10-QPeriod: Q2 FY2024

Expedia Group, Inc. Quarterly Report for Q2 Ended Jun 30, 2024

Filed August 9, 2024For Securities:EXPE

Summary

Expedia Group, Inc. (EXPE) reported its second-quarter 2024 financial results, demonstrating continued revenue growth driven primarily by its B2B segment and lodging services. Total revenue increased by 6% to $3.56 billion for the quarter and by 7% to $6.45 billion for the six-month period ended June 30, 2024. The company's B2B segment showed particularly strong performance, with revenue up 22% year-over-year for the six-month period. Adjusted EBITDA also saw a healthy increase, rising 5% for the quarter and 12% year-to-date, indicating improved operational profitability. Despite an increase in selling and marketing expenses, particularly in direct costs, the company managed operating income growth due to improved revenue margins and disciplined cost management in technology and administrative functions. Expedia also continued its share repurchase program, buying back $1.1 billion in stock during the first half of the year, underscoring its commitment to returning capital to shareholders. The company maintains a strong liquidity position with substantial cash reserves and an undrawn credit facility, positioning it to navigate potential macroeconomic uncertainties and continue strategic investments.

Financial Highlights

50 data points
Beta

Revenue

$3.56B

Net Income

$386.00M

10.8% Net Margin

EPS (Diluted)

$2.80

Total Assets

$25.89B

Cash & Equivalents

$6.24B

Free Cash Flow

$1.31B

Financial Statements
Beta
Revenue$3.56B
Operating Income$451.00M
Net Income$386.00M
EPS (Basic)$2.92
EPS (Diluted)$2.80
Shares Outstanding (Basic)131.95M
Shares Outstanding (Diluted)137.83M

Key Highlights

  • 1Total revenue for the second quarter of 2024 increased by 6% year-over-year to $3.56 billion, driven by strong performance in the B2B segment and lodging services.
  • 2The B2B segment was a key growth driver, with revenue increasing 22% for the first six months of 2024 compared to the same period in 2023.
  • 3Adjusted EBITDA for the second quarter rose 5% to $786 million, and for the first six months increased 12% to $1.04 billion, reflecting improved operational efficiency.
  • 4Selling and marketing - direct expenses increased by 14% for the quarter and 12% for the six-month period, primarily due to higher B2B partner commissions and increased marketing spend at Vrbo.
  • 5The company repurchased $1.1 billion of its common stock in the first six months of 2024 under its $5 billion share repurchase program, demonstrating capital return initiatives.
  • 6Expedia Group maintained a robust liquidity position with $6.3 billion in cash and cash equivalents and short-term investments as of June 30, 2024, and an undrawn $2.5 billion revolving credit facility.

Frequently Asked Questions

Expedia's revenue growth in Q2 2024 was primarily driven by its B2B segment and strong performance in lodging services. The B2B segment saw a significant year-over-year revenue increase of 22% for the first six months of the year. Lodging revenue also grew by 6% for the quarter and 8% for the six-month period.

While direct selling and marketing expenses increased due to higher B2B commissions and Vrbo marketing spend, Expedia managed its overall costs effectively. Decreases in cost of revenue, driven by efficiency initiatives, and reduced general and administrative expenses, stemming from cost-saving measures, helped offset the marketing increases and contributed to operating income growth.

Expedia has an active share repurchase program. In the first six months of 2024, the company repurchased approximately $1.1 billion worth of its common stock. As of June 30, 2024, $3.8 billion remained authorized for future repurchases under the program.

Expedia is involved in several legal proceedings, notably concerning hotel occupancy and other taxes. While the company has reserves for potential settlements and believes it has strong defenses, adverse outcomes in these matters could materially impact its business. Additionally, the company is subject to tax audits and inquiries in various jurisdictions, including potential 'pay-to-play' requirements.