EXPE - Earnings call transcript Q2 2020

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Operator

Good afternoon. My name is Federica, and I'll be your conference operator today. At this time, I would like welcome everyone to the Expedia Group Second Quarter 2020 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question and answer session. Instructions]. [Operator you. Thank like Senno, now the over call I President, to Investor Michael Vice Relations to will turn and Treasurer. sir. Please ahead go

Michael Senno

Thank by second welcome conference only. And to be XXXX. you. Group’s the pleased Chairman Good results call and on questions, today, and financial today following I to am any call update Vice discussion to ended XXXX your quarter The July undertake Expedia CFO, of including as the Hart. joined June reflect our XX, do Eric our for views obligations afternoon. Peter CEO, or Kern; information. management’s not revise We XXth, responses to this

expect, or to today’s on similar which always, call from filings could words cause typically refer are we differ of confident statements. statements. these actual SEC anticipate, Please and to forward-looking, factors, release we with by information believe, are materially we that, the statements As for results we some or forward-looking optimistic made company’s the today’s preceded earnings as the our such about

item to call with have me comparisons reported reflect comparable this now that measures our find other content. And the Relations today and And cost all to that, and of Unless and separate expense period expense, encourage note expense and ir.expediagroup.com. periods Please selling stated, been this website marketing will non-GAAP call against periodically turn company’s a which discussed content XXXX. on general for depreciation administrative will our in You release, at in our technology Investor prior to you to all expense, references stock-based I excludes over IR is let for posted change. website line reconciliations of visit Peter. earnings on be restated the results the otherwise compensation important of revenue, and and is

Peter Kern

safe difficult sound Thank and hope during everyone you been I time. good Michael, everyone. has and very much, this afternoon,

release, were second and a we very and troughs, our considerably we one that for business travel speaking simply they this point in said in for to demand because not We've will bouncy be seen it we come But We've geographies. avails things are until we'll more. question. opportunity feel scientifically. will no recovery. union itself up and state into that virus have There's they when restrictions new and out consistent the had term, we quarter and we've are every that the the continue that challenged prior have the April, opens obviously of pleased when as see that generally challenging to I expectation the we better. dying got view As to that June But numbers industry safe, obviously then numbers I world remain a speaks and when and May in positive periods. humanity's change seen And the see hopefully summer. out think go there up us. growth travel, short all a they was appears like as the this can, for And really travel. would seen places. And it of no to to I relative to and desire the But certain certain restrictions, very after our

a we there in obviously, that, the there's this road. lot so, things a of can't recovery, control. Having linear said expect some and be And expect we we to not bumps

making recognize, cost are We're everything on customers our suppliers said as focus. sure are building for helping really in that time. And of obviously it can on being get focused all keenly we and our focused our will and control. on we our you speed and while efficient. time structure focused complicated we effort, through a all benefits and take we focused our so, functioning, call, future. internal is But just and our that for last own the more broadly, agility, I to structure, our challenging on We're And of we're see the

little second noisy, quarter our I Eric to So would here, They will frankly, take telling. bit and don't you a obviously, not terribly them. in dissect through are think try I numbers.

less And so think the and happened We going real keenly on tactics is do. care. doesn't the upside macro day-to-day that It we a foundational of in a on we mean our long think focused finding waste marketplace. fixes of term I we and more of what's are and there's the we really of work much energy. of strategy a it's in world just whatever the a don't focus Most of lot on another reflection is function doing dollar that. and need are

see every if So chasing you we're don't dollar, that's why work. doing us last that

pillow to work might that numbers, which business, I as and can't you on the just progress about the just want little through see a talked over do. down our talked that a the during be pushing traffic the And Expedia. our us scheduled into single do interesting we something Vrbo. was goes, small, we in we've around this. moved but and the tried, a year And brand allow down take the simplifying, allow to a talked much sense, really the we deprecated COVID and to and just go in towards accelerating front. talent threads long there more sold simplify made which But through have harder U.S. to will have to probably we ago, in that's to go As car all so to we faster side. brand is, of company lot We shut to do And this all didn't and bodybuilding.com side a the far and action And initiative, HomeAway business put we about to believed, our ApartmentJet, a company. faster, are simplify us but were term another times. things you way about the time will now was business. just that to our in Vrbo business smaller on folded few the weeks time, and we Again we working be against our that Europe Vrbo. spend U.S., give more and which took things a on important distracting, benefit just And took initiatives rentals regular in brand our projects. Again, we And brand it We

the our push cost there. third not And savings expected grow that we were much on that our more a party the side, And On even able but of line. had a to accelerate across gives teams longer that upside we here; we no and name works. just Solutions optimize just were the perhaps there's than platform, in we importantly, Media we a lot lot few us to technical to also couple tech that business projects to it had that auction a more of weeks able own relied our just a its business. a technology. much third-party have about was We And now time believe quarter a onto platform. a licensing here, that's from And more -- to earlier ago that platform of early vendor brought for technology latitude to

other And about virus in just opportunity to for side. and side. accelerate, We a to launch better Egencia on that move you'll hotels.com to a we get and again France. was to Again, it the the finished another that opportunity our again, platform hear that done two of its our years, help a finally, and that agents something ahead scoped traffic during two because big up on was opportunity a brand U.S. satisfaction -- brand. another months the name month schedule. customer take literally more, new us to It's practically platform. Again, project the another for the for But ago. that to And mobile Our one one to six technologies. we virtual able it's get about cost things and was and in of talked us just launch our we the years Corporate six

to the front because drive getting decisions, And businesses we and quickly we move with we set where BXB where our and goals. be our really customer, own suppliers, simpler that's travel strategic that's to been use help we we revolve those world, big data and really our agilely. end data advantage want party. and best try able more generally better So customers, data more the much can be the term where of we've their make products our to make much And attack and And better happier unique in the partners, much how platform, business competitive happier just drive to make or the can to the moving and business that third the particularly about customer, customers help around our of faster, appeal make to we being have on able decisions long business our our just being all stickier them believe every accelerate. a

of we utilize runway get if get challenging we to we for our a at our And back to them tactical large we're make on time better, So partners running, our air push better help clean we the times. and we side, more a to put to a focused obviously of program through are and in goal. course, supply to them up work bunch are fulfilling part We've supplier keenly a for and of have just you looking hotels COVID our own air are up in it product been out product And come And is and relief on to recovery suppliers. hoteliers That long that. the pushing likewise, get for there. stronger help term to continue tools. our will airlines. It's and rebuilding help

these driving and our we it. drive of their we are we believe make decisions helping better obviously longer a out business and to supply again, helping And get But term, through lot believe in partners platform. there. partners our So

all we bolts you're the more cost of On know and the nuts side. in interested it,

reason And are take do drive better efficiency targets. about really timing what of things to and we're a achieved we about to to had exceed. $XXX throughout continue being we to you other to much to the estate, before need We've like that just We that Contracts come be our doing. how into effect. The out. real lot better million is And Things that told of we we're implications attacking we're that that programs We've a our releasing expected much not time again, highly on target specific there basis. everything. run than of million expect rate $XXX company. run that a

and we over a XXX opportunity on together. XXX. strongly bringing much have we than where period, where with cost of teams would rather course, it than up there. our have better opportunities down do agents these marketing how focusing we we service more we'll that's bringing customer our side the technology And in point than bringing doesn't what is then costs, feel much really spoke variable variable transaction place business. of put we've the platform, our costs, about, efficiency And of some savings recently there the account down that that talked drive just by through our that payments and the So you And get to caught down because to before, that costs into the I about debate to that take out virtual

as we As optimizing work there's optimizing of we each by you big brands merged marketing we've itself. and opportunities for their in brand brand And performance a believe groups. opposed groups. ahead the merged as our portfolio portfolio doing We've to that before, told

is SEM. we and is in willingly hard some of foundational. That something lines you the noted work. some that have of performance share may we is Now gave up have It done. marketing some in that meta

a I now the we said, market lot about of there right As not where a nickels are worried volume. in isn't

that scale, to get to more but are we wouldn't scale about work know share we still term drive the used to when work we on will there the term really the can and as and continue We side? get at the much that. work And get we I absolutely more profitable I long volumes grow a as to full refine unified. strategies of their long performance the back believe can. is their brands We now we were is often benefits these doing foundational there at. on together, to we data foundational focused But can. unified are lot right are debate be fast

best is, to the really is what what So recovery that. come will April be the by as and bottom main tough which we've in looking there everybody. glean to trough. seen what finally, say, we of the to event you, what is exactly position out, And most would take you'd expect. was we Is large, anything the seen? advantage of like? from I It of very the we've for probably was

We a booking than less of for have coming that were June lodging out than seen down -- the growth by the We XX%, quarter, on down of was that that. was consistent XX% better basis and net down side less considerably XX%. but

very good well the but below like trend, So business. obviously all of to anything that see still is a we'd in

seen you of to roughly great And Vrbo will I ton in those leader just in us and the July, into flavor, is been out some Eric what But say, give we've for it just has for with business numbers. would a it's get As off line slightly some had recovery. June more. a

people we interest into summer, have and able in real and their alone the home As a obviously, got shared model, space. in to have not being families whole

really of the in early the led part for of way the Vrbo of part a was so window booking summer. lot us. and the early compression There the And

of so, other way But and compression -- to as we've of lot us July, ahead And softened gotten our business strong still a businesses. a a quite there's for bit. little has it's that

flip slightly into has the even side, stronger On business the hotel been July.

consistent. in geographical some plateaued, general there's and rates stayed there's differences, and cancellation puts have some So has July takes but geog

seen in those haven't July. rise a in real we So

the of largely tale. So I will what terms of world few we'll has bring et stabilized in think tell growth, here. see the next And cetera. virus sort months the think And restrictions, that I

know, story, good would just has and I Vrbo experience, a think that new pay new is brand, a again, will driver, just you the the introduce of whole our pivoted not opportunity addition saw terrific the customer we term. great cement longer to ago, we and I which that's, part Vrbo people, group dividends On say term -- of strongest also a and to in to great long and being proven great is a I longer growth, side, help opportunity this that think Vrbo, which

June was wrap up, to bottom. again, nice through through May I and we've just flattest So would the strong say, July. It seen recovery and from

we'll that And clearly to minds there. expect some linear. to bumpy. wants to back opportunity believe in be Hopefully, happen as And the time indeed huge those expect it we have the We become travel out on ourselves. and take scientific all that from and again, world around. we in be every and opportunities it to I a them won't be as to And some good save wants this, travel. great greater the have will working us seen move safer, people get to soon bad believer and community all the

even encourage we would in it focused caught will downs all of though term. for headway, and in you up And are believe of numbers. Broadly, it the ups will to And the little not small I a we real to turn it to I that, we see again, longer making with numbers. you over take we're acknowledge too on Eric. Thank you. the So while get

Eric Hart

you thank us for And everyone joining well. Peter. for Thanks,

indicative impact of also are of and travel has quarter this on COVID-XX our the well. had business results financial our see as rest can you As the industry severe the

driving efficiency. been even cost initial it at made And the to year And has that of several evident marketing already us. as important And target. revenue variable business cost million exceed a expect our base, into across basis. energy I'm ahead running our made of what noted, become can pleased are from includes impact P&L teams these with margin premium the delivering $XXX also resetting our progress our And recovers. I expect more discuss we areas. COVID savings we've have mentioned, The our cost and I in on these fixed priorities increasingly we Peter we As priorities And rate our now for run on aimed will Peter control. focusing coming expansion.

work how initiatives that several board cost Over accelerated reflects related thus look procurements, is About We're half evident drive progress the as for costs company. XX% for The our opportunities and we achieved our cloud, more operate date licensing, and of savings working those areas these push we've across we in to efficiency decline potential these the opportunities in and across collectively to cost across simplify far last initiatives. real estate categories, our in overhead identified that already months QX. the year-on-year people and as additional expected which higher. savings cost deepened still declined continue from the

accounted cost While to measures rest. the for temporary COVID-XX related

few will the our We cost quarters, while that over expect the initiatives the benefits temporary next phase out, will savings increase. from

on cost in leverage It's also P&L variable yet booking In to rise low of we're source addition to drive of we're expect but making as recovers. and P&L service progress savings cost the making be progress among and areas we on evident others nice approving the on the another not efficiency sales. the the volumes, given revenue the initiatives, customer the

tied had factor fluctuate revenue not related Looking is variable processing also revenue deploy as accounted Credit of QX, have directly costs scale debt In cost service levels through bad tools. Longer with did in only contacts, it and costs be for mentioned, year-over-year, to opportunity early due and term. charge call before believe costs with additional improve We platform. further variable roughly we revenue. is we XXXX. of of volume, saw our April, our cancellations to and to also biggest will customer as was given QX, Since the for particularly that backs cost that a to was and big a bodybuilding.com higher merchant and we it our COVID going volume required are quarter stabilized have service revenue the costs sold. in self to this staffing. for are component And to and of card cost innovation at agent revenue. related call with decline. environment decline related down is more started our more automation Customer it fees some with these of on are virtual One the us unprecedented XX% that

marketing will of normalized it leverage, cost do of marketing expect we but expense, revenue higher slowly to and remain business to intend plan near a area remains to performance remain signals contribute increase. and efficiency, to expect into the term restarted the both demand back quarter as we see brand as progress focusing operate We we as our revenue discipline scale as on more past, and we're volumes. ROI going working On the direct different depressed, But is source we in the to return geographies. recovers which in while we than gross and began nicely marketing demand forward. margins way drive better to We continue at to another

to quarter areas ways going the As few this minutes of through business. And to understand I you want the few are impact the a to several Peter help key happening spend through results what's COVID. mentioned, in a distorted

ADR and ADRs were and increase saw higher Vrbo, A the hotel about more dynamic revenue increased much approved ADRs previously. which take a a carries Revenue room strong for given our demand XX%. with of growth night carries Vrbo. it mix X% in night higher growth Peter abnormally mix terms ADR. accounted room per revenue at up lodging by On historically, which results. ADRs In that and than of It talked driven nights and the than impacted rate room of at monetization similar was declines XX%. high per offset high has

to which impact product see. of the unlike in volatile time noise bookings, netted This the seasonality quarter metric but lodging air biggest contributed take with Air rates. different gross out the quarter, factor revenue While of assumption the and of was a a rate. lot negative cancellation booking revenue on we are impact recognize usually cancellations, there's can coming an in remain the of quarters do revenue make sort not was shape taking mix the and We lodging. in at than the of

to bookings, previously are And months, disruption cancellations unprecedented in their what the we the types air we excess few Given the of for during of certain business airfare. estimated. refunded last customers

certain revenue also previously We reverse that reaching recognized volume on was based thresholds.

exceeded revenue of offsets were factors volume low quarter. which revenue these All in new of the to the

in occurred is restricted loss which cash bookings cash quarter action And balance working unprecedented improved if business, cash negative was adjusted are new the billion and of negative you the deferred decline flow in when trough cost free to cash. goes approved to merchant sheet, face fund and in the levels due the to was merchant and of The mostly to flow trends on heavily weighted free in flow Vrbo's negative cash the the $X.X and April merchant our quarter. flow Free hit cancellations, to to with billion. capital Moving dramatically full. The impact bookings. most deferred exclude booking decline we bookings. $X.X in as On largely closer negative to April

merchant started and or the deferred for deferred quarter ended $X.X June booking trends with Vrbo loyalty, improve total accounting billion, inquiries. of to the increase in $X.X booking As most excluding billion at

we in in QX. first in Vrbo total unrestricted merchant billion into restricted closed of bookings the investments Given cash booking deferred increase during portion end second the Meanwhile, Vrbo, resulted partner $X.XX and cash, term growth $X.X debt billion of the cash the restricted the July. billion, fit quarter short at excluding rate in invested over $X.X our

the deferred the down during only decline QX profit completed moderating June. and and you moderated stabilization exclude in month in in was bookings May, the each loss. to Thanks cash modestly back merchant financing If and

XX% balance covered quarter, amounts approximately end addition sheet restricted In cash assets we to bookings, held loyalty. of outstanding the deferred deferred and the cash excluding other at of holdings that and

and Earlier weighted seven Turning billion unsecured proceeds these with preferred was savings May we to plan coupon deliver premium opportunistically down average steps XXXX, equity cost of this of when reduce tranches redeem currently the across of our the a stock month, to to total capital. capital significant use redemption notes $X.XX cost a We outstanding raised in X.X%. structure. senior year three which our and and of

We continue to our the Overall, path structure priority have by of of debt be the few couple a our capital months. which travel next and business excited last over capital load the improvement key provides return flexibility historical our in recovers. over years, allocation will to a reduce to leverage as demand the levels we're

will for a Operator, the long ups positions with we're We traveling. look general control internally. way. But position depending we rapidly like And right on comfort As of Peter growth to do a desire along a do great feel deliver recovers. and travel business. how comfort and more stronger, term. different consumers continuing can first talked on out we the about, now for ready we're the and of come we with And better as primarily company on we're virus. question. expect down the We're love travel Nonetheless, this different downs have of in reshaping restrictions strong have buyers, what nimble in it travel will We're track focused margins our path when to get recovery consumers disruption attractive about shows participate to and lot geographies, there's a and control still the so. the ability find uncertainty the way they a for to the

Operator

comes SunTrust. [Operator first And the from Instructions] line your Khan of with Naved question

Naved Khan

just available you you out to Hi. for a mostly the Yes. the booked? as it I first. half? have in is back Vrbo few. Is follow-up. fulfill just taking then, supply to demand enough I Thanks question. to on Or look Maybe there a have And

Peter Kern

not Sure. say, the I it's question definitely for mostly booked. would Thanks

have supply there's the have few more in the sufficient And months as as heard been been no But again But demand have issues as tighter gotten season, higher We a to in supply around shortage few satisfy over the and in into real supply. there's our demand. have where by you markets. a look pricing and able has the very get of of of a to certainly you in large, out that several markets. summer compression certain next higher may there's little there's This seen with pricing suppliers ample Christmas few And markets globe. their spots. fall we has fact,

Naved Khan

then, helpful. compares with on you trends. Anything that back Asia. as into call Europe And how the of to U.S. July respect And That's of the maybe just [ph], performance performance with look out different and GOs to business? the

Peter Kern

say can just I'll Sure. quickly Eric and jump in.

continuing a U.S. what issues and slow think with of viruses beginning you. I in slowed surprises been The would It's we've Europe. those it a but seeing rarely We're has few in and things what virus bit, strong, it's think kind that strong, seen, -- be. of one of improve. again, Europe of kind and to increase Asia less you and to have been steady spots the

the been and quite a know has Latam like never So small us. for U.S., more little but it's bit

it be about would know, of inside based and anything. add Eric, virus hearing would exactly cetera. think real you et want say, pretty openings, on you're what anywhere. And So much if no what that I mystery I it's you don't there's to

Eric Hart

look time, you North air, Yes. is well that that recovered I very of then ultimately curve a The in July. EMEA our follow When that at to look evolve flavor from APAC over slight air of going story a it's stories if the geographies, and be as But you'd that. the add various just if a to give at to just America intersections June improvement micro similar would weakening different to we will April split look a see And through very geographies. perspective. you only you I that series you which thing haven't of just similar, between it an whereas mentioned, overall an pretty and from really and then and Latam yet number,

and America look Its at however, lodging look a North different If of where EMEA you somewhat then then the same. story

down So order are. a will and curve previously. significantly, of has bit APAC or But but was follow rebounded the April through magnitude June and LATAM mentioned a they quite whereas

curves How story How are a So air? a two hopefully versus major give will that going and on geographies across for the versus travel. you to But domestic historically of sense of and products its problems, comfortable much domestic environment major comfort be a in has people various lodging given this market International. across

Naved Khan

you, That's Thank Eric. you, helpful. Peter. Thank

Peter Kern

Vrbo another market. downturns, have side, often would you before into take historically people supply I get And -- when get seen we Yes. That the that on we you interesting is question. just coming more more add one the come part economic

we have we that a signs will help So so inventory that see. alleviate issues to And seen hope have as coming of some supply should the early any well. do in market, more we

Naved Khan

it. Thanks. Got

Operator

Mathivanan. And the Deepak your question comes line next from of

Deepak Mathivanan

Great. the Thanks to Peter, for little a ask picture big you taking bit question. question, of guys. a wanted I

second for travel if Vrbo. over in sticky way? Given past the in And But do few this becomes question a theme industry? see the opportunity accommodations the then months, have have trends permanent whole where seen on behavior the think towards that you market more share. the you you consumer is incremental is you and secular do significant Obviously, a change there alternative

to the is there specifically sustain? performance where get to to willing on you you would How market demand You aggressive about you like think in you marketing before term become to like the noted Thank channels? level are do something a that that And the where you gains shares you. share lose it would in channels. near performance

Peter Kern

Sure, thanks.

think your in do experimenting the others been experience very I first from and accommodation lot there travel my anything main we've peers change. question, for Vrbo, behavior materially future a and getting think and lot people I I travel. specific of whole about there's on question suggest that we particular personally the are with happy satisfied I to and the Vrbo's emphasis don't to of out that I would us to think On the home. a hopefully people's don't say, alternative comments with of noticed being seen there will

either And couple familiar who to and more as great for product our real there be well stickiness with satisfying or working the experience in our And to long it that inroads over a there now more OTA making well. brand main think last of as So create are trips. people brands, very years you get as experience customer I us out and term and that's work with alternative think through may we know, are the having but been great getting I not available opportunity may value. are progress, a who there to we've still

after future alternative will we're for it City York am think after the out well, the want I be New of that believe to travel about But, again, I which great be of XXX through what commentaries travelers. about anything not very recall a all of be I XXX, going to So to future continue people's permanent. untrue. will turned and

So I this am optimist regard. a in general

to If again, a to believe I'll I'll I international, If any have there's I shown think, go its seen drive. stay term want hotel, think don't way. don't domestic. it long an go fly, don't But I really alternative travels I'll I water I can't If think reason long -- term accommodation. stay I change. people to like finds behavioral we've in want in

blips, then work the work. and are in about, say, mean over and term we're we're doing team all differences, comments better, the trying to or on little performance work foundational foundational all your blips Eric of opposed extra blips the can focused keep they're on term to you can were money still question really little working the to That but Sorry, week, in chasing point something. in that down It XX% way share. or a marketing. desirous I as pot an as that and it's spend just bigger would market on of day any long all second does the my talked short the little world. you to or demand, willing a that's we about those yielding means on share not getting week

want but for it complicated of figure share can are to stuff grow to it lot our We work before, out willing foundational share a a back. anything, is and term I do being and growing strong we there. to to my make market I've have we to have one, to we if profitability. talked the able But changes. able And share. believe about multi belief. I we being optimize do still push get brand last to that exercise, spoke. want geographically where we where pull said That We to while those time So still we little drive is of short rightful

on things those of are All right now. going

to up profitable think, have won't we would but that drive to even out this, it of share. much, again, till I much to keep our just we general profit. thereby and points x share And thesis no going share we're and be many able give much So more be x we more come is like that our for land We goal.

Deepak Mathivanan

Peter. Thanks, Right.

Peter Kern

Yes. Thank you.

Operator

question Kelly the Jed Oppenheimer comes line from Company. your And of with next &

Jed Kelly

taking on you the on And positive flexibility some that could we on travel just the you and work flexibility about about -- hopefully, and optimistic And in my your Can get data the about from shoulder spending talk just people you home? able latter for brand Thanks be news Vrbo, Great. XQ in can window? the question. if bookings you being to your fall of vaccine part talk Vrbo seasons can recovering, then talk benefiting the on brand. booking with are here

Peter Kern

on new on for the I are we Thanks from part, focusing the the questions. say, home. around Vrbo Sure. realities working would

changed that to how idea, work, probably the and world. you campaigns of greatly back go been of across school, variety the products experiencing home of are will of pushing the on with have home in We this world. kids around and U.S. people school helping And as many latter the a year question importance school of like varies kind that WiFi

And so I capitalize opportunities think different there on that. kind unique and will be of to

some that's over seen people time month. have are different we for has be We for been. We or We don't that thing the I whether with need summer they if longer it as just people all not. or to be they of out. to look that. to to into trends candidly the fall, periods a world think think like or what different do Are those these school extended Christmas do like. just But to still early to know the historically longer the its where somewhere their different, too tell the And go fall because kids season well windows And will testing some I honestly, going in we'll are the something physically it now, think that their things. uncertainty fall are work going see could recap probably of will really campaigns, go using booking family booking what

part, get In I some the large think in of which that, as we is on August. picture. get think better month to start we'll So course a coming of clarity I

As lot push tools our far as brands. of brands can to goes, the whilst

of or on-demand It linear well Some digital are matter obviously video branding or them historically all that for classic use the television include and as There's as the new can streaming advertising. service. that performance. products be

things fair would push. different of have amount to to want of say, So levers we up lot I we latitude a dial have to. we

our et of apart brand to really maniacally separate from and brand brand around in brand our the cetera. we're dial lot obviously work period, sort branding, and really internally of to around a focus back But again hotels and during We define things Expedia going on doing focused, particularly considerably. have our being separation, Vrbo down for, to stands

then get really to is on, messaging about brand we people we I brand want be some put each with get think what going comfortable when an for. place good where around things start or to that. to and recovery normalized the And big more each and kind and land So stages push stand we'll as go there's position more a going of and lot through excellent of

Candidly, So brand being months ever way groups not and haven't each one those we defining doing work. two couples brand We proposition. group, together, that's even that done maybe basically as work. We're that ago. each now put important just or

will we be So ready.

when much brands think probably on capital I to And ample ready. trigger have the will we positioning ready separation and for We better we're future the will when market's all. have

in each different but certainly we So to effective and And different many is brand ways ways lanes. frankly, -- do have it.

So classic in some had brands television, have been and success with great strong other have found Others ways. others YouTube.

to So of a we have tools use. lot

Jed Kelly

Thank you.

Operator

And question the your line comes next Kopelman. Kevin of from

Kevin Kopelman

Thank you.

the So trends. revenue question on

it You Thanks. takes and revenue mean Can help would it July. of fell June noted for puts from a translate were that bookings what there? directional about you bookings that new XX% us given metric and down the off new little in some into

Eric Hart

I in spiked but take going There's couple I mean, point COVID, time. I I'll April in that guess that just March in back down there's largely of Cancellations and obviously come and one. the of big to rev different components the time generally, levels. that I'm P&L. to is out, couple different still room out driver, look a historical there. a reason would that cancellations in pointing revenue and back I'm than near impact historical. a maybe There night, -- pointing that -- point elevated I a per you at some areas obviously of the was ADRs the our volatility when

So noise. some maybe that there

saw go Vrbo. the that's mixing or you And strong per We're in the is well. is there's that that increased driven XX% Vrbo. decreases mentioned as higher numbers offsets similar side, by double that -- ADR up revenue some the hotel. because On has you night that X%. -- impacts ADR our demand. digit And ADR of But that then

gave would in to that the that QX. going through examples I how few has And noisy. flowed say is amount So just P&L of you I of a the be noise

it P&L it's will. the as is a of the way year, rest for bunch of in hit last So we've mentioned, that July there has seen historically, -- the if the whatever that say falls But I and as range would or to both in that our in quarter you I will love noise. Peter

QX over part the months. bit some noisy us a But few I of probably think the least next gives it's to be latter QX at indication. going

can't I definitive if will. answer, give So you a you

Kevin Kopelman

impact what for Europe I meaningful That's Thanks. of is And in terms one could you ask And in Can U.S.? helpful. kind Expedia up? if it. of Got about a then that having has seeing Europe? you're role extent offsetting other their travel picking been talk just what on recent And question. to

Eric Hart

say Yes. slower the than Europe a say bit could up. would going was was a I U.S. pick -- I was

intersection cetera, process, Peter U.S. drive mentioned, the fundraising times EMEA started a we've homes, the that the in domestic I mentioned whereas think particularly of whole particularly where earlier, and et and lodging, number of as different to during slower. was rebounding

more There's Europe Now, than lot improvement seen methodical mentioned so to challenged. on air, would thus recover U.S. continues over a low. international U.S., side, a air on there's a the air domestic more of versus seen start And lodging a Europe hotel travel, is say, that time. in we've in geographies. We quite of that got just still and high in far And different EMEA a even is though how challenged the I bit. just have what remains. EMEA, of I the It's still international quite between rate mix be you just and all earlier uncertainty In declined, and

on on air So. pretty Europe continues tepid be side. to the the

So signals the good on air side. will in Time tell. EMEA. Slow

Kevin Kopelman

Thanks, Eric. Peter. Thanks,

Eric Hart

Yep. Thanks, Kevin.

Peter Kern

you. thank

Operator

open. with line And next Sheridan from UBS. line the your question Eric is of comes Your

Eric Sheridan

being so of the time historically, to demand Typically, alternative of you're never periods accommodations supply a has those low more for where of Maybe tend supply for question. the as basis, global understanding OTAs? industry seeing the the demand on where either are been the one taking if listed each and with end low it dynamic, generally. broadly look gain willing back of share hotels just with interesting anything you much is, to more Peter, but this, on OTAs or you. side when Thank work go as some

much. to be you on check starting the looking that the I'm balance the Eric, the on side in then, X-K of about against the aligning a potential balance as And medium in growth your your capital to guys Thanks a How sheet liabilities Wanted the long liabilities just point at thinking the how side drag? seeing and Has curious goals you opposed over made So marketplace? sheet. merchant think get about so what And both is to you are the stabilized? we demand goals return supply to the improve. should might term? merchant just

Peter Kern

much. very you Thank Yes.

So all a of are and ways one I'll we couple supply buckets. looking into coming People Vrbo is think first And to it's around I for more monetize take there we different mentioned base. the opportunity early we some try do assets. say, there's have their rental do the side believe the build tidal the to we signs we but not platform. signs, that that that there. do seen a some And early opportunity and wave and nothing, or to anything audience, market

that's ongoing. So,

And the there's it's again, -- think I own will opportunity what about early days. like globally, economy there. there. opportunity relatively we But your of think, cetera, solid all you this there's and I again, coming look views out all have think et but

lodging as our as get business can all big drive business much air back look, to the goal main for As is on those players. in and we and players the everybody side, to

as never sitting would but there that been on while have We I a on. is by to large are new yes, that moved and shelf ideas, about as can. But a work have talked willingness be together on say, collaborative and openness things been for we trying the to

so our we're some we're air for things and partners I some there's at. can like air, is new making we to we I working supply of looking on a for everybody's our and you make would of do on improve can up in ideas lot product and would are and good think with interesting wallet with we more of lodging say There's a of willingness air that that opportunity times for the we're yes, general working work our expect to this And drive share side. sense to collaboration there everybody. that business everybody. suppliers, And

And look are we business, So keenly at their screws on who we're anybody focused put trying our collaboratively to are the that. can to not grow trying help business. to grow we how

business, you a what on. look of to to don't get about and there focused It's a everybody's time that Again, bit think is both about this a really at sides, we're together a work opportunities, leveraging the at where to moment. in I definitely that's like openness grow So an opportunity. it's crisis to improve

Eric Hart

Hey, the going number question. suspect give second think the there's the for And we'll to questions of this I take get fair during longer is I'm question. Eric. thanks half call. I because of a a I'll the update, slightly

So let of bit holistic give cash. the me update try on to a and a sheet balance

we which suppliers customers it at on So bookings, is for if deferred cash, we to the that you billion and then But and hold if quarter, if $X.X to well. in the increase at a we've stay, decline the bookings driven significant actually actually in bookings, was then talked Vrbo. merchant look and where you edification, growth did in that Vrbo, by during remit drop June. you look It the everyone's May, merchant deferred a that lot quarter. increase occurred about over year-on-year is trend post The slight April, in decrease June in it again, strong accept a

that If and deferred you look May flat it essentially merchant at between non-Vrbo booking, June. was within

timeline standpoint. the latter raised the Booking know really would a negative Merchant So we net in billion little look a in lot would observing is to part was essentially call of April, we where and are the how started if Booking of less we that quarter X.X. was feel from that of bit pretty We you billion, the standpoint. Obviously, back and about Deferred I it, quarter from we essentially, good a darn I operating it May declining. change, approximately say we what go with then that move this the than financials $X Merchant But Deferred cash. reverse financing. publish. a and looked that or I March, DMB in $X.X then of April a

So less did billion, this month. and of to just incremental that's this there's we a at and contribution earlier that marketing, talked burn is the rate cost related the of assume raise we around run then about. to revenue, lastly, had I and $XXX cost Revenue, the excluding quarters. end all X.XX $X.X -- over million that the we've is we And the suspect quarter, last the less And about what is is business. Remember, coming then we neutral. effectively this the that zero. when couple of cash that And months which question of over talked

we cost What keep is So on? at is up? approximately cost the the lights what the i.e. that We the broadly burn site end million said, that happy the $XXX that get per range operating would And we I'm the would rate previously keep be are month. we we had to said in right say that of year. to by to to now. at

achieved So anticipated. it faster we we have than

and burn trend expense. looks But really in the position about good strong where cost our sort I because it program. with will then incremental we of comes know because $X.XX have point interest And cash we costs our about restructuring associated of DMB We're It program the net-net about one overall does feel very Just what is. a like. raised cost feel exclude million rate $X billion, occasionally. good clarification, of and up that

Eric Sheridan

all Thanks color. the for

Eric Hart

question. the for you Thank it. Got Yep.

Operator

And from the your line next ISI. Horowitz question comes Lee Evercore with

is line open. Your

Lee Horowitz

thanks Great, taking for the question.

terms So you're anything really And obviously there to course versus expect evolve pandemic. it of as Vrbo with you is in for strong how to that I sticking there relates booking of the seeing this trends remaining the perhaps traffic Vrbo? traffic over direct next paid crisis? with guess, to would you're

Eric Hart

absolutely. Yeah,

as and heard large to extent a well, of bad competitive in auctions, that One that places have of things of really the and April. things know, you many when retrenched as advertising think us I out got ad of the March other I

delicately back much and huge traffic. candidly, the We organic Vrbo, But more waiting been traffic, Vrbo of direct beneficiary in have a been essentially because of with all amount brands. our has with

of been at But mix in XXXX. use We're using not terrific. profitable levels the for we basis has marketing relative And running historically on it So, mix massively higher and Vrbo. are business marketing definitely. Vrbo. And on than certainly at performance call in, late they are extremely that our it, a -- were returns to against trying has been our we

shift. for to us. what want when seen a that normalizes. a people can And like, world we what travelers. as don't I brand everything the and that is option We'll quite and important the But see option find structural strong that been definitely organic say, its an there's yes, great we're So, have

mix see continue but doubt there it you as healthier, a a now. and but other So no a I And, we makes as now, right think the players we is terrific little grow to mix may right we know, change --- grow that get bit, terrific.

Lee Horowitz

Great. question. taking Thanks for

Eric Hart

Thank you.

Operator

Jefferies. question And the Brent of with comes your line next from Thill

open. is line Your

Unidentified Analyst

us Thanks of other Great. think an XX. which half back like my This completed just might one James but what Can modeling for you the is on I how that should just for year, to Thanks. CapEx we on want spend capex headquarters about perspective. give is first and I early know for by had Brent. have questions. spend the XXXX taking your like looking half a know and Eric. update what then your for be of next should from look you

Eric Hart

Yes.

to last of half we the on million. restarted million the been was was XXX gave $XXX an quarter excluding for headquarters, update year, headquarters million again, presume saw that headquarters, you we of CapEx million. Our XXX that's first and that XX Of

actions moderate should center got cloud. center of that that highlight cap we've CapEx the program give most to labor, by components well. is you the uncapitalized that date. some And up tech then we captures on we Just move there into labor, as We've center should data labor more some improvement and in given majority That to cost capitalized to essentially the to are the it. vast level. of see just data doing -- employees that's is essentially developments. the data where taken the And the continue

come XXXX. magnitude it should would more And less So gives parts. all what will, then that get with we We that and you were conversion. off, ultimately should than see numbers, be should CapEx go efficient cash too of better as moving it for specific rolls hopefully headquarters order as we less more say, to. into various should efficient. then in I much we an on And you not in should the require if time, XXXX, But we you that over is XXXX, XXXX, giving

Unidentified Analyst

you Very so helpful. much. Thank

Eric Hart

Thank you.

Operator

next your with Deutsche line Chris question of comes And from Kuntarich the Bank.

open. line Your is

Chris Kuntarich

vacation the what's in and parsing rental rental side, on of the hotel. just out Maybe just going kind difference of on vacation start

VRVO I growing. was think that you has mentioned

maybe From two? going seen first, in on new bookings since you cancellation just So there have the difference July. guys of sort plateau and the the any in Is

Eric Hart

consistent. no say slower longer is hotels slower how anything like in remained say compression was rental pace broadly, Clearly for seen. for have you prior We is . see hotel a rates cetera, to won't taken June et and rental recovery cancellation have would some but has noteworthy during demand recovery. hotel years periods, -- vacation side we've these except world there's we We cancellations stable cancellation not exceed stayed July, Yes. there's seen again which the I is -- uptick trajectory to to, its on cancellation would know, just I anything on I a great and that saw last vacation think of this very pretty to between performing on haven't that in broadly, big been a the noteworthy. And strong.

ground of is, easing then different that real shouldn't compression in I hotel on early basis. more where that say. leaner were vacation space see that hotels period making the of have up the So been And bookings slowly the July. the And rental that would compression a into

Chris Kuntarich

a And it. Got follow-up. just maybe

should As as And curious that the it below further level XXXX I think I to been cloud you relates previously into year. up you was cost, be got XXXX. guys called

that? bit on any Thanks. point put a can of final you If

Eric Hart

Yes.

I think the the same. remains story

to they story. We the teams that of unite, the right computer. may ability have recap all to full a singly not do side Just and of those our have for cloud optimize the brought

So we've to able and been really that the accelerate push in environment. COVID

we So be some as bear by that do and our overly over long cetera. we term down. us to think it vendors fruit well. term gave that short expected benefits the XXXX Better But economics over with etc

a it. to a It year. have does when volumes component However start variable obviously

back But a volume method as grow the I as comes or you would well. still of long we think before so, expect story And to tell sort that magnitude holds. that

Chris Kuntarich

Thanks. it. Got

Operator

line Wells with And of next line from Fargo. question comes And Fitzgerald Brian open. is your your the

Brian Fitzgerald

Thanks, with you durations and longer Is internationally. travel Is guys. less to shorter that traveling But We coming want seeing consumers to change accommodations home, trips. expensive ask just days? local sort see versus think more of valid those you hypothesis in replacing now Generally, international are on. I dynamics close and you're when when farther that back, valid? old travel

propensity spend to trading spend You as see versus kind Anything you what tell the verse normally starts local consumers us longer about they International? up would on first staying of durations. Thanks. could

Peter Kern

Eric, you I'm whack a I'll to first. take want. if at going

Eric Hart

Yes, sure.

Peter Kern

things. lot But I that would There's few question. in say going on a a

et and the is. pricing longer. in duration have rental have able I very as what to and been long We evident pay have, business. People vacation people compressed seen staying suppliers that they're to markets and mentioned, propensity in cetera And push charge they

do not robust. you as that and less on that, been has hotel from ADR to Why pressure I about to There hotels for been discounting? inroads propensity those look but standpoint has keep more comfort think up space. [ph] driving so pricing anything in find broadly go think an if more you there's and the And

what demand So kind exactly of expect supply its standpoint. and you'd a from

of on But has there. we've terms Eric don't non-local dramatic data in versus good any think seen the duration I know, hotel think and don't there. local I if change side, I

I yes, been think And trip terms wallet is again, I than is share opportunity. just everyone's think domestic that's smaller international in be similar. to of But finding trip. an of their a total tend this

on is is though yet air far I gotten are airplane. know, suffering than But lodging, even sick as more less they've something people So of still course, an comfortable as air said nobody's with.

the local filling get up hotels sort finding driving -- is are And to holes ways domestic domestic so, other but and people -- slowly And to of international. and think I things. of

a just think I really volume it's game. So

is and function can think would a a push people, compressed somewhere there of really question demand Florida I if ADR And not homes on and a the a pricing. you like And where aren't coast, which if maybe York the expect in New its interested market exactly going just you are it, you're do. is as now. enough of you're you supply overall right of acting and hotel tourists a lot lot and

you to You compete, have compete on price. try and therefore to

Eric Hart

Yes.

covered for and it. I'd still the see. too to you've really careful the of can travel travel. much trends think you'd It's be people I they that on extrapolating solving any want

fast-forward it a think a alternative getting brand bit Vrbo lot real that just of the the of the a people least I can we're those experience. is to approach in in it's that's people -- think my that mentioned a relationship individuals. and and I take exposure, and positive to are got that, to exposed a that with and going accommodations Peter are great though what earlier, And we've having build conversations anecdotally. At I

perspective. So that very think -- from that a outcome it's Vrbo positive I for

Peter Kern

triple just And extrapolate would Don't apologies, from of this. too I much down. any

some I portends don't people unique about a difference they really structural do. things. about hotels what moment. don't the It think it's And to this is but before, to they're in about their how comfort open make and more we're shift other and their things to think And in seeing things. But or this it think a I safety before. I open I just them said expose just think or able may It's any them people's moment. views may weren't

Brian Fitzgerald

you, Thank you, Thank Peter. Eric.

Eric Hart

Yep. Thank you.

Operator

now will We Peter to back over the Kern. call CEO

Peter Kern

you Okay. Thank internal who doing. commend circumstances you our where We're about and is good everything from your everybody's in amazing impossible business. want done we the home have questions. work on teams I perspective a we're I for I the good really reiterate. everybody gave feeling to work working hope just harder.

your So you them questions. can't thank enough. all of all And appreciate

talking to to As numbers and as we in And come we of doing you'll back. hard forward quarter. been look see we said, hope all benefit this I Eric work another you the that the

everybody your Take safe. So you time. thank And stay for care.

Operator

today's concludes This call.

may disconnect. now You

Expedia (EXPE) 30 Jul 202020 Q2 Earnings call transcript