Summary
Expedia Group, Inc. reported solid revenue growth for the nine months ended September 30, 2012, with total revenue increasing by 15% to $3.06 billion compared to the prior year. This growth was driven primarily by a significant increase in hotel room nights stayed and a strong performance in the Egencia corporate travel segment, which saw a 54% revenue increase. The company's balance sheet also strengthened, with cash and cash equivalents and short-term investments totaling $2.4 billion at the end of the third quarter. Despite the positive top-line performance, the company faced challenges, including a decline in revenue per hotel room night and revenue per air ticket, and a decrease in its overall revenue margin for the quarter. Additionally, Expedia is actively managing various legal proceedings, most notably those related to hotel occupancy taxes, and is subject to ongoing antitrust investigations in the UK and US. Financially, Expedia demonstrated healthy operating cash flow generation. The company continued to return capital to shareholders through share repurchases and dividend payments. Significant items impacting the period include the spin-off of TripAdvisor in late 2011, which resulted in the presentation of TripAdvisor's results as discontinued operations, and a loss incurred from the early extinguishment of debt related to this spin-off. Looking ahead, Expedia is focused on product innovation, global expansion, and exploring new channel penetration, particularly in mobile and social media. Investors should monitor the company's ability to navigate competitive pressures, manage litigation risks, and successfully execute its growth strategies in the evolving online travel landscape.
Financial Highlights
53 data points| Revenue | $1.20B |
| Cost of Revenue | $243.63M |
| Gross Profit | $955.39M |
| Operating Income | $227.09M |
| Interest Expense | $22.10M |
| Net Income | $171.48M |
| EPS (Basic) | $1.26 |
| EPS (Diluted) | $1.21 |
| Shares Outstanding (Basic) | 135.97M |
| Shares Outstanding (Diluted) | 141.42M |
Key Highlights
- 1Total revenue increased by 15% to $3.06 billion for the nine months ended September 30, 2012, compared to the prior year.
- 2Gross bookings for the nine months increased by 16% to $26.4 billion, with a notable 32% increase in the Egencia segment.
- 3Cash and cash equivalents and short-term investments stood at $2.4 billion as of September 30, 2012, indicating strong liquidity.
- 4Operating income for the nine months grew by 11% to $430.2 million, though operating margin decreased slightly.
- 5The company repurchased approximately 9.9 million shares of common stock for $351 million during the first nine months of 2012.
- 6Significant ongoing litigation related to hotel occupancy taxes continues, with reserves established for potential settlements.
- 7Expedia is subject to investigations by the UK Office of Fair Trading and has faced multiple class-action lawsuits in the US concerning hotel booking practices.