10-KPeriod: FY2019

Expedia Group, Inc. Annual Report, Year Ended Dec 31, 2019

Filed February 14, 2020For Securities:EXPE

Summary

Expedia Group, Inc.'s 2019 Form 10-K filing highlights a year of revenue growth, driven primarily by its Core Online Travel Agencies (OTA) segment and the Vrbo platform. The company reported an 8% increase in total revenue to $12.1 billion, with lodging being the largest contributor at 70% of total revenue. Despite this growth, the company faced increased marketing costs and a slight decline in revenue per room night, partly due to foreign exchange impacts. Expedia Group also detailed its ongoing investments in technology and product innovation, alongside efforts to streamline operations and improve cost structures. The filing also touched upon significant legal and regulatory matters, including ongoing litigation concerning occupancy and other taxes, and noted the potential impact of the novel coronavirus outbreak on its near-term financial performance.

Financial Highlights

56 data points
Beta

Revenue

$12.07B

82.1% Gross Margin

Net Income

$565.00M

4.7% Net Margin

EPS (Diluted)

$3.77

Total Assets

$21.42B

Cash & Equivalents

$3.31B

Free Cash Flow

$1.61B

Financial Statements
Beta
Revenue$12.07B
Cost of Revenue$2.16B
Gross Profit$9.90B
Operating Income$903.00M
Interest Expense$173.00M
Net Income$565.00M
EPS (Basic)$3.84
EPS (Diluted)$3.77
Shares Outstanding (Basic)147.19M
Shares Outstanding (Diluted)149.88M

Key Highlights

  • 1Expedia Group reported an 8% increase in total revenue for 2019, reaching $12.1 billion, with the Lodging segment accounting for 70% of this.
  • 2The company experienced an 11% increase in room nights stayed within its Lodging segment, though revenue per room night saw a 1% decrease, partly due to foreign exchange.
  • 3Vrbo, the alternative accommodations platform, saw a 14% revenue increase, driven by transactional revenue growth.
  • 4Selling and marketing expenses increased by 6% to $6.1 billion, reflecting investments in traffic generation and brand presence across various brands.
  • 5The company continued to invest in technology and content, with these expenses rising by 9% to $1.8 billion.
  • 6Expedia Group maintained a strong liquidity position with $3.8 billion in cash and cash equivalents and short-term investments as of December 31, 2019.
  • 7The filing acknowledges the potential material negative impact of the 2019 Novel Coronavirus outbreak on first quarter 2020 financial results and beyond.

Frequently Asked Questions

Expedia Group's primary revenue driver in 2019 was its Lodging segment, which accounted for 70% of total revenue. The Core Online Travel Agencies (OTA) segment, which includes brands like Expedia.com and Hotels.com, saw significant growth, as did the Vrbo platform for alternative accommodations.

The company faced challenges including increased selling and marketing expenses, a slight decrease in revenue per room night (partially due to foreign exchange), and the broader competitive landscape within the online travel industry. Additionally, the filing notes the potential impact of the 2019 Novel Coronavirus outbreak on future performance.

As of December 31, 2019, Expedia Group had a strong liquidity position with $3.8 billion in cash and cash equivalents and short-term investments. The company also had a $2 billion revolving credit facility, which was largely undrawn. It also issued $1.25 billion in senior unsecured notes in September 2019 to fund general corporate purposes, which may include debt repayment.

Key risks highlighted include intense competition from online and traditional travel providers, potential disruptions from search engine algorithm changes, reliance on travel supplier relationships, susceptibility to global economic downturns and travel-related events (like health crises), increasing brand awareness costs, payments and fraud risks, and international operational risks. The concentration of voting power with Barry Diller is also noted as a governance factor.