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Expedia Group (EXPE) Q3 Earnings & Revenues Beat Estimates
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Expedia Group, Inc. (EXPE - Free Report) reported adjusted earnings of $3.53 per share for third-quarter 2021, which surpassed the Zacks Consensus Estimate by 116.6%.
Notably, the bottom line compares favorably with the prior quarter’s loss of $1.13 per share and the year-ago quarter’s loss of 22 cents per share.
Revenues of $2.96 billion surpassed the Zacks Consensus Estimate of $2.77 billion. Further, the top line rose 40.3% sequentially and 97% year over year.
The company witnessed recovery across all its lines of business, owing to improving travel conditions. The strong performance of Vrbo and solid demand in domestic travel drove the results.
Expedia Group’s gross bookings were $18.73 billion, which increased 117% year over year. However, the figure decreased 10% from the prior quarter, owing to a sequential decline in lodging, air, and other travel products due to risks and uncertainties related to the new COVID variant — Delta.
Although the coronavirus pandemic-led uncertainties continue to persist in the global travel industry, the removal of travel restrictions in many parts of the world as well as many countries opening for international travelers remain major tailwinds.
Further, optimism regarding the ongoing vaccination drive remains another positive.
Expedia Group, Inc. Price, Consensus and EPS Surprise
Retail: The company generated $2.35 billion in revenues (79.4% of total revenues) from the segment, surging 89% year over year.
B2B: The segment yielded revenues of $490 million (16.5% of total revenues), up 142% from the year-ago quarter.
trivago: Revenues from the segment totaled $163 million (5.5% of revenues), up 132% year over year.
Revenues by Business Model
The Merchant model generated revenues of $1.92 billion (64.9% of revenues), up 86% year over year. Merchant gross bookings were $9.9 billion, up 93% from the prior-year quarter.
The Agency division generated revenues of $800 million (27% of revenues), improving 143% from the prior-year quarter. Agency gross bookings were $8.9 billion, up 151% year over year.
Advertising & Media and Other generated $239 million of revenues (8.1% of the top line), increasing 67% 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 $2.18 billion in revenues (73.5% of total revenues) from domestic regions, up 111% from the prior-year quarter.
Revenues generated from international regions totaled $785 million (26.5% of revenues), up 67% on a year-over-year basis.
Revenues by Product Line
Lodging revenues accounted for 78% of total revenues. The company witnessed 87% growth in Lodging revenues, owing to the solid momentum in stayed room nights, which grew 59%. The company witnessed a 17% rise in revenues per room night.
Air revenues accounted for 2% of revenues. Notably, the company witnessed strong growth in Air revenues, owing to growth of 132% in air tickets sold.
Operating Details
Adjusted EBITDA was $855 million in the reported quarter, up 181% from the year-ago quarter.
Adjusted selling and marketing expenses were $1.3 billion, up 150% year over year. Adjusted general and administrative expenses were $133 million, up 16% year over year. Adjusted technology and content expenses were $245 million, up 8% from the year-ago quarter.
The company reported a third-quarter operating income of $524 million against the loss of $113 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash and cash equivalents were $5.03 billion, down from $5.5 billion as of Jun 30, 2021. Short-term investments were nil compared with $11 million in the previous quarter.
Long-term debt was $7.7 billion at the end of the third quarter compared with $8.5 billion at the end of the second quarter.
Expedia Group used $1.2 billion of cash from operations in the quarter under review against $2.5 billion of cash generated from operations in the last reported quarter.
Free cash flow was ($1.4 billion) in the third quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
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Expedia Group (EXPE) Q3 Earnings & Revenues Beat Estimates
Expedia Group, Inc. (EXPE - Free Report) reported adjusted earnings of $3.53 per share for third-quarter 2021, which surpassed the Zacks Consensus Estimate by 116.6%.
Notably, the bottom line compares favorably with the prior quarter’s loss of $1.13 per share and the year-ago quarter’s loss of 22 cents per share.
Revenues of $2.96 billion surpassed the Zacks Consensus Estimate of $2.77 billion. Further, the top line rose 40.3% sequentially and 97% year over year.
The company witnessed recovery across all its lines of business, owing to improving travel conditions. The strong performance of Vrbo and solid demand in domestic travel drove the results.
Expedia Group’s gross bookings were $18.73 billion, which increased 117% year over year. However, the figure decreased 10% from the prior quarter, owing to a sequential decline in lodging, air, and other travel products due to risks and uncertainties related to the new COVID variant — Delta.
Although the coronavirus pandemic-led uncertainties continue to persist in the global travel industry, the removal of travel restrictions in many parts of the world as well as many countries opening for international travelers remain major tailwinds.
Further, optimism regarding the ongoing vaccination drive remains another positive.
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 $2.35 billion in revenues (79.4% of total revenues) from the segment, surging 89% year over year.
B2B: The segment yielded revenues of $490 million (16.5% of total revenues), up 142% from the year-ago quarter.
trivago: Revenues from the segment totaled $163 million (5.5% of revenues), up 132% year over year.
Revenues by Business Model
The Merchant model generated revenues of $1.92 billion (64.9% of revenues), up 86% year over year. Merchant gross bookings were $9.9 billion, up 93% from the prior-year quarter.
The Agency division generated revenues of $800 million (27% of revenues), improving 143% from the prior-year quarter. Agency gross bookings were $8.9 billion, up 151% year over year.
Advertising & Media and Other generated $239 million of revenues (8.1% of the top line), increasing 67% 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 $2.18 billion in revenues (73.5% of total revenues) from domestic regions, up 111% from the prior-year quarter.
Revenues generated from international regions totaled $785 million (26.5% of revenues), up 67% on a year-over-year basis.
Revenues by Product Line
Lodging revenues accounted for 78% of total revenues. The company witnessed 87% growth in Lodging revenues, owing to the solid momentum in stayed room nights, which grew 59%. The company witnessed a 17% rise in revenues per room night.
Air revenues accounted for 2% of revenues. Notably, the company witnessed strong growth in Air revenues, owing to growth of 132% in air tickets sold.
Operating Details
Adjusted EBITDA was $855 million in the reported quarter, up 181% from the year-ago quarter.
Adjusted selling and marketing expenses were $1.3 billion, up 150% year over year. Adjusted general and administrative expenses were $133 million, up 16% year over year. Adjusted technology and content expenses were $245 million, up 8% from the year-ago quarter.
The company reported a third-quarter operating income of $524 million against the loss of $113 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash and cash equivalents were $5.03 billion, down from $5.5 billion as of Jun 30, 2021. Short-term investments were nil compared with $11 million in the previous quarter.
Long-term debt was $7.7 billion at the end of the third quarter compared with $8.5 billion at the end of the second quarter.
Expedia Group used $1.2 billion of cash from operations in the quarter under review against $2.5 billion of cash generated from operations in the last reported quarter.
Free cash flow was ($1.4 billion) in the third quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
AutoNation, Inc. (AN - Free Report) , The Kroger Co. (KR - Free Report) and Costco Wholesale (COST - Free Report) are some better-ranked companies in the broader Retail-Wholesale sector. While AutoNation and Kroger sport a Zacks Rank #1 (Strong Buy) at present, Costco 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, Kroger and Costco are pegged at 19.08%, 8.91% and 8.56%, respectively.