01—Abstract
Summary
Summary of the 10-Q filed November 5, 2020. Cited figures are marked; the original filing is the authoritative source.
Expedia Group, Inc. (EXPE) reported its third-quarter and nine-month results for the period ending September 30, 2020.
The company experienced significant revenue declines year-over-year due to the ongoing impact of the COVID-19 pandemic on the travel industry. Revenue for the third quarter was $1.5 billiona, a 58% decrease from the same period in 2019, while nine-month revenue was $4.3 billion, down 54%. This resulted in a net loss attributable to Expedia Group, Inc. common stockholders of $221 million for the third quarter and $2.3 billion for the nine months.
Despite the challenging environment, Expedia Group took several measures to bolster liquidity and financial flexibility, including suspending share repurchases and quarterly dividends, and raising approximately $1.2 billionb in gross proceeds through a private placement of preferred stock and warrants. The company also issued new senior notes totaling $3.75 billion in the third quarter to enhance its liquidity. The company's operating segments, Retail and B2B, both saw significant revenue declines, with the Retail segment's performance being partially offset by growth in Vrbo.
The trivago segment also experienced a substantial revenue decrease. Management anticipates that the COVID-19 pandemic will continue to impact financial and operating results into 2021.
02—Key points
Key Highlights
- Revenue for Q3 2020 was $1.5 billion, a 58% decrease compared to $3.6 billion in Q3 2019, largely due to the impact of COVID-19 on travel.
- Net loss attributable to common stockholders was $221 million in Q3 2020, compared to a net income of $409 million in Q3 2019.
- Nine-month revenue reached $4.3 billion, a 54% decrease from $9.3 billion in the prior year period, resulting in a net loss attributable to common stockholders of $2.3 billion.
- The company raised approximately $1.2 billion in gross proceeds through a private placement of Series A Preferred Stock and warrants in May 2020 to strengthen liquidity.
- Expedia Group issued new senior notes totaling $3.75 billion in May and July 2020 to bolster its cash position and financial flexibility.
- Significant goodwill and intangible asset impairments totaling $799 million and $172 million, respectively, were recognized for the nine months ended September 30, 2020, primarily due to the impact of COVID-19.
- Operating losses were reported for both the three-month ($113 million) and nine-month ($2.3 billion) periods ended September 30, 2020, a stark contrast to the operating income recorded in the prior year periods.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2020filed November 5, 2020Financial Statements
Q3 FY2020 against Q3 FY2019
| Line item | Q3 FY2020Q3 FY2019 | Change |
|---|---|---|
| Revenue | $1.50B$3.56B | −57.7% |
| Operating Income | -$113.00M$609.00M | −118.6% |
| Interest Expense | $113.00M$40.00M | +182.5% |
| Net Income | -$192.00M$409.00M | −146.9% |
| EPS (Basic) | $-1.56$2.77 | −156.3% |
| EPS (Diluted) | $-1.56$2.71 | −157.6% |
| Shares Outstanding (Basic) | 141.31M147.23M | −4.0% |
| Shares Outstanding (Diluted) | 141.31M150.63M | −6.2% |
05—Questions
Frequently Asked Questions
How has the COVID-19 pandemic impacted Expedia Group's financial performance?
The COVID-19 pandemic has had a significant negative impact on Expedia Group's financial performance. Revenue for the third quarter of 2020 decreased by 58% year-over-year to $1.5 billion, and for the first nine months of 2020, revenue decreased by 54% to $4.3 billion. This resulted in substantial net losses for both periods due to reduced travel demand, government restrictions, and elevated cancellation rates.
What steps has Expedia Group taken to manage its liquidity and financial position during the pandemic?
Expedia Group has taken several proactive steps to preserve financial flexibility and bolster liquidity. These include suspending share repurchases and quarterly dividends, raising approximately $1.2 billion in gross proceeds through a private placement of preferred stock and warrants, and issuing new senior notes totaling $3.75 billion in May and July 2020. The company also has access to a revolving credit facility.
How have the company's different business segments performed?
All segments experienced declines. The Retail segment revenue decreased by 52% in Q3 2020, partially offset by growth at Vrbo. The B2B segment saw a more significant decline of 72% due to slower recovery in corporate travel. The trivago segment's revenue decreased by 71% in Q3 2020 as advertising spend by online travel agencies was reduced.
What is the outlook for Expedia Group given the ongoing pandemic?
Management anticipates that the COVID-19 pandemic will continue to significantly impact the company's financial and operating results into the fourth quarter of 2020 and into 2021. The full duration and total impact remain uncertain, making it difficult to predict the timing and shape of the recovery for the travel industry and Expedia Group's business.
06—Continue