10-QPeriod: Q3 FY2023

Expedia Group, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 3, 2023For Securities:EXPE

Summary

Expedia Group, Inc. reported strong third-quarter 2023 results, with total revenue increasing by 9% to $3.9 billion compared to the prior year period. This growth was primarily driven by a 12% increase in lodging revenue and a significant 26% surge in the B2B segment. Despite an overall increase in revenue, operating income saw a decline of 19% to $607 million, largely attributable to a substantial $297 million goodwill impairment charge related to the trivago segment. Adjusted EBITDA, a key non-GAAP metric, showed a healthy 13% increase to $1.2 billion, indicating underlying operational strength. Financially, Expedia maintained a solid liquidity position with $5.1 billion in cash and cash equivalents and short-term investments as of September 30, 2023, and an undrawn $2.5 billion revolving credit facility. The company actively managed its capital through share repurchases, spending $1.6 billion in the first nine months of 2023, and announced a new $5 billion repurchase program. Investors should note the ongoing legal proceedings concerning occupancy taxes, though management believes these will not have a material adverse effect.

Financial Highlights

49 data points
Beta

Revenue

$3.93B

Net Income

$425.00M

10.8% Net Margin

EPS (Diluted)

$2.87

Total Assets

$22.52B

Cash & Equivalents

$5.06B

Free Cash Flow

-$1.59B

Financial Statements
Beta
Revenue$3.93B
Operating Income$607.00M
Interest Expense$62.00M
Net Income$425.00M
EPS (Basic)$2.98
EPS (Diluted)$2.87
Shares Outstanding (Basic)142.23M
Shares Outstanding (Diluted)147.75M

Key Highlights

  • 1Total revenue increased by 9% year-over-year to $3.9 billion for the third quarter of 2023, driven by strong performance in lodging and B2B segments.
  • 2Operating income decreased by 19% to $607 million, primarily due to a $297 million goodwill impairment charge related to the trivago segment.
  • 3Adjusted EBITDA, a key performance indicator, grew by 13% to $1.2 billion, demonstrating underlying operational profitability.
  • 4The B2B segment showed robust growth, with revenue increasing by 26% year-over-year, indicating successful expansion in this area.
  • 5Expedia maintained a strong liquidity position with $5.1 billion in cash and equivalents and an undrawn credit facility.
  • 6The company repurchased $1.6 billion worth of shares in the first nine months of 2023 and announced a significant $5 billion share repurchase program.
  • 7Despite a favorable legal ruling in Mississippi, ongoing litigation related to occupancy taxes remains a factor to monitor.

Frequently Asked Questions

Expedia's revenue growth in Q3 2023 was primarily driven by a 12% increase in lodging revenue and a substantial 26% increase in revenue from its B2B segment, reflecting strong demand in these areas.

Operating income declined by 19% due to a significant $297 million goodwill impairment charge recognized in the third quarter of 2023, which was related to a strategic shift within the trivago segment.

Expedia is actively managing its capital through share repurchases. The company repurchased $1.6 billion of its common stock in the first nine months of 2023 and has authorized an additional $5 billion share repurchase program, indicating a commitment to returning capital to shareholders.

While Expedia achieved a favorable ruling in Mississippi, litigation regarding occupancy taxes is ongoing in other jurisdictions. However, management believes that the aggregate liability from these proceedings is unlikely to have a material adverse effect on the company's financial results, although they continue to defend their positions vigorously.