EXPE - Earnings call transcript Q1 2024

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Operator

Good day, everyone, and welcome to the Expedia Group Q1 2024 Financial Results Teleconference. My name is Lauren, and I will be the operator for today's call. [Operator Instructions]

For opening remarks, I will turn the call over to SVP, Corporate Development, Strategy and Investor Relations, Harshit Vaish. Please go ahead.

Harshit Vaish

to First welcome Call. XXXX and afternoon, Expedia Quarter Group's Earnings Good incoming pleased today's CFO, Kern; our on be Julie Ariane by and I'm joined Peter call to our CEO, Whalen; CEO, Gorin. our

measures. measures expenses commentary otherwise our stated, And to include certain non-GAAP reminder, a exclude in Reconciliations comparable our today these GAAP As of most unless to stock-based included references compensation. any will to reference non-GAAP are the release. measures earnings

in call, current which making statements subject be will assumptions, that the to Actual uncertainties with or statements. recent These other undertake statements our We XX-Q and are results do SEC. which law, and predictions, forward-looking update the XX-K, these most other forward-looking discussed predict. are during about materially could statements also due and projections are expectations are events. to Forms filings future differ as responsibility to not factors risks difficult based we to on and required Except any by call, during this

release, filings turn Relations can Investor replay found a And be SEC to and of our call at over Peter. that, call today's let on the ir.expediagroup.com. with me website earnings Our

Peter Kern

all you thank us and joining afternoon, Good today. for

a call. to some thoughts this after now, be As know of for share forward. to and time ambition sense you get her her company to all going by we Julie be reins Ariane, you my I'm last over will for the earnings excited handing have can the reserved so

and on to company team she want say everything this and several over our forward months a can these last have built over to of just few have last bring and years. make to closely hitch, she working excited take and see we accelerate these truly Ariane sure top without I'm how I been I

now is the geo the major for the travel a growing prices pandemic-driven recovery. and markets, pressure past relative for but closing North in that normalized quarter, for general but to business. we geography lodging, under we healthy air international the globally. environment Adjusting for mix, remains continued product saw gap car more market up but the America and we're slowest are largely held in As

our to our a decision quarter our actions EBITDA gross the our first as bookings. EBITDA backdrop, guidance but direct this to marketing. will the revenue business, results business, with less performance met beat, performance invest in revenue details, from 'XX pricing and of Against strong a and Julie benefited and get into opposed in our mix of but for advertising more robust

continued Unfortunately, gross Vrbo, our its only migration. for bookings, ramp-up our for with As BXB business strong that our line excluding in its for up expectations. a slower-than-expected made and BXC Vrbo post partly performance, technical was business,

Vrbo last back had we been the of slower-than-expected half while As on marketing our we second ramping quarter, we pulled and we recovery. spend year last product seen a improving, we have has And went have the that been while through discussed in migration.

lower be in in Based on anticipated we what for our than the business growth 'XX. BXC so had to this expect far and trends we overall QX, initially

full in relatively We range line high a with growth, year. year are, therefore, our single-digit with top lowering mid- guidance line margins of last to to

reignite future driven in those the the will invest to we velocity to across expect to BXC 'XX the markets conversion by to and see up being continued us early still best test with and rollouts. our to indicator we improvement international years higher that, gains growth flywheels come. set Behind We broad in for our seen growth business, in Vrbo have continue

faith new consistently momentum every is our all have team's what have day, capabilities, are in say ability optimize of wanting not yet full extract business potential to we tremendous pleased the I'm improving the built. lines, to all, our to in all while back in and of All I that we

to who journey. at owe are profound realized, the that, from by my shareholders, also expressing I'm on over journey. to the and and sometimes most our this all of There's very this community years, of to us been the investor often close been understanding of this you. teams gratitude. transformation transformation and bumpy the all the a existing companies takes commitment covering all of When don't painful, will to just patience Expedia it appreciative working has fully come a I returns pleasure a throughout engagement of I constructive with for determined we for this will and people us, this analysts with work broader journey. great reason along scale, our all thank have a With appreciation bunch undertake our their multiyear, want debt along dedication you, it

to with So Julie. over that,

Julie Whalen

and everyone. afternoon, Peter, you, Thank good

up ongoing primarily Let driven was bookings, me last first $XX.X lodging X% start were with by X%, Total Growth XX%. than partially the for our our longer key to recover. by of fully expected year. gross growing business that, billion metrics quarter. by offset which was led is gross grew in versus Vrbo bookings strong the the taking softness total growth hotel business hotel This while improving,

Brand and which revenue, bookings, X% revenue from Easter advertising by points over stays grew driven was shift. margins, year, driven our geo last during pull-in The Revenue increased of led strength basis product and gross but XX businesses. BXB, $X.X QX of [ a which ] revenue Expedia billion revenue higher and by quarter, not the the in the contributes versus mix advertising to increased by

million Cost $XX with a approximately of as our of lower combined XXX basis points the revenue XX% of which, leverage year, for strong year-over-year. revenue versus million or last was drove growth, percentage quarter and $XXX sales

are ongoing delivering We pleased our to initiatives transactional see efficiencies.

to bookings our which our expense first growth business as commissions and of as billion, last due XX% the up partners quarter sales of in and primarily Sales in was with the quarter marketing versus percentage BXB our growth deleveraged strong year. result to XX%. Direct $X.X this marketing of a a was gross

expensive and As business. line and previously, marketing commissions BXB are stated percentage partners BXC direct have our revenue are to as our more sales of we a than our paid in

because stayed immediate. agreed generally ] are on are and contractually returns [ basis more to guaranteed percentages, upon However, they a paid the

we our some In growth this business, we drive global one this our to also marketing key expansion, drive and year. our increased growth market deleverage our BXC strategic business initiatives of saw into our Vrbo quarter back investments to as improving reinvested

were We our operations. product our further migration, And below boulders P&L. now expenses across platform of tech $XXX last particularly costs year $XX million XX leveraging of revenue the growth, driving efficiencies we able and that done in with million, remain to committed increase to or were drive points. Overhead our versus basis are an we X%, major our

end, we February, that year. actions To cost that announced will in this through approximately impact employees X,XXX

capitalized these unlock sales basis an on cost across labor, actions will overhead that savings and costs. annualized substantial expect We of

And more lower growth. P&L as points the revenue quarter we all sales, we an the that of than million, first EBITDA marketing year-over-year, EBITDA expected of future $XXX which of was year-over-year. result offset a XX% over margin of up with along drive leverage delivered This the of to and to cost given our of investments than higher these provides, which both with delivered XXX higher basis factors, was expanding strong X.X%,

benefited pricing invest note It from a to marketing. in is that in direct more made the as additional actions opposed also decision EBITDA also These stay we are to P&L when actions pricing the reflected important to occurs.

stays when come the impact these will future contra As quarters in. instead a revenue as investments result,

compensation. Starting the this quarter, in depreciation are addition basis versus we XX negative which $XX last basis providing as million and year. or of of is includes impact of driven XXX stock-based compared by compensation, X.X%, was to to negative a around the amortization. points quarter, points approximately The disclosure In additional performance, with margin improvement EBITDA, from first of leverage EBIT EBITDA expansion million $XX our an additional EBIT stock-based

capital, this quarter lower first free free another bookings, generate includes flow softness flow enabled by to billion. driven merchant growth bookings quarter. changes in The within working at cash with $X.X which Our decline EBITDA associated year-over-year of deferred quarter is the Vrbo in timing cash us primarily robust

$X.X with and of undrawn our credit sheet. of billion our of on the balance Moving by $X.X to unrestricted $X.X liquidity ended of cash line quarter our We revolving balance driven billion, billion. strong

Our debt only level remains at approximately at $X.X billion X.X%. with average an cost

further at ratio a our make leverage of progress X.Xx ratio strong driven reduced continues towards EBITDA target gross our by Xx, Our to gross leverage ongoing growth.

approximately year-to-date. or undervalued enabled to over million position continue repurchased And that not to shares repurchasing long-term stock business. remains performance cash believe of X.X $XXX strong expected Our our the reflect and million shares continue does our with us we

to continue business our $X.X the opportunistically. authorization cash-generating remaining As such, buy stock to repurchase of we utilize billion strong back will and share our our power

Vrbo, so range in bookings As full we and line in growth financial BXC Vrbo given quarter in and trends the outlook, to are continue invest in year drive on lower-than-expected gross guidance the quarter our possible growth in first to lowering marketing far the international particular, seeing the are in while of reflect for our far we the second the top business, outcomes markets. our to as in we

top in our year. mid- with to EBITDA we line the of EBIT growth last margins such, single-digit range with be As high relatively line now will and growth believe in

in the our line mid-single quarter from bookings from reflects digits, In the to expect quarter we gross our sequential to growth investments. the which as second shorter expect marketing a improve term, to acceleration continue we Vrbo top in first deliver

bookings Easter revenue first stays from growth lower quarter the the contra expect actions. arising lower revenue gross and forward pricing first the into We pull first the be the rate quarter, than the of growth quarter, to given in

some our margins second growth, revenue pressure our this last growth, EBIT with year. versus we with expect marketing along and to in investments drive in continued EBITDA quarter And

combined with year relatively outperformance, in be and to above with in the half. quarter first expect our However, slightly line EBIT when to we EBITDA margins first last

opportunity the despite our to that remain we deliver long-term returns. has lower shareholder and the committed growth us transformation given closing, guidance, profitable In to

to let that, call me with the Ariane. turn And over

Ariane Gorin

and joined know working of Peter, and having both and firsthand I've company markets. advertising inventory BXB consistently our Julie, you, recently XX company, our Expedia most us you. learned I last businesses, leadership the double-digit whole X I which for for the for last also XX years led includes our in source delivered seen Europe industry with and your have Thanks, I well. international closely Business. supply years, global our I've so lived thank very growth. And all ago This for over our for years teams opportunity in that for led

few last to work the teams announcement leadership consumer our in strategy in longer-term immediate priority from and and our My CEO getting business with changes loyalty years. business. as to accelerate I've to business. the for undergone February, It's our know extreme is our over program our time detail. our Since how consumer teams in the to sharpen to in growth our technical more migrations transformation changes operate spent

with lot dealt of So turbulence. we've a

While brand, of competitiveness of most we were development the well, our has less our a features, capabilities our our built front impacted very and lot where new and and turn, this, the products. aren't disrupted while brands common was end, least to benefited like which be. migrations, in grown impacted Expedia, them new build we which Hotels.com to like by have from capacity we'd investments some and our Vrbo,

higher want to the more through driving brand products having attach, traffic, Ultimately, is To and our this from down great going come great value to acceleration business, conversion marketing. and expanding we to the focus propositions. and basics: efficient need rates take our increasing on margins consumer we get

running our now of we're AI all and to Our at tests great. to use most allows effectively. innovate this of still across brands, more seeing scale, But platform benefits we're learning all the which of and is us

it trained a gets traveler Vrbo on be And another. smarter because the a between brand on on compared may but tests faster behave our example, differences For scale, differently Expedia. one one to algorithm shopping that of work on recommendation to has on

experiences time. capacity to some moving lost we'll to more have great of our complete making traveler our work While for up and building still development dedicate platform, tech fully we forward,

rebuilding going while than business longer made it's we've take to consumer ahead, our off. the our the benefits come Looking through pay we'd anticipated to somewhat will in see numbers, investments

our tech new to us grow Our foundation a gives platform solid business.

share. to posted strengths opportunity quarter, We're just and have a on. leaders win the also we other BXB and in And still segment another there's big fantastic real to build

of business growing, I advertising Our ahead and lots is differentiated and opportunity here. see big, equally

loved in We brands, market supply into and well-recognized leader have strong as our our and the international relationships And with the is of to travelers. for markets. partners consumer get business great with supply move we're U.S. and traction course, our back we starting

every focused look on invest. know, carefully we're and to we'll continue we you at driving efficiencies, also As dollar

powerful in the I So in have closing, a platform, BXB best brands, and what consumer leading travel. team a great business, we is think

of opportunity ahead. potential, lots do and to couldn't the excited realize have I about to be We work our more

with let And questions. the that, for me call open

Operator

first question from Instructions] Our Sheridan [Operator Goldman from comes Sachs. Eric

Eric Sheridan

Peter, travel Wishing a Vrbo best congrats and for and where how back going think when come just Ariane. of new to back positioning, we the some of you and investments as maybe about it And accelerate role, the you to a accommodation more potentially landscape think leaning specifically? those forward, growth? what competitive on Peter, know shared looking minute compared the about sort that of to moment asset you the is across to can guys normalized improve do you team to Vrbo in for get its lean kind are into behind signals investments to to it's and

Peter Kern

everyone's Eric. in like asked to have And where for specifically questions, in whatever along these Thanks, you Sure. she'd for Ariane I've benefit, addition to her. with chip

really and cetera. space which it are to strong some strong But just being business in we whole in have right geographies et very in and directly are does and our specifically is we the shared markets home with some where And does space, our win accommodations, we on supply, of competitors focused of compete not is compete it way certain brand core cities. which our Vrbo, not some to with the a Vrbo, strong see we in excellent the

our now. is but -- focus may point, always Ariane that for We core focus now. that at remit where could So some expand we that's

and obviously as last as talked on half in is before, we But for strong through the up and spin what impact the lingering down we we products quarter real the had it as we've an of seeing, as to Vrbo in been migration there. wanted year so quarter seeing a As to investment first it again. our product, wasn't the the of into far about we're leaning it's unfortunate important improvement that going flywheel are spend we're get just back sort

flaws to places other not everything lean don't Meta on is in it's just because So much that got go so And as brand it, driven, and into and some to into. we any We've have It's we build that spend back BR marketing it. into. re-spent not see up. ability just be that's ramp got to and taking performance to and time

progress. And very But we hopeful that about continues, product improvement. the the really it feel feel good we about We're obviously. good

on will it driving fast back for spend that's to behind invest improvement, working, how we spending the But the this cetera. it's a how we're to really far, question into a seasonality and of and looking that. what the we're get continue is But growth know we So just year and timing et we're is what's differences, we trajectory. know what

Ariane Gorin

in Expedia alternative just and other would brands, those have we add, do brands those have we brands well. and opportunity after accommodations our again, with an yes, that conviction also deep belief as and market sell we of on Vrbo to also some I Hotels.com, And go so

Operator

Our comes Deutsche Lee Bank. next question from from Horowitz

Lee Horowitz

view that Great. Is your expected previously, for full is across this lines. the any the the all more there centric? full change for business Or of share given your gains guidance outlook largest to really cautious I seemingly Vrbo year year? guess sort

you comfortable ultimately of BXC through the sustain stacking relatedly, there? get year? Is how the your think just acceleration it you're acceleration that doing? things non-Vrbo about it seeing Is And on the then And can the business, that you're the do what's that of balance you the going market? when in

Peter Kern

Yes.

say piece. a and piece So the see let -- can me so were Lee, what Julie Ariane questions, and take X and -- jump crack. you, would sorry non-Vrbo in. Thank then and we in I Vrbo But Vrbo there that

improvements through footing migration best still, the getting went ago, On the a improvements in non-Vrbo -- can. Hcom been a on product we but while we to piece, back making it are we've making the consistently. and

seeing are we product. the improvement So continuous in

from deploy that We are we of seeing products. apps wins areas that whether coming entire platform, or learning much slate can it's machine -- across faster across and the other big the are

conversion getting wins. So product wins. we're getting We're We're wins. getting

gives all us better that's And confidence. and what So leads that of marketing to ultimately more efficient everything conversion, else.

are non-Vrbo we the like but business. that making good faster, progress we would feeling are So everything to on go we

-- question I'm got the first it. part it. to Oh, about you I sorry, Vrbo On it? the gains. I first again? came Lee, Can sorry. share back repeat

other share than across all core gain share North America major focus focus major actually, our seeing in gains virtually the front, business our and Vrbo, all markets. hotel we're On our good markets,

feel So in good we're own good the really about that. and hotel we Vrbo its seeing product gains, business, is quite thing.

look at lodging other both booking accommodations, in both of of which and given obviously we're there. those some we particularly improve you But to the city-centric has on are we up gains So kinds much all our continue making just if when VR don't in in you compete share, hotel all space, Airbnb strong Vrbo other product and in. product. at lines, lodging, really And look again, up,

pay going. good We feel about they're believe And off. products continue those where to we will

Operator

Group. Our Richard question from Societe Clarke next from comes Bernstein Generale

Richard Clarke

you're pivot mentioned more now deciding you Just investment. price to towards

Just loyalty? that Is to marketing? what's Key? that than leading the that overall, wondering, is more decision One that backing going do maybe And just up into to rather

Peter Kern

of bucket jump piece one all before, but to in. as marketing, at capital. things drive look we've we consumer a say, it I all and said are our can take behavior big Ariane I'll just would

marketing, merchandising and pricing that's spend. work, we our it's loyalty direct do, So the sales work it's and

opportunity saw is more out value it basically by what more taking have good drive prices where to vein, into do this just of efficiently. customers So there been way an is to good been the we've there. drive seen more an was opportunity, margins acquire pricing we've returns, we more seeing to and velocity, And opportunity what modify a our

pricing, it's bit towards So a that's a really and we've just little rebalance what done.

Ariane Gorin

said, would to sort we of that of can I forward, buckets And going where to pricing of and And opportunities. all Peter as that. of just marketing about think use see we we invest buckets do add, as loyalty continue we'll those

most teams growth, will invest view is, regardless think which they the order the dialed-in brand a very have So return. of the of international, in where X those whether it's of I it get drive to in what can best

Richard Clarke

Maybe just whether your follow-up Key points going I peers rather program guess, which this is on One maybe more, loyalty into has matching one a program a price-oriented loyalty disproportionately, of program. than

Ariane Gorin

Well, our One member say I tiered discounts. would include part is of does program what Key

if for spend gold member, who members valuable So silver Those to get discounts. better are or those member hotels, discounts. example, when actually a more more a travel more. you'll the to access get are our want you're supplier-funded And who

So supplier-funded Key. a of it's one know you're that I is benefits the but One if of to, program, don't program that's referring what and

Peter Kern

Yes.

think it some that described, what benefits, I to as our X just of of as by think, you've been there's some about provided which clearly Richard, we've more competition. to just to customers Ariane from to tiered give There's our benefit, all get we suppliers seen what akin more our is you, of opportunities. able can it

And I in give things. we then which on Key discounting create activity, We awesome, have benefit to do win shopping the to customers other One to and to them to mentioned also we acquire us Key to give itself, opportunity customers that now, create incentives have and specifically is One allow efficiently. price

pricing well. a that is are core that are as buckets buckets the spend. loyalty really of the those are and the there goes the and through of bit big strong, But still that largest So that

Julie Whalen

any we And going this other we decision of options. at at just were obviously, I what spend. to We on better and we put what that the pricing than a And end get for that's do. we the return. pin made the best what are return going the based to look saw the on at it, the everything day, moment, best is our mean actions

in have but but And so return. to focused because you noise it driving so it's actually P&L situation, the of of the creates is obviously, until what you're best the on, some at the the seeing, stay, a P&L timing bit we're get day, it end impact a that little that's doesn't

Operator

comes Our Trevor Barclays. from next Young from question

Trevor Young

little achieve that Great. to Hotels.com you expand Ariane, where the it to that bit what Can or driving are I a think brand? something about get the excited trip? commented more you'd consumer Is few interconnected it be. isn't opportunities experiences you beyond And you picture, you like on what bigger then next else areas AI with and like that better altogether? experience, of it years? in most a a Is holistic something hope

Ariane Gorin

business Trevor, that question. Okay. whole portfolio. reminding you start run just me the for a by we let Look, you as consumer thank our

And so return. best we invest behind where we see the

it's And brands may was as want not said, versus And in again, it mean by migrations. impacted impacted number we of cases, so it's others. a growing, I be, our by where the some to not was and things. it Hotels.com some most And that

went an the which the first So product had we through its impact on it obviously when was performance. migration,

excited can bigger we've so that change Hotels.com Also the last in and was we leaned impacted. as as international less were returns, And when into the have will of getting for in it brands, for We're in change our product, deliver, in a said, Hotels.com better few was the been I Key with we example, the years there. is Expedia, then about has you very leaning so on second loyalty over international, program. a less One most loyalty Hotels.com, The it's earn. the what true change made program big but the

good great which, number Hotels.com we the lodging in see those into go because international, of Hotels.com. we're Two, going course, as a growth to that, on there. one, path, countries, seeing is our we're of brand really news back gains good is benefits The lead conversion

from international is to benefiting get platform and ambition Hotels.com the growth. think obviously the I So

terms of in are what excited there And I lot get about, of things. a look, just

think that experiences opportunity I going we one move of opportunities than have to AI for our so way with probably platform, personalized especially brands we're our we travelers. have learning, a I with AI, given that all across and faster and ever is to now think, in the platform can bigger deliver

course, about So But us you we're are I BXB. allow tell our excited I'm going excited to us. doing do I'm a advertising, parts is can that of are differentiate that think how I when I about traveler There deliver fundamentally, think we as business. will of that, experiences of technology to lot it's truly personalized. that really And and

Operator

comes next from Melius Our question from Conor Cunningham Research.

Conor Cunningham

how Just to into just it's international level-set as realize you but with any well? the performing that maybe and I next on year for today? in back is a ramp as in results second. Hotels.com, year, implications to the there potential slower look One still Vrbo slower -- that's you the expected this do Key Can early, than really with on

Ariane Gorin

more you So know, across launched happy was repeat last One -- members see the to the more summer, them to I'm it as get have look, brands. we shopping goal our on and Key, and

In year-on-year, that. with And and terms seeing membership we're programs, rates. of on XX% up good growth loyalty really is pleased new we're repeat member our

are redeemed new completely people their comes that Vrbo. it earned XX% when that to actually Key have to we've on had Vrbo, And cross-shopping, is or who who Expedia, of One cash cash on either what Hotels.com seen

from this And it because trips we being think internationally Key of more of really travelers capture are -- be reassures us idea able to sort I to later that program. this So the will of we year. out roll looking in One

Operator

Khan from Our Riley. B. next comes question from Naved

Naved Khan

issues a Maybe bit maybe Vrbo. trying kind questions. [indiscernible]. you are solve little on if to Can the X So of talk just about you

And the around international market. had second question is I

sort you year, markets. from see think dollars when talked those in into new I can you were going ad So markets and of the spending about we those contribution some start Wondering this markets. P&L of kind new to

Peter Kern

Sure.

that. Let me take

issue. for traffic So it's first it's largely all, of a Vrbo, --

it's down as while I last we're which it's through as That we year build going awareness the time. well, spent has was So to as spending product converting and is, migrating, X migration. mentioned, not much while through that effects, not

seeing on Ariane awareness, benefit. well it right? our for stack, winners very won -- because converting now All other we're products, of quickly those very getting mentioned, improving of product Vrbo. rebuilding we're and the are things The the benefits, As that is as is itself many the single have actually

benefit so getting And we're more quickly. more

improve But is XX conversion typically. good itself Vrbo back And every a if X with got Key Ariane said, year, to Key in continues sometimes that. and a travel shape. So don't XX Vrbo, travel in customers once the or We've helping to One years. for as One rebuild traffic. is year They times once, once, months

that which for of time. we flywheel the benefits is key create So Key program, even a One think the and differentiator Vrbo, take longer over accumulate to

traffic just as on back, strides. and and building back general It's not just we're things. we're building had making those We're we awareness into expected. general and solid focused fast So traffic as

we product We've places. the of improved, It's performance in the leaning good large that But in good quite leaning different tried the more think places, numbers. all in And into. back some for seen On now But invest it share. other it's we to we've this into growth in and to North is win ways places long-term brand into returns international think side, have the marketing right why, started international, it's it's meant so we've year. continue we're more contributing. have a to pushed win, as in where the to these we hard markets years Ariane come. and building drive that's succeed, as many see will into to we that pushing we markets back said, more seeing that America just broadly number response. into and We

Julie Whalen

have on double-digit get campaigns, new like did Scandinavia, your launched see to to short-term markets, to really it's there's where from P&L have ones time international build right, is it in and up investment But take an perspective Brazil wins. growth seen to there. our we the because And We we you see period, brands some it in a return. while Peter small going the

already we So in the reflected benefits numbers, flow seeing our [indiscernible] are through. that's

Operator

comes question next Our from TD from Kevin Securities. Kopelman

Jacob Seed

concentration Kevin. there's is how customers This on comment Google, for on how on impact you any know top if on And side, wanted benefits BXB, ] also, few can do there? within have? Jacob [ the many you Ariane, for regulatory I to changes customers BXB positive large and your

Ariane Gorin

Okay.

concentration. I a think hard it to BXB first business little customer was think hear, the -- but question and the about was bit I

obviously, me concentration also disclose But of some take business let about I agencies, a is will some think of of travel for BXB very quite partners, banks, what first. the So tail of example. long of of sort that very large is airlines, our mix one information, we Look, and customers. think a say don't the

would I it's a So business. well-balanced say

the types things but customers, nice it's and with. is of balanced partners BXB not the that's it's One of about of very geographically in what business balanced terms work terms really only of in we

I think part the about was to... changes was oh, this -- what second --

Peter Kern

again? it say Sorry,

Jacob Seed

Yes. regulatory in Google from Any changes, Europe? from benefits the you're seeing

Peter Kern

of Not our business? terms really, core In no. BXC

I think -- yes.

and things still trying funnel to in back. Carousells the I [ ] introduced hotel think They've push things. Google other is some with new

SEO down, much regulators we're where of of to pretty So looking hoping from ways what and have they continue new as push within balance the for doing, we cetera. operate terms traffic et monetize they much they're as to help for and operate how in

impact. no So no, real noticeable

Jacob Seed

on How big more [indiscernible]? traffic. One

Ariane Gorin

hear. to hard Really

Jacob Seed

there on is any -- traffic, commentary you direct any can that? provide On

Peter Kern

think, as basis traffic, provide of I say app. points I'd which of remains been coming don't in app, and commentary pushing how we've through about business we've into recall, our I several years, on that. X/X came much improvement we business you the strong improvement seen XXX in probably -- our the for we from direct think

continues help we're to that we So vein into obviously of One that on future be focused and in something more expect a direct with pushing we're the driving time. to more terms over Obviously, and just traffic. Key, for

into far, things a has driving going over improvement lot so there's So good. but the that been of time,

Operator

next question Ron Josey Citigroup. from from comes Our

Unknown Analyst

launch do Ron. of the of to change to One EasyLab excited Gen way at you maybe guess, and the for to products learnings about? last on expect Can users Robert some point of share travel? What you're the some market search for year? most these for is are you question the AI. what guys you products come following start I This on

Peter Kern

X a experimentation obviously, We've EXPLORE within be cool any steal as days lot and the announcing and of in the all a from or standpoint but won't an company kinds XX Ron. Yes. AI, done thunder, as of efficiency new And our team Thanks, I places. Gen really service, will well things weeks. at in Ariane of lot Conference user-facing customer

coming and of time gives see experiment lot, a because AI to that our in bunch that's space things to are year. and guide is Gen the conversion But going in as its it early you impact going is people we've and it new basically, a learn, still learned the in on goes. else. in terms pretty terms or certainly It's days the modest far use anything approach of as search But good of many how it customers to early to

learning So from a there's I because more There's across of kinds across of much deployed as business. new about machine we've all across all readily more at And mentioned, lot can of a impact scale before, be as driving and of they brands impact, much from wins old-fashioned talked different the it. product. lines lot also

ML but would things experience Ariane we a newest So we're will and having AI, are in coming still and week or really the really coolest, say, consumer behavior and [indiscernible] think good from impact wins, so. I

Ariane Gorin

some Peter development to them we're help teams, what travelers, improve How our our as use AI be our we us? to be said, use commercial better there's advertising experimenting even just brands? with more teams How Gen we to Gen of for for And do to Peter there Yes. to partners. as show customer Our apps their in How to can use share addition it are There's at as things well. do how for said, again, with more doing of with we our pilots we're their use organization. add, conference. do effective? looking support partners lot to effective AI are allow those a work, in they at weeks couple in we're work I that excited a partner inventory or would our in

organization well think I the really travelers every So going as search as internal to part of it's touch how book. and

Operator

Mahaney from next ISI. comes Evercore from Our question Mark

Mark Stephen Mahaney

new questions? reengineering just is, sort you any costs? but cost work, in of X that well First are rethinking terms managing down I paring the Can thoughts be further all on kind or Where may asking. of of ask It structure? you that finished

things products a units, percentage what bundled? an in in while that? wasn't ability And Do of are a to that on cross-sell you've products past. way apps, what mobile services then to you have that secondly, interested And like whether your are particularly AI, really or led a have sold products case about the since think bundled the sold, greater I talked in is travel that particularly update been I'm travel it's to

Julie Whalen

just Mark, that, say thanks we getting cost question. I I'll for the the take question. literally, started. would are

X,XXX had the that. we mean, announcement back impacted in did We're I have an associates. journey February on So about of we where still

of We yet. that all haven't done

the course, see through all of the those EBIT cap But move [indiscernible] P&L, savings to labor. the lines, you billed the of an more You again, and of is of continue cost be capitalized because basis. overhead to in can X on won't within as we of over sales already some forward. in substantial labor X it see amortized even see should years. within it you'll and capitalized annualized hitting And and coming in come, there's within also savings that P&L

looking single said, But I every line think we're even at to as drive Ariane efficiencies.

sort of on go so push we really through few P&L. off the and projects And kicked to a have

to of this systems, incredible drive side lot So opportunity forward. there's of going out deprecate a we obviously, be come of more other opportunity down an [indiscernible] side bring as of to there's we cost the migration think it, the we to going

Ariane Gorin

lean take Expedia comes or a the is, you to part what disclose that second and a is and proposition. bundle. a cross-sell. products like. path, package tell great as air one, we our to and Look, But I of about seeing we would Brand dynamically think And continue to we package what value bundle happy from this of it's packages I'm into from don't business the good really percentage path an with And unique the hotel the our we're value we results ability ticket proposition

doing lot and I've learning, mean, when is you then again is of It what as in that think cross-sell about help of has cross-sell And best has we at a you propose machine attach, thing attach, what around strategies, given Group, know can I true learning there. to which What think I been they they're get as about sort been. what for and what most of understanding know to it Expedia are attach given about plan? in traveler. have with the the one we we can always machine that smarter trip lots us So what our ambitions likely to a and do them, been long next to

Operator

Gawrelski Our next question Wells comes from from Ken Fargo.

Unknown Analyst

business, to rate. how question while It growth Alec the some This lot corporate we for is the a BXB been to rate been whether Asia I grown travel seems exposure transient or of the get on the to than Pacific. a benefits is A faster appreciate it's corporate now. investors has question. like from there's for growth recovery overall about think long-term the Ken.

when I long to over term? medium do those And how guess, so normalize we you think factors, the growth for about BXB

Ariane Gorin

see a everyone not travel. for I sharing projections question. things And thanks our market the that long guess Ken, there's for I remind out there we're huge would how Yes, Look, term. of just we we serves partnership they're We with business We with the they're world. whether a airlines, a lot travel of different whether Walmart. BXB off-line over of types work all banks. Last work year, agencies. launched partners,

certainly few continue -- clip for at a business. say, to has years, just if ambitions very would So the last And for we big fast it growing have been I even that as about in think and investments relationships, in great we assets being in in our our BXB. partner supply, think I leaders continue our teams technology, and really to we've our got

Operator

Jed question from from comes next Oppenheimer. Our Kelly

Jed Kelly

marketing? Great. of sort some can be of head capitalized reinvested much the into Can that versus around the coming recent mechanics How is into you dive reduction? much software count out how of of just

to trending in then your great growth. And North hotel see in you America international? segment, Can about how double-digit to that's relative talk

Julie Whalen

I'll question. Sure. cost take the actions

We broken have line. much how detail in out each is impacting not

labor. in of I they've in our labor, in how see it within of mentioned, improvements, is But capital can much how at of least is with come overhead it A you cost to deduce you kind expenditures the it our improvements, you sales that quarter, significant cap you of As could down. portion see capital can that can due see associated also this that.

it we year, I of think all, there's a want why moving to unpack this didn't the reason lot parts. especially

a that X those across to basis, our savings, guidance, is and which go-forward is is Most on across lines, it implied As hit capital we I partial lines. sales, marketing. within reinvesting be it said, an cost savings. annualized a back some hitting capital it or significant are and taking labor, will a the X asked, labor. on and you going of overhead and And for But into basis, of as piece it's it of of year substantial

Peter Kern

Ariane obviously, exposure as business more in on And of mean, businesses, that the has so just all in things been mentioned, to better It's has to mind. Yes. hotel in couple I'll some of BXB jump a tailwinds, keep segment. our I has international. international, the our

Our and investments have fairly our been business small a that's international doing part of but well, BXC all.

is answer are the the growing in U.S. short because the taking So But share of just is segment we it U.S. tailwinds. U.S. more are hotel the in yes, growing outside we and

we growth, the if obviously love are are are U.S., it it growing doesn't. the but as in share We'd we XX% and growing both But had macro U.S. good. and of tailwinds So more are growing that a in most our focus Asia a bit from other little growing then diversity and places into faster. of share mentioned, And LatAm I geographical benefits BXB markets. and

Operator

next America. from Bank of comes Post Anthony question from Our

Justin Post

more to then in huge working. like of bit during the looked distributed customer want getting apps it pandemic. And little just was I a Obviously, on your surge strategy dive app Vrbo.

repeat of expectations? it -- rates? paid fix the So just kind that? the not or is reactivating plan higher And customers kind to that what's of what's Is your to channel it meeting

trending? can love would help think or own commentary up us second, of I with provide then Vrbo some you people how detail are but down on the coming their whether to core, it's we that. And versus not, that's estimates with any mix

Peter Kern

Well, was well acquisition. help It pandemic you a out We we saw way. can't great customer which are I'll business. talk first. XXXX today. we be great But is, part, the for don't above business the still Vrbo Yes. was bad we to levels huge for splits. with And I'll yes, surge. the clear, beginning as the That We even sit news that the do break about

seen a So the has sustained boost. It boost. has the category

go Vrbo that meant us, meant were our going the just what didn't product, many what not for it And on the changing spend -- get with On went is we're to we think we we think money we've when that migration. while through through we could happy now that. to you Vrbo to I going said forward. go backwards through, as times, have we efficiently

we're customer we winning are -- new investment. push new we So winning with back back as marketing with in customers

But through in America who North fairly bumpy get also demand. gone is flat of have the of in now back VR terms period right customers have migration. may We to

don't driver So of the a there. growth just tailwinds that was again, have we

the Now We believe the we most do great do believe supply. Key it makes we have we have we best product. do One valuable, believe

getting mentioned, attract a into really point, Expedia as pools, the customers to and customers staying them And of have where One us Key, bring benefits within the our of total from we and Ariane and products. a Hotels.com, on of gives bigger humans that base good to in much verbal customers those universe back, really And back not it's customers so Vrbo tool in. only but see

is happy them want it experience to really lot a of putting know now we're we have just past tools we better. now us. product the come the it and where through that be we be. now that we get use. it, making use the We're So product what migration, again sticky And will the and to to we returns will know it, can keep customers when will a to we're it's at But invest behind and place with we

gave we're keep we win got it back. it. So what backdrop, backdrop, -- have to just we're clearly, and we've and to that's investing into up now the some driving that's that and We ground really

Operator

last from comes question Sandler. Champion Our from Piper Tom

Thomas Champion

period. seems on your in full a remains maybe to over it little transition just for you bit the business difficult X or curious and the be about elaborate commentary quarter priorities next margin how a I'm think the Ariane, [indiscernible] Where year year similar count are stack being versus seem would and your will expectations. savings. be to maybe to improving? There's be migrated to a you such head The last a reduction. that more cost tech be going investing margins

Ariane Gorin

me the Look, stepping business quarter say, X, if this on into XX let like Tom. been years, or Thanks, next perspective. even new CEO in I've is for the role a

months and teams over come. with And our will so the listen I learn to

the as in helping prepared and back acceleration teams is have in we remarks, our foundations. to delivering And my set the and that's implied the get guidance. thing of one traffic think conversion said really basics solid I I

if term growth. adapt So are is out helping of places need deliver And team to to that adjust and focus a on and also execution be our there's figuring the of we going really on which it to then deliver there learning to may in short listening the sort part our long-term or acceleration. anything

we that to great lots always think motivated have So obviously, again, here with want fortunate win. I all I really partners of time say, would that's and and to like, the team I'm a

a time to looking months So in of spending to them come. with couple I'm forward

Julie Whalen

up of we're where obviously, spot to to back the leverage. the as And opposed expansion. It's the line, marketing we the in we're on margin really at. of being top function of back still the sales we where to relatively what just of generating year the to last cost in We're on possible outcomes we overhead line leverage, line, still end still generating question, a It's top on then because motivated, with leverage. range end up margins in ramp-up half get going now and function a see

to markets ourselves in obviously reinvigorate room our U.S. that make and expand investments that we need enough our And in to the so make make support give outside initiative to the Vrbo want we to sure to international we to brand, to be growth able

opportunity. so that gives And that us

Operator

concludes today's This call.

now disconnect nice may a Thank You you. your lines. Have day.

Expedia (EXPE) 2 May 242024 Q1 Earnings call transcript