01—Abstract
Summary
Summary of the 10-Q filed April 29, 2011. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc.'s first quarter 2011 results show revenue growth of 15% year-over-year to $822.2 milliona, driven by a strong performance in the Leisure segment and increased advertising revenue from TripAdvisor Media Group.
While operating income saw a slight decrease of 4% to $108.2 millionb, this was largely due to increased operating expenses outpacing revenue growth, particularly in selling and marketing. The company also reported a significant increase in net cash provided by operating activities, up 17.6% to $729.1 million, largely attributable to improved working capital benefits. A notable development during the quarter was the preliminary approval to spin off the TripAdvisor business into a separate publicly traded company, expected to be completed in the fall of 2011.
This strategic move aims to unlock value for shareholders by creating two focused entities: one for travel transaction brands and another for travel media and advertising. Despite some challenges, such as a 10%c decrease in air ticket volumes due to pricing and the temporary absence of American Airlines content, the company demonstrated resilience with healthy room night growth in its hotel business and a growing international presence. Expedia also continues to actively manage its capital through share repurchases and dividend payments.
02—Key points
Key Highlights
- Total revenue increased 15% to $822.2 million for the three months ended March 31, 2011, compared to $717.9 million in the prior year period.
- Net income attributable to Expedia, Inc. was $52.0 million, or $0.19 per diluted share, a decrease from $59.4 million, or $0.20 per diluted share, in the prior year period.
- The company announced a preliminary plan to spin off its TripAdvisor business into a separate publicly traded company, expected to complete in Fall 2011.
- Net cash provided by operating activities increased significantly by 17.6% to $729.1 million, primarily due to enhanced working capital benefits.
- Selling and marketing expenses increased by 21% to $341.2 million, driven by higher online and offline marketing expenses and increased personnel costs, particularly at TripAdvisor Media Group.
- Hotel revenue grew 16% due to a 15% increase in room nights stayed, while air revenue saw a 6% increase driven by higher average ticket prices, despite a 10% decrease in ticket volumes.
- Cash and cash equivalents and short-term investments totaled $1.8 billion as of March 31, 2011, providing strong liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2011, Expedia Group, Inc. kept $0.07.
- Revenue$727.8M100.0%
- Cost of revenue−$175.6M24.1%
- Gross profit$552.2M75.9%
- Operating costs−$517.1M71.0%
- Operating income$35.2M4.8%
- Interest, other & tax$16.9M2.3%
- Net income$52.0M7.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2011filed April 29, 2011Financial Statements
Q1 FY2011 against Q1 FY2010
| Line item | Q1 FY2011Q1 FY2010 | Change |
|---|---|---|
| Revenue | $727.84M$646.42M | +12.6% |
| Cost of Revenue | $175.61M$158.03M | +11.1% |
| Gross Profit | $552.23M$488.39M | +13.1% |
| Operating Income | $35.16M$52.16M | −32.6% |
| Interest Expense | $22.52M$21.20M | +6.2% |
| Net Income | $52.04M$59.40M | −12.4% |
| EPS (Basic) | $0.38$0.41 | −7.3% |
| EPS (Diluted) | $0.37$0.40 | −7.5% |
| Shares Outstanding (Basic) | 136.93M144.30M | −5.1% |
| Shares Outstanding (Diluted) | 139.08M147.25M | −5.5% |
05—Questions
Frequently Asked Questions
What is the financial performance of Expedia Group in Q1 2011 compared to Q1 2010?
In the first quarter of 2011, Expedia Group reported a 15% increase in revenue, reaching $822.2 million, up from $717.9 million in the same period of 2010. However, net income attributable to Expedia, Inc. decreased to $52.0 million ($0.19 per diluted share) from $59.4 million ($0.20 per diluted share). Operating income also saw a slight decrease of 4% to $108.2 million.
What are the key strategic developments announced in this filing?
The most significant strategic development is the preliminary approval of a plan to spin off the TripAdvisor business into a separate, publicly traded company. This separation is expected to be completed in the fall of 2011, creating two distinct entities focused on travel transactions and travel media/advertising, respectively.
How did the different segments of Expedia Group perform?
The Leisure segment showed robust growth with revenue up 12% year-over-year, driven by strong hotel bookings. The TripAdvisor Media Group reported a 32% increase in third-party revenue, highlighting growth in its advertising business. Egencia, the corporate travel segment, also saw significant revenue growth of 25%.
What is the company's cash position and liquidity outlook?
Expedia Group maintained a strong liquidity position, with cash and cash equivalents and short-term investments totaling $1.8 billion as of March 31, 2011. The company also has access to a $750 million revolving credit facility, with $723 million available. Management believes these resources are sufficient to meet foreseeable liquidity needs.
06—Continue