Expedia Group, Inc. EXPE delivered second-quarter 2024 adjusted earnings of $3.51 per share, which rose 21% year over year. The figure surpassed the Zacks Consensus Estimate by 10.7%.

Revenues of $3.56 billion rose 6% year over year. The figure surpassed the Zacks Consensus Estimate by 0.6%.

Year-over-year revenue growth was driven by solid momentum across B2B, Brand Expedia and Advertising. Strength in lodging offerings and growing momentum across non-U.S. regions contributed well.

Growing gross bookings, owing to solid momentum in the ‘booked room nights’ metric, was another positive.

However, softness in Trivago was concerning.

EXPE shares have lost 22.3% in a year against the Zacks Retail-Wholesale sector’s growth of 4.3%.

EXPE’s initiative to infuse generative AI technology into its services is expected to drive customer momentum by delivering an enhanced user experience.

Expedia Group, Inc. Price, Consensus and EPS Surprise

Expedia Group, Inc. price-consensus-eps-surprise-chart | Expedia Group, Inc. Quote

Top Line in Detail

Revenues by Segment

B2C: Expedia generated $2.43 billion in revenues (68.3% of the total revenues) from the segment, growing 0.7% year over year.

B2B: The segment yielded revenues of $1.05 billion (29.5% of the total revenues), up 21.8% from the year-ago quarter.

Trivago: Revenues from the segment totaled $77 million (2.2% of the total revenues), down 6.1% year over year.

Revenues by Region

Expedia generated $2.25 billion in revenues (63.1% of the total revenues) from U.S. points of sale, up 3.4% from the prior-year quarter.

Revenues generated by non-U.S. points of sale totaled $1.3 billion (36.9% of the total revenues), up 10.6% on a year-over-year basis.

Revenues by Product Line

Lodging revenues were $2.86 billion, accounting for 80.4% of the total revenues. EXPE witnessed 6.1% growth in Lodging revenues on a year-over-year basis.

Air revenues were $111 million, representing 3.1% of the total revenues. The figure remained flat on a year-over-year basis. Nevertheless, the company experienced 6.6% year-over-year growth in ‘booked air tickets.’

Advertising and media for Expedia Group generated revenues of $152 million, up 27.7% from the prior-year quarter. The figure accounted for 4.3% of the total revenues.

Advertising and media for Trivago generated revenues of $77 million, down 6.1% from the prior-year quarter. The figure accounted for 2.2% of the total revenues.

Other revenues were $356 million (10% of the total revenues), up 2.3% year over year.

Gross Bookings

Expedia’s gross bookings were $28.8 billion, which increased 6% year over year. The reported figure beat the Zacks Consensus Estimate by 0.6%.

Agency’s gross bookings were $12.6 billion (43.6% of gross bookings), up 1.7% year over year. The figure beat the consensus mark by 2.6%.

Merchant’s gross bookings were $16.3 billion (56.4%), up 8.7% from the prior-year quarter’s figure. The figure lagged the consensus mark by 0.9%.

Lodging gross bookings grew 8% year over year in the reported quarter to $20.7 billion.

Strength in ‘booked room nights,’ which rose 10% from the year-ago quarter to 98.9 million, was a positive. The figure surpassed the consensus mark by 2.8%.

Operating Details

Adjusted EBITDA was $786 million in the reported quarter, up 5% from the year-ago quarter.

Selling and marketing expenses (direct and indirect) were $1.99 billion, up 12.4% year over year. As a percentage of revenues, the figure expanded 320 basis points (bps) year over year.

General and administrative expenses were $180 million, down 7.2% year over year. The figure contracted 70 bps year over year as a percentage of revenues.

Technology and content expenses were $331 million, down 3.8% from the year-ago quarter. The figure contracted 90 bps from the year-ago quarter as a percentage of revenues.

EXPE reported an operating margin of 12.7% for the second quarter, which contracted 50 bps from the year-ago period.

Balance Sheet & Cash Flow

As of Jun 30, 2024, cash and cash equivalents and short-term investments were $6.27 billion, up from $5.71 billion as of Mar 31, 2024.

Long-term debt was $6.259 billion at the end of the second quarter compared with $6.256 billion at the end of the first quarter.

Expedia generated $1.5 billion of cash from operations in the reported quarter against $2.9 billion generated in the previous quarter.

Zacks Rank & Stocks to Consider

Currently, Expedia has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader retail-wholesale sector are The Gap GPS, American Eagle Outfitters AEO and Best Buy BBY. While The Gap sports a Zacks Rank #1 (Strong Buy), American Eagle Outfitters and Best Buy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Gap has gained 6.4% in the year-to-date period. The long-term earnings growth rate for GPS is currently estimated at 9.35%.

Shares of American Eagle Outfitters have gained 0.2% in the year-to-date period. The long-term earnings growth rate for AEO is currently projected at 11.83%.

Best Buy has gained 7.8% in the year-to-date period. The long-term earnings growth rate for BBY is currently anticipated at 5.07%.

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