Expedia Group Inc. (NASDAQ:EXPE)

The analysis of the financial ratios over the quarterly periods reveals several notable trends and shifts in operational efficiency and asset utilization.

Net Fixed Asset Turnover

This ratio demonstrates a declining trend starting from 6.39 in March 2018, gradually decreasing through to a low of 1.89 in December 2020. Subsequently, the ratio shows a recovery, increasing steadily to 4.43 by March 2022. This pattern indicates a reduction in the efficiency with which fixed assets were used to generate revenue during the middle period, followed by a gradual improvement in asset productivity towards the end of the timeline.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The data tracks a similar declining trend from 6.39 in March 2018 down to 1.55 in June 2021, with an earlier and somewhat sharper decline beginning around mid-2019. This ratio also displays a recovery into 2022, climbing to 3.74 by March 2022. The inclusion of right-of-use assets diminished the turnover values in the later periods compared to the standard net fixed asset turnover, reflecting the impact of lease accounting changes on asset base and turnover measurements.

Total Asset Turnover

Initial values around 0.54 to 0.62 in the 2017-2019 periods indicate moderate asset utilization efficiency. However, from 2020 onwards, there is a clear downturn, with turnover dropping to a low of 0.19 in December 2020. A modest recovery phase follows, bringing the ratio back up to around 0.39 by March 2022. This behavior highlights an overall contraction in asset efficiency during the crisis period, with partial recovery in subsequent quarters.

Equity Turnover

The equity turnover demonstrates more volatility and generally higher ratios compared to other turnover metrics. Beginning at approximately 2.22 in March 2018, it increases sharply to a peak of 5.14 in March 2020. This is followed by a decline and stabilization around the 2.0 mark through the end of 2020. The ratio then rebounds strongly, reaching 4.62 by March 2022. The pronounced fluctuations suggest significant changes in equity utilization and possibly substantial variations in net income or equity base during these periods.

Overall, the data reflects the impact of external factors, likely including market disruptions, on asset and equity utilization. The mid-period performance downturns across asset turnover measures indicate reduced operational efficiency and utilization, with signs of recovery in recent quarters. The equity turnover's distinct volatility may be indicative of structural changes in financial leverage or profitability metrics over time.

The revenue exhibits a seasonal and cyclical pattern over the periods analyzed. Between March 31, 2017, and December 31, 2019, revenue generally increased each year, peaking in the third quarter and declining in the fourth quarter, indicating a seasonal trend. Notably, the revenue reached a high of $3,558 million on September 30, 2019. However, a significant decrease is observed starting in the first quarter of 2020, with the lowest revenue of $566 million in the second quarter of 2020. This steep decline likely reflects external market disruptions. Following this trough, revenue shows a gradual recovery trend, increasing steadily through 2021 but still not returning to pre-2020 levels by March 31, 2022, where revenue is reported at $2,249 million.

Property and equipment, net, showed consistent growth from March 31, 2017, through June 30, 2020, increasing from $1,422 million to $2,305 million. This upward trend suggests ongoing capital investment during this period. From June 30, 2020, onward, the net value of property and equipment stabilizes, fluctuating slightly around the $2,200 million level, indicating a potential pause or slow down in additional capital expenditures or asset disposals.

Regarding the net fixed asset turnover ratio, the data begins from September 30, 2017, with a value of 6.39. This ratio declines steadily from 6.39 in late 2017 to a low of 1.89 by December 31, 2020. The substantial drop in turnover ratio corresponds with the sharp decline in revenue during the same period and increasing asset base, highlighting lower efficiency in generating revenue from fixed assets. Thereafter, the ratio improves to 4.43 by March 31, 2022, suggesting a recovery in asset utilization alongside the rising revenue trend, but still below historical pre-2020 levels.

In summary, the data demonstrates the impact of a significant external event starting in early 2020, causing a sharp decline in revenue and asset utilization efficiency. Capital investment increased steadily before this event and then plateaued. The subsequent periods show gradual recovery in revenue and operating efficiency, although not yet at previous peak performance.

The quarterly financial data demonstrates several notable trends regarding revenue, property and equipment, and net fixed asset turnover over the analyzed period.

Revenue

Revenue exhibited a generally upward trend from early 2017 through late 2019, increasing from approximately $2.2 billion at the beginning of 2017 to nearly $3.6 billion in the third quarter of 2019. Seasonal fluctuations appear evident, with revenue typically peaking in the third quarter each year and declining in the fourth quarter and first quarter of the following year.

The onset of 2020 marked a significant decline in revenue, correlated with the global disruptions occurring that year. Revenue dropped sharply in the second quarter of 2020 to $566 million, a steep decrease compared to previous years. Although there was some recovery through the latter half of 2020 and into 2021, the revenue figures remained below pre-2020 levels, demonstrating a partial but incomplete rebound. By the first quarter of 2022, revenue was approximately $2.25 billion, still below the peak range encountered in prior years.

Property and Equipment, Net (Including Operating Lease, Right-of-Use Asset)

The carrying value of property and equipment showed consistent growth throughout the entire period under review, rising from $1.42 billion in the first quarter of 2017 to a peak of about $2.93 billion in the second quarter of 2020. Post mid-2020, there was a gradual decline observed, with values decreasing to approximately $2.56 billion by the first quarter of 2022.

This pattern suggests continued investments in fixed assets up until mid-2020, possibly supported by capital expenditure strategies or acquisition of leased assets. The decline following this period could indicate asset disposals, write-downs, or a reduction in leased asset liabilities.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The net fixed asset turnover ratio consistently decreased from early 2017 through mid-2021, beginning at around 6.39 and declining to a low of approximately 1.55 in the second quarter of 2021. This declining trend reflects a decreasing efficiency in generating revenue from property and equipment investments.

However, from mid-2021 onwards, the ratio showed signs of recovery, increasing to 3.74 by the first quarter of 2022. The earlier decline aligns with the substantial drop in revenue during 2020 and early 2021, coupled with sustained or increasing asset base, thus reducing turnover. The subsequent improvement in the ratio indicates a better utilization of assets in generating revenue as market conditions improved.

In summary, the data reveals that the company experienced strong revenue growth and asset expansion up to 2019, with notable seasonal variation. The significant downturn in revenue during 2020 adversely affected asset turnover, while the asset base remained elevated until mid-2020, followed by a modest reduction. Recovery trends in revenue and asset utilization emerged in late 2021 into early 2022, though pre-2020 levels had not yet been fully restored at the end of the period analyzed.

The data reveals several notable trends in the financial performance and asset management over the analyzed periods.

Revenue Trends

Revenue demonstrated a generally cyclical pattern with significant fluctuations aligned with quarters. Initially, there was steady growth from Q1 2017 (US$ 2,189 million) through Q3 2019 (US$ 3,558 million), peaking in the third quarter of 2019. However, a sharp decline occurred starting in Q1 2020, coinciding with a drastic fall to US$ 2,209 million, followed by an unprecedented low of US$ 566 million in Q2 2020. The revenue started recovering gradually thereafter, reaching US$ 2,962 million in Q3 2021, though not yet fully returning to pre-pandemic peak levels as of Q1 2022 (US$ 2,249 million).

Total Assets Movements

Total assets exhibited a generally increasing trend from US$ 17,669 million in Q1 2017 to a peak of US$ 24,577 million in Q1 2022. Notwithstanding some fluctuations, assets remained relatively stable and showed growth particularly in 2021 and early 2022. The stability of asset base during volatile revenue periods suggests capacity retention or strategic positioning despite external pressures.

Total Asset Turnover Ratios

Asset turnover ratio showed a moderate decline over time. Starting at about 0.54 in Q4 2017, the ratio slightly increased to reach a peak of approximately 0.57 in Q1-Q2 2018 and remained near 0.56 till the end of 2019. However, starting from 2020 it dropped substantially, reaching a low of 0.19 in Q4 2020, reflecting a period of less efficient utilization of assets, likely impacted by lower operational activity. Despite gradual improvement in subsequent quarters, the ratio remained below pre-2020 levels, indicating that asset productivity had not fully normalized by early 2022.

Insights and Interpretations

The combined trends indicate that while the company managed to increase its asset base over the years, the sudden and steep drop in revenue during 2020 severely impaired asset utilization efficiency. The recovery phase shows positive momentum in revenue but at a lower asset turnover, suggesting an ongoing adjustment period to either new operational conditions or market environments. Maintaining a high asset base during revenue downturns might indicate investments in long-term capabilities or potential underutilization in the short term. Monitoring the return to higher turnover ratios will be key for assessing the effectiveness of asset reallocation or utilization strategies moving forward.

The quarterly financial data reveals several noteworthy trends in revenue, stockholders’ equity, and equity turnover ratios over the analyzed period.

Revenue Trends

The revenue shows a general seasonal pattern with higher values typically in the third quarter and lower values in the fourth quarter each year, consistent from 2017 through 2019. For example, revenue was strongest during the third quarters of 2017 to 2019—peaking at 3,558 million US dollars in September 2019. However, a significant decline is observed starting in the first quarter of 2020, coinciding with the onset of the COVID-19 pandemic. Revenue dropped sharply to 2,209 million US dollars in March 2020, fell further to a low of 566 million in June 2020, and then showed a partial recovery through late 2020 and 2021. Although revenue rebounded over the subsequent quarters, reaching 2,962 million in September 2021, it did not show consistent growth in the most recent quarter recorded (March 2022), ending at 2,249 million US dollars. This pattern reflects the volatility and disruption experienced due to external market conditions in 2020 and the gradual recovery afterward.

Stockholders’ Equity Trends

Total stockholders’ equity remained relatively stable from 2017 through 2019, fluctuating modestly within the range of approximately 3,900 to 4,600 million US dollars. This stability is indicative of consistent shareholder value during this period. However, starting in March 2020, equity declined sharply to 2,270 million US dollars, which coincides with the period of severe revenue contraction. Thereafter, equity values fluctuate with a general downward trend through 2021, hitting a low point of 1,607 million in June 2021 before modestly recovering to around 2,078 million by March 2022. This decline and partial recovery in stockholders' equity mirror the impact of the pandemic on the firm's net asset position and the subsequent recovery efforts.

Equity Turnover Ratio Trends

The equity turnover ratio, which measures efficiency in using equity to generate revenue, shows an increasing trend over the period with some significant variations. Starting at approximately 2.22 in December 2017, this ratio gradually increased and peaked dramatically at 5.14 in March 2020, reflecting a sharp drop in equity relative to revenue at that time. After March 2020, the ratio decreased but remained elevated compared to pre-pandemic levels, fluctuating between 1.9 and 4.62 through March 2022. The higher equity turnover ratios during and after 2020 indicate that despite reductions in stockholders' equity, the company managed to generate relatively higher revenue per unit of equity, suggesting improved capital efficiency or changes in capital structure amidst the pandemic disruption.

In summary, the data indicates marked impacts from the COVID-19 pandemic beginning in early 2020, with significant declines in revenue and stockholders’ equity and unusual spikes in equity turnover ratios. Recovery signs are apparent from mid-2020 onwards, with revenues partially rebounding and equity beginning to stabilize, while capital efficiency, as indicated by equity turnover, remains relatively higher than pre-pandemic levels. This pattern highlights resilience in operational performance despite challenges to the balance sheet.