Expedia Group Inc. (NASDAQ:EXPE)

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Segment Profit Margin: Retail

Expedia Group Inc.; Retail; segment profit margin calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Adjusted EBITDA	1,782)	254)	2,121)	2,088)	—)
Revenue	6,821)	3,993)	8,808)	8,389)	—)
Segment Profitability Ratio
Segment profit margin¹	26.13%	6.36%	24.08%	24.89%	—

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).

¹ 2021 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Revenue
= 100 × 1,782 ÷ 6,821 = 26.13%

The financial performance of the Retail segment from 2018 to 2021 is characterized by a period of stability, a severe contraction in 2020, and a subsequent strong recovery in profitability by 2021.

Revenue and EBITDA Volatility: Revenue remained relatively stable between 2018 and 2019, increasing from US$ 8,389 million to US$ 8,808 million. However, a significant decline occurred in 2020, where revenue dropped to US$ 3,993 million, representing a reduction of approximately 54.6% from the previous year. By 2021, revenue recovered to US$ 6,821 million, although it remained below 2019 levels.; Adjusted EBITDA followed a similar trajectory, moving from US$ 2,088 million in 2018 to US$ 2,121 million in 2019, before plummeting to US$ 254 million in 2020. A robust recovery was observed in 2021, with Adjusted EBITDA rising to US$ 1,782 million.
Segment Profit Margin Trends: The segment profit margin exhibited high stability during 2018 and 2019, maintaining levels of 24.89% and 24.08%, respectively. The operational disruption in 2020 led to a sharp compression of the margin to 6.36%, reflecting the disproportionate impact of declining revenues on the cost structure.; In 2021, the segment profit margin not only recovered but surpassed pre-crisis levels, reaching 26.13%. This indicates an improvement in operational efficiency or a favorable shift in the revenue mix, as the margin peaked in 2021 despite the total revenue being lower than that of 2018 and 2019.

The data indicates that while the segment experienced a significant operational shock in 2020, the 2021 recovery was characterized by margin expansion, suggesting a more efficient cost-to-revenue alignment following the period of contraction.

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Segment Profit Margin: B2B

Expedia Group Inc.; B2B; segment profit margin calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Adjusted EBITDA	110)	(208)	447)	341)	—)
Revenue	1,460)	942)	2,579)	2,143)	—)
Segment Profitability Ratio
Segment profit margin¹	7.53%	-22.08%	17.33%	15.91%	—

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).

¹ 2021 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Revenue
= 100 × 110 ÷ 1,460 = 7.53%

The B2B segment experienced significant volatility in financial performance between 2018 and 2021, characterized by an initial growth phase, a severe contraction, and a subsequent partial recovery.

Revenue Trajectory: Revenue demonstrated an upward trend in the early period, increasing from 2,143 million US dollars in 2018 to a peak of 2,579 million US dollars in 2019. This growth was followed by a sharp decline in 2020, where revenue fell to 942 million US dollars, representing a substantial contraction. A recovery trend began in 2021, with revenue rising to 1,460 million US dollars.
Adjusted EBITDA Performance: Profitability followed a similar pattern to revenue, with Adjusted EBITDA rising from 341 million US dollars in 2018 to 447 million US dollars in 2019. The segment shifted to a loss of 208 million US dollars in 2020, indicating an inability to cover operating expenses during the revenue collapse. By 2021, the segment returned to profitability with an Adjusted EBITDA of 110 million US dollars.
Segment Profit Margin Analysis: The segment profit margin expanded from 15.91% in 2018 to 17.33% in 2019, reflecting improved operational efficiency. A drastic reversal occurred in 2020, with the margin dropping to negative 22.08%, highlighting high operating leverage and sensitivity to volume decreases. In 2021, the margin recovered to 7.53%, although this remained significantly below the pre-2020 peak.

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Segment Profit Margin: trivago

Expedia Group Inc.; trivago; segment profit margin calculation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Adjusted EBITDA	39)	(14)	85)	16)	—)
Revenue	423)	280)	938)	1,084)	—)
Segment Profitability Ratio
Segment profit margin¹	9.22%	-5.00%	9.06%	1.48%	—

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).

¹ 2021 Calculation
Segment profit margin = 100 × Adjusted EBITDA ÷ Revenue
= 100 × 39 ÷ 423 = 9.22%

The trivago segment exhibited significant volatility in financial performance between 2018 and 2021, characterized by a sharp contraction in revenue and a subsequent recovery in profit margins.

Revenue Performance: A downward trend in revenue was observed from 2018 to 2020, with values decreasing from US$ 1,084 million to US$ 280 million. Although a recovery began in 2021 with revenue rising to US$ 423 million, the figures remained substantially lower than the 2018 peak.
Adjusted EBITDA and Profitability Trends: Profitability experienced significant swings during the period. The segment profit margin grew from 1.48% in 2018 to 9.06% in 2019, coinciding with an increase in Adjusted EBITDA from US$ 16 million to US$ 85 million. This expansion occurred despite a slight decline in revenue, indicating an improvement in operational efficiency during that fiscal year.
Impact of the 2020 Downturn and 2021 Recovery: A sharp reversal occurred in 2020, as the segment profit margin plummeted to -5.00% and Adjusted EBITDA fell to a loss of US$ 14 million. However, by 2021, a strong recovery was evident. The segment profit margin rebounded to 9.22%, the highest level recorded in the analyzed period, and Adjusted EBITDA returned to a positive US$ 39 million. This suggests that the segment successfully optimized its cost structure to restore profitability even while revenue remained suppressed relative to pre-2020 levels.

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Expedia Group Inc., revenue by reportable segment

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Retail	6,821)	3,993)	8,808)	8,389)	—)
B2B	1,460)	942)	2,579)	2,143)	—)
trivago	423)	280)	938)	1,084)	—)
Corporate & eliminations	(106)	(16)	(258)	(393)	—)
Total	8,598)	5,199)	12,067)	11,223)	—)

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).

Total revenue exhibited a period of growth through 2019, followed by a severe contraction in 2020 and a partial recovery in 2021. From 2018 to 2019, total revenue increased from US$ 11,223 million to US$ 12,067 million. However, a significant decline occurred in 2020, with revenue falling to US$ 5,199 million, representing a reduction of approximately 57% relative to the prior year. By 2021, total revenue rebounded to US$ 8,598 million, though it remained below 2019 peak levels.

Retail Segment Performance: The Retail segment serves as the primary revenue driver for the organization. It grew from US$ 8,389 million in 2018 to US$ 8,808 million in 2019. Similar to the total revenue trend, it experienced a sharp decline to US$ 3,993 million in 2020. This segment showed the most robust recovery in 2021, increasing to US$ 6,821 million, which indicates a strong return of consumer demand in the retail channel.
B2B Segment Performance: The B2B segment demonstrated steady growth between 2018 and 2019, rising from US$ 2,143 million to US$ 2,579 million. The 2020 downturn reduced B2B revenue to US$ 942 million. Recovery in 2021 brought the segment to US$ 1,460 million, which represents a slower pace of recovery compared to the Retail segment and remains well below 2018 levels.
trivago Segment Performance: The trivago segment exhibited a downward trajectory starting prior to the 2020 volatility, with revenue decreasing from US$ 1,084 million in 2018 to US$ 938 million in 2019. The 2020 contraction was severe, with revenue dropping to US$ 280 million. While a modest increase to US$ 423 million was recorded in 2021, the segment has not regained its pre-2020 scale.
Corporate and Eliminations: Corporate and eliminations consistently presented as a negative value, acting as a reduction to the gross segment totals. This offset was most pronounced in 2018 at US$ -393 million and reached its lowest absolute value in 2020 at US$ -16 million, coinciding with the overall decrease in business activity.

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Expedia Group Inc., adjusted ebitda by reportable segment

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Retail	1,782)	254)	2,121)	2,088)	—)
B2B	110)	(208)	447)	341)	—)
trivago	39)	(14)	85)	16)	—)
Corporate & eliminations	(454)	(400)	(519)	(475)	—)
Total	1,477)	(368)	2,134)	1,970)	—)

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 consolidated Adjusted EBITDA exhibited significant volatility between 2018 and 2021, characterized by a period of growth, a severe contraction in 2020, and a subsequent recovery in 2021. Total Adjusted EBITDA reached a peak of US$ 2,134 million in 2019 before falling to a deficit of US$ 368 million in 2020, eventually rebounding to US$ 1,477 million by the end of 2021.

Retail Segment Performance: The Retail segment served as the primary driver of overall profitability. After a marginal increase from US$ 2,088 million in 2018 to US$ 2,121 million in 2019, the segment experienced a precipitous decline to US$ 254 million in 2020. A strong recovery was observed in 2021, with Adjusted EBITDA returning to US$ 1,782 million, although this remained below 2019 levels.
B2B and trivago Segments: The B2B segment demonstrated growth from US$ 341 million in 2018 to US$ 447 million in 2019, but shifted to a negative Adjusted EBITDA of US$ 208 million in 2020. Recovery in 2021 brought the segment back to a positive US$ 110 million. Similarly, trivago grew from US$ 16 million in 2018 to US$ 85 million in 2019, dipped to a loss of US$ 14 million in 2020, and recovered to US$ 39 million in 2021.
Corporate and Eliminations: Corporate and eliminations maintained a consistent negative impact on the total Adjusted EBITDA throughout the period. These costs ranged from a high of US$ 519 million in 2019 to a low of US$ 400 million in 2020, concluding the period at US$ 454 million in 2021.
Consolidated Trend Analysis: The overall financial trajectory indicates that the 2020 contraction was systemic across all operational segments. The recovery observed in 2021 was driven primarily by the Retail segment, which effectively offset the more modest return to profitability seen in the B2B and trivago segments.

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