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Stock Analysis on Net

Expedia Group Inc. (NASDAQ:EXPE)

This company has been moved to the archive! The financial data has not been updated since May 3, 2022.

Common-Size Income Statement

Expedia Group Inc., common-size consolidated income statement

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Revenue 100.00 100.00 100.00 100.00 100.00
Cost of revenue, exclusive of depreciation and amortization -17.70 -32.31 -17.21 -16.61 -17.46
Gross profit 82.30% 67.69% 82.79% 83.39% 82.54%
Selling and marketing -49.09 -48.97 -50.37 -50.98 -52.66
Technology and content -12.49 -19.43 -10.16 -10.00 -13.79
General and administrative -8.20 -11.48 -6.75 -6.90 -6.72
Depreciation and amortization -9.47 -17.18 -7.54 -8.54 -2.74
Impairment of goodwill -0.16 -15.37 0.00 -0.77 0.00
Intangible and other long-term asset impairment -0.07 -3.37 0.00 -0.37 0.00
Legal reserves, occupancy tax and other -0.01 0.25 -0.28 0.53 -0.25
Restructuring and related reorganization charges -0.64 -4.44 -0.20 0.00 -0.17
Operating income (loss) 2.16% -52.30% 7.48% 6.36% 6.21%
Interest income 0.10 0.35 0.49 0.63 0.34
Interest expense -4.08 -6.92 -1.43 -1.69 -1.81
Loss on debt extinguishment -3.26 0.00 0.00 0.00 0.00
Gain (loss) on sale of business, net 5.30 -0.25 0.00 0.00 0.00
Foreign exchange rate gains (losses), net -0.56 1.37 -0.28 0.03 -0.45
Gains (losses) on minority equity investments, net -0.34 -2.73 0.07 -0.99 -0.14
Other 0.22 -0.12 0.10 -0.02 -0.01
Other, net -0.67% -1.48% -0.12% -0.98% -0.60%
Other expense, net -2.61% -8.31% -1.06% -2.04% -2.07%
Income (loss) before income taxes -0.44% -60.61% 6.42% 4.32% 4.14%
Provision for income taxes 0.62 8.14 -1.68 -0.78 -0.45
Net income (loss) 0.17% -52.47% 4.74% 3.55% 3.69%
Net (income) loss attributable to non-controlling interests -0.03 2.23 -0.06 0.07 0.07
Net income (loss) attributable to Expedia Group, Inc. 0.14% -50.24% 4.68% 3.62% 3.76%
Preferred stock dividend and loss on redemption of preferred stock -3.27 -1.44 0.00 0.00 0.00
Net income (loss) attributable to Expedia Group, Inc. common stockholders -3.13% -51.68% 4.68% 3.62% 3.76%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance from 2017 to 2021 is characterized by a period of relative stability followed by a severe contraction in 2020 and a partial recovery in 2021. While the company maintained consistent margins for the first three years of the period, the fiscal year 2020 experienced a significant disruption across almost all income statement line items, primarily driven by increased operating costs and substantial non-cash impairment charges.

Gross Profitability and Cost of Revenue
Gross profit margins remained highly stable between 2017 and 2019, fluctuating within a narrow range of 82.54% to 83.39%. However, a sharp decline occurred in 2020, where gross profit fell to 67.69% due to the cost of revenue nearly doubling to 32.31% of total revenue. By 2021, gross profit margins rebounded strongly to 82.30%, returning to pre-2020 levels.
Operating Expense Trends
Selling and marketing expenses represent the largest operational cost, consistently accounting for approximately 49% to 53% of revenue throughout the entire period. Technology and content costs were stable at roughly 10% to 14% of revenue from 2017 to 2019, spiked to 19.43% in 2020, and normalized to 12.49% in 2021. General and administrative expenses followed a similar pattern, remaining around 6.7% to 6.9% until a peak of 11.48% in 2020, before settling at 8.20% in 2021.
Non-Cash Charges and Impairments
The year 2020 was marked by extraordinary non-cash charges. Depreciation and amortization surged to 17.18% of revenue, compared to a range of 2.74% to 8.54% in previous years. Furthermore, significant impairment charges were recognized in 2020, with goodwill impairment at 15.37% and intangible asset impairment at 3.37% of revenue. These charges were largely absent or negligible in other years, contributing heavily to the operating losses of that period.
Operating and Net Income Analysis
Operating income was positive and stable from 2017 to 2019, peaking at 7.48% of revenue. This shifted to a substantial operating loss of 52.30% in 2020. While operating income returned to positive territory in 2021 at 2.16%, net income attributable to common stockholders remained negative at -3.13%. This discrepancy in 2021 is attributed to non-operating factors, including a loss on debt extinguishment of 3.26% and preferred stock dividends and redemption losses of 3.27%.
Financial Obligations and Other Expenses
Interest expense as a percentage of revenue remained low and stable between 1.43% and 1.81% from 2017 to 2019, but increased significantly to 6.92% in 2020 and 4.08% in 2021, indicating an increase in the relative cost of debt servicing relative to revenue generation.

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