Yahoo Finance Expedia (EXPE) Posts Q1 Loss, Witnesses Y/Y Rise in Revenues
Expedia Group, Inc. EXPE reported a first-quarter 2023 adjusted loss of 20 cents per share, narrower than a loss of 47 cents reported in the year-ago quarter.
However, the figure missed the Zacks Consensus Estimate of $0.00.
Revenues of $2.67 billion rose 18% year over year. The figure marginally missed the Zacks Consensus Estimate of $2.69 billion.
Year-over-year revenue growth was driven by solid travel demand especially increasing international and major city travel demand. Further, the strong performance delivered by the B2C and B2B segments of the company contributed well.
Also, the reopening of Asia remained a major positive.
This apart, growing gross bookings owing to solid momentum in ‘booked room nights’ metric was a positive.
However, softness in Trivago was a concern.
The uncertain macroeconomic environment remains a negative.
Nevertheless, EXPE’s growing efforts toward strengthening its products and technology offerings for customers remain noteworthy. Moreover, the company’s initiative to infuse AI and ML technologies into its products and recent integration with ChatGPT are expected to drive its customer momentum by delivering enhanced user experience. This, in turn, will likely benefit its financial performance in the days ahead and instill investor optimism in the stock.
Coming to price performance, Expedia has gained 5.8% in the year-to-date period, underperforming the industry’s rally of 11.5%.
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
Notably, the company has renamed its ‘Retail’ segment ‘B2C’.
B2C: Expedia generated $1.92 billion of revenues (72% of the total revenues) from the segment, rising 10.4% year over year.
B2B: The segment yielded revenues of $668 million (25% of the total revenues), up 54.6% from the year-ago quarter’s level.
Trivago: Revenues from the segment totaled $76 million (3% of the total revenues), down 1.3% year over year.
Revenues by Region
Expedia generated $1.75 billion of revenues (65.6% of the total revenues) from U.S. points of sale, up 5.6% from the prior-year quarter’s level.
Revenues generated by non-U.S. points of sale totaled $917 million (34.4% of the total revenues), up 54.6% on a year-over-year basis.
Revenues by Product Line
Lodging revenues were $2.03 billion, accounting for 76.1% of the total revenues. EXPE witnessed 26% growth in Lodging revenues on a year-over-year basis.
Air revenues were $113 million, representing 4.2% of the total revenues. EXPE witnessed a 52.7% rise in Air revenues, owing to 6.9% year-over-year growth in ‘booked air tickets’.
Advertising and media generated revenues of $175 million, up 5.4% from the prior-year quarter. The figure accounted for 6.6% of the total revenues.
Other revenues were $348 million (13.1% of total revenues), down 12.8% year over year.
Gross Bookings
Expedia’s gross bookings were $29.4 billion, which increased 20% year over year.
Agency’s gross bookings were $13.4 billion (45.7% of gross bookings), up 18.3% year over year. Merchant’s gross bookings were $15.97 billion (54.3%), up 22.3% from the prior-year quarter’s figure.
Strong momentum in lodging gross bookings, which grew 18.6% from the year-ago quarter, contributed well. Also, strength in ‘booked room nights,’ which jumped 23% each, was a positive.
Operating Details
Adjusted EBITDA was $185 million in the reported quarter, up 7% from the year-ago quarter’s level.
Adjusted selling and marketing expenses were $1.65 billion, up 24.9% year over year. As a percentage of revenues, the figure expanded 320 basis points (bps) year over year.
Adjusted general and administrative expenses were $138 million, down 2.1% year over year. The figure contracted 110 bps year over year as a percentage of revenues.
Adjusted technology and content expenses were $283 million, up 16.5% from the year-ago quarter’s level. The figure contracted 20 bps from the year-ago quarter’s figure as a percentage of revenues.
EXPE reported a first-quarter operating loss of $121 million compared with a loss of $135 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2023, cash and cash equivalents were $5.9 billion, up from $4.1 billion as of Dec 31, 2022. Short-term investments were $44 million compared with $48 million at the end of the previous quarter.
Long-term debt was $6.243 billion at the end of the first quarter compared with $6.240 billion at the end of the fourth quarter.
Expedia generated $3.2 billion of cash from operations during the quarter under review compared with $182 million of cash used in operations in the previous quarter.
Free cash flow was $2.9 billion in the first quarter.
Zacks Rank & Stocks to Consider
Currently, Expedia carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are The Kroger Co. KR, Ulta Beauty ULTA and Rush Enterprises RUSHA. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kroger has gained 9.9% on a year-to-date basis. The long-term earnings growth rate for KR is currently projected at 5.99%.
Ulta Beauty has gained 10.4% on a year-to-date basis. The long-term earnings growth rate for ULTA is currently projected at 12.26%.
Rush Enterprises has lost 2.9% on a year-to-date basis. The long-term earnings growth rate for RUSHA is currently projected at 15%.
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