travelzoo (NASDAQ:TZOO) reported a rise in fourth-quarter revenue as the company stepped up spending to grow its paid membership base, a strategy that weighed on short-term earnings but is aimed at boosting recurring revenue over time.
For the quarter ended December 31, 2025, consolidated revenue increased 9% year over year to $22.5 million, compared with $20.7 million a year earlier. On a constant-currency basis, revenue rose 7% to $22.1 million. The company generates revenue from advertising, commissions tied to member purchases and membership fees.
Net loss attributable to Travelzoo narrowed sharply to $19,000, or $0.00 per share, from $0.26 per share in the prior-year period. On a non-GAAP basis, operating profit totaled $0.9 million, excluding $2,000 in amortization of intangibles and $339,000 in stock-based compensation.
Management said the company continued to invest aggressively in acquiring new Club Members during the quarter when it determined that marketing spend could generate a positive return on investment. Because marketing expenses are recognized immediately, while membership fees are recorded ratably over the 12-month subscription period, the strategy had a temporary dampening effect on earnings per share.
“We will continue to leverage Travelzoo’s global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more Club Offers for Club Members and add new benefits, such as our popular complimentary airport lounge access worldwide in case of a delayed flight,” said Holger Bartel, Travelzoo’s Global CEO. “Travelzoo members are affluent, active, and open to new experiences. We inspire travel enthusiasts to travel to places they never imagined they could. Travelzoo is the must-have membership for those who love to travel as much as we do.”
Regional performance
In North America, revenue rose 6% year over year to $14.8 million. Operating profit in the region declined to $1.5 million, or 10% of revenue, compared with $4.6 million, or 33% of revenue, in the prior-year quarter.
European revenue climbed 16% to $6.3 million. The segment posted an operating loss of $1 million, or 16% of revenue, versus operating profit of $159,000 a year earlier. The swing to a loss was attributed to higher investment in member acquisition.
Jack’s Flight Club, in which Travelzoo holds a 60% stake, reported a 2% increase in revenue to $1.3 million, with premium subscriber numbers flat year over year. Operating profit edged up to $153,000 from $150,000 in the prior-year period.
Revenue from New Initiatives, including licensing and Travelzoo META, totaled $16,000, while the segment recorded an operating loss of $34,000.
Licensing and reach
Travelzoo continues to operate royalty-based licensing agreements in Australia, Japan, New Zealand and Singapore. Licensing revenue totaled $8,000 from Australia and $7,000 from Japan in the fourth quarter, with management expecting growth going forward.
The company said it now reaches 30 million travelers globally, including Jack’s Flight Club subscribers. Comparisons with prior periods are less meaningful due to strategic changes to the membership model.
Financial position and outlook
As of December 31, 2025, Travelzoo held $10.8 million in cash, cash equivalents and restricted cash. Operating cash flow for the quarter was $1.5 million. Deferred revenue increased as membership fees are recognized over the subscription period.
The company recorded a $521,000 income tax provision for the quarter and expects to utilize net operating losses to largely offset the tax liability.
Travelzoo did not repurchase shares during the fourth quarter.
Looking ahead, management expects revenue growth to continue in the first quarter of 2026 and beyond, supported by new member additions and the ongoing conversion of Legacy Members—those who joined prior to the introduction of the membership fee in 2024—into paying Club Members. While near-term net income may fluctuate due to marketing investment, the company anticipates profitability will improve over time as recurring membership revenue builds.