Expedia Group Files Q3 2024 10-Q

TL;DR

Expedia's Q3 2024 10-Q is in, check financials and risks.

AI Summary

Expedia Group, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter of 2024. Key financial figures and business segments are presented, along with any material events or risks.

Why It Matters

This filing provides investors and analysts with the latest financial health and strategic direction of Expedia Group, a major player in the online travel industry.

Risk Assessment

Risk Level: medium — The filing contains standard disclosures for a public company, including financial performance and potential risks, but no immediate red flags are apparent without deeper analysis.

Key Players & Entities

• Expedia Group, Inc. (company) — Filer of the 10-Q
• 2024-09-30 (date) — End of the reporting period
• 2024-11-08 (date) — Filing date

FAQ

Key Financial Figures

• $0.0001 — ange on which registered Common stock, $0.0001 par value EXPE The Nasdaq Global Select

Filing Documents

• expe-20240930.htm (10-Q) — 1529KB
• ex22-q32024.htm (EX-22) — 12KB
• ex311-q32024.htm (EX-31.1) — 11KB
• ex312-q32024.htm (EX-31.2) — 10KB
• ex313-q32024.htm (EX-31.3) — 10KB
• ex321-q32024.htm (EX-32.1) — 5KB
• ex322-q32024.htm (EX-32.2) — 6KB
• ex323-q32024.htm (EX-32.3) — 6KB
• 0001324424-24-000052.txt ( ) — 7106KB
• expe-20240930.xsd (EX-101.SCH) — 34KB
• expe-20240930_cal.xml (EX-101.CAL) — 62KB
• expe-20240930_def.xml (EX-101.DEF) — 232KB
• expe-20240930_lab.xml (EX-101.LAB) — 565KB
• expe-20240930_pre.xml (EX-101.PRE) — 377KB
• expe-20240930_htm.xml (XML) — 1090KB

Financial Information

Part I Financial Information

Consolidated Financial Statements

Item 1 Consolidated Financial Statements Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 2 Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 3 Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 202 3 4 Consolidated Statements of Stockholders Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited) 7

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 20

Quantitative and Qualitative Disclosures about Market Risk

Item 3 Quantitative and Qualitative Disclosures about Market Risk 34

Controls and Procedures

Item 4 Controls and Procedures 35

Other Information

Part II Other Information

Legal Proceedings

Item 1 Legal Proceedings 36

Risk Factors

Item 1A Risk Factors 37

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 37

Other Information

Item 5 Other Information 37

Exhibits

Item 6 Exhibits 38 Signature 39 Table of Contents

Item 1. Consolidated Financial Statements

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, 2024 2023 2024 2023 Revenue $ 4,060 $ 3,929 $ 10,507 $ 9,952 Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) (1) 388 412 1,108 1,233 Selling and marketing - direct 1,855 1,671 5,298 4,737 Selling and marketing - indirect (1) 197 185 580 563 Technology and content (1) 320 340 992 1,001 General and administrative (1) 229 194 595 572 Depreciation and amortization 211 208 626 599 Impairment of goodwill — 297 — 297 Impairment of intangible assets 33 15 33 15 Legal reserves, occupancy tax and other 59 — 100 6 Restructuring and related reorganization charges (1) 6 — 72 — Operating income 762 607 1,103 929 Other income (expense): Interest income 67 56 185 162 Interest expense ( 61 ) ( 62 ) ( 184 ) ( 184 ) Other, net 106 ( 157 ) 103 ( 60 ) Total other income (expense), net 112 ( 163 ) 104 ( 82 ) Income before income taxes 874 444 1,207 847 Provision for income taxes ( 190 ) ( 139 ) ( 284 ) ( 295 ) Net income 684 305 923 552 Net loss attributable to non-controlling interests — 120 12 113 Net income attributable to Expedia Group, Inc. $ 684 $ 425 $ 935 $ 665 Earnings per share attributable to Expedia Group, Inc. available to common stockholders: Basic $ 5.28 $ 2.98 $ 7.07 $ 4.51 Diluted 5.04 2.87 6.75 4.37 Shares used in computing earnings per share (000's): Basic 129,758 142,228 132,393 147,253 Diluted 135,732 147,748 138,655 152,172 _______ (1) Includes stock-based compensation as follows: Cost of revenue $ 3 $ 3 $ 9 $ 10 Selling and marketing 19 20 61 60 Technology and content 40 35 120 105 General and administrative 85 47 167 139 Restructuring and related reorganization charges — — 8 — See accompanying notes. 2 Table of Contents EX

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements September 30, 2024 (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 and Expedia Cruises TM . 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. 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 indicat

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) booking volumes, and the more stable nature of our fixed costs. As a result on a consolidated basis, revenue and income are typically the lowest in the first quarter and highest in the third quarter. Note 2 – Summary of Significant Accounting Policies Recent Accounting Policies Not Yet Adopted In November 2023, the Financial Accounting Standards Board ("FASB") issued new guidance that modifies the disclosure and presentation requirements of reportable segments. The new guidance requires the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit and loss. In addition, the new guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures. In December 2023, the FASB issued new guidance to improve its income tax disclosure requirements. Under the new guidance, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The new guidance is effective for public business entities for annual periods beginning after December 15, 2024. We are in the

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) primarily relates to certain traveler deposits 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, 2024 December 31, 2023 (in millions) Cash and cash equivalents $ 4,722 $ 4,225 Restricted cash and cash equivalents 1,324 1,436 Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statements of cash flows $ 6,046 $ 5,661 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, 2024, we recorded approximately $ 29 million of incremental allowance for expected uncollectible accounts, offset by $ 15 million of write-offs. Note 3 – Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 168 $ 168 $ — Term deposits 71 — 71 Derivatives: Cross-currency interest rate swaps 8 — 8 Investments: Term deposits 28 — 28 Equity investments 584 584 — Total assets $ 859 $ 752 $ 107 Liabilities Derivatives: Foreign currency forward contracts $ 9 $ — $ 9 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, 2024 and December 31, 2023, our cash and cash equivalents

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