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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Expedia Group Inc | NASDAQ:EXPE | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -3.12 | -2.40% | 126.89 | 126.70 | 126.88 | 129.69 | 126.3301 | 128.51 | 2,417,235 | 22:21:03 |
From Jul 2024 to Aug 2024
Posts double-digit room night growth
Drove 3 points of sequential acceleration in gross bookings growth to 6%
Expedia Group, Inc. (NASDAQ: EXPE) announced financial results today for the second quarter ended June 30, 2024.
“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.
Second Quarter Highlights
Financial Summary & Operating Metrics (In millions except per share amounts)
Expedia Group, Inc.
Metric
Q2 2024
Q2 2023
Δ Y/Y
Booked room nights
98.9
89.7
10%
Gross bookings
$28,837
$27,321
6%
Revenue
$3,558
$3,358
6%
Operating income
$451
$443
2%
Net income attributable to Expedia Group, Inc.
$386
$385
—%
Diluted earnings per share
$2.80
$2.54
10%
Adjusted EBITDA*
$786
$747
5%
Adjusted EBIT*
$475
$442
8%
Adjusted net income (loss)*
$469
$428
10%
Adjusted EPS*
$3.51
$2.89
21%
Net cash provided by operating activities
$1,501
$1,146
31%
Free cash flow*
$1,307
$923
42%
* 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 second quarter 2024 financial results and certain forward-looking information on Thursday, August 8, 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.
© 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
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
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
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
$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
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
$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
$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
$8,741
$9,113
B2B
432
650
788
676
668
861
995
864
833
1,049
2,546
3,388
trivago (third-party revenue)
77
111
124
68
76
82
115
65
70
77
380
338
Total
$2,249
$3,181
$3,619
$2,618
$2,665
$3,358
$3,929
$2,887
$2,889
$3,558
$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
$8,905
$10,264
Air
74
95
100
93
113
111
100
86
115
111
362
410
Advertising and media - EG(1)
89
102
98
108
99
119
125
140
145
152
397
483
Advertising and media - trivago(1)
77
111
124
68
76
82
115
65
70
77
380
338
Other(2)
399
473
416
335
348
348
356
292
331
356
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
$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
$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
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
$11,667
$12,839
Adjusted EBITDA by segment(3)
B2C
$188
$582
$943
$411
$148
$653
$1,056
$468
$215
$654
$2,124
$2,325
B2B
80
156
221
142
133
206
266
193
172
263
599
798
Other(4)
(95)
(90)
(85)
(104)
(96)
(112)
(106)
(129)
(132)
(131)
(374)
(443)
Total
$173
$648
$1,079
$449
$185
$747
$1,216
$532
$255
$786
$2,349
$2,680
Net income (loss) attributable to Expedia Group, Inc.(5)
$(122)
$(185)
$482
$177
$(145)
$385
$425
$132
$(135)
$386
$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:
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
Three months ended
June 30,
Six months ended
June 30,
2024
2023
2024
2023
Revenue
$
3,558
$
3,358
$
6,447
$
6,023
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below) (1)
362
407
720
821
Selling and marketing - direct
1,793
1,579
3,443
3,066
Selling and marketing - indirect (1)
197
191
383
378
Technology and content (1)
331
344
672
661
General and administrative (1)
180
194
366
378
Depreciation and amortization
205
199
415
391
Legal reserves, occupancy tax and other
21
1
41
6
Restructuring and related reorganization charges (1)
18
—
66
—
Operating income
451
443
341
322
Other income (expense):
Interest income
67
63
118
106
Interest expense
(61
)
(61
)
(123
)
(122
)
Other, net
31
19
(3
)
97
Total other income (expense), net
37
21
(8
)
81
Income before income taxes
488
464
333
403
Provision for income taxes
(113
)
(77
)
(94
)
(156
)
Net income
375
387
239
247
Net (income) loss attributable to non-controlling interests
11
(2
)
12
(7
)
Net income attributable to Expedia Group, Inc.
$
386
$
385
$
251
$
240
Earnings per share attributable to Expedia Group, Inc. available to common stockholders:
Basic
$
2.92
$
2.62
$
1.88
$
1.60
Diluted
2.80
2.54
1.79
1.55
Shares used in computing earnings per share (000's):
Basic
131,948
147,168
133,724
149,808
Diluted
137,832
151,844
140,131
154,425
(1) Includes stock-based compensation as follows:
Cost of revenue
$
4
$
4
$
6
$
7
Selling and marketing
23
20
42
40
Technology and content
40
36
80
70
General and administrative
39
46
82
92
Restructuring and related reorganization charges
8
—
8
—
EXPEDIA GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands and par value)
June 30, 2024
December 31, 2023
June 30, 2023
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
6,242
$
4,225
$
6,274
Restricted cash and cash equivalents
2,120
1,436
2,484
Short-term investments
31
28
27
Accounts receivable, net of allowance of $57, $46 and $51
4,127
2,786
2,903
Income taxes receivable
71
47
70
Prepaid expenses and other current assets
924
708
1,055
Total current assets
13,515
9,230
12,813
Property and equipment, net
2,381
2,359
2,318
Operating lease right-of-use assets
332
357
348
Long-term investments and other assets
1,283
1,238
1,202
Deferred income taxes
544
586
665
Intangible assets, net
991
1,023
1,180
Goodwill
6,847
6,849
7,150
TOTAL ASSETS
$
25,893
$
21,642
$
25,676
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, merchant
$
2,206
$
2,041
$
1,775
Accounts payable, other
1,361
1,077
1,066
Deferred merchant bookings
12,083
7,723
11,523
Deferred revenue
176
164
185
Income taxes payable
32
26
61
Accrued expenses and other current liabilities
857
752
819
Current maturities of long-term debt
1,041
—
—
Total current liabilities
17,756
11,783
15,429
Long-term debt, excluding current maturities
5,218
6,253
6,247
Deferred income taxes
31
33
35
Operating lease liabilities
292
314
302
Other long-term liabilities
470
473
447
Commitments and contingencies
Stockholders’ equity:
Common stock: $.0001 par value; Authorized shares: 1,600,000
—
—
—
Shares issued: 284,861, 282,149 and 280,006; Shares outstanding: 125,281, 131,522 and 138,885
Class B common stock: $.0001 par value; Authorized shares: 400,000
—
—
—
Shares issued: 12,800; Shares outstanding: 5,523
Additional paid-in capital
15,697
15,398
15,072
Treasury stock - Common stock and Class B, at cost; Shares 166,857, 157,903 and 148,398
(14,204
)
(13,023
)
(11,937
)
Retained earnings (deficit)
(381
)
(632
)
(1,169
)
Accumulated other comprehensive income (loss)
(223
)
(209
)
(207
)
Total Expedia Group, Inc. stockholders’ equity
889
1,534
1,759
Non-redeemable non-controlling interests
1,237
1,252
1,457
Total stockholders’ equity
2,126
2,786
3,216
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
25,893
$
21,642
$
25,676
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six months ended
June 30,
2024
2023
Operating activities:
Net income
$
239
$
247
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment, including internal-use software and website development
385
361
Amortization of intangible assets
30
30
Amortization of stock-based compensation
218
209
Deferred income taxes
39
(17
)
Foreign exchange (gain) loss on cash, restricted cash and short-term investments, net
44
(3
)
Realized (gain) loss on foreign currency forwards, net
55
(26
)
Gain on minority equity investments, net
(47
)
(54
)
Other, net
38
28
Changes in operating assets and liabilities:
Accounts receivable
(1,361
)
(846
)
Prepaid expenses and other assets
(180
)
(147
)
Accounts payable, merchant
165
66
Accounts payable, other, accrued expenses and other liabilities
403
175
Tax payable/receivable, net
(8
)
(91
)
Deferred merchant bookings
4,360
4,371
Net cash provided by operating activities
4,380
4,303
Investing activities:
Capital expenditures, including internal-use software and website development
(371
)
(456
)
Purchases of investments
(69
)
—
Sales and maturities of investments
43
22
Other, net
(52
)
46
Net cash used in investing activities
(449
)
(388
)
Financing activities:
Purchases of treasury stock
(1,172
)
(1,062
)
Proceeds from exercise of equity awards and employee stock purchase plan
48
40
Other, net
(25
)
4
Net cash used in financing activities
(1,149
)
(1,018
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents
(81
)
10
Net increase in cash, cash equivalents and restricted cash and cash equivalents
2,701
2,907
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
$
8,362
$
8,758
Supplemental cash flow information
Cash paid for interest
$
116
$
115
Income tax payments, net
57
193
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) gains (losses) recognized on changes in the value of contingent consideration arrangements; and (ii) 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 June 30, 2024, which is calculated as the six months ended June 30, 2024 plus the year ended December 31, 2023 less the six months ended June 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 June 30, 2024
B2C
B2B
trivago
Corporate &
Eliminations
Total
(In millions)
Operating income (loss)
$
533
$
236
$
(6
)
$
(312
)
$
451
Realized gain (loss) on revenue hedges
(8
)
(7
)
—
—
(15
)
Restructuring and related reorganization charges, excluding stock-based compensation
—
—
—
10
10
Legal reserves, occupancy tax and other
—
—
—
21
21
Stock-based compensation
—
—
—
114
114
Amortization of intangible assets
—
—
—
15
15
Depreciation
129
34
1
26
190
Adjusted EBITDA(1)
$
654
$
263
$
(5
)
$
(126
)
$
786
Three months ended June 30, 2023
B2C
B2B
trivago
Corporate &
Eliminations
Total
(In millions)
Operating income
$
529
$
175
$
12
$
(273
)
$
443
Realized gain (loss) on revenue hedges
(6
)
4
—
—
(2
)
Legal reserves, occupancy tax and other
—
—
—
1
1
Stock-based compensation
—
—
—
106
106
Amortization of intangible assets
—
—
—
15
15
Depreciation
130
27
1
26
184
Adjusted EBITDA(1)
$
653
$
206
$
13
$
(125
)
$
747
(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
June 30,
Six months ended
June 30,
Year Ended December 31,
TTM
June 30,
2024
2023
2024
2023
2023
2024
($ in millions)
Net income attributable to Expedia Group, Inc.
$
386
$
385
$
251
$
240
$
797
$
808
Net income (loss) attributable to non-controlling interests
(11
)
2
(12
)
7
(109
)
(128
)
Provision for income taxes
113
77
94
156
330
268
Total other (income) expense, net
(37
)
(21
)
8
(81
)
15
104
Operating income
451
443
341
322
1,033
1,052
Gain (loss) on revenue hedges related to revenue recognized
(15
)
(2
)
(32
)
4
(7
)
(43
)
Restructuring and related reorganization charges, including stock-based compensation
18
—
66
—
—
66
Legal reserves, occupancy tax and other
21
1
41
6
8
43
Impairment of goodwill
—
—
—
—
297
297
Impairment of intangible assets
—
—
—
—
129
129
Adjusted EBIT
475
442
416
332
1,460
1,544
Stock-based compensation, excluding restructuring and related reorganization charges
106
106
210
209
413
414
Depreciation and amortization
205
199
415
391
807
831
Adjusted EBITDA
$
786
$
747
$
1,041
$
932
$
2,680
$
2,789
Net income margin(1)
10.8
%
11.5
%
3.9
%
4.0
%
6.2
%
6.1
%
Adjusted EBIT margin(1)
13.3
%
13.1
%
6.4
%
5.5
%
11.4
%
11.6
%
Adjusted EBITDA margin(1)
22.1
%
22.2
%
16.1
%
15.5
%
20.9
%
21.0
%
Long-term debt, including current maturities
$
6,259
Long-term debt to net income ratio
7.7
Long-term debt, including current maturities
$
6,259
Unamortized discounts and debt issuance costs
35
Adjusted debt
$
6,294
Leverage ratio(2)
2.3
(1) 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.
(2) Leverage ratio represents adjusted debt divided by TTM Adjusted EBITDA.
Adjusted Net Income (Loss) & Adjusted EPS
Three months ended
June 30,
Six months ended
June 30,
2024
2023
2024
2023
(In millions, except share and per share data)
Net income attributable to Expedia Group, Inc.
$
386
$
385
$
251
$
240
Less: Net (income) loss attributable to non-controlling interests
11
(2
)
12
(7
)
Less: Provision for income taxes
(113
)
(77
)
(94
)
(156
)
Income before income taxes
488
464
333
403
Amortization of intangible assets
15
15
30
30
Stock-based compensation
114
106
218
209
Legal reserves, occupancy tax and other
21
1
41
6
Restructuring and related reorganization charges, excluding stock-based compensation
10
—
58
—
Unrealized (gain) loss on revenue hedges
(2
)
17
(3
)
15
Gain on minority equity investments, net
(56
)
(53
)
(47
)
(54
)
TripAdvisor tax indemnification adjustment
(6
)
2
(6
)
(67
)
Gain on sale of businesses
—
(4
)
(3
)
(24
)
Adjusted income before income taxes
584
548
621
518
GAAP Provision for income taxes
(113
)
(77
)
(94
)
(156
)
Provision for income taxes for adjustments
(13
)
(40
)
(40
)
45
Total Adjusted provision for income taxes
(126
)
(117
)
(134
)
(111
)
Total Adjusted income tax rate
21.5
%
21.5
%
21.5
%
21.5
%
Non-controlling interests
11
(3
)
11
(9
)
Adjusted net income attributable to Expedia Group, Inc.
$
469
$
428
$
498
$
398
GAAP diluted earnings per share
$
2.80
$
2.54
$
1.79
$
1.55
Amortization of intangible assets
0.11
0.10
0.22
0.20
Stock-based compensation
0.85
0.72
1.60
1.39
Legal reserves, occupancy tax and other
0.16
—
0.30
0.04
Restructuring and related reorganization charges
0.08
—
0.43
—
Unrealized (gain) loss on revenue hedges
(0.01
)
0.11
(0.02
)
0.11
Gain on minority equity investments, net
(0.42
)
(0.36
)
(0.35
)
(0.36
)
TripAdvisor tax indemnification adjustment
(0.05
)
0.02
(0.05
)
(0.44
)
Gain on sale of businesses
—
(0.03
)
(0.03
)
(0.16
)
Income tax effects and adjustments
(0.09
)
(0.27
)
(0.29
)
0.30
Non-controlling interest
(0.01
)
(0.01
)
(0.01
)
(0.01
)
Adjustment to GAAP dilutive securities (1)
0.08
0.07
0.05
0.04
Adjusted earnings per share(2)
$
3.51
$
2.89
$
3.66
$
2.64
GAAP diluted weighted average shares outstanding (000's)
137,832
151,844
140,131
154,425
Adjustment to dilutive securities (000's)(1)
(3,921
)
(3,921
)
(3,921
)
(3,921
)
Adjusted weighted average shares outstanding (000's) (2)
133,910
147,923
136,209
150,504
Ex-trivago Adjusted Net Income and Adjusted EPS
Adjusted net income attributable to Expedia Group, Inc.
$
469
$
428
$
498
$
398
Less: Adjusted net income (loss) attributable to trivago
7
7
(1
)
16
Adjusted net income excluding trivago
$
462
$
421
$
499
$
382
Adjusted earnings per share
$
3.51
$
2.89
$
3.66
$
2.64
Less: Adjusted earnings (loss) per share attributable to trivago
0.05
0.05
(0.01
)
0.11
Adjusted earnings per share excluding trivago(2)
$
3.46
$
2.84
$
3.67
$
2.53
(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
June 30,
Six months ended
June 30,
2024
2023
2024
2023
(In millions)
Net cash provided by operating activities
$
1,501
$
1,146
$
4,380
$
4,303
Less: Total capital expenditures
(194
)
(223
)
(371
)
(456
)
Free cash flow
$
1,307
$
923
$
4,009
$
3,847
Adjusted Expenses (Cost of revenue, direct and indirect selling and marketing, technology and content and general and administrative expenses)
Three months ended
June 30,
Six months ended
June 30,
2024
2023
2024
2023
(In millions)
Cost of revenue
$
362
$
407
$
720
$
821
Less: stock-based compensation
4
4
6
7
Adjusted cost of revenue
$
358
$
403
$
714
$
814
Less: trivago cost of revenue(1)
4
4
8
9
Adjusted cost of revenue excluding trivago
$
354
$
399
$
706
$
805
Selling and marketing - direct
$
1,793
$
1,579
$
3,443
$
3,066
Less: trivago selling and marketing - direct(2)
54
42
107
70
Adjusted selling and marketing excluding trivago - direct
$
1,739
$
1,537
$
3,336
$
2,996
Selling and marketing - indirect
$
197
$
191
383
378
Less: stock-based compensation
23
20
42
40
Adjusted selling and marketing - indirect
$
174
$
171
$
341
$
338
Less: trivago selling and marketing - indirect(1)
2
2
5
5
Adjusted selling and marketing excluding trivago - indirect
$
172
$
169
$
336
$
333
Technology and content
$
331
$
344
$
672
$
661
Less: stock-based compensation
40
36
80
70
Adjusted technology and content
$
291
$
308
$
592
$
591
Less: trivago technology and content(1)
12
12
24
23
Adjusted technology and content excluding trivago
$
279
$
296
$
568
$
568
General and administrative
$
180
$
194
$
366
$
378
Less: stock-based compensation
39
46
82
92
Adjusted general and administrative
$
141
$
148
$
284
$
286
Less: trivago general and administrative(1)
9
9
17
17
Adjusted general and administrative excluding trivago
$
132
$
139
$
267
$
269
Total adjusted overhead expenses(3)
$
606
$
627
$
1,217
$
1,215
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 August 8, 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808773380/en/
Investor Relations ir@expediagroup.com
Communications press@expediagroup.com
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