10-QPeriod: Q1 FY2022

Expedia Group, Inc. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 3, 2022For Securities:EXPE

Summary

Expedia Group, Inc. reported strong revenue growth of 81% year-over-year for the first quarter of 2022, reaching $2.25 billion. This significant increase was driven by a robust recovery in the travel industry, with all segments—Retail, B2B, and trivago—experiencing substantial growth. Despite the revenue surge, the company reported a net loss of $123 million for the quarter, an improvement from the $581 million net loss in the prior year period. This loss was influenced by a significant increase in selling and marketing expenses, which rose 102% to $1.34 billion, reflecting the company's investment in capitalizing on the recovering travel demand. Adjusted EBITDA, a key non-GAAP metric, showed a substantial improvement, turning positive at $173 million compared to a negative $58 million in the first quarter of 2021, indicating a healthier operational performance.

Financial Highlights

50 data points
Beta

Revenue

$2.25B

Net Income

-$122.00M

-5.4% Net Margin

EPS (Diluted)

$-0.78

Total Assets

$24.58B

Cash & Equivalents

$5.55B

Free Cash Flow

$2.83B

Financial Statements
Beta
Revenue$2.25B
Operating Income-$135.00M
Interest Expense$81.00M
Net Income-$122.00M
EPS (Basic)$-0.78
EPS (Diluted)$-0.78
Shares Outstanding (Basic)156.34M
Shares Outstanding (Diluted)156.37M

Key Highlights

  • 1Revenue grew by 81% to $2.25 billion in Q1 2022, driven by a strong rebound in travel demand across all segments.
  • 2Net loss improved significantly to $123 million, from $581 million in the prior year period, demonstrating operational recovery.
  • 3Selling and marketing expenses increased by 102% to $1.34 billion, reflecting increased investment in driving bookings amidst recovering demand.
  • 4Adjusted EBITDA turned positive, reaching $173 million compared to a negative $58 million in Q1 2021, highlighting improved core operational profitability.
  • 5Lodging revenue saw a substantial 78% increase, supported by a 52% rise in room nights and a 20% increase in Average Daily Rates (ADR).
  • 6The company redeemed its 2.5% senior notes due in June 2022 for approximately €650 million on March 3, 2022.
  • 7A new $2.5 billion credit facility was established on April 14, 2022, replacing previous credit lines, enhancing financial flexibility.

Frequently Asked Questions

In the first quarter of 2022, Expedia Group, Inc. reported an 81% increase in revenue to $2.25 billion compared to the same period in 2021. Despite this strong revenue growth, the company posted a net loss of $123 million. However, this represents a significant improvement from the $581 million net loss in the first quarter of 2021. Adjusted EBITDA, a key performance indicator, improved substantially to $173 million from a negative $58 million in the prior year, indicating positive operational momentum.

The substantial increase in selling and marketing expenses (102% year-over-year) was primarily driven by the company's strategy to capitalize on the recovering travel demand. Expedia increased its investment in direct costs, including traffic generation from search engines, affiliate programs, and other promotional activities, to drive bookings and revenue growth in the recovering market.

Expedia Group took steps to manage its debt and enhance financial flexibility. Notably, the company redeemed its €650 million of 2.5% senior notes due in June 2022 on March 3, 2022. Furthermore, on April 14, 2022, Expedia entered into a new $2.5 billion revolving credit facility, replacing its previous credit facilities, which provides enhanced liquidity and financial flexibility.

Expedia acknowledges that the COVID-19 pandemic continues to create uncertainty, impacting consumer sentiment, travel restrictions, and supply chain disruptions. While travel trends have improved significantly, the company notes that booking volumes are still below pre-COVID levels and cancellation rates remain slightly elevated. The full duration and impact of COVID-19 remain uncertain, making it difficult to predict the timing and shape of a sustained recovery.