Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| But despite this backdrop, given the operational changes we have made to our business over the last couple of years, we expect to have another strong year with top line year-over-year growth, relatively in line with what we saw in 2023 |
| We drove $12.8 billion of revenue, growing 10%, and we also generated $2.7 billion of EBITDA, with EBITDA margin of 21%, which grew faster than revenue at 14%, and resulted in year-over-year margin expansion of almost 75 basis points |
| As far as One Key goes, I also mentioned, we feel very good about the early indicators |
| Over the last four years, we built a tremendous team who in turn accomplished amazing things |
| We have an improving product that I have no doubt will be best-in-class |
| I think we have a good brand |
| But I think we feel very good about Vrbo |
| She is a seasoned leader with a very successful track record at Expedia Group, including most recently as head of our market-leading B2B business |
| Now, our hedge against renting a mountain house or a beach house is, of course, renting a hotel or resort room as the alternative, and we've participated very well in that, and we feel good about our position there |
| We did it to get to materially better, and now Vrbo can benefit, and the reason it's going as quickly as it is we have lots of winning tests, if you will, that we used on the broader OTA platform that are also winners for Vrbo |
| On the bottom line, we believe we have further room to optimize our cost structure, and therefore improve margins |
| With most of the heavy lifting behind us, we are now better positioned than ever to go on the offense, and this combined with our strong financial position should enable us to continue to deliver long-term profitable growth and shareholder returns |
| So in closing, I am really proud of what our team has been able to accomplish to the successful execution of our multi-year initiatives, which enabled us to deliver one of the strongest financial years on record here at Expedia Group |
| And like many areas of our business, we see significant opportunity to grow, regardless of any macro headwinds |
| Our lodging business held up very well and had yet another record quarter, with our hotel gross bookings growing 13% year-over-year |
| As we move throughout the year, we expect our growth rates will increase due to conversion gains from product improvements, the continued stacking of high ROI customers accelerated further by momentum building in our One Key Loyalty Program, and higher traction in our faster growing global markets |
| As it pertains to our first quarter outlook, last year our first quarter was very strong, and we therefore are facing some tough comps in the first quarter of 2024 |
| We also expect this EBITDA growth, combined with the benefit we expect to see from the CapEx efficiencies I mentioned earlier, to drive strong free cash flow growth |
| Putting this all together, we expect to deliver another record year of EBITDA with EBITDA margin expansion at levels relatively similar to what we saw in 2023 |
| And we're seeing their repeat rates improve and their business improve |
| Our gross leverage ratio, at a further reduced 2.3 times, continues to make progress towards our target gross leverage ratio of 2 times, driven by our ongoing strong EBITDA growth |
| And while there are endless achievements to be proud of in our transformation, it is equally remarkable that even while swapping out our engine mid-flight, we were able to deliver consistently solid financial performance |
| We grew our business throughout our transformation, notably reaching record levels of lodging gross bookings and revenue, despite having sold off and shuttered a number of businesses along the way |
| Our continued operating discipline has driven EBITDA margins to the highest levels in over a decade |
| We have used our strong free cash flow to aggressively buy back our stock at attractive prices, and as a result, our share count today is down to 2015 levels |
| This strong earnings growth enabled us to generate another year of robust free cash flow at $1.8 billion |
| Both EBITDA growth and margin expansion accelerated sequentially from the third quarter |
| With our strong revenue performance and expense discipline, with expenses overall growing slower than revenue, we delivered record EBITDA of $532 million, which was up 19% year-over-year, with an EBITDA margin of 18.5%, expanding over 130 basis points year-over-year |
| Against this backdrop, though, we are well-positioned to go back on offense, gain share against competition, and ultimately grow our top and bottom line meaningfully this year |
| With a greatly improved product driven by the latest ML and AI capabilities, and One Key, which now has over 100 million members, we will continue to drive greater retention, repeat, and direct business, all of which underpins our shift towards more loyalty in app members |
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| Additionally, to start the year, we have seen continued pressure in air due to reduced pricing levels from increased capacity and the grounding of the Boeing fleet, as well as some pressure in our Vrbo brand, as Peter alluded to earlier |
| Vrbo finished its planned front-end migration in Q4 and suffered expected conversion, degradation |
| Gross bookings were impacted by some pressure in our air bookings in the quarter, primarily driven by lower average ticket prices as more capacity came online, as well as overall gross bookings pressure at the beginning of the quarter from the crisis in the Middle East, as we called out on our last quarter's earnings call |
| We may also see some softness in prices across categories |
| In addition, we expect some EBITDA margin compression consistent with the levels we saw in Q1 last year |
| We pulled back in certain countries where we did not have the right product market fit and had been spending more but losing share |
| And I'm a little surprised that it's still been seeing some weakness in January |
| And as I mentioned earlier, air ticket prices have declined, particularly in the U.S., and we are seeing some continued pressure on car rental rates |
| We've had no shortage of finding inventory, and I think housing market issues and other things probably make that macro easier now |
| This will naturally drive some shorter-term pressure on marketing efficiency for our B2C business |
| And our people, our shareholders, and most of the world were unsure how and when we would ever come back |
| As we look ahead towards 2024, we anticipate that market growth rates will moderate in 2024, given the absence of COVID-driven tailwinds that were prominent last year |
| We've talked before about how we retrenched back to the U.S |
| So what does all that mean for 2024? On a macro level, we expect travel demand to remain relatively healthy, but we expect growth rates across the world to decelerate, especially early in the year as we lap the post-Omicron tailwinds we saw last year |
| And again, this is one of those places where you had to take a pause, go slow to go fast |
| And the slow part always hurts a little, but if you don't do it, you can never go fast |
| Strangely, those days never really worried me |
| This past quarter, both hotel and vacation rental ADRs grew very slightly, but the mixed effects led to overall lodging ADRs declining year-over-year |
| There is a little bit of a lag there because you've been underspending, if you will, for a bit waiting for the product to get to where it's converting as strongly |
| And I don't worry about the supply situation, and I don't really think we're losing ground to other competitors who have some super sticky product |
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