Shares of Spanish travel booking company eDreams fell more than 10% today after the company announced slower subscriber growth in April-June compared with the previous quarter.
The company said its Prime membership - which now accounts for about 75% of its revenue - grew by 20% year-on-year to 7.5 million users, slowing from a 25% increase in the previous three month period.
Its shares were down 10.6% this morning.
While subscriptions are common in other industries, such as music, television and telecoms, eDreams pioneered a membership model giving customers access to discounted airlines and hotel bookings through its website. They pay a flat annual fee of €80 to €100.
Though global air travel demand is growing at a slower pace than expected by airlines body IATA, eDreams' transition to a subscription-based business has shielded it from industry fluctuations.
As a result of the increase in subscribers, the company swung to a net profit of €13.6m in the April to June period, the first quarter of its accounting year, from a net loss of €1.2m the same time last year.
The company reiterated its guidance, saying it expects its cash earnings before interest, taxes, depreciation and amortization to rise to between €215-220m in the fiscal year ending on March 31, 2026, up from €180m last year.
