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Expedia Group, Inc. (EXPE - Free Report) delivered third-quarter 2023 adjusted earnings of $5.41 per share, up 33% from the year-ago quarter. Further, the figure beat the Zacks Consensus Estimate by 5.05%.
Revenues of $3.93 billion rose 9% year over year. The figure beat the Zacks Consensus Estimate of $3.87 billion.
Year-over-year revenue growth was driven by solid travel demand. Further, the strong performance delivered by the B2B segment of the company contributed well.
This apart, growing gross bookings owing to solid momentum in the ‘booked room nights’ metric was positive.
However, softness in Trivago was a concern.
The uncertain macroeconomic environment remains negative.
Coming to price performance, Expedia has gained 8.3% in the year-to-date period, underperforming the Zacks Internet Commerce industry’s rally of 38.4%.
EXPE’s growing efforts toward strengthening its products and technology offerings for customers remain noteworthy. Moreover, the company’s initiative to infuse generative AI technology into its services is expected to drive customer momentum by delivering an enhanced user experience.
Further, its transformation strategy, growth initiatives and strength in its loyalty programs are likely to bolster Expedia’s customer base. These factors will likely benefit its financial performance in the days ahead and instill investor optimism in the stock.
Expedia Group, Inc. Price, Consensus and EPS Surprise
B2C: Expedia generated $2.82 billion of revenues (71.7% of the total revenues) from the segment, up 4.1% year over year.
B2B: The segment yielded revenues of $995 million (25.3% of the total revenues), up 26.3% from the year-ago quarter’s level.
Trivago: Revenues from the segment totaled $115 million (3% of the total revenues), down 7.3% year over year.
Revenues by Region
Expedia generated $2.44 billion of revenues (62.1% of the total revenues) from U.S. points of sale, up 3.5% from the prior-year quarter’s level.
Revenues generated by non-U.S. points of sale totaled $1.49 billion (37.9% of the total revenues), up 18.1% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $3.23 billion, accounting for 82.3% of the total revenues. EXPE witnessed 12.2% growth in Lodging revenues on a year-over-year basis.
Air revenues were $100 million, representing 2.5% of the total revenues. It also experienced 4.9% year-over-year growth in ‘booked air tickets.’
Advertising and media generated revenues of $240 million, up 8.1% from the prior-year quarter. The figure accounted for 6.1% of the total revenues.
Other revenues were $356 million (9.1% of total revenues), down 14.4% year over year.
Gross Bookings
Expedia’s gross bookings were $25.68 billion, which increased 7% year over year. The reported figure missed the Zacks Consensus Estimate of $25.98 billion.
Agency’s gross bookings were $10.93 billion (42.5% of gross bookings), up 0.2% year over year. The figure lagged the consensus mark of $11.41 billion.
Merchant’s gross bookings were $14.76 billion (57.5%), up 12.8% from the prior-year quarter’s figure. The figure beat the consensus mark of $14.57 billion.
Strong momentum in lodging gross bookings, which grew 8% year over year, contributed well. Strength in ‘booked room nights,’ which surged 9% from the year-ago quarter, was a positive.
Operating Details
Adjusted EBITDA was $1.2 billion in the reported quarter, up 13% from the year-ago quarter’s level.
Adjusted selling and marketing expenses were $1.84 billion, up 11.2% year over year. As a percentage of revenues, the figure expanded 110 basis points (bps) year over year.
Adjusted general and administrative expenses were $147 million, up 5% year over year. The figure contracted 20 bps year over year as a percentage of revenues.
Adjusted technology and content expenses were $305 million, up 8.2% from the year-ago quarter’s level.
EXPE reported a third-quarter operating income of $607 million, which decreased 19% year over year. Operating margin was 15.4%, which contracted 520 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents were $5.06 billion, up from $6.3 billion as of Jun 30, 2023.
Long-term debt was $6.250 billion at the end of the third quarter compared with $6.247 billion at the end of the second quarter.
Expedia used $1.37 billion of cash from operations during the quarter under review compared with $1.15 billion of cash generated in operations in the previous quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
Image: Bigstock
Expedia (EXPE) Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Expedia Group, Inc. (EXPE - Free Report) delivered third-quarter 2023 adjusted earnings of $5.41 per share, up 33% from the year-ago quarter. Further, the figure beat the Zacks Consensus Estimate by 5.05%.
Revenues of $3.93 billion rose 9% year over year. The figure beat the Zacks Consensus Estimate of $3.87 billion.
Year-over-year revenue growth was driven by solid travel demand. Further, the strong performance delivered by the B2B segment of the company contributed well.
This apart, growing gross bookings owing to solid momentum in the ‘booked room nights’ metric was positive.
However, softness in Trivago was a concern.
The uncertain macroeconomic environment remains negative.
Coming to price performance, Expedia has gained 8.3% in the year-to-date period, underperforming the Zacks Internet Commerce industry’s rally of 38.4%.
EXPE’s growing efforts toward strengthening its products and technology offerings for customers remain noteworthy. Moreover, the company’s initiative to infuse generative AI technology into its services is expected to drive customer momentum by delivering an enhanced user experience.
Further, its transformation strategy, growth initiatives and strength in its loyalty programs are likely to bolster Expedia’s customer base. These factors will likely benefit its financial performance in the days ahead and instill investor optimism in the stock.
Expedia Group, Inc. Price, Consensus and EPS Surprise
Expedia Group, Inc. price-consensus-eps-surprise-chart | Expedia Group, Inc. Quote
Top-Line in Detail
Revenues by Segment
B2C: Expedia generated $2.82 billion of revenues (71.7% of the total revenues) from the segment, up 4.1% year over year.
B2B: The segment yielded revenues of $995 million (25.3% of the total revenues), up 26.3% from the year-ago quarter’s level.
Trivago: Revenues from the segment totaled $115 million (3% of the total revenues), down 7.3% year over year.
Revenues by Region
Expedia generated $2.44 billion of revenues (62.1% of the total revenues) from U.S. points of sale, up 3.5% from the prior-year quarter’s level.
Revenues generated by non-U.S. points of sale totaled $1.49 billion (37.9% of the total revenues), up 18.1% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $3.23 billion, accounting for 82.3% of the total revenues. EXPE witnessed 12.2% growth in Lodging revenues on a year-over-year basis.
Air revenues were $100 million, representing 2.5% of the total revenues. It also experienced 4.9% year-over-year growth in ‘booked air tickets.’
Advertising and media generated revenues of $240 million, up 8.1% from the prior-year quarter. The figure accounted for 6.1% of the total revenues.
Other revenues were $356 million (9.1% of total revenues), down 14.4% year over year.
Gross Bookings
Expedia’s gross bookings were $25.68 billion, which increased 7% year over year. The reported figure missed the Zacks Consensus Estimate of $25.98 billion.
Agency’s gross bookings were $10.93 billion (42.5% of gross bookings), up 0.2% year over year. The figure lagged the consensus mark of $11.41 billion.
Merchant’s gross bookings were $14.76 billion (57.5%), up 12.8% from the prior-year quarter’s figure. The figure beat the consensus mark of $14.57 billion.
Strong momentum in lodging gross bookings, which grew 8% year over year, contributed well. Strength in ‘booked room nights,’ which surged 9% from the year-ago quarter, was a positive.
Operating Details
Adjusted EBITDA was $1.2 billion in the reported quarter, up 13% from the year-ago quarter’s level.
Adjusted selling and marketing expenses were $1.84 billion, up 11.2% year over year. As a percentage of revenues, the figure expanded 110 basis points (bps) year over year.
Adjusted general and administrative expenses were $147 million, up 5% year over year. The figure contracted 20 bps year over year as a percentage of revenues.
Adjusted technology and content expenses were $305 million, up 8.2% from the year-ago quarter’s level.
EXPE reported a third-quarter operating income of $607 million, which decreased 19% year over year. Operating margin was 15.4%, which contracted 520 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents were $5.06 billion, up from $6.3 billion as of Jun 30, 2023.
Long-term debt was $6.250 billion at the end of the third quarter compared with $6.247 billion at the end of the second quarter.
Expedia used $1.37 billion of cash from operations during the quarter under review compared with $1.15 billion of cash generated in operations in the previous quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are American Eagle Outfitters (AEO - Free Report) , Best Buy (BBY - Free Report) and Amazon (AMZN - Free Report) . While American Eagle Outfitters currently sports a Zacks Rank #1 (Strong Buy), Best Buy and Amazon carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters shares have risen 37.3% year to date. It has a long-term earnings growth rate of 15.31%.
Best Buy’s shares have risen 15.9% on a year-to-date basis. The company has a long-term earnings growth rate of 6.14%.
Amazon’s shares have rallied 47.6% on a year-to-date basis. AMZN has a long-term earnings growth rate of 28.5%.