Expedia Group Inc. (NASDAQ:EXPE)

The receivables turnover ratio demonstrates a fluctuating trend from March 2017 to March 2022. Initially, the ratio decreased from 5.39 to 4.52 during the latter half of 2017, then gradually increased to 5.22 by early 2019. A notable surge occurred in early 2020, peaking at 9.06 in June 2020, followed by a decrease throughout 2021, ending at 6.8 by December 2021 and slightly declining to 5.53 in March 2022. This pattern indicates periods of improved efficiency in collecting receivables around 2020, with some moderation thereafter.

The payables turnover ratio remained relatively stable from 2017 through 2019, mostly oscillating between 0.96 and 1.16. A significant increase occurred during the pandemic period, rising sharply to a peak of 3.96 in June 2020. Subsequently, the ratio decreased and stabilized around 1.1 to 1.2 in 2021 and early 2022, suggesting an initial acceleration in paying obligations followed by reversion to historical levels.

Working capital turnover data is limited and only available from mid-2020 onwards. It shows an extraordinary increase with values of 8.47, 6.39, 22.8, and 68.32 between June 2020 and December 2020. These figures indicate a substantial intensification in the utilization of working capital during this period, which likely reflects operational adjustments during the pandemic. No further data is present to evaluate continuation of this trend.

The average receivable collection period varied with some volatility. It increased from 68 days in March 2017 to a peak of 91 days in September 2019, showing a trend toward longer collection times. During the pandemic in mid-2020, it dropped noticeably to 40 days but increased again in 2021, reaching 91 days in June 2021. By March 2022, it had moderated to 66 days. This suggests fluctuating cash flow patterns influenced by external conditions over time.

The average payables payment period exhibited an overall decreasing trend. Early values were significantly high, near or above 350 days through 2017 to 2019, indicating extended payment terms. Starting in March 2020, there was a precipitous decline to 138 days, and a further reduction to 92 days by June 2020. The period then gradually increased again during 2021, returning toward about 300 days by March 2022, implying initial tightening of payment schedules followed by gradual normalization.

Overall, the data highlights the impact of external factors around 2020, with marked changes in receivables and payables management and working capital efficiency. The company appeared to accelerate its collections and payables turnover rates during the early stages of the pandemic and exhibited heightened working capital turnover. Trends in collection and payment periods also suggest cyclical adjustments possibly linked to cash management strategies in response to operational challenges.

The financial data exhibits several notable trends and fluctuations over the observed periods.

Revenue

Revenue demonstrates a generally cyclical pattern with quarterly fluctuations. The values increased steadily from March 2017 (2,189 million USD) through September 2019 (3,558 million USD), indicating growth over this period. However, there is a sharp decline beginning March 2020 (2,209 million USD) continuing into the middle of 2020, reaching a low of 566 million USD in June 2020, reflecting a significant contraction. Partial recovery is observed afterwards, with revenue rising again to 2,962 million USD by September 2021, followed by a decline to 2,249 million USD in March 2022. This pattern suggests an external disruptive event impacting revenue in early 2020, with gradual recovery into 2021, but without reaching the prior peak levels.

Accounts Receivable, Net of Allowance

Accounts receivable increased consistently from 1,580 million USD in March 2017 to a high of 2,893 million USD in June 2019, mirroring the overall revenue growth trend. Post-June 2019, accounts receivable declined sharply during 2020, reaching a low of 701 million USD in December 2020. A recovery trend is apparent from early 2021 onward, increasing to 1,736 million USD by March 2022. This trend aligns with the revenue fluctuations and suggests tighter receivables management or reduced sales activity during the downturn period.

Receivables Turnover Ratio

The receivables turnover ratio shows variability, with values ranging from 4.01 to 9.06 over the periods where available. Notably, this ratio increases significantly during 2020, peaking at 9.06 in June 2020 and remaining elevated through December 2020. This surge indicates a faster collection of receivables during the revenue contraction phase, implying improved efficiency in receivables management or changing customer payment behavior. Subsequently, the ratio declines again in 2021 but remains above pre-2020 levels at 6.8 by December 2021 and 5.53 in March 2022, suggesting a partial return to previous operating conditions, yet with some sustained increased turnover efficiency.

In summary, the data reflects a period of sustained growth in both revenue and accounts receivable up to late 2019, followed by a sharp decline in early 2020 consistent with a major external shock. During this downturn, operational efficiency in receivables improved notably, as shown by elevated turnover ratios. Revenue and accounts receivable partially recovered through 2021 but had not fully reached pre-2020 highs by the first quarter of 2022. The receivables turnover ratio remains somewhat higher than earlier periods, implying lasting changes in collections or customer payment terms.

The cost of revenue, exclusive of depreciation and amortization, exhibits a relatively stable pattern from March 2017 through December 2019, fluctuating moderately between approximately $422 million and $548 million. Beginning in the first quarter of 2020, there is a pronounced decline, which coincides with global disruptions affecting many industries during that period. The cost decreases substantially to a low of $287 million in the fourth quarter of 2020. From 2021 onward, there is a gradual recovery trend, with values increasing but remaining below the pre-2020 levels, ending at $371 million in the first quarter of 2022.

Accounts payable, merchant demonstrates a seasonal pattern with a general increasing trend from March 2017 to December 2019, ranging from about $1.4 billion to nearly $2 billion. However, starting in the first quarter of 2020, a sharp decline in payables occurs, plummeting to as low as $531 million in the second quarter of 2020. Following that trough, the account shows a recovery trajectory similar to cost of revenue, increasing steadily through 2021 to early 2022, though still not reaching the peak levels observed prior to 2020.

The payables turnover ratio reflects operational efficiency in managing payables in relation to cost of revenue. From the available data starting late 2017, the ratio maintains a range slightly above 1.0 through 2019, indicating relatively consistent turnover rates. In 2020, a significant increase is observed, with the ratio peaking at 3.96 in the second quarter of 2020, suggesting a much faster payment cycle amid reduced business volume. After this spike, the ratio decreases gradually, trending towards the levels observed before 2020, ending at 1.22 in the first quarter of 2022.

Overall, the financial items analyzed reveal the substantial impact of 2020 events, marked by declines in cost of revenue and accounts payable, alongside accelerated payables turnover. Subsequently, the data indicate a phase of recovery in 2021 and early 2022, though not fully returning to the pre-2020 figures within the observed timeframe.

Cost of Revenue Trends

Stable before 2020, significant drop in 2020, partial recovery in 2021-2022.

Accounts Payable, Merchant

Increasing trend until end of 2019, sharp decline in early 2020, gradual increase afterward.

Payables Turnover Ratio

Consistent near 1.0 before 2020, sharp spike in 2020 indicating faster payment turnover, then gradual normalization.

The financial data reveals distinct trends over the examined periods, highlighting fluctuations in working capital, revenue, and working capital turnover.

Working Capital

Throughout most of the periods from March 2017 to March 2022, working capital consistently showed negative values, indicating a working capital deficit. Values ranged roughly between -2691 million US$ and -1269 million US$. This persistent negative working capital suggests that current liabilities exceeded current assets for the majority of the quarters.

Notably, in the quarters corresponding to June, September, and December 2020, the working capital metric turned positive, peaking at 1099 million US$ in September 2020 before declining again in subsequent quarters. This temporary improvement may reflect changes in operational or financial strategies, possibly linked to unique external circumstances impacting liquidity and balance sheet management during that period.

Following this positive phase, working capital reverted back to negative territory with values of -600 million US$ or lower, indicating a return to the typical deficit pattern observed earlier.

Revenue

Revenue demonstrated typical seasonal fluctuations, with higher values generally recorded in the third quarters across most years, consistent with probable seasonal demand patterns. Values ranged from a low of 566 million US$ in June 2020, reflecting an exceptional low point, up to a high of 3558 million US$ in September 2019.

A significant drop in revenue occurred starting in the first quarter of 2020, coinciding with global economic disruptions. The lowest revenue was recorded in mid-2020, followed by a gradual recovery trend through 2021 and into early 2022. However, revenue figures in early 2022 had not yet reached pre-2020 levels, indicating that the recovery process was ongoing.

Working Capital Turnover

The working capital turnover ratio was only reported intermittently, with data available for late 2020 and 2021 quarters. The ratio experienced unusually high values, peaking at 68.32 in December 2020. Such elevated turnover ratios often indicate efficient use of working capital or possibly distortions caused by the low or positive working capital values reported during those quarters.

Subsequent turnover ratios remained relatively high but with a declining trend, suggesting normalization or adjustments after the earlier extreme spike.

In summary, the data points to a historically negative working capital position with transient positive fluctuations during 2020, significant revenue disruption starting early 2020 followed by gradual recovery, and volatile yet generally elevated working capital turnover ratios in the periods of 2020 and 2021. These patterns likely reflect the operational impact of external economic factors and adjustments in balance sheet management over time.

The receivables turnover ratio exhibits notable fluctuations over the analyzed periods. Starting at 5.39 in March 2018, the ratio gradually declines to a low of 4.01 in September 2019, indicating a slower rate of receivables collection during that interval. Subsequently, the ratio increases significantly to a peak of 9.06 in June 2020, suggesting a marked improvement in the efficiency of collecting receivables. After this peak, the ratio decreases again, reaching 4.01 in June 2021 before rebounding moderately towards 6.8 by December 2021 and settling at 5.53 in March 2022.

The average receivable collection period, expressed in number of days, displays an inverse pattern relative to the receivables turnover ratio, consistent with financial theory. The period begins at 68 days in March 2018 and extends to 91 days by September 2019, illustrating a lengthening of the time taken to collect receivables. A sharp contraction in the collection period follows, reaching a low of 40 days in June 2020, which coincides with the receivables turnover ratio peak in the same timeframe. Thereafter, the collection period lengthens again, peaking at 91 days by June 2021, before decreasing to 54 days as of December 2021 and rising slightly to 66 days in March 2022.

Overall, these fluctuations suggest periods of both enhanced and diminished efficiency in receivables management. The pronounced improvement observed during 2020 may be reflective of strategic operational changes or external factors influencing collections speed. Conversely, the elongated collection periods and lower turnover ratios before and after 2020 imply challenges in maintaining consistent receivables turnover performance. The data indicates a volatile pattern rather than a steady trend, signaling the need for continued monitoring and potentially targeted interventions to stabilize receivables management efficiency.

Receivables Turnover Ratio

Shows a general decline from early 2018 to late 2019, followed by a sharp increase in 2020, then a decrease and partial recovery into early 2022.

Average Receivable Collection Period

Increases steadily through 2019, drops significantly in 2020 aligning with the turnover peak, then rises again in 2021 and moderately decreases by early 2022.

Relationship between Metrics

Inversely correlated as expected, with turnover ratio improvements corresponding to shorter collection periods and vice versa.

Implications

The marked variations highlight periods of operational improvements and challenges, underscoring the importance of consistent receivables management practices.

Payables Turnover

The payables turnover ratio exhibits a generally stable pattern from 2017 through early 2019, fluctuating slightly around values close to 1.0. Starting in the first quarter of 2020, there is a significant and abrupt rise, peaking at 3.96 in the second quarter of 2020, indicating a markedly faster rate of payables turnover during this period. Subsequently, the ratio decreases progressively throughout 2020 and 2021, returning closer to historical levels by early 2022, with a value of 1.22.

Average Payables Payment Period

The average payables payment period in days shows an inverse relationship with the payables turnover ratio. From 2017 to early 2019, the period remains relatively steady, averaging approximately 320 to 380 days. A sharp decline occurs in 2020, with the payment period dropping to a low of 92 days in the second quarter, coinciding with the peak in payables turnover. Following that, the period gradually extends again, reaching near pre-2020 levels around 320 days by the end of 2021 and slightly decreasing to 298 days by the first quarter of 2022.

Insights and Interpretation

The data suggests that during the initial phases of 2020, there was a significant acceleration in the payment of payables, as evidenced by the sharp increase in payables turnover ratio and the corresponding decrease in payment days. This change likely reflects adjustments in financial management strategies or responses to external conditions impacting liquidity or supplier terms. Over the subsequent quarters, a normalization trend is observed with the ratios and payment periods gradually returning toward pre-2020 figures, indicating a stabilization in payables management processes.