Expedia Group Inc. (NASDAQ:EXPE)

The financial performance exhibits distinct trends over the analyzed periods, reflecting fluctuations likely influenced by external market conditions and internal operational factors.

Gross Profit Margin

The gross profit margin remained relatively stable from early 2018 through the end of 2019, consistently above 82%. However, a notable decline occurred starting in the first quarter of 2020, dropping sharply to 67.69% by the end of 2020. This decline was followed by a recovery trend throughout 2021 and into early 2022, reaching and slightly surpassing previous highs at 83.52% by March 2022.

Operating Profit Margin

The operating profit margin displayed positive levels through 2018 and 2019, generally ranging between 5% and 8%. A marked downturn began in the first quarter of 2020, turning negative and continuing to deteriorate steeply to -52.3% by December 2020. Thereafter, operating margins improved gradually in 2021, moving from deep negative values toward marginal positive territory by early 2022.

Net Profit Margin

Net profit margin trends closely mirror the operating margin. Positive margins persisted from 2018 into 2019, peaking around 5.36% in mid-2019. A sharp decline started at the onset of 2020, with margins plunging to -50.24% by the end of 2020. Recovery signs emerged in 2021 with incremental improvements, culminating in a modestly positive margin of 4.87% in the first quarter of 2022.

Return on Equity (ROE)

ROE showed steady positive returns prior to 2020, with peaks surpassing 14% in some quarters of 2019. A severe downturn occurred beginning in early 2020, with progressively worsening negative returns reaching beyond -103% at the end of 2020. This was followed by a partial recovery through 2021 and a significant rebound by March 2022 to 22.52%, indicating a restoration of profitability and effective equity utilization.

Return on Assets (ROA)

Return on assets demonstrated modest positive values through 2018 and 2019, generally around 2%. Starting in 2020, ROA entered negative territory, hitting its lowest point near -14% by late 2020. Improvement was observed during 2021, returning to slight positivity by the end of the year and reaching 1.9% by the first quarter of 2022.

Overall, the data reveal a period of stable and profitable operations leading up to 2020, followed by a substantial deterioration in profitability and asset returns during 2020, which may correlate with large-scale economic disruptions. The subsequent recovery throughout 2021 and early 2022 suggests a gradual return to operational efficiency and financial health, although some metrics have yet to fully return to previous peak levels.

Revenue Trends

Revenue showed a general upward trend from early 2018 through late 2019, increasing from approximately 2.5 billion USD in March 2018 to a peak near 3.6 billion USD by September 2019. However, this was followed by a sharp decline in early 2020, reaching a low point of 566 million USD in June 2020, reflecting a significant disruption during that period. Revenue began to recover gradually from the third quarter of 2020 onward, reaching around 3 billion USD by September 2021 before experiencing some volatility and minor decreases thereafter.

Gross Profit Movements

Gross profit mirrored the revenue trend with initial growth from roughly 2.0 billion USD in March 2018 to just over 3.0 billion USD in September 2019. A pronounced decline occurred in 2020, bottoming out at 177 million USD in June 2020. Following this trough, gross profit recovered steadily through 2021, achieving levels close to pre-2020 figures by late 2021. The first quarter of 2022 shows a slight reduction compared to late 2021 but remains higher than early 2020 levels.

Gross Profit Margin Analysis

Gross profit margin remained relatively stable and high, ranging from approximately 82.4% to 83.1% through 2018 and 2019, indicating efficient cost control relative to revenues during these periods. In 2020, a clear decline in margin occurred, dropping to a low point of 67.7% in December 2020, corresponding with the revenue and gross profit declines, possibly reflecting increased costs or pricing pressures. From 2021 onward, margins improved steadily, reaching above 83% by the first quarter of 2022, exceeding pre-pandemic levels and suggesting enhanced profitability or improved cost structures during the recovery phase.

Summary of Observations

The data reveals cyclical patterns impacted heavily by external conditions starting in early 2020. Revenue and gross profit peaked through 2019 before contracting sharply in the first half of 2020. Both metrics resumed a recovery trajectory through 2021, supported by gradually improving margins. The rebound in gross profit margin surpassing earlier peaks indicates possible strategic adjustments leading to greater operational efficiency or favorable pricing dynamics. Despite recovery, revenue and gross profit levels in early 2022 show some fluctuations, implying ongoing volatility in the operating environment.

The financial data reveals notable fluctuations in both operating income and revenue over the analyzed periods, reflecting varying business conditions.

Revenue Trends

Revenue exhibited an overall growth trend from early 2018 through the end of 2019, increasing from approximately $2.5 billion to nearly $3.6 billion at its peak within this timeframe. However, a significant decline occurred starting in the first quarter of 2020, coinciding with external factors likely affecting business operations. The lowest point was recorded in the second quarter of 2020 with revenue dropping to $566 million, followed by a gradual recovery evident through 2021. Despite this recovery, revenue by the first quarter of 2022 remained below its pre-2020 peak, registering at approximately $2.25 billion.

Operating Income (Loss) Patterns

Operating income demonstrated considerable volatility across the periods reviewed. Initially, operating income improved from a loss of $165 million at the beginning of 2018 to gains exceeding $600 million in late 2018 and 2019. This positive momentum reversed sharply in early 2020, with operating income plunging into significant losses, peaking at -$1.294 billion in the first quarter of 2020. Subsequent quarters showed some mitigation of losses but still reflected negative operating income through 2020 and early 2021. A recovery phase emerged towards the latter part of 2021, with operating income returning to positive figures, though not consistently, as losses reappeared in early 2022.

Operating Profit Margin Insights

Operating profit margin followed a similar trajectory to operating income. The margin remained positive and relatively stable between 5% and 7.8% from 2018 through 2019, indicating healthy profitability levels during that period. Starting in 2020, a marked decline was observed, with margins turning negative and reaching a drastically low point of -52.3% in the last quarter of 2020. This reflects substantial operational challenges and inefficiencies during this interval. Margins started improving in 2021, reducing negative percentages and briefly becoming positive at 2.16% by the end of the year. The first quarter of 2022 showed a continued upward margin at 4.37%, indicating a restoration of operating profitability but still below the pre-2020 levels.

Overall, the data indicates a significant impact on operational performance beginning in early 2020, with sharp declines in revenue, operating income, and profitability margins. Recovery trends are visible through 2021 and into early 2022, though the financial metrics have yet to fully return to the previous peak levels experienced between 2018 and 2019. This pattern suggests both external disruptions and gradual adaptation or improvement in operational efficiency over time.

Revenue Trends

The revenue experienced a general increase from the first quarter of 2018 through to the fourth quarter of 2019, peaking at 3,558 million USD in the third quarter of 2019. However, in early 2020, there was a sharp decline in revenue, reaching a low of 566 million USD in the second quarter of 2020. After this trough, revenue gradually recovered, achieving 2,962 million USD by the third quarter of 2021, but it slightly decreased to 2,279 million USD by the first quarter of 2022.

Net Income Patterns

Net income displayed significant volatility over the observed period. Initially, net income was negative or only marginally positive, peaking at 525 million USD in the third quarter of 2018. Substantial losses appeared starting in the first quarter of 2020, with a pronounced net loss of 1,301 million USD, followed by continued losses through 2020. Beginning in the first quarter of 2021, net income showed signs of recovery, turning positive again in the third and fourth quarters of 2021, but experienced a slight negative reversal in the first quarter of 2022.

Net Profit Margin Insights

Net profit margin followed trends consistent with net income and revenue. It generally ranged between approximately 2.5% and 5.4% before 2020, indicating stable profitability levels. The margin dropped drastically starting in the first quarter of 2020, reaching a low of -50.24% in the fourth quarter of 2020, evidencing severe profitability challenges. Recovery was evident from 2021 onwards, with margin improvements culminating in a positive margin of 4.87% in the first quarter of 2022.

Overall Financial Performance Interpretation

The data indicate a strong period of growth and profitability until late 2019, followed by a severe disruption beginning in early 2020, likely reflecting external economic impacts. The subsequent gradual improvement through 2021 and into early 2022 suggests a recovery phase, though volatility remains evident. Profitability remains below pre-2020 levels at the latest date observed but is trending upward.

The analysis of the presented financial data reveals several notable trends regarding the company's profitability and equity position over the examined periods.

Net Income (Loss) Attributable to Expedia Group, Inc.

The net income demonstrates a significant level of volatility across the quarters. Initially, from early 2018, net income fluctuated between slight losses and positive gains, peaking at 525 million USD in the third quarter of 2018. From 2019 through the first quarter of 2020, the company generally recorded positive income, with some quarters achieving profits above 400 million USD.

Starting from the first quarter of 2020, there is a marked deterioration in net income, with increasingly deep losses peaking at -1,301 million USD in Q1 2020. The losses persist throughout the remainder of 2020 and into early 2021, indicating financial difficulties or extraordinary events adversely impacting profitability.

From mid-2021 onward, net income shows signs of recovery, with positive figures returning in Q3 and Q4 of 2021 and continuing into Q1 2022, albeit the amounts fluctuate and have not yet consistently reached the pre-2020 peak levels.

Total Stockholders’ Equity

Total equity remained relatively stable from early 2018 through the end of 2019, fluctuating modestly within a range of approximately 3,900 to 4,300 million USD. However, starting in 2020, equity values declined sharply, bottoming out near 1,600 million USD in mid-2021.

This decline reflects the impact of losses and possibly other financial factors such as share repurchases or dividends. Towards the end of the observed timeline, equity stabilizes and shows a mild rebound, hovering slightly above 2,000 million USD in late 2021 and early 2022.

Return on Equity (ROE)

ROE metrics closely mirror the trend in net income. Positive ROE values dominated the period from 2018 through 2019, with peaks above 14% in parts of 2019, indicating strong profitability relative to equity.

Starting in Q1 2020, ROE plunges dramatically into negative territory, reaching a low point exceeding -100% by the end of 2020. This reflects the substantial losses relative to a reduced equity base, indicating severe operational challenges.

In subsequent quarters, ROE gradually improves, moving from highly negative values in 2020 and early 2021 towards a near breakeven point by Q4 2021 and turning positive again by Q1 2022 with a value above 22%. This suggests a recovery in earnings efficiency relative to stockholders’ equity.

In summary, the company experienced strong profitability and solid equity until 2019. The year 2020 marks a period of significant financial distress, likely driven by extraordinary external factors, leading to substantial net losses, erosion of equity, and negative returns on equity. The latter part of the dataset indicates a recovery phase, with improvements in profitability and stabilization of equity, though it is yet to return consistently to former peak levels.

The financial data reveals notable fluctuations in net income, total assets, and return on assets (ROA) for the analyzed periods.

Net Income (Loss) Attributable to the Company (US$ in millions)

The net income shows significant volatility over the observed quarters. Initially, the company experienced a loss of $137 million, followed by a positive trend peaking at $525 million during the third quarter of 2018. The profit margins fluctuated thereafter, with recurring gains and losses noted through to the first quarter of 2022.

From the first quarter of 2020 onward, there is a marked increase in losses, with the most severe loss reported at $1,301 million. Although there was some recovery towards the end of 2021 with net income improving to $386 million, the first quarter of 2022 saw a reversal to a loss of $122 million.

Total Assets (US$ in millions)

The total assets remained relatively stable with moderate fluctuations. Starting at $20,429 million in the first quarter of 2018, assets peaked at $24,181 million in the second quarter of 2021. A decline followed, leading to $21,548 million in the fourth quarter of 2021 before rising again to $24,577 million in the first quarter of 2022.

This data indicates a generally stable asset base with occasional increases, possibly reflecting investments or asset revaluation activities, despite intermittent periods of decline.

Return on Assets (ROA, %)

The ROA trend demonstrates considerable variability. Positive returns were recorded throughout most of 2018 and 2019, with peaks around 2.8%. However, the onset of 2020 marked a downturn, with ROA descending sharply into negative territory, reaching a low of -13.98% in the fourth quarter of 2020.

Subsequently, ROA exhibited an improving trend, moving into low positive values by the end of 2021 and the start of 2022, indicating a gradual recovery in the company’s ability to generate profit relative to its assets.

In summary, the data reflects a challenging period starting in early 2020, likely influenced by external macroeconomic or industry-specific factors, leading to significant losses and negative returns on assets. There are signs of partial recovery in net income and ROA toward the end of the observed timeframe, while total assets remain largely stable with minor fluctuations.