Increased travel demand and deployment of AI improved Expedia's Q1 revenues.
Expedia experienced revenues of $2.67 billion.
Its stock went up by 6.26% in after-hours trade.
Online travel company Expedia has announced its financial results for the first quarter.
Its excellent performance has been credited to heightened travel demand incorporating AI — via ChatGPT — and machine learning into its services.
Expedia delivered revenues amounting to $2.67 billion, rising by 18% year-on-year. This amount reportedly surpassed estimates from Wall Street.
To fully grasp what impact AI supposedly had on its fortunes, we need to clarify how its first quarter went and the numbers behind it. Let's dive deep;
Its $2.67 billion revenue — although less than the $2.69 billion forecasted by seven analysts from Zacks Investment Research — was an 18% increase from the previous one.
However, the company missed profit estimates, recording an adjusted net loss per share of $0.20.
Concurrently, the company reduced losses, delivering an adjusted loss per share of $0.20, up from the loss of $0.47 in the previous year's quarter.
This, however, didn't reach the analysts' earning estimate of $0.02 per share.
Peter Kern, the CEO, attributed its gains to some external factors, mentioning increased demand.
"Q1 saw strong travel demand driven by increasing international travel, major city travel, and the reopening in Asia."
Expedia's growth in the B2B market was also due to a widening partner base and development from their existing partners.
Furthermore, technology such as artificial intelligence (AI) and machine learning (ML) made consumers' search experiences easy. As a result, it further aided the company's overall performance.
The following is a list of Q1 highlights:
Total gross bookings were $29.4 billion, a gain of 20% compared to 2022.
The lodging bookings hit record levels at $21.1 billion.
The highest ever-first-quarter revenue was $2.7 billion, an increase of 18% compared to 2022.
B2B revenue was $668 million, an improvement of 55% compared to 2022.
Record net cash delivered by operating activities of $3.2 billion and free cash flow of $2.9 billion.
Repurchased at an accelerated pace of $600 million or approximately 6.0 million shares year-to-date.
All these improved Expedia's stock (EXPE) by 6% in after-hours trading.
In Q3, Expedia reported adjusted earnings of $4.05 per share, surpassing the Zacks Consensus Estimate by 4.1%. This figure represents a 15% increase on a year-over-year basis.
Reportedly, revenues of $3.62 billion rose 22% year over year, surpassing the Zacks Consensus Estimate of $3.55 billion.
This year-over-year revenue growth was mainly driven by a strong performance of all the business lines owing to solid travel demand during Q3.
In addition, strong momentum in lodging and air bookings also contributed.
Additionally, strong growth in 'booked room nights' and 'stayed room nights' received positive responses.
It is anticipated that EXPE will necessitate strong demand and growth initiatives to support its financial performance in 2023.
Yet, the moderation in its growth in the short term ensures analysts stay cautiously optimistic about Expedia.
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