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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a positive sentiment with strong financial metrics such as growth in gross bookings and revenue, and a robust liquidity position. The share repurchase program further enhances shareholder returns. Despite some challenges like soft Vrbo bookings, the optimistic outlook on marketing leverage and B2B growth, coupled with strategic inventory moves, indicates potential for future growth. The positive sentiment from analysts in the Q&A, along with a focus on improving product and supply, supports a positive stock price prediction over the next two weeks.
Gross Bookings $27.5 billion, up 7% year-over-year, driven by lodging gross bookings which grew 8% and hotel business growing 10%.
Revenue $4.1 billion, grew 3% year-over-year; excluding FX, revenue growth would have been 5%. Impacted by pricing actions in prior quarters and soft Vrbo bookings in the first half of 2024.
EBITDA $1.25 billion, up 3% year-over-year with an EBITDA margin of 30.8%, slightly deleveraging approximately 16 basis points year-over-year.
EBIT $892 million with a margin of 22%, deleveraging approximately 100 basis points year-over-year; included a one-time $51 million increase in stock-based compensation.
Free Cash Flow $2.3 billion, up 3% year-over-year, driven primarily by higher EBITDA and lower capital expenditures.
Liquidity $7.2 billion, driven by unrestricted cash balance of $4.7 billion and undrawn revolving line of credit of $2.5 billion.
Debt Level Approximately $6.3 billion with an average cost of 3.7%.
Gross Leverage Ratio Reduced to 2.2x, progressing towards target gross leverage ratio of 2x.
Share Repurchase $1.6 billion or 12 million shares repurchased year-to-date, with approximately $3.2 billion remaining on share repurchase authorization.
Room Night Growth 9% year-over-year.
Advertising Revenue Growth 32% year-over-year.
Active Membership Growth 7% year-over-year in Q3.
Repeat Rate for Members Up 150 basis points compared to last year.
Direct Sales and Marketing Expense $1.9 billion, up 11% year-over-year.
Overhead Expenses $602 million, a decrease of $15 million or 3% year-over-year.
Cost of Sales $385 million, down $24 million or 6% year-over-year.
New Product Features: Introduced features like destination comparison, flexible date search, and live flight tracker to enhance traveler experiences.
Package Product: Launched a package product allowing travelers to bundle flights, hotels, and cars, resulting in a 25% increase in package bookings.
Vrbo App Improvements: Enhanced Vrbo app performance with faster loading times and new features, leading to increased traffic and conversion.
International Expansion: Accelerated bookings growth outside the U.S. by 5 points, with notable double-digit growth for Hotels.com in Scandinavia.
Advertising Growth: Advertising revenue increased by 32%, driven by more advertisers and new product capabilities like video ads.
Cost Management: Cost of sales and overheads declined year-over-year, contributing to operational efficiencies.
B2B Growth: B2B bookings grew 19% year-on-year, with new solutions and partnerships enhancing service offerings.
Leadership Changes: Julie Whalen announced her departure as CFO, with a successor to be named soon; Ramana Thumu appointed as Chief Technology Officer.
Focus on Loyalty Program: Enhanced One Key loyalty program with member-only discounts on Vrbo and expanded redemption options on Brand Expedia.
Weather Events: Hurricane impacts (Helene and Milton) affected bookings and performance, particularly for Vrbo.
Currency Headwinds: Currency fluctuations presented challenges to revenue growth.
Competitive Pressures: The company faces competition in the alternative accommodations market, particularly from other providers.
Regulatory Issues: Recent regulatory updates in California and Hawaii may impact the alternative accommodations market.
Economic Factors: Unfavorable macro trends affected overall performance, including pricing actions from previous quarters.
Supply Chain Challenges: Challenges in expanding supply for Vrbo, particularly in urban markets.
Marketing Investments: Significant investments in marketing for Vrbo and international markets may pressure overall marketing leverage.
B2B Growth: While B2B is growing, it requires ongoing investment and may impact margins.
Technology Integration: Integrating technology across brands and ensuring effective use of AI for customer service and product offerings.
Gross Bookings Growth: Total gross bookings of $27.5 billion grew 7% year-over-year, driven by lodging gross bookings, which grew 8%.
Advertising Business Growth: Advertising business revenue increased by 32%, with more advertisers and new product capabilities driving engagement.
B2B Business Growth: B2B bookings were up 19% year-on-year, with growth broad-based across partner segments and regions.
International Expansion: Bookings growth for consumer brands outside the U.S. accelerated by 5 points in Q3, with double-digit growth for Hotels.com in Scandinavia.
Vrbo Performance Improvement: Vrbo delivered its first full quarter of bookings growth this year, with modest growth in bookings despite Hurricane Helene.
One Key Loyalty Program: Global active membership grew 7% year-over-year, with a 150 basis point increase in the 12-month member repeat rate.
Q4 Gross Bookings Growth: Expect gross bookings growth in Q4 to be in the range of 6% to 8% versus last year.
Full Year 2024 Gross Bookings Growth: Raising full year guidance to approximately 5% growth versus last year, up 1 point from prior outlook.
Revenue Growth Guidance: Revenue guidance remains at approximately 6% growth versus last year.
EBITDA and EBIT Margins: Expect EBITDA and EBIT margins to be slightly up versus last year, an improvement from prior outlook of flat levels.
Share Repurchase Program: Expedia Group repurchased $1.6 billion worth of shares, totaling 12 million shares year-to-date. The company believes its stock is undervalued and plans to continue buying back stock opportunistically, with approximately $3.2 billion remaining on its share repurchase authorization.
The earnings call summary and Q&A session indicate strong financial performance, optimistic guidance, and strategic growth plans, particularly in B2B and advertising. The raised guidance, AI integration, and international growth are positive indicators. Some concerns in B2B competition and unclear responses slightly temper the sentiment, but overall, the outlook is positive.
The earnings call summary reveals positive developments across multiple areas, including improvements in product offerings, marketing leverage, international growth, and loyalty programs. Despite some unclear management responses, the overall sentiment is bolstered by strategic initiatives in AI, B2B, and brand expansion. These factors, coupled with optimistic guidance and a shareholder return plan, suggest a positive stock price movement over the next two weeks.
The earnings call indicates strong financial performance with 13% growth in gross bookings and 10% revenue growth. The reinstated dividend and significant share repurchases are positive for shareholders. Although there are some concerns about Q1 softening and vague responses on Vrbo and advertising growth, the overall sentiment is positive due to strong financial metrics, improved EBITDA margins, and optimistic guidance.
The earnings call reflects a positive sentiment with strong financial metrics such as growth in gross bookings and revenue, and a robust liquidity position. The share repurchase program further enhances shareholder returns. Despite some challenges like soft Vrbo bookings, the optimistic outlook on marketing leverage and B2B growth, coupled with strategic inventory moves, indicates potential for future growth. The positive sentiment from analysts in the Q&A, along with a focus on improving product and supply, supports a positive stock price prediction over the next two weeks.
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