EXPE Q3 2023 Earnings

Call Details

• Call Title: Expedia Group, Inc. Q3 2023 Earnings Call
• Date: November 2, 2023 at 8:30 PM UTC
• Management Team:
  • Peter Kern (Chief Executive Officer)
  • Julie Whalen (Chief Financial Officer)
  • Harshit Vaish (SVP, Corporate Development Strategy and Investor Relations)

Call Summary

Financial Performance

• Total revenue was $3.9B and represented the highest on record for the company for a quarter.
• Total gross bookings were $25.7B, which were up 7% versus last year.
• Lodging gross bookings grew 8% year over year, with the hotel business growing at a higher pace of 14%.
• Reported EBITDA was $1.2B, which was up 13% year over year and produced an EBITDA margin of almost 31%, expanding over 110 basis points versus prior year.
• Cost of sales was $409M, down $42M or 10% versus last year, delivering approximately 210 basis points of leverage as a percentage of revenue versus Q3 2022.
• Direct sales and marketing expense was $1.7B, up 11% year over year driven by higher commissions paid to B2B partners.
• Overhead expense was $617M, up $48M or 9% year over year, in line with revenue growth and reflecting investments in product and technology talent.
• Free cash flow was $2.3B year to date, and the company ended the quarter with liquidity of $7.6B consisting of $5.1B unrestricted cash and $2.5B undrawn revolver.

Guidance

• The company reiterated full-year guidance of double-digit top-line growth with margin expansion.
• For Q4 the company expects gross bookings growth to be relatively in line with Q3 levels, with modest sequential acceleration in year-over-year revenue and EBITDA versus Q3.
• Q4 guidance reflects caution around uncertain geopolitical environment and its potential impact on travel demand.
• The company expects momentum from transformation work and product initiatives to continue into 2024 but acknowledged that benefits will compound over multiple quarters.
• The company expects continued efficiencies from system deprecations and reductions in cloud, licenses, and maintenance starting in 2024.
• No new numeric quarterly guidance ranges were provided on the call beyond reiterating full-year posture and directional Q4 commentary.