01—Abstract
Summary
Summary of the 10-K filed February 14, 2020. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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.
02—Key points
Key Highlights
- Expedia Group reported an 8% increase in total revenue for 2019, reaching $12.1 billion, with the Lodging segment accounting for 70% of this.
- The 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.
- Vrbo, the alternative accommodations platform, saw a 14% revenue increase, driven by transactional revenue growth.
- Selling and marketing expenses increased by 6% to $6.1 billion, reflecting investments in traffic generation and brand presence across various brands.
- The company continued to invest in technology and content, with these expenses rising by 9% to $1.8 billion.
- Expedia Group maintained a strong liquidity position with $3.8 billion in cash and cash equivalents and short-term investments as of December 31, 2019.
- The filing acknowledges the potential material negative impact of the 2019 Novel Coronavirus outbreak on first quarter 2020 financial results and beyond.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Expedia Group, Inc. kept $0.05.
- Revenue$12.07B100.0%
- Cost of revenue−$2.16B17.9%
- Gross profit$9.90B82.1%
- Operating costs−$9.00B74.6%
- Operating income$903.0M7.5%
- Interest, other & tax−$338.0M2.8%
- Net income$565.0M4.7%
Where FY2019 revenue went
$12.07B- Operating costs: $9.00B, 75% of revenue
- Cost of revenue: $2.16B, 18% of revenue
- Net income: $565.0M, 4.7% of revenue
- Interest, other & tax: $338.0M, 2.8% of revenue
Kept 4.7% as net incomeNet income $565.0M · 4.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 14, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $12.07B$11.22B | +7.5% |
| Cost of Revenue | $2.16B$1.97B | +10.1% |
| Gross Profit | $9.90B$9.26B | +7.0% |
| Operating Income | $903.00M$714.00M | +26.5% |
| Interest Expense | $173.00M$190.00M | −8.9% |
| Net Income | $565.00M$406.00M | +39.2% |
| EPS (Basic) | $3.84$2.71 | +41.7% |
| EPS (Diluted) | $3.77$2.65 | +42.3% |
| Shares Outstanding (Basic) | 147.19M149.96M | −1.8% |
| Shares Outstanding (Diluted) | 149.88M152.89M | −2.0% |
05—Questions
Frequently Asked Questions
What were Expedia Group's main revenue drivers in 2019?
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.
What challenges did Expedia Group face in 2019?
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.
How is Expedia Group managing its debt and liquidity?
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.
What are the key risks highlighted in the filing for investors?
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.
06—Continue