10-QPeriod: Q2 FY2023

Expedia Group, Inc. Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 3, 2023For Securities:EXPE

Summary

Expedia Group, Inc. (EXPE) reported strong financial results for the second quarter and first half of 2023, demonstrating a significant rebound from the previous year. Revenue for the three months ended June 30, 2023, increased by 6% to $3.36 billion, and for the six months ended June 30, 2023, revenue rose by 11% to $6.02 billion. This growth was primarily driven by a robust performance in the B2B segment and a strong increase in lodging revenue, which grew 12% and 18% for the respective periods. The company also reported a substantial increase in operating income, up 28% for the quarter and 53% for the six-month period, reflecting improved revenue generation and operational efficiencies. Net income attributable to Expedia Group, Inc. for the second quarter was $385 million, a significant turnaround from a net loss of $185 million in the prior year period. For the six months, net income was $240 million compared to a net loss of $307 million in the prior year. This profitability improvement was supported by strong Adjusted EBITDA growth, particularly in the B2C and B2B segments, alongside effective cost management. The company continues to invest in technology and product innovation, underscoring its commitment to enhancing traveler experiences and strengthening direct customer relationships.

Financial Highlights

49 data points
Beta

Revenue

$3.36B

Net Income

$385.00M

11.5% Net Margin

EPS (Diluted)

$2.54

Total Assets

$25.68B

Cash & Equivalents

$6.27B

Free Cash Flow

$923.00M

Financial Statements
Beta
Revenue$3.36B
Operating Income$443.00M
Interest Expense$61.00M
Net Income$385.00M
EPS (Basic)$2.62
EPS (Diluted)$2.54
Shares Outstanding (Basic)147.17M
Shares Outstanding (Diluted)151.84M

Key Highlights

  • 1Revenue increased by 6% to $3.36 billion for the three months ended June 30, 2023, and by 11% to $6.02 billion for the six months ended June 30, 2023.
  • 2Net income attributable to Expedia Group, Inc. for the second quarter was $385 million, a substantial improvement from a net loss of $185 million in the prior year period.
  • 3Operating income increased by 28% to $443 million for the quarter and by 53% to $322 million for the six-month period.
  • 4The B2B segment showed strong growth, with revenue increasing by 32% for the quarter and 41% for the six-month period.
  • 5Lodging revenue, a key driver of overall revenue, increased by 12% for the quarter and 18% for the six-month period.
  • 6Adjusted EBITDA grew by 15% to $747 million for the three months ended June 30, 2023, indicating improved operational profitability.
  • 7The company continues to repurchase shares, with $1 billion in repurchases during the first six months of 2023 under an existing authorization.

Frequently Asked Questions

Expedia's revenue growth in the second quarter of 2023 was primarily driven by strong performance in its B2B segment and an increase in lodging revenue. The B2B segment saw a 32% revenue increase, while lodging revenue grew by 12%, reflecting higher room nights stayed.

Expedia has shown a significant improvement in profitability. For the second quarter of 2023, the company reported a net income of $385 million, a substantial turnaround from a net loss of $185 million in the same period last year. Operating income also saw a healthy increase of 28%.

Expedia is evolving its strategy to focus on building direct relationships with customers. This includes investing in loyalty programs, such as the 'One Key' platform launched in July 2023, and allocating more marketing spend towards these initiatives and paid app downloads to foster customer loyalty and engagement.

Expedia is involved in ongoing litigation related to occupancy and other taxes, with a reserve of $46 million established as of June 30, 2023. The company is also subject to transfer pricing audits by tax authorities. While management believes it has strong legal positions, adverse outcomes could potentially impact liquidity. Additionally, there was a significant TripAdvisor tax indemnification adjustment recorded in 'Other, net' for the first half of 2023.