10-QPeriod: Q3 FY2007

Expedia Group, Inc. Quarterly Report for Q3 Ended Sep 30, 2007

Filed November 8, 2007For Securities:EXPE

Summary

Expedia Group, Inc. reported strong performance in the third quarter of 2007, with total revenue increasing by 24% year-over-year to $759.6 million. This growth was primarily driven by a 22% increase in worldwide merchant hotel revenue and a significant rise in advertising and media revenue. Net income also saw a substantial increase of 69% to $99.6 million, or $0.32 per diluted share. The company's strategic focus on innovation, global expansion, and a diversified brand portfolio continues to yield positive results. The company's financial position remains robust, with total assets growing to $8.46 billion. While liabilities also increased, particularly current liabilities due to deferred merchant bookings, the company maintained a healthy cash position of $836.5 million. Expedia executed significant share repurchases during the quarter, acquiring approximately 25 million shares, demonstrating a commitment to returning value to shareholders. The company expects continued investment in technology and infrastructure to support future growth.

Key Highlights

  • 1Total revenue grew 24% year-over-year to $759.6 million for the three months ended September 30, 2007.
  • 2Net income increased by 69% to $99.6 million, or $0.32 per diluted share.
  • 3Merchant hotel revenue increased by 22% due to higher room nights stayed and increased average daily rates.
  • 4Advertising and media revenue saw significant growth, contributing to overall revenue expansion.
  • 5The company repurchased approximately 25 million shares of common stock for $725 million during the quarter.
  • 6Total assets reached $8.46 billion, with a strong cash and cash equivalents balance of $836.5 million.

Frequently Asked Questions

Expedia's revenue growth was primarily driven by a 22% increase in worldwide merchant hotel revenue, supported by higher room nights stayed and improved average daily rates. Additionally, advertising and media revenue experienced significant growth.

Expedia maintained a strong cash position of $836.5 million. The company also had $500 million in outstanding borrowings under its credit facility and $500 million in senior unsecured notes. It utilized $500 million of its credit facility to partially fund a significant share repurchase program.

Expedia anticipates continued investment in technology, infrastructure, and global expansion. Selling and marketing expenses are expected to increase in absolute terms as a percentage of revenue, supporting brand growth and market development. Technology and content expenses are also projected to rise due to ongoing investments in innovation and platform development.

Expedia is involved in various legal proceedings, most notably litigation related to hotel occupancy taxes. While many of these cases are in various stages, and some have been dismissed, the company has established a reserve of $18.8 million for potential settlements. Management believes these proceedings will not have a material adverse effect on the company's financial condition or results of operations.