Gross bookings increase 20% with record lodging gross bookings
Highest ever first quarter revenue, up 18%
Accelerated level of share repurchases at $600 million year-to-date
SEATTLE, WA – May 4, 2023 – Expedia Group, Inc. (NASDAQ: EXPE) announced financial results today for the first quarter ended March 31, 2023.
"The first quarter saw strong travel demand driven by increasing international travel, major city travel, and the reopening in Asia. We invested into that demand driving record lodging bookings and continued strength in app usage and loyalty member counts. We also saw strong growth in B2B driven by an expanding partner base and growth from our existing partners. Our performance was enhanced by greater testing velocity and accelerating deployment of AI and ML, including our recent integration of ChatGPT into our iOS experience," said Peter Kern, Vice Chairman and CEO, Expedia Group. "With our strategy gaining momentum, we saw the opportunity to continue to buy our equity attractively. We repurchased $600 million of shares, one of our highest levels ever year-to-date."
First Quarter Highlights
•Total gross bookings were $29.4 billion, an increase of 20%, compared to 2022.
•Lodging bookings at $21.1 billion were at record levels.
•Highest ever first quarter revenue was $2.7 billion, an increase of 18%, compared to 2022.
•B2B revenue was $668 million, an increase of 55%, compared to 2022.
•Record net cash provided by operating activities of $3.2 billion and record free cash flow of $2.9 billion.
•Repurchased at an accelerated pace $600 million or approximately 6.0 million shares year-to-date.
Financial Summary & Operating Metrics (In millions except per share amounts)
Expedia Group, Inc.
Metric
Q1 2023
Q1 2022
Δ Y/Y
Booked room nights
94.5
77.0
23%
Gross bookings
$29,401
$24,412
20%
Revenue
$2,665
$2,249
18%
Operating loss
$(121)
$(135)
(11)%
Net loss attributable to Expedia Group, Inc.
$(145)
$(122)
18%
Diluted loss per share
$(0.95)
$(0.78)
21%
Adjusted EBITDA(1)
$185
$173
7%
Adjusted net loss(1)
$(30)
$(74)
(59)%
Adjusted EPS(1)
$(0.20)
$(0.47)
(58)%
Net cash provided by operating activities
$3,157
$2,991
6%
Free cash flow(1)
$2,924
$2,835
3%
(1) See Definitions of Non-GAAP Measures and reconciliations of GAAP to non-GAAP measures beginning on page 8.
Page 1 of 15
Conference Call
Expedia Group, Inc. will webcast a conference call to discuss first quarter 2023 financial results and certain forward-looking information on Thursday, May 4, 2023 at 1:30 p.m. Pacific Time (PT). The webcast will be open to the public and available via ir.expediagroup.com. Expedia Group expects to maintain access to the webcast on the IR website for approximately twelve months subsequent to the initial broadcast.
About Expedia Group
Expedia Group, Inc. (NASDAQ: EXPE) companies power travel for everyone, everywhere through our global platform. Driven by the core belief that travel is a force for good, we help people experience the world in new ways and build lasting connections. We provide industry-leading technology solutions to fuel partner growth and success, while facilitating memorable experiences for travelers. Our organization is made up of three pillars: Expedia Product and Technology, focused on the group’s product and technical strategy and offerings; Expedia Brands, housing all our consumer brands; and Expedia for Business, consisting of business-to-business solutions and relationships throughout the travel ecosystem. The Expedia Group family of brands includes: Expedia®, Hotels.com®, Expedia® Partner Solutions, Vrbo®, trivago®, Orbitz®, Travelocity®, Hotwire®, Wotif®, ebookers®, CheapTickets®, Expedia Group™ Media Solutions, CarRentals.com™, and Expedia Cruises™.
The supplemental metrics below are intended to supplement the financial statements in this release and in our filings with the SEC, and do not include adjustments for one-time items, acquisitions, foreign exchange or other adjustments. The definition, methodology and appropriateness of any of our supplemental metrics are subject to removal and/or change, and such changes could be material. In the event of any discrepancy between any supplemental metric and our historical financial statements, you should rely on the information filed with the SEC and the financial statements in our most recent earnings release.
2021
2022
2023
Full Year
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2021
2022
Units sold
Booked room nights
54.0
68.4
65.4
59.7
77.0
82.5
81.6
70.8
94.5
247.5
312.0
Booked air tickets
8.9
13.4
12.7
11.3
13.1
13.5
12.2
11.1
14.0
46.3
49.9
Gross bookings by business model
Agency
$6,737
$10,362
$8,855
$8,325
$11,346
$12,773
$10,904
$9,469
$13,425
$34,279
$44,492
Merchant
8,685
10,453
9,870
9,138
13,066
13,366
13,083
11,042
15,976
38,146
50,557
Total
$15,422
$20,815
$18,725
$17,463
$24,412
$26,139
$23,987
$20,511
$29,401
$72,425
$95,049
Lodging gross bookings
$12,002
$14,431
$13,046
$12,000
$17,756
$17,867
$17,099
$14,117
$21,055
$51,479
$66,839
Revenue by segment
B2C
$1,025
$1,715
$2,351
$1,730
$1,740
$2,420
$2,707
$1,874
$1,921
$6,821
$8,741
B2B
184
305
490
481
432
650
788
676
668
1,460
2,546
trivago (third-party revenue)
37
91
121
68
77
111
124
68
76
317
380
Total
$1,246
$2,111
$2,962
$2,279
$2,249
$3,181
$3,619
$2,618
$2,665
$8,598
$11,667
Revenue by product
Lodging
$903
$1,533
$2,300
$1,713
$1,610
$2,400
$2,881
$2,014
$2,029
$6,449
$8,905
Air
50
78
61
65
74
95
100
93
113
254
362
Advertising and media
88
161
202
152
166
213
222
176
175
603
777
Other(1)
205
339
399
349
399
473
416
335
348
1,292
1,623
Total
$1,246
$2,111
$2,962
$2,279
$2,249
$3,181
$3,619
$2,618
$2,665
$8,598
$11,667
Revenue by geography
U.S. points of sale
$1,001
$1,736
$2,177
$1,655
$1,656
$2,208
$2,358
$1,717
$1,748
$6,569
$7,939
Non-U.S. points of sale
245
375
785
624
593
973
1,261
901
917
2,029
3,728
Total
$1,246
$2,111
$2,962
$2,279
$2,249
$3,181
$3,619
$2,618
$2,665
$8,598
$11,667
Adjusted EBITDA by segment(3)
B2C
$106
$316
$879
$481
$188
$582
$943
$411
$148
$1,782
$2,124
B2B
(57)
(4)
74
97
80
156
221
142
133
110
599
Other(2)
(107)
(111)
(98)
(99)
(95)
(90)
(85)
(104)
(96)
(415)
(374)
Total
$(58)
$201
$855
$479
$173
$648
$1,079
$449
$185
$1,477
$2,349
Net income (loss) attributable to Expedia Group common stockholders(4)
$(606)
$(301)
$362
$276
$(122)
$(185)
$482
$177
$(145)
$(269)
$352
(1) Other revenue primarily includes insurance, car rental, destination services and cruise revenue.
(2) Other is comprised of trivago, corporate and intercompany eliminations. See the section below titled "Tabular Reconciliations for Non-GAAP Measures — Adjusted EBITDA by segment" for additional details.
(3) See Definitions of Non-GAAP Measures and reconciliations of GAAP to non-GAAP measures beginning on page 8.
(4) Expedia Group does not calculate or report net income (loss) by segment.
Notes:
•All trivago revenue is classified as Non-U.S. point of sale.
•B2B includes Egencia, our former full-service travel management company, through its sale in November 2021.
•Some numbers may not add due to rounding.
Page 3 of 15
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
Three months ended March 31,
2023
2022
Revenue
$
2,665
$
2,249
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below) (1)
414
371
Selling and marketing (1)
1,674
1,339
Technology and content (1)
317
270
General and administrative (1)
184
186
Depreciation and amortization
192
197
Legal reserves, occupancy tax and other
5
21
Operating loss
(121)
(135)
Other income (expense):
Interest income
43
3
Interest expense
(61)
(81)
Other, net
78
5
Total other income (expense), net
60
(73)
Loss before income taxes
(61)
(208)
Provision for income taxes
(79)
85
Net loss
(140)
(123)
Net (income) loss attributable to non-controlling interests
(5)
1
Net loss attributable to Expedia Group, Inc.
$
(145)
$
(122)
Earnings (loss) per share attributable to Expedia Group, Inc. available to common stockholders:
Basic
$
(0.95)
$
(0.78)
Diluted
(0.95)
(0.78)
Shares used in computing earnings (loss) per share (000's):
Basic
152,477
156,336
Diluted
152,477
156,366
(1) Includes stock-based compensation as follows:
Cost of revenue
$
3
$
3
Selling and marketing
20
15
Technology and content
34
27
General and administrative
46
45
Page 4 of 15
EXPEDIA GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands and par value)
March 31, 2023
December 31, 2022
March 31, 2022
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
5,904
$
4,096
$
5,552
Restricted cash and cash equivalents
2,483
1,755
2,583
Short-term investments
44
48
—
Accounts receivable, net of allowance of $45, $40 and $66
2,523
2,078
1,736
Income taxes receivable
53
40
93
Prepaid expenses and other current assets
1,119
774
1,183
Total current assets
12,126
8,791
11,147
Property and equipment, net
2,260
2,210
2,169
Operating lease right-of-use assets
353
363
395
Long-term investments and other assets
1,198
1,184
1,468
Deferred income taxes
703
661
864
Intangible assets, net
1,196
1,209
1,368
Goodwill
7,150
7,143
7,166
TOTAL ASSETS
$
24,986
$
21,561
$
24,577
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, merchant
$
1,531
$
1,709
$
1,292
Accounts payable, other
1,010
947
934
Deferred merchant bookings
11,036
7,151
9,203
Deferred revenue
186
163
178
Income taxes payable
104
21
19
Accrued expenses and other current liabilities
745
787
843
Total current liabilities
14,612
10,778
12,469
Long-term debt
6,243
6,240
7,719
Deferred income taxes
35
52
58
Operating lease liabilities
305
312
350
Other long-term liabilities
501
451
414
Commitments and contingencies
Stockholders’ equity:
Common stock: $.0001 par value; Authorized shares: 1,600,000
—
—
—
Shares issued: 279,097, 278,264 and 276,329; Shares outstanding: 144,084, 147,757 and 151,554
Class B common stock: $.0001 par value; Authorized shares: 400,000
—
—
—
Shares issued: 12,800; Shares outstanding: 5,523
Additional paid-in capital
14,938
14,795
14,431
Treasury stock - Common stock and Class B, at cost; Shares 142,289, 137,783 and 132,051
(11,341)
(10,869)
(10,309)
Retained earnings (deficit)
(1,554)
(1,409)
(1,883)
Accumulated other comprehensive income (loss)
(211)
(234)
(161)
Total Expedia Group, Inc. stockholders’ equity
1,832
2,283
2,078
Non-redeemable non-controlling interests
1,458
1,445
1,489
Total stockholders’ equity
3,290
3,728
3,567
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
24,986
$
21,561
$
24,577
Page 5 of 15
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three months ended March 31,
2023
2022
Operating activities:
Net loss
$
(140)
$
(123)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of property and equipment, including internal-use software and website development
177
175
Amortization of intangible assets
15
22
Amortization of stock-based compensation
103
90
Deferred income taxes
(57)
(101)
Foreign exchange (gain) loss on cash, restricted cash and short-term investments, net
(8)
6
Realized (gain) loss on foreign currency forwards, net
(12)
32
Gain on minority equity investments, net
(1)
(21)
Other, net
14
2
Changes in operating assets and liabilities:
Accounts receivable
(456)
(476)
Prepaid expenses and other assets
(293)
(356)
Accounts payable, merchant
(178)
(41)
Accounts payable, other, accrued expenses and other liabilities
79
280
Tax payable/receivable, net
29
(13)
Deferred merchant bookings
3,885
3,515
Net cash provided by operating activities
3,157
2,991
Investing activities:
Capital expenditures, including internal-use software and website development
(233)
(156)
Sales and maturities of investments
5
200
Proceeds from initial exchange of cross-currency interest rate swaps
—
337
Payments for initial exchange of cross-currency interest rate swaps
—
(337)
Other, net
33
(31)
Net cash provided by (used in) investing activities
(195)
13
Financing activities:
Payment of long-term debt
—
(724)
Purchases of treasury stock
(469)
(47)
Proceeds from exercise of equity awards and employee stock purchase plan
29
101
Other, net
3
7
Net cash used in financing activities
(437)
(663)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents
11
(11)
Net increase in cash, cash equivalents and restricted cash and cash equivalents
2,536
2,330
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
5,851
5,805
Cash, cash equivalents and restricted cash and cash equivalents at end of period
$
8,387
$
8,135
Supplemental cash flow information
Cash paid for interest
$
81
$
117
Income tax payments, net
34
26
Page 6 of 15
Notes & Definitions:
Booked Room Nights: Booked room nights represent booked hotel room nights and include property nights for our B2C reportable segment and booked hotel room nights for our B2B reportable segment. Booked hotel room nights include both merchant and agency hotel stays. Property nights are related to our alternative accommodation business.
Booked Air Tickets : Includes both merchant and agency air bookings.
Gross Bookings: Gross bookings generally represent the total retail value of transactions booked, recorded at the time of booking reflecting the total price due for travel by travelers, including taxes, fees and other charges, adjusted for cancellations and refunds.
Lodging Metrics: Reported on a booked basis except for revenue, which is on a stayed basis. Lodging consists of both merchant and agency model hotel and alternative accommodations.
B2C: The B2C segment (formerly referred to as Retail), which consists of the aggregation of operating segments, provides a full range of travel and advertising services to our worldwide customers through a variety of consumer brands including: Expedia, Hotels.com, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers, Hotwire.com, and CarRentals.com.
B2B: The B2B segment is comprised of Expedia Partner Solutions, which operates private label and co-branded programs to make travel services available to leisure travelers though third-party company branded websites and Egencia through its sale on November 1, 2021. In addition, this segment also includes Expedia Cruises and Traveldoo.
trivago: The trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its localized hotel metasearch websites.
Corporate: Includes unallocated corporate expenses
Page 7 of 15
Definitions of Non-GAAP Measures
Expedia Group reports Adjusted EBITDA, Leverage Ratio, Adjusted Net Income (Loss), Adjusted EPS, Free Cash Flow and Adjusted Expenses (non-GAAP cost of revenue, non-GAAP selling and marketing, non-GAAP technology and content and non-GAAP general and administrative), all of which are supplemental measures to GAAP and are defined by the SEC as non-GAAP financial measures. These measures are among the primary metrics by which management evaluates the performance of the business and on which internal budgets are based. Management believes that investors should have access to the same set of tools that management uses to analyze our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted EPS have certain limitations in that they do not take into account the impact of certain expenses to our consolidated statements of operations. We endeavor to compensate for the limitation of the non-GAAP measures presented by also providing the most directly comparable GAAP measures and descriptions of the reconciling items and adjustments to derive the non-GAAP measures. Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted EPS also exclude certain items related to transactional tax matters, which may ultimately be settled in cash. We urge investors to review the detailed disclosure regarding these matters in the Management Discussion and Analysis and Legal Proceedings sections, as well as the notes to the financial statements, included in the Company's annual and quarterly reports filed with the Securities and Exchange Commission. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Adjusted EBITDA is defined as net income (loss) attributable to Expedia Group adjusted for:
(1) net income (loss) attributable to non-controlling interests;
(2) provision for income taxes;
(3) total other expenses, net;
(4) stock-based compensation expense, including compensation expense related to certain subsidiary equity plans;
(5) acquisition-related impacts, including
(i) amortization of intangible assets and goodwill and intangible asset impairment,
(ii) gains (losses) recognized on changes in the value of contingent consideration arrangements; and
(iii) upfront consideration paid to settle employee compensation plans of the acquiree;
(6) certain other items, including restructuring;
(7) items included in legal reserves, occupancy tax and other, which includes reserves for potential settlement of issues related to transactional taxes (e.g. hotel and excise taxes), related to court decisions and final settlements, and charges incurred, if any, for monies that may be required to be paid in advance of litigation in certain transactional tax proceedings;
(8) that portion of gains (losses) on revenue hedging activities that are included in other, net that relate to revenue recognized in the period; and
(9) depreciation.
The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items is unpredictable, not driven by core operating results and renders comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA is a useful measure for analysts and investors to evaluate our future on-going performance as this measure allows a more meaningful comparison of our performance and projected cash earnings with our historical results from prior periods and to the results of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments. In addition, we believe that by excluding certain items, such as stock-based compensation and acquisition-related impacts, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of our business, from which capital investments are made and debt is serviced.
Page 8 of 15
Trailing Twelve Month Financial Information
Expedia Group includes certain unaudited financial information for the trailing twelve months ("TTM") ended March 31, 2023, which is calculated as the three months ended March 31, 2023 plus the year ended December 31, 2022 less the three months ended March 31, 2022. This presentation is not in accordance with GAAP. However, we believe that this presentation provides useful information to investors regarding its recent financial performance, and it views this presentation of the four most recently completed fiscal quarters as a key measurement period for investors to assess its historical results.
Adjusted Net Income (Loss) generally captures all items on the statements of operations that occur in normal course operations and have been, or ultimately will be, settled in cash and is defined as net income (loss) attributable to Expedia Group plus the following items, net of tax(a):
(1) stock-based compensation expense, including compensation expense related to equity plans of certain subsidiaries and equity-method investments;
(2) acquisition-related impacts, including;
(i) amortization of intangible assets, including as part of equity-method investments, and goodwill and intangible asset impairment;
(ii) gains (losses) recognized on changes in the value of contingent consideration arrangements;
(iii) upfront consideration paid to settle employee compensation plans of the acquiree; and
(iv) gains (losses) recognized on non-controlling investment basis adjustments when we acquire or lose controlling interests;
(3) currency gains or losses on U.S. dollar denominated cash;
(4) the changes in fair value of equity investments;
(5) certain other items, including restructuring charges;
(6) items included in legal reserves, occupancy tax and other, which includes reserves for potential settlement of issues related to transactional taxes (e.g., hotel occupancy and excise taxes), related court decisions and final settlements, and charges incurred, if any, for monies that may be required to be paid in advance of litigation in certain transactional tax proceedings, including as part of equity method investments;
(7) discontinued operations;
(8) the non-controlling interest impact of the aforementioned adjustment items; and
(9) unrealized gains (losses) on revenue hedging activities that are included in other, net.
Adjusted Net Income (Loss) includes preferred share dividends. We believe Adjusted Net Income (Loss) is useful to investors because it represents Expedia Group's combined results, taking into account depreciation, which management believes is an ongoing cost of doing business, but excluding the impact of certain expenses and items not directly tied to the core operations of our businesses.
(a)Effective January 1, 2023, we changed our methodology for the computation of the effective tax rate on pretax adjusted net income to a long-term projected tax rate as our management believes this tax rate provides better consistency across reporting periods and produces results that are reflective of Expedia Group’s long-term effective tax rate. This projected effective tax rate excludes the income tax effects of Adjusted Net Income items described above and eliminates the effects of non-recurring and period specific items which can vary in size and frequency. Based on our current long-term projections, we are using an effective tax rate on pretax adjusted net income of 21.5% for 2023.
Adjusted EPS is defined as Adjusted Net Income (Loss) divided by adjusted weighted average shares outstanding, which, when applicable, include dilution from our convertible debt instruments per the treasury stock method for Adjusted EPS. The treasury stock method assumes we would elect to settle the principal amount of the debt for cash and the conversion premium for shares. If the conversion prices for such instruments exceed our average stock price for the period, the instruments generally would have no impact to adjusted weighted average shares outstanding. This differs from the GAAP method for dilution from our convertible debt instruments, which include them on an if-converted method. We believe Adjusted EPS is useful to investors because it represents, on a per share basis, Expedia Group's consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other items which are not allocated to the operating businesses such as interest expense, taxes, foreign exchange gains or losses, and minority interest, but excluding the effects of certain expenses not
Page 9 of 15
directly tied to the core operations of our businesses. Adjusted Net Income (Loss) and Adjusted EPS have similar limitations as Adjusted EBITDA. In addition, Adjusted Net Income (Loss) does not include all items that affect our net income (loss) and net income (loss) per share for the period. Therefore, we think it is important to evaluate these measures along with our consolidated statements of operations.
Free Cash Flow is defined as net cash flow provided by operating activities less capital expenditures. Management believes Free Cash Flow is useful to investors because it represents the operating cash flow that our operating businesses generate, less capital expenditures but before taking into account other cash movements that are not directly tied to the core operations of our businesses, such as financing activities, foreign exchange or certain investing activities. Free Cash Flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent the residual cash flow for discretionary expenditures. Therefore, it is important to evaluate Free Cash Flow along with the consolidated statements of cash flows.
Adjusted Expenses (cost of revenue, direct and indirect selling and marketing, technology and content and general and administrative expenses) exclude stock-based compensation related to expenses for stock options, restricted stock units and other equity compensation under applicable stock-based compensation accounting standards. Expedia Group excludes stock-based compensation from these measures primarily because they are non-cash expenses that we do not believe are necessarily reflective of our ongoing cash operating expenses and cash operating income. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting applicable stock-based compensation accounting standards, management believes that providing non-GAAP financial measures that exclude stock-based compensation allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies, as well as providing management with an important tool for financial operational decision making and for evaluating our own recurring core business operating results over different periods of time. There are certain limitations in using financial measures that do not take into account stock-based compensation, including the fact that stock-based compensation is a recurring expense and a valued part of employees' compensation. Therefore, it is important to evaluate both our GAAP and non-GAAP measures. See the Notes to the Consolidated Statements of Operations for stock-based compensation by line item.
Expedia Group, Inc. (excluding trivago) In order to provide increased transparency on the transaction-based component of the business, Expedia Group is reporting results both in total and excluding trivago.
In addition, we evaluate certain operating and financial measures, including revenue growth, on both an as-reported and excluding the impact of foreign exchange, FX neutral, basis. FX neutral results are among the primary metrics by which management evaluates the performance of the business and management believes that investors should have access to the same set of tools that management uses to analyze our results. We estimate FX neutral revenue growth by (i) excluding the FX impacts resulting from the time period between a transaction's booking date and revenue recognition date for both the current and prior year periods, and (ii) converting our current-year period results for transactions recorded in currencies other than U.S. Dollars using the corresponding prior-year period exchange rates rather than the current-year period exchange rates.
Page 10 of 15
Tabular Reconciliations for Non-GAAP Measures
Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization) by Segment(1)
Three months ended March 31, 2023
B2C
B2B
trivago
Corporate & Eliminations
Total
(In millions)
Operating income (loss)
$
18
$
106
$
19
$
(264)
$
(121)
Realized gain (loss) on revenue hedges
4
2
—
—
6
Legal reserves, occupancy tax and other
—
—
—
5
5
Stock-based compensation
—
—
—
103
103
Amortization of intangible assets
—
—
—
15
15
Depreciation
126
25
1
25
177
Adjusted EBITDA(1)
$
148
$
133
$
20
$
(116)
$
185
Three months ended March 31, 2022
B2C
B2B
trivago
Corporate & Eliminations
Total
(In millions)
Operating income (loss)
$
60
$
60
$
23
$
(278)
$
(135)
Legal reserves, occupancy tax and other
—
—
—
21
21
Stock-based compensation
—
—
—
90
90
Amortization of intangible assets
—
—
—
22
22
Depreciation
128
20
2
25
175
Adjusted EBITDA(1)
$
188
$
80
$
25
$
(120)
$
173
(1) Adjusted EBITDA for our B2C and B2B segments includes allocations of certain expenses, primarily cost of revenue and facilities, the total costs of our global travel supply organizations, the majority of platform and marketplace technology costs, and the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant lodging revenue. We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate certain shared expenses such as accounting, human resources, certain information technology and legal to our reportable segments. We include these expenses in Corporate and Eliminations. Our allocation methodology is periodically evaluated and may change.
Page 11 of 15
Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization)
Three months ended March 31,
Year Ended December 31,
TTM March 31,
2023
2022
2022
2023
($ in millions)
Net income (loss) attributable to Expedia Group, Inc.
$
(145)
$
(122)
$
352
$
329
Net income (loss) attributable to non-controlling interests
5
(1)
(9)
(3)
Provision for income taxes
79
(85)
195
359
Total other (income) expense, net
(60)
73
547
414
Operating income (loss)
(121)
(135)
1,085
1,099
Gain (loss) on revenue hedges related to revenue recognized
6
—
(6)
—
Legal reserves, occupancy tax and other
5
21
23
7
Stock-based compensation
103
90
374
387
Depreciation and amortization
192
197
792
787
Impairment of intangible assets
—
—
81
81
Adjusted EBITDA
$
185
$
173
$
2,349
$
2,361
Net income margin(1)
(5.4)
%
(5.4)
%
3.0
%
2.7
%
Adjusted EBITDA margin(1)
6.9
%
7.7
%
20.1
%
19.5
%
Long-term debt
$
6,243
Long-term debt to net income ratio
19.0
Long-term debt
$
6,243
Unamortized discounts and debt issuance costs
51
Adjusted debt
$
6,294
Leverage ratio(2)
2.7
(1) Net income and Adjusted EBITDA margins represent net income (loss) attributable to Expedia Group, Inc. or Adjusted EBITDA divided by revenue.
(2) Leverage ratio represents adjusted debt divided by TTM Adjusted EBITDA.
Page 12 of 15
Adjusted Net Income (Loss) & Adjusted EPS
Three months ended March 31,
2023
2022
(In millions, except share and per share data)
Net loss attributable to Expedia Group, Inc.
$
(145)
$
(122)
Less: Net (income) loss attributable to non-controlling interests
(5)
1
Less: Provision for income taxes
(79)
85
Loss before income taxes
(61)
(208)
Amortization of intangible assets
15
22
Stock-based compensation
103
90
Legal reserves, occupancy tax and other
5
21
Unrealized (gain) loss on revenue hedges
(2)
7
Gain on minority equity investments, net
(1)
(21)
TripAdvisor tax indemnification adjustment
(69)
—
Gain on sale of business, net
(20)
(2)
Adjusted loss before income taxes
(30)
(91)
GAAP Provision for income taxes
(79)
85
Provision for income taxes for adjustments
85
(61)
Total Adjusted provision for income taxes
6
24
Total Adjusted income tax rate
21.5
%
26.3
%
Non-controlling interests
(6)
(7)
Adjusted net loss attributable to Expedia Group, Inc.
$
(30)
$
(74)
GAAP diluted weighted average shares outstanding (000's)
152,477
156,366
GAAP diluted loss per share
$
(0.95)
$
(0.78)
Adjusted loss per share attributable to Expedia Group, Inc.
$
(0.20)
$
(0.47)
Ex-trivago Adjusted Net Income (Loss) and Adjusted EPS
Adjusted net loss attributable to Expedia Group, Inc.
$
(30)
$
(74)
Less: Adjusted net income attributable to trivago
9
14
Adjusted net loss excluding trivago
$
(39)
$
(88)
Adjusted loss per share attributable to Expedia Group, Inc.
$
(0.20)
$
(0.47)
Less: Adjusted earnings per share attributable to trivago
0.06
0.09
Adjusted loss per share excluding trivago
$
(0.26)
$
(0.56)
Free Cash Flow
Three months ended March 31,
2023
2022
(In millions)
Net cash provided by operating activities
$
3,157
$
2,991
Less: Total capital expenditures
(233)
(156)
Free cash flow
$
2,924
$
2,835
Page 13 of 15
Adjusted Expenses (Cost of revenue, direct and indirect selling and marketing, technology and content and general and administrative expenses)
Three months ended March 31,
2023
2022
(In millions)
Cost of revenue
$
414
$
371
Less: stock-based compensation
3
3
Adjusted cost of revenue
$
411
$
368
Less: trivago cost of revenue(1)
5
4
Adjusted cost of revenue excluding trivago
$
406
$
364
Selling and marketing expense - direct
$
1,487
$
1,176
Selling and marketing expense - indirect
187
163
Selling and marketing expense
1,674
1,339
Less: stock-based compensation
20
15
Adjusted selling and marketing expense
$
1,654
$
1,324
Less: trivago selling and marketing expense(1)(2)
31
27
Adjusted selling and marketing expense excluding trivago
$
1,623
$
1,297
Technology and content expense
$
317
$
270
Less: stock-based compensation
34
27
Adjusted technology and content expense
$
283
$
243
Less: trivago technology and content expense(1)
11
13
Adjusted technology and content expense excluding trivago
$
272
$
230
General and administrative expense
$
184
$
186
Less: stock-based compensation
46
45
Adjusted general and administrative expense
$
138
$
141
Less: trivago general and administrative expense(1)
8
8
Adjusted general and administrative expense excluding trivago
$
130
$
133
Total adjusted overhead expenses(3)
$
588
$
532
Note: Some numbers may not add due to rounding.
(1) trivago amount presented without stock-based compensation as those are included with the consolidated totals above.
(2) Selling and marketing expense adjusted to add back B2C direct marketing spend on trivago eliminated in consolidation.
(3) Total adjusted overhead expenses is the sum of adjusted expenses for Selling and marketing - indirect, Technology and content, and General and administrative.
Page 14 of 15
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These forward-looking statements are based on assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as “believe,” “estimate,” “expect” and “will,” or the negative of these terms or other similar expressions, among others, generally identify forward-looking statements. However, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and may include statements relating to future revenues, expenses, margins, profitability, net income (loss), earnings per share and other measures of results of operations and the prospects for future growth of Expedia Group, Inc.’s business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed periodic reports on Form 10-K and Form 10-Q, which are available on our investor relations website at ir.expediagroup.com and on the SEC website at www.sec.gov. All information provided in this release is as of May 4, 2023. Undue reliance should not be placed on forward-looking statements in this release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.
