Expedia Inc. (NASDAQ:EXPE) Q4 2014 Earnings Conference Call - Final Transcript
Feb 05, 2015 • 04:30 pm ET
Good day and welcome to the Expedia Fourth Quarter 2014 Earnings Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Alan Pickerill. Please go ahead, sir.
Thank you very much. Good afternoon, everybody. Welcome to Expedia Inc.'s financial results conference call for the fourth quarter and full year ended December 31, 2014. I'm pleased to be joined on the call today by Dara Khosrowshahi, Expedia's CEO and President; and Mark Okerstrom, our CFO and EVP of Operations. The following discussion, including responses to your questions, reflects management's views as of today, February 5, 2015 only. We do not undertake any obligation to update or revise this information.
(Forward-looking Cautionary Statements)
Finally, unless otherwise stated, all references to cost of revenue, selling and marketing expense, general and administrative expense and technology and content expense, exclude stock-based compensation and depreciation expense and all comparisons on this call will be against our results for the comparable period of 2013.
With that, I'll turn the call over to Dara.
Thanks, Alan. 2014 was a terrific year for Expedia, Inc. We delivered healthy top line growth with gross bookings up 28% and revenue up 21% year-on-year. Room nights grew 26% for the year, air tickets were up 28% and we grew our ad and media business including, Trivago, by 50%.
At the same time, we made significant investments in areas that will position us for long-term growth, ramping up our hotel acquisition efforts, scaling our global technology platforms, and making key investments to drive growth at Trivago. In total, we were able to balance our near-term profit objectives and long-term investment priorities and deliver full-year adjusted EBITDA growth of 17%.
As we move into 2015, we like to talk to you about four distinct businesses in our portfolio: the core OTA group, eLong, Trivago and Egencia, each of which has its own market opportunity, good drivers, competitive dynamics and ultimately value creation potential.
Our core OTA group is led by our two flagship global brands, brand Expedia and Hotels.com, and also includes regional or segment brand leaders such as Hotwire, Venere and CarRentals.com in our affiliate business and now Travelocity and Wotif.
Over the past several years, we've made significant investments and improved our execution across our online marketing platforms, customer facing technology and supply facing platforms. And while the work is never done, this business is performing well and we are seeing the benefits show up in our operating results.
On a combine basis, our core OTA business generated approximately $43 billion of gross bookings in 2014, up about 30% year-on-year. This growth is significantly faster than the industry and we believe we are gaining market share in every major geography. Additionally, we are finding key commercial deals and acquisitions that enable us to leverage our existing technology and operations infrastructure to amplify our growth, such as the deal to power and now own Travelocity, and the acquisition of Wotif.
Our platforms and operational processes now