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Expedia Group (EXPE) Posts Q2 Loss, Beats Revenue Estimates

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Expedia Group, Inc. (EXPE - Free Report) reported an adjusted loss of $1.13 per share for second-quarter 2021, wider than the Zacks Consensus Estimate of a loss of 76 cents.

Notably, the bottom line compares favorably with the prior quarter’s loss of $2.02 per share and the year-ago quarter’s loss of $4.09 per share.

Revenues of $2.11 billion surpassed the Zacks Consensus Estimate of $2.04 billion. Further, the top line surged 69.4% sequentially and 273% year over year.

The coronavirus pandemic-led sluggishness in travel trends, especially international and corporate travel, continued to be a major headwind.

Nevertheless, the company witnessed improving travel conditions in North America, which were positives. Further, strengthening momentum across vacation rental and conventional lodging contributed well to top-line growth. Also, improved air travel demand was a positive.

Expedia Group’s gross bookings were $20.8 billion, which surpassed the Zacks Consensus Estimate of $19.2 billion. The figure increased 667% year over year. The company experienced a sequential improvement in the booking for lodging, air and other travel products in the second quarter.

However, uncertainties continue to persist in the global travel industry, owing to the resurgence in the number of COVID-19 cases and the emergence of new corona variants.

Nevertheless, optimism regarding the ongoing vaccination drive remains a major tailwind.Additionally, the proper execution of the company’s cost-saving strategies remained a tailwind.

Expedia Group, Inc. Price, Consensus and EPS Surprise

Expedia Group, Inc. Price, Consensus and EPS Surprise

Expedia Group, Inc. price-consensus-eps-surprise-chart | Expedia Group, Inc. Quote

Revenues by Segment

Retail: The company generated $1.7 billion in revenues (81.2% of total revenues) from the segment, which surged 270% year over year.

B2B: The segment yielded revenues of $305 million (14.4% of total revenues), which were up 348% from the year-ago quarter.

trivago: Revenues from the segment totaled $115 million (5.4% of revenues), up 551% year over year.

Revenues by Business Model

The Merchant model generated revenues of $1.34 billion (63.4% of revenues), up 264% year over year. Merchant gross bookings were $10.4 billion, up 674% from the prior-year quarter.

The Agency division generated revenues of $573 million (27.1% of revenues), improving442% from the prior-year quarter. Agency gross bookings were $10.4 billion, up661% year over year.

Advertising & Media and Other generated $200 million of revenues (9.5% of the top line), increasing 115% from the year-ago quarter. This can primarily be attributed to the strong performance of Expedia Group Media Solutions and trivago.

Revenues by Geography

Expedia Group generated $1.74 billion in revenues (82.2% of total revenues) from domestic regions, up275% from the prior-year quarter.

Revenues generated from international regions totaled $375 million (17.8% of revenues), up264% on a year-over-year basis.

Revenues by Product Line

Lodging revenues accounted for 73% of total revenues. The company witnessed 215% growth in Lodging revenues, owing to the solid momentum in stayed room nights, which grew 196%.The company witnessed a 7% rise in revenues per room night.

Air revenues accounted for 4% of revenues. Notably, the company witnessed strong growth in Air revenues, owing to growth of 299% in air tickets sold.

Operating Details

Adjusted EBITDA was $201 million in the reported quarter against ($436) million in the year-ago quarter.

Adjusted selling and marketing expenses were $1.2 billion, up320% year over year. Adjusted general and administrative expenses were $134 million, up4% year over year. Adjusted technology and content expenses were $244 million, down 4% from the year-ago quarter.

The company reported a second-quarter operating loss of $132 million compared with the loss of $849 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Jun 30, 2021, cash and cash equivalents were $5.5 billion, up from $4.3 billion as of Mar 31, 2021. Short-term investments totaled $11 million, down from $23 million in the previous quarter.

Long-term debt was $8.48 billion at the end of the second quarter compared with $8.46 billion at the end of the first quarter.

Expedia Group generated $2.5 billion of cash from operations in the quarter under review compared with $2.2 billion in the last reported quarter.

Free cash flow was $2.3 billion in the second quarter.

Zacks Rank & Stocks to Consider

Currently, the company carries a Zacks Rank #5 (Strong Sell).

AutoNation, Inc. (AN - Free Report) , Revolve Group, Inc. (RVLV - Free Report) and Target Coporation (TGT - Free Report) are some better-ranked stocks in the broader Retail-Wholesale sector. While AutoNation and Revolve sport a Zacks Rank #1 (Strong Buy) at present, Target carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for AutoNation, Revolve and Target are pegged at 20.16%, 14.93% and 13.27%, respectively.