01—Abstract
Summary
Summary of the 10-Q filed July 28, 2017. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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.
02—Key points
Key Highlights
- Revenue increased 18% to $2.586 billion for the three months ended June 30, 2017, compared to the prior year period.
- Gross bookings grew 12% to $22.8 billion for the three months ended June 30, 2017.
- Operating income improved significantly to $102.8 million from a loss of $71.6 million in the six months ended June 30, 2016.
- The Core OTA segment showed strong performance with revenue up 14% and Adjusted EBITDA up 14% for the quarter.
- trivago experienced substantial revenue growth of 62% for the quarter, indicating successful expansion of its advertising business.
- HomeAway revenue increased 31% for the quarter, reflecting growth in its vacation rental marketplace and transition to a transactional model.
- Net 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2017, Expedia Group, Inc. kept $0.02.
- Revenue$2.59B100.0%
- Cost of revenue−$439.0M17.0%
- Gross profit$2.15B83.0%
- Operating costs−$2.04B79.0%
- Operating income$103.0M4.0%
- Interest, other & tax−$46.0M1.8%
- Net income$57.0M2.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2017filed July 28, 2017Financial Statements
Q2 FY2017 against Q2 FY2016
| Line item | Q2 FY2017Q2 FY2016 | Change |
|---|---|---|
| Revenue | $2.59B$2.20B | +17.8% |
| Cost of Revenue | $439.00M$406.38M | +8.0% |
| Gross Profit | $2.15B$1.79B | +20.0% |
| Operating Income | $103.00M$25.66M | +301.4% |
| Interest Expense | $43.00M$42.94M | +0.1% |
| Net Income | $57.00M$31.65M | +80.1% |
| EPS (Basic) | $0.37$0.21 | +76.2% |
| EPS (Diluted) | $0.36$0.21 | +71.4% |
| Shares Outstanding (Basic) | 151.58M149.55M | +1.4% |
| Shares Outstanding (Diluted) | 157.03M153.53M | +2.3% |
05—Questions
Frequently Asked Questions
What was Expedia's revenue growth in Q2 2017?
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.
How did Expedia's profitability change in Q2 2017?
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.
What are the key drivers of revenue growth for Expedia?
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.
What is the company's financial position regarding liquidity and debt?
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.
06—Continue