FALSE2022Q312/31000132442400013244242022-01-012022-09-300001324424us-gaap:CommonStockMember2022-10-21xbrli:shares0001324424us-gaap:CommonClassBMember2022-10-2100013244242022-07-012022-09-30iso4217:USD00013244242021-07-012021-09-3000013244242021-01-012021-09-30iso4217:USDxbrli:shares0001324424us-gaap:CostOfSalesMember2022-07-012022-09-300001324424us-gaap:CostOfSalesMember2021-07-012021-09-300001324424us-gaap:CostOfSalesMember2022-01-012022-09-300001324424us-gaap:CostOfSalesMember2021-01-012021-09-300001324424us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001324424us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001324424us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001324424us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001324424expe:TechnologyAndContentExpenseMember2022-07-012022-09-300001324424expe:TechnologyAndContentExpenseMember2021-07-012021-09-300001324424expe:TechnologyAndContentExpenseMember2022-01-012022-09-300001324424expe:TechnologyAndContentExpenseMember2021-01-012021-09-300001324424us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001324424us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001324424us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001324424us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-3000013244242022-09-3000013244242021-12-310001324424us-gaap:CommonClassBMember2022-09-300001324424us-gaap:CommonClassBMember2021-12-310001324424us-gaap:CommonStockMember2021-06-300001324424us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-06-300001324424us-gaap:AdditionalPaidInCapitalMember2021-06-300001324424us-gaap:TreasuryStockCommonMember2021-06-300001324424us-gaap:RetainedEarningsMember2021-06-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001324424us-gaap:NoncontrollingInterestMember2021-06-3000013244242021-06-300001324424us-gaap:RetainedEarningsMember2021-07-012021-09-300001324424us-gaap:NoncontrollingInterestMember2021-07-012021-09-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001324424us-gaap:CommonStockMember2021-07-012021-09-300001324424us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001324424us-gaap:TreasuryStockCommonMember2021-07-012021-09-300001324424us-gaap:CommonStockMember2021-09-300001324424us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-09-300001324424us-gaap:AdditionalPaidInCapitalMember2021-09-300001324424us-gaap:TreasuryStockCommonMember2021-09-300001324424us-gaap:RetainedEarningsMember2021-09-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001324424us-gaap:NoncontrollingInterestMember2021-09-3000013244242021-09-300001324424us-gaap:CommonStockMember2020-12-310001324424us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-310001324424us-gaap:AdditionalPaidInCapitalMember2020-12-310001324424us-gaap:TreasuryStockCommonMember2020-12-310001324424us-gaap:RetainedEarningsMember2020-12-310001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001324424us-gaap:NoncontrollingInterestMember2020-12-3100013244242020-12-310001324424us-gaap:RetainedEarningsMember2021-01-012021-09-300001324424us-gaap:NoncontrollingInterestMember2021-01-012021-09-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001324424us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001324424us-gaap:CommonStockMember2021-01-012021-09-300001324424us-gaap:TreasuryStockCommonMember2021-01-012021-09-300001324424us-gaap:CommonStockMember2022-06-300001324424us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-06-300001324424us-gaap:AdditionalPaidInCapitalMember2022-06-300001324424us-gaap:TreasuryStockCommonMember2022-06-300001324424us-gaap:RetainedEarningsMember2022-06-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001324424us-gaap:NoncontrollingInterestMember2022-06-3000013244242022-06-300001324424us-gaap:RetainedEarningsMember2022-07-012022-09-300001324424us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001324424us-gaap:CommonStockMember2022-07-012022-09-300001324424us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001324424us-gaap:TreasuryStockCommonMember2022-07-012022-09-300001324424us-gaap:CommonStockMember2022-09-300001324424us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-09-300001324424us-gaap:AdditionalPaidInCapitalMember2022-09-300001324424us-gaap:TreasuryStockCommonMember2022-09-300001324424us-gaap:RetainedEarningsMember2022-09-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001324424us-gaap:NoncontrollingInterestMember2022-09-300001324424us-gaap:CommonStockMember2021-12-310001324424us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-12-310001324424us-gaap:AdditionalPaidInCapitalMember2021-12-310001324424us-gaap:TreasuryStockCommonMember2021-12-310001324424us-gaap:RetainedEarningsMember2021-12-310001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001324424us-gaap:NoncontrollingInterestMember2021-12-310001324424us-gaap:RetainedEarningsMember2022-01-012022-09-300001324424us-gaap:NoncontrollingInterestMember2022-01-012022-09-300001324424us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001324424us-gaap:CommonStockMember2022-01-012022-09-300001324424us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001324424us-gaap:TreasuryStockCommonMember2022-01-012022-09-300001324424expe:DeferredMerchantBookingsMember2021-12-310001324424expe:DeferredMerchantBookingsMember2022-01-012022-09-300001324424expe:DeferredMerchantBookingsMember2022-09-300001324424expe:DeferredLoyaltyRewardsMember2021-12-310001324424expe:DeferredLoyaltyRewardsMember2022-01-012022-09-300001324424expe:DeferredLoyaltyRewardsMember2022-09-300001324424expe:OtherDeferredRevenueMember2021-12-310001324424expe:OtherDeferredRevenueMember2022-01-012022-09-300001324424expe:OtherDeferredRevenueMember2022-09-300001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-09-300001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-09-300001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel1Member2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel2Member2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel1Member2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel2Member2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EquitySecuritiesMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EquitySecuritiesMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMember2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-09-300001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-09-300001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001324424us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel3Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:BankTimeDepositsMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel1Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel2Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueInputsLevel3Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EquitySecuritiesMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EquitySecuritiesMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:EquitySecuritiesMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMember2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001324424us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001324424us-gaap:ForeignExchangeForwardMember2022-09-300001324424us-gaap:ForeignExchangeForwardMember2021-12-310001324424us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-02expe:instrumentiso4217:EURxbrli:pure0001324424us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300001324424us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-012022-09-300001324424expe:Despegar.comCorp.Member2022-01-012022-09-300001324424expe:Despegar.comCorp.Member2021-01-012021-09-300001324424expe:AmericanExpressGlobalBusinessTravelMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2021-11-012021-11-010001324424expe:AmericanExpressGlobalBusinessTravelMember2021-11-012021-11-010001324424us-gaap:EquitySecuritiesMemberexpe:AmericanExpressGlobalBusinessTravelMember2022-01-012022-03-310001324424expe:GlobalBusinessTravelGroupMember2022-09-302022-09-300001324424expe:GlobalBusinessTravelGroupMember2022-06-012022-06-010001324424expe:GlobalBusinessTravelGroupMemberus-gaap:EquitySecuritiesMember2022-07-012022-09-300001324424expe:GlobalBusinessTravelGroupMemberus-gaap:EquitySecuritiesMember2022-01-012022-09-300001324424us-gaap:EquitySecuritiesMember2021-12-310001324424us-gaap:EquitySecuritiesMember2022-01-012022-09-300001324424us-gaap:EquitySecuritiesMember2022-09-300001324424us-gaap:FairValueMeasurementsNonrecurringMember2021-01-012021-09-300001324424us-gaap:FairValueMeasurementsNonrecurringMember2021-07-012021-09-300001324424us-gaap:FairValueMeasurementsNonrecurringMember2022-07-012022-09-300001324424us-gaap:FairValueMeasurementsNonrecurringMember2022-01-012022-09-300001324424expe:TwoPointFivePercentSeniorNotesDueOnTwoThousandTwentyTwoMemberus-gaap:SeniorNotesMember2021-12-310001324424expe:TwoPointFivePercentSeniorNotesDueOnTwoThousandTwentyTwoMemberus-gaap:SeniorNotesMember2022-09-300001324424us-gaap:SeniorNotesMemberexpe:ThreePointSixPercentSeniorNotesDueTwoThousandTwentyThreeMember2021-12-310001324424us-gaap:SeniorNotesMemberexpe:ThreePointSixPercentSeniorNotesDueTwoThousandTwentyThreeMember2022-09-300001324424us-gaap:SeniorNotesMemberexpe:FourPointFivePercentSeniorNotesDueOnTwoThousandTwentyFourMember2021-12-310001324424us-gaap:SeniorNotesMemberexpe:FourPointFivePercentSeniorNotesDueOnTwoThousandTwentyFourMember2022-09-300001324424us-gaap:SeniorNotesMemberexpe:SixPointTwentyFivePercentUnsecuredSeniorNotesDueMayTwoThousandTwentyFiveMember2022-09-300001324424us-gaap:SeniorNotesMemberexpe:SixPointTwentyFivePercentUnsecuredSeniorNotesDueMayTwoThousandTwentyFiveMember2021-12-310001324424us-gaap:SeniorNotesMemberexpe:FivePointZeroPercentSeniorNotesDueOnTwoZeroTwoSixMember2022-09-300001324424us-gaap:SeniorNotesMemberexpe:FivePointZeroPercentSeniorNotesDueOnTwoZeroTwoSixMember2021-12-310001324424expe:ConvertibleSeniorNotesDue2026Memberus-gaap:ConvertibleDebtMember2022-09-300001324424expe:ConvertibleSeniorNotesDue2026Memberus-gaap:ConvertibleDebtMember2021-12-310001324424expe:FourPointSixTwoFivePercentSeniorNotesDueTwoThousandTwentySevenMemberus-gaap:SeniorNotesMember2022-09-300001324424expe:FourPointSixTwoFivePercentSeniorNotesDueTwoThousandTwentySevenMemberus-gaap:SeniorNotesMember2021-12-310001324424expe:ThreePointEightPercentSeniorNotesDueOnTwoZeroTwoEightMemberus-gaap:SeniorNotesMember2022-09-300001324424expe:ThreePointEightPercentSeniorNotesDueOnTwoZeroTwoEightMemberus-gaap:SeniorNotesMember2021-12-310001324424us-gaap:SeniorNotesMemberexpe:ThreePointTwentyFivePercentSeniorNotesDueTwoThousandThirtyMember2021-12-310001324424us-gaap:SeniorNotesMemberexpe:ThreePointTwentyFivePercentSeniorNotesDueTwoThousandThirtyMember2022-09-300001324424expe:TwoPointNineFivePercentageSeniorNotesDue2031Memberus-gaap:SeniorNotesMember2021-12-310001324424expe:TwoPointNineFivePercentageSeniorNotesDue2031Memberus-gaap:SeniorNotesMember2022-09-300001324424expe:TwoPointNineFivePercentageSeniorNotesDue2031Memberus-gaap:SeniorNotesMember2022-07-012022-09-300001324424expe:TwoPointNineFivePercentageSeniorNotesDue2031Memberus-gaap:SeniorNotesMember2022-01-012022-09-300001324424us-gaap:SeniorNotesMember2022-01-012022-09-300001324424us-gaap:SeniorNotesMember2022-09-300001324424us-gaap:SeniorNotesMember2021-12-310001324424us-gaap:SeniorNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001324424us-gaap:SeniorNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001324424us-gaap:ConvertibleDebtMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001324424us-gaap:ConvertibleDebtMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001324424expe:NewRevolvingCreditFacilityMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-09-300001324424expe:ForeignCreditFacilityMemberexpe:NewRevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-09-300001324424expe:NewRevolvingCreditFacilityMembersrt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-01-012022-09-300001324424expe:NewRevolvingCreditFacilityMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-01-012022-09-300001324424expe:NewRevolvingCreditFacilityMembersrt:MinimumMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-01-012022-09-300001324424expe:NewRevolvingCreditFacilityMemberus-gaap:BaseRateMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-01-012022-09-300001324424expe:NewRevolvingCreditFacilityMemberus-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMember2022-09-300001324424expe:NewRevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-09-300001324424us-gaap:RevolvingCreditFacilityMember2021-12-310001324424expe:ForeignCreditFacilityMember2021-12-310001324424us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-310001324424expe:ForeignCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-310001324424us-gaap:LetterOfCreditMember2021-12-310001324424us-gaap:CommonStockMember2022-09-300001324424us-gaap:CommonStockMember2021-12-310001324424srt:BoardOfDirectorsChairmanMember2018-12-310001324424srt:BoardOfDirectorsChairmanMember2019-12-310001324424srt:BoardOfDirectorsChairmanMember2021-12-310001324424us-gaap:SubsequentEventMember2022-10-012022-10-310001324424expe:TwoPointFivePercentSeniorNotesDueOnTwoThousandTwentyTwoMember2022-01-012022-09-300001324424expe:TwoPointFivePercentSeniorNotesDueOnTwoThousandTwentyTwoMember2021-01-012021-12-310001324424expe:TwoPointFivePercentSeniorNotesDueOnTwoThousandTwentyTwoMember2021-12-310001324424us-gaap:CrossCurrencyInterestRateContractMember2022-01-012022-09-300001324424expe:TwoPointFivePercentSeniorNotesDueOnTwoThousandTwentyTwoMemberus-gaap:SeniorNotesMember2022-03-310001324424us-gaap:StockCompensationPlanMember2022-01-012022-09-300001324424us-gaap:StockCompensationPlanMember2022-07-012022-09-300001324424us-gaap:StockCompensationPlanMember2021-07-012021-09-300001324424expe:ShareBasedPaymentArrangementAndWarrantsMember2021-01-012021-09-300001324424us-gaap:ConvertibleDebtSecuritiesMember2021-01-012021-09-300001324424us-gaap:InternalRevenueServiceIRSMember2019-10-012019-12-310001324424us-gaap:InternalRevenueServiceIRSMemberus-gaap:SubsequentEventMember2022-10-012022-12-310001324424expe:LitigationRelatingToOccupancyTaxMember2022-09-30expe:lawsuit0001324424expe:LitigationRelatingToOccupancyTaxMember2022-01-012022-09-300001324424expe:LitigationRelatingToOccupancyTaxMember2021-12-310001324424expe:BreachOfAustralianConsumerLawMembersrt:AffiliatedEntityMember2022-04-222022-04-22iso4217:AUD0001324424expe:BreachOfAustralianConsumerLawMembersrt:AffiliatedEntityMember2021-12-310001324424expe:BreachOfAustralianConsumerLawMembersrt:AffiliatedEntityMember2022-01-012022-03-310001324424expe:BreachOfAustralianConsumerLawMembersrt:AffiliatedEntityMember2022-03-310001324424expe:RetailSegmentMember2022-07-012022-09-300001324424expe:BusinessToBusinessMember2022-07-012022-09-300001324424expe:TrivagoMember2022-07-012022-09-300001324424us-gaap:CorporateNonSegmentMember2022-07-012022-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:RetailSegmentMember2022-07-012022-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:BusinessToBusinessMember2022-07-012022-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:TrivagoMember2022-07-012022-09-300001324424us-gaap:IntersegmentEliminationMember2022-07-012022-09-300001324424us-gaap:OperatingSegmentsMemberexpe:RetailSegmentMember2022-07-012022-09-300001324424us-gaap:OperatingSegmentsMemberexpe:BusinessToBusinessMember2022-07-012022-09-300001324424us-gaap:OperatingSegmentsMemberexpe:TrivagoMember2022-07-012022-09-300001324424expe:CorporateAndEliminationsMember2022-07-012022-09-300001324424expe:RetailSegmentMember2021-07-012021-09-300001324424expe:BusinessToBusinessMember2021-07-012021-09-300001324424expe:TrivagoMember2021-07-012021-09-300001324424us-gaap:CorporateNonSegmentMember2021-07-012021-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:RetailSegmentMember2021-07-012021-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:BusinessToBusinessMember2021-07-012021-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:TrivagoMember2021-07-012021-09-300001324424us-gaap:IntersegmentEliminationMember2021-07-012021-09-300001324424us-gaap:OperatingSegmentsMemberexpe:RetailSegmentMember2021-07-012021-09-300001324424us-gaap:OperatingSegmentsMemberexpe:BusinessToBusinessMember2021-07-012021-09-300001324424us-gaap:OperatingSegmentsMemberexpe:TrivagoMember2021-07-012021-09-300001324424expe:CorporateAndEliminationsMember2021-07-012021-09-300001324424expe:RetailSegmentMember2022-01-012022-09-300001324424expe:BusinessToBusinessMember2022-01-012022-09-300001324424expe:TrivagoMember2022-01-012022-09-300001324424us-gaap:CorporateNonSegmentMember2022-01-012022-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:RetailSegmentMember2022-01-012022-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:BusinessToBusinessMember2022-01-012022-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:TrivagoMember2022-01-012022-09-300001324424us-gaap:IntersegmentEliminationMember2022-01-012022-09-300001324424us-gaap:OperatingSegmentsMemberexpe:RetailSegmentMember2022-01-012022-09-300001324424us-gaap:OperatingSegmentsMemberexpe:BusinessToBusinessMember2022-01-012022-09-300001324424us-gaap:OperatingSegmentsMemberexpe:TrivagoMember2022-01-012022-09-300001324424expe:CorporateAndEliminationsMember2022-01-012022-09-300001324424expe:RetailSegmentMember2021-01-012021-09-300001324424expe:BusinessToBusinessMember2021-01-012021-09-300001324424expe:TrivagoMember2021-01-012021-09-300001324424us-gaap:CorporateNonSegmentMember2021-01-012021-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:RetailSegmentMember2021-01-012021-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:BusinessToBusinessMember2021-01-012021-09-300001324424us-gaap:IntersegmentEliminationMemberexpe:TrivagoMember2021-01-012021-09-300001324424us-gaap:IntersegmentEliminationMember2021-01-012021-09-300001324424us-gaap:OperatingSegmentsMemberexpe:RetailSegmentMember2021-01-012021-09-300001324424us-gaap:OperatingSegmentsMemberexpe:BusinessToBusinessMember2021-01-012021-09-300001324424us-gaap:OperatingSegmentsMemberexpe:TrivagoMember2021-01-012021-09-300001324424expe:CorporateAndEliminationsMember2021-01-012021-09-300001324424expe:MerchantCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2022-07-012022-09-300001324424expe:MerchantCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2021-07-012021-09-300001324424expe:MerchantCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2022-01-012022-09-300001324424expe:MerchantCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2021-01-012021-09-300001324424expe:AgencyCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2022-07-012022-09-300001324424expe:AgencyCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2021-07-012021-09-300001324424expe:AgencyCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2022-01-012022-09-300001324424expe:AgencyCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2021-01-012021-09-300001324424expe:AdvertisingMediaAndOtherCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2022-07-012022-09-300001324424expe:AdvertisingMediaAndOtherCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2021-07-012021-09-300001324424expe:AdvertisingMediaAndOtherCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2022-01-012022-09-300001324424expe:AdvertisingMediaAndOtherCustomersMemberus-gaap:SalesChannelThroughIntermediaryMember2021-01-012021-09-300001324424expe:LodgingMember2022-07-012022-09-300001324424expe:LodgingMember2021-07-012021-09-300001324424expe:LodgingMember2022-01-012022-09-300001324424expe:LodgingMember2021-01-012021-09-300001324424expe:AirMember2022-07-012022-09-300001324424expe:AirMember2021-07-012021-09-300001324424expe:AirMember2022-01-012022-09-300001324424expe:AirMember2021-01-012021-09-300001324424expe:AdvertisingandMediaCustomersMember2022-07-012022-09-300001324424expe:AdvertisingandMediaCustomersMember2021-07-012021-09-300001324424expe:AdvertisingandMediaCustomersMember2022-01-012022-09-300001324424expe:AdvertisingandMediaCustomersMember2021-01-012021-09-300001324424expe:OtherServicesMember2022-07-012022-09-300001324424expe:OtherServicesMember2021-07-012021-09-300001324424expe:OtherServicesMember2022-01-012022-09-300001324424expe:OtherServicesMember2021-01-012021-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|
|
|
|
|
|
|
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2022
OR
|
|
|
|
|
|
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from
to
Commission File Number: 001-37429
EXPEDIA GROUP, INC.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
|
|
|
|
|
Delaware |
|
20-2705720 |
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
1111 Expedia Group Way W.
Seattle, WA 98119
(Address of principal executive office) (Zip Code)
(206) 481-7200
(Registrant’s telephone number, including area code)
__________________________________
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90
days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large accelerated filer |
|
☒ |
|
Accelerated filer |
|
☐ |
|
Non-accelerated filer |
|
☐ |
|
Smaller reporting company |
|
☐ |
|
Emerging growth company |
|
☐ |
|
|
|
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
☐
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the
Act:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Title of each class |
|
Trading symbol(s) |
|
Name of each exchange on which registered |
|
Common stock, $0.0001 par value |
|
EXPE |
|
The Nasdaq Global Select Market |
The number of shares outstanding of each of the registrant’s
classes of common stock as of October 21, 2022
was:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value per share |
|
150,567,424 |
|
shares |
|
Class B common stock, $0.0001 par value per share |
|
5,523,452 |
|
shares |
|
|
|
|
|
Expedia Group, Inc.
Form 10-Q
For the Quarter Ended September 30, 2022
Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
Part I |
|
|
|
|
|
|
Item 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 2 |
|
|
|
|
|
|
Item 3 |
|
|
|
|
|
|
Item 4 |
|
|
|
|
|
|
Part II |
|
|
|
|
|
|
Item 1 |
|
|
|
|
|
|
Item 1A |
|
|
|
|
|
|
Item 2 |
|
|
|
|
|
|
Item 6 |
|
|
|
|
|
Part I. Item 1. Consolidated Financial Statements
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
3,619 |
|
|
$ |
2,962 |
|
|
$ |
9,049 |
|
|
$ |
6,319 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization shown separately
below)
(1)
|
455 |
|
|
442 |
|
|
1,245 |
|
|
1,127 |
|
|
Selling and
marketing
(1)
|
1,669 |
|
|
1,314 |
|
|
4,724 |
|
|
3,177 |
|
|
Technology and
content
(1)
|
310 |
|
|
277 |
|
|
864 |
|
|
800 |
|
|
General and
administrative
(1)
|
187 |
|
|
182 |
|
|
562 |
|
|
522 |
|
|
Depreciation and amortization |
199 |
|
|
201 |
|
|
593 |
|
|
615 |
|
|
|
|
|
|
|
|
|
|
Impairment of intangible assets |
52 |
|
|
— |
|
|
81 |
|
|
— |
|
|
Legal reserves, occupancy tax and other |
— |
|
|
10 |
|
|
23 |
|
|
1 |
|
|
Restructuring and related reorganization charges |
— |
|
|
12 |
|
|
— |
|
|
54 |
|
|
Operating income |
747 |
|
|
524 |
|
|
957 |
|
|
23 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
20 |
|
|
2 |
|
|
33 |
|
|
5 |
|
|
Interest expense |
(63) |
|
|
(86) |
|
|
(217) |
|
|
(267) |
|
|
Gain (loss) on debt extinguishment, net |
73 |
|
|
— |
|
|
49 |
|
|
(280) |
|
|
Other, net |
(87) |
|
|
25 |
|
|
(467) |
|
|
10 |
|
|
Total other expense, net |
(57) |
|
|
(59) |
|
|
(602) |
|
|
(532) |
|
|
Income (loss) before income taxes |
690 |
|
|
465 |
|
|
355 |
|
|
(509) |
|
|
Provision for income taxes |
(214) |
|
|
(87) |
|
|
(187) |
|
|
129 |
|
|
Net income (loss) |
476 |
|
|
378 |
|
|
168 |
|
|
(380) |
|
|
Net (income) loss attributable to non-controlling
interests |
6 |
|
|
(2) |
|
|
7 |
|
|
6 |
|
|
Net income (loss) attributable to Expedia Group, Inc. |
482 |
|
|
376 |
|
|
175 |
|
|
(374) |
|
|
Preferred stock dividend |
— |
|
|
(14) |
|
|
— |
|
|
(64) |
|
|
Loss on redemption of preferred stock |
— |
|
|
— |
|
|
— |
|
|
(107) |
|
|
Net income (loss) attributable to Expedia Group, Inc. common
stockholders |
$ |
482 |
|
|
$ |
362 |
|
|
$ |
175 |
|
|
$ |
(545) |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Expedia Group, Inc.
available to common stockholders |
|
|
|
|
|
|
|
|
Basic |
$ |
3.05 |
|
|
$ |
2.40 |
|
|
$ |
1.11 |
|
|
$ |
(3.67) |
|
|
Diluted |
2.98 |
|
|
2.26 |
|
|
1.08 |
|
|
(3.67) |
|
|
Shares used in computing earnings (loss) per share
(000's): |
|
|
|
|
|
|
|
|
Basic |
157,628 |
|
|
151,019 |
|
|
157,100 |
|
|
148,453 |
|
|
Diluted |
161,829 |
|
|
160,460 |
|
|
162,495 |
|
|
148,453 |
|
_______
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation as follows: |
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
4 |
|
|
$ |
6 |
|
|
$ |
10 |
|
|
$ |
17 |
|
|
Selling and marketing |
18 |
|
|
29 |
|
|
50 |
|
|
78 |
|
|
Technology and content |
28 |
|
|
32 |
|
|
82 |
|
|
91 |
|
|
General and administrative |
47 |
|
|
49 |
|
|
138 |
|
|
133 |
|
See accompanying notes.
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net income (loss) |
$ |
476 |
|
|
$ |
378 |
|
|
$ |
168 |
|
|
$ |
(380) |
|
|
Currency translation adjustments, net of tax(1)
|
(96) |
|
|
(44) |
|
|
(212) |
|
|
(62) |
|
|
Comprehensive income (loss) |
380 |
|
|
334 |
|
|
(44) |
|
|
(442) |
|
|
Less: Comprehensive loss attributable to non-controlling
interests |
(25) |
|
|
(7) |
|
|
(51) |
|
|
(25) |
|
|
Less: Preferred stock dividend |
— |
|
|
14 |
|
|
— |
|
|
64 |
|
|
Less: Loss on redemption of preferred stock |
— |
|
|
— |
|
|
— |
|
|
107 |
|
|
Comprehensive income (loss) attributable to Expedia Group, Inc.
common stockholders |
$ |
405 |
|
|
$ |
327 |
|
|
$ |
7 |
|
|
$ |
(588) |
|
(1)Currency
translation adjustments include tax expense of $4 million and $13
million associated with net investment hedges for the three and
nine months ended September 30, 2022 and tax expense of $5
million and $11 million for the three and nine months ended
September 30, 2021.
See accompanying notes.
EXPEDIA GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares, which are reflected in
thousands, and par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2022 |
|
December 31,
2021 |
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
4,588 |
|
|
$ |
4,111 |
|
|
Restricted cash and cash equivalents |
1,778 |
|
|
1,694 |
|
|
Short-term investments |
49 |
|
|
200 |
|
|
Accounts receivable, net of allowance of $61 and $65
|
1,991 |
|
|
1,264 |
|
|
Income taxes receivable |
65 |
|
|
85 |
|
|
Prepaid expenses and other current assets |
799 |
|
|
827 |
|
|
Total current assets |
9,270 |
|
|
8,181 |
|
|
Property and equipment, net |
2,169 |
|
|
2,180 |
|
|
Operating lease right-of-use assets |
360 |
|
|
407 |
|
|
Long-term investments and other assets |
1,122 |
|
|
1,450 |
|
|
Deferred income taxes |
626 |
|
|
766 |
|
|
Intangible assets, net |
1,223 |
|
|
1,393 |
|
|
Goodwill |
7,109 |
|
|
7,171 |
|
|
TOTAL ASSETS |
$ |
21,879 |
|
|
$ |
21,548 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable, merchant |
$ |
1,535 |
|
|
$ |
1,333 |
|
|
Accounts payable, other |
1,132 |
|
|
688 |
|
|
Deferred merchant bookings |
7,457 |
|
|
5,688 |
|
|
Deferred revenue |
160 |
|
|
166 |
|
|
Income taxes payable |
46 |
|
|
16 |
|
|
Accrued expenses and other current liabilities |
789 |
|
|
824 |
|
|
Current maturities of long-term debt |
— |
|
|
735 |
|
|
Total current liabilities |
11,119 |
|
|
9,450 |
|
|
Long-term debt, excluding current maturities |
6,237 |
|
|
7,715 |
|
|
Deferred income taxes |
50 |
|
|
58 |
|
|
Operating lease liabilities |
315 |
|
|
360 |
|
|
Other long-term liabilities |
445 |
|
|
413 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock: $.0001 par value; Authorized shares:
1,600,000
|
— |
|
|
— |
|
|
Shares issued: 277,607 and 274,661; Shares outstanding: 150,966 and
150,125
|
|
|
|
|
Class B common stock: $.0001 par value; Authorized shares:
400,000
|
— |
|
|
— |
|
|
Shares issued: 12,800 and 12,800; Shares outstanding: 5,523 and
5,523
|
|
|
|
|
Additional paid-in capital |
14,674 |
|
|
14,229 |
|
|
Treasury stock - Common stock and Class B, at cost; Shares 133,917
and 131,813
|
(10,503) |
|
|
(10,262) |
|
|
Retained earnings (deficit) |
(1,586) |
|
|
(1,761) |
|
|
Accumulated other comprehensive income (loss) |
(317) |
|
|
(149) |
|
|
Total Expedia Group, Inc. stockholders’ equity |
2,268 |
|
|
2,057 |
|
|
Non-redeemable non-controlling interests |
1,445 |
|
|
1,495 |
|
|
Total stockholders’ equity |
3,713 |
|
|
3,552 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
21,879 |
|
|
$ |
21,548 |
|
See accompanying notes.
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY
(In millions, except share and per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2021 |
|
Common stock |
|
Class B
common stock |
|
Additional
paid-in
capital |
|
Treasury stock - Common and Class B |
|
Retained
earnings
(deficit) |
|
Accumulated
other
comprehensive
income (loss) |
|
Non-redeemable
non-controlling
interest |
|
Total |
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
|
Balance as of June 30, 2021 |
|
269,239,032 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
13,995 |
|
|
131,318,418 |
|
|
$ |
(10,182) |
|
|
$ |
(2,531) |
|
|
$ |
(186) |
|
|
$ |
1,486 |
|
|
$ |
2,582 |
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
376 |
|
|
|
|
2 |
|
|
378 |
|
|
Other comprehensive income (loss), net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35) |
|
|
(9) |
|
|
(44) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of equity instruments and employee stock
purchase plans |
|
878,243 |
|
|
— |
|
|
|
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury stock activity related to vesting of equity
instruments |
|
|
|
|
|
|
|
|
|
|
|
151,203 |
|
|
(23) |
|
|
|
|
|
|
|
|
(23) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to the fair value of redeemable non-controlling
interests |
|
|
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
8 |
|
|
|
|
|
|
19 |
|
|
Other changes in ownership of non-controlling interests |
|
|
|
|
|
|
|
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
9 |
|
|
6 |
|
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
130 |
|
|
|
|
|
|
|
|
|
|
|
|
130 |
|
|
Other |
|
|
|
|
|
|
|
|
|
1 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
Balance as of September 30, 2021 |
|
270,117,275 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
14,176 |
|
|
131,469,621 |
|
|
$ |
(10,205) |
|
|
$ |
(2,147) |
|
|
$ |
(221) |
|
|
$ |
1,488 |
|
|
$ |
3,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2021 |
|
Common stock |
|
Class B
common stock |
|
Additional
paid-in
capital |
|
Treasury stock - Common and Class B |
|
Retained
earnings
(deficit) |
|
Accumulated
other
comprehensive
income (loss) |
|
Non-redeemable
non-controlling
interest |
|
Total |
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
|
Balance as of December 31, 2020 |
|
261,563,912 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
13,566 |
|
|
130,766,537 |
|
|
$ |
(10,097) |
|
|
$ |
(1,781) |
|
|
$ |
(178) |
|
|
$ |
1,494 |
|
|
$ |
3,004 |
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(374) |
|
|
|
|
(6) |
|
|
(380) |
|
|
Other comprehensive income (loss), net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(43) |
|
|
(19) |
|
|
(62) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of preferred dividends (declared at $47.11 per
share)
|
|
|
|
|
|
|
|
|
|
(50) |
|
|
|
|
|
|
|
|
|
|
|
|
(50) |
|
|
Proceeds from exercise of equity instruments and employee stock
purchase plans |
|
6,083,142 |
|
|
— |
|
|
|
|
|
|
421 |
|
|
|
|
|
|
|
|
|
|
|
|
421 |
|
|
Exercise of common stock warrants |
|
2,470,221 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
Loss on redemption of preferred stock |
|
|
|
|
|
|
|
|
|
(107) |
|
|
|
|
|
|
|
|
|
|
|
|
(107) |
|
|
Withholding taxes for stock options |
|
|
|
|
|
|
|
|
|
(7) |
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|
|
Treasury stock activity related to vesting of equity
instruments |
|
|
|
|
|
|
|
|
|
|
|
703,084 |
|
|
(108) |
|
|
|
|
|
|
|
|
(108) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to the fair value of redeemable non-controlling
interests |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
8 |
|
|
|
|
|
|
8 |
|
|
Other changes in ownership of non-controlling interests |
|
|
|
|
|
|
|
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
19 |
|
|
16 |
|
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
355 |
|
|
|
|
|
|
|
|
|
|
|
|
355 |
|
|
Other |
|
|
|
|
|
|
|
|
|
1 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
Balance as of September 30, 2021 |
|
270,117,275 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
14,176 |
|
|
131,469,621 |
|
|
$ |
(10,205) |
|
|
$ |
(2,147) |
|
|
$ |
(221) |
|
|
$ |
1,488 |
|
|
$ |
3,091 |
|
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY
(In millions, except share and per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2022 |
|
Common stock |
|
Class B
common stock |
|
Additional
paid-in
capital |
|
Treasury stock - Common and Class B |
|
Retained
earnings
(deficit) |
|
Accumulated
other
comprehensive
income (loss) |
|
Non-redeemable
non-controlling
interest |
|
Total |
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
|
Balance as of June 30, 2022 |
|
276,967,093 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
14,549 |
|
|
132,219,690 |
|
|
$ |
(10,331) |
|
|
$ |
(2,068) |
|
|
$ |
(240) |
|
|
$ |
1,471 |
|
|
$ |
3,381 |
|
|
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
482 |
|
|
|
|
(6) |
|
|
476 |
|
|
Other comprehensive income (loss), net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(77) |
|
|
(19) |
|
|
(96) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of equity instruments and employee stock
purchase plans |
|
639,564 |
|
|
— |
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury stock activity related to vesting of equity
instruments |
|
|
|
|
|
|
|
|
|
|
|
172,498 |
|
|
(19) |
|
|
|
|
|
|
|
|
(19) |
|
|
Common stock repurchases |
|
|
|
|
|
|
|
|
|
|
|
1,524,580 |
|
|
(153) |
|
|
|
|
|
|
|
|
(153) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes in ownership of non-controlling interests |
|
|
|
|
|
|
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
7 |
|
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
106 |
|
|
|
|
|
|
|
|
|
|
|
|
106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2022 |
|
277,606,657 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
14,674 |
|
|
133,916,768 |
|
|
$ |
(10,503) |
|
|
$ |
(1,586) |
|
|
$ |
(317) |
|
|
$ |
1,445 |
|
|
$ |
3,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2022 |
|
Common stock |
|
Class B
common stock |
|
Additional
paid-in
capital |
|
Treasury stock - Common and Class B |
|
Retained
earnings
(deficit) |
|
Accumulated
other
comprehensive
income (loss) |
|
Non-redeemable
non-controlling
interest |
|
Total |
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
|
Balance as of December 31, 2021 |
|
274,660,725 |
|
|
— |
|
|
12,799,999 |
|
|
— |
|
|
14,229 |
|
|
131,812,764 |
|
|
(10,262) |
|
|
(1,761) |
|
|
(149) |
|
|
1,495 |
|
|
$ |
3,552 |
|
|
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175 |
|
|
|
|
(7) |
|
|
168 |
|
|
Other comprehensive income (loss), net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(168) |
|
|
(44) |
|
|
(212) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of equity instruments and employee stock
purchase plans |
|
2,945,932 |
|
|
— |
|
|
|
|
|
|
125 |
|
|
|
|
|
|
|
|
|
|
|
|
125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury stock activity related to vesting of equity
instruments |
|
|
|
|
|
|
|
|
|
|
|
579,424 |
|
|
(88) |
|
|
|
|
|
|
|
|
(88) |
|
|
Common stock repurchases |
|
|
|
|
|
|
|
|
|
|
|
1,524,580 |
|
|
(153) |
|
|
|
|
|
|
|
|
(153) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes in ownership of non-controlling interests |
|
|
|
|
|
|
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
14 |
|
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
307 |
|
|
|
|
|
|
|
|
|
|
|
|
307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2022 |
|
277,606,657 |
|
|
$ |
— |
|
|
12,799,999 |
|
|
$ |
— |
|
|
$ |
14,674 |
|
|
133,916,768 |
|
|
$ |
(10,503) |
|
|
$ |
(1,586) |
|
|
$ |
(317) |
|
|
$ |
1,445 |
|
|
$ |
3,713 |
|
See accompanying notes.
EXPEDIA GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, |
|
|
2022 |
|
2021 |
|
Operating activities: |
|
|
|
|
Net income (loss) |
$ |
168 |
|
|
$ |
(380) |
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
Depreciation of property and equipment, including internal-use
software and website development |
527 |
|
|
538 |
|
|
Amortization of intangible assets |
66 |
|
|
77 |
|
|
Impairment of intangible assets |
81 |
|
|
— |
|
|
Amortization of stock-based compensation |
280 |
|
|
319 |
|
|
Deferred income taxes |
106 |
|
|
(158) |
|
|
Foreign exchange loss on cash, restricted cash and short-term
investments, net |
193 |
|
|
76 |
|
|
Realized loss on foreign currency forwards |
170 |
|
|
21 |
|
|
Loss on minority equity investments, net |
423 |
|
|
7 |
|
|
(Gain) loss on debt extinguishment, net |
(49) |
|
|
280 |
|
|
Other, net |
(26) |
|
|
(33) |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
(748) |
|
|
(781) |
|
|
Prepaid expenses and other assets |
31 |
|
|
(190) |
|
|
Accounts payable, merchant |
202 |
|
|
663 |
|
|
Accounts payable, other, accrued expenses and other
liabilities |
427 |
|
|
238 |
|
|
Tax payable/receivable, net |
6 |
|
|
7 |
|
|
Deferred merchant bookings |
1,770 |
|
|
2,787 |
|
|
Deferred revenue |
(5) |
|
|
(8) |
|
|
Net cash provided by operating activities |
3,622 |
|
|
3,463 |
|
|
Investing activities: |
|
|
|
|
Capital expenditures, including internal-use software and website
development |
(485) |
|
|
(530) |
|
|
Purchases of investments |
(60) |
|
|
(1) |
|
|
Sales and maturities of investments |
200 |
|
|
23 |
|
|
Proceeds from initial exchange of cross-currency interest rate
swaps |
337 |
|
|
— |
|
|
Payments for initial exchange of cross-currency interest rate
swaps |
(337) |
|
|
— |
|
|
Other, net |
(169) |
|
|
2 |
|
|
Net cash used in investing activities |
(514) |
|
|
(506) |
|
|
Financing activities: |
|
|
|
|
Proceeds from issuance of long-term debt, net of issuance
costs |
— |
|
|
1,964 |
|
|
Payment of long-term debt |
(2,141) |
|
|
(1,706) |
|
|
Debt extinguishment costs |
(22) |
|
|
(258) |
|
|
Redemption of preferred stock |
— |
|
|
(618) |
|
|
Purchases of treasury stock |
(241) |
|
|
(108) |
|
|
Payment of preferred stock dividends |
— |
|
|
(50) |
|
|
Proceeds from exercise of equity awards and employee stock purchase
plan |
125 |
|
|
421 |
|
|
Other, net |
34 |
|
|
4 |
|
|
Net cash used in financing activities |
(2,245) |
|
|
(351) |
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash and cash equivalents |
(302) |
|
|
(126) |
|
|
Net increase in cash, cash equivalents and restricted cash and cash
equivalents |
561 |
|
|
2,480 |
|
|
Cash, cash equivalents and restricted cash and cash equivalents at
beginning of period |
5,805 |
|
|
4,138 |
|
|
Cash, cash equivalents and restricted cash and cash equivalents at
end of period |
$ |
6,366 |
|
|
$ |
6,618 |
|
|
Supplemental cash flow information |
|
|
|
|
Cash paid for interest |
$ |
254 |
|
|
$ |
298 |
|
|
Income tax payments, net |
71 |
|
|
15 |
|
See accompanying notes.
Notes to Consolidated Financial Statements
September 30, 2022
(Unaudited)
Note 1 – Basis of Presentation
Description of Business
Expedia Group, Inc. and its subsidiaries provide travel products
and services to leisure and corporate travelers in the United
States and abroad as well as various media and advertising
offerings to travel and non-travel advertisers. These travel
products and services are offered through a diversified portfolio
of brands including: Brand Expedia®, Hotels.com®, Expedia® Partner
Solutions, Vrbo®, trivago®, Orbitz®, Travelocity®, Hotwire®,
Wotif®, ebookers®, CheapTickets®, Expedia Group™ Media Solutions,
CarRentals.com™, Expedia CruisesTM
and Traveldoo®. In addition, many of these brands have related
international points of sale. We refer to Expedia Group, Inc. and
its subsidiaries collectively as “Expedia Group,” the “Company,”
“us,” “we” and “our” in these consolidated financial
statements.
COVID-19
The COVID-19 pandemic, and measures to contain the virus, including
government travel restrictions and quarantine orders, have had a
significant negative impact on the global travel industry and
materially and negatively impacted our business, financial results
and financial condition. Since the first quarter of 2020, COVID-19
has negatively impacted consumer sentiment and consumer’s ability
to travel, and many of our supply partners, particularly airlines
and hotels, continue to operate at reduced but improving service
levels in 2022. More recently, travel trends have continued to
improve. Overall, the full duration and total impact of COVID-19
remains uncertain and it is difficult to predict how the recovery
will unfold for the travel industry and, in particular, our
business, going forward.
Basis of Presentation
These accompanying financial statements present our results of
operations, financial position and cash flows on a consolidated
basis. The unaudited consolidated financial statements include
Expedia Group, Inc., our wholly-owned subsidiaries, and entities we
control, or in which we have a variable interest and are the
primary beneficiary of expected cash profits or losses. We record
our investments in entities that we do not control, but over which
we have the ability to exercise significant influence, using the
equity method or at fair value. We have eliminated significant
intercompany transactions and accounts.
We have prepared the accompanying unaudited consolidated financial
statements in accordance with accounting principles generally
accepted in the United States (“GAAP”) for interim financial
reporting. We have included all adjustments necessary for a fair
presentation of the results of the interim period. These
adjustments consist of normal recurring items. Our interim
unaudited consolidated financial statements are not necessarily
indicative of results that may be expected for any other interim
period or for the full year. These interim unaudited consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements and related notes included in our
Annual Report on Form 10-K for the year ended December 31,
2021, previously filed with the Securities and Exchange Commission
(“SEC”). trivago is a separately listed company on the Nasdaq
Global Select Market and, therefore is subject to its own reporting
and filing requirements, which could result in possible differences
that are not expected to be material to Expedia Group.
Accounting Estimates
We use estimates and assumptions in the preparation of our interim
unaudited consolidated financial statements in accordance with
GAAP. Our estimates and assumptions affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities as of the date of our interim unaudited consolidated
financial statements. These estimates and assumptions also affect
the reported amount of net income or loss during any period. Our
actual financial results could differ significantly from these
estimates. The significant estimates underlying our interim
unaudited consolidated financial statements include revenue
recognition; recoverability of current and long-lived assets,
intangible assets and goodwill; income and transactional taxes,
such as potential settlements related to occupancy and excise
taxes; loss contingencies; deferred loyalty rewards; stock-based
compensation; accounting for derivative instruments and provisions
for credit losses, customer refunds and chargebacks.
The COVID-19 pandemic has created and may continue to create
significant uncertainty in macroeconomic conditions, which may
cause further business disruptions and adversely impact our results
of operations. As a result, many of our estimates and assumptions
required increased judgment and carry a higher degree of
variability and volatility. As events continue to evolve and
additional information becomes available, our estimates may change
materially in future periods.
Notes to Consolidated Financial Statements –
(Continued)
Reclassifications
We have reclassified prior period financial statements to conform
to the current period presentation.
Seasonality
We generally experience seasonal fluctuations in the demand for our
travel services. For example, traditional leisure travel bookings
are generally the highest in the first three quarters as travelers
plan and book their spring, summer and winter holiday travel. The
number of bookings typically decreases in the fourth quarter. Since
revenue for most of our travel services, including merchant and
agency hotel, is recognized as the travel takes place rather than
when it is booked, revenue typically lags bookings by several weeks
for our hotel business and can be several months or more for our
alternative accommodations business. Historically, Vrbo has seen
seasonally stronger bookings in the first quarter of the year, with
the relevant stays occurring during the peak summer travel months.
The seasonal revenue impact is exacerbated with respect to income
by the nature of our variable cost of revenue and direct sales and
marketing costs, which we typically realize in closer alignment to
booking volumes, and the more stable nature of our fixed costs.
Furthermore, operating profits for our primary advertising
business, trivago, have typically been experienced in the second
half of the year, particularly the fourth quarter, as selling and
marketing costs offset revenue in the first half of the year as we
typically increase marketing during the busy booking period for
spring, summer and winter holiday travel. As a result on a
consolidated basis, revenue and income are typically the lowest in
the first quarter and highest in the third quarter. The growth of
our international operations, advertising business or a change in
our product mix, including the growth of Vrbo, may influence the
typical trend of seasonality in the future.
Impacts from COVID-19 disrupted our typical seasonal pattern for
bookings, revenue, profit and cash flows during 2020 and 2021.
Significantly higher cancellations and reduced booking volumes,
particularly in the first half of 2020, resulted in material
operating losses and negative cash flow. Booking and travel trends
improved in the second half of 2020, throughout 2021, and in the
first nine months of 2022. This has resulted in working capital
benefits and positive cash flow more akin to typical historical
trends. It remains difficult to forecast the seasonality for
upcoming quarters, given the uncertainty related to the shape and
timing of any sustained recovery.
Note 2 – Summary of Significant Accounting
Policies
Recent Adopted Accounting Policies
In June 2022, the Financial Accounting Standards Board (“FASB”)
issued new guidance related to fair value measurement of equity
securities, which clarifies the fair value measurement of an equity
security that is subject to a contractual sale restriction and
requires specific disclosures related to such an equity security.
The new guidance is effective for fiscal years beginning after
December 15, 2023, with early adoption permitted. We elected to
early adopt the new guidance in the second quarter of 2022 on a
prospective basis. One of our minority equity investments is
accounted for in accordance with this new guidance. See Note 3 –
Fair Value Measurements
for additional information.
Recent Accounting Policies Not Yet Adopted
In October 2021, the FASB issued new guidance relate to recognizing
and measuring contract assets and contract liabilities from
contracts with customers acquired in a business combination. The
new guidance will require acquiring entities to apply Topic 606 to
recognize and measure contract assets and contract liabilities in a
business combination as compared to current GAAP where an acquirer
generally recognizes such items at fair value on the acquisition
date. The new guidance is effective on a prospective basis for
fiscal years beginning after December 15, 2022, with early adoption
permitted. We do not expect it will have a material impact, if any,
on our consolidated financial statements.
Significant Accounting Policies
Below are the significant accounting policies with interim
disclosure requirements. For a comprehensive description of our
accounting policies, refer to our Annual Report on Form 10-K for
the year ended December 31, 2021.
Revenue
Prepaid Merchant Bookings.
We classify payments made to suppliers in advance of Vrbo
performance obligations as prepaid merchant bookings included
within prepaid and other current assets. Prepaid merchant bookings
was $522 million as of September 30, 2022 and $591 million as
of December 31, 2021.
Notes to Consolidated Financial Statements –
(Continued)
Deferred Merchant Bookings.
We classify cash payments received in advance of our performance
obligations as deferred merchant bookings. At December 31,
2021, $4.9 billion of advance cash payments was reported within
deferred merchant bookings, $4.2 billion of which was recognized
resulting in $686 million of revenue during the nine months ended
September 30, 2022. At September 30, 2022, the related
balance was $6.5 billion.
At December 31, 2021, $798 million of deferred loyalty rewards
was reported within deferred merchant bookings, $575 million of
which was recognized within revenue during the nine months ended
September 30, 2022. At September 30, 2022, the related
balance was $915 million.
Deferred Revenue.
At December 31, 2021, $166 million was recorded as deferred
revenue, $109 million of which was recognized as revenue during the
nine months ended September 30, 2022. At September 30,
2022, the related balance was $160 million.
Practical Expedients and Exemptions.
We have used the portfolio approach to account for our loyalty
points as the rewards programs share similar characteristics within
each program in relation to the value provided to the traveler and
their breakage patterns. Using this portfolio approach is not
expected to differ materially from applying the guidance to
individual contracts. However, we will continue to assess and
refine, if necessary, how a portfolio within each rewards program
is defined.
We do not disclose the value of unsatisfied performance obligations
for (i) contracts with an original expected length of one year or
less and (ii) contracts for which we recognize revenue at the
amount to which we have the right to invoice for services
performed.
Cash, Restricted Cash, and Cash Equivalents
Our cash and cash equivalents include cash and liquid financial
instruments, including U.S. treasury securities, money market funds
and term deposit investments, with maturities of three months or
less when purchased. Restricted cash includes cash and cash
equivalents that is restricted through legal contracts, regulations
or our intention to use the cash for a specific purpose. Our
restricted cash relates to certain traveler deposits, primarily for
Vrbo, and to a lesser extent collateral for office leases. The
following table reconciles cash, cash equivalents and restricted
cash reported in our consolidated balance sheets to the total
amount presented in our consolidated statements of cash
flows:
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2022 |
|
December 31,
2021 |
|
(in millions) |
|
Cash and cash equivalents |
$ |
4,588 |
|
|
$ |
4,111 |
|
|
Restricted cash and cash equivalents |
1,778 |
|
|
1,694 |
|
|
|
|
|
|
Total cash, cash equivalents and restricted cash and cash
equivalents in the consolidated statements of cash
flows |
$ |
6,366 |
|
|
$ |
5,805 |
|
Accounts Receivable and Allowances
Accounts receivable are generally due within thirty days and are
recorded net of an allowance for expected uncollectible amounts. We
consider accounts outstanding longer than the contractual payment
terms as past due. The risk characteristics we generally review
when analyzing our accounts receivable pools primarily include the
type of receivable (for example, credit card vs hotel collect),
collection terms and historical or expected credit loss patterns.
For each pool, we make estimates of expected credit losses for our
allowance by considering a number of factors, including the length
of time trade accounts receivable are past due, previous loss
history continually updated for new collections data, the credit
quality of our customers, current economic conditions, reasonable
and supportable forecasts of future economic conditions and other
factors that may affect our ability to collect from customers. The
provision for estimated credit losses is recorded as cost of
revenue in our consolidated statements of operations. During the
nine months ended September 30, 2022, we recorded
approximately $12 million of incremental allowance for expected
uncollectible accounts, offset by $16 million of write-offs. Actual
future bad debt could differ materially from this estimate
resulting from changes in our assumptions of the duration and
severity of the impact of the COVID-19 pandemic.
Notes to Consolidated Financial Statements –
(Continued)
Note 3 – Fair Value Measurements
Financial assets and liabilities measured at fair value on a
recurring basis as of September 30, 2022 are classified using
the fair value hierarchy in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
Level 1 |
|
Level 2 |
|
|
(In millions) |
|
Assets |
|
|
|
|
|
|
Cash equivalents: |
|
|
|
|
|
|
Money market funds |
$ |
4 |
|
|
$ |
4 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
Term deposits |
184 |
|
|
— |
|
|
184 |
|
|
Derivatives: |
|
|
|
|
|
|
Foreign currency forward contracts |
29 |
|
|
— |
|
|
29 |
|
|
Cross-currency interest rate swaps |
42 |
|
|
— |
|
|
42 |
|
|
Investments: |
|
|
|
|
|
|
Term deposits |
49 |
|
|
— |
|
|
49 |
|
|
Equity investments |
486 |
|
|
55 |
|
|
431 |
|
|
Total assets |
$ |
794 |
|
|
$ |
59 |
|
|
$ |
735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair value on a recurring basis as of
December 31, 2021 are classified using the fair value
hierarchy in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
(In millions) |
|
Assets |
|
|
|
|
|
|
|
|
Cash equivalents: |
|
|
|
|
|
|
|
|
Money market funds |
$ |
47 |
|
|
$ |
47 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Mutual funds |
23 |
|
|
23 |
|
|
— |
|
|
— |
|
|
Term deposits |
153 |
|
|
— |
|
|
153 |
|
|
— |
|
|
Derivatives: |
|
|
|
|
|
|
|
|
Foreign currency forward contracts |
3 |
|
|
— |
|
|
3 |
|
|
— |
|
|
Investments: |
|
|
|
|
|
|
|
|
Term deposits |
200 |
|
|
— |
|
|
200 |
|
|
— |
|
|
Equity investments |
909 |
|
|
94 |
|
|
— |
|
|
815 |
|
|
Total assets |
$ |
1,335 |
|
|
$ |
164 |
|
|
$ |
356 |
|
|
$ |
815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We classify our cash equivalents and investments within Level 1 and
Level 2 as we value our cash equivalents and investments using
quoted market prices or alternative pricing sources and models
utilizing market observable inputs. Valuation of the foreign
currency forward contracts is based on foreign currency exchange
rates in active markets, a Level 2 input. Valuation of the
cross-currency interest rate swaps is based on foreign currency
exchange rates and the current interest rate curve, Level 2
inputs.
We hold term deposit investments with financial institutions. Term
deposits with original maturities of less than three months are
classified as cash equivalents, those with remaining maturities of
less than one year are classified within short-term investments and
those with remaining maturities of greater than one year are
classified within long-term investments and other
assets.
As of September 30, 2022 and December 31, 2021, our cash
and cash equivalents consisted primarily of term deposits, money
market funds and mutual funds with maturities of three months or
less and bank account balances.
We use foreign currency forward contracts to economically hedge
certain merchant revenue exposures, foreign denominated liabilities
related to certain of our loyalty programs and our other foreign
currency-denominated operating liabilities. Our goal in managing
our foreign exchange risk is to reduce, to the extent practicable,
our potential exposure to the changes that exchange rates might
have on our earnings, cash flows and financial position. Our
foreign currency forward contracts are typically short-term and, as
they do not qualify for hedge accounting treatment, we classify the
changes in their fair value in other, net. As of September 30,
2022, we were party to outstanding forward contracts hedging our
liability exposures with a total net notional value of $2.3
billion. We had a net forward asset of $29 million ($47 million
gross asset) as
Notes to Consolidated Financial Statements –
(Continued)
of September 30, 2022 and a net forward asset of $3 million
($12 million gross asset) as of December 31, 2021 recorded in
prepaid expenses and other current assets. We recorded $(60)
million and $15 million in net gains (losses) from foreign currency
forward contracts during the three months ended September 30,
2022 and 2021 as well as $144 million and $8 million in net losses
from foreign currency forward contracts during the nine months
ended September 30, 2022 and 2021.
On March 2, 2022, we entered into two fixed-to-fixed cross-currency
interest rate swaps with an aggregate notional amount of
€300 million. The swaps were designated as net investment
hedges of Euro assets with the objective to protect the U.S. dollar
value of our net investments in the Euro foreign operations due to
movements in foreign currency. Hedge effectiveness is assessed each
quarter based on the net investment in the foreign subsidiaries
designated as the hedged item and the changes in the fair value of
designated interest rate swaps based on spot rates. For hedges that
meet the effectiveness requirements, changes in fair value are
recorded as accumulated other comprehensive income (loss) (“AOCI”)
within the foreign currency translation adjustment. Amounts
excluded from hedge effectiveness at inception are recognized as
interest accrues within interest expense. The maturity date of both
swaps is February 2026, whereby, we will receive U.S. dollars from
and pay Euros to the contract counterparties. During the term of
each contract, we receive interest payments in U.S. dollars at a
fixed rate of 5% and make interest payments in Euros at an average
fixed rate of 3.38% based on a notional amount and fixed interest
rates determined at contract inception. The fair value of the
cross-currency interest rate swaps was a $42 million asset as of
September 30, 2022 recorded in long-term investments and other
assets, and the gain recognized in interest expense during the nine
months ended September 30, 2022 was $4 million.
Our equity investments include our marketable equity investment in
Despegar, a publicly traded company, which is included in long-term
investments and other assets in our consolidated balance sheets.
During the nine months ended September 30, 2022 and 2021, we
recognized a loss of approximately $39 million and approximately $7
million within other, net in our consolidated statements of
operations related to the fair value changes of this equity
investment.
In connection with our disposition of Egencia (our former corporate
travel arm) in November 2021, we became an indirect holder of an
approximately 19% interest in GBT JerseyCo Ltd. (“GBT”), doing
business as American Express Global Business Travel, with an
initial fair value of $815 million. As we elected the fair
value option for our investment, during the first quarter of 2022,
we recorded a downward adjustment of approximately $2 million
based on an updated valuation. In May 2022, GBT completed a deSPAC
business combination with Apollo Strategic Growth Capital. This
combination resulted in a newly publicly traded company, Global
Business Travel Group, Inc (“GBTG”), which together with GBT’s
pre-combination shareholders owned all of GBT. Post combination and
as of September 30, 2022, we had an approximately 16%
ownership interest in GBT and a commensurate
voting interest in GBTG. Our shares in GBT are exchangeable on a
1:1 basis for GBTG shares, and as such, we valued our investment
based on the GBTG’s share price at the end of the third quarter of
2022, which resulted in a loss of $48 million within other,
net in our consolidated statements of operations during the three
months ended September 30, 2022. The loss for the nine months ended
September 30, 2022 was $384 million. We are subject to a
lockup period on sales of these equity securities until November
23, 2022.
The following table reconciles, in millions, the beginning and
ending balances of our Level 3 assets. With the May 2022 business
combination of GBTG, we reclassified our equity investment from a
Level 3 asset to a Level 2 asset.
|
|
|
|
|
|
|
Balance as of December 31, 2021 |
$ |
815 |
|
|
Upward (downward) adjustment to valuation |
(335) |
|
|
Reclassification to Level 2 |
(480) |
|
|
Balance as of September 30, 2022 |
$ |
— |
|
Assets Measured at Fair Value on a Non-recurring Basis
Our non-financial assets, such as goodwill, intangible assets and
property and equipment, as well as equity method investments for
which we have not elected the fair value option, are adjusted to
fair value when an impairment charge is recognized or the
underlying investment is sold. Such fair value measurements are
based predominately on Level 3 inputs. We measure our minority
investments that do not have readily determinable fair values at
cost less impairment, adjusted by observable price changes with
changes recorded within other, net on our consolidated statements
of operations.
Intangible Assets.
During the three and nine months ended September 30, 2022, we
recognized intangible impairment charges of $52 million and $81
million related to an indefinite-lived trade name within our
trivago segment that primarily resulted from changes in the
weighted average cost of capital. The indefinite-lived trade name
asset, classified as Level 3 measurements, was valued using the
relief-from-royalty method, which includes unobservable inputs,
including projected revenues, royalty rates and weighted average
cost of capital. As noted above, trivago is subject to its own
reporting and filing requirements and, therefore, assesses goodwill
at a lower level, which could result in possible differences in the
ultimate amount or timing of impairments recognized.
Notes to Consolidated Financial Statements –
(Continued)
Minority Investments without Readily Determinable Fair
Values.
As of both September 30, 2022 and December 31, 2021, the
carrying values of our minority investments without readily
determinable fair values totaled $330 million. During the three and
nine months ended September 30, 2022 and 2021, we had no
material gains or losses recognized related to these minority
investments. As of September 30, 2022, total cumulative
adjustments made to the initial cost basis of these investments
included $2 million in unrealized upward adjustments and
$105 million in unrealized downward adjustments (including
impairments).
Note 4 – Debt
The following table sets forth our outstanding debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2022 |
|
December 31,
2021 |
|
|
(In millions) |
|
2.5% (€650 million) senior notes due 2022
|
$ |
— |
|
|
$ |
735 |
|
|
3.6% senior notes due 2023
|
— |
|
|
497 |
|
|
4.5% senior notes due 2024
|
— |
|
|
498 |
|
|
6.25% senior notes due 2025
|
1,035 |
|
|
1,033 |
|
|
5.0% senior notes due 2026
|
746 |
|
|
745 |
|
|
0% convertible senior notes due 2026
|
988 |
|
|
986 |
|
|
4.625% senior notes due 2027
|
745 |
|
|
744 |
|
|
3.8% senior notes due 2028
|
995 |
|
|
994 |
|
|
3.25% senior notes due 2030
|
1,236 |
|
|
1,235 |
|
|
2.95% senior notes due 2031
|
492 |
|
|
983 |
|
|
Long-term debt(1)
|
6,237 |
|
|
8,450 |
|
|
Current maturities of long-term debt |
— |
|
|
(735) |
|
|
Long-term debt, excluding current maturities |
$ |
6,237 |
|
|
$ |
7,715 |
|
_______________
(1)Net
of applicable discounts and debt issuance costs.
Redemption of Senior Notes
During the three and nine months ended September 30, 2022, we
settled a tender offer to purchase $500 million in aggregate
principal of our 2.95% Senior Notes due 2031 for an aggregate cash
repurchase price of approximately $418 million, which resulted in
the recognition of a net gain on debt extinguishment of $73
million. The net gain included the write-off of debt issuance costs
and discounts of $8 million as well as fees of
$1 million.
During the nine months ended September 30, 2022, we early redeemed
all of our €650 million registered senior unsecured notes that
were due June 2022 and bore interest at 2.5% (the “2.5% Notes”),
all of our $500 million registered senior unsecured notes that
were due December 2023 and bore interest at 3.6% (the “3.6%
Notes”), and all of our $500 million registered senior
unsecured notes that were due August 2024 and bore interest at 4.5%
(the “4.5% Notes”), which resulted in the recognition of a loss on
debt extinguishment of $24 million during the period. This
loss primarily reflected the payment of “make-whole” premiums of
$20 million for the 3.6% and 4.5% Notes as well as the
write-off of unamortized debt issuance costs and discounts of
$4 million.
We paid accrued and unpaid interest on the 2.5%, 3.6%, 4.5% and
2.95% Notes up to their dates of redemption.
Long-term Debt
Additional information about
our $1 billion aggregate principal amount of unsecured 0%
convertible senior notes due 2026 (the “Convertible Notes”)
and
our other
outstanding senior notes (collectively the “Senior Notes”),
see
Note 8
–
Debt of the Notes to Consolidated Financial Statements in
our
2021
Form 10-K.
All of our outstanding Senior Notes are senior unsecured
obligations issued by Expedia Group and guaranteed by certain
domestic Expedia Group subsidiaries. The Senior Notes rank equally
in right of payment with all of our existing and future unsecured
and unsubordinated obligations of Expedia Group and the guarantor
subsidiaries. In addition, the Senior Notes include covenants that
limit our ability to (i) create certain liens, (ii) enter
into sale/leaseback transactions and (iii) merge or
consolidate with or into another entity or transfer substantially
all of our assets. The Senior Notes are redeemable in whole or
in part, at the option of the holders thereof, upon the occurrence
of certain change of control triggering events at a purchase price
in cash equal to 101% of the principal plus accrued and unpaid
interest. Accrued interest related to the Senior Notes was $48
million and $98 million as of September 30, 2022 and
December 31, 2021.
Notes to Consolidated Financial Statements –
(Continued)
Estimated Fair Value.
The total estimated fair value of our Senior Notes was
approximately $4.8 billion and $8.0 billion as of
September 30, 2022 and December 31, 2021. Additionally,
the estimated fair value of the Convertible Notes was $874 million
and $1.2 billion as of September 30, 2022 and
December 31, 2021. The fair value was determined based on
quoted market prices in less active markets and is categorized
according as Level 2 in the fair value hierarchy.
Credit Facility
As of September 30, 2022, Expedia Group maintained a $2.5
billion revolving credit facility that matures in April 2027. As of
September 30, 2022, we had no revolving credit facility
borrowings outstanding. Loans under the revolving credit facility
bear interest at a rate equal to an index rate plus a margin (a) in
the case of term benchmark loans, ranging from 1.00% to 1.75% per
annum, depending on Expedia Group’s credit ratings, and (b) in the
case of base rate loans, ranging from 0.00% to 0.75% per annum,
depending on Expedia Group’s credit ratings. A fee is payable
quarterly in respect of undrawn commitments under the revolving
credit facility at a rate ranging from 0.10% to 0.25% per annum,
depending on Expedia Group’s credit ratings. The terms of the
revolving credit facility require Expedia Group to not exceed a
specified maximum consolidated leverage ratio as of the end of each
fiscal quarter.
The revolving credit facility has a $120 million letter of
credit (“LOC”) sublimit, and the amount of LOCs issued under the
facility reduced the credit amount available. As of
September 30, 2022, there was $38 million of outstanding
stand-by LOCs issued under the facility.
The current facility was setup in April 2022 and Expedia Group
terminated all outstanding commitments and repaid all outstanding
obligations under our prior $1.145 billion revolving credit
facility and $855 million foreign credit facility. As of
December 31, 2021, we had no borrowings outstanding under
either prior facility and $14 million of outstanding stand-by LOCs
issued under the $1.145 billion revolving
facility.
Note 5 – Capital Stock
Treasury Stock
As of September 30, 2022, the Company’s treasury stock was
comprised of approximately 126.6 million common stock and 7.3
million Class B shares. As of December 31, 2021, the Company’s
treasury stock was comprised of approximately 124.5 million shares
of common stock and 7.3 million Class B shares.
Share Repurchases.
In 2018 and 2019, the Executive Committee, acting on behalf of the
Board of Directors, authorized a repurchase of up to an additional
15 million shares and 20 million shares of our common
stock, respectively with 23.3 million shares remaining as of
December 31, 2021. During the three and nine months ended September
30, 2022, we repurchased, through open market transactions, 1.5
million shares under these authorizations for the total cost of
$153 million, excluding transaction costs, representing an average
repurchase price of $100.07 per share. As of September 30, 2022,
there were approximately 21.8 million shares remaining under the
2018 and 2019 repurchase authorizations. There is no fixed
termination date for the repurchases. Subsequent to the end of the
third quarter of 2022, we repurchased an additional 0.5 million
shares for a total cost of $47 million, excluding transaction
costs, representing an average purchase price of $95.65 per
share.
Accumulated Other Comprehensive Income (Loss)
The balance of AOCI as of September 30, 2022 and
December 31, 2021 was comprised of foreign currency
translation adjustments. These translation adjustments include
foreign currency transaction losses at September 30, 2022 of
$7 million ($10 million before tax) and $15 million ($22 million
before tax) at December 31, 2021 associated with our
Euro-denominated 2.5% Notes, as well as foreign currency
transaction gains at September 30, 2022 of $32 million
($42 million before tax) associated with our cross-currency
interest rate swaps as described in Note 3 – Fair Value
Measurements. Until their redemption in March 2022, the aggregate
principal value of the 2.5% Notes was designated as a hedge of our
net investment in certain Euro-functional currency subsidiaries. In
March 2022, we redeemed the 2.5% Notes and terminated the related
hedging relationship. The currency translation adjustment amounts
associated with the net investment hedge of the 2.5% Notes will
remain in AOCI until realized upon a full or partial sale or
liquidation of the applicable Euro-functional currency
subsidiaries.
Notes to Consolidated Financial Statements –
(Continued)
Note 6 – Earnings (Loss) Per Share
The following table presents our basic and diluted earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
(In millions, except share and per share data) |
|
Net income (loss) attributable to Expedia Group, Inc. |
$ |
482 |
|
|
$ |
376 |
|
|
$ |
175 |
|
|
$ |
(374) |
|
|
Preferred stock dividend |
— |
|
|
(14) |
|
|
— |
|
|
(64) |
|
|
Loss on redemption of preferred stock |
— |
|
|
— |
|
|
— |
|
|
(107) |
|
|
Net income (loss) attributable to Expedia Group, Inc. common
stockholders |
$ |
482 |
|
|
$ |
362 |
|
|
$ |
175 |
|
|
$ |
(545) |
|
|
Earnings (loss) per share attributable to Expedia Group, Inc.
available to common stockholders |
|
|
|
|
|
|
|
|
Basic |
$ |
3.05 |
|
|
$ |
2.40 |
|
|
$ |
1.11 |
|
|
$ |
(3.67) |
|
|
Diluted |
2.98 |
|
|
2.26 |
|
|
1.08 |
|
|
(3.67) |
|
|
Weighted average number of shares outstanding (000's): |
|
|
|
|
|
|
|
|
Basic |
157,628 |
|
|
151,019 |
|
|
157,100 |
|
|
148,453 |
|
|
Dilutive effect of: |
|
|
|
|
|
|
|
|
Convertible Notes |
3,921 |
|
|
3,921 |
|
|
3,921 |
|
|
— |
|
|
Stock-based awards |
274 |
|
|
3,271 |
|
|
1,469 |
|
|
— |
|
|
Warrants to purchase common
stock |
— |
|
|
2,244 |
|
|
— |
|
|
— |
|
|
Other dilutive securities |
6 |
|
|
5 |
|
|
5 |
|
|
— |
|
|
Diluted |
161,829 |
|
|
160,460 |
|
|
162,495 |
|
|
148,453 |
|
Basic earnings per share is calculated using our weighted-average
outstanding common shares. The earnings per share amounts are the
same for common stock and Class B common stock because the holders
of each class are legally entitled to equal per share distributions
whether through dividends or in liquidation.
Diluted earnings per share is calculated using our weighted-average
outstanding common shares including the dilutive effect of stock
awards and common stock warrants as determined under the treasury
stock method and of our Convertible Notes using the if-converted
method.
In periods when we recognize a net loss, we exclude the impact of
outstanding stock awards, common stock warrants and the potential
share settlement impact related to our Convertible Notes from the
diluted loss per share calculation as their inclusion would have an
antidilutive effect. For the three and nine months ended
September 30, 2022, approximately 9 million of outstanding
stock awards have been excluded from the calculations of diluted
earnings per share attributable to common stockholders because
their effect would have been antidilutive. For the three months
ended September 30, 2021, approximately 5 million of
outstanding stock awards were excluded. For the nine months ended
September 30, 2021, approximately 18 million of outstanding
stock awards and common stock warrants and approximately 4 million
shares related to the potential share settlement impact related to
our Convertible Notes were excluded.
Note 7 – Income Taxes
We determine our provision for income taxes for interim periods
using an estimate of our annual effective tax rate. We record any
changes affecting the estimated annual effective tax rate in the
interim period in which the change occurs, including discrete
items.
For the three months ended September 30, 2022, the effective
tax rate was a 31.0% expense on pre-tax income, compared to an
18.7% expense on pre-tax income for the three months ended
September 30, 2021. For the nine months ended
September 30, 2022, the effective tax rate was an 52.6%
expense on pre-tax income, compared to a 25.3% benefit on pre-tax
loss for the nine months ended September 30, 2021. The change
in the effective tax rate for both periods was primarily due to
nondeductible mark-to-market adjustments to our minority equity
investments as well as other discrete items.
We are subject to taxation in the United States and foreign
jurisdictions. Our income tax filings are regularly examined by
federal, state and foreign tax authorities. During the fourth
quarter of 2019, the Internal Revenue Service (“IRS”) issued final
adjustments related to transfer pricing with our foreign
subsidiaries for our 2011 to 2013 tax years. The adjustments would
increase our U.S. taxable income by $696 million, which would
result in federal tax of approximately $244 million, subject to
interest. We do not agree with the position of the IRS. We have
formally filed a protest for our 2011 to 2013 tax years and the
case has been scheduled with Appeals. During the fourth quarter of
2022, the IRS issued similar proposed adjustments
related
Notes to Consolidated Financial Statements –
(Continued)
to transfer pricing with our foreign subsidiaries for our 2014 to
2016 tax years. The adjustments would increase our U.S. taxable
income by $1.413 billion, which would result in federal tax of
approximately $494 million, subject to interest. The proposed
adjustments provided by the IRS exclude any offsetting adjustments
that may reduce the amount of federal tax. We do not agree with the
position of the IRS and intend to formally protest. We are also
under examination by the IRS for our 2017-2020 tax years. We do not
anticipate a significant impact to our gross unrecognized tax
benefits within the next 12 months related to these
years.
Note 8 – Commitments and Contingencies
Legal Proceedings
In the ordinary course of business, we are a party to various
lawsuits. Management does not expect these lawsuits to have a
material impact on the liquidity, results of operations, or
financial condition of Expedia Group. We also evaluate other
potential contingent matters, including value-added tax, excise
tax, sales tax, transient occupancy or accommodation tax and
similar matters. We do not believe that the aggregate amount of
liability that could be reasonably possible with respect to these
matters would have a material adverse effect on our financial
results; however, litigation is inherently uncertain and the actual
losses incurred in the event that our legal proceedings were to
result in unfavorable outcomes could have a material adverse effect
on our business and financial performance.
Litigation Relating to Occupancy Taxes.
One hundred three lawsuits have been filed by or against cities,
counties and states involving hotel occupancy and other taxes.
Eight lawsuits are currently active. These lawsuits are in various
stages and we continue to defend against the claims made in them
vigorously. With respect to the principal claims in these matters,
we believe that the statutes or ordinances at issue do not apply to
us or the services we provide and, therefore, that we do not owe
the taxes that are claimed to be owed. We believe that the statutes
or ordinances at issue generally impose occupancy and other taxes
on entities that own, operate or control hotels (or similar
businesses) or furnish or provide hotel rooms or similar
accommodations. To date, forty-nine of these lawsuits have been
dismissed. Some of these dismissals have been without prejudice
and, generally, allow the governmental entity or entities to seek
administrative remedies prior to pursuing further litigation.
Thirty-four dismissals were based on a finding that we and the
other defendants were not subject to the local tax ordinance or
that the local government lacked standing to pursue its claims. As
a result of this litigation and other attempts by certain
jurisdictions to levy such taxes, we have established a reserve for
the potential settlement of issues related to hotel occupancy and
other taxes, consistent with applicable accounting principles and
in light of all current facts and circumstances, in the amount of
$44 million and $50 million as of September 30, 2022 and
December 31, 2021, respectively. Our settlement reserve is
based on our best estimate of probable losses and the ultimate
resolution of these contingencies may be greater or less than the
liabilities recorded. An estimate for a reasonably possible loss or
range of loss in excess of the amount reserved cannot be made.
Changes to the settlement reserve are included within legal
reserves, occupancy tax and other in the consolidated statements of
operations.
Pay-to-Play.
Certain jurisdictions may assert that we are required to pay any
assessed taxes prior to being allowed to contest or litigate the
applicability of the ordinances. This prepayment of contested taxes
is referred to as “pay-to-play.” Payment of these amounts is not an
admission that we believe we are subject to such taxes and, even
when such payments are made, we continue to defend our position
vigorously. If we prevail in the litigation, for which a
pay-to-play payment was made, the jurisdiction collecting the
payment will be required to repay such amounts and also may be
required to pay interest.
We are in various stages of inquiry or audit with various tax
authorities, some of which, including in the City of Los Angeles
regarding hotel occupancy taxes, may impose a pay-to-play
requirement to challenge an adverse inquiry or audit result in
court.
Matters Relating to International VAT.
We are in various stages of inquiry or audit in multiple European
Union jurisdictions regarding the application of VAT to our
European Union related transactions. While we believe we comply
with applicable VAT laws, rules and regulations in the relevant
jurisdictions, the tax authorities may determine that we owe
additional taxes. In certain jurisdictions, including the United
Kingdom, we may be required to “pay-to-play” any VAT assessment
prior to contesting its validity. While we believe that we will be
successful based on the merits of our positions with regard to
audits in pay-to-play jurisdictions, it is nevertheless reasonably
possible that we could be required to pay any assessed amounts in
order to contest or litigate the applicability of any assessments
and an estimate for a reasonably possible amount of any such
payments cannot be made.
Competition and Consumer Matters.
On August 23, 2018, the Australian Competition and Consumer
Commission, or "ACCC", instituted proceedings in the Australian
Federal Court against trivago. The ACCC alleged breaches of
Australian Consumer Law, or "ACL," relating to trivago’s
advertisements in Australia concerning the hotel prices available
on trivago’s Australian site, trivago’s strike-through pricing
practice and other aspects of the way offers for accommodation were
displayed on trivago's Australian website. On January 20, 2020, the
Australian Federal Court issued a judgment finding trivago
had
Notes to Consolidated Financial Statements –
(Continued)
engaged in conduct in breach of the ACL. On October 18 and 19,
2021, the court heard submissions from the parties regarding
penalties and other orders. On April 22, 2022, the Australian
Federal Court issued a judgment ordering trivago to pay a penalty
of AU$44.7 million, which was paid in the second quarter of
2022, and to cover the ACCC’s costs arising from the
proceedings.
The court also enjoined trivago from engaging in misleading conduct
of the type found by the Australian Federal Court to be in
contravention of the ACL. We recorded an estimated loss of
approximately $11 million with respect to these proceedings in
a previous period and an additional loss of approximately
$23 million during the first quarter of 2022, for a total of
approximately $34 million previously included in accrued
expenses and other current liabilities as of March 31,
2022.
Note 9 – Segment Information
We have the following reportable segments: Retail, B2B, and
trivago. Our Retail segment provides a full range of travel and
advertising services to our worldwide customers through a variety
of consumer brands including: Expedia.com and Hotels.com in the
United States and localized Expedia and Hotels.com websites
throughout the world, Vrbo, Orbitz, Travelocity, Wotif Group,
ebookers, CheapTickets, Hotwire.com, CarRentals.com and Expedia
Cruises. Our B2B segment is comprised of our Expedia Business
Services organization including Expedia Partner Solutions, which
offers private label and co-branded products to make travel
services available to travelers through third-party company branded
websites, and Egencia (until its sale in November 2021), a
full-service travel management company that provides travel
services to businesses and their corporate customers. Our trivago
segment generates advertising revenue primarily from sending
referrals to online travel companies and travel service providers
from its hotel metasearch websites.
We determined our operating segments based on how our chief
operating decision makers manage our business, make operating
decisions and evaluate operating performance. Our primary operating
metric is Adjusted EBITDA. Adjusted EBITDA for our Retail and B2B
segments includes allocations of certain expenses, primarily
related to our global travel supply organization and the majority
of costs from our product and technology platform, as well as
facility 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. During the fourth quarter of 2021, we consolidated our
divisional finance teams into one global finance organization,
which resulted in the reclassification of expenses from Retail and
B2B into our Corporate function. We have reclassified prior period
segment information to conform to our current period
presentation.
Our segment disclosure includes intersegment revenues, which
primarily consist of advertising and media services provided by our
trivago segment to our Retail segment. These intersegment
transactions are recorded by each segment at amounts that
approximate fair value as if the transactions were between third
parties, and therefore, impact segment performance. However, the
revenue and corresponding expense are eliminated in consolidation.
The elimination of such intersegment transactions is included
within Corporate and Eliminations in the table below.
Corporate and Eliminations also includes unallocated corporate
functions and expenses. In addition, we record amortization of
intangible assets and any related impairment, as well as
stock-based compensation expense, restructuring and related
reorganization charges, legal reserves, occupancy tax and other,
and other items excluded from segment operating performance in
Corporate and Eliminations. Such amounts are detailed in our
segment reconciliation below.
The following tables present our segment information for the three
and nine months ended September 30, 2022 and 2021. As a
significant portion of our property and equipment is not allocated
to our operating segments and depreciation is not included in our
segment measure, we do not report the assets by segment as it would
not be meaningful. We do not regularly provide such information to
our chief operating decision makers.
Notes to Consolidated Financial Statements –
(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2022 |
|
|
Retail |
|
B2B |
|
trivago |
|
Corporate &
Eliminations |
|
Total |
|
|
(In millions) |
|
Third-party revenue |
$ |
2,707 |
|
|
$ |
788 |
|
|
$ |
124 |
|
|
$ |
— |
|
|
$ |
3,619 |
|
|
Intersegment revenue |
— |
|
|
— |
|
|
61 |
|
|
(61) |
|
|
— |
|
|
Revenue |
$ |
2,707 |
|
|
$ |
788 |
|
|
$ |
185 |
|
|
$ |
(61) |
|
|
$ |
3,619 |
|
|
Adjusted EBITDA |
$ |
943 |
|
|
$ |
221 |
|
|
$ |
34 |
|
|
$ |
(119) |
|
|
$ |
1,079 |
|
|
Depreciation |
(126) |
|
|
(22) |
|
|
(2) |
|
|
(26) |
|
|
(176) |
|
|
Amortization of intangible assets |
— |
|
|
— |
|
|
— |
|
|
(23) |
|
|
(23) |
|
|
Impairment of intangible assets |
— |
|
|
— |
|
|
— |
|
|
(52) |
|
|
(52) |
|
|
Stock-based compensation |
— |
|
|
— |
|
|
— |
|
|
(97) |
|
|
(97) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized (gain) loss on revenue hedges |
10 |
|
|
6 |
|
|
— |
|
|
— |
|
|
16 |
|
|
Operating income |
$ |
827 |
|
|
$ |
205 |
|
|
$ |
32 |
|
|
$ |
(317) |
|
|
747 |
|
|
Other expense, net |
|
|
|
|
|
|
|
|
(57) |
|
|
Income before income taxes |
|
|
|
|
|
|
|
|
690 |
|
|
Provision for income taxes |
|
|
|
|
|
|
|
|
(214) |
|
|
Net income |
|
|
|
|
|
476 |
|
|
Net loss attributable to non-controlling interests |
|
|
|
|
|
6 |
|
|
Net income attributable to Expedia Group, Inc. |
|
|
|
|
|
$ |
482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2021 |
|
|
Retail |
|
B2B |
|
trivago |
|
Corporate &
Eliminations |
|
Total |
|
|
(In millions) |
|
Third-party revenue |
$ |
2,351 |
|
|
$ |
490 |
|
|
$ |
121 |
|
|
$ |
— |
|
|
$ |
2,962 |
|
|
Intersegment revenue |
— |
|
|
— |
|
|
42 |
|
|
(42) |
|
|
— |
|
|
Revenue |
$ |
2,351 |
|
|
$ |
490 |
|
|
$ |
163 |
|
|
$ |
(42) |
|
|
$ |
2,962 |
|
|
Adjusted EBITDA |
$ |
879 |
|
|
$ |
74 |
|
|
$ |
18 |
|
|
$ |
(116) |
|
|
$ |
855 |
|
|
Depreciation |
(130) |
|
|
(24) |
|
|
(3) |
|
|
(20) |
|
|
(177) |
|
|
Amortization of intangible assets |
— |
|
|
— |
|
|
— |
|
|
(24) |
|
|
(24) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
— |
|
|
— |
|
|
— |
|
|
(116) |
|
|
(116) |
|
|
Legal reserves, occupancy tax and other |
— |
|
|
— |
|
|
— |
|
|
(10) |
|
|
(10) |
|
|
Restructuring and related reorganization charges |
— |
|
|
— |
|
|
— |
|
|
(12) |
|
|
(12) |
|
|
Realized (gain) loss on revenue hedges |
8 |
|
|
— |
|
|
— |
|
|
— |
|
|
8 |
|
|
Operating income |
$ |
757 |
|
|
$ |
50 |
|
|
$ |
15 |
|
|
$ |
(298) |
|
|
524 |
|
|
Other expense, net |
|
|
|
|
|
|
|
|
(59) |
|
|
Income before income taxes |
|
|
|
|
|
|
|
|
465 |
|
|
Provision for income taxes |
|
|
|
|
|
|
|
|
(87) |
|
|
Net income |
|
|
|
|
|
|
|
|
378 |
|
|
Net income attributable to non-controlling interests |
|
|
|
|
|
(2) |
|
|
Net income attributable to Expedia Group, Inc. |
|
|
|
|
|
376 |
|
|
Preferred stock dividend |
|
|
|
|
|
|
|
|
(14) |
|
|
Net income attributable to Expedia Group, Inc. common
stockholders |
|
|
|
$ |
362 |
|
Notes to Consolidated Financial Statements –
(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2022 |
|
|
Retail |
|
B2B |
|
trivago |
|
Corporate &
Eliminations |
|
Total |
|
|
(In millions) |
|
Third-party revenue |
$ |
6,867 |
|
|
$ |
1,870 |
|
|
$ |
312 |
|
|
$ |
— |
|
|
$ |
9,049 |
|
|
Intersegment revenue |
— |
|
|
— |
|
|
143 |
|
|
(143) |
|
|
— |
|
|
Revenue |
$ |
6,867 |
|
|
$ |
1,870 |
|
|
$ |
455 |
|
|
$ |
(143) |
|
|
$ |
9,049 |
|
|
Adjusted EBITDA |
$ |
1,713 |
|
|
$ |
457 |
|
|
$ |
92 |
|
|
$ |
(362) |
|
|
$ |
1,900 |
|
|
Depreciation |
(381) |
|
|
(62) |
|
|
(7) |
|
|
(77) |
|
|
(527) |
|
|
Amortization of intangible assets |
— |
|
|
— |
|
|
— |
|
|
(66) |
|
|
(66) |
|
|
Impairment of intangible assets |
— |
|
|
— |
|
|
— |
|
|
(81) |
|
|
(81) |
|
|
Stock-based compensation |
— |
|
|
— |
|
|
— |
|
|
(280) |
|
|
(280) |
|
|
Legal reserves, occupancy tax and other |
— |
|
|
— |
|
|
— |
|
|
(23) |
|
|
(23) |
|
|
|
|
|
|
|
|
|
|
|
|
Realized (gain) loss on revenue hedges |
25 |
|
|
9 |
|
|
— |
|
|
— |
|
|
34 |
|
|
Operating income |
$ |
1,357 |
|
|
$ |
404 |
|
|
$ |
85 |
|
|
$ |
(889) |
|
|
957 |
|
|
Other expense, net |
|
|
|
|
|
|
|
|
(602) |
|
|
Income before income taxes |
|
|
|
|
|
|
|
|
355 |
|
|
Provision for income taxes |
|
|
|
|
|
|
|
|
(187) |
|
|
Net income |
|
|
|
|
|
|
|
|
168 |
|
|
Net loss attributable to non-controlling interests |
|
|
|
|
|
7 |
|
|
Net income attributable to Expedia Group, Inc. |
|
|
|
|
|
$ |
175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Consolidated Financial Statements –
(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2021 |
|
|
Retail |
|
B2B |
|
trivago |
|
Corporate &
Eliminations |
|
Total |
|
|
(In millions) |
|
Third-party revenue |
$ |
5,091 |
|
|
$ |
979 |
|
|
$ |
249 |
|
|
$ |
— |
|
|
$ |
6,319 |
|
|
Intersegment revenue |
— |
|
|
— |
|
|
75 |
|
|
(75) |
|
|
— |
|
|
Revenue |
$ |
5,091 |
|
|
$ |
979 |
|
|
$ |
324 |
|
|
$ |
(75) |
|
|
$ |
6,319 |
|
|
Adjusted EBITDA |
$ |
1,301 |
|
|
$ |
13 |
|
|
$ |
19 |
|
|
$ |
(335) |
|
|
$ |
998 |
|
|
Depreciation |
(396) |
|
|
(78) |
|
|
(8) |
|
|
(56) |
|
|
(538) |
|
|
Amortization of intangible assets |
— |
|
|
— |
|
|
— |
|
|
(77) |
|
|
(77) |
|
|
Stock-based compensation |
— |
|
|
— |
|
|
— |
|
|
(319) |
|
|
(319) |
|
|
Legal reserves, occupancy tax and other |
— |
|
|
— |
|
|
— |
|
|
(1) |
|
|
(1) |
|
|
Restructuring and related reorganization charges |
— |
|
|
— |
|
|
— |
|
|
(54) |
|
|
(54) |
|
|
Realized (gain) loss on revenue hedges |
14 |
|
|
— |
|
|
— |
|
|
— |
|
|
14 |
|
|
Operating income (loss) |
$ |
919 |
|
|
$ |
(65) |
|
|
$ |
11 |
|
|
$ |
(842) |
|
|
23 |
|
|
Other expense, net |
|
|
|
|
|
|
|
|
(532) |
|
|
Loss before income taxes |
|
|
|
|
|
|
|
|
(509) |
|
|
Provision for income taxes |
|
|
|
|
|
|
|
|
129 |
|
|
Net loss |
|
|
|
|
|
|
|
|
(380) |
|
|
Net loss attributable to non-controlling interests |
|
|
|
|
|
6 |
|
|
Net loss attributable to Expedia Group, Inc. |
|
|
|
|
|
(374) |
|
|
Preferred stock dividend |
|
|
|
|
|
|
|
|
(64) |
|
|
Loss on redemption of preferred stock |
|
|
|
|
|
(107) |
|
|
Net loss attributable to Expedia Group, Inc. common
stockholders |
|
|
|
|
|
$ |
(545) |
|
Revenue by Business Model and Service Type
The following table presents revenue by business model and service
type:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
(in millions) |
|
Business Model: |
|
|
|
|
|
|
|
|
Merchant |
$ |
2,427 |
|
|
$ |
1,923 |
|
|
$ |
6,037 |
|
|
$ |
4,057 |
|
|
Agency |
935 |
|
|
800 |
|
|
2,309 |
|
|
1,696 |
|
|
Advertising, media and other |
257 |
|
|
239 |
|
|
703 |
|
|
566 |
|
|
Total revenue
|
$ |
3,619 |
|
|
$ |
2,962 |
|
|
$ |
9,049 |
|
|
$ |
6,319 |
|
|
Service Type: |
|
|
|
|
|
|
|
|
Lodging |
$ |
2,881 |
|
|
$ |
2,300 |
|
|
$ |
6,891 |
|
|
$ |
4,736 |
|
|
Air |
100 |
|
|
61 |
|
|
269 |
|
|
189 |
|
|
Advertising and media |
222 |
|
|
202 |
|
|
601 |
|
|
451 |
|
|
Other(1)
|
416 |
|
|
399 |
|
|
1,288 |
|
|
943 |
|
|
Total revenue
|
$ |
3,619 |
|
|
$ |
2,962 |
|
|
$ |
9,049 |
|
|
$ |
6,319 |
|
____________________________
(1)Other
includes car rental, insurance, destination services, cruise and
fee revenue related to our corporate travel business prior to our
sale of Egencia in November 2021, among other revenue streams, none
of which are individually material.
Our Retail and B2B segments generate revenue from the merchant,
agency and advertising, media and other business models as well as
all service types. trivago segment revenue is generated through
advertising and media.
Part I. Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements reflect the
views of our management regarding current expectations and
projections about future events and are based on currently
available information. Actual results could differ materially from
those contained in these forward-looking statements for a variety
of reasons, including, but not limited to, those discussed in our
Annual Report on Form 10-K for the year ended December 31,
2021, Part I, Item 1A, “Risk Factors,” as well as those
discussed elsewhere in this report. COVID-19, and the volatile
regional and global economic conditions stemming from it, and
additional or unforeseen effects from the COVID-19 pandemic, could
also give rise to or aggravate these risk factors, which in turn
could materially adversely affect our business, financial
condition, liquidity, results of operations (including revenues and
profitability) and/or stock price. Further, COVID-19 may also
affect our operating and financial results in a manner that is not
presently known to us or that we currently do not consider to
present significant risks to our operations. Other unknown or
unpredictable factors also could have a material adverse effect on
our business, financial condition and results of operations.
Accordingly, readers should not place undue reliance on these
forward-looking statements. The use of words such as “anticipates,”
“believes,” “could,” “estimates,” “expects,” “goal,” “intends,”
“likely,” “may,” “plans,” “potential,” “predicts,” “projected,”
“seeks,” “should” 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. These forward-looking statements are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. We are not under any
obligation to, and do not intend to, publicly update or review any
of these forward-looking statements, whether as a result of new
information, future events or otherwise, even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be realized.
Please carefully review and consider the various disclosures made
in this report and in our other reports filed with the SEC that
attempt to advise interested parties of the risks and factors that
may affect our business, prospects and results of
operations.
The information included in this management’s discussion and
analysis of financial condition and results of operations should be
read in conjunction with our consolidated financial statements and
the notes included in this Quarterly Report, and the audited
consolidated financial statements and notes and Management’s
Discussion and Analysis of Financial Condition and Results of
Operations contained in our Annual Report on Form 10-K for the year
ended December 31, 2021.
Overview
Expedia Group's mission is to power global travel for everyone,
everywhere. We believe travel is a force for good. Travel is an
essential human experience that strengthens connections, broadens
horizons and bridges divides. We help reduce the barriers to
travel, making it easier, more enjoyable, more attainable and more
accessible. We bring the world within reach for customers and
partners around the globe. We leverage our supply portfolio,
platform and technology capabilities across an extensive portfolio
of consumer brands, and provide solutions to our business partners,
to empower travelers to efficiently research, plan, book and
experience travel. We make available, on a stand-alone and package
basis, travel services provided by numerous lodging properties,
airlines, car rental companies, activities and experiences
providers, cruise lines, alternative accommodations property owners
and managers, and other travel product and service companies. We
also offer travel and non-travel advertisers access to a potential
source of incremental traffic and transactions through our various
media and advertising offerings on our websites. For additional
information about our portfolio of brands, see the disclosure set
forth in Part I, Item 1, Business, under the caption
“Management Overview” in our Annual Report on Form 10-K for the
year ended December 31, 2021.
All percentages within this section are calculated on actual,
unrounded numbers.
Trends
The COVID-19 pandemic, and measures to contain the virus, including
government travel restrictions and quarantine orders, have had a
significant negative impact on the travel industry. COVID-19 has
negatively impacted consumer sentiment and consumer’s ability to
travel, and many of our supply partners, particularly airlines and
hotels, continue to operate at reduced but improving service
levels.
Additionally, further health-related events, political instability,
geopolitical conflicts, acts of terrorism, significant fluctuations
in currency values, sustained levels of increased inflation,
sovereign debt issues, and natural disasters, are examples of other
events that could have a negative impact on the travel industry in
the future. More specifically, the recent Russia/
Ukraine conflict has had a varying impact on the travel industry
and potential broader economic uncertainties, and it remains
unclear what the extent of the impact on future results will
be.
Our financial and operating results for both 2020 and 2021 were
significantly impacted due to the decrease in travel demand related
to COVID-19. During the first nine months of 2022, we have
experienced a recovery in travel demand and gross bookings have
nearly recovered to pre-COVID levels. However, the full duration
and total impact of COVID-19 and related variants remains
uncertain, and it is difficult to predict the future impacts on the
travel industry and, in particular, our business.
In addition, COVID-19 has also had broader economic impacts,
including at times an increase in unemployment levels and reduction
in economic activity globally. As the recovery unfolds, staffing
shortages have also been experienced across most of the hospitality
industry. Broader, sustained negative economic impacts could
continue to put strain on our suppliers, business and service
partners, which increases the risk of credit losses and service
level or other disruptions. More recently, inflation and other
macroeconomic pressures in the U.S. and the global economy, such as
rising interest rates, energy prices and recession fears, have
contributed to an increasingly complex macroeconomic
environment.
Our future results of operations may be subject to volatility,
particularly in the short-term, due to the impact of the above
trends.
Prior to the onset of COVID-19, we began to execute a cost savings
initiative aimed at simplifying the organization and increasing
efficiency. Following the onset of COVID-19, we accelerated
execution on several of these cost savings initiatives and took
additional actions to reduce costs to help mitigate the impact to
demand from COVID-19 and reduce our monthly cash usage. While some
cost actions during COVID-19 were temporary and intended to
minimize cash usage during this disruption, we expect to continue
to benefit from the majority of the savings as business conditions
return to more normalized levels. In 2021, we successfully achieved
the previously outlined annualized run-rate fixed costs savings of
$700 to $750 million compared to the fourth quarter of 2019 exit
rate, as well as the greater than $200 million in variable cost
savings, at 2019 volume levels. We also believe we have improved
our marketing efficiency and continue to evaluate additional
opportunities to increase efficiency and improve operational
effectiveness across the Company.
As a result of these cost savings initiatives, we expect Adjusted
EBITDA margins to increase compared to historical levels when
revenue returns to more normalized levels.
Online Travel
Increased usage and familiarity with the internet continues to
drive rapid growth in online penetration of travel expenditures.
Online penetration is higher in the U.S. and European markets with
online penetration rates in the emerging markets, such as Asia
Pacific and Latin American regions, historically lagging behind
those regions. The emerging market penetration rates increased over
the past few years, and are expected to continue growing, which
presents an attractive growth opportunity for our business, while
also attracting many competitors to online travel. This competition
intensified in recent years, and the industry is expected to remain
highly competitive for the foreseeable future. In addition to the
growth of online travel agencies, we see increased interest in the
online travel industry from search engine companies such as Google,
evidenced by continued product enhancements, including new trip
planning features for users and the integration of its various
travel products into the Google Travel offering, as well as further
prioritizing its own products in search results. Competitive
entrants such as “metasearch” companies, including Kayak.com (owned
by Booking Holdings), trivago (in which Expedia Group owns a
majority interest) as well as TripAdvisor, introduced
differentiated features, pricing and content compared with the
legacy online travel agency companies, as well as various forms of
direct or assisted booking tools. Further, airlines and lodging
companies are aggressively pursuing direct online distribution of
their products and services. In addition, the increasing popularity
of the “sharing economy,” accelerated by online penetration, has
had a direct impact on the travel and lodging industry. Businesses
such as Airbnb, Vrbo (previously HomeAway, which Expedia Group
acquired in December 2015) and Booking.com (owned by Booking
Holdings) have emerged as leaders, bringing incremental alternative
accommodation and vacation rental inventory to the market. Many
other competitors, including vacation rental metasearch players,
continue to emerge in this space, which is expected to continue to
grow as a percentage of the global accommodation market. Finally,
traditional consumer ecommerce and group buying websites expanded
their local offerings into the travel market by adding hotel offers
to their websites.
The online travel industry also saw the development of alternative
business models and variations in the timing of payment by
travelers and to suppliers, which in some cases place pressure on
historical business models. In particular, the agency hotel model
saw rapid adoption in Europe. Expedia Group facilitates both
merchant (Expedia Collect) and agency (Hotel Collect) hotel
offerings with our hotel supply partners through both agency-only
contracts as well as our hybrid Expedia Traveler Preference (“ETP”)
program, which offers travelers the choice of whether to pay
Expedia Group at the time of booking or pay the hotel at the time
of stay.
In 2020, we shifted to managing our marketing investments
holistically across the brand portfolio in our Retail segment to
optimize results for the Company and making decisions on a market
by market and customer segment basis that we think are
appropriate based on the relative growth opportunity, the expected
returns, and the competitive environment. Over time, intense
competition historically led to aggressive marketing efforts by the
travel suppliers and intermediaries, and a meaningful unfavorable
impact on our overall marketing efficiencies and operating margins.
During 2020, we increased our focus on opportunities to
differentiate brands across customer and geographic segments,
increase marketing efficiency, drive a higher proportion of
transactions through direct channels and ultimately improve the
balance of transaction growth and profitability.
Lodging
Lodging includes both hotel and alternative accommodations. As a
percentage of our total worldwide revenue in the third quarter of
2022, lodging accounted for 80%. As a result of the improvement in
travel demand this year, room nights stayed grew 33% in the first
nine months of 2022, as compared to a growth of 35% in 2021 and a
decline of 55% in 2020. The timing of recovery in consumer
sentiment on travel and on staying at hotels has, and will continue
to be, a factor in our level of room night growth, and we expect
that to vary by country. Average Daily Rates (“ADRs”) for rooms
stayed for Expedia Group increased 3% in 2020, increased 20% in
2021 and increased 8% in the first nine months of 2022. During 2021
and through the first nine months of 2022, ADRs for our Vrbo
business, which carries a higher ADR than hotels, remains elevated
compared to years prior to the COVID-19 outbreak.
The uncertain environment as a result of COVID-19, including travel
restrictions and shifts in consumer behavior, the mix of our
lodging bookings across geographies and types of accommodations,
and general variability in supply and demand, make it difficult to
predict ADR trends in the near-term.
As of September 30, 2022, our global lodging marketplace had
approximately 3 million lodging properties available, including
over 2 million online bookable alternative accommodations listings
through Vrbo and approximately 880,000 hotels and alternative
accommodation listings through our other brands.
Hotel.
We generate the majority of our revenue through the facilitation of
hotel reservations (stand-alone and package bookings). After
rolling out ETP globally over a period of several years, during
which time we reduced negotiated economics in certain instances to
compensate for hotel supply partners absorbing expenses such as
credit card fees and customer service costs, our relationships and
overall economics with hotel supply partners have been broadly
stable in recent years. As we continue to expand the breadth and
depth of our global hotel offering, in some cases we have reduced
our economics in various geographies based on local market
conditions. These impacts are due to specific initiatives intended
to drive greater global size and scale through faster overall room
night growth. Additionally, increased promotional activities such
as growing loyalty programs contribute to declines in revenue per
room night and profitability.
Since our hotel supplier agreements are generally negotiated on a
percentage basis, any increase or decrease in ADRs has an impact on
the revenue we earn per room night. Over the course of the last
several years, occupancies and ADRs in the lodging industry
generally increased on a currency-neutral basis in a gradually
improving overall travel environment. Other factors could pressure
ADR trends, including the continued growth in hotel supply in
recent years and the increase in alternative accommodation
inventory. Further, while the global lodging industry remains very
fragmented, there has been consolidation in the hotel space among
chains as well as ownership groups. In the meantime, certain hotel
chains have been focusing on driving direct bookings on their own
websites and mobile applications by advertising lower rates than
those available on third-party websites as well as incentives such
as loyalty points, increased or exclusive product availability and
complimentary Wi-Fi.
Alternative Accommodations.
With our acquisition of Vrbo (previously HomeAway) and all of its
brands in December 2015, we expanded into the fast-growing
alternative accommodations market. Vrbo is a leader in this market
and represents an attractive growth opportunity for Expedia Group.
Vrbo has transitioned from a listings-based classified advertising
model to an online transactional model that optimizes for both
travelers and homeowner and property manager partners, with a goal
of increasing monetization and driving growth through investments
in marketing as well as in product and technology. Vrbo offers
hosts subscription-based listing or pay-per-booking service models.
It also generates revenue from a traveler service fee for bookings.
In addition, we have actively moved to integrate Vrbo listings into
our global Retail services, as well as directly add alternative
accommodation listings to our offerings, to position our key global
brands to offer a full range of lodging options for
consumers.
Air
As a result of the significantly reduced air travel demand due to
government travel restrictions and the impact on consumer sentiment
related to COVID-19, airlines have been operating with less
capacity, staffing shortages and lower passenger demand. While we
have experienced improvement in air bookings in year-to-date in
2022 and throughout 2021, versus 2020, it continues to lag lodging
bookings and remains below 2019 levels. The recovery in air travel
remains difficult to predict and may not correlate with the
recovery in lodging demand. According to the Transportation
Security Administration (“TSA”), air traveler 7-day average
throughput declined 95% in April 2020 compared to prior year
levels. The declines in
throughput moderated to down approximately 20% by the end of 2021,
and as of mid-October 2022 were down 7%, compared to 2019
levels.
In addition, there is significant correlation between airline
revenue and fuel prices, and fluctuations in fuel prices generally
take time to be reflected in air revenue. Given current volatility,
it is uncertain how fuel prices could impact airfares. We could
encounter pressure on air remuneration as air carriers combine,
certain supply agreements renew, and as we continue to add airlines
to ensure local coverage in new markets.
Air ticket volumes increased 11% in the first nine months of 2022
and 43% in 2021, compared to a decline of 63% in 2020. As a
percentage of our total worldwide revenue in the third quarter of
2022, air accounted for 3%.
Advertising & Media
Our advertising and media business is principally driven by revenue
generated by trivago, a leading hotel metasearch website, and
Expedia Group Media Solutions, which is responsible for generating
advertising revenue on our global online travel brands. In the
third quarter of 2022, we generated $222 million of advertising and
media revenue, a 10% increase from the same period in 2021,
representing 6% of our total worldwide revenue. Given the decline
in travel demand related to COVID-19, online travel agencies
dramatically reduced marketing spend, including on trivago, and
given the uncertain duration and impact of COVID-19 it is difficult
to predict when spend will recover to normalized levels. In
response, in 2020, trivago significantly reduced its marketing
spend and took additional actions to lower operating expenses,
which continued throughout 2021 and through the first nine months
of 2022. We expect trivago to continue to experience pressure on
revenue and profit until online travel agencies and other hotel
suppliers see consumer demand that warrants increasing their
advertising spend with trivago.
Business Strategy
As we endeavor to power global travel for everyone, everywhere our
focus is to: leverage our brand and supply strength, and our
platform, to provide greater services and value to our travelers,
suppliers and business partners, and generate sustained, profitable
growth.
Leverage Brand and Supply Strength to Power the Travel
Ecosystem.
We believe the strength of our brand portfolio and consistent
enhancements to product and service offerings, combined with our
global scale and broad-based supply, drive increasing value to
customers and customer demand. With our significant global audience
of travelers, and our deep and broad selection of travel products,
we are also able to provide value to supply partners wanting to
grow their business through a better understanding of travel
retailing and consumer demand in addition to reaching consumers in
markets beyond their reach. Our deep product and supply footprint
allows us to tailor offerings to target different types of
consumers and travel needs, employ geographic segmentation in
markets around the world, and leverage brand differentiation, among
other benefits. Recently, we shifted to more of a unified brand
strategy with an increased focus on uniting our retail brands and
teams under one centralized group, which we believe will enable us
to drive further value to travelers. For example, in 2021, we
announced plans to unify and expand our existing loyalty programs
into one global rewards platform spanning all products and global
brands. We also market to consumers through a variety of channels,
including internet search, metasearch and social media websites,
and having multiple brands appear in search results also increases
the likelihood of attracting new visitors. Further, we are focusing
on building longer term customer relationships. To drive this, we
need to engage our customers more frequently, generate more repeat
business and drive more transactions on a direct basis. Two key
factors drive the value of a traveler in our view – their
membership in our loyalty program and the usage of our app. We
hence are focused on converting our traffic to join our loyalty
programs and use of our app. We believe that will in the long-term
increase conversion from our traffic, increase repeat rates, lower
acquisition cost of travelers and ultimately drive increased
lifetime value of our travelers.
Leverage Our Platform to Deliver More Rapid Product Innovation
Resulting in Better Traveler Experiences.
During 2020, Expedia Group shifted to a platform operating model
with more unified technology, product, data engineering and data
science teams building services and capabilities that are leveraged
across our business units to serve our end customers and provide
value-add services to our travel suppliers. This model enables us
to deliver more scalable services and operate more efficiently. All
of our transaction-based businesses share and benefit from our
platform infrastructure, including customer servicing and support,
data centers, search capabilities and transaction processing
functions, including payment processing and fraud
operations.
As we continue to evolve our platform infrastructure, our focus is
on developing technical capabilities that support various travel
products while using common applications and frameworks. We believe
this strategy will enable us to: build in parallel because of
simpler, standard architecture; ship products faster; create more
innovative solutions; and achieve greater scale. And ultimately, we
believe this will result in faster product innovation and therefore
better traveler experiences, which is a bigger focus for the
Company going forward. In addition, over time, as we enable domains
around application development
frameworks, we believe we can unlock additional platform service
opportunities beyond our internal brands and other business travel
partners.
Seasonality
We generally experience seasonal fluctuations in the demand for our
travel services. For example, traditional leisure travel bookings
are generally the highest in the first three quarters as travelers
plan and book their spring, summer and winter holiday travel. The
number of bookings typically decreases in the fourth quarter. Since
revenue for most of our travel services, including merchant and
agency hotel, is recognized as the travel takes place rather than
when it is booked, revenue typically lags bookings by several weeks
for our hotel business and can be several months or more for our
alternative accommodations business. Historically, Vrbo has seen
seasonally stronger bookings in the first quarter of the year, with
the relevant stays occurring during the peak summer travel months.
The seasonal revenue impact is exacerbated with respect to income
by the nature of our variable cost of revenue and direct sales and
marketing costs, which we typically realize in closer alignment to
booking volumes, and the more stable nature of our fixed costs.
Furthermore, operating profits for our primary advertising
business, trivago, have typically been experienced in the second
half of the year, particularly the fourth quarter, as selling and
marketing costs offset revenue in the first half of the year as we
typically increase marketing during the busy booking period for
spring, summer and winter holiday travel. As a result on a
consolidated basis, revenue and income are typically the lowest in
the first quarter and highest in the third quarter. The growth of
our international operations, advertising business or a change in
our product mix, including the growth of Vrbo, may influence the
typical trend of seasonality in the future.
Impacts from COVID-19 disrupted our typical seasonal pattern for
bookings, revenue, profit and cash flows during 2020 and 2021.
Significantly higher cancellations and reduced booking volumes,
particularly in the first half of 2020, resulted in material
operating losses and negative cash flow. Booking and travel trends
improved in the second half of 2020, throughout 2021, and in the
first nine months of 2022. This has resulted in working capital
benefits and positive cash flow more akin to typical historical
trends. It remains difficult to forecast the seasonality for
upcoming quarters, given the uncertainty related to the shape and
timing of any sustained recovery.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates are those that we
believe are important in the preparation of our consolidated
financial statements because they require that we use judgment and
estimates in applying those policies. We prepare our consolidated
financial statements and accompanying notes in accordance with
generally accepted accounting principles in the United States
(“GAAP”). Preparation of the consolidated financial statements and
accompanying notes requires that we make estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities as of the date of
the consolidated financial statements as well as revenue and
expenses during the periods reported. We base our estimates on
historical experience, where applicable, and other assumptions that
we believe are reasonable under the circumstances. Actual results
may differ from our estimates under different assumptions or
conditions.
There are certain critical estimates that we believe require
significant judgment in the preparation of our consolidated
financial statements. We consider an accounting estimate to be
critical if:
•It
requires us to make an assumption because information was not
available at the time or it included matters that were highly
uncertain at the time we were making the estimate; and
•Changes
in the estimate or different estimates that we could have selected
may have had a material impact on our financial condition or
results of operations.
The COVID-19 pandemic has created and may continue to create
significant uncertainty in macroeconomic conditions, which may
cause further business disruptions and adversely impact our results
of operations. As a result, many of our estimates and assumptions
required increased judgment and carry a higher degree of
variability and volatility. As events continue to evolve and
additional information becomes available, our estimates may change
materially in future periods.
For additional information about our other critical accounting
policies and estimates, see the disclosure included in our Annual
Report on Form 10-K for the year ended December 31, 2021 as
well as updates in the current fiscal year provided in
Note 2 – Summary of Significant Accounting Policies
in the notes to the consolidated financial statements.
Occupancy and Other Taxes
Legal Proceedings.
We are currently involved in eight lawsuits brought by or against
states, cities and counties over issues involving the payment of
hotel occupancy and other taxes. We continue to defend these
lawsuits vigorously. With respect to the principal claims in these
matters, we believe that the statutes and/or ordinances at issue do
not apply to us or the services we provide, namely the facilitation
of travel planning and reservations, and, therefore, that we do not
owe the taxes that are
claimed to be owed. We believe that the statutes and ordinances at
issue generally impose occupancy and other taxes on entities that
own, operate or control hotels (or similar businesses) or furnish
or provide hotel rooms or similar accommodations.
For additional information and other recent developments on these
and other legal proceedings, see Part II, Item 1, Legal
Proceedings.
We have established a reserve for the potential settlement of
issues related to hotel occupancy and other tax litigation,
consistent with applicable accounting principles and in light of
all current facts and circumstances, in the amount of $44 million
and $50 million as of September 30, 2022 and December 31,
2021, respectively.
Certain jurisdictions, including without limitation the states of
New York, New Jersey, North Carolina, Minnesota, Oregon, Rhode
Island, Maryland, Pennsylvania, Hawaii, Iowa, Massachusetts,
Arizona, Wisconsin, Idaho, Arkansas, Indiana, Maine, Nebraska,
Vermont, Mississippi, Virginia, the city of New York, and the
District of Columbia, have enacted legislation seeking to tax
online travel company services as part of sales or other taxes for
hotel and/or other accommodations and/or car rental. In addition,
in certain jurisdictions, we have entered into voluntary collection
agreements pursuant to which we have agreed to voluntarily collect
and remit taxes to state and/or local taxing jurisdictions. We are
currently remitting taxes to a number of jurisdictions, including
without limitation the states of New York, New Jersey, South
Carolina, North Carolina, Minnesota, Georgia, Wyoming, West
Virginia, Oregon, Rhode Island, Montana, Maryland, Kentucky, Maine,
Pennsylvania, Hawaii, Iowa, Massachusetts, Arizona, Wisconsin,
Idaho, Arkansas, Indiana, Nebraska, Vermont, Colorado, Mississippi,
Virginia, the city of New York and the District of Columbia, as
well as certain other jurisdictions.
Pay-to-Play
Certain jurisdictions may assert that we are required to pay any
assessed taxes prior to being allowed to contest or litigate the
applicability of the ordinances. This prepayment of contested taxes
is referred to as “pay-to-play.” Payment of these amounts is not an
admission that we believe we are subject to such taxes and, even
when such payments are made, we continue to defend our position
vigorously. If we prevail in the litigation, for which a
pay-to-play payment was made, the jurisdiction collecting the
payment will be required to repay such amounts and also may be
required to pay interest. However, any significant pay-to-play
payment or litigation loss could negatively impact our
liquidity.
Other Jurisdictions.
We are also in various stages of inquiry or audit with various tax
authorities, some of which, including the City of Los Angeles
regarding hotel occupancy taxes, may impose a pay-to-play
requirement to challenge an adverse inquiry or audit result in
court.
Segments
We have the following reportable segments: Retail, B2B, and
trivago. Our Retail segment provides a full range of travel and
advertising services to our worldwide customers through a variety
of consumer brands including: Expedia.com and Hotels.com in the
United States and localized Expedia and Hotels.com websites
throughout the world, Vrbo, Orbitz, Travelocity, Wotif Group,
ebookers, CheapTickets, Hotwire.com, CarRentals.com and Expedia
Cruises. Our B2B segment is comprised of our Expedia Business
Services organization including Expedia Partner Solutions, which
offers private label and co-branded products to make travel
services available to travelers through third-party company branded
websites, and, through its sale in November 2021, Egencia, a
full-service travel management company that provides travel
services to businesses and their corporate customers. Our trivago
segment generates advertising revenue primarily from sending
referrals to online travel companies and travel service providers
from its hotel metasearch websites.
Operating Metrics
Our operating results are affected by certain metrics, such as
gross bookings and revenue margin, which we believe are necessary
for understanding and evaluating us. Gross bookings generally
represent the total retail value of transactions booked for agency
and merchant transactions, recorded at the time of booking
reflecting the total price due for travel by travelers, including
taxes, fees and other charges, and are reduced for cancellations
and refunds. Revenue margin is defined as revenue as a percentage
of gross bookings.
Gross Bookings and Revenue Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
Nine months ended September 30, |
|
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
($ in millions) |
|
|
|
($ in millions) |
|
|
|
Gross bookings |
$ |
23,987 |
|
|
$ |
18,725 |
|
|
28 |
% |
|
$ |
74,538 |
|
|
$ |
54,962 |
|
|
36 |
% |
|
Revenue margin
(1)
|
15.1 |
% |
|
15.8 |
% |
|
|
|
12.1 |
% |
|
11.5 |
% |
|
|
____________________________
(1)trivago,
which is comprised of a hotel metasearch business that differs from
our transaction-based websites, does not have associated gross
bookings or revenue margin. However, third-party revenue from
trivago is included in revenue used to calculate total revenue
margin.
During the three and nine months ended September 30, 2022,
gross bookings increased 28% and 36%, compared to the same periods
in 2021, as gross bookings for lodging, air and other travel
products grew as travel demand recovered.
Results of Operations
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
Nine months ended September 30, |
|
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
|
($ in millions) |
|
|
|
($ in millions) |
|
|
|
Revenue by Segment |
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
2,707 |
|
|
$ |
2,351 |
|
|
15 |
% |
|
$ |
6,867 |
|
|
$ |
5,091 |
|
|
35 |
% |
|
B2B |
788 |
|
|
490 |
|
|
61 |
% |
|
1,870 |
|
|
979 |
|
|
91 |
% |
|
trivago (Third-party revenue) |
124 |
|
|
121 |
|
|
2 |
% |
|
312 |
|
|
249 |
|
|
25 |
% |
|
Total revenue |
$ |
3,619 |
|
|
$ |
2,962 |
|
|
22 |
% |
|
$ |
9,049 |
|
|
$ |
6,319 |
|
|
43 |
% |
Revenue increased 22% and 43% for the three and nine months ended
September 30, 2022, compared to the same periods in 2021, with
all segment’s growth reflecting the improvement in travel
demand.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
Nine months ended September 30, |
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
($ in millions) |
|
|
|
($ in millions) |
|
|
|
Revenue by Service Type |
|
|
|
|
|
|
|
|
|
|
|
|
Lodging |
$ |
2,881 |
|
|
$ |
2,300 |
|
|
25 |
% |
|
$ |
6,891 |
|
|
$ |
4,736 |
|
|
46 |
% |
|
Air |
100 |
|
|
61 |
|
|
61 |
% |
|
269 |
|
|
189 |
|
|
42 |
% |
|
Advertising and media(1)
|
222 |
|
|
202 |
|
|
10 |
% |
|
601 |
|
|
451 |
|
|
33 |
% |
|
Other |
416 |
|
|
399 |
|
|
4 |
% |
|
1,288 |
|
|
943 |
|
|
37 |
% |
|
Total revenue
|
$ |
3,619 |
|
|
$ |
2,962 |
|
|
22 |
% |
|
$ |
9,049 |
|
|
$ |
6,319 |
|
|
43 |
% |
____________________________
(1)Includes
third-party revenue from trivago as well as our transaction-based
websites.
Lodging revenue increased 25% and 46% for the three and nine months
ended September 30, 2022, compared to the same periods in
2021, on a 20% and 33% increase in room nights stayed as well as
stayed ADR growth of 4% and 8%.
Air revenue increased 61% for the three months ended
September 30, 2022 primarily driven by a 69% growth in revenue
per air ticket. Air revenue increased 42% for the nine months ended
September 30, 2022 driven by an increase in air tickets sold
of 11% and revenue per ticket of 28%.
Advertising and media revenue increased 10% and 33% for the three
and nine months ended September 30, 2022, compared to the same
periods in 2021, due to increases at both Expedia Group Media
Solutions and trivago. All other revenue, which includes car
rental, insurance, destination services, fee revenue related to our
corporate travel business (through Egencia’s sale in November
2021), increased 4% and 37% for the three and nine months ended
September 30, 2022, compared to the same periods in 2021, from
growth in travel insurance products. The year-to-date period also
increased from growth in car rental revenue.
In addition to the above segment and product revenue discussion,
our revenue by business model is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
Nine months ended September 30, |
|
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
|
($ in millions) |
|
|
|
($ in millions) |
|
|
|
Revenue by Business Model |
|
|
|
|
|
|
|
|
|
|
|
|
Merchant |
$ |
2,427 |
|
|
$ |
1,923 |
|
|
26 |
% |
|
$ |
6,037 |
|
|
$ |
4,057 |
|
|
49 |
% |
|
Agency |
935 |
|
|
800 |
|
|
17 |
% |
|
2,309 |
|
|
1,696 |
|
|
36 |
% |
|
Advertising, media and other |
257 |
|
|
239 |
|
|
7 |
% |
|
703 |
|
|
566 |
|
|
24 |
% |
|
Total revenue |
$ |
3,619 |
|
|
$ |
2,962 |
|
|
22 |
% |
|
$ |
9,049 |
|
|
$ |
6,319 |
|
|
43 |
% |
Merchant revenue increased for the three and nine months ended
September 30, 2022, compared to the same periods in 2021,
primarily due to an increase in merchant hotel revenue driven by an
increase in room nights stayed as well as an increase in Vrbo
merchant alternative accommodations revenue and travel insurance
revenue.
Agency revenue increased for the three and nine months ended
September 30, 2022, compared to the same periods in 2021,
primarily due to an increase in agency hotel, air and alternative
accommodations. The year-to-date period was also impacted by an
increase in car rental revenue.
Advertising, media and other increased for the three and nine
months ended September 30, 2022, compared to the same periods
in 2021, primarily due to an increase in advertising
revenue.
Cost of Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
|
Nine months ended September 30, |
|
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
|