Trivago N : Q3 2023 Earnings Release

Exhibit 99.1

Operating and Financial Review

The following discussion should be considered together with our unaudited financial information included with this review and the periodic reports we file with the Securities and Exchange Commission, including the section contained in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, "Item 5. Operating and Financial Review and Prospects." Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") have been omitted from this review.

As used herein, references to "we," "us," the "company," or "trivago," or similar terms shall mean trivago N.V. and, as the context requires, its subsidiaries.

Overview

trivago is a global hotel and accommodation search platform. We are focused on reshaping the way travelers search for and compare different types of accommodations, such as hotels, vacation rentals and apartments, while enabling our advertisers to grow their businesses by providing them with access to a broad audience of travelers via our websites and apps. Our platform allows travelers to make informed decisions by personalizing their search for accommodations and providing them with access to a deep supply of relevant information and prices. As of September 30, 2023, we offered access to more than

5.0 million hotels and other types of accommodation in over 190 countries, including over 3.8 million units of alternative accommodation, such as vacation rentals and apartments.

Our search platform forms the core of our user experience and can be accessed globally via 53 localized websites and apps available in 31 languages. Our users initially search via a text-based search function, which supports searches across a broad range of criteria. This leads through to a listings page that displays search results and allows for further refinement based on more nuanced filters. Additionally, we enhance our users' experience by giving them the option to display their search results in listing or map formats. Users can search our platform on desktop and mobile devices, and benefit from a familiar user interface, resulting in a consistent user experience.

Financial Summary & Operating Metrics (€ millions, unless otherwise stated)

	Three months ended		Nine months ended
		September 30,			September 30,
	2023			2022		Δ Y/Y		2023			2022		Δ Y/Y
Total revenue	157.9	183.7	(14)%	393.3	430.1	(9)%
Referral Revenue	156.1	180.5	(14)%	388.0	420.3	(8)%
Return on Advertising Spend	134.3%	147.6%		(13.3) ppts	145.9%	161.0%		(15.1) ppts
Net loss	(182.6)	(67.1)	172%	(167.0)	(137.6)	21%
Adjusted EBITDA(1)	16.0	33.5	(52)%	46.8	84.8	(45)%

1. "Adjusted EBITDA" is a non-GAAP measure. Please see "Definitions of Non-GAAP Measures" and "Tabular Reconciliations for Non-GAAP Measures" on pages 14 to 15 herein for explanations and reconciliations of non-GAAP measures used throughout this review.

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Recent Trends

In the third quarter of 2023, we continued to observe seasonal trends more closely aligned to those in 2019, with the summer uplift in monetization beginning later and continuing to be of a lower magnitude than in the prior year when we had benefited from a very strong auction in our marketplace. We observed elevated levels of average booking values1, comparable to prior year which exceed 2019 levels. However, the loss of favorable tailwinds during the first half of 2023 from higher levels of average daily rates compared to prior year, and foreign exchange headwinds negatively impacted our monetization levels. Higher levels of competition in performance marketing channels resulted in declines in traffic volumes, particularly in our Americas and Developed Europe segments. In addition, lower levels of television advertising since the COVID-19 pandemic continue to result in the contribution of less direct traffic to our platform than had been the case prior to the pandemic.

The net loss of €182.6 million in the third quarter was primarily driven by a cumulative impairment charge of €196.1 million in connection with our annual indefinite-lived intangible asset and goodwill impairment analysis. The impairment was driven by adjustments made to our profitability outlook arising from the announced strategy shift to long-term growth, share price decline during the third quarter of 2023, uncertainty in our operating environment, and the continued uncertainty in respect of the overall economic environment. The elevated levels of marketing investments necessary to stimulate long-term growth affected our profitability outlook in the short-to-midterm.

We continue to closely monitor the ongoing conflict affecting the Middle Eastern region. A prolonged or further escalation in the conflict may have a negative impact on our Rest of World segment results.

Outlook and strategy

Following management's review of the initial results of our summer brand campaigns in select test markets and the results of incremental improvements made to our platform, we updated our strategy to increase brand marketing investments. As we increase our brand marketing efforts, we expect operating expenditures other than Advertising Spend to remain stable. While these investments are expected to negatively impact our profitability in the short-to-midterm, we believe they will have a long-term positive impact on the volume of direct traffic to our platform.

Update on capital distribution

On September 15, 2023, we announced that we intend to distribute an extraordinary one-time dividend totaling €184.4 million (€0.529228 per share), recognized on our balance sheet, as we continue to return value to shareholders and optimize our capital structure. The payment of the dividend is anticipated to be made on November 6, 2023 to holders of Class A and B shares. The payment of the dividend to holders of our American Depositary Shares is anticipated to occur on November 13, 2023.

Changes in management

On October 5, 2023, we announced that Robin Harries will rejoin the Company as Chief Financial Officer (CFO) no later than April 1, 2024, as Matthias Tillmann will step down from the position at the close of this year to pursue other interests.

• Average booking value is the average amount our advertisers obtain from referrals as a result of hotels and other accommodation booked on their sites. We estimate this amount from data voluntarily provided to us by certain advertisers.

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Revenue

Referral Revenue & Other Revenue

We match our users' searches with large numbers of hotel and other accommodation offers through our auction platform, which we call our marketplace. With our marketplace, we provide advertisers a competitive forum to access user traffic by facilitating a vast quantity of auctions on any particular day. Advertisers submit hotel room and other accommodation rates and participate in our marketplace primarily by making bids for each user click on an advertised rate for a hotel or other accommodation on a cost-per-click, or CPC, basis. We also offer the option for our advertisers to participate in our marketplace on a cost-per-acquisition, or CPA, basis.

We earn substantially all of our revenue when users of our websites and apps click on hotel and accommodation offers or advertisements in our search results and are referred to one of our advertisers. We call this our Referral Revenue.

Management has identified three reportable segments, which correspond to our three operating segments: Americas, Developed Europe and Rest of World (RoW). Our Americas segment is comprised of Argentina, Brazil, Canada, Chile, Colombia, Ecuador, Mexico, Peru, the United States and Uruguay. Our Developed Europe segment is comprised of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Our RoW segment is comprised of all other countries. In the third quarter of 2023, the most significant countries by revenue in that segment were Japan, Turkey, Australia, Hong Kong and India.

We also earn revenue by offering our advertisers business-to-business (B2B) solutions, such as white label services, data product offerings, and subscription fees earned from advertisers for the trivago Business Studio PRO Package. These revenues do not represent a significant portion of our total revenue.

Referral Revenue by Segment & Other Revenue (€ millions)

		Three months ended September 30,			Nine months ended September 30,
		2023			2022		Δ €		Δ %			2023			2022		Δ €		Δ % Y/Y
Americas	€	59.7		€	75.2	(15.5)	(21)%		€	143.1		€	174.6	(31.5)	(18)%
Developed Europe		69.5			83.5	(14.0)	(17)%			178.1			193.7	(15.6)	(8)%
Rest of World		27.0			21.8		5.2		24%			66.8			52.0		14.8		28%
Total Referral Revenue	€	156.1		€	180.5	(24.4)	(14)%		€	388.0		€	420.3	(32.3)	(8)%
Other revenue		1.7			3.2		(1.5)		(47)%			5.3			9.8		(4.5)		(46)%
Total revenue	€	157.9		€	183.7	(25.8)	(14)%		€	393.3		€	430.1	(36.8)	(9)%

Note: Some figures may not add up due to rounding.

In the third quarter of 2023, total revenue decreased by €25.8 million, or 14%, to €157.9 million compared to the same period in 2022. In the nine months ended September 30, 2023, total revenue decreased by €36.8 million, or 9%, to €393.3 million compared to the same period in 2022.

Americas

In the third quarter of 2023, Referral Revenue decreased by €15.5 million to €59.7 million, compared to the same period in 2022. The decrease was primarily driven by lower traffic volumes from increased competition in performance marketing channels. The decrease was further driven by a negative foreign exchange rate impact due to the weakening of the U.S. dollar against the euro and lower booking conversion, partly offset by higher average booking values compared to the same period in 2022.

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In the nine months ended September 30, 2023, Referral Revenue decreased by €31.5 million to €143.1 million compared to the same period in 2022. The decrease was primarily driven by lower traffic volumes from increased competition in performance marketing channels, softer bidding dynamics on our platform compared to the same period in 2022 when we had benefited from a strong auction, and a negative foreign exchange rate impact due to the weakening of the U.S. dollar against the euro. These were partly offset by higher average booking values compared to the same period in 2022.

Developed Europe

In the third quarter of 2023, Referral Revenue decreased by €14.0 million to €69.5 million compared to the same period in 2022. The decrease was primarily driven by a reduction in traffic volumes from increased competition in performance marketing channels and further driven by softer bidding dynamics on our platform compared to the same period in 2022 when we had benefited from a strong auction.

In the nine months ended September 30, 2023, Referral Revenue decreased by €15.6 million to €178.1 million, compared to the same period in 2022. The decrease was primarily driven by lower traffic volumes from increased competition in performance marketing channels and further driven by softer bidding dynamics on our platform compared to 2022 when we had benefited from a strong auction. The decrease was partly offset by better booking conversion and higher average booking values compared to the same period in 2022.

Rest of World

In the third quarter of 2023, Referral Revenue increased by €5.2 million to €27.0 million, compared to the same period in 2022. The increase was driven by higher average booking values and increased traffic volumes, particularly in Japan and Turkey, due to the continued increase in travel demand combined with increased marketing investments. The increase in Referral Revenue was partly offset by lower traffic volumes in Central Eastern Europe.

In the nine months ended September 30, 2023, Referral Revenue increased by €14.8 million to €66.8 million, compared to the same period in 2022. The increase was driven by higher average booking values, better booking conversion, and an increase in traffic volumes, particularly in Japan. The increase was partly offset by a decrease in traffic volumes in Central Eastern Europe compared to the same period in 2022.

Other Revenue

Other revenue decreased by €1.5 million, or 47%, during the third quarter of 2023, and by €4.5 million or 46%, during the nine months ended September 30, 2023 compared to the same period in 2022, mainly due to our decision in the second quarter of 2022 to discontinue some of our B2B products such as display ads.

Advertiser Concentration

We generate the majority of our Referral Revenue from online travel agencies, or OTAs. For brands affiliated with Expedia Group, including Brand Expedia, Hotels.com, Orbitz, Travelocity, Hotwire, Wotif, Vrbo and ebookers, the share of our Referral Revenue was 34% and 37% in the third quarter of 2023 and in the nine months ended September 30, 2023, respectively, compared to 34% and 32% in the same periods in 2022. For brands affiliated with Booking Holdings, including Booking.com, Agoda and priceline.com, the share of our Referral Revenue was 46% and 43% in the third quarter of 2023 and for the nine months ended September 30, 2023, respectively, compared to 50% in the same periods in 2022.

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Return on Advertising Spend (ROAS)

We track the ratio of our Referral Revenue to our Advertising Spend, or ROAS. We believe that ROAS is an indicator of the efficiency of our advertising and it is our primary operating metric. The following table sets forth the ROAS for our reportable segments:

ROAS by Segment (in %)

	Three months ended September 30,		Nine months ended September 30,
	2023	2022		Δ ppts	2023	2022		Δ ppts
ROAS
Americas	127.8%	142.5%		(14.7) ppts	143.4%	159.0%		(15.6) ppts
Developed Europe	138.7%	146.8%		(8.1) ppts	144.7%	156.3%		(11.6) ppts
Rest of World	138.3%		172.2%		(33.9) ppts		154.9%		190.8%		(35.9) ppts
Consolidated ROAS	134.3%	147.6%		(13.3) ppts	145.9%	161.0%		(15.1) ppts

In the third quarter of 2023, consolidated ROAS decreased by 13.3 ppts to 134.3%, compared to the same period in 2022. The decrease in ROAS was driven by a decrease of 14.7 ppts, 8.1 ppts and 33.9 ppts in Americas, Developed Europe and RoW, respectively, compared to the same period in 2022. In the nine months ended September 30, 2023, consolidated ROAS decreased by 15.1 ppts to 145.9%, which was driven by a decrease of 15.6 ppts, 11.6 ppts and 35.9 ppts in Americas, Developed Europe and RoW, respectively, compared to the same period in 2022.

Americas

In the third quarter of 2023, ROAS decreased to 127.8%, as the relative decrease in Referral Revenue was greater than the relative decrease in Advertising Spend, compared to the same period in 2022. Advertising Spend decreased by €6.1 million to €46.7 million in the third quarter of 2023, compared to the same period in 2022, mainly due to adjustments made to our performance marketing activities to maintain our ROAS targets. Contribution decreased by €9.4 million to €13.0 million in the third quarter of 2023 compared to the same period in 2022.

In the nine months ended September 30, 2023, ROAS decreased to 143.4%, as the relative decrease in Referral Revenue was greater than the relative decrease in Advertising Spend, compared to the same period in 2022. Advertising Spend decreased by €10.0 million to €99.8 million in the nine months ended September 30, 2023, compared to the same period in 2022, mainly due to adjustments made to our performance marketing activities to maintain our ROAS targets. Contribution decreased by €21.4 million to €43.3 million in the nine months ended September 30, 2023 compared to the same period in 2022.

Developed Europe

In the third quarter of 2023, ROAS decreased to 138.7%, as the relative decrease in Referral Revenue was greater than the relative decrease in Advertising Spend compared to the same period in 2022. Advertising Spend decreased by €6.7 million to €50.1 million, compared to the same period in 2022, mainly due to adjustments made to our performance marketing activities to maintain our ROAS targets. Contribution decreased by €7.2 million to €19.4 million in the third quarter of 2023 compared to the same period in 2022.

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In the nine months ended September 30, 2023, ROAS decreased to 144.7%, as the relative decrease in Referral Revenue was greater than the relative decrease in Advertising Spend, compared to the same period in 2022. Advertising Spend decreased by €0.9 million to €123.1 million in the nine months ended September 30, 2023, compared to the same period in 2022, mainly due to adjustments made to our performance marketing activities to maintain our ROAS targets, which were partly offset by increased brand investments in the first half year of 2023. Contribution decreased by €14.8 million to €55.0 million in the nine months ended September 30, 2023 compared to the same period in 2022.

Rest of World

In the third quarter of 2023, ROAS decreased to 138.3%, as the relative increase in Advertising Spend was greater than the relative increase in Referral Revenue compared to the same period in 2022. Advertising Spend increased by €6.8 million to €19.5 million in the third quarter of 2023, compared to the same period in 2022. The increase in marketing activities, particularly in Japan and Turkey, was mainly driven by the increase in travel demand in these markets. Contribution decreased by €1.6 million to €7.5 million in the third quarter of 2023 compared to the same period in 2022.

In the nine months ended September 30, 2023, ROAS decreased to 154.9%, as the relative increase in Advertising Spend was greater than the relative increase in Referral Revenue, compared to the same period in 2022. Advertising Spend increased by €15.8 million to €43.1 million in the nine months ended September 30, 2023, compared to the same period in 2022, mainly driven by a significant increase in marketing activities due to the recovery of travel demand, particularly in Japan. Contribution decreased by €1.1 million to €23.7 million in the nine months ended September 30, 2023, compared to the same period in 2022.

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Expenses

Expenses by cost category (€ millions)

				Costs and expenses			As a % of revenue
				Three months ended		Three months ended
				September 30,					September 30,
		2023		2022					Δ %		2023		2022		Δ in ppts
Cost of revenue	€	3.1		€	3.2					(3)%		2 %		2 %			- %
of which share-based compensation			0.0				0.0					- %
Selling and marketing			121.7				128.8					(6)%		77 %		70 %		7 %
of which share-based compensation			0.1				0.2					(50)%
Technology and content			12.0				13.5					(11)%		8 %		7 %		1 %
of which share-based compensation			0.5				0.7					(29)%
General and administrative			9.3				11.1					(16)%		6 %		6 %			- %
of which share-based compensation			2.4				4.0					(40)%
Amortization of intangible assets			0.0				0.0					- %	0 %		0 %			- %
Impairment of intangible assets and goodwill				196.1				100.4					95 %		124 %		55 %		69 %
Total costs and expenses		€	342.2		€	257.1					33 %		217%		140 %		77 %
Note: Some figures may not add up due to rounding.
				Costs and Expenses		As a % of Revenue
				Nine months ended		Nine months ended
					September 30,					September 30,
				2023				2022				Δ % Y/Y		2023			2022			Δ in ppts
Cost of revenue		€	9.2		€	9.2				-%	2 %	2 %		- %
of which share-based compensation			0.1			0.2				(50)%
Selling and marketing			281.9			280.5				-%	72 %	65 %	7 %
of which share-based compensation			0.3			0.6				(50)%
Technology and content			36.9			42.5				(13)%		9 %	10 %	(1)%
of which share-based compensation			1.3			2.3				(43)%
General and administrative			30.1			51.2				(41)%		8 %	12 %	(4)%
of which share-based compensation			6.5			8.7				(25)%
Amortization of intangible assets			0.1			0.1				-%	0 %	0 %		- %
Impairment of intangible assets and goodwill			196.1			184.6				6%			50%		43 %		7 %
Total costs and expenses		€	554.3		€	568.1				(2)%		141%	132 %	9 %

Cost of revenue

In the third quarter of 2023, cost of revenue decreased by €0.1 million, or 3%, to €3.1 million, and remained stable at €9.2 million in the nine months ended September 30, 2023, compared to the same period in 2022.

The decrease in the third quarter of 2023 was driven by lower data center-related service provider costs. In the nine months ended September 30, 2023, higher personnel costs, driven by an increase in compensation costs compared to the same period in 2022 were offset by lower data center-related service provider costs and lower depreciation expense.

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Selling and marketing

In the third quarter of 2023, selling and marketing expense decreased by €7.1 million, or 6%, to €121.7 million compared to the same period in 2022, of which €116.3 million, or 96%, was Advertising Spend. In the nine months ended September 30, 2023, selling and marketing expense increased by €1.4 million, or 0.5%, to €281.9 million compared to the same period in 2022, of which €266.0 million, or 94%, was Advertising Spend.

Advertising Spend

In the third quarter of 2023, Advertising Spend decreased by €6.1 million and €6.7 million to €46.7 million and €50.1 million in Americas and Developed Europe, respectively, while it increased by €6.8 million to €19.5 million in Rest of World, compared to the same period in 2022. The overall decrease in Advertising Spend was driven by lower performance marketing spend. For a more detailed discussion of changes in Advertising Spend by segment, see "Return on Advertising Spend (ROAS)" above.

In the nine months ended September 30, 2023, Advertising Spend decreased by €10.0 million and €0.9 million to €99.8 million and €123.1 million in Americas and Developed Europe, respectively, while it increased by €15.8 million to €43.1 million in Rest of World, compared to the same period in 2022. The overall increase in Advertising Spend was driven by higher brand investments in the first half of 2023, partly offset by lower performance marketing spend in the second and third quarter of 2023. For a more detailed discussion of changes in Advertising Spend by segment, see "Return on Advertising Spend (ROAS)" above.

Other selling and marketing expense

In the third quarter of 2023, other selling and marketing expense decreased by €1.1 million, or 17%, to €5.4 million, and decreased by €3.5 million, or 18%, to €15.9 million in the nine months ended September 30, 2023, compared to the same period in 2022.

The decrease in the third quarter of 2023 was mainly due to cancellation fees incurred in the third quarter of 2022 for contracts related to discontinued products, and lower expenses incurred in 2023 to acquire traffic.

The decrease in the nine months ended September 30, 2023 was mainly due to lower personnel costs from a lower headcount following the discontinuation of certain products and projects in the prior year and as a result of an internal reorganization of existing teams to achieve efficiencies in 2022. The decrease was further driven by lower expenses incurred to acquire traffic and cancellation fees incurred in the prior year for contracts related to discontinued products.

Technology and content

In the third quarter of 2023, technology and content expense decreased by €1.5 million, or 11%, to €12.0 million, and decreased by €5.6 million, or 13%, to €36.9 million in the nine months ended September 30, 2023, compared to the same period in 2022.

The decrease in the third quarter of 2023 was mainly due to lower personnel costs from a lower headcount following an internal reorganization of existing teams to achieve efficiencies through attrition and headcount reductions as a result of the discontinuation of certain products and projects in 2022. The decrease was further driven by lower depreciation expense and was partly offset by higher cloud-related service provider costs and continuous investments to improve our platform.

The decrease in the nine months ended September 30, 2023 was primarily due to lower personnel costs from a lower headcount and lower severance payments, compared to the same period in 2022. It was further driven by lower depreciation expense, lower share-based compensation expense and the impairment of capitalized software assets related to discontinued products and projects recognized in the

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prior year. These were partly offset by higher cloud-related service provider costs and continuous investments to improve our platform.

General and administrative

In the third quarter of 2023, general and administrative expense decreased by €1.8 million, or 16%, to €9.3 million, and decreased by €21.1 million, or 41%, to €30.1 million in the nine months ended September 30, 2023, compared to the same period in 2022.

The decrease in the third quarter of 2023 was mostly due to lower share-based compensation expense.

The decrease in the nine months ended September 30, 2023, was mainly driven by the non-recurrence of the incremental expense of €20.7 million during 2022, in relation to the proceeding brought by the Australian Competition and Consumer Commission (ACCC) against us. The decrease was further driven by lower share-based compensation and insurance expense, and partly offset by higher personnel expenses due to an increase in compensation costs and higher expected credit losses on trade receivables, compared to the same period in 2022.

Amortization of intangible assets

Amortization of intangible assets was €34 thousand in both the third quarter of 2023 and 2022, and was €0.1 million in both the nine months ended September 30, 2023 and 2022, as we amortize intangible assets acquired through the weekengo GmbH acquisition.

Impairment of intangible assets and goodwill

As a result of our annual goodwill impairment test performed as of September 30, 2023, we recorded impairment charges of €95.5 million and €86.5 million to our Developed Europe and Americas reporting unit goodwill balances, respectively, as well as an impairment charge of €14.2 million to our indefinite- lived intangible assets for the three and nine months ended September 30, 2023. The impairment was driven by adjustments made to our profitability outlook arising from the announced strategy shift to long- term growth, share price decline during the third quarter of 2023, uncertainty in our operating environment, and the continued uncertainty in respect of the overall economic environment.

In the three months ended September 30, 2022, we recorded an impairment charge of €47.6 million to our Developed Europe reporting unit goodwill balance and €52.8 million to our indefinite-lived intangible assets as we performed our 2022 annual impairment test. The impairments in the prior year were due to deteriorating macroeconomic conditions, including rising interest rates, increased inflation and more uncertainty in respect of the overall economic environment. In the nine months ended September 30, 2022, we recorded cumulative impairment charges of €104.6 million to our Developed Europe reporting unit goodwill balance and €80.0 million to our indefinite-lived intangible assets. The impairments were due to deteriorating macroeconomic conditions and a shift in the Company's internal priorities beginning in the second quarter of 2022.

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Income taxes, net income/(loss) and Adjusted EBITDA(1) (€ millions)

		Three months ended			Nine months ended
		September 30,				September 30,
		2023			2022			Δ €			2023			2022			Δ €
Operating loss	€	(184.3)		€	(73.4)			(110.9)		€	(161.0)		€	(138.0)			(23.0)
Other income/(expense)
Interest expense		(0.0)			(0.0)			-			(0.0)			(0.0)			-
Interest income		1.8			0.1			1.7			4.1			0.2			3.9
Other, net		(0.1)			0.3			(0.4)			(0.3)			0.7			(1.0)
Total other income, net	€	1.7		€	0.4			1.3		€	3.8		€	0.9			2.9
Loss before income taxes		(182.6)			(73.0)			(109.6)			(157.2)			(137.2)			(20.0)
Expense/(benefit) for income taxes		(0.0)			(6.1)			6.1			9.6			0.2			9.4
Loss before equity method investment	€	(182.6)		€	(66.9)			(115.7)		€	(166.8)		€	(137.3)			(29.5)
Loss from equity method investment		(0.1)			(0.3)			0.2			(0.2)			(0.3)			0.1
Net loss	€	(182.6)		€	(67.1)			(115.5)		€	(167.0)		€	(137.6)			(29.4)
Adjusted EBITDA(1)
€	16.0		€	33.5			(17.5)		€	46.8		€	84.8			(38.0)

Note: Some figures may not add up due to rounding.

1. "Adjusted EBITDA" is a non-GAAP measure. Please see "Definitions of Non-GAAP Measures" and "Tabular Reconciliations for Non-GAAP Measures" on pages 14 to 15 herein for explanations and reconciliations of non-GAAP measures used throughout this review.

Income taxes

Income tax benefit was €35 thousand in the third quarter of 2023, compared to €6.1 million in the same period in 2022. The total weighted average tax rate was 31.2%, which was mainly driven by the German statutory tax rate of approximately 31.2%. Our effective tax rate for the third quarter of 2023 was (2.4)%, compared to 8.4% in the same period in 2022. The difference in effective tax rate in the quarter ended September 30, 2023 compared to the same period in 2022 is primarily attributable to the higher amount of goodwill impairment recognized in the current year, which is not deductible for tax purposes, and the difference in pre-tax profit and loss position between periods.

The difference between the weighted average tax rate of 31.2% and the effective tax rate of (2.4)% in the third quarter of 2023 is primarily attributable to the goodwill impairment, which is non-deductible for tax purposes.

Income tax expense was €9.6 million in the nine months ended September 30, 2023, compared to €0.2 million in the nine months ended September 30, 2022. Our effective tax rate for the nine months ended September 30, 2023 was (6.1)%, compared to (0.1)% in the same period in 2022.

The difference between the weighted average tax rate and the effective tax rate for the nine months ended September 30, 2023 is primarily attributable to the goodwill impairment, which is non-deductible for tax purposes.

An uncertain tax position in connection with unrecognized tax benefits relating to the deductibility of expenses amounted to €8.5 million as of September 30, 2023. A liability for these tax benefits is presented under other long-term liabilities in the unaudited condensed consolidated financial statements. During the quarter ended September 30, 2023, we released €0.8 million of the uncertain tax position that was previously presented within other current liabilities.

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