01—Abstract
Summary
Summary of the 10-K filed February 11, 2016. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc.'s 2015 10-K filing highlights a year of significant strategic expansion and technological advancement.
The company successfully executed several key acquisitions, including Orbitz Worldwide and HomeAway, bolstering its portfolio and market reach. These acquisitions, coupled with ongoing investments in product innovation and global expansion, position Expedia to capitalize on the continued shift of travel bookings from offline to online channels. The company reported substantial revenue growth, driven primarily by its Core OTA segment, though it also faced pressure on revenue per room night due to strategic margin adjustments and foreign exchange impacts.
Expedia continues to focus on leveraging technology to improve customer experience and operational efficiency across its diverse brand portfolio. Financially, Expedia demonstrated strong operational cash flow, supported by its expanding global footprint. The company's financial strategy included managing its debt levels and returning capital to shareholders through dividends and share repurchases.
Despite facing intense competition and evolving industry dynamics, Expedia's management expressed confidence in its ability to adapt and grow, emphasizing its robust brand portfolio, technological capabilities, and expansive supply base as key competitive advantages. Investors should note the company's ongoing efforts to integrate acquisitions and manage the complexities of international operations and regulatory environments.
02—Key points
Key Highlights
- Expedia completed several significant acquisitions in 2015, notably Orbitz Worldwide and HomeAway, expanding its market presence and service offerings.
- The company reported substantial revenue growth, driven by strong performance in its Core OTA segment, including Brand Expedia and Hotels.com.
- Expedia experienced pressure on its revenue per room night due to strategic margin adjustments aimed at expanding its global hotel supply portfolio and unfavorable foreign exchange impacts.
- The company continues to invest heavily in technology and product innovation, aiming to enhance customer experience and booking efficiency across its brands.
- Expedia is actively pursuing global expansion, with a strategic goal to generate at least 65% of its revenue from outside the United States.
- Mobile bookings represented one in four Expedia, Inc. transactions globally in 2015, highlighting the growing importance of mobile channels.
- The company is involved in numerous legal proceedings, primarily concerning occupancy and other taxes, with significant "pay-to-play" amounts paid in some cases, though the company believes it is not liable for many of these claims.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Expedia Group, Inc. kept $0.11.
- Revenue$6.67B100.0%
- Cost of revenue−$1.31B19.6%
- Gross profit$5.36B80.4%
- Operating costs−$4.95B74.2%
- Operating income$413.6M6.2%
- Interest, other & tax$350.9M5.3%
- Net income$764.5M11.5%
Where FY2015 revenue went
$6.67B- Operating costs: $4.95B, 74% of revenue
- Cost of revenue: $1.31B, 20% of revenue
- Operating income: $413.6M, 6.2% of revenue
Kept 6.2% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 11, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $6.67B$5.76B | +15.8% |
| Cost of Revenue | $1.31B$1.18B | +11.1% |
| Gross Profit | $5.36B$4.58B | +17.0% |
| Operating Income | $413.57M$517.76M | −20.1% |
| Interest Expense | $126.19M$98.09M | +28.7% |
| Net Income | $764.47M$398.10M | +92.0% |
| EPS (Basic) | $5.87$3.09 | +90.0% |
| EPS (Diluted) | $5.70$2.99 | +90.6% |
| Shares Outstanding (Basic) | 130.16M128.91M | +1.0% |
| Shares Outstanding (Diluted) | 134.02M133.17M | +0.6% |
05—Questions
Frequently Asked Questions
What were the key acquisitions made by Expedia in 2015?
In 2015, Expedia completed several significant acquisitions, including Orbitz Worldwide in September and HomeAway in December. The company also acquired additional equity in the AirAsia-Expedia joint venture and assets of Travelocity.
How did the company's revenue performance fare in 2015?
Expedia reported strong revenue growth, with total revenue increasing to $6.67 billion, up from $5.76 billion in 2014. This growth was primarily driven by its Core OTA segment, with notable contributions from Brand Expedia and Hotels.com, as well as the advertising and media business (trivago).
What challenges did Expedia face regarding its hotel business in 2015?
Expedia experienced pressure on its revenue per room night due to strategic margin reductions aimed at expanding its global hotel supply, unfavorable foreign exchange impacts, and increased promotional activities like loyalty programs. The company expects this trend of declining revenue per room night to continue.
What is Expedia's strategy for global expansion?
Expedia's global expansion strategy involves leveraging its existing brands and technology platforms to enter new markets. The company aims to generate at least 65% of its revenue from businesses and points of sale outside the United States and has been actively expanding its international presence through organic growth and strategic partnerships.
06—Continue