Summary
Expedia Group, Inc. reported a net loss of $14.3 million for the first quarter of 2014, a significant improvement from the $104.2 million net loss in the same period of 2013. This improvement was primarily driven by a substantial reduction in "Acquisition-related and other" and "Legal reserves, occupancy tax and other" expenses, which were significant in the prior year. Revenue for the quarter increased by 19% year-over-year to $1.2 billion, boosted by strong performance in the Leisure segment, particularly from hotel and advertising/media revenue, and continued growth in the Egencia corporate travel segment. Despite the revenue growth, the company's operating loss narrowed considerably due to the aforementioned expense reductions, though the top-line revenue growth was partially offset by a decrease in revenue margin. The company also saw a substantial increase in cash flow from operations, largely due to favorable changes in working capital, and maintained a strong liquidity position with significant cash and short-term investments. Investors should note the ongoing legal battles concerning occupancy taxes, which represent a material contingent liability and potential risk.
Financial Highlights
51 data points| Revenue | $1.20B |
| Cost of Revenue | $294.62M |
| Gross Profit | $905.75M |
| Operating Income | -$3.00M |
| Interest Expense | $21.80M |
| Net Income | -$14.30M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 130.56M |
| Shares Outstanding (Diluted) | 130.56M |
Key Highlights
- 1Revenue increased by 19% year-over-year to $1.2 billion, driven by growth in hotel, advertising/media, and air ticket revenue.
- 2Net loss narrowed significantly to $14.3 million from $104.2 million in the prior year's quarter, primarily due to lower expenses, particularly acquisition-related costs and legal reserves.
- 3Operating loss decreased substantially from $105.6 million to $3.0 million, reflecting improved expense management and the absence of large prior-year charges.
- 4Gross bookings saw a strong 29% increase, indicating healthy underlying demand across the platform.
- 5Cash flow from operating activities significantly increased by $90 million year-over-year to $971 million, aided by favorable working capital changes, notably deferred merchant bookings.
- 6The company maintained a strong liquidity position with $1.48 billion in cash and cash equivalents and short-term investments as of March 31, 2014.
- 7Significant ongoing litigation related to hotel occupancy taxes remains a material risk, with a reserve of $50 million established for potential settlements.