Key Takeaways From Expedia’s Q4 2016 Earnings

February 10th, 2017 by Trefis Team
-21.72%
Downside
184
Market
144
Trefis
EXPE: Expedia logo
EXPE
Expedia

Expedia released its Q4 and full year 2016 results on February 9th. All its segments performed well and the company is planning on gearing up its marketing and product development spends even further for quite a few of its segments. For the full year 2016, the company’s top line grew by 32% y-o-y to $8.8 billion while its EBITDA displayed a 39% growth to $1.6 billion. During 2016, the total customer transactions on its platform reached $72 billion and there were 246 million room nights sold through its various websites (21% y-o-y growth).

The Core OTA Segment Will Witness Increased Marketing And Branding Initiatives

The Orbitz integration has been completed with all its consumer as well as business brands coming under the Expedia umbrella. All of Expedia’s other hotel booking sites such as Brand Expedia, Hotels.com, EAN, and Egencia, are growing well and driving the company’s core OTA growth. The marketing programs for regional brands such as Travelocity, Orbitz, Hotwire, and Wotif are being strengthened to generate more returns on investment from these brands.

Relevant Articles
  1. Down 23% This Year, What Lies Ahead For Expedia Stock Post Q2 Results?
  2. Down 11% This Year, Will Expedia Stock Recover Following Q1 Results?
  3. Expedia Stock is Up 75% Since 2023. Where Is It Headed Post Q4?
  4. What To Expect From Expedia’s Q3 After Stock Up 8% This Year?
  5. Can Expedia Stock Return To Pre-Inflation Shock Highs?
  6. Can Expedia’s Stock Rebound After Falling 50% Over The Last Year?

HomeAway’s Growth Is Going On Track

It has been over a year since HomeAway, the second largest platform for alternate lodging in the world, has been a part of Expedia. . The brands witnesses over $15 billion worth of annual offline transactions, and currently Expedia is on track in its endeavors to further expand the brand’s presence to the online sphere by creating a global e-commerce enabled alternative lodging market. The HomeAway platform has started charging a booking fee since 2016, the tiered subscription (eg, Gold, Platinum, Classic etc) has been eliminated from the platform, and Expedia is making investments towards aggressive online marketing and the enhancement of the products and technology. The platform generated its planned $163 million adjusted EBITDA in 2016 and targets on reaching $350 million EBITDA by 2018.

Trivago’s Strong Top Line Growth Continues

Expedia’s metasearch arm, Trivago (where it has ~62% stake), has also continued on its growth track delivering a standalone revenue of $836 million reflecting a 53% y-o-y growth. Trivago recently raised an initial public offering of $184 million in net proceeds and is currently listed on the NASDAQ with the ticker symbol, ‘TRVG.’  Trivago is the most important contributor to Expedia’s revenues from the advertising and media segment.

Egencia’s Strong Growth Might Be Further Boosted With A Future Acquisition

Expedia’s corporate travel arm, Egencia, displayed a 16% growth in the top line and an 18% EBITDA growth which was helped by Orbitz for Business. Egencia’s EBITDA grew by 97% for the fourth quarter and the brand witnessed close to $6.5 billion gross annual bookings on its platform, which it plans on doubling over the next four years. Egencia might be looking for acquisition targets in the corporate travel sector to further strengthen and expand its services.

Editor’s Note: We care deeply about your inputs, and want to ensure our content is increasingly more useful to you. Please let us know what/why you liked or disliked in this article, and importantly, alternative analyses you want to see. Drop us a line at content@trefis.com