Trivago CEO moves aside as quarterly revenue dips

Trivago will have a new boss on December 31 when current chief financial officer Axel Hefer replaces outgoing CEO Rolf Schrömgens, who has formally announced his departure.

The unexpected move came on Tuesday before the company’s third quarter earnings call.

Schrömgens co-founded Trivago in 2005 and has served as CEO for 15 years. He will join the company's "supervisory board."

Matthias Tillmann, senior vice president and head of corporate finance, will transition into the CFO role as Hefer moves up.

Says Schrömgens: “I believe that Axel will fill the CEO role with the same passion and dedication as I have. 

“I know he will continue to develop the organization and execute on the strategy the leadership team has put in place.”

The Düsseldorf, Germany-based company reported a 1% year-over-year decrease in revenue to €250.3 million in the third quarter of 2019, falling short of analyst expectations of €9.74 million.

Net income declined to €0.3 million from €10.1 million in the third quarter of 2018, while adjusted EBITDA fell from €26.6 million to €10.9 million for the same time period.

Qualified referrals decreased 14%, down from 189.1 million in the third quarter of 2018 to 162 million last quarter.

Silver linings

Despite a 9% decline in referral revenue in Europe and a 16% decline throughout the rest of the world, there is one bright spot – the Americas.

Referral revenue in the Americas increased 19% year-over-year.

In a call to discuss earnings, Hefer said that the growth in the Americas “gives us the confidence that we are able to outgrow the market.”

“Our investments in the Americas are already showing positive results,” says Hefer.

“We remain confident in our long-term strategy and our ability to deliver value for our advertisers, accommodation providers and users.”

Alternative accommodation offerings more than doubled since last year, with 2.3 million units on the platform on September 30.

Schrömgens attributed the growth in alternative accommodations to “a result of both better integration with our search capabilities and expansion of our offerings.”

Selling and marketing expenses, excluding share-based compensation, declined 36%, largely due to decreased investments in the production of television advertisements.

As a result of the decreased spending, Trivago achieved profitability for the fifth consecutive quarter.