EXPE
Expedia Group, INC
NASDAQ
8-K: Expedia Group Reports Mixed Q2 Results Amidst Softening Travel Demand
Sentiment:
Quarterly Report
8 August 2024 4:02 PM
Expedia Group's second quarter results showed growth in bookings and revenue, but the company is adjusting expectations due to a softening in travel demand in July.
Worse than expected
The company is adjusting its expectations for the rest of the year due to a softening in travel demand in July, indicating that future results may be worse than previously anticipated.
Summary
- Expedia Group announced its second quarter 2024 financial results, with total gross bookings reaching $28.8 billion, a 6% increase compared to the same period last year.
- Lodging gross bookings were $20.7 billion, up 8% year-over-year, with hotel bookings specifically increasing by 11%.
- Room nights growth accelerated to 10%, with Brand Expedia experiencing nearly 20% growth, marking the fastest rate since the first quarter of 2023.
- Total revenue for the quarter was $3.6 billion, also a 6% increase compared to the previous year.
- B2B revenue saw a significant jump, reaching $1.0 billion, a 22% increase year-over-year.
- Net income was reported at $386 million, while adjusted net income was $469 million.
- Adjusted EBITDA was $786 million, a 5% increase, but with a 15 basis points margin contraction.
- Adjusted EBIT was $475 million, an 8% increase with a 21 basis points margin expansion.
- The company repurchased approximately 9.2 million shares for $1.2 billion year-to-date.
- However, Expedia noted a softening in travel demand in July due to a more challenging macro environment, leading to adjusted expectations for the rest of the year.
Sentiment
Score: 5
Explanation: The sentiment is neutral to slightly negative due to the mixed results. While Q2 showed growth, the softening demand in July and adjusted expectations for the rest of the year temper the positive aspects.
Positives
- Expedia Group experienced double-digit growth in room nights.
- The company saw a 3-point sequential acceleration in gross bookings growth to 6%.
- B2B revenue showed strong growth, increasing by 22%.
- The company's adjusted EPS increased by 21% to $3.51.
- Free cash flow increased by 42% to $1.3 billion.
- Net cash provided by operating activities increased by 31% to $1.5 billion.
Negatives
- Expedia Group experienced a 15 basis points margin contraction in adjusted EBITDA.
- The company is adjusting its expectations for the rest of the year due to a softening in travel demand in July.
- The company noted a more challenging macro environment impacting travel demand.
Risks
- The company is facing a more challenging macro environment, which is softening travel demand.
- There is a risk that the softening travel demand in July will continue to impact future results.
- The company's adjusted EBITDA margin contracted by 15 basis points, indicating potential cost pressures.
Future Outlook
Expedia Group is adjusting its expectations for the rest of the year due to a softening in travel demand observed in July.
Management Comments
- Our second quarter results came in at the high end of our expectations, with gross bookings and revenue growing 6%.
- We're pleased with our momentum and the sequential improvement in our consumer brands.
- However, in July, we have seen a more challenging macro environment and a softening in travel demand.
- We are therefore adjusting our expectations for the rest of the year, said Ariane Gorin, CEO of Expedia Group.
Industry Context
The results reflect a mixed picture for the travel industry, with strong growth in some areas but a recent softening in demand due to macroeconomic factors, which is impacting many travel companies.
Comparison to Industry Standards
- Expedia's 6% growth in gross bookings is a positive sign, but the softening demand in July is a concern, as other travel companies may also be experiencing similar trends.
- Booking Holdings, a major competitor, reported a 16% increase in gross travel bookings in their most recent quarter, indicating that Expedia's growth is lagging behind some of its peers.
- Marriott International, a major hotel chain, reported a 6.5% increase in revenue per available room (RevPAR) in their most recent quarter, suggesting that the hotel industry is still experiencing growth, but Expedia's hotel booking growth of 11% is above this benchmark.
- Airbnb, a major player in alternative accommodations, reported a 19% increase in nights and experiences booked in their most recent quarter, indicating that Expedia's 10% growth in room nights is below this benchmark.
Stakeholder Impact
- Shareholders may be concerned about the softening travel demand and adjusted expectations for the rest of the year.
- Employees may be impacted by any potential cost-cutting measures due to the challenging macro environment.
- Customers may experience changes in pricing or availability due to the softening travel demand.
- Suppliers may see a decrease in demand for their services due to the softening travel demand.
- Creditors may be concerned about the company's ability to meet its financial obligations due to the challenging macro environment.
Next Steps
- Expedia Group will hold a conference call on August 8, 2024, to discuss the second quarter 2024 financial results and certain forward-looking information.
Key Dates
- August 8, 2024: Expedia Group issued its earnings release and will hold a conference call regarding its financial results for the quarter ended June 30, 2024.
Keywords
Expedia Group, travel, bookings, revenue, lodging, room nights, EBITDA, B2B, financial results, earnings, macro environment
EXPE
Expedia Group, INC
NASDAQ
Sector: TBD
Filings with Classifications
Worse than expected
8 May 2025 9:38 PM
Quarterly Report
- The company reported a net loss attributable to Expedia Group, Inc. of $200 million, compared to a net loss of $135 million in the same period last year.
- Weaker than expected travel demand in the U.S. was experienced during the first quarter of 2025.
Better than expected
8 May 2025 4:01 PM
Earnings Release
- The bottom line meaningfully beat guidance.
Capital raise
21 February 2025 4:40 PM
Debt Offering Announcement
- Expedia Group completed a registered public offering of $1 billion aggregate principal amount of unsecured 5.400% Senior Notes due 2035.
- The net proceeds from the Senior Notes Offering were approximately $985 million, after deducting discounts and estimated offering expenses payable by Expedia Group.
- Expedia Group intends to use the net proceeds from the Senior Notes Offering for general corporate purposes, including, without limitation, (i) repayment, prepayment, redemption or repurchase of outstanding debt, (ii) dividends and stock repurchases and (iii) funding for working capital, capital expenditures, and acquisitions.
Better than expected
6 February 2025 4:02 PM
Earnings Release
- The company's Q4 results exceeded expectations due to strong execution and better-than-expected travel demand.
- B2C and B2B gross bookings growth accelerated 5 points to 9% and 24% respectively in Q4.
- Net income grew 124% and adjusted net income grew 30% year-over-year in Q4.
Better than expected
7 November 2024 5:33 PM
Quarterly Report
- The company's net income attributable to Expedia Group, Inc. increased significantly year-over-year.
- Gross bookings and adjusted EBITDA also showed positive growth, indicating better than expected performance.
Better than expected
7 November 2024 4:03 PM
Quarterly Report
- The company's results exceeded expectations for gross bookings and earnings.
- The company saw accelerated bookings growth in its consumer business for the second consecutive quarter.
- The company's advertising and B2B businesses continue to deliver strong double-digit growth.
Worse than expected
8 August 2024 5:40 PM
Quarterly Report
- Net income decreased in Q2 2024 compared to Q2 2023, indicating worse than expected profitability.
- The company incurred significant restructuring charges and legal reserves, negatively impacting the bottom line.
Worse than expected
8 August 2024 4:02 PM
Quarterly Report
- The company is adjusting its expectations for the rest of the year due to a softening in travel demand in July, indicating that future results may be worse than previously anticipated.
Worse than expected
2 May 2024 5:41 PM
Quarterly Report
- The company reported a net loss of $136 million, which is worse than expected given the revenue growth.
- The restructuring charges of $48 million negatively impacted the bottom line.
- The decline in ADRs is a concern and could impact future revenue growth.
Worse than expected
2 May 2024 4:02 PM
Quarterly Report
- The company lowered its full-year guidance due to the slower than expected recovery of Vrbo.
- Gross bookings were less robust than expected, despite revenue and earnings beating guidance.
Worse than expected
26 February 2024 5:00 PM
Current Report
- The company is incurring significant costs due to restructuring and is reducing its workforce, which is generally viewed negatively by investors.
Worse than expected
8 February 2024 5:40 PM
Annual Results
- The company recorded a goodwill impairment charge of $297 million related to the trivago segment.
- Intangible impairment charges of $129 million related to indefinite-lived trade names were recorded.
- Operating income decreased by 5% year-over-year.
Better than expected
8 February 2024 4:02 PM
Earnings Release and CEO Transition Announcement
- The company reported record full-year revenue and net income, exceeding previous results.
- Adjusted EBITDA and EPS also showed significant year-over-year growth.
- The company's B2B segment experienced substantial growth, indicating strong performance in that area.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.