Summary
Expedia Group, Inc. (EXPE) reported a significant downturn in its first quarter of 2020 results, primarily driven by the unprecedented impact of the COVID-19 pandemic on the global travel industry. Revenue declined 15% year-over-year to $2.21 billion, and the company swung to a net loss of $1.30 billion, or $(9.24) per diluted share, compared to a net loss of $100 million in the prior year period. This substantial loss was exacerbated by significant non-cash charges, including $765 million for goodwill impairment and $121 million for intangible asset impairment, both directly attributed to the pandemic's severe impact on travel demand and future revenue expectations. Operationally, gross bookings plummeted by 39% to $17.89 billion, with March 2020 experiencing a net negative in bookings as cancellations outpaced new reservations. The company took proactive measures to strengthen its liquidity position, including drawing down $1.9 billion on its revolving credit facility and securing approximately $1.2 billion in gross proceeds from a private placement of preferred stock and warrants. Expedia Group also suspended share repurchases and quarterly dividends to conserve cash. Despite the severe challenges, management is implementing cost-saving initiatives and adapting cancellation policies to navigate the crisis and position for recovery.
Financial Highlights
50 data points| Revenue | $2.21B |
| Operating Income | -$1.29B |
| Interest Expense | $50.00M |
| Net Income | -$1.30B |
| EPS (Basic) | $-9.24 |
| EPS (Diluted) | $-9.24 |
| Shares Outstanding (Basic) | 140.82M |
| Shares Outstanding (Diluted) | 140.82M |
Key Highlights
- 1COVID-19 pandemic caused a severe decline in travel demand, leading to a 15% year-over-year revenue decrease to $2.21 billion for Q1 2020.
- 2Expedia reported a substantial net loss of $1.30 billion ($9.24 per share) in Q1 2020, a significant deterioration from a $100 million net loss in Q1 2019.
- 3Significant goodwill ($765 million) and intangible asset ($121 million) impairments were recognized in Q1 2020, directly linked to the pandemic's impact on future earnings potential.
- 4Gross bookings fell sharply by 39% year-over-year to $17.89 billion, with March 2020 bookings turning negative due to high cancellation rates.
- 5The company took decisive actions to bolster liquidity, including drawing $1.9 billion on its credit facility and completing a $1.2 billion private placement of preferred stock and warrants.
- 6Share repurchases and quarterly dividends have been suspended to preserve cash during the uncertain economic environment.
- 7Selling and marketing expenses decreased by 20% primarily due to reduced marketing spend in response to declining travel demand caused by COVID-19.