Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trainline PLC (TNLIF, Financial) reported a 44% increase in adjusted EBITDA to £82 million, driven by strong financial performance and operating leverage.
- The company achieved a 14% increase in net ticket sales and a 17% rise in revenue, surpassing previous guidance.
- Trainline PLC (TNLIF) is Europe's number one rail app, with its app being downloaded almost twice as often as its closest competitors.
- The company has successfully expanded its market share in the UK commuter segment to 24% and increased e-ticket penetration to 51%.
- Trainline PLC (TNLIF) is effectively monetizing customer relationships, with non-commission revenue from ancillary products like hotels and travel insurance tripling year-on-year.
Negative Points
- The company faces challenges in France and Germany, where net ticket sales growth has slowed due to paused brand marketing and changes in Google search engine results.
- There is a potential headwind from the delayed Transport for London's project oval expansion, now expected to impact in FY26.
- The UK market faces a reduction in net commissions, which could impact revenue growth despite operating leverage benefits.
- Trainline PLC (TNLIF) is experiencing a natural headwind to take rate due to faster growth in on-the-day travel, where no booking fee is charged.
- The company anticipates a multiyear journey for the rollout of pay-as-you-go trials and digital season tickets, indicating potential delays in realizing these opportunities.
Q & A Highlights
Q: What is the timeline for the implementation of the pay-as-you-go trial and digital season tickets in the UK?
A: Jody Ford, CEO, explained that the pay-as-you-go trial is likely a multi-year journey, with trials informing the process over the coming year. Digital season tickets currently cover just over half of the market, with further rollout dependent on public ownership transitions of certain operators.
Q: Can you elaborate on the growth potential of non-commission revenue, such as hotels and insurance?
A: Pete Wood, CFO, noted that there is still opportunity for growth in these areas by optimizing implementation and exploring synergies with other verticals, such as experiences, to continue innovating and scaling.
Q: How does the company view the competitive landscape in the UK, particularly with Uber's entry?
A: Jody Ford, CEO, acknowledged Uber's market share of about 1.5% and expressed satisfaction with Trainline's response, highlighting the brand's strong customer trust and feature set. Uber's entry into Spain is noted, but Trainline's partnership with Cabify offers a competitive edge.
Q: What is the outlook for Trainline's international markets, particularly in France and Germany?
A: Jody Ford, CEO, stated that growth in France and Germany is slower due to less competition and regulatory frameworks. However, the company is poised for growth in Italy and Spain, with expectations of increased competition and market liberalization in the coming years.
Q: How should we think about the relationship between revenue and net ticket sales growth in the UK?
A: Pete Wood, CFO, explained that while ancillary revenues have driven recent growth, there are headwinds from increased on-the-day travel sales and industry changes affecting refund fees. The commission change from April next year will also impact revenue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
