Trip.com Group Ltd. (NASDAQ: TCOM) just gave us one of those earnings reports where the headline numbers can send you looking in the wrong direction. Revenue was up 6% year over year to RMB15.7 billion ($2.34 billion), and non-GAAP diluted EPS came in at RMB7.27, or $1.07, versus RMB7.20 ($1.07) a year ago.
That’s a solid quarter. But the number that’s keeping me awake is the 50%+ jump in international platform revenue
That’s a massive gap between what’s happening inside the overall business and what’s happening inside the piece Trip.com is trying to build for the next leg of growth. And if you’re looking at the stock, you need to understand that gap before deciding what to do with TCOM.
The ugly headline is the RMB5.2 billion ($780 million) anti-monopoly penalty from China’s State Administration for Market Regulation (SAMR), which pushed Trip.com into a net loss of RMB2.4 billion ($360 million) versus RMB4.9 billion ($730 million) in net income a year ago. But strip out that penalty, and the company would have posted RMB2.7 billion ($400 million) of net income.
So, yes, the GAAP number looks underwhelming. But if you’re trading the underlying business rather than the accounting noise, there’s a much more interesting setup here.
Look at the revenue breakdown and the divergence jumps right off the page.
Trip.com’s total revenue grew 6%, but international platform revenue grew more than 50%. Management also said inbound travel revenue increased at a high-double-digit rate.
That’s not a small difference.
- Accommodation revenue was up 6% to RMB6.6 billion($980 million).
- Packaged tours grew 8% to RMB1.2 billion ($180 million).
- Corporate travel jumped 11% to RMB771 million ($114.96 million).
Transportation was the weak spot, with revenue down 1% year over year to RMB5.4 billion ($810 million) and 12% sequentially, as higher energy prices and geopolitical volatility hit the business.
Then you get into the international numbers, and things start looking very different.
First- and business-class flight bookings on Trip.com were up more than 70% year over year in the first half, while customized tour bookings exploded 600%.
Now, I’m not saying you take that 50% growth rate and slap it onto the next five years. That’s not how this works. But the divergence is real.
The company is growing 6% at the top level while the international platform is growing 50%+. That’s the part I’d keep on the screen.
The Fine Changes The Domestic Economics, Not Just The Quarter
Here’s where I’d be careful if you’re looking at TCOM and thinking, “Easy. The fine is one-time, so just ignore it.”
I wouldn’t go that far. The SAMR penalty totaled RMB5.18 billion ($770 million), including a RMB3.52 billion ($520 million) fine and RMB1.66 billion (250 million) in confiscated gains. It also created a contra-revenue impact in accommodation reservation revenue. Without that impact, Trip.com said accommodation revenue would have grown 8% instead of 6%.
The bigger issue is what happens to the business after the charge disappears.
SAMR’s decision forces Trip.com to change parts of how it works with hotel partners, and management said the company is changing its hotel framework around value, transparency, service quality and product competitiveness.
So there’s a real reset happening inside the China business. At the same time, it is spending more to push internationally. Sales and marketing expenses climbed 15% year over year, while adjusted EBITDA fell to RMB4.6 billion ($690 million) from RMB4.9 billion ($730 million). That’s the trade-off I’m watching.
Then AI Enters The Equation
TCOM isn’t just throwing AI into the earnings call because every public company feels obligated to mention it. There are actual transaction numbers here. AI-assisted orders through TripGenie increased about 400% year over year, and nearly 60% of TripGenie’s interactions are now booking-related across hotels, flights and attractions.
That’s worth watching. Because Trip.com doesn’t need to build the next ChatGPT to benefit from AI in travel. If AI gets people to search for trips differently, somebody still has to actually sell the hotel room, book the flight, provide the inventory, process the transaction and handle the customer.
Trip.com already has that infrastructure. So I think the interesting AI angle here is less “Trip.com is an AI company” and more AI could make Trip.com’s existing travel infrastructure more valuable.
The Stock Still Looks Like It Needs Proof
TCOM is around $41.08, sitting below the 20-day SMA at roughly $42.88 and the 50-day SMA at around $43.89. The 200-day SMA is way up near $53.15.
And the bigger picture isn’t pretty. The stock has fallen from roughly $78 earlier this year into the low $40s, leaving us with a pretty obvious series of lower highs and lower lows.
So if you’re trading this, I’m not chasing the earnings pop. The first level I’d watch is that $43–44 zone. Get back above the 20-day and 50-day averages and you’ve got the first sign that buyers are actually stepping back in. Then I’d watch the $48 area, with the 200-day around $53–54 as the bigger test.
Until TCOM starts reclaiming those levels, the chart is basically saying: show me.
Not Buying Yet
And that’s where I land on it.
Trip.com is clearly more interesting than the 6% headline growth suggests. But I’m not buying simply because the numbers underneath the GAAP loss look better.
You’ve got a domestic business going through a regulatory reset, heavier spending on international expansion, and adjusted EBITDA still moving lower.
The story I want to see play out is pretty simple: can that 50%+ international growth become large enough to move the economics of the entire company?
If it can, TCOM could eventually give the chart something worth buying. Right now, I’m waiting for the chart to start agreeing with the story.
