trivago sets a date on profitability: 10% EBITDA margin by 2028, backed by a compounding brand and regulatory tailwind
Earnings Momentum & a Quantified Target
trivago's second-quarter report marks a clear inflection in its turnaround narrative. Revenue reached €168.4M, up 21% year over year, and adjusted EBITDA turned positive at €1.1M — the first positive second quarter since 2023, when the company was still recovering from the pandemic-era downturn. Management explicitly framed this as a validation of the strategy: “These developments reinforce our confidence in targeting a 10% adjusted EBITDA margin by 2028.” — Wolf Schmuhl, CFO · 2026-08-05 That date is new — in the prior quarter's call the target was still phrased as “within the next few years.” Now it is a dated commitment, and full-year guidance was raised to mid-teens revenue growth with ~€30M of adjusted EBITDA.
What's Driving the Change
The improvement is not a one-off. It rests on several compounding initiatives, most of which have been running for over a year. The strongest signal is member strategy — the company now generates more than 30% of referral revenue from logged-in members, up from roughly 20% a year ago. The funnel has become self-reinforcing: brand marketing brings users in, members convert at higher rates, and CRM channels re-engage them at near-zero marginal cost. As Johannas noted, “CRM related channels now give us new ways to engage travelers with no dedicated marketing investment required.” — Johannes Thomas, CEO and Managing Director · 2026-08-05 Revenue from CRM channels more than doubled year over year, and management called it a “meaningful profit contributor.”
The second engine is Branded traffic referral revenue growth, which continues to outpace total referral revenue. The brand flywheel is showing real elasticity: despite increasing marketing spend 18% in Q2, global ROAS rose from 119% to 121.8%. The company is now confident enough to let brand investment grow at a “more moderate pace” and let the compounding effect flow to the bottom line.
In our view, the current share price continues to understate trivago's long term earnings potential. And we will continue our buyback program as we see it as a disciplined and high return use of capital.
AI Adoption as a Structural Advantage
trivago has quietly become a case study in AI‑native operations. The company now reports that 93% of its ~600 core employees use AI daily, saving an average of 55 minutes per day. Management has invested more than 5x their 2025 spend on AI tooling in the first seven months of 2026. This is not just cost reduction; it is a product and marketing multiplier. The same call also highlighted AI adoption peaks at companies of trivago's size, a research finding they believe gives them an edge. The CEO framed it succinctly: “Each of us is becoming dramatically more capable, making better decisions, building products, and scaling reliable systems faster.” — Johannes Thomas, CEO and Managing Director · 2026-08-05
Regulatory Winds: Google's Noncompliance
A notable external development is the European Commission's finding that Google is non‑compliant with the Digital Markets Act, including in the hotel vertical. The Commission fined Google €890M and has threatened daily penalties if it does not act within 30 days. trivago has filed its own claim against Google, and CFO Wolf Schmuhl called the ruling “a structural tailwind” — Wolf Schmuhl, CFO · 2026-08-05 that validates their position: “We can compete on eye level because we believe we have a better product for consumers.” — Wolf Schmuhl, CFO · 2026-08-05 This is a genuine change from prior quarters, where management only noted the possibility of a finding; now they have a concrete ruling and an active legal case.
Risks and the Rest of the Story
Not everything is rosy. Rest of World referral revenue declined 11% YoY, hurt by FX (−7%) and geopolitical pressures in the Middle East, including airspace restrictions and elevated oil prices. Management is actively managing exposure, but the region still contributes 18% of referral revenue, so the drag is contained. The all-others advertiser tier has grown to 35% of referral revenue, and the structural diversification is deliberate, though the company warns it will not go below 30%.
On Book and Go, the platform's in-house booking solution has tripled its share year over year, and Expedia has been onboarded as a supply partner. Management sees this as a complement, not a cannibalization, of the metasearch model: “We expect to be multi-partner and our book and go is a funnel that facilitates it for those users who want to.”
What to Watch
trivago is now balancing growth and profitability with unusual clarity. The path to 10% margin is driven by three known levers: moderating brand spend growth, conversion rate improvements (up 64% since Q2'23), and the member/CRM flywheel. The Google case adds an asymmetric upside. If Google is forced to dismantle its self‑preferencing in hotel search, trivago could capture a larger share of organic hotel intent — a market they have long argued they serve better than Google's own product.
The company is small (market cap ~$230M) and the Street has been skeptical of its growth story, but the numbers are now backing up the narrative. With six consecutive quarters of double-digit growth and a dated margin target, trivago is transitioning from turnaround to compounder.