Travelzoo reported second-quarter revenue of $23.2 million, down 3% from a year earlier, and posted a reported loss of $2.8 million compared with an operating profit of $2.1 million in the prior-year period, according to the company’s earnings presentation.

The company’s reported GAAP operating margin was negative 12% during Q2 2026. On a non-GAAP basis, Travelzoo reported an operating loss of $2.1 million, compared with a non-GAAP operating profit of $2.4 million a year earlier.

Travelzoo’s advertising and commerce revenue totaled $18.2 million, while membership-fee revenue rose to $5 million. The company expects membership fees to account for more than 20% of revenue in 2026.

Bartel said traveler hesitation was most evident in April and May 2026, but noted that advertising and commerce revenue, which declined in Q2, improved during June and continued to strengthen in July. He said the company is seeing advertisers reduce their hesitation and members book more offers and travel more than roughly a quarter ago.

Travelzoo spent $4.6 million on marketing in Q2 2026, almost entirely directed toward adding new members and converting legacy members into paying club members, according to Bartel. The average club-member acquisition cost was $62. Bartel said the company would continue investing at current levels as long as investments deliver positive returns and relatively quick payback periods.

Travelzoo reported an average transaction revenue of $15 per member during Q2 2026. Management expects the current investment to reduce EPS incrementally by $0.60 in 2026, followed by an incremental $1.20 increase in 2027 as memberships renew. The company clarified that a previously cited $1.20 figure for 2027 represented an estimated incremental EPS benefit, not a formal projection.

As of June 30, 2026, Travelzoo had consolidated cash equivalents and restricted cash of $7.6 million. Financial Controller Jeff Hoffman said the decline in cash was not caused by increased member acquisition spending; the company reduced merchant payables by $2.7 million and repurchased $1.9 million of common stock during the quarter. Bartel said the company would like to raise the cash balance and expects it to increase in Q3 2026.

Travelzoo recorded more membership trials in Q2 2026 than any period since introducing the membership offering, according to the company. Bartel said on membership profitability, the principal cost comes at the beginning for members acquired through paid marketing, with renewals requiring no acquisition spending and incremental profitability close to 100%. Travelzoo has selected member benefits including a travel enthusiast hotline launched with Allianz in Q1 2026.

Travelzoo expects year-over-year revenue growth in Q3 2026 and subsequent quarters, and management expects the first Travelzoo META experiences to become available in Q3 2026. Christina Ciocca, Travelzoo’s chair and general counsel and CEO of Jack’s Flight Club, said access to Travelzoo META will be an exclusive benefit of Travelzoo club membership. She added that Jack’s Flight Club is focused on revenue growth through membership growth in alignment with Travelzoo’s broader priorities.

Travelzoo’s stock fell 25% after the Q2 2026 earnings release.