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Expedia Group (EXPE) Q4 Earnings Beat, Revenues Rise Y/Y
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Expedia Group, Inc. (EXPE - Free Report) delivered fourth-quarter 2023 adjusted earnings of $1.72 per share, up 37% from the year-ago quarter. The figure beat the Zacks Consensus Estimate by 2.99%.
Revenues of $2.89 billion rose 10% year over year. The figure surpassed the Zacks Consensus Estimate of $2.88 billion.
Year-over-year revenue growth was driven by the strong performance delivered by the B2B segment. Strength in lodging offerings and growing momentum across non-U.S. regions contributed well.
Growing gross bookings, owing to a solid momentum in the ‘booked room nights’ metric, was another positive.
However, softness in Trivago was concerning.
EXPE’s growing efforts toward strengthening its B2C and B2B businesses are noteworthy. The company’s initiative to infuse generative AI technology into its services is expected to drive customer momentum by delivering an enhanced user experience. These factors will likely benefit its financial performance in the days ahead and instill investor optimism in the stock.
EXPE shares have returned 35.5% in a year, outperforming the Zacks Retail-Wholesale sector’s rally of 26.2%.
Expedia Group, Inc. Price, Consensus and EPS Surprise
B2C: Expedia generated $1.96 billion in revenues (67.8% of the total revenues) from the segment, growing 4% year over year.
B2B: The segment yielded revenues of $864 million (30% of the total revenues), up 28% from the year-ago quarter.
Trivago: Revenues from the segment totaled $65 million (2.2% of the total revenues), down 5% year over year.
Revenues by Region
Expedia generated $1.8 billion in revenues (61.9% of the total revenues) from U.S. points of sale, up 4% from the prior-year quarter.
Revenues generated by non-U.S. points of sale totaled $1.1 billion (38.1% of the total revenues), up 22% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $2.3 billion, accounting for 79.8% of the total revenues. EXPE witnessed 14% growth in Lodging revenues on a year-over-year basis.
Air revenues were $86 million, representing 3% of the total revenues. EXPE witnessed a 7% fall in Air revenues. Nevertheless, the company experienced 3% year-over-year growth in ‘booked air tickets.’
Advertising and media generated revenues of $205 million, up 16% from the prior-year quarter. The figure accounted for 7.1% of the total revenues.
Other revenues were $292 million (10.1% of the total revenues), down 13% year over year.
Gross Bookings
Expedia’s gross bookings were $21.7 billion, which increased 6% year over year. The reported figure missed the Zacks Consensus Estimate of $21.9 billion.
Agency’s gross bookings were $9.44 billion (43.6% of gross bookings), down 0.3% year over year. The figure lagged the consensus mark of $9.62 billion.
Merchant’s gross bookings were $12.23 billion (56.4%), up 11% from the prior-year quarter’s figure. The figure lagged the consensus mark of $12.27 billion.
Strong momentum in lodging gross bookings, which grew 8% year over year, contributed well.
Strength in ‘booked room nights,’ which rose 9% from the year-ago quarter, was a positive.
Operating Details
Adjusted EBITDA was $532 million in the reported quarter, up 19% from the year-ago quarter.
Selling and marketing expenses (direct and indirect) were $1.56 billion, up 13.6% year over year. As a percentage of revenues, the figure expanded 150 basis points (bps) year over year.
General and administrative expenses were $199 million, up 7% year over year. The figure contracted 20 bps year over year as a percentage of revenues.
Technology and content expenses were $357 million, up 12.6% from the year-ago quarter. The figure expanded 30 bps from the year-ago quarter as a percentage of revenues.
EXPE reported a fourth-quarter operating income of $104 million, which decreased 19% year over year. The operating margin was 3.6%, which contracted 130 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash and cash equivalents were $4.23 billion, up from $5.06 billion as of Sep 30, 2023. Short-term investments were $28 million in the reported quarter.
Long-term debt was $6.253 billion at the end of the fourth quarter compared with $6.250 billion at the end of the third quarter.
Expedia used $238 million of cash in operations in the quarter under review compared with $1.37 billion in the previous quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
Investors interested in the broader retail-wholesale sector can consider some better-ranked stocks like Amazon (AMZN - Free Report) , Fastenal (FAST - Free Report) and Darden Restaurants (DRI - Free Report) . Amazon sports a Zacks Rank #1 (Strong Buy), and Fastenal and Darden Restaurants carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Amazon have gained 72.9% over a year. The long-term earnings growth rate for AMZN is projected at 28.13%.
Shares of Fastenal have gained 36.9% over a year. The long-term earnings growth rate for FAST is expected to be 9%.
Shares of Darden Restaurants have gained 16.8% in the same time frame. The long-term earnings growth rate for DRI is projected at 7.96%.
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Expedia Group (EXPE) Q4 Earnings Beat, Revenues Rise Y/Y
Expedia Group, Inc. (EXPE - Free Report) delivered fourth-quarter 2023 adjusted earnings of $1.72 per share, up 37% from the year-ago quarter. The figure beat the Zacks Consensus Estimate by 2.99%.
Revenues of $2.89 billion rose 10% year over year. The figure surpassed the Zacks Consensus Estimate of $2.88 billion.
Year-over-year revenue growth was driven by the strong performance delivered by the B2B segment. Strength in lodging offerings and growing momentum across non-U.S. regions contributed well.
Growing gross bookings, owing to a solid momentum in the ‘booked room nights’ metric, was another positive.
However, softness in Trivago was concerning.
EXPE’s growing efforts toward strengthening its B2C and B2B businesses are noteworthy. The company’s initiative to infuse generative AI technology into its services is expected to drive customer momentum by delivering an enhanced user experience. These factors will likely benefit its financial performance in the days ahead and instill investor optimism in the stock.
EXPE shares have returned 35.5% in a year, outperforming the Zacks Retail-Wholesale sector’s rally of 26.2%.
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 $1.96 billion in revenues (67.8% of the total revenues) from the segment, growing 4% year over year.
B2B: The segment yielded revenues of $864 million (30% of the total revenues), up 28% from the year-ago quarter.
Trivago: Revenues from the segment totaled $65 million (2.2% of the total revenues), down 5% year over year.
Revenues by Region
Expedia generated $1.8 billion in revenues (61.9% of the total revenues) from U.S. points of sale, up 4% from the prior-year quarter.
Revenues generated by non-U.S. points of sale totaled $1.1 billion (38.1% of the total revenues), up 22% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $2.3 billion, accounting for 79.8% of the total revenues. EXPE witnessed 14% growth in Lodging revenues on a year-over-year basis.
Air revenues were $86 million, representing 3% of the total revenues. EXPE witnessed a 7% fall in Air revenues. Nevertheless, the company experienced 3% year-over-year growth in ‘booked air tickets.’
Advertising and media generated revenues of $205 million, up 16% from the prior-year quarter. The figure accounted for 7.1% of the total revenues.
Other revenues were $292 million (10.1% of the total revenues), down 13% year over year.
Gross Bookings
Expedia’s gross bookings were $21.7 billion, which increased 6% year over year. The reported figure missed the Zacks Consensus Estimate of $21.9 billion.
Agency’s gross bookings were $9.44 billion (43.6% of gross bookings), down 0.3% year over year. The figure lagged the consensus mark of $9.62 billion.
Merchant’s gross bookings were $12.23 billion (56.4%), up 11% from the prior-year quarter’s figure. The figure lagged the consensus mark of $12.27 billion.
Strong momentum in lodging gross bookings, which grew 8% year over year, contributed well.
Strength in ‘booked room nights,’ which rose 9% from the year-ago quarter, was a positive.
Operating Details
Adjusted EBITDA was $532 million in the reported quarter, up 19% from the year-ago quarter.
Selling and marketing expenses (direct and indirect) were $1.56 billion, up 13.6% year over year. As a percentage of revenues, the figure expanded 150 basis points (bps) year over year.
General and administrative expenses were $199 million, up 7% year over year. The figure contracted 20 bps year over year as a percentage of revenues.
Technology and content expenses were $357 million, up 12.6% from the year-ago quarter. The figure expanded 30 bps from the year-ago quarter as a percentage of revenues.
EXPE reported a fourth-quarter operating income of $104 million, which decreased 19% year over year. The operating margin was 3.6%, which contracted 130 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash and cash equivalents were $4.23 billion, up from $5.06 billion as of Sep 30, 2023. Short-term investments were $28 million in the reported quarter.
Long-term debt was $6.253 billion at the end of the fourth quarter compared with $6.250 billion at the end of the third quarter.
Expedia used $238 million of cash in operations in the quarter under review compared with $1.37 billion in the previous quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
Investors interested in the broader retail-wholesale sector can consider some better-ranked stocks like Amazon (AMZN - Free Report) , Fastenal (FAST - Free Report) and Darden Restaurants (DRI - Free Report) . Amazon sports a Zacks Rank #1 (Strong Buy), and Fastenal and Darden Restaurants carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Amazon have gained 72.9% over a year. The long-term earnings growth rate for AMZN is projected at 28.13%.
Shares of Fastenal have gained 36.9% over a year. The long-term earnings growth rate for FAST is expected to be 9%.
Shares of Darden Restaurants have gained 16.8% in the same time frame. The long-term earnings growth rate for DRI is projected at 7.96%.