Expedia Group(EXPE) - 2025 Q1 - Quarterly Results

Financial and Operational Highlights Expedia Group's first quarter 2025 results met top-line guidance with 4% growth in gross bookings and 3% in revenue year-over-year, surpassing bottom-line expectations with a 16% increase in Adjusted EBITDA and expanding margins | Metric | Q1 2025 | Q1 2024 | Δ Y/Y | | :--- | :--- | :--- | :--- | | Gross bookings | $31,451M | $30,164M | 4% | | Revenue | $2,988M | $2,889M | 3% | | Operating loss | $(70)M | $(110)M | (36)% | | Net loss attributable to Expedia Group, Inc. | $(200)M | $(135)M | 49% | | Adjusted EBITDA* | $296M | $255M | 16% | | Adjusted EPS* | $0.40 | $0.21 | 90% | | Free cash flow* | $2,756M | $2,702M | 2% | - CEO Ariane Gorin stated that despite weaker than expected demand in the US, the company achieved its guidance, drove bottom-line growth, and is committed to continuing margin expansion while growing its top-line[3] - Key growth drivers in Q1 included a 6% increase in booked room nights, a 14% rise in B2B gross bookings, and a 20% growth in the Advertising business revenue[7] - The company repurchased approximately 1.7 million shares for $330 million and paid a quarterly dividend of $0.40 per share during the first quarter[7] Detailed Financial and Operating Metrics This section provides a detailed quarterly breakdown of key operating metrics and financial performance by business segment, highlighting an 8% growth in Merchant gross bookings and a 14% increase in B2B segment revenue Trended Metrics Q1 2025 operating metrics show a 6% year-over-year increase in booked room nights and a 4% rise in booked air tickets, though the Average Daily Rate (ADR) declined by 1% | Operating Metric | Q1 2025 | Q1 2024 | Y/Y Growth | | :--- | :--- | :--- | :--- | | Booked room nights (millions) | 107.7 | 101.2 | 6% | | Average Daily Rate (ADR) Booked | $213.9 | $216.5 | (1)% | | Booked air tickets (millions) | 14.8 | 14.2 | 4% | | Gross Bookings by Business Model | Q1 2025 ($M) | Q1 2024 ($M) | Y/Y Growth | | :--- | :--- | :--- | :--- | | Agency | $13,239 | $13,301 | 0% | | Merchant | $18,212 | $16,863 | 8% | | Total | $31,451 | $30,164 | 4% | | Revenue by Product | Q1 2025 ($M) | Q1 2024 ($M) | Y/Y Growth | | :--- | :--- | :--- | :--- | | Lodging | $2,289 | $2,228 | 3% | | Air | $107 | $115 | (7)% | | Advertising and media - EG | $174 | $145 | 20% | Segment Performance The B2B segment was the primary growth driver in Q1 2025, with gross bookings up 14% and revenue increasing 14% year-over-year, while the B2C segment saw modest 1% growth in gross bookings but a 2% decline in revenue | Performance by Segment (Q1 2025 vs Q1 2024) | B2C | B2B | | :--- | :--- | :--- | | Gross Bookings Growth | 1% | 14% | | Revenue Growth | (2)% | 14% | | Adjusted EBITDA Growth | 0% | 26% | - Direct selling and marketing expenses as a percentage of gross bookings remained stable for the B2C segment at 4.9% but increased for the B2B segment[19] - The B2B segment demonstrated improved profitability with its Adjusted EBITDA margin expanding by 219 basis points to 22.8%, while the B2C segment's margin saw a modest 20 basis point increase to 11.1%[19] Consolidated Financial Statements (GAAP) The GAAP-based consolidated financial statements detail the company's financial position and performance, reporting Q1 2025 revenue of $2.99 billion, an operating loss of $70 million, and a net loss of $200 million Consolidated Statements of Operations For Q1 2025, Expedia Group's revenue increased 3% YoY to $2.99 billion, recording an operating loss of $70 million, a 36% improvement, though net loss widened to $200 million primarily due to 'Other, net' expenses | Income Statement (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $2,988 | $2,889 | | Operating loss | $(70) | $(110) | | Net loss attributable to Expedia Group, Inc. | $(200) | $(135) | | Diluted loss per share | $(1.56) | $(0.99) | Consolidated Balance Sheets As of March 31, 2025, Expedia Group held $5.7 billion in cash and cash equivalents and total assets of $26.1 billion, with total liabilities at $23.8 billion, including $12.9 billion in deferred merchant bookings | Balance Sheet (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,715 | $4,183 | | Total current assets | $13,587 | $9,815 | | Total assets | $26,114 | $22,388 | | Deferred merchant bookings | $12,915 | $8,517 | | Total liabilities | $23,793 | $19,589 | | Total stockholders' equity | $2,321 | $2,799 | Consolidated Statements of Cash Flows In Q1 2025, the company generated $2.95 billion in cash from operating activities, largely driven by a $4.4 billion increase in deferred merchant bookings, while using $384 million in investing and $469 million in financing activities | Cash Flow (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,952 | $2,879 | | Net cash used in investing activities | $(384) | $(240) | | Net cash used in financing activities | $(469) | $(631) | | Net increase in cash and equivalents | $2,160 | $1,961 | Non-GAAP Financial Measures and Reconciliations This section defines non-GAAP metrics like Adjusted EBITDA and Free Cash Flow, presenting detailed reconciliations to GAAP, with Q1 2025 Adjusted EBITDA at $296 million and Free Cash Flow at $2.76 billion Definitions of Non-GAAP Measures The company uses non-GAAP measures like Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, and Free Cash Flow to evaluate business performance by excluding items such as stock-based compensation and restructuring charges - Management uses non-GAAP measures like Adjusted EBITDA to evaluate performance, believing they provide a more meaningful comparison of core operating results by excluding non-cash or unpredictable items such as stock-based compensation, restructuring, and acquisition impacts[35][37] - Adjusted Net Income is used to represent combined results settled in cash, excluding items like stock-based compensation and amortization of intangibles, and is calculated using a long-term projected tax rate of 21.5% for 2025[42][46] - Free Cash Flow is defined as net cash from operating activities less capital expenditures and is considered useful for showing cash generated by core business operations before financing and certain investing activities[47] Reconciliation of GAAP to Non-GAAP Measures This section provides detailed tables reconciling GAAP figures to non-GAAP metrics, showing Q1 2025 operating loss of $70 million reconciled to an Adjusted EBITDA of $296 million, and GAAP net loss of $200 million to an Adjusted Net Income of $53 million | Reconciliation to Adjusted EBITDA (Q1 2025, in millions) | Amount | | :--- | :--- | | Operating loss (GAAP) | $(70) | | Realized gain on revenue hedges | $23 | | Restructuring charges | $26 | | Stock-based compensation | $98 | | Amortization of intangible assets | $11 | | Depreciation | $208 | | Adjusted EBITDA (Non-GAAP) | $296 | | Reconciliation to Adjusted Net Income & EPS (Q1 2025) | Amount | | :--- | :--- | | Net loss attributable to Expedia Group (GAAP) | $(200)M | | Adjustments (e.g., stock comp, amortization, investment loss) | +$273M | | Tax effects of adjustments | $(20)M | | Adjusted net income (Non-GAAP) | $53M | | Adjusted EPS (Non-GAAP) | $0.40 | | Free Cash Flow Calculation (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,952 | $2,879 | | Less: Total capital expenditures | $(196) | $(177) | | Free cash flow | $2,756 | $2,702 |