Mercialys

Revenue was $23.2 million in Q2 2026, down 3% year over year; in constant currencies, revenue was $23.1 million. Advertising and commerce revenue was $18.2 million, and membership fee revenue was $5 million. Reported loss was $2.8 million versus reported operating profit of $2.1 million in the prior-year period; non-GAAP operating loss was $2.1 million versus non-GAAP operating profit of $2.4 million a year ago. GAAP operating margin was negative 12%, and cash, cash equivalents and restricted cash were $7.6 million at June 30, 2026. Looking ahead, management expects year-over-year revenue growth in Q3 2026 and in subsequent quarters, and said membership fees should account for over 20% of revenue this year. They also said they now estimate 2027 EPS of $1.20 as an incremental effect from the membership investment, while cautioning that short-term net income will remain volatile.

Holger Bartel emphasized a strategic pivot toward paying Club Members and recurring revenue, saying the company intentionally accelerated marketing because it believes the investment will pay back quickly and support stronger results in 2027 and beyond. He said the business is using Travelzoo’s global reach and supplier relationships to create exclusive Club Offers, convert Legacy Members, and expand the membership base, while keeping spending disciplined and tied to positive ROI. His tone was confident and explanatory, repeatedly framing the quarter’s weaker EPS as a short-term tradeoff for a more durable subscription model.

Jeff Hoffman said consolidated revenue was $23.2 million, down 3% year over year, with Q2 reported loss of $2.8 million versus $2.1 million of operating profit last year and a GAAP operating margin of negative 12%. He highlighted $62 average acquisition cost per Club Member, $15 average transaction revenue per member in Q2, and $7.6 million of consolidated cash, cash equivalents and restricted cash at June 30, 2026. He also said cash declined mainly because merchant payables were reduced by $2.7 million and the company repurchased $1.9 million of shares, and he expects cash to rebound next quarter.

Analysts focused on the impact of weaker travel demand and conflicts, the doubling of marketing spend, the path to EPS normalization, cash and buybacks, and whether benefits to Club Members could hurt margins. Management said demand softened in April and May but improved in June and July, and that the marketing spend was almost entirely to acquire new members rather than retain existing ones. On capital allocation, management said the board regularly քննարկs buybacks and other options, but there was no new announcement; on renewals, they confirmed there has been no marketing spend on renewals to date and that renewals have been organic.