Good morning and welcome to the Travelzoo third quarter 2025 earnings call. Today's conference is being recorded. Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be open for your questions. If you would like to ask a question at that time, please press star one on your telephone keypad. If you need to remove yourself from the queue, please press star one again. At any time, if you need an operator's assistance, please press star zero. The company would like to remind you that all statements made during this conference call and presented in the slides are not statements of historical facts, constitute forward-looking statements, and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could vary materially from those contained in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements are described in the company's Forms 10-K and 10-Q and other SEC filings. Unless required by law, the company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to the company's website for important information, including the company's earnings press release issued earlier today. An archived recording of this conference call will be made available on the company's investor relations website at travelzoo.com/ir. Now, it is my pleasure to turn the floor over to Travelzoo's Global CEO, Holger Bartel, its Chair, General Counsel, and CEO of Jack's Flight Club, Christina Ciocca, and its Financial Controller, North America, Jeff Hoffman. Jeff, we'll start now with an overview. Thank you, operator, and welcome to those of you joining us. Today, I'm stepping in for Lijun Qi, our Chief Accounting Officer. Please refer to the management presentation to follow along with our prepared remarks. The presentation in PDF format is available on our investor relations site at travelzoo.com/ir. Let's begin with slide four. Travelzoo's consolidated Q3 revenue was $22.2 million, up 10% from the prior year. In constant currency, revenue was $21.9 million, up 9% from the prior year. Operating income, which we as management call operating profit, decreased as we invested more in the growth of club members. Q3 operating profit was $0.5 million, or 2% of revenue, down from $4 million in the prior year. Let me explain the rationale for our significant increase in marketing expense, which lowered EPS. Slide five shows that investments in the acquisition of club members are attractive as they have a quick payback. On the left side, you see that the average acquisition cost for a full paying club member was $28 in Q1, $38 in Q2, and $40 in Q3. On the right side, you see that we get this money back fast. The member pays, in the U.S. case here, their $40 annual membership fee right at the beginning of the membership period. Additionally, we generated $15 in revenue from transactions in the same quarter. This full payback doesn't even consider an increase in advertising revenue and future membership fees and other revenues. Now, slide six shows, as a reminder, that with subscription businesses, the membership fee is recognized ratably over the subscription period, whereas acquisition costs are expensed immediately when incurred. Slide seven shows the effect. While we have a quick payback, the reported EPS is different. Higher member acquisition expenses, coupled with only a portion of revenue recognized in the quarter, reduced EPS this quarter. In the case of Q3, that effect was a reduction of $0.15. As shown on slide eight, our strategy is fueling member growth at a rate of 135% year-to-date. New club members come roughly half from legacy members and half from those new to Travelzoo. On slide nine, we break down our main categories of revenues: advertising and commerce, and membership fees. Advertising and commerce revenue was $18.6 million for Q3 2025. Revenue from membership fees increased to $3.6 million. Membership fees, which are more stable and predictable, are adding revenue and are becoming a larger share. Next year, we expect them to account for about 25% of revenue. On slide ten, you can see that revenue growth came from all reporting segments. With favorable ROI on member acquisition in the UK, we invested heavily there. Jack's Flight Club revenue increased 12%. Operating profit was lower in both our North America and Europe segments and was slightly less in our Jack's Flight Club segment. On slide 11, you can see that GAAP operating margin was 2% in Q3 2025. Acquiring more club members has the effect of lowering GAAP operating margin. Still, given the favorable ROI, our goal is to further grow the number of club members to accelerate Travelzoo's growth. Slide 12 shows the investment in club members occurring in all key markets. Over time, we expect margins to return to previous levels or even exceed them. On slide 13, we provide information on non-GAAP operating profit, as we believe it better explains how we evaluate financial performance. Q3 2025 non-GAAP operating profit was $1.1 million. That's approximately 5% of revenue compared to non-GAAP operating profit of $4.9 million in the prior year period. Slide 14 provides information about the items that are excluded in the calculation of non-GAAP operating profit. Please turn to slide 15. As of September 30, 2025, consolidated cash, cash equivalents, and restricted cash was $9.2 million. Cash flow from operations was negative $0.4 million. We reduced merchant payables by $0.7 million and repurchased 148,602 shares. Now, looking ahead, for Q4 2025, we expect year-over-year revenue growth to continue. We expect revenue growth to accelerate as a trend in subsequent quarters, as membership fees revenue is recognized ratably over the subscription period of 12 months, as we acquire new members and as more legacy members become club members. Over time, we expect profitability to substantially increase as recurring membership fees revenue will be recognized. In the short term, fluctuations in reported net income are possible. We might see attractive opportunities to increase marketing. We expense marketing costs immediately. Now, I'm going to turn the discussion over to Holger. Thank you, Jeff. We will continue to leverage Travelzoo's global reach, trusted brand, and our strong relationships with top travel suppliers to negotiate more club offers for club members. 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. Today, I would like to share a bit more information about the Travelzoo club membership. Please turn to slide 17. Travelzoo is becoming the must-have membership for travel enthusiasts. Membership empowers you to live your life as a travel enthusiast to the fullest while respecting different cultures. Membership provides access to high-quality and highly valuable club offers. Our global team negotiates and vets them rigorously. These offers cannot be found anywhere else. Membership also provides complimentary access to airport lounges worldwide in case your flight is delayed. Culinary travel deals curated for the travel enthusiasts are coming soon. Slide 18 shows a few of the many exclusive club offers that we created for club members during Q3. For example, Travelzoo members could head to an all-inclusive vacation in the Caribbean for $499, which even includes round-trip flights, or attend the futuristic ABBA Voyage Show in London at a special member price. In Rome, Travelzoo members would pay EUR 99 for two nights at the four-star hotel, while the general public would pay three times as much. Trips to high-end luxury resorts like the Fairmont Mayakoba here are particularly popular with members. These are all offers that you can only get as a Travelzoo member. You will not find them anywhere else. Slide 19 shows the worldwide complimentary lounge access in case of flight delays. It's perfect for the travel enthusiast. Slide 20 provides information about Travelzoo members. Travelzoo is loved by travel enthusiasts who are affluent, active, and open to new experiences. Slide 22 provides an overview of our management focus. We are working to grow the number of paying members and accelerate revenue growth by converting legacy members and adding new club members, retain and grow our profitable advertising business from the popular Top 20 product, accelerate revenue growth, which drives future profits in spite of temporary lower EPS, grow Jack's Flight Club's profitable subscription revenue, and develop Travelzoo Meta with discipline. Now, Christina will provide an update on Travelzoo Meta and Jack's Flight Club. Thank you, Holger. We continue to work on the production of the first metaverse travel experiences. They will be browser-enabled. As stated in previous earnings calls, we are conscious of developing Travelzoo Meta in a financially disciplined way. We will provide additional updates in due time. For Jack's Flight Club, revenue increased 12% year- over- year, and the number of premium subscribers increased 8%. We continue to invest in the growth of premium subscribers. We expect to see a greater increase in premium subscribers year- over- year in Q4 due to promotional activities that took place in Q3. I'm now handing over to the operator for questions for Jeff, Holger, and me. Thank you. At this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue by pressing star one again. Please limit yourself to one question and one follow-up. We'll take our first question from Theodore O'Neill from Litchfield Hills Research. Please go ahead. Your line is open. Thanks very much. I'm looking at slide nine, and it's clear here that if I look at the advertising and commerce revenue on a rolling four-quarter basis, the numbers are rising, and obviously, the fees are rising on the same basis. Clearly, this is all working in your favor. I was wondering, what do you think is driving the popularity of these options that you're providing out there for travel and experiences? Because in light of economic uncertainty, I think a number of us would have thought these numbers would be going in the other direction. Hi Theo. I think the slide that shows the offers that we are negotiating for our members shows that very well. The travel opportunities you receive from Travelzoo, and they are exclusive to our members, are so much better than what the regular person can get, that they motivate people to travel. They motivate people to travel even more. They make it also more affordable. They allow our members to go, as you saw with this example from Fairmont Mayak oba, to go on luxury vacations when they normally could only afford a relatively inexpensive trip. Travel enthusiasts are people who love to travel. They can't get enough of it. I think the Travelzoo membership is what enables them to live that to the fullest. I think that's why we are seeing the popularity of the membership continuing to increase. Looking at the membership numbers, which are clearly increasing here, how does that reconcile with your expectations for that growth? It's in line with expectations. Please remember that the number that's shown on this slide includes also Jack's Flight Club. Jack's Flight Club is not growing quite as fast as Travelzoo membership. Travelzoo membership is even growing much faster than what you might think when you look at this data on the right. In general, we're in line with what we are expecting. We obviously always want to grow faster, and we are very optimistic with the return that we are receiving on our marketing investments that we can even accelerate the growth more because, as we say here, we expect next year membership revenue to account for at least 25%. Membership revenue is recurring. It's attractive. The combination of membership revenue and a continued strong advertising business will ultimately create a Travelzoo business that is more profitable than in the past. Thanks very much. Our next question comes from Michael Kupinski from Noble Capital Markets. Please go ahead. Your line is open. Thank you. Thanks for taking my questions. I see that the cost of customer acquisition has gone up a little bit, and I was just wondering if you could just talk a little bit about what's driving that and at what price would you say that you're not getting the benefit? I know $40, you're still getting a benefit from the membership, but at what price do you think that you would not see an attractive return from that? Sure. It didn't change that much from 38 to 40. I think it's just a minor fluctuation. I let Christina comment a bit more on what's driving the success in member acquisition. Sure. I agree with what Holger said. It hasn't gone up too much. The only reasons that I believe it would have gone up even the $2 is just they're scaling and spending more. That's kind of just what naturally happens as you start to scale up and spend more on member acquisition on certain channels. We are doing everything we can to counteract that by finding optimizations that will enable us to not have that kind of cost per acquisition go up too much more. I think in general, we have been finding ways to optimize and channels that work for us. It also helps that we have such strong club offers. To what Holger said previously, that's really what's working for us is people see these amazing club offers and they want to join, and that helps us to get to our efficiencies. Great. As I said, Mike, four times a year, we have member days. Member days are, what's special about the offers on member days are these are offers that only club members can see. You could see other offers if you just get a preview of the offer. These offers on member days are offers that you can only see once you are a paying club member. They drive member acquisition. What's important here is these are offers that some of our travel partners like to create and make even more aggressive because they know these can only be seen by a very, very small, select, and very closed group of members. Put yourself into the shoes of this luxury hotel. Do you want to name out to millions of people on Expedia that you're offering a discount? No, you don't want to. Travelzoo provides the opportunity here for these luxury hotels and similar travel partners to create offers that are hidden away from the public, but that can be enjoyed by people who love them. That's why, for example, these member days have been quite critical in driving member acquisition. What we are seeing is that during those periods, and we are looking to boost these even more, during those periods, cost per acquisition is even substantially lower than the $40 we see here. In short, it's really the strength of offers, and the better the offers are, that's what's impacting the cost per acquisition. Of course, over time, our marketing efforts will also become more efficient. We also think there's a good chance that we can drive cost per acquisition in certain quarters even lower than the $40. As long as we see this attractive payback, which we illustrated a couple of times before, we will continue to invest because if we get the money back within a quarter, if the profitability is there long term, even if in the short term we see a hit on profitability, it's the right thing to do. We're actually quite happy that we are in this situation. Thanks for the color there, Holger. Can you talk a little bit about the current advertising environment? I would have thought that it would have been a little bit stronger in the quarter. Can you just talk a little bit about how you see that and whether or not it might be improving, especially now in North America, given that we're seeing the Fed rate cuts and so forth? Do you anticipate that it will improve, or do you think that, you know, just kind of give us your general thoughts about the advertising environment? Look, you have a good eye, Michael. Yes, this quarter was a bit slower on the advertising revenue side as it normally would be. Q3 is generally our slowest quarter. There were a couple of advertisers who pulled back. We have these fluctuations from one quarter to the next all the time. Sometimes it's more, sometimes it's less. In general, the feeling in the U.S. is quite good. Where we really see hesitancy is in the UK, and not just us, I'm hearing this from other companies as well, travel companies and any kind of consumer company in the UK. There is probably an announcement about quite aggressive tax hikes at the end of November. Until people hear what exactly is going on, they are hesitant. The businesses are hesitant to spend. Consumers are hesitant to buy. There I would say we are seeing a relatively soft advertising business in general. In all the other markets, what we are seeing, I would not overinterpret that. It's just a natural fluctuation from one quarter to the next. Gotcha. Thank you. Our next question comes from Patrick Sholl from Barrington Research. Please go ahead. Your line is open. Hi. Could you maybe talk a little bit on some of the retention efforts around subscribers that became paying members in either Q4 of last year? I realize that's a really small cohort, or the legacy members that became paying members at the start of this year. Just any sort of commentary around retention metrics or how you would expect the retention cost relative to initial acquisition costs in those months? Really good question. Christina, do you want to respond to that one? Sure. Of course, we're constantly tracking retention and renewals. I will say that the volumes have not been massive just yet, and we expect much more renewals, especially for the legacy members that joined in Q4 of last year. They actually did not start their membership until January 1st, 2023. I think we'll be expecting to have many more renewals starting in Q1 of next year. We're working on implementing different strategies to kind of ensure they renew. The main thing is just making sure we get them content and information about the club membership while they are a member and hit kind of their preferences so that they see the value in the membership and want to stay. So far, we are seeing fairly good renewal rates, especially coming from legacy members that became club members. We're hoping that trend will continue next year when we have larger quantities of renewals. As in like they're actively opting in to make sure that it's renewed because they wouldn't have had, like, they would have until the end of year to cancel. I I guess, how do you? For the ones that joined, that's a good point. For the ones that joined previously, not necessarily on any specific promotions, we're starting to see some renewals. I guess many of them are not legacy members, but new to Travelzoo. We are seeing other kind of conversion rates and things for legacy members that are trending in the right direction. Okay. I understand Pat's question might be about renewal itself. It's an automated renewal. They don't have to actively renew. It will automatically renew unless they cancel. As you mentioned, Pat, as you mentioned very correctly, we have a very large group of renewals coming up at the end of this year. Again, at the end of Q1, those are really large numbers of renewals. We can already see a little bit. We can forecast renewal rates quite well because we can look at how many of these members have already deactivated their automated renewal on these two groups. It's actually very, very small because they've been with Travelzoo for a long time. The reason I also mentioned it, at that point of time when they renew, the membership fee comes in. That's why we are expecting also quite a nice income of cash at the end of this year. Again, at the end of Q1, we're also looking and will most likely increase the membership fee in certain markets next year, maybe already at the beginning of the year, because the $40 just seems maybe a little bit too low. People who use the membership really love it. From what we are hearing is we have an opportunity to increase the membership fees there. It's not decided yet, just to be clear, but we are looking into it very seriously. Okay. On the advertising and commerce components of revenue, could you maybe talk about how the mix of that has shifted over the last four quarters? It's really a relatively small portion where we have the opportunity to buy travel inventory, for example, hotel rooms in advance, which is where that then has an impact on cost of revenue. It's a relatively small part, and it hasn't really changed dramatically, nor do we expect it to change dramatically. That goes into cost of revenues, and you know that was about a $2 million increase year- over- year. Is that kind of that component that we should be thinking about as being a relatively lower margin? That would kind of be the, I guess, delta on the advertising side then. Yes. Okay. Just on the overall travel environment, are you seeing any kind of difference between the types of travel services offered in terms of what's more, I guess, active in offering deals, whether it's flights or hotels? We are not seeing any changes. It's still the same. Consumers in general, and particularly our travel enthusiasts, they're looking for value. They're looking for amazing offers, and they're looking for experiences, and they want to do something new. They're not looking for something boring. They're looking for vacations that reward them, that are exciting for them. Most of all, they're really looking for great value, as I said. That's where the Travelzoo membership comes in and offers them exactly that and offers them more opportunity to travel because that's what they would like. Okay, thank you. Our next question comes from Steve Silver from Argus Research. Please go ahead. Your line is open. Thanks, operator, and thanks for taking my question as well. Holger, the presentation cites additional advertising revenues as a potential incremental value driver over time. I'm curious as to whether there's any color you can provide on your thinking, just in terms of the timeline for reaching some of the thresholds to reach that critical mass, or whether you think that those opportunities might be either more near, immediate, or longer term based on the current member acquisition rate. In the past, we've seen a roughly time delay of one year. It's difficult to predict this, Steve, and that's why we didn't put a number on it. We just illustrated on the slide as, you know, obviously, if I have more members, if I have a bigger audience, I can increase my advertising fees. Right now, it's not something we are so focused on incredibly, probably more maybe 2026 or 2027, because right now our main focus is really on getting the number of club members up and providing them a service that they absolutely do not want to give up on. That's helpful. Thank you. One last one, if I may. There's been a lot of chatter, particularly in North America, just in terms of flights being delayed, whether it's the shutdown or a shortage of air traffic controls, all of those types of issues. I'm curious as to whether there is the risk of any capacity issues at these airport lounges if there was an increase in flight cancellations, those types of things, or whether airport lounges are equipped to take on a higher number of potential people if flights are delayed at that kind of pace. So far, we haven't heard about any issues or problems. Our members would certainly let us know. Thanksgiving is at the end of November. It's the big travel period. Hopefully, all these travel issues will be resolved by then, and people can travel safely and without too much interruption. It's nice for our members to know that this service and this benefit exists when they need it. Okay. Fair enough. Thanks for taking the questions. Our last question comes from Ed Woo from Ascendiant Capital. Please go ahead. Your line is open. Yeah. A little bit more on what you're seeing out in the travel environment, with all the economic issues and stuff. Are you seeing any change in the consumer, either they want to travel, spending down or traveling less? Also, on the supply side, are you hearing much from your hotel or travel providers that they are having issues filling seats with consumers or that they have to lower their prices? Last week, I read a report that there's an increasing disparity between more affluent consumers who continue to travel and travel even more and those who really, really have to watch their budget. Luckily, you know, our members, Travelzoo members, are very affluent. I mean, you saw like a really high percentage of them that have incomes over $200,000. Our members are not cheap. They are not on the low-income side. They are more in the group of people who travel more. As long as we provide them with excellent opportunities and with fantastic offers, they will continue to travel. Great. Are you hearing any concerns from the travel suppliers, either that they feel like they have to advertise more to fill their rooms, or are there any concerns, or do they feel optimistic, you know, heading into the holidays and next year? We haven't heard anything that really changes how they are looking at it. I think they are more focused now on keeping occupancy rates high, you know, compared to the COVID period when it was just normal that the hotel was not busy. I would not say it goes much more beyond what we seasonally have seen in the past. The economy in the U.S., particularly, is still doing well. Let's see what happens in 2026. As we said in the past, if we have more travel suppliers, for example, hotels, as you say, that have trouble being full, they come to us and they will create offers for us. Now that we have this closed user group that allows them to do this very discreetly, we are really positioned to be a great partner for them. Great. Thanks for answering my questions, and I wish you guys good luck. Thank you. Thanks, Ed. You too. Okay. This concludes the Q&A portion of today's call. I would like to turn the call back over to Mr. Holger Bartel for closing remarks. Great. Dear investors, thank you again for your time and support today. We look forward to speaking with you again next quarter. Have a great day. This concludes today's Travelzoo third quarter 2025 earnings call and webcast. You may disconnect your lines at this time and have a wonderful day.