01—Abstract
Summary
Summary of the 10-Q filed April 30, 2010. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. reported solid revenue growth in the first quarter of 2010, with a 13% increase year-over-year, reaching $717.9 milliona.
This growth was driven by strong performance in its Leisure and TripAdvisor Media Network segments, along with increased advertising and media revenue. Profitability also saw a significant improvement, with operating income rising 21% to $112.2 millionb. This was supported by increased revenue and a more favorable cost structure, including the absence of restructuring charges incurred in the prior year.
The company also benefited from a lower effective tax rate. Expedia initiated a quarterly dividend in Q1 2010 and continued its share repurchase program, demonstrating a commitment to returning value to shareholders while maintaining operational strength.
02—Key points
Key Highlights
- Revenue increased by 13% to $717.9 million in Q1 2010 compared to Q1 2009.
- Operating income grew by 21% to $112.2 million, indicating improved profitability.
- The company's cash position strengthened, with cash and cash equivalents increasing by $354.9 million to $997.5 million.
- Expedia initiated a quarterly dividend of $0.07 per share in Q1 2010.
- Share repurchases continued, with $188 million spent in Q1 2010 to buy back 8.4 million shares.
- Legal matters related to hotel occupancy taxes remain significant, with ongoing litigation and a reserve of $21 million established.
- Gross bookings increased by 27% to $6.6 billion, driven by a 18% increase in transactions and a 9% increase in average airfares.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2010, Expedia Group, Inc. kept $0.09.
- Revenue$646.4M100.0%
- Cost of revenue−$158.0M24.4%
- Gross profit$488.4M75.6%
- Operating costs−$436.2M67.5%
- Operating income$52.2M8.1%
- Interest, other & tax$7.2M1.1%
- Net income$59.4M9.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2010filed April 30, 2010Financial Statements
| Revenue | $646.42M |
| Cost of Revenue | $158.03M |
| Gross Profit | $488.39M |
| Operating Income | $52.16M |
| Interest Expense | $21.20M |
| Net Income | $59.40M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.40 |
| Shares Outstanding (Basic) | 144.30M |
| Shares Outstanding (Diluted) | 147.25M |
05—Questions
Frequently Asked Questions
What was Expedia's revenue performance in Q1 2010?
Expedia reported a 13% increase in revenue for the first quarter of 2010, reaching $717.9 million, up from $635.7 million in the same period of 2009. This growth was primarily attributed to increased hotel revenue within the Leisure segment and higher advertising and media revenue from the TripAdvisor Media Network.
How did Expedia's profitability change in Q1 2010?
Profitability showed a strong improvement. Operating income increased by 21% to $112.2 million in Q1 2010 compared to $92.9 million in Q1 2009. This was driven by revenue growth and favorable cost management, including the absence of significant restructuring charges from the prior year and a lower effective tax rate.
What is the company's cash position and how is it managing capital?
Expedia's cash and cash equivalents significantly increased by $354.9 million to $997.5 million as of March 31, 2010. The company also initiated a quarterly cash dividend of $0.07 per share and continued its share repurchase program, spending $188 million on repurchases in Q1 2010. This indicates a focus on returning capital to shareholders while maintaining a strong liquidity position.
What are the key legal risks facing Expedia?
A significant ongoing risk is litigation related to hotel occupancy taxes, with 48 lawsuits filed by or against various municipalities and counties. The company believes these claims lack merit but has established a reserve of $21 million for potential settlements. Some legal developments have been favorable, but this remains a material area of focus.
06—Continue