Posts strong first quarter revenue and
profitability Revenue grew 8% y/y with margin expansion
Accelerated level of share repurchases at $786 million
year-to-date
Expedia Group, Inc. (NASDAQ: EXPE) announced financial results
today for the first quarter ended March 31, 2024.
“Our first quarter results met our guidance with a revenue and
earnings beat but with less robust gross bookings. We saw continued
momentum in B2B, Brand Expedia and Advertising. However, Vrbo’s
recovery following the recent re-platforming has been slower than
anticipated, which has put pressure on gross bookings,” said Peter
Kern, Vice Chairman and CEO, Expedia Group. “As we enter the second
quarter, we are seeing some acceleration in the rest of our B2C
business and expect it to continue throughout the year. But given
the Vrbo drag and the rate of acceleration in B2C thus far, we are
lowering our full year guidance to a range of mid to high single
digit top line growth with margins relatively in line versus last
year. Despite this slower than expected acceleration, the
underpinning of the work we have done on the platform is in place
and I have every confidence in the teams to continue to leverage
these capabilities to drive even stronger growth.”
First Quarter Highlights
- Total gross bookings were $30.2 billion, an increase of 3%
compared to 2023.
- Lodging gross bookings were $21.9 billion, an increase of 4%
compared to 2023. Hotel bookings were up 12% compared to 2023.
- Revenue at $2.9 billion grew 8% compared to 2023. B2B revenue
was $833 million, an increase of 25% compared to 2023.
- Net loss was $135 million and adjusted net income was $29
million. Adjusted EBITDA was $255 million, an increase of 38% with
191 basis points of margin expansion compared to 2023.
- Repurchased approximately 5.7 million shares for approximately
$786 million year-to-date.
Financial Summary & Operating Metrics (In millions except
per share amounts)
Expedia Group, Inc.
Metric
Q1 2024
Q1 2023
Δ Y/Y
Booked room nights
101.2
94.5
7
%
Gross bookings
$
30,164
$
29,401
3
%
Revenue
$
2,889
$
2,665
8
%
Operating loss
$
(110
)
$
(121
)
(9
)%
Net loss attributable to Expedia Group,
Inc.
$
(135
)
$
(145
)
(7
)%
Diluted earnings (loss) per share
$
(0.99
)
$
(0.95
)
4
%
Adjusted EBITDA*
$
255
$
185
38
%
Adjusted EBIT*
$
(59
)
$
(110
)
(46
)%
Adjusted net income (loss)*
$
29
$
(30
)
NM
Adjusted EPS*
$
0.21
$
(0.20
)
NM
Net cash provided by operating
activities
$
2,879
$
3,157
(9
)%
Free cash flow*
$
2,702
$
2,924
(8
)%
* A reconciliation of non-GAAP financial
measures to the most comparable GAAP measures is provided at the
end of this release.
Conference Call
Expedia Group, Inc. will webcast a conference call to discuss
first quarter 2024 financial results and certain forward-looking
information on Thursday, May 2, 2024 at 1:30 p.m. Pacific Time
(PT). The webcast will be open to the public and available via
ir.expediagroup.com. Expedia Group expects to maintain access to
the webcast on the IR website for approximately twelve months
subsequent to the initial broadcast.
About Expedia Group
Expedia Group, Inc. brands power travel for everyone, everywhere
through our global platform. Driven by the core belief that travel
is a force for good, we help people experience the world in new
ways and build lasting connections. We provide industry-leading
technology solutions to fuel partner growth and success, while
facilitating memorable experiences for travelers. Our organization
is made up of three pillars: Expedia Brands, housing all our
consumer brands; Expedia Product & Technology, focused on the
group’s product and technical strategy and offerings; and Expedia
for Business, consisting of business-to-business solutions and
relationships throughout the travel ecosystem.
Expedia Group’s three flagship consumer brands includes:
Expedia®, Hotels.com®, and Vrbo®. One Key™ is our comprehensive
loyalty program that unifies Expedia, Hotels.com and Vrbo into one
simple, flexible travel rewards experience. To enroll in One Key,
download Expedia, Hotels.com and Vrbo mobile apps for free on iOS
and Android devices. One Key is currently available in the U.S. and
will become available globally soon.
© 2024 Expedia, Inc., an Expedia Group company. All rights
reserved. Trademarks and logos are the property of their respective
owners. CST: 2029030-50
Expedia Group, Inc. Trended
Metrics (All figures in millions)
The metrics below are intended to supplement the financial
statements in this release and in our filings with the SEC, and do
not include adjustments for one-time items, acquisitions, foreign
exchange or other adjustments. The definition or methodology of any
of our supplemental metrics are subject to change, and such changes
could be material. We may also discontinue certain supplemental
metrics as our business evolves over time. In the event of any
discrepancy between any supplemental metric and our historical
financial statements, you should rely on the information included
in the financial statements filed with or furnished to the SEC.
2022
2023
2024
Full Year
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2022
2023
Units sold
Booked room nights
77.0
82.5
81.6
70.8
94.5
89.7
89.3
77.4
101.2
312.0
350.9
Booked air tickets
13.1
13.5
12.2
11.1
14.0
13.6
12.8
11.4
14.2
49.9
51.9
Gross bookings by business model
Agency
$
11,346
$
12,773
$
10,904
$
9,469
$
13,425
$
12,370
$
10,927
$
9,439
$
13,301
$
44,492
$
46,161
Merchant
13,066
13,366
13,083
11,042
15,976
14,951
14,758
12,233
16,863
50,557
57,918
Total
$
24,412
$
26,139
$
23,987
$
20,511
$
29,401
$
27,321
$
25,685
$
21,672
$
30,164
$
95,049
$
104,079
Lodging gross bookings
$
17,756
$
17,867
$
17,099
$
14,117
$
21,055
$
19,167
$
18,513
$
15,253
$
21,903
$
66,839
$
73,987
Revenue by segment
B2C
$
1,740
$
2,420
$
2,707
$
1,874
$
1,921
$
2,415
$
2,819
$
1,958
$
1,986
$
8,741
$
9,113
B2B
432
650
788
676
668
861
995
864
833
2,546
3,388
trivago (third-party revenue)
77
111
124
68
76
82
115
65
70
380
338
Total
$
2,249
$
3,181
$
3,619
$
2,618
$
2,665
$
3,358
$
3,929
$
2,887
$
2,889
$
11,667
$
12,839
Revenue by product
Lodging
$
1,610
$
2,400
$
2,881
$
2,014
$
2,029
$
2,698
$
3,233
$
2,304
$
2,228
$
8,905
$
10,264
Air
74
95
100
93
113
111
100
86
115
362
410
Advertising and media - EG(1)
89
102
98
108
99
119
125
140
145
397
483
Advertising and media - trivago(1)
77
111
124
68
76
82
115
65
70
380
338
Other(2)
399
473
416
335
348
348
356
292
331
1,623
1,344
Total
$
2,249
$
3,181
$
3,619
$
2,618
$
2,665
$
3,358
$
3,929
$
2,887
$
2,889
$
11,667
$
12,839
Revenue by geography
U.S. points of sale
$
1,656
$
2,208
$
2,358
$
1,717
$
1,748
$
2,172
$
2,440
$
1,787
$
1,793
$
7,939
$
8,147
Non-U.S. points of sale
593
973
1,261
901
917
1,186
1,489
1,100
1,096
3,728
4,692
Total
$
2,249
$
3,181
$
3,619
$
2,618
$
2,665
$
3,358
$
3,929
$
2,887
$
2,889
$
11,667
$
12,839
Adjusted EBITDA by segment(3)
B2C
$
188
$
582
$
943
$
411
$
148
$
653
$
1,056
$
468
$
215
$
2,124
$
2,325
B2B
80
156
221
142
133
206
266
193
172
599
798
Other(4)
(95
)
(90
)
(85
)
(104
)
(96
)
(112
)
(106
)
(129
)
(132
)
(374
)
(443
)
Total
$
173
$
648
$
1,079
$
449
$
185
$
747
$
1,216
$
532
$
255
$
2,349
$
2,680
Net income (loss) attributable to Expedia
Group common stockholders(5)
$
(122
)
$
(185
)
$
482
$
177
$
(145
)
$
385
$
425
$
132
$
(135
)
$
352
$
797
(1) Our advertising and media business
consists of Expedia Group ("EG") Media Solutions, which is
responsible for generating advertising revenue on our global online
travel brands, and third-party revenue for trivago, a leading hotel
metasearch site.
(2) Other revenue primarily includes
insurance, car rental, destination services and cruise revenue.
(3) See the section below titled "Tabular
Reconciliations for Non-GAAP Measures — Adjusted EBITDA by segment"
for additional details.
(4) Other is comprised of trivago,
corporate and intercompany eliminations.
(5) Expedia Group does not calculate or
report net income (loss) by segment.
Notes: • All trivago revenue is classified as Non-U.S. point of
sale. • Some numbers may not add due to rounding. All percentages
throughout this release are calculated on precise, unrounded
numbers.
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except share and
per share data)
(Unaudited)
Three months ended
March 31,
2024
2023
Revenue
$
2,889
$
2,665
Costs and expenses:
Cost of revenue (exclusive of depreciation
and amortization shown separately below) (1)
358
414
Selling and marketing - direct
1,650
1,487
Selling and marketing - indirect (1)
186
187
Technology and content (1)
341
317
General and administrative (1)
186
184
Depreciation and amortization
210
192
Legal reserves, occupancy tax and
other
20
5
Restructuring and related reorganization
charges
48
—
Operating loss
(110
)
(121
)
Other income (expense):
Interest income
51
43
Interest expense
(62
)
(61
)
Other, net
(34
)
78
Total other income (expense), net
(45
)
60
Loss before income taxes
(155
)
(61
)
Provision for income taxes
19
(79
)
Net loss
(136
)
(140
)
Net (income) loss attributable to
non-controlling interests
1
(5
)
Net loss attributable to Expedia Group,
Inc.
$
(135
)
$
(145
)
Loss per share attributable to Expedia
Group, Inc. available to common stockholders:
Basic
$
(0.99
)
$
(0.95
)
Diluted
(0.99
)
(0.95
)
Shares used in computing earnings
(loss) per share (000's):
Basic
135,501
152,477
Diluted
135,501
152,477
(1) Includes stock-based compensation as
follows:
Cost of revenue
$
2
$
3
Selling and marketing
19
20
Technology and content
40
34
General and administrative
43
46
EXPEDIA GROUP, INC.
CONSOLIDATED BALANCE
SHEETS
(In millions, except number of
shares which are reflected in thousands and par value)
March 31, 2024
December 31, 2023
March 31, 2023
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
5,686
$
4,225
$
5,904
Restricted cash and cash equivalents
1,936
1,436
2,483
Short-term investments
26
28
44
Accounts receivable, net of allowance of
$52, $46 and $45
3,750
2,786
2,523
Income taxes receivable
56
47
53
Prepaid expenses and other current
assets
894
708
1,119
Total current assets
12,348
9,230
12,126
Property and equipment, net
2,353
2,359
2,260
Operating lease right-of-use assets
341
357
353
Long-term investments and other assets
1,245
1,238
1,198
Deferred income taxes
621
586
703
Intangible assets, net
1,006
1,023
1,196
Goodwill
6,847
6,849
7,150
TOTAL ASSETS
$
24,761
$
21,642
$
24,986
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable, merchant
$
1,948
$
2,041
$
1,531
Accounts payable, other
1,207
1,077
1,010
Deferred merchant bookings
11,392
7,723
11,036
Deferred revenue
177
164
186
Income taxes payable
25
26
104
Accrued expenses and other current
liabilities
816
752
745
Total current liabilities
15,565
11,783
14,612
Long-term debt
6,256
6,253
6,243
Deferred income taxes
31
33
35
Operating lease liabilities
301
314
305
Other long-term liabilities
472
473
501
Commitments and contingencies
Stockholders’ equity:
Common stock: $.0001 par value; Authorized
shares: 1,600,000
—
—
—
Shares issued: 283,225, 282,149 and
279,097; Shares outstanding: 128,007, 131,522 and 144,084
Class B common stock: $.0001 par value;
Authorized shares: 400,000
—
—
—
Shares issued: 12,800; Shares outstanding:
5,523
Additional paid-in capital
15,550
15,398
14,938
Treasury stock - Common stock and Class B,
at cost; Shares 162,495, 157,903 and 142,289
(13,671
)
(13,023
)
(11,341
)
Retained earnings (deficit)
(767
)
(632
)
(1,554
)
Accumulated other comprehensive income
(loss)
(222
)
(209
)
(211
)
Total Expedia Group, Inc. stockholders’
equity
890
1,534
1,832
Non-redeemable non-controlling
interests
1,246
1,252
1,458
Total stockholders’ equity
2,136
2,786
3,290
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
24,761
$
21,642
$
24,986
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
Three months ended
March 31,
2024
2023
Operating activities:
Net loss
$
(136
)
$
(140
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation of property and equipment,
including internal-use software and website development
195
177
Amortization of intangible assets
15
15
Amortization of stock-based
compensation
104
103
Deferred income taxes
(38
)
(57
)
Foreign exchange (gain) loss on cash,
restricted cash and short-term investments, net
30
(8
)
Realized (gain) loss on foreign currency
forwards, net
41
(12
)
(Gain) loss on minority equity
investments, net
9
(1
)
Other, net
10
14
Changes in operating assets and
liabilities:
Accounts receivable
(974
)
(456
)
Prepaid expenses and other assets
(171
)
(293
)
Accounts payable, merchant
(93
)
(178
)
Accounts payable, other, accrued expenses
and other liabilities
219
79
Tax payable/receivable, net
(1
)
29
Deferred merchant bookings
3,669
3,885
Net cash provided by operating
activities
2,879
3,157
Investing activities:
Capital expenditures, including
internal-use software and website development
(177
)
(233
)
Purchases of investments
(69
)
—
Sales and maturities of investments
43
5
Other, net
(37
)
33
Net cash used in investing
activities
(240
)
(195
)
Financing activities:
Purchases of treasury stock
(643
)
(469
)
Proceeds from exercise of equity awards
and employee stock purchase plan
32
29
Other, net
(20
)
3
Net cash used in financing
activities
(631
)
(437
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash and cash equivalents
(47
)
11
Net increase in cash, cash equivalents
and restricted cash and cash equivalents
1,961
2,536
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of period
5,661
5,851
Cash, cash equivalents and restricted
cash and cash equivalents at end of period
$
7,622
$
8,387
Supplemental cash flow
information
Cash paid for interest
$
82
$
81
Income tax payments, net
26
34
Notes & Definitions:
Booked Room Nights: Represents
booked hotel room nights and property nights for our B2C reportable
segment and booked hotel room nights for our B2B reportable
segment. Booked hotel room nights include both merchant and agency
hotel room nights. Property nights are related to our alternative
accommodation business.
Booked Air Tickets: Includes both
merchant and agency air bookings.
Gross Bookings: Generally represent
the total retail value of transactions booked, recorded at the time
of booking reflecting the total price due for travel by travelers,
including taxes, fees and other charges, adjusted for cancellations
and refunds.
Lodging Metrics: Reported on a
booked basis except for revenue, which is on a stayed basis.
Lodging consists of both merchant and agency model hotel and
alternative accommodations.
B2C: The B2C segment provides a
full range of travel and advertising services to our worldwide
customers through a variety of consumer brands including: Expedia,
Hotels.com, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers,
Hotwire.com, and CarRentals.com.
B2B: The B2B segment fuels a wide
range of travel and non-travel companies including airlines,
offline travel agents, online retailers, corporate travel
management and financial institutions, who leverage our leading
travel technology and tap into our diverse supply to augment their
offerings and market Expedia Group rates and availabilities to
their travelers.
trivago: The trivago segment
generates advertising revenue primarily from sending referrals to
online travel companies and travel service providers from its
localized hotel metasearch websites.
Corporate: Includes unallocated
corporate expenses.
Non-GAAP Measures
Expedia Group reports Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted EBIT, Adjusted EBIT Margin, Leverage Ratio, Adjusted Net
Income (Loss), Adjusted EPS, Free Cash Flow and Adjusted Expenses
(non-GAAP cost of revenue, non-GAAP selling and marketing, non-GAAP
technology and content and non-GAAP general and administrative),
all of which are supplemental measures to GAAP and are defined by
the SEC as non-GAAP financial measures. These measures are among
the primary metrics by which management evaluates the performance
of the business and on which internal budgets are based. Management
believes that investors should have access to the same set of tools
that management uses to analyze our results. These non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for
or superior to GAAP. Adjusted EBITDA, Adjusted Net Income (Loss)
and Adjusted EPS have certain limitations in that they do not take
into account the impact of certain expenses to our consolidated
statements of operations. We endeavor to compensate for the
limitation of the non-GAAP measures presented by also providing the
most directly comparable GAAP measures and descriptions of the
reconciling items and adjustments to derive the non-GAAP measures.
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income (Loss) and
Adjusted EPS also exclude certain items related to transactional
tax matters, which may ultimately be settled in cash. We urge
investors to review the detailed disclosure regarding these matters
in the Management Discussion and Analysis and Legal Proceedings
sections, as well as the notes to the financial statements,
included in the Company's annual and quarterly reports filed with
the Securities and Exchange Commission. The non-GAAP financial
measures used by the Company may be calculated differently from,
and therefore may not be comparable to, similarly titled measures
used by other companies.
Adjusted EBITDA is defined as net
income (loss) attributable to Expedia Group adjusted for: (1) net
income (loss) attributable to non-controlling interests; (2)
provision for income taxes; (3) total other expenses, net; (4)
stock-based compensation expense, including compensation expense
related to certain subsidiary equity plans; (5) acquisition-related
impacts, including
(i) amortization of intangible assets and
goodwill and intangible asset impairment, (ii) gains (losses)
recognized on changes in the value of contingent consideration
arrangements; and (iii) upfront consideration paid to settle
employee compensation plans of the acquiree;
(6) certain other items, including restructuring; (7) items
included in legal reserves, occupancy tax and other, which includes
reserves for potential settlement of issues related to
transactional taxes (e.g. hotel and excise taxes), related to court
decisions and final settlements, and charges incurred, if any, for
monies that may be required to be paid in advance of litigation in
certain transactional tax proceedings; (8) that portion of gains
(losses) on revenue hedging activities that are included in other,
net that relate to revenue recognized in the period; and (9)
depreciation. The above items are excluded from our Adjusted EBITDA
measure because these items are non-cash in nature, or because the
amount and timing of these items is unpredictable, not driven by
core operating results and renders comparisons with prior periods
and competitors less meaningful. We believe Adjusted EBITDA is a
useful measure for analysts and investors to evaluate our future
on-going performance as this measure allows a more meaningful
comparison of our performance and projected cash earnings with our
historical results from prior periods and to the results of our
competitors. Moreover, our management uses this measure internally
to evaluate the performance of our business as a whole and our
individual business segments. In addition, we believe that by
excluding certain items, such as stock-based compensation and
acquisition-related impacts, Adjusted EBITDA corresponds more
closely to the cash operating income generated from our business
and allows investors to gain an understanding of the factors and
trends affecting the ongoing cash earnings capabilities of our
business, from which capital investments are made and debt is
serviced.
Adjusted EBIT is defined as net
income (loss) attributable to Expedia Group adjusted for: (1) net
income (loss) attributable to non-controlling interests; (2)
provision for income taxes; (3) total other expenses, net; (4)
acquisition-related impacts, including
(i) gains (losses) recognized on changes in
the value of contingent consideration arrangements; and (ii)
upfront consideration paid to settle employee compensation plans of
the acquiree;
(5) certain other items, including restructuring; (6) items
included in legal reserves, occupancy tax and other, which includes
reserves for potential settlement of issues related to
transactional taxes (e.g. hotel and excise taxes), related to court
decisions and final settlements, and charges incurred, if any, for
monies that may be required to be paid in advance of litigation in
certain transactional tax proceedings; and (7) that portion of
gains (losses) on revenue hedging activities that are included in
other, net that relate to revenue recognized in the period. The
above items are excluded from our Adjusted EBIT measure because the
amount and timing of these items is unpredictable, not driven by
core operating results and renders comparisons with prior periods
and competitors less meaningful. We believe Adjusted EBIT is a
useful measure for analysts and investors to evaluate our future
on-going performance as this measure allows a more comprehensive
comparison of our performance with our historical results from
prior periods and to the results of our competitors. Moreover, our
management uses this measure internally to evaluate the performance
of our business as a whole and it allows investors to gain an
understanding of the factors and trends affecting profitability,
including the ongoing costs to operating our business, which we
believe are inclusive of non-cash items such as stock-based
compensation.
Trailing Twelve Month Financial
Information
Expedia Group includes certain unaudited financial information
for the trailing twelve months ("TTM") ended March 31, 2024, which
is calculated as the three months ended March 31, 2024 plus the
year ended December 31, 2023 less the three months ended March 31,
2023. This presentation is not in accordance with GAAP. However, we
believe that this presentation provides useful information to
investors regarding its recent financial performance, and it views
this presentation of the four most recently completed fiscal
quarters as a key measurement period for investors to assess its
historical results.
Adjusted Net Income (Loss)
generally captures all items on the statements of operations that
occur in normal course operations and have been, or ultimately will
be, settled in cash and is defined as net income (loss)
attributable to Expedia Group plus the following items, net of
tax(a): (1) stock-based compensation expense, including
compensation expense related to equity plans of certain
subsidiaries and equity-method investments; (2) acquisition-related
impacts, including;
(i) amortization of intangible assets,
including as part of equity-method investments, and goodwill and
intangible asset impairment; (ii) gains (losses) recognized on
changes in the value of contingent consideration arrangements;
(iii) upfront consideration paid to settle employee compensation
plans of the acquiree; and (iv) gains (losses) recognized on
non-controlling investment basis adjustments when we acquire or
lose controlling interests;
(3) currency gains or losses on U.S. dollar denominated cash;
(4) the changes in fair value of equity investments; (5) certain
other items, including restructuring charges; (6) items included in
legal reserves, occupancy tax and other, which includes reserves
for potential settlement of issues related to transactional taxes
(e.g., hotel occupancy and excise taxes), related court decisions
and final settlements, and charges incurred, if any, for monies
that may be required to be paid in advance of litigation in certain
transactional tax proceedings, including as part of equity method
investments; (7) discontinued operations; (8) the non-controlling
interest impact of the aforementioned adjustment items; and (9)
unrealized gains (losses) on revenue hedging activities that are
included in other, net. Adjusted Net Income (Loss) includes
preferred share dividends. We believe Adjusted Net Income (Loss) is
useful to investors because it represents Expedia Group's combined
results, taking into account depreciation, which management
believes is an ongoing cost of doing business, but excluding the
impact of certain expenses and items not directly tied to the core
operations of our businesses. (a) Effective January 1, 2023, we
changed our methodology for the computation of the effective tax
rate used in the calculation of adjusted net income to a long-term
projected tax rate as we believe this tax rate provides better
consistency across reporting periods and produces results that are
reflective of Expedia Group’s long-term effective tax rate. This
projected effective tax rate is a total tax rate, and eliminates
the effects of non-recurring and period specific income tax items
which can vary in size and frequency. We apply this tax rate to
pretax income, as adjusted commensurate with our Adjusted Net
Income definition. Based on our current long-term projections, in
2023 and 2024, we are using a 21.5% effective tax rate to compute
Adjusted Net Income.
Adjusted EPS is defined as Adjusted
Net Income (Loss) divided by adjusted weighted average shares
outstanding, which, when applicable, include dilution from our
convertible debt instruments per the treasury stock method for
Adjusted EPS. The treasury stock method assumes we would elect to
settle the principal amount of the debt for cash and the conversion
premium for shares. If the conversion prices for such instruments
exceed our average stock price for the period, the instruments
generally would have no impact to adjusted weighted average shares
outstanding. This differs from the GAAP method for dilution from
our convertible debt instruments, which include them on an
if-converted method. We believe Adjusted EPS is useful to investors
because it represents, on a per share basis, Expedia Group's
consolidated results, taking into account depreciation, which we
believe is an ongoing cost of doing business, as well as other
items which are not allocated to the operating businesses such as
interest expense, taxes, foreign exchange gains or losses, and
minority interest, but excluding the effects of certain expenses
not directly tied to the core operations of our businesses.
Adjusted Net Income (Loss) and Adjusted EPS have similar
limitations as Adjusted EBITDA. In addition, Adjusted Net Income
(Loss) does not include all items that affect our net income (loss)
and net income (loss) per share for the period. Therefore, we think
it is important to evaluate these measures along with our
consolidated statements of operations.
Free Cash Flow is defined as net
cash flow provided by operating activities less capital
expenditures. Management believes Free Cash Flow is useful to
investors because it represents the operating cash flow that our
operating businesses generate, less capital expenditures but before
taking into account other cash movements that are not directly tied
to the core operations of our businesses, such as financing
activities, foreign exchange or certain investing activities. Free
Cash Flow has certain limitations in that it does not represent the
total increase or decrease in the cash balance for the period, nor
does it represent the residual cash flow for discretionary
expenditures. Therefore, it is important to evaluate Free Cash Flow
along with the consolidated statements of cash flows.
Adjusted Expenses (cost of revenue, direct
and indirect selling and marketing, technology and content and
general and administrative expenses) exclude stock-based
compensation related to expenses for stock options, restricted
stock units and other equity compensation under applicable
stock-based compensation accounting standards. Expedia Group
excludes stock-based compensation from these measures primarily
because they are non-cash expenses that we do not believe are
necessarily reflective of our ongoing cash operating expenses and
cash operating income. Moreover, because of varying available
valuation methodologies, subjective assumptions and the variety of
award types that companies can use when adopting applicable
stock-based compensation accounting standards, management believes
that providing non-GAAP financial measures that exclude stock-based
compensation allows investors to make meaningful comparisons
between our recurring core business operating results and those of
other companies, as well as providing management with an important
tool for financial operational decision making and for evaluating
our own recurring core business operating results over different
periods of time. There are certain limitations in using financial
measures that do not take into account stock-based compensation,
including the fact that stock-based compensation is a recurring
expense and a valued part of employees' compensation. Therefore, it
is important to evaluate both our GAAP and non-GAAP measures. See
the Notes to the Consolidated Statements of Operations for
stock-based compensation by line item.
Expedia Group, Inc. (excluding
trivago) In order to provide increased transparency on the
transaction-based component of the business, Expedia Group is
reporting results both in total and excluding trivago.
Tabular Reconciliations for Non-GAAP
Measures
Adjusted EBITDA (Adjusted Earnings Before
Interest, Taxes, Depreciation & Amortization) by Segment(1)
Three months ended March 31,
2024
B2C
B2B
trivago
Corporate &
Eliminations
Total
(In millions)
Operating income (loss)
$
95
$
142
$
(10
)
$
(337
)
$
(110
)
Realized gain (loss) on revenue hedges
(13
)
(4
)
—
—
(17
)
Restructuring and related reorganization
charges
—
—
—
48
48
Legal reserves, occupancy tax and
other
—
—
—
20
20
Stock-based compensation
—
—
—
104
104
Amortization of intangible assets
—
—
—
15
15
Depreciation
133
34
1
27
195
Adjusted EBITDA(1)
$
215
$
172
$
(9
)
$
(123
)
$
255
Three months ended March 31,
2023
B2C
B2B
trivago
Corporate &
Eliminations
Total
(In millions)
Operating income
$
18
$
106
$
19
$
(264
)
$
(121
)
Realized gain (loss) on revenue hedges
4
2
—
—
6
Legal reserves, occupancy tax and
other
—
—
—
5
5
Stock-based compensation
—
—
—
103
103
Amortization of intangible assets
—
—
—
15
15
Depreciation
126
25
1
25
177
Adjusted EBITDA(1)
$
148
$
133
$
20
$
(116
)
$
185
(1) Adjusted EBITDA for our B2C and B2B
segments includes allocations of certain expenses, primarily cost
of revenue and facilities, the total costs of our global travel
supply organizations, the majority of platform and marketplace
technology costs, and the realized foreign currency gains or losses
related to the forward contracts hedging a component of our net
merchant lodging revenue. We base the allocations primarily on
transaction volumes and other usage metrics. We do not allocate
certain shared expenses such as accounting, human resources,
certain information technology and legal to our reportable
segments. We include these expenses in Corporate and Eliminations.
Our allocation methodology is periodically evaluated and may
change.
Adjusted EBIT (Adjusted Earnings Before
Interest & Taxes) and Adjusted EBITDA (Adjusted Earnings Before
Interest, Taxes, Depreciation & Amortization)
Three months ended
March 31,
Year Ended December
31,
TTM
March 31,
2024
2023
2023
2024
($ in millions)
Net income (loss) attributable to Expedia
Group, Inc.
$
(135
)
$
(145
)
$
797
$
807
Net income (loss) attributable to
non-controlling interests
(1
)
5
(109
)
(115
)
Provision for income taxes
(19
)
79
330
232
Total other (income) expense, net
45
(60
)
15
120
Operating income (loss)
(110
)
(121
)
1,033
1,044
Gain (loss) on revenue hedges related to
revenue recognized
(17
)
6
(7
)
(30
)
Restructuring and related reorganization
charges
48
—
—
48
Legal reserves, occupancy tax and
other
20
5
8
23
Impairment of goodwill
—
—
297
297
Impairment of intangible assets
—
—
129
129
Adjusted EBIT
(59
)
(110
)
1,460
1,511
Stock-based compensation
104
103
413
414
Depreciation and amortization
210
192
807
825
Adjusted EBITDA
$
255
$
185
$
2,680
$
2,750
Net income margin(1)
(4.7
)%
(5.4
)%
6.2
%
6.2
%
Adjusted EBIT margin(1)
(2.1
)%
(4.1
)%
11.4
%
11.6
%
Adjusted EBITDA margin(1)
8.8
%
6.9
%
20.9
%
21.1
%
Long-term debt
$
6,256
Long-term debt to net income ratio
7.7
Long-term debt
$
6,256
Unamortized discounts and debt issuance
costs
38
Adjusted debt
$
6,294
Leverage ratio(2)
2.3
(1) Net income, Adjusted EBIT and Adjusted
EBITDA margins represent net income (loss) attributable to Expedia
Group, Inc., Adjusted EBIT or Adjusted EBITDA divided by
revenue.
(2) Leverage ratio represents adjusted
debt divided by TTM Adjusted EBITDA.
Adjusted Net Income (Loss) & Adjusted
EPS
Three months ended
March 31,
2024
2023
(In millions, except share and
per share data)
Net loss attributable to Expedia Group,
Inc.
$
(135
)
$
(145
)
Less: Net (income) loss attributable to
non-controlling interests
1
(5
)
Less: Provision for income taxes
19
(79
)
Loss before income taxes
(155
)
(61
)
Amortization of intangible assets
15
15
Stock-based compensation
104
103
Legal reserves, occupancy tax and
other
20
5
Restructuring and related reorganization
charges
48
—
Unrealized (gain) loss on revenue
hedges
(1
)
(2
)
(Gain) loss on minority equity
investments, net
9
(1
)
TripAdvisor tax indemnification
adjustment
—
(69
)
Gain on sale of businesses
(3
)
(20
)
Adjusted income (loss) before income
taxes
37
(30
)
GAAP Provision for income taxes
19
(79
)
Provision for income taxes for
adjustments
(27
)
85
Total Adjusted provision for income
taxes
(8
)
6
Total Adjusted income tax rate
21.5
%
21.5
%
Non-controlling interests
—
(6
)
Adjusted net income (loss) attributable
to Expedia Group, Inc.
$
29
$
(30
)
GAAP diluted loss per share
$
(0.99
)
$
(0.95
)
Amortization of intangible assets
0.11
0.10
Stock-based compensation
0.75
0.67
Legal reserves, occupancy tax and
other
0.14
0.03
Restructuring and related reorganization
charges
0.34
—
Unrealized (gain) loss on revenue
hedges
(0.01
)
(0.01
)
(Gain) loss on minority equity
investments, net
0.06
(0.01
)
TripAdvisor tax indemnification
adjustment
—
(0.45
)
Gain on sale of businesses
(0.02
)
(0.13
)
Income tax effects and adjustments
(0.20
)
0.56
Non-controlling interest
—
(0.01
)
Adjustment to GAAP dilutive securities
(1)
0.02
—
Adjusted earnings (loss) per
share
$
0.21
$
(0.20
)
GAAP diluted weighted average shares
outstanding (000's)
135,501
152,477
Adjustment to dilutive securities
(000's)(1)
3,008
—
Adjusted weighted average shares
outstanding (000's)
138,509
152,477
Ex-trivago Adjusted Net Income (Loss) and
Adjusted EPS
Adjusted net income (loss) attributable to
Expedia Group, Inc.
$
29
$
(30
)
Less: Adjusted net income (loss)
attributable to trivago
(7
)
9
Adjusted net income (loss) excluding
trivago
$
36
$
(39
)
Adjusted earnings (loss) per share
$
0.21
$
(0.20
)
Less: Adjusted earnings (loss) per share
attributable to trivago
(0.05
)
0.06
Adjusted earnings (loss) per share
excluding trivago
$
0.26
$
(0.26
)
(1) In periods for which we have an
Adjusted net loss (i.e. three months ended March 31, 2023), GAAP
basic weighted average shares outstanding and GAAP basic loss per
share is presented. In periods for which we have Adjusted net
income (i.e. the three months ended March 31, 2024), the GAAP
diluted average shares and diluted earnings (loss) per share is
presented adjusted for our convertible debt instruments per the
treasury stock method.
Free Cash Flow
Three months ended
March 31,
2024
2023
(In millions)
Net cash provided by operating
activities
$
2,879
$
3,157
Less: Total capital expenditures
(177
)
(233
)
Free cash flow
$
2,702
$
2,924
Adjusted Expenses (Cost of revenue, direct
and indirect selling and marketing, technology and content and
general and administrative expenses)
Three months ended
March 31,
2024
2023
(In millions)
Cost of revenue
$
358
$
414
Less: stock-based compensation
2
3
Adjusted cost of revenue
$
356
$
411
Less: trivago cost of revenue(1)
4
5
Adjusted cost of revenue excluding
trivago
$
352
$
406
Selling and marketing expense - direct
$
1,650
$
1,487
Less: trivago selling and marketing
expense(2)
$
53
$
28
Adjusted selling and marketing expense
excluding trivago - direct
$
1,597
$
1,459
Selling and marketing expense -
indirect
$
186
$
187
Less: stock-based compensation
19
20
Adjusted selling and marketing expense -
indirect
$
167
$
167
Less: trivago selling and marketing
expense - indirect(1)
3
3
Adjusted selling and marketing expense
excluding trivago - indirect
$
164
$
164
Technology and content expense
$
341
$
317
Less: stock-based compensation
40
34
Adjusted technology and content
expense
$
301
$
283
Less: trivago technology and content
expense(1)
12
11
Adjusted technology and content expense
excluding trivago
$
289
$
272
General and administrative expense
$
186
$
184
Less: stock-based compensation
43
46
Adjusted general and administrative
expense
$
143
$
138
Less: trivago general and administrative
expense(1)
8
8
Adjusted general and administrative
expense excluding trivago
$
135
$
130
Total adjusted overhead expenses(3)
$
611
$
588
Note: Some numbers may not add due to
rounding.
(1) trivago amount presented without
stock-based compensation as those are included with the
consolidated totals above.
(2) Selling and marketing expense adjusted
to add back B2C direct marketing spend on trivago eliminated in
consolidation.
(3) Total adjusted overhead expenses is
the sum of adjusted expenses for Selling and marketing - indirect,
Technology and content, and General and administrative.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This release may contain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties. These forward-looking
statements are based on assumptions that are inherently subject to
uncertainties, risks and changes in circumstances that are
difficult to predict. The use of words such as “believe,”
“estimate,” “expect” and “will,” or the negative of these terms or
other similar expressions, among others, generally identify
forward-looking statements. However, these words are not the
exclusive means of identifying such statements. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances are
forward-looking statements and may include statements relating to
future revenues, expenses, margins, profitability, net income
(loss), earnings per share and other measures of results of
operations and the prospects for future growth of Expedia Group,
Inc.’s business. Actual results may differ materially from the
results predicted and reported results should not be considered as
an indication of future performance. The potential risks and
uncertainties that could cause actual results to differ from the
results predicted include, among others, those described in the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of our most
recently filed periodic reports on Form 10-K and Form 10-Q, which
are available on our investor relations website at
ir.expediagroup.com and on the SEC website at www.sec.gov. All
information provided in this release is as of May 2, 2024. Undue
reliance should not be placed on forward-looking statements in this
release, which are based on information available to us on the date
hereof. We undertake no duty to update this information unless
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502197510/en/
Investor Relations ir@expediagroup.com
Communications press@expediagroup.com
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