10-QPeriod: Q2 FY2017

Expedia Group, Inc. Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 28, 2017For Securities:EXPE

Summary

Expedia Group, Inc. reported a solid second quarter for 2017, demonstrating strong revenue growth across its segments. Total revenue increased by 18% to $2.586 billion compared to the same period in 2016, driven by broad-based strength in the Core OTA segment, significant growth in trivago, and continued expansion in HomeAway. The company also saw a healthy increase in gross bookings, up 12% year-over-year, indicating robust demand for its travel services. Operationally, Expedia returned to profitability with an operating income of $102.8 million for the quarter, a significant improvement from a loss in the prior year's period. This profitability was supported by improved revenue margins and disciplined cost management, although selling and marketing expenses increased to fuel growth. The company also highlighted strong cash flow generation from operations, underscoring its financial health and ability to fund future growth initiatives.

Financial Highlights

51 data points
Beta

Revenue

$2.59B

83.0% Gross Margin

Net Income

$57.00M

2.2% Net Margin

EPS (Diluted)

$0.36

Total Assets

$18.62B

Cash & Equivalents

$2.87B

Free Cash Flow

$511.00M

Financial Statements
Beta
Revenue$2.59B
Cost of Revenue$439.00M
Gross Profit$2.15B
Operating Income$103.00M
Interest Expense$43.00M
Net Income$57.00M
EPS (Basic)$0.37
EPS (Diluted)$0.36
Shares Outstanding (Basic)151.58M
Shares Outstanding (Diluted)157.03M

Key Highlights

  • 1Revenue increased 18% to $2.586 billion for the three months ended June 30, 2017, compared to the prior year period.
  • 2Gross bookings grew 12% to $22.8 billion for the three months ended June 30, 2017.
  • 3Operating income improved significantly to $102.8 million from a loss of $71.6 million in the six months ended June 30, 2016.
  • 4The Core OTA segment showed strong performance with revenue up 14% and Adjusted EBITDA up 14% for the quarter.
  • 5trivago experienced substantial revenue growth of 62% for the quarter, indicating successful expansion of its advertising business.
  • 6HomeAway revenue increased 31% for the quarter, reflecting growth in its vacation rental marketplace and transition to a transactional model.
  • 7Net cash provided by operating activities was $2.366 billion for the six months ended June 30, 2017, a substantial increase from $1.726 billion in the prior year.

Frequently Asked Questions

Expedia's total revenue for the three months ended June 30, 2017, increased by 18% to $2.586 billion, compared to $2.196 billion in the same period of 2016.

Expedia reported a significant improvement in profitability. Operating income for the three months ended June 30, 2017, was $102.8 million, a substantial increase from $25.7 million in the prior year period. For the six-month period, operating income was $30 million compared to a loss of $71.6 million in the prior year.

Revenue growth was driven by multiple segments. The Core OTA segment saw a 14% increase, trivago's third-party revenue grew by 62%, and HomeAway revenue increased by 31%. These increases were supported by a 12% rise in total gross bookings.

Expedia maintained a strong liquidity position with $3.8 billion in cash and cash equivalents and short-term investments as of June 30, 2017. The company also has an undrawn $1.5 billion revolving credit facility. Long-term debt stood at $3.2 billion, and the company was in compliance with its debt covenants.