10-QPeriod: Q1 FY2019

Expedia Group, Inc. Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 3, 2019For Securities:EXPE

Summary

Expedia Group, Inc. reported its first quarter 2019 financial results, indicating a net loss of $103 million, or $0.69 per share, compared to a net loss of $137 million, or $0.91 per share, in the prior year's first quarter. Revenue for the quarter increased by 4% year-over-year to $2.6 billion, primarily driven by growth in the Core OTA segment and Vrbo, despite a decline in trivago's revenue. The company saw an increase in room nights stayed and air tickets sold, though revenue per room night and revenue per ticket experienced slight decreases, partly due to foreign exchange impacts. Significant operational highlights include a substantial increase in net cash provided by operating activities, driven by working capital improvements, particularly in deferred merchant bookings. The company also noted progress in its global expansion and product innovation strategies. Despite the net loss, the company maintained a strong liquidity position with $4.2 billion in cash and cash equivalents and short-term investments. A major event disclosed is the April 2019 announcement of a merger agreement with Liberty Expedia Holdings, Inc., which is expected to result in former Liberty Expedia Holdings shareholders owning approximately 14% of Expedia Group's outstanding shares.

Financial Highlights

50 data points
Beta

Revenue

$2.61B

80.3% Gross Margin

Net Income

-$103.00M

-3.9% Net Margin

EPS (Diluted)

$-0.69

Total Assets

$20.96B

Cash & Equivalents

$3.71B

Free Cash Flow

$1.88B

Financial Statements
Beta
Revenue$2.61B
Cost of Revenue$513.00M
Gross Profit$2.10B
Operating Income-$131.00M
Interest Expense$41.00M
Net Income-$103.00M
EPS (Basic)$-0.69
EPS (Diluted)$-0.69
Shares Outstanding (Basic)147.88M
Shares Outstanding (Diluted)147.88M

Key Highlights

  • 1Revenue increased by 4% to $2.6 billion in Q1 2019 compared to Q1 2018.
  • 2Net loss attributable to Expedia Group, Inc. narrowed to $103 million ($0.69/share) from $137 million ($0.91/share) year-over-year.
  • 3Net cash provided by operating activities increased significantly by $473 million to $2.15 billion, largely due to improved working capital management, especially deferred merchant bookings.
  • 4Lodging revenue grew 7% year-over-year, driven by a 9% increase in room nights stayed.
  • 5Vrbo segment revenue increased by 14%, supported by a 25% rise in transactional revenue.
  • 6The company announced an agreement to acquire Liberty Expedia Holdings, Inc. in April 2019, signaling a significant corporate restructuring.
  • 7Liquidity remains strong with $4.2 billion in cash, cash equivalents, and restricted cash at the end of the quarter.

Frequently Asked Questions

Expedia Group reported a total revenue of $2.609 billion for the three months ended March 31, 2019, a 4% increase compared to $2.508 billion in the same period of 2018. This growth was primarily driven by increases in the Core OTA and Vrbo segments, partially offset by a decline in trivago's revenue.

Expedia Group narrowed its net loss in the first quarter of 2019. The net loss attributable to Expedia Group, Inc. was $103 million, or $0.69 per share, compared to a net loss of $137 million, or $0.91 per share, in the first quarter of 2018. This improvement was driven by revenue growth outpacing operating cost increases.

In April 2019, Expedia announced an agreement to merge with Liberty Expedia Holdings, Inc. This transaction is a significant corporate event expected to reshape the company's ownership and governance structure. Upon closing, former Liberty Expedia Holdings shareholders are anticipated to own approximately 14% of Expedia Group's outstanding shares. The merger involves complex financial and governance arrangements, including potential exchanges of shares and new governance agreements.

The company demonstrated strong cash flow generation, with net cash provided by operating activities increasing by $473 million to $2.15 billion in Q1 2019. This improvement was largely attributed to favorable changes in working capital, particularly deferred merchant bookings. Expedia maintained a robust liquidity position with $4.2 billion in cash, cash equivalents, and restricted cash, supplemented by an undrawn $2 billion revolving credit facility, indicating ample resources to meet its obligations.