10-QPeriod: Q1 FY2015

Expedia Group, Inc. Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 1, 2015For Securities:EXPE

Summary

Expedia Group, Inc. reported a significant turnaround in its first quarter of 2015 compared to the same period in 2014. The company swung from a net loss of $19.8 million in Q1 2014 to a net income of $32.6 million in Q1 2015. This improvement is driven by a substantial increase in revenue, up 14% year-over-year to $1.37 billion, and a successful acquisition strategy, including the recent purchase of the Travelocity brand and increased stake in AAE Travel Pte. Ltd. Despite the overall profitability, the company saw a decrease in its revenue margin from 9.5% to 9.2%, primarily due to lower revenue per room night, influenced by foreign exchange rates and promotional activities. However, gross bookings saw a healthy 19% increase, demonstrating strong underlying demand and operational growth. Investors should monitor the ongoing integration of acquisitions and the impact of foreign currency fluctuations on future profitability and margins.

Financial Highlights

51 data points
Beta

Revenue

$1.37B

76.6% Gross Margin

Net Income

$44.14M

3.2% Net Margin

EPS (Diluted)

$0.34

Total Assets

$10.14B

Cash & Equivalents

$1.74B

Free Cash Flow

$948.41M

Financial Statements
Beta
Revenue$1.37B
Cost of Revenue$321.92M
Gross Profit$1.05B
Operating Income-$51.00M
Interest Expense$27.99M
Net Income$44.14M
EPS (Basic)$0.35
EPS (Diluted)$0.34
Shares Outstanding (Basic)127.56M
Shares Outstanding (Diluted)131.40M

Key Highlights

  • 1Reported a net income of $32.6 million for Q1 2015, a significant improvement from a net loss of $19.8 million in Q1 2014.
  • 2Total revenue increased by 14% to $1.37 billion in Q1 2015, driven by growth in the Core OTA and trivago segments.
  • 3Gross bookings rose by 19% to $15.0 billion in Q1 2015, indicating robust demand, with the Core OTA segment being the primary driver.
  • 4The company completed the acquisition of the Travelocity brand and associated assets and increased its stake in AAE Travel Pte. Ltd., signaling an active M&A strategy.
  • 5Selling and marketing expenses increased by 22% to $763 million, reflecting increased investment in direct and indirect costs to drive growth.
  • 6Operating loss widened from $3 million in Q1 2014 to $51 million in Q1 2015, largely due to increased operating expenses outpacing revenue growth.
  • 7The company maintained a strong liquidity position with $2.0 billion in cash, cash equivalents, and short-term investments as of March 31, 2015.

Frequently Asked Questions

Expedia reported a net income of $32.6 million for the first quarter of 2015, a significant improvement from a net loss of $19.8 million in the same period of 2014. This represents a strong turnaround in profitability.

Total revenue increased by 14% to $1.37 billion in Q1 2015 compared to Q1 2014. Gross bookings also saw substantial growth, rising by 19% to $15.0 billion, driven primarily by the Core OTA segment.

Expedia is actively pursuing strategic acquisitions. In Q1 2015, they acquired the Travelocity brand and increased their ownership in AAE Travel Pte. Ltd. to 75%. They also announced a definitive agreement to acquire Orbitz Worldwide, Inc. for approximately $1.6 billion.

The revenue margin decreased slightly from 9.5% to 9.2% in Q1 2015. This was primarily due to lower revenue per room night, influenced by unfavorable foreign exchange impacts, promotional activities, and efforts to expand global hotel supply. These factors were partially offset by a favorable mix shift towards higher-margin products like advertising and media revenue.