10-KPeriod: FY2021

Expedia Group, Inc. Annual Report, Year Ended Dec 31, 2021

Filed February 11, 2022For Securities:EXPE

Summary

Expedia Group, Inc.'s 2021 Form 10-K reflects a year of significant recovery following the severe impact of the COVID-19 pandemic on the travel industry. The company reported a substantial increase in revenue and gross bookings compared to 2020, signaling a rebound in travel demand. Expedia continued its strategic shift towards a more unified brand and platform operating model, aiming for greater efficiency and scalability. The sale of Egencia was a key divestiture, allowing for increased focus on core travel businesses. While the company demonstrated resilience and recovery, it faces ongoing challenges including intense competition, evolving search engine dynamics, and the lingering uncertainty surrounding the pandemic's full impact and potential new variants. The company's significant debt load also remains a factor for investors to consider. Overall, Expedia is navigating a dynamic environment, leveraging its brand portfolio and platform strategy to capture growth opportunities in the recovering global travel market.

Financial Highlights

52 data points
Beta

Revenue

$8.60B

Net Income

$15.00M

0.2% Net Margin

EPS (Diluted)

$-1.80

Total Assets

$21.55B

Cash & Equivalents

$4.11B

Free Cash Flow

$3.08B

Financial Statements
Beta
Revenue$8.60B
Operating Income$186.00M
Interest Expense$351.00M
Net Income$15.00M
EPS (Basic)$-1.80
EPS (Diluted)$-1.80
Shares Outstanding (Basic)149.73M
Shares Outstanding (Diluted)149.73M

Key Highlights

  • 1Significant revenue and gross booking recovery in 2021 compared to 2020, indicating a strong rebound in travel demand.
  • 2Strategic shift towards a unified brand and platform operating model for improved efficiency and scalability.
  • 3Divestiture of Egencia completed, allowing for greater focus on core travel segments.
  • 4Lodging revenue, representing 75% of total revenue, saw substantial growth driven by increased room nights and higher ADRs, especially in alternative accommodations (Vrbo).
  • 5Continued investment in technology and content, with a multi-year project to migrate to cloud computing services.
  • 6Management of marketing investments has been consolidated across brands to optimize results.
  • 7Significant debt of $7.8 billion outstanding as of December 31, 2021, requiring careful financial management.

Frequently Asked Questions

Expedia Group experienced a significant recovery in 2021 compared to 2020. Total revenue increased by 65% to $8.6 billion, and gross bookings grew by 97% year-over-year to $72.4 billion, driven by the rebound in travel demand as pandemic restrictions eased. The company returned to operating income in 2021 ($186 million) after a substantial operating loss in 2020 ($2.7 billion), largely due to the absence of significant impairment charges and revenue growth exceeding operating cost increases.

Expedia Group is focusing on a platform operating model and a more unified brand strategy to simplify operations and improve efficiency. Key initiatives include unifying loyalty programs into a single global platform, leveraging technology and data to enhance traveler experiences and partner solutions, and optimizing marketing investments holistically across its brand portfolio. The company also continues to streamline its operations by closing, shutting down, or selling certain businesses, as exemplified by the sale of Egencia.

Expedia Group faces several risks and challenges. The ongoing impact and uncertainty of the COVID-19 pandemic on the travel industry remain a primary concern. Intense competition from other Online Travel Agencies (OTAs), travel suppliers directly, search engines (like Google), and alternative accommodation providers is a significant factor. Additionally, the company is subject to risks related to cybersecurity, data privacy, changes in search engine algorithms, fluctuations in currency exchange rates, and substantial indebtedness ($7.8 billion outstanding). Legal and regulatory uncertainties, particularly concerning occupancy taxes and competition law investigations, also present challenges.

The sale of Egencia, Expedia Group's corporate travel management business, to American Express Global Business Travel (GBT) was completed on November 1, 2021. This transaction allowed Expedia Group to streamline its operations, focus on its core travel businesses, and receive a minority ownership position in the combined GBT entity, along with a 10-year lodging supply agreement. This divestiture aligns with the company's strategy to simplify its organizational structure and improve cost structure.