Continued strength in room night growth at
9%
Sequential acceleration in gross bookings
growth to 7%
Raises full-year guidance
Announces Chief Financial Officer
transition
Expedia Group, Inc. (NASDAQ: EXPE) announced financial results
today for the third quarter ended September 30, 2024.
Third Quarter Highlights
- Booked room nights grew 9% compared to 2023, with Brand Expedia
growing at mid-teens.
- Total gross bookings of $27.5 billion grew 7% compared to 2023,
a more than 150 basis point acceleration from the second
quarter.
- B2C gross bookings increased 3% year-over-year, a 2-point
acceleration from the second quarter. B2B had yet another strong
quarter with gross bookings up 19% year-over-year.
- Lodging gross bookings of $20.0 billion grew 8% compared to
2023. Within that, hotel bookings were up 10% compared to
2023.
- Revenue of $4.1 billion grew 3% compared to 2023, which
includes a 2 point negative impact from FX. B2B revenue of $1.2
billion grew 18% compared to 2023.
- Repurchased approximately 12.0 million shares for $1.6 billion
year-to-date.
“Our third quarter results exceeded our expectations on gross
bookings and earnings with revenue landing in-line. We accelerated
bookings growth in our consumer business for the second consecutive
quarter, and our advertising and B2B businesses continue to deliver
strong double-digit growth," said Ariane Gorin, CEO of Expedia
Group.
Expedia Group and Julie Whalen have agreed that she will step
down from her role as Expedia Group’s Chief Financial Officer,
effective upon the appointment of her successor, which is expected
to occur before February 17, 2025. Ms. Whalen has agreed to remain
with the Company through February 17, 2025 to facilitate a smooth
transition. Ms. Whalen has also resigned as a member of the Board
of Directors of the Company, effective today. “I want to thank
Julie for all she has done for Expedia Group as a board member and
as CFO over the last five years. We are grateful for her
contributions,” said Ariane Gorin, CEO of Expedia Group.
Financial Summary & Operating Metrics
(In millions except per share amounts)
Expedia Group, Inc.
Metric
Q3 2024
Q3 2023
Δ Y/Y
Booked room nights
97.4
89.3
9%
Gross bookings
$27,498
$25,685
7%
Revenue
$4,060
$3,929
3%
Operating income
$762
$607
26%
Net income attributable to Expedia Group,
Inc.
$684
$425
61%
Diluted earnings per share
$5.04
$2.87
76%
Adjusted EBITDA*
$1,250
$1,216
3%
Adjusted EBIT*
$892
$903
(1)%
Adjusted net income*
$809
$778
4%
Adjusted EPS*
$6.13
$5.41
13%
Net cash used in operating activities
$(1,493)
$(1,375)
9%
Free cash flow*
$(1,687)
$(1,588)
6%
* A reconciliation of non-GAAP financial measures to the most
comparable GAAP measures is provided at the end of this
release.
Conference Call
Expedia Group, Inc. will webcast a conference call to discuss
third quarter 2024 financial results and certain forward-looking
information on Thursday, November 7, 2024 at 1:30 p.m. Pacific Time
(PT). The webcast will be open to the public and available via
ir.expediagroup.com. Expedia Group expects to maintain access to
the webcast on the IR website for approximately twelve months
subsequent to the initial broadcast.
About Expedia Group
Expedia Group, Inc. brands power travel for everyone, everywhere
through our global platform. Driven by the core belief that travel
is a force for good, we help people experience the world in new
ways and build lasting connections. We provide industry-leading
technology solutions to fuel partner growth and success, while
facilitating memorable experiences for travelers.
Expedia Group’s three flagship consumer brands includes:
Expedia®, Hotels.com®, and Vrbo®. One Key™ is our comprehensive
loyalty program that unifies Expedia, Hotels.com and Vrbo into one
simple, flexible travel rewards experience. To enroll in One Key,
download Expedia, Hotels.com and Vrbo mobile apps for free on iOS
and Android devices. One Key is currently available in the U.S. and
U.K.
© 2024 Expedia, Inc., an Expedia Group company. All rights
reserved. Trademarks and logos are the property of their respective
owners. CST: 2029030-50
Expedia Group, Inc. Trended
Metrics (All figures in millions)
The metrics below are intended to supplement the financial
statements in this release and in our filings with the SEC, and do
not include adjustments for one-time items, acquisitions, foreign
exchange or other adjustments. The definition or methodology of any
of our supplemental metrics are subject to change, and such changes
could be material. We may also discontinue certain supplemental
metrics as our business evolves over time. In the event of any
discrepancy between any supplemental metric and our historical
financial statements, you should rely on the information included
in the financial statements filed with or furnished to the SEC.
2022
2023
2024
Full Year
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2022
2023
Units sold
Booked room nights
77.0
82.5
81.6
70.8
94.5
89.7
89.3
77.4
101.2
98.9
97.4
312.0
350.9
Booked air tickets
13.1
13.5
12.2
11.1
14.0
13.6
12.8
11.4
14.2
14.5
13.8
49.9
51.9
Gross bookings by business model
Agency
$11,346
$12,773
$10,904
$9,469
$13,425
$12,370
$10,927
$9,439
$13,301
$12,578
$11,379
$44,492
$46,161
Merchant
13,066
13,366
13,083
11,042
15,976
14,951
14,758
12,233
16,863
16,259
16,119
50,557
57,918
Total
$24,412
$26,139
$23,987
$20,511
$29,401
$27,321
$25,685
$21,672
$30,164
$28,837
$27,498
$95,049
$104,079
Lodging gross bookings
$17,756
$17,867
$17,099
$14,117
$21,055
$19,167
$18,513
$15,253
$21,903
$20,749
$20,027
$66,839
$73,987
Revenue by segment
B2C
$1,740
$2,420
$2,707
$1,874
$1,921
$2,415
$2,819
$1,958
$1,986
$2,432
$2,780
$8,741
$9,113
B2B
432
650
788
676
668
861
995
864
833
1,049
1,178
2,546
3,388
trivago (third-party revenue)
77
111
124
68
76
82
115
65
70
77
102
380
338
Total
$2,249
$3,181
$3,619
$2,618
$2,665
$3,358
$3,929
$2,887
$2,889
$3,558
$4,060
$11,667
$12,839
Revenue by product
Lodging
$1,610
$2,400
$2,881
$2,014
$2,029
$2,698
$3,233
$2,304
$2,228
$2,862
$3,317
$8,905
$10,264
Air
74
95
100
93
113
111
100
86
115
111
104
362
410
Advertising and media - EG(1)
89
102
98
108
99
119
125
140
145
152
167
397
483
Advertising and media - trivago(1)
77
111
124
68
76
82
115
65
70
77
102
380
338
Other(2)
399
473
416
335
348
348
356
292
331
356
370
1,623
1,344
Total
$2,249
$3,181
$3,619
$2,618
$2,665
$3,358
$3,929
$2,887
$2,889
$3,558
$4,060
$11,667
$12,839
Revenue by geography
U.S. points of sale
$1,656
$2,208
$2,358
$1,717
$1,748
$2,172
$2,440
$1,787
$1,793
$2,246
$2,435
$7,939
$8,147
Non-U.S. points of sale
593
973
1,261
901
917
1,186
1,489
1,100
1,096
1,312
1,625
3,728
4,692
Total
$2,249
$3,181
$3,619
$2,618
$2,665
$3,358
$3,929
$2,887
$2,889
$3,558
$4,060
$11,667
$12,839
Adjusted EBITDA by segment(3)
B2C
$188
$582
$943
$411
$148
$653
$1,056
$468
$215
$654
$1,028
$2,124
$2,325
B2B
80
156
221
142
133
206
266
193
172
263
338
599
798
Other(4)
(95)
(90)
(85)
(104)
(96)
(112)
(106)
(129)
(132)
(131)
(116)
(374)
(443)
Total
$173
$648
$1,079
$449
$185
$747
$1,216
$532
$255
$786
$1,250
$2,349
$2,680
Net income (loss) attributable to Expedia
Group, Inc.(5)
$(122)
$(185)
$482
$177
$(145)
$385
$425
$132
$(135)
$386
$684
$352
$797
(1) Our advertising and media business consists of Expedia Group
("EG") Media Solutions, which is responsible for generating
advertising revenue on our global online travel brands, and
third-party revenue for trivago, a leading hotel metasearch site.
(2) Other revenue primarily includes insurance, car rental,
destination services and cruise revenue. (3) See the section below
titled "Tabular Reconciliations for Non-GAAP Measures — Adjusted
EBITDA by segment" for additional details. (4) Other is comprised
of trivago, corporate and intercompany eliminations. (5) Expedia
Group does not calculate or report net income (loss) by
segment.
Notes:
- All trivago revenue is classified as Non-U.S. point of
sale.
- Some numbers may not add due to rounding. All percentages
throughout this release are calculated on precise, unrounded
numbers.
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except share and
per share data)
(Unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
Revenue
$
4,060
$
3,929
$
10,507
$
9,952
Costs and expenses:
Cost of revenue (exclusive of depreciation
and amortization shown separately below) (1)
388
412
1,108
1,233
Selling and marketing - direct
1,855
1,671
5,298
4,737
Selling and marketing - indirect (1)
197
185
580
563
Technology and content (1)
320
340
992
1,001
General and administrative (1)
229
194
595
572
Depreciation and amortization
211
208
626
599
Impairment of goodwill
—
297
—
297
Impairment of intangible assets
33
15
33
15
Legal reserves, occupancy tax and
other
59
—
100
6
Restructuring and related reorganization
charges (1)
6
—
72
—
Operating income
762
607
1,103
929
Other income (expense):
Interest income
67
56
185
162
Interest expense
(61
)
(62
)
(184
)
(184
)
Other, net
106
(157
)
103
(60
)
Total other income (expense), net
112
(163
)
104
(82
)
Income before income taxes
874
444
1,207
847
Provision for income taxes
(190
)
(139
)
(284
)
(295
)
Net income
684
305
923
552
Net loss attributable to non-controlling
interests
—
120
12
113
Net income attributable to Expedia
Group, Inc.
$
684
$
425
$
935
$
665
Earnings per share attributable to
Expedia Group, Inc. available to common stockholders:
Basic
$
5.28
$
2.98
$
7.07
$
4.51
Diluted
5.04
2.87
6.75
4.37
Shares used in computing earnings per
share (000's):
Basic
129,758
142,228
132,393
147,253
Diluted
135,732
147,748
138,655
152,172
(1) Includes stock-based compensation as
follows:
Cost of revenue
$
3
$
3
$
9
$
10
Selling and marketing
19
20
61
60
Technology and content
40
35
120
105
General and administrative
85
47
167
139
Restructuring and related reorganization
charges
—
—
8
—
EXPEDIA GROUP, INC.
CONSOLIDATED BALANCE
SHEETS
(In millions, except number of
shares which are reflected in thousands and par value)
September 30,
2024
December 31, 2023
September 30,
2023
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
4,722
$
4,225
$
5,056
Restricted cash and cash equivalents
1,324
1,436
1,436
Short-term investments
196
28
—
Accounts receivable, net of allowance of
$60, $46 and $52
3,764
2,786
2,753
Income taxes receivable
68
47
84
Prepaid expenses and other current
assets
758
708
765
Total current assets
10,832
9,230
10,094
Property and equipment, net
2,400
2,359
2,354
Operating lease right-of-use assets
334
357
330
Long-term investments and other assets
1,527
1,238
1,155
Deferred income taxes
514
586
595
Intangible assets, net
947
1,023
1,149
Goodwill
6,851
6,849
6,845
TOTAL ASSETS
$
23,405
$
21,642
$
22,522
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable, merchant
$
1,980
$
2,041
$
1,887
Accounts payable, other
1,178
1,077
1,130
Deferred merchant bookings
9,413
7,723
8,394
Deferred revenue
173
164
167
Income taxes payable
114
26
108
Accrued expenses and other current
liabilities
887
752
874
Current maturities of long-term debt
1,042
—
—
Total current liabilities
14,787
11,783
12,560
Long-term debt, excluding current
maturities
5,221
6,253
6,250
Deferred income taxes
34
33
34
Operating lease liabilities
291
314
288
Other long-term liabilities
506
473
464
Commitments and contingencies
Stockholders’ equity:
Common stock: $.0001 par value; Authorized
shares: 1,600,000
—
—
—
Shares issued: 286,437, 282,149 and
280,957; Shares outstanding: 123,316, 131,522 and 134,331
Class B common stock: $.0001 par value;
Authorized shares: 400,000
—
—
—
Shares issued: 12,800; Shares outstanding:
5,523
Additional paid-in capital
15,890
15,398
15,227
Treasury stock - Common stock and Class B,
at cost; Shares 170,397, 157,903 and 153,903
(14,677
)
(13,023
)
(12,550
)
Retained earnings (deficit)
303
(632
)
(764
)
Accumulated other comprehensive income
(loss)
(194
)
(209
)
(240
)
Total Expedia Group, Inc. stockholders’
equity
1,322
1,534
1,673
Non-redeemable non-controlling
interests
1,244
1,252
1,253
Total stockholders’ equity
2,566
2,786
2,926
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
23,405
$
21,642
$
22,522
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
Nine months ended
September 30,
2024
2023
Operating activities:
Net income
$
923
$
552
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of property and equipment,
including internal-use software and website development
582
555
Amortization of intangible assets
44
44
Impairment of goodwill and intangible
assets
33
312
Amortization of stock-based
compensation
365
314
Deferred income taxes
66
49
Foreign exchange (gain) loss on cash,
restricted cash and short-term investments, net
—
32
Realized (gain) loss on foreign currency
forwards, net
(21
)
35
(Gain) loss on minority equity
investments, net
(121
)
73
Other, net
69
34
Changes in operating assets and
liabilities:
Accounts receivable
(1,007
)
(704
)
Prepaid expenses and other assets
(19
)
43
Accounts payable, merchant
(61
)
178
Accounts payable, other, accrued expenses
and other liabilities
235
223
Tax payable/receivable, net
109
(55
)
Deferred merchant bookings
1,690
1,243
Net cash provided by operating
activities
2,887
2,928
Investing activities:
Capital expenditures, including
internal-use software and website development
(565
)
(669
)
Purchases of investments
(405
)
—
Sales and maturities of investments
43
49
Other, net
26
(15
)
Net cash used in investing
activities
(901
)
(635
)
Financing activities:
Purchases of treasury stock
(1,641
)
(1,669
)
Proceeds from exercise of equity awards
and employee stock purchase plan
77
53
Other, net
(26
)
17
Net cash used in financing
activities
(1,590
)
(1,599
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash and cash equivalents
(11
)
(53
)
Net increase in cash, cash equivalents
and restricted cash and cash equivalents
385
641
Cash, cash equivalents and restricted cash
and cash equivalents at beginning of period
5,661
5,851
Cash, cash equivalents and restricted
cash and cash equivalents at end of period
$
6,046
$
6,492
Supplemental cash flow
information
Cash paid for interest
$
197
$
197
Income tax payments, net
97
228
Notes & Definitions:
Booked Room Nights: Represents
booked hotel room nights and property nights for our B2C reportable
segment and booked hotel room nights for our B2B reportable
segment. Booked hotel room nights include both merchant and agency
hotel room nights. Property nights are related to our alternative
accommodation business.
Booked Air Tickets: Includes both
merchant and agency air bookings.
Gross Bookings: Generally represent
the total retail value of transactions booked, recorded at the time
of booking reflecting the total price due for travel by travelers,
including taxes, fees and other charges, adjusted for cancellations
and refunds.
Lodging Metrics: Reported on a
booked basis except for revenue, which is on a stayed basis.
Lodging consists of both merchant and agency model hotel and
alternative accommodations.
B2C: The B2C segment provides a
full range of travel and advertising services to our worldwide
customers through a variety of consumer brands including: Expedia,
Hotels.com, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers,
Hotwire.com, and CarRentals.com.
B2B: The B2B segment fuels a wide
range of travel and non-travel companies including airlines,
offline travel agents, online retailers, corporate travel
management and financial institutions, who leverage our leading
travel technology and tap into our diverse supply to augment their
offerings and market Expedia Group rates and availabilities to
their travelers.
trivago: The trivago segment
generates advertising revenue primarily from sending referrals to
online travel companies and travel service providers from its
localized hotel metasearch websites.
Corporate: Includes unallocated
corporate expenses.
Non-GAAP Measures
Expedia Group reports Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted EBIT, Adjusted EBIT Margin, Leverage Ratio, Adjusted Net
Income (Loss), Adjusted EPS, Free Cash Flow and Adjusted Expenses
(non-GAAP cost of revenue, non-GAAP selling and marketing, non-GAAP
technology and content and non-GAAP general and administrative),
all of which are supplemental measures to GAAP and are defined by
the SEC as non-GAAP financial measures. These measures are among
the primary metrics by which management evaluates the performance
of the business and on which internal budgets are based. Management
believes that investors should have access to the same set of tools
that management uses to analyze our results. These non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for
or superior to GAAP. Adjusted EBITDA, Adjusted Net Income (Loss)
and Adjusted EPS have certain limitations in that they do not take
into account the impact of certain expenses to our consolidated
statements of operations. We endeavor to compensate for the
limitation of the non-GAAP measures presented by also providing the
most directly comparable GAAP measures and descriptions of the
reconciling items and adjustments to derive the non-GAAP measures.
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income (Loss) and
Adjusted EPS also exclude certain items related to transactional
tax matters, which may ultimately be settled in cash. We urge
investors to review the detailed disclosure regarding these matters
in the Management Discussion and Analysis and Legal Proceedings
sections, as well as the notes to the financial statements,
included in the Company's annual and quarterly reports filed with
the Securities and Exchange Commission. The non-GAAP financial
measures used by the Company may be calculated differently from,
and therefore may not be comparable to, similarly titled measures
used by other companies.
Adjusted EBITDA is defined as net
income (loss) attributable to Expedia Group adjusted for: (1) net
income (loss) attributable to non-controlling interests; (2)
provision for income taxes; (3) total other expenses, net; (4)
stock-based compensation expense, including compensation expense
related to certain subsidiary equity plans; (5) acquisition-related
impacts, including
(i) amortization of intangible assets and
goodwill and intangible asset impairment, (ii) gains (losses)
recognized on changes in the value of contingent consideration
arrangements; and (iii) upfront consideration paid to settle
employee compensation plans of the acquiree;
(6) certain other items, including restructuring; (7) items
included in legal reserves, occupancy tax and other, which includes
reserves for potential settlement of issues related to
transactional taxes (e.g. hotel and excise taxes), related to court
decisions and final settlements, and charges incurred, if any, for
monies that may be required to be paid in advance of litigation in
certain transactional tax proceedings; (8) that portion of gains
(losses) on revenue hedging activities that are included in other,
net that relate to revenue recognized in the period; and (9)
depreciation.
The above items are excluded from our Adjusted EBITDA measure
because these items are non-cash in nature, or because the amount
and timing of these items is unpredictable, not driven by core
operating results and renders comparisons with prior periods and
competitors less meaningful. We believe Adjusted EBITDA is a useful
measure for analysts and investors to evaluate our future on-going
performance as this measure allows a more meaningful comparison of
our performance and projected cash earnings with our historical
results from prior periods and to the results of our competitors.
Moreover, our management uses this measure internally to evaluate
the performance of our business as a whole and our individual
business segments. In addition, we believe that by excluding
certain items, such as stock-based compensation and
acquisition-related impacts, Adjusted EBITDA corresponds more
closely to the cash operating income generated from our business
and allows investors to gain an understanding of the factors and
trends affecting the ongoing cash earnings capabilities of our
business, from which capital investments are made and debt is
serviced.
Adjusted EBIT is defined as net
income (loss) attributable to Expedia Group adjusted for: (1) net
income (loss) attributable to non-controlling interests; (2)
provision for income taxes; (3) total other expenses, net; (4)
acquisition-related impacts, including
(i) goodwill and intangible asset impairment,
(ii) gains (losses) recognized on changes in the value of
contingent consideration arrangements; and (iii) upfront
consideration paid to settle employee compensation plans of the
acquiree;
(5) certain other items, including restructuring; (6) items
included in legal reserves, occupancy tax and other, which includes
reserves for potential settlement of issues related to
transactional taxes (e.g. hotel and excise taxes), related to court
decisions and final settlements, and charges incurred, if any, for
monies that may be required to be paid in advance of litigation in
certain transactional tax proceedings; and (7) that portion of
gains (losses) on revenue hedging activities that are included in
other, net that relate to revenue recognized in the period.
The above items are excluded from our Adjusted EBIT measure
because the amount and timing of these items is unpredictable, not
driven by core operating results and renders comparisons with prior
periods and competitors less meaningful. We believe Adjusted EBIT
is a useful measure for analysts and investors to evaluate our
future on-going performance as this measure allows a more
comprehensive comparison of our performance with our historical
results from prior periods and to the results of our competitors.
Moreover, our management uses this measure internally to evaluate
the performance of our business as a whole and it allows investors
to gain an understanding of the factors and trends affecting
profitability, including the ongoing costs to operating our
business, which we believe are inclusive of non-cash items such as
stock-based compensation.
Trailing Twelve Month Financial
Information
Expedia Group includes certain unaudited financial information
for the trailing twelve months ("TTM") ended September 30, 2024,
which is calculated as the nine months ended September 30, 2024
plus the year ended December 31, 2023 less the nine months ended
September 30, 2023. This presentation is not in accordance with
GAAP. However, we believe that this presentation provides useful
information to investors regarding its recent financial
performance, and it views this presentation of the four most
recently completed fiscal quarters as a key measurement period for
investors to assess its historical results.
Adjusted Net Income (Loss)
generally captures all items on the statements of operations that
occur in normal course operations and have been, or ultimately will
be, settled in cash and is defined as net income (loss)
attributable to Expedia Group plus the following items, net of
tax(a): (1) stock-based compensation expense, including
compensation expense related to equity plans of certain
subsidiaries and equity-method investments; (2) acquisition-related
impacts, including;
(i) amortization of intangible assets,
including as part of equity-method investments, and goodwill and
intangible asset impairment; (ii) gains (losses) recognized on
changes in the value of contingent consideration arrangements;
(iii) upfront consideration paid to settle employee compensation
plans of the acquiree; and (iv) gains (losses) recognized on
non-controlling investment basis adjustments when we acquire or
lose controlling interests;
(3) currency gains or losses on U.S. dollar denominated cash;
(4) the changes in fair value of equity investments; (5) certain
other items, including restructuring charges; (6) items included in
legal reserves, occupancy tax and other, which includes reserves
for potential settlement of issues related to transactional taxes
(e.g., hotel occupancy and excise taxes), related court decisions
and final settlements, and charges incurred, if any, for monies
that may be required to be paid in advance of litigation in certain
transactional tax proceedings, including as part of equity method
investments; (7) discontinued operations; (8) the non-controlling
interest impact of the aforementioned adjustment items; and (9)
unrealized gains (losses) on revenue hedging activities that are
included in other, net.
Adjusted Net Income (Loss) includes preferred share dividends.
We believe Adjusted Net Income (Loss) is useful to investors
because it represents Expedia Group's combined results, taking into
account depreciation, which management believes is an ongoing cost
of doing business, but excluding the impact of certain expenses and
items not directly tied to the core operations of our
businesses.
(a) Effective January 1, 2023, we changed our methodology for
the computation of the effective tax rate used in the calculation
of adjusted net income to a long-term projected tax rate as we
believe this tax rate provides better consistency across reporting
periods and produces results that are reflective of Expedia Group’s
long-term effective tax rate. This projected effective tax rate is
a total tax rate, and eliminates the effects of non-recurring and
period- specific income tax items which can vary in size and
frequency. We apply this tax rate to pretax income, as adjusted
commensurate with our Adjusted Net Income definition. Based on our
long-term projections, in 2023 and 2024 we are applying a 21.5%
effective tax rate to compute Adjusted Net Income.
Adjusted EPS is defined as Adjusted
Net Income (Loss) divided by adjusted weighted average shares
outstanding, which, when applicable, include dilution from our
convertible debt instruments per the treasury stock method for
Adjusted EPS. The treasury stock method assumes we would elect to
settle the principal amount of the debt for cash and the conversion
premium for shares. If the conversion prices for such instruments
exceed our average stock price for the period, the instruments
generally would have no impact to adjusted weighted average shares
outstanding. This differs from the GAAP method for dilution from
our convertible debt instruments, which include them on an
if-converted method. We believe Adjusted EPS is useful to investors
because it represents, on a per share basis, Expedia Group's
consolidated results, taking into account depreciation, which we
believe is an ongoing cost of doing business, as well as other
items which are not allocated to the operating businesses such as
interest expense, taxes, foreign exchange gains or losses, and
minority interest, but excluding the effects of certain expenses
not directly tied to the core operations of our businesses.
Adjusted Net Income (Loss) and Adjusted EPS have similar
limitations as Adjusted EBITDA. In addition, Adjusted Net Income
(Loss) does not include all items that affect our net income (loss)
and net income (loss) per share for the period. Therefore, we think
it is important to evaluate these measures along with our
consolidated statements of operations.
Free Cash Flow is defined as net
cash flow provided by operating activities less capital
expenditures. Management believes Free Cash Flow is useful to
investors because it represents the operating cash flow that our
operating businesses generate, less capital expenditures but before
taking into account other cash movements that are not directly tied
to the core operations of our businesses, such as financing
activities, foreign exchange or certain investing activities. Free
Cash Flow has certain limitations in that it does not represent the
total increase or decrease in the cash balance for the period, nor
does it represent the residual cash flow for discretionary
expenditures. Therefore, it is important to evaluate Free Cash Flow
along with the consolidated statements of cash flows.
Adjusted Expenses (cost of revenue, direct
and indirect selling and marketing, technology and content and
general and administrative expenses) exclude stock-based
compensation related to expenses for stock options, restricted
stock units and other equity compensation under applicable
stock-based compensation accounting standards. Expedia Group
excludes stock-based compensation from these measures primarily
because they are non-cash expenses that we do not believe are
necessarily reflective of our ongoing cash operating expenses and
cash operating income. Moreover, because of varying available
valuation methodologies, subjective assumptions and the variety of
award types that companies can use when adopting applicable
stock-based compensation accounting standards, management believes
that providing non-GAAP financial measures that exclude stock-based
compensation allows investors to make meaningful comparisons
between our recurring core business operating results and those of
other companies, as well as providing management with an important
tool for financial operational decision making and for evaluating
our own recurring core business operating results over different
periods of time. There are certain limitations in using financial
measures that do not take into account stock-based compensation,
including the fact that stock-based compensation is a recurring
expense and a valued part of employees' compensation. Therefore, it
is important to evaluate both our GAAP and non-GAAP measures. See
the Notes to the Consolidated Statements of Operations for
stock-based compensation by line item.
Expedia Group, Inc. (excluding
trivago) In order to provide increased transparency on the
transaction-based component of the business, Expedia Group is
reporting results both in total and excluding trivago.
Tabular Reconciliations for Non-GAAP Measures
Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes,
Depreciation & Amortization) by Segment(1)
Three months ended September
30, 2024
B2C
B2B
trivago
Corporate &
Eliminations
Total
(In millions)
Operating income
$
879
$
285
$
13
$
(415
)
$
762
Realized gain (loss) on revenue hedges
16
16
—
—
32
Restructuring and related reorganization
charges, excluding stock-based compensation
—
—
—
6
6
Legal reserves, occupancy tax and
other
—
—
—
59
59
Stock-based compensation
—
—
—
147
147
Amortization of intangible assets
—
—
—
14
14
Depreciation
133
37
1
26
197
Impairment of intangible assets
—
—
—
33
33
Adjusted EBITDA(1)
$
1,028
$
338
$
14
$
(130
)
$
1,250
Three months ended September
30, 2023
B2C
B2B
trivago
Corporate &
Eliminations
Total
(In millions)
Operating income
$
935
$
237
$
16
$
(581
)
$
607
Realized gain (loss) on revenue hedges
(16
)
—
—
—
(16
)
Stock-based compensation
—
—
—
105
105
Amortization of intangible assets
—
—
—
14
14
Depreciation
137
29
2
26
194
Impairment of goodwill
—
—
—
297
297
Impairment of intangible assets
—
—
—
15
15
Adjusted EBITDA(1)
$
1,056
$
266
$
18
$
(124
)
$
1,216
(1) Adjusted EBITDA for our B2C and B2B segments includes
allocations of certain expenses, primarily cost of revenue and
facilities, the total costs of our global travel supply
organizations, the majority of platform and marketplace technology
costs, and the realized foreign currency gains or losses related to
the forward contracts hedging a component of our net merchant
lodging revenue. We base the allocations primarily on transaction
volumes and other usage metrics. We do not allocate certain shared
expenses such as accounting, human resources, certain information
technology and legal to our reportable segments. We include these
expenses in Corporate and Eliminations. Our allocation methodology
is periodically evaluated and may change.
Adjusted EBIT (Adjusted Earnings Before Interest & Taxes)
and Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes,
Depreciation & Amortization)
Three months ended
September 30,
Nine months ended
September 30,
Year Ended December
31,
TTM
September 30,
2024
2023
2024
2023
2023
2024
($ in millions)
Net income attributable to Expedia Group,
Inc.
$
684
$
425
$
935
$
665
$
797
$
1,067
Net loss attributable to non-controlling
interests
—
(120
)
(12
)
(113
)
(109
)
(8
)
Provision for income taxes
190
139
284
295
330
319
Total other (income) expense, net
(112
)
163
(104
)
82
15
(171
)
Operating income
762
607
1,103
929
1,033
1,207
Gain (loss) on revenue hedges related to
revenue recognized
32
(16
)
—
(12
)
(7
)
5
Restructuring and related reorganization
charges, including stock-based compensation
6
—
72
—
—
72
Legal reserves, occupancy tax and
other
59
—
100
6
8
102
Impairment of goodwill
—
297
—
297
297
—
Impairment of intangible assets
33
15
33
15
129
147
Adjusted EBIT(1)
892
903
1,308
1,235
1,460
1,533
Stock-based compensation, excluding
restructuring and related reorganization charges(1)
147
105
357
314
413
456
Depreciation and amortization
211
208
626
599
807
834
Adjusted EBITDA
$
1,250
$
1,216
$
2,291
$
2,148
$
2,680
$
2,823
Net income margin(2)
16.9
%
10.8
%
8.9
%
6.7
%
6.2
%
8.0
%
Adjusted EBIT margin(1)(2)
22.0
%
23.0
%
12.4
%
12.4
%
11.4
%
11.4
%
Adjusted EBITDA margin(2)
30.8
%
30.9
%
21.8
%
21.6
%
20.9
%
21.1
%
Long-term debt, including current
maturities
$
6,263
Long-term debt to net income ratio
5.9
Long-term debt, including current
maturities
$
6,263
Unamortized discounts and debt issuance
costs
31
Adjusted debt
$
6,294
Leverage ratio(3)
2.2
(1) Includes approximately $51 million of accelerated
stock-compensation expense related to the recent departure of our
Vice Chairman. (2) Net income, Adjusted EBIT and Adjusted EBITDA
margins represent net income (loss) attributable to Expedia Group,
Inc., Adjusted EBIT or Adjusted EBITDA divided by revenue. (3)
Leverage ratio represents adjusted debt divided by TTM Adjusted
EBITDA.
Adjusted Net Income (Loss) & Adjusted EPS
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
(In millions, except share and
per share data)
Net income attributable to Expedia
Group, Inc.
$
684
$
425
$
935
$
665
Less: Net loss attributable to
non-controlling interests
—
120
12
113
Less: Provision for income taxes
(190
)
(139
)
(284
)
(295
)
Income before income taxes
874
444
1,207
847
Amortization of intangible assets
14
14
44
44
Stock-based compensation
147
105
365
314
Legal reserves, occupancy tax and
other
59
—
100
6
Restructuring and related reorganization
charges, excluding stock-based compensation
6
—
64
—
Impairment of goodwill
—
297
—
297
Impairment of intangible assets
33
15
33
15
Unrealized (gain) loss on revenue
hedges
(13
)
(4
)
(16
)
11
(Gain) loss on minority equity
investments, net
(74
)
127
(121
)
73
TripAdvisor tax indemnification
adjustment
—
—
(6
)
(67
)
Gain on sale of businesses and cost
investments
(2
)
—
(5
)
(24
)
Adjusted income before income taxes
1,044
998
1,665
1,516
GAAP Provision for income taxes
(190
)
(139
)
(284
)
(295
)
Provision for income taxes for
adjustments
(34
)
(76
)
(74
)
(31
)
Total Adjusted provision for income
taxes
(224
)
(215
)
(358
)
(326
)
Total Adjusted income tax rate
21.5
%
21.5
%
21.5
%
21.5
%
Non-controlling interests
(11
)
(5
)
—
(14
)
Adjusted net income attributable to
Expedia Group, Inc.
$
809
$
778
$
1,307
$
1,176
GAAP diluted earnings per share
$
5.04
$
2.87
$
6.75
$
4.37
Amortization of intangible assets
0.10
0.10
0.33
0.30
Stock-based compensation
1.11
0.73
2.71
2.11
Legal reserves, occupancy tax and
other
0.45
—
0.74
0.04
Restructuring and related reorganization
charges
0.04
—
0.48
—
Impairment of goodwill
—
2.06
—
2.00
Impairment of intangible assets
0.25
0.10
0.25
0.10
Unrealized (gain) loss on revenue
hedges
(0.10
)
(0.03
)
(0.12
)
0.08
(Gain) loss on minority equity
investments, net
(0.56
)
0.89
(0.90
)
0.49
TripAdvisor tax indemnification
adjustment
—
—
(0.05
)
(0.45
)
Gain on sale of businesses and cost
investments
(0.01
)
—
(0.04
)
(0.16
)
Income tax effects and adjustments
(0.26
)
(0.53
)
(0.55
)
(0.21
)
Non-controlling interest
(0.08
)
(0.87
)
(0.09
)
(0.86
)
Adjustment to GAAP dilutive securities
(1)
0.15
0.08
0.20
0.12
Adjusted earnings per share(2)
$
6.13
$
5.41
$
9.70
$
7.93
GAAP diluted weighted average shares
outstanding (000's)
135,732
147,748
138,655
152,172
Adjustment to dilutive securities
(000's)(1)
(3,921
)
(3,921
)
(3,921
)
(3,921
)
Adjusted weighted average shares
outstanding (000's) (2)
131,811
143,827
134,734
148,251
Ex-trivago Adjusted Net Income and
Adjusted EPS
Adjusted net income attributable to
Expedia Group, Inc.
$
809
$
778
$
1,307
$
1,176
Less: Adjusted net income (loss)
attributable to trivago
—
9
(1
)
25
Adjusted net income excluding trivago
$
809
$
769
$
1,308
$
1,151
Adjusted earnings per share
$
6.13
$
5.41
$
9.70
$
7.93
Less: Adjusted earnings per (loss) share
attributable to trivago
—
0.06
(0.01
)
0.17
Adjusted earnings per share excluding
trivago(2)
$
6.13
$
5.35
$
9.71
$
7.76
(1) In periods for which we have Adjusted net income, the GAAP
diluted average shares and diluted earnings (loss) per share is
presented adjusted for our convertible debt instruments per the
treasury stock method. (2) Share and per share numbers may not add
due to rounding.
Free Cash Flow
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
(In millions)
Net cash provided by operating
activities
$
(1,493
)
$
(1,375
)
$
2,887
$
2,928
Less: Total capital expenditures
(194
)
(213
)
(565
)
(669
)
Free cash flow
$
(1,687
)
$
(1,588
)
$
2,322
$
2,259
Adjusted Expenses (Cost of revenue, direct and indirect selling
and marketing, technology and content and general and
administrative expenses)
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
(In millions)
Cost of revenue
$
388
$
412
$
1,108
$
1,233
Less: stock-based compensation
3
3
9
10
Adjusted cost of revenue
$
385
$
409
$
1,099
$
1,223
Less: trivago cost of revenue(1)
5
5
13
14
Adjusted cost of revenue excluding
trivago
$
380
$
404
$
1,086
$
1,209
Selling and marketing - direct
$
1,855
$
1,671
$
5,298
$
4,737
Less: trivago selling and marketing -
direct(2)
62
71
169
141
Adjusted selling and marketing excluding
trivago - direct
$
1,793
$
1,600
$
5,129
$
4,596
Selling and marketing - indirect
$
197
$
185
580
563
Less: stock-based compensation
19
20
61
60
Adjusted selling and marketing -
indirect
$
178
$
165
$
519
$
503
Less: trivago selling and marketing -
indirect(1)
3
3
8
8
Adjusted selling and marketing excluding
trivago - indirect
$
175
$
162
$
511
$
495
Technology and content
$
320
$
340
$
992
$
1,001
Less: stock-based compensation
40
35
120
105
Adjusted technology and content
$
280
$
305
$
872
$
896
Less: trivago technology and
content(1)
11
11
35
34
Adjusted technology and content excluding
trivago
$
269
$
294
$
837
$
862
General and administrative
$
229
$
194
$
595
$
572
Less: stock-based compensation
85
47
167
139
Adjusted general and administrative
$
144
$
147
$
428
$
433
Less: trivago general and
administrative(1)
6
7
23
24
Adjusted general and administrative
excluding trivago
$
138
$
140
$
405
$
409
Total adjusted overhead expenses(3)
$
602
$
617
$
1,819
$
1,832
Note: Some numbers may not add due to rounding.
(1) trivago amount presented without stock-based compensation as
those are included with the consolidated totals above. (2) Selling
and marketing expense adjusted to add back B2C direct marketing
spend on trivago eliminated in consolidation. (3) Total adjusted
overhead expenses is the sum of adjusted expenses for Selling and
marketing - indirect, Technology and content, and General and
administrative.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This release may contain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties. These forward-looking
statements are based on assumptions that are inherently subject to
uncertainties, risks and changes in circumstances that are
difficult to predict. The use of words such as “believe,”
“estimate,” “expect” and “will,” or the negative of these terms or
other similar expressions, among others, generally identify
forward-looking statements. However, these words are not the
exclusive means of identifying such statements. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances are
forward-looking statements and may include statements relating to
future revenues, expenses, margins, profitability, net income
(loss), earnings per share and other measures of results of
operations and the prospects for future growth of Expedia Group,
Inc.’s business. Actual results may differ materially from the
results predicted and reported results should not be considered as
an indication of future performance. The potential risks and
uncertainties that could cause actual results to differ from the
results predicted include, among others, those described in the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of our most
recently filed periodic reports on Form 10-K and Form 10-Q, which
are available on our investor relations website at
ir.expediagroup.com and on the SEC website at www.sec.gov. All
information provided in this release is as of November 7, 2024.
Undue reliance should not be placed on forward-looking statements
in this release, which are based on information available to us on
the date hereof. We undertake no duty to update this information
unless required by law.
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Investor Relations ir@expediagroup.com
Communications press@expediagroup.com
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