Delaware | 001-37429 | 20-2705720 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
Emerging growth company ☐ | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common stock, $0.0001 par value | EXPE | The Nasdaq Global Select Market |
Expedia Group, Inc. 2.500% Senior Notes due 2022 | EXPE22 | New York Stock Exchange |
Exhibit Number | Description | |
EXPEDIA GROUP, INC. | ||
By: | /s/ ALAN PICKERILL | |
Alan Pickerill | ||
Chief Financial Officer |
• | Gross bookings increased $2.4 billion or 9% to $28.3 billion. Revenue increased 9% to $3.2 billion. Core OTA gross bookings increased 11% and revenue increased 10%. |
• | Net income increased $182 million(2) and Adjusted EBITDA grew $105 million or 23%. Diluted EPS increased $1.20(2) and Adjusted EPS grew $0.39 or 29%. |
• | Total stayed lodging room nights increased 12% and Vrbo stayed property nights grew 8%. |
• | Expedia Group's core lodging platform included nearly 1.3 million properties available as of June 30, 2019, including approximately 570,000 integrated Vrbo listings. |
• | Year-to-date net cash provided by operating activities and free cash flow grew 32% and 31%, respectively. |
Expedia Group (excluding trivago)(4) | Expedia Group, Inc. | |||||
Metric | Q2 2019 | Q2 2018 | Δ Y/Y | Q2 2019 | Q2 2018 | Δ Y/Y |
Room night growth | 12% | 12% | (54) bps | 12% | 12% | (54) bps |
Gross bookings | $28,292 | $25,898 | 9% | $28,292 | $25,898 | 9% |
Revenue | 2,990 | 2,706 | 10% | 3,153 | 2,880 | 9% |
Operating income | 254 | 142 | 79% | 265 | 111 | 138% |
Net income attributable to Expedia Group | 183 | 1 | NM | |||
Diluted earnings per share | $1.21 | $0.01 | NM | |||
Adjusted EBITDA(3) | 548 | 483 | 14% | 568 | 463 | 23% |
Adjusted net income(3) | 274 | 224 | 22% | 276 | 213 | 29% |
Adjusted EPS(3) | $1.76 | $1.45 | 22% | $1.77 | $1.38 | 29% |
Free cash flow(3) | 839 | 596 | 41% |
Gross Bookings | Revenue | |||||||||||||||||||
Second Quarter | Second Quarter | |||||||||||||||||||
2019 | 2018 | Δ% | 2019 | 2018 | Δ% | |||||||||||||||
Core OTA | $ | 23,305 | $ | 21,011 | 11% | $ | 2,480 | $ | 2,253 | 10% | ||||||||||
Vrbo | 2,862 | 2,814 | 2% | 347 | 297 | 17% | ||||||||||||||
Egencia | 2,125 | 2,073 | 3% | 163 | 156 | 4% | ||||||||||||||
Expedia Group (excluding trivago) | $ | 28,292 | $ | 25,898 | 9% | $ | 2,990 | $ | 2,706 | 10% | ||||||||||
trivago | — | — | —% | 251 | 280 | (10)% | ||||||||||||||
Intercompany eliminations | — | — | —% | (88 | ) | (106 | ) | 17% | ||||||||||||
Total | $ | 28,292 | $ | 25,898 | 9% | $ | 3,153 | $ | 2,880 | 9% |
Costs and Expenses | As a % of Revenue | |||||||||||||||||||
Second Quarter | Second Quarter | |||||||||||||||||||
2019 | 2018 | Δ% | 2019 | 2018 | Δ (bps) | |||||||||||||||
Generally Accepted Accounting Principles (GAAP) Expenses - Expedia Group | ||||||||||||||||||||
Cost of revenue | $ | 522 | $ | 498 | 5 | % | 16.6 | % | 17.3 | % | (72 | ) | ||||||||
Selling and marketing | 1,657 | 1,541 | 8 | % | 52.6 | % | 53.5 | % | (96 | ) | ||||||||||
Technology and content | 435 | 400 | 9 | % | 13.8 | % | 13.9 | % | (9 | ) | ||||||||||
General and administrative | 214 | 196 | 9 | % | 6.8 | % | 6.8 | % | (2 | ) | ||||||||||
Total GAAP costs and expenses | $ | 2,828 | $ | 2,635 | 7 | % | 89.7 | % | 91.5 | % | (179 | ) | ||||||||
Adjusted Expenses - Expedia Group | ||||||||||||||||||||
Cost of revenue* | $ | 497 | $ | 469 | 6 | % | 15.8 | % | 16.3 | % | (53 | ) | ||||||||
Selling and marketing* | 1,631 | 1,518 | 7 | % | 51.7 | % | 52.7 | % | (98 | ) | ||||||||||
Technology and content | 285 | 260 | 9 | % | 9.0 | % | 9.0 | % | (2 | ) | ||||||||||
General and administrative* | 180 | 169 | 7 | % | 5.7 | % | 5.9 | % | (15 | ) | ||||||||||
Total adjusted costs and expenses | $ | 2,593 | $ | 2,416 | 7 | % | 82.2 | % | 83.9 | % | (167 | ) | ||||||||
Adjusted Expenses - Expedia Group (excluding trivago)** | ||||||||||||||||||||
Cost of revenue* | $ | 495 | $ | 468 | 6 | % | 16.5 | % | 17.3 | % | (77 | ) | ||||||||
Selling and marketing* | 1,517 | 1,354 | 12 | % | 50.7 | % | 50.0 | % | 70 | |||||||||||
Technology and content | 269 | 244 | 10 | % | 8.9 | % | 9.0 | % | (6 | ) | ||||||||||
General and administrative* | 170 | 156 | 9 | % | 5.7 | % | 5.8 | % | (8 | ) | ||||||||||
Total adjusted costs and expenses excluding trivago | $ | 2,451 | $ | 2,222 | 10 | % | 81.9 | % | 82.1 | % | (20 | ) |
• | For the second quarter of 2019, total GAAP and adjusted cost of revenue increased 5% and 6%, respectively, compared to the second quarter of 2018, primarily due to an increase in cloud expense. Cloud expense in cost of revenue was $37 million during the second quarter of 2019 compared to $22 million in the second quarter of 2018. |
• | For the second quarter of 2019, total GAAP and adjusted selling and marketing expense increased 8% and 7%, respectively, compared to the second quarter of 2018, primarily due to a $118 million increase in direct costs partly offset by a decrease in indirect costs. Indirect costs represented 17% of total GAAP selling and marketing costs and 15% of total adjusted selling and marketing expense in the second quarter of 2019 compared to 18% and 17%, respectively, in the second quarter of 2018. |
• | Adjusted selling and marketing expense excluding trivago increased 12% in the second quarter of 2019 reflecting higher direct costs at Brand Expedia, Expedia Partner Solutions and Vrbo. |
• | For the second quarter of 2019, both total GAAP and adjusted technology and content expense increased 9% compared to the second quarter of 2018, primarily due to investments in product and technology initiatives. Cloud expense in technology and content expense was $15 million during the second quarter of 2019, compared to $12 million during the second quarter of 2018. |
• | For the second quarter of 2019, total GAAP and adjusted general and administrative expense increased 9% and 7%, respectively, compared to the second quarter of 2018, primarily due to increases in personnel and overhead costs and professional fees. The increase in total GAAP general and administrative expense in the second quarter of 2019 also included higher stock-based compensation compared to the second quarter of 2018. |
Second Quarter | |||||||||
2019 | 2018 | Δ% | |||||||
Core OTA | $ | 623 | $ | 561 | 11% | ||||
Vrbo | 84 | 78 | 8% | ||||||
Egencia | 37 | 30 | 24% | ||||||
Unallocated overhead costs | (196 | ) | (186 | ) | (5)% | ||||
Expedia Group (excluding trivago) | $ | 548 | $ | 483 | 14% | ||||
trivago(1) | 20 | (20 | ) | NM | |||||
Total Adjusted EBITDA | $ | 568 | $ | 463 | 23% | ||||
Net income attributable to Expedia Group(2) | $ | 183 | $ | 1 | NM |
• | Expedia Group's core lodging platform included nearly 1.3 million properties available as of June 30, 2019, including approximately 570,000 integrated Vrbo listings. Vrbo now offers over 2 million online bookable listings. |
• | The Lufthansa Group airlines and Expedia Group announced a new multi-year cooperation to help more travelers access the best possible air travel options with Lufthansa, SWISS and Austrian Airlines on Expedia Group sites including Brand Expedia, ebookers and Egencia. The companies committed to greater technological collaboration using an industry-leading New Distribution Capability (NDC) direct API connection. |
• | In May, Expedia Group and the Fédération Nationale des Gîtes de France, a leading holiday rentals company and tourism association, announced a joint national agreement to boost exposure of Gîtes de France’s thousands of properties in the short-term rentals sector. It was the first agreement of its kind in the company’s 60+ year history. |
• | Expedia Group was the official travel partner of the UEFA Champions League, which held its final in Madrid on June 1st, with the partnership rights shared between Brand Expedia and Hotels.com. Additionally, Hotwire sponsored FOX Sports’ coverage of the FIFA Women’s World Cup France 2019™, showcasing new brand creative airing during FOX Soccer Tonight as well as branded show integrations and digital features across social media. |
• | Expedia Local Expert migrated 100% of mobile shopping to the progressive web app (PWA) experience resulting in better site speed for customers. |
• | Brand Expedia is partnering with Malaysia Airlines to launch a fully digitalized student travel program. Under the program students will be able to enjoy 8% off domestic hotels and 10% off international hotels. |
• | Hotels.com launched a new brand campaign in 11 countries. The “Be there. Do that. Get Rewarded” creative campaign highlights consumers envying the trips of others, while stuck in their day-to-day lives. |
• | Expedia Partner Solutions became the accommodations provider for Virgin Australia and Virgin Australia Holidays through its ecommerce template solution Expedia.com for Partners. As a result of this launch, Virgin Australia will be able to offer better flight and hotel deals to their travelers and improve their hotel booking experience. |
• | Expedia TAAP (Travel Agent Affiliate Program), a booking engine which connects travel agents to Expedia’s global portfolio of accommodations, flights, packages, car rentals and in-destination activities, exceeded a milestone of 15 million cumulative trips booked. Over the years, more than 100,000 agents helped travelers find their perfect trip in over 200 countries and territories. |
• | Expedia Group Media Solutions won three Internet Advertising Competition Awards and five Hermes Creative Awards for its campaigns with marketing partners. |
• | Expedia CruiseShipCenters sold a record number of cruises during its Princess Cruises 3 Day Sale in June. |
• | Vrbo introduced Boost, a program designed to help improve listings’ search position for select days, to all Premier Partner listings. Owners and property managers can earn power-ups on a listing both when they accept bookings on Vrbo sites and after a traveler completes a stay, which can then be used to boost a listing’s search position for select dates. |
• | Vrbo's newly refreshed app was featured as a "Best New Update" in the travel section of the Apple App store. |
• | Vrbo now offers over 1.3 million instantly bookable listings. |
• | trivago increased the flexibility for advertisers to participate in the marketplace by introducing bid modifiers in selected markets. Advertisers can now adjust their bids for ‘time to travel’ and ‘length of stay.’ |
• | Egencia completed its global roll out of Savings Finder for Air, which saves customers money by automatically re-shopping and re-booking air tickets when the price for the same flight drops within the first seven days of booking. |
• | Egencia's recently launched Smart Mix for Air saves travelers and travel arrangers time by using machine learning to sort flights according to a traveler’s preference on duration, number of stops and price, to ensure the most relevant flight options are shown first. 13% more customers find the flight they book in the top 10 options using Smart Mix. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | $ | 3,153 | $ | 2,880 | $ | 5,762 | $ | 5,388 | |||||||
Costs and expenses: | |||||||||||||||
Cost of revenue (1) (2) | 522 | 498 | 1,035 | 985 | |||||||||||
Selling and marketing (1) (2) | 1,657 | 1,541 | 3,192 | 3,057 | |||||||||||
Technology and content (1) (2) | 435 | 400 | 864 | 796 | |||||||||||
General and administrative (1) (2) | 214 | 196 | 405 | 395 | |||||||||||
Amortization of intangible assets | 52 | 72 | 104 | 144 | |||||||||||
Impairment of goodwill | — | 61 | — | 61 | |||||||||||
Legal reserves, occupancy tax and other | 4 | 1 | 14 | 4 | |||||||||||
Restructuring and related reorganization charges | 4 | — | 14 | — | |||||||||||
Operating income (loss) | 265 | 111 | 134 | (54 | ) | ||||||||||
Other income (expense): | |||||||||||||||
Interest income | 17 | 16 | 28 | 27 | |||||||||||
Interest expense | (39 | ) | (51 | ) | (80 | ) | (102 | ) | |||||||
Other, net | (8 | ) | (90 | ) | 12 | (54 | ) | ||||||||
Total other expense, net | (30 | ) | (125 | ) | (40 | ) | (129 | ) | |||||||
Income (loss) before income taxes | 235 | (14 | ) | 94 | (183 | ) | |||||||||
Provision for income taxes | (48 | ) | 5 | (7 | ) | 25 | |||||||||
Net income (loss) | 187 | (9 | ) | 87 | (158 | ) | |||||||||
Net (income) loss attributable to non-controlling interests | (4 | ) | 10 | (7 | ) | 22 | |||||||||
Net income (loss) attributable to Expedia Group, Inc. | $ | 183 | $ | 1 | $ | 80 | $ | (136 | ) | ||||||
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders: | |||||||||||||||
Basic | $ | 1.23 | $ | 0.01 | $ | 0.54 | $ | (0.90 | ) | ||||||
Diluted | 1.21 | 0.01 | 0.53 | (0.90 | ) | ||||||||||
Shares used in computing earnings (loss) per share (000's): | |||||||||||||||
Basic | 149,049 | 150,076 | 148,468 | 150,942 | |||||||||||
Diluted | 151,561 | 152,617 | 151,057 | 150,942 | |||||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||
Cost of revenue | $ | 3 | $ | 3 | $ | 6 | $ | 5 | |||||||
Selling and marketing | 12 | 12 | 23 | 23 | |||||||||||
Technology and content | 19 | 16 | 38 | 31 | |||||||||||
General and administrative | 25 | 19 | 48 | 41 | |||||||||||
(2) Includes depreciation as follows: | |||||||||||||||
Cost of revenue | $ | 22 | $ | 26 | $ | 45 | $ | 53 | |||||||
Selling and marketing | 14 | 11 | 28 | 22 | |||||||||||
Technology and content | 131 | 124 | 263 | 243 | |||||||||||
General and administrative | 9 | 8 | 16 | 18 |
June 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,258 | $ | 2,443 | |||
Restricted cash and cash equivalents | 619 | 259 | |||||
Short-term investments | 631 | 28 | |||||
Accounts receivable, net of allowance of $41 and $34 | 2,893 | 2,151 | |||||
Income taxes receivable | 128 | 24 | |||||
Prepaid expenses and other current assets | 295 | 292 | |||||
Total current assets | 8,824 | 5,197 | |||||
Property and equipment, net | 1,953 | 1,877 | |||||
Operating lease right-of-use assets | 524 | — | |||||
Long-term investments and other assets | 815 | 778 | |||||
Deferred income taxes | 80 | 69 | |||||
Intangible assets, net | 1,887 | 1,992 | |||||
Goodwill | 8,118 | 8,120 | |||||
TOTAL ASSETS | $ | 22,201 | $ | 18,033 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable, merchant | $ | 1,970 | $ | 1,699 | |||
Accounts payable, other | 1,153 | 788 | |||||
Deferred merchant bookings | 7,053 | 4,327 | |||||
Deferred revenue | 522 | 364 | |||||
Income taxes payable | 28 | 74 | |||||
Accrued expenses and other current liabilities | 950 | 808 | |||||
Total current liabilities | 11,676 | 8,060 | |||||
Long-term debt, excluding current maturities | 3,715 | 3,717 | |||||
Deferred income taxes | 65 | 69 | |||||
Operating lease liabilities | 466 | — | |||||
Other long-term liabilities | 343 | 506 | |||||
Redeemable non-controlling interests | 29 | 30 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock $.0001 par value | — | — | |||||
Authorized shares: 1,600,000 | |||||||
Shares issued: 234,102 and 231,493; Shares outstanding: 136,718 and 134,334 | |||||||
Class B common stock $.0001 par value | — | — | |||||
Authorized shares: 400,000 | |||||||
Shares issued and outstanding: 12,800 and 12,800 | |||||||
Additional paid-in capital | 9,821 | 9,549 | |||||
Treasury stock - Common stock, at cost | (5,771 | ) | (5,742 | ) | |||
Shares: 97,384 and 97,159 | |||||||
Retained earnings | 508 | 517 | |||||
Accumulated other comprehensive income (loss) | (216 | ) | (220 | ) | |||
Total Expedia Group, Inc. stockholders’ equity | 4,342 | 4,104 | |||||
Non-redeemable non-controlling interests | 1,565 | 1,547 | |||||
Total stockholders’ equity | 5,907 | 5,651 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 22,201 | $ | 18,033 |
Six months ended June 30, | |||||||
2019 | 2018 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 87 | $ | (158 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation of property and equipment, including internal-use software and website development | 352 | 336 | |||||
Amortization of stock-based compensation | 115 | 100 | |||||
Amortization of intangible assets | 104 | 144 | |||||
Impairment of goodwill | — | 61 | |||||
Deferred income taxes | (15 | ) | (6 | ) | |||
Foreign exchange (gain) loss on cash, restricted cash and short-term investments, net | (13 | ) | 85 | ||||
Realized gain on foreign currency forwards | (16 | ) | (16 | ) | |||
(Gain) loss on minority equity investments, net | (12 | ) | 61 | ||||
Other | (13 | ) | 21 | ||||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
Accounts receivable | (742 | ) | (476 | ) | |||
Prepaid expenses and other assets | (7 | ) | (96 | ) | |||
Accounts payable, merchant | 271 | (25 | ) | ||||
Accounts payable, other, accrued expenses and other liabilities | 436 | 216 | |||||
Tax payable/receivable, net | (143 | ) | (159 | ) | |||
Deferred merchant bookings | 2,726 | 2,268 | |||||
Deferred revenue | 157 | 135 | |||||
Net cash provided by operating activities | 3,287 | 2,491 | |||||
Investing activities: | |||||||
Capital expenditures, including internal-use software and website development | (573 | ) | (411 | ) | |||
Purchases of investments | (636 | ) | (1,669 | ) | |||
Sales and maturities of investments | 27 | 624 | |||||
Other, net | 16 | 22 | |||||
Net cash used in investing activities | (1,166 | ) | (1,434 | ) | |||
Financing activities: | |||||||
Purchases of treasury stock | (29 | ) | (426 | ) | |||
Payment of dividends to stockholders | (95 | ) | (91 | ) | |||
Proceeds from exercise of equity awards and employee stock purchase plan | 156 | 67 | |||||
Other, net | 2 | (6 | ) | ||||
Net cash provided by (used in) financing activities | 34 | (456 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | 20 | (106 | ) | ||||
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 2,175 | 495 | |||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 2,705 | 2,917 | |||||
Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ | 4,880 | $ | 3,412 | |||
Supplemental cash flow information | |||||||
Cash paid for interest | $ | 87 | $ | 106 | |||
Income tax payments, net | 157 | 136 |
2017 | 2018 | 2019 | Y / Y | |||||||||||||||||||||||||||||||||||
Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Growth | ||||||||||||||||||||||||||||||
Gross bookings by segment | ||||||||||||||||||||||||||||||||||||||
Core OTA | $ | 18,456 | $ | 16,182 | $ | 21,171 | $ | 21,011 | $ | 20,217 | $ | 17,921 | $ | 23,029 | $ | 23,305 | 11% | |||||||||||||||||||||
Vrbo | 2,013 | 1,913 | 3,947 | 2,814 | 2,496 | 2,192 | 4,163 | 2,862 | 2% | |||||||||||||||||||||||||||||
Egencia | 1,728 | 1,670 | 2,078 | 2,073 | 1,963 | 1,844 | 2,217 | 2,125 | 3% | |||||||||||||||||||||||||||||
Total | $ | 22,197 | $ | 19,766 | $ | 27,196 | $ | 25,898 | $ | 24,676 | $ | 21,957 | $ | 29,409 | $ | 28,292 | 9% | |||||||||||||||||||||
Gross bookings by geography | ||||||||||||||||||||||||||||||||||||||
Domestic | $ | 13,540 | $ | 11,800 | $ | 16,582 | $ | 16,213 | $ | 15,232 | $ | 13,362 | $ | 18,363 | $ | 17,962 | 11% | |||||||||||||||||||||
International | 8,657 | 7,966 | 10,614 | 9,685 | 9,444 | 8,595 | 11,046 | 10,330 | 7% | |||||||||||||||||||||||||||||
Total | $ | 22,197 | $ | 19,766 | $ | 27,196 | $ | 25,898 | $ | 24,676 | $ | 21,957 | $ | 29,409 | $ | 28,292 | 9% | |||||||||||||||||||||
Gross bookings by business model | ||||||||||||||||||||||||||||||||||||||
Agency | $ | 10,392 | $ | 9,493 | $ | 12,445 | $ | 12,290 | $ | 11,442 | $ | 10,688 | $ | 13,727 | $ | 13,680 | 11% | |||||||||||||||||||||
Merchant | 9,792 | 8,360 | 10,803 | 10,794 | 10,739 | 9,077 | 11,519 | 11,750 | 9% | |||||||||||||||||||||||||||||
Vrbo | 2,013 | 1,913 | 3,947 | 2,814 | 2,496 | 2,192 | 4,163 | 2,862 | 2% | |||||||||||||||||||||||||||||
Total | $ | 22,197 | $ | 19,766 | $ | 27,196 | $ | 25,898 | $ | 24,676 | $ | 21,957 | $ | 29,409 | $ | 28,292 | 9% | |||||||||||||||||||||
Revenue by segment | ||||||||||||||||||||||||||||||||||||||
Core OTA | $ | 2,314 | $ | 1,857 | $ | 1,926 | $ | 2,253 | $ | 2,527 | $ | 2,054 | $ | 2,037 | $ | 2,480 | 10% | |||||||||||||||||||||
Vrbo | 305 | 193 | 234 | 297 | 410 | 230 | 267 | 347 | 17% | |||||||||||||||||||||||||||||
Egencia | 126 | 137 | 151 | 156 | 139 | 155 | 153 | 163 | 4% | |||||||||||||||||||||||||||||
Expedia Group (excluding trivago) | $ | 2,745 | $ | 2,187 | $ | 2,311 | $ | 2,706 | $ | 3,076 | $ | 2,439 | $ | 2,457 | $ | 2,990 | 10% | |||||||||||||||||||||
trivago | 338 | 215 | 319 | 280 | 295 | 190 | 237 | 251 | (10)% | |||||||||||||||||||||||||||||
Intercompany eliminations | (117 | ) | (83 | ) | (122 | ) | (106 | ) | (95 | ) | (70 | ) | (85 | ) | (88 | ) | 17% | |||||||||||||||||||||
Total | $ | 2,966 | $ | 2,319 | $ | 2,508 | $ | 2,880 | $ | 3,276 | $ | 2,559 | $ | 2,609 | $ | 3,153 | 9% | |||||||||||||||||||||
Revenue by geography | ||||||||||||||||||||||||||||||||||||||
Domestic | $ | 1,578 | $ | 1,255 | $ | 1,351 | $ | 1,632 | $ | 1,792 | $ | 1,426 | $ | 1,476 | $ | 1,838 | 13% | |||||||||||||||||||||
International | 1,388 | 1,065 | 1,157 | 1,248 | 1,484 | 1,133 | 1,133 | 1,315 | 5% | |||||||||||||||||||||||||||||
Total | $ | 2,966 | $ | 2,319 | $ | 2,508 | $ | 2,880 | $ | 3,276 | $ | 2,559 | $ | 2,609 | $ | 3,153 | 9% | |||||||||||||||||||||
Revenue by business model | ||||||||||||||||||||||||||||||||||||||
Agency | $ | 803 | $ | 629 | $ | 658 | $ | 777 | $ | 876 | $ | 699 | $ | 686 | $ | 841 | 8% | |||||||||||||||||||||
Merchant | 1,559 | 1,283 | 1,334 | 1,532 | 1,688 | 1,396 | 1,392 | 1,680 | 10% | |||||||||||||||||||||||||||||
Advertising & media | 299 | 214 | 282 | 274 | 302 | 233 | 264 | 285 | 4% | |||||||||||||||||||||||||||||
Vrbo | 305 | 193 | 234 | 297 | 410 | 230 | 267 | 347 | 17% | |||||||||||||||||||||||||||||
Total | $ | 2,966 | $ | 2,319 | $ | 2,508 | $ | 2,880 | $ | 3,276 | $ | 2,559 | $ | 2,609 | $ | 3,153 | 9% | |||||||||||||||||||||
Adjusted EBITDA by segment | ||||||||||||||||||||||||||||||||||||||
Core OTA | $ | 734 | $ | 534 | $ | 323 | $ | 561 | $ | 837 | $ | 584 | $ | 344 | $ | 623 | 11% | |||||||||||||||||||||
Vrbo | 126 | 31 | (21 | ) | 78 | 209 | 22 | (40 | ) | 84 | 8% | |||||||||||||||||||||||||||
Egencia | 20 | 19 | 27 | 30 | 19 | 31 | 29 | 37 | 24% | |||||||||||||||||||||||||||||
Unallocated overhead costs | (163 | ) | (173 | ) | (177 | ) | (186 | ) | (184 | ) | (199 | ) | (181 | ) | (196 | ) | (5)% | |||||||||||||||||||||
Expedia Group (excluding trivago) | $ | 717 | $ | 411 | $ | 152 | $ | 483 | $ | 881 | $ | 438 | $ | 152 | $ | 548 | 14% | |||||||||||||||||||||
trivago | (8 | ) | (9 | ) | (28 | ) | (20 | ) | 31 | 33 | 24 | 20 | NM | |||||||||||||||||||||||||
Total | $ | 709 | $ | 402 | $ | 124 | $ | 463 | $ | 912 | $ | 471 | $ | 176 | $ | 568 | 23% | |||||||||||||||||||||
Net income (loss) attributable to Expedia Group | $ | 352 | $ | 55 | $ | (137 | ) | $ | 1 | $ | 525 | $ | 17 | $ | (103 | ) | $ | 183 | NM | |||||||||||||||||||
2017 | 2018 | 2019 | ||||||||||||||||||||||||
Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |||||||||||||||||||
Worldwide lodging (merchant, agency & Vrbo) | ||||||||||||||||||||||||||
Room nights | 93.5 | 74.8 | 73.9 | 89.6 | 105.3 | 82.8 | 80.8 | 100.1 | ||||||||||||||||||
Room night growth | 16 | % | 15 | % | 15 | % | 12 | % | 13 | % | 11 | % | 9 | % | 12 | % | ||||||||||
Domestic room night growth | 12 | % | 10 | % | 10 | % | 8 | % | 9 | % | 9 | % | 8 | % | 8 | % | ||||||||||
International room night growth | 22 | % | 21 | % | 21 | % | 17 | % | 16 | % | 12 | % | 11 | % | 15 | % | ||||||||||
ADR growth | 4 | % | 4 | % | 7 | % | 6 | % | 4 | % | 2 | % | (1 | )% | — | % | ||||||||||
Revenue per night growth | (1 | )% | (4 | )% | — | % | 2 | % | (1 | )% | (1 | )% | (2 | )% | — | % | ||||||||||
Lodging revenue | $2,102 | $1,606 | $1,612 | $1,992 | $2,347 | $1,761 | $1,725 | $2,231 | ||||||||||||||||||
Lodging revenue growth | 15 | % | 11 | % | 15 | % | 14 | % | 12 | % | 10 | % | 7 | % | 12 | % | ||||||||||
Worldwide air (merchant & agency) | ||||||||||||||||||||||||||
Tickets sold growth | 4 | % | 3 | % | 1 | % | 6 | % | 4 | % | 10 | % | 11 | % | 10 | % | ||||||||||
Airfare growth | (2 | )% | 1 | % | 3 | % | 1 | % | 4 | % | 2 | % | (1 | )% | 1 | % | ||||||||||
Revenue per ticket growth | (10 | )% | (3 | )% | 10 | % | 4 | % | 6 | % | 7 | % | (7 | )% | (7 | )% | ||||||||||
Air revenue | $189 | $176 | $242 | $223 | $209 | $207 | $248 | $228 | ||||||||||||||||||
Air revenue growth | (7 | )% | —% | 11 | % | 10 | % | 11 | % | 18 | % | 3 | % | 2 | % | |||||||||||
• | Advertising & Media Revenue includes 3rd party revenue from trivago. All trivago revenue is classified as international. |
• | During the first quarter of 2018, we updated our allocations methodology and recast the historical domestic and international revenue and Adjusted EBITDA by segment information presented to be on a comparable basis. |
• | Some numbers may not add due to rounding. All percentages above and throughout this release are calculated on precise, unrounded numbers |
Three months ended June 30, 2019 | |||||||||||||||||||||||
Core OTA | trivago | Vrbo | Egencia | Corporate & Eliminations | Total | ||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Operating income (loss) | $ | 521 | $ | 17 | $ | 60 | $ | 24 | $ | (357 | ) | $ | 265 | ||||||||||
Realized gain (loss) on revenue hedges | 8 | — | — | — | — | 8 | |||||||||||||||||
Restructuring and related reorganization charges | — | — | — | — | 4 | 4 | |||||||||||||||||
Legal reserves, occupancy tax and other | — | — | — | — | 4 | 4 | |||||||||||||||||
Stock-based compensation | — | — | — | — | 59 | 59 | |||||||||||||||||
Amortization of intangible assets | — | — | — | — | 52 | 52 | |||||||||||||||||
Depreciation | 94 | 3 | 24 | 13 | 42 | 176 | |||||||||||||||||
Adjusted EBITDA(1) | $ | 623 | $ | 20 | $ | 84 | $ | 37 | $ | (196 | ) | $ | 568 |
Three months ended June 30, 2018 | |||||||||||||||||||||||
Core OTA | trivago | Vrbo | Egencia | Corporate & Eliminations | Total | ||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Operating income (loss) | $ | 477 | $ | (24 | ) | $ | 63 | $ | 18 | $ | (423 | ) | $ | 111 | |||||||||
Realized gain (loss) on revenue hedges | (1 | ) | — | — | — | — | (1 | ) | |||||||||||||||
Legal reserves, occupancy tax and other | — | — | — | — | 1 | 1 | |||||||||||||||||
Stock-based compensation | — | — | — | — | 50 | 50 | |||||||||||||||||
Amortization of intangible assets | — | — | — | — | 72 | 72 | |||||||||||||||||
Impairment of goodwill | — | — | — | — | 61 | 61 | |||||||||||||||||
Depreciation | 85 | 4 | 15 | 12 | 53 | 169 | |||||||||||||||||
Adjusted EBITDA(1) | $ | 561 | $ | (20 | ) | $ | 78 | $ | 30 | $ | (186 | ) | $ | 463 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions) | ||||||||||||||||
Operating income (loss) | $ | 265 | $ | 111 | $ | 134 | $ | (54 | ) | |||||||
Less: trivago operating income (loss)(1) | 11 | (31 | ) | 26 | (67 | ) | ||||||||||
Operating income excluding trivago | $ | 254 | $ | 142 | $ | 108 | $ | 13 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions) | ||||||||||||||||
Net income (loss) attributable to Expedia Group, Inc. | $ | 183 | $ | 1 | $ | 80 | $ | (136 | ) | |||||||
Net income (loss) attributable to non-controlling interests | 4 | (10 | ) | 7 | (22 | ) | ||||||||||
Provision for income taxes | 48 | (5 | ) | 7 | (25 | ) | ||||||||||
Total other expense, net | 30 | 125 | 40 | 129 | ||||||||||||
Operating income (loss) | 265 | 111 | 134 | (54 | ) | |||||||||||
Gain (loss) on revenue hedges related to revenue recognized | 8 | (1 | ) | 11 | (4 | ) | ||||||||||
Restructuring and related reorganization charges | 4 | — | 14 | — | ||||||||||||
Legal reserves, occupancy tax and other | 4 | 1 | 14 | 4 | ||||||||||||
Stock-based compensation | 59 | 50 | 115 | 100 | ||||||||||||
Impairment of goodwill | — | 61 | — | 61 | ||||||||||||
Amortization of intangible assets | 52 | 72 | 104 | 144 | ||||||||||||
Depreciation | 176 | 169 | 352 | 336 | ||||||||||||
Adjusted EBITDA | $ | 568 | $ | 463 | $ | 744 | $ | 587 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions, except share and per share data) | ||||||||||||||||
Net income (loss) attributable to Expedia Group, Inc. | $ | 183 | $ | 1 | $ | 80 | $ | (136 | ) | |||||||
Amortization of intangible assets | 52 | 72 | 104 | 144 | ||||||||||||
Stock-based compensation | 59 | 50 | 115 | 100 | ||||||||||||
Legal reserves, occupancy tax and other | 4 | 1 | 14 | 4 | ||||||||||||
Restructuring and related reorganization charges | 4 | — | 14 | — | ||||||||||||
Impairment of goodwill | — | 61 | — | 61 | ||||||||||||
Unrealized (gain) loss on revenue hedges | (1 | ) | (22 | ) | 9 | (29 | ) | |||||||||
Gain on minority equity investments, net | 10 | 98 | (12 | ) | 61 | |||||||||||
Release of a non-operating liability | — | — | (12 | ) | — | |||||||||||
Provision for income taxes | (33 | ) | (44 | ) | (72 | ) | (53 | ) | ||||||||
Non-controlling interests | (2 | ) | (4 | ) | (4 | ) | (8 | ) | ||||||||
Adjusted net income attributable to Expedia Group, Inc. | 276 | 213 | 236 | 144 | ||||||||||||
Less: Adjusted net income (loss) attributable to trivago | 2 | (11 | ) | 14 | (26 | ) | ||||||||||
Adjusted net income excluding trivago | $ | 274 | $ | 224 | $ | 222 | $ | 170 | ||||||||
GAAP diluted weighted average shares outstanding (000's) | 151,561 | 152,617 | 151,057 | 150,942 | ||||||||||||
Additional dilutive securities (000's) | 3,856 | 2,429 | 3,244 | 4,726 | ||||||||||||
Adjusted weighted average shares outstanding (000's) | 155,417 | 155,046 | 154,301 | 155,668 | ||||||||||||
Diluted earnings (loss) per share | $ | 1.21 | $ | 0.01 | $ | 0.53 | $ | (0.90 | ) | |||||||
Adjusted earnings per share | $ | 1.77 | $ | 1.38 | $ | 1.53 | $ | 0.93 | ||||||||
Less: trivago adjusted earnings (loss) per share | 0.01 | (0.07 | ) | 0.09 | (0.17 | ) | ||||||||||
Adjusted earnings per share excluding trivago | $ | 1.76 | $ | 1.45 | $ | 1.43 | $ | 1.09 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions) | ||||||||||||||||
Net cash provided by operating activities | $ | 1,138 | $ | 815 | $ | 3,287 | $ | 2,491 | ||||||||
Headquarters capital expenditures | (110 | ) | (38 | ) | (189 | ) | (70 | ) | ||||||||
Non-headquarters capital expenditures | (189 | ) | (181 | ) | (384 | ) | (341 | ) | ||||||||
Less: Total capital expenditures | (299 | ) | (219 | ) | (573 | ) | (411 | ) | ||||||||
Free cash flow | $ | 839 | $ | 596 | $ | 2,714 | $ | 2,080 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In millions) | ||||||||||||||||
Cost of revenue | $ | 522 | $ | 498 | $ | 1,035 | $ | 985 | ||||||||
Less: stock-based compensation | 3 | 3 | 6 | 5 | ||||||||||||
Less: depreciation | 22 | 26 | 45 | 53 | ||||||||||||
Adjusted cost of revenue | $ | 497 | $ | 469 | $ | 984 | $ | 927 | ||||||||
Less: trivago cost of revenue(1) | 2 | 1 | 4 | 3 | ||||||||||||
Adjusted cost of revenue excluding trivago | $ | 495 | $ | 468 | $ | 980 | $ | 924 | ||||||||
Selling and marketing expense | $ | 1,657 | $ | 1,541 | $ | 3,192 | $ | 3,057 | ||||||||
Less: stock-based compensation | 12 | 12 | 23 | 23 | ||||||||||||
Less: depreciation | 14 | 11 | 28 | 22 | ||||||||||||
Adjusted selling and marketing expense | $ | 1,631 | $ | 1,518 | $ | 3,141 | $ | 3,012 | ||||||||
Less: trivago selling and marketing expense(1)(2) | 114 | 164 | 213 | 356 | ||||||||||||
Adjusted selling and marketing expense excluding trivago | $ | 1,517 | $ | 1,354 | $ | 2,928 | $ | 2,656 | ||||||||
Technology and content expense | $ | 435 | $ | 400 | $ | 864 | $ | 796 | ||||||||
Less: stock-based compensation | 19 | 16 | 38 | 31 | ||||||||||||
Less: depreciation | 131 | 124 | 263 | 243 | ||||||||||||
Adjusted technology and content expense | $ | 285 | $ | 260 | $ | 563 | $ | 522 | ||||||||
Less: trivago technology and content expense(1) | 16 | 16 | 33 | 33 | ||||||||||||
Adjusted technology and content expense excluding trivago | $ | 269 | $ | 244 | $ | 530 | $ | 489 | ||||||||
General and administrative expense | $ | 214 | $ | 196 | $ | 405 | $ | 395 | ||||||||
Less: stock-based compensation | 25 | 19 | 48 | 41 | ||||||||||||
Less: depreciation | 9 | 8 | 16 | 18 | ||||||||||||
Adjusted general and administrative expense | $ | 180 | $ | 169 | $ | 341 | $ | 336 | ||||||||
Less: trivago general and administrative expense(1) | 10 | 13 | 20 | 27 | ||||||||||||
Adjusted general and administrative expense excluding trivago | $ | 170 | $ | 156 | $ | 321 | $ | 309 |
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