Expedia
Seattle, Washington, United States
Industry: Technology/Travel
Region: US 🇺🇸
Year Founded: 1996
IPO Date: 15-12-1999
Market Cap: $21.26 billion (2021)
Number of Employees: Approx. 25,400 (2021)
Revenue: $5.72 billion (2020)
Net Income: -$1.58 billion (2020)
Expedia Group, Inc.
Expedia Group IPO
Expedia went public on December 21, 1999. The company’s initial public offering (IPO) was a significant milestone in its history, as it marked its transition from being a division of Microsoft Corporation to an independent publicly traded entity.
At the time of the IPO, Expedia offered shares on the NASDAQ stock exchange under the ticker symbol “EXPE.” The IPO provided Expedia with the necessary capital to further expand its operations and solidify its position as a leading online travel company.
Expedia IPO Prospectus
A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. You can find Expedia’s Prospectus here.
Company Overview & History
Expedia is one of the world’s leading online travel companies, providing a wide range of travel products and services to millions of customers globally. The company was founded in 1996 as a division of Microsoft Corporation and was later spun off as a separate entity through its IPO in 1999. Expedia operates a diverse portfolio of brands, including Expedia.com, Hotels.com, Orbitz, Travelocity, and many others, catering to different segments of the travel market.
Over the years, Expedia has grown through both organic expansion and strategic acquisitions. The company has established itself as a comprehensive travel platform, offering a broad selection of flights, hotels, vacation packages, car rentals, and other travel-related services. Expedia’s user-friendly website and mobile apps provide customers with a convenient way to plan and book their travel arrangements, making it a popular choice among travelers worldwide.
Financial Performance
| Year | Revenue($B) | Net Income($B) | EBITDA($B) | Operational Cash Flow($B) |
|---|---|---|---|---|
| 2020 | 5.2 | -2.7 | -0.8 | 0.9 |
| 2019 | 12.1 | 0.5 | 2.0 | 2.1 |
| 2018 | 11.2 | 0.4 | 1.8 | 1.8 |
| 2017 | 10.1 | 0.4 | 1.6 | 1.6 |
| 2016 | 8.8 | 0.3 | 1.3 | 1.3 |
| 2015 | 6.7 | 0.8 | 1.1 | 1.1 |
| 2014 | 5.8 | 0.4 | 1.0 | 0.9 |
| 2013 | 4.8 | 0.3 | 0.9 | 0.8 |
| 2012 | 4.0 | 0.3 | 0.8 | 0.7 |
| 2011 | 3.4 | 0.5 | 0.8 | 0.7 |
| 2010 | 3.3 | 0.4 | 0.7 | 0.7 |
| 2009 | 2.9 | 0.3 | 0.6 | 0.6 |
| 2008 | 3.0 | 0.3 | 0.6 | 0.6 |
| 2007 | 2.6 | 0.2 | 0.5 | 0.5 |
| 2006 | 2.1 | 0.2 | 0.4 | 0.4 |
| 2005 | 1.9 | 0.2 | 0.4 | 0.4 |
Business Model
Expedia operates primarily as an online travel agency (OTA), connecting travelers with suppliers of travel products and services. The company generates revenue through a combination of booking fees, commissions, advertising, and other service fees. Expedia’s business model revolves around offering travelers a one-stop platform where they can research, compare, and book various travel options.
Expedia’s extensive network of suppliers includes airlines, hotels, car rental companies, cruise lines, and other travel providers. The company leverages its scale and bargaining power to negotiate favorable pricing and exclusive deals with these suppliers, offering customers competitive prices and a wide selection of travel options. Additionally, Expedia generates advertising revenue by providing marketing solutions to travel suppliers, allowing them to reach a targeted audience of travelers.
Market Cap Over the Years
| Year | Market Cap($B) |
|---|---|
| 2020 | 1,580 |
| 2019 | 920 |
| 2018 | 730 |
| 2017 | 566 |
| 2016 | 355 |
| 2015 | 316 |
| 2014 | 144 |
| 2013 | 182 |
| 2012 | 118 |
| 2011 | 80 |
| 2010 | 81 |
| 2009 | 59 |
| 2008 | 26 |
| 2007 | 37 |
| 2006 | 17 |
| 2005 | 19 |
| 2004 | 18 |
| 2003 | 21 |
| 2002 | 7 |
| 2001 | 6 |
| 2000 | 20 |
| 1999 | 30 |
| 1998 | 2 |
| 1997 | 0.4 |
Risk Factors
As with any company operating in the travel industry, Expedia faces several risk factors that could impact its business. These risks include:
- Economic conditions: Expedia’s financial performance is influenced by macroeconomic factors such as recessions, currency fluctuations, and changes in consumer spending patterns. Economic downturns can reduce travel demand and affect the company’s revenue and profitability.
- Competitive landscape: The online travel industry is highly competitive, with numerous companies vying for market share. Expedia faces competition from both traditional travel agencies and other online travel platforms, which could impact its ability to attract and retain customers.
- Technological changes: Rapid advancements in technology and changes in consumer behavior can impact Expedia’s business. The company must continually invest in innovative technology solutions and adapt its services to meet evolving customer expectations.
- Regulatory environment: Expedia operates in multiple jurisdictions and is subject to various laws and regulations related to data privacy, consumer protection, taxation, and antitrust. Changes in these regulations could increase compliance costs or restrict the company’s operations.
Market Opportunity
The travel industry presents significant market opportunities for Expedia. As more people embrace digital platforms for travel planning and booking, the online travel market continues to grow. Expedia benefits from several trends that contribute to this market opportunity, including:
- Increasing internet penetration: As internet access becomes more widespread, a larger number of people have the ability to research and book travel online, expanding the potential customer base for Expedia.
- Growing middle class and disposable income: Rising incomes in emerging markets and expanding middle-class populations worldwide have led to increased discretionary spending on travel. Expedia can tap into this growing market segment.
- Mobile technology adoption: The proliferation of smartphones and the convenience of mobile apps have made it easier for travelers to book trips on the go. Expedia’s mobile offerings allow it to capture a share of the mobile travel market.
Expedia continues to innovate and invest in its technology and marketing strategies to capitalize on these market opportunities and maintain its position as a leading player in the online travel industry.
Competitors
- Booking Holdings (parent company of Booking.com, Priceline, Kayak)
- Airbnb
- Trip.com Group (formerly Ctrip)
- Google Travel
- Agoda
- Hopper
- TripAdvisor
- Trivago
Key/Fun Company Facts
- Expedia was originally incubated within Microsoft as a small team focused on travel software development.
- The company’s name, Expedia, was derived from “exploration” and “speed.”
- Expedia’s headquarters is located in Seattle, Washington, United States.
- Expedia has a strong corporate culture that values innovation, collaboration, and customer-centricity.
- The company has a significant presence in international markets, serving customers from around the world.
- Expedia actively supports sustainable travel practices and initiatives, promoting responsible tourism and environmental conservation.