HomeAway, Inc. Reports Second Quarter 2011 Financial Results
-- Total revenue of $58.7 million, up 40.9% year-over-year
-- Listing revenue of $51.0 million, up 33.9% year-over-year
-- Adjusted EBITDA of $18.2 million, up 45.5% year-over-year
-- TTM Free Cash Flow generation of $56.1 million, up 40.7% year-over-year
HomeAway, Inc. (NASDAQ:AWAY - News), the world's largest online marketplace for the vacation rental industry, today reported its financial results for the second quarter ended June 30, 2011.
Management Commentary
"HomeAway® delivered strong, profitable growth in the second quarter, highlighting the reach and scalability of our global online vacation rentals marketplace," says Brian Sharples, Chief Executive Officer of HomeAway. "During the quarter, we continued to invest in our network of online vacation rental listing websites through new product launches, ongoing network improvements and strategic acquisitions. As a result, we increased the reach of our platform, growing our paid listings by 19.3% year-over-year, while concurrently improving the monetization of our platform, as evidenced by the continued growth in our revenue per listing. Looking beyond the first half of 2011, we expect to build upon our market-leading position and brand excellence by delivering an unparalleled user experience for travelers and property owners and managers."
Second Quarter 2011 Financial Highlights
Total revenue increased 40.9% to $58.7 million from $41.6 million in the second quarter of 2010. Growth in total revenue was driven primarily by continued strength in renewal rates, coupled with increases in new listings and revenue per listing.
Listing revenue increased 33.9% to $51.0 million from $38.1 million in the second quarter of 2010.
Adjusted EBITDA increased 45.5% to $18.2 million from $12.5 million in the second quarter of 2010. For the second quarter of 2011, Adjusted EBITDA, as a percentage of revenue, was 31.0%, up from 30.0% for the second quarter of 2010.
Free cash flow increased 23.1% to $16.9 million from $13.7 million in the second quarter of 2010. On a trailing twelve month basis, free cash flow increased 40.7% to $56.1 million from $39.9 million in the comparable trailing twelve month period.
Net income was $2.2 million compared to net income of $14.9 million for the second quarter of 2010. Net income in the second quarter of 2010 was positively impacted by the release of a deferred tax asset valuation allowance, resulting in a one-time benefit of $13.4 million.
Net loss attributable to common stockholders was $6.7 million, or ($0.17) per diluted share, which was inclusive of $8.8 million of cumulative preferred stock dividends and discount accretion. This is compared to net income attributable to common stockholders in the second quarter of 2010 of $3.2 million, or $0.08 per diluted share, which was inclusive of $11.7 million of cumulative preferred stock dividends and discount accretion.
Cash and short-term investments as of June 30, 2011 were $111.6 million. Cash and short-term investments exclude net cash received from HomeAway's initial public offering, which was completed on July 5, 2011, after the end of the second quarter.
Second Quarter 2011 Business Highlights
Expansion of HomeAway's global network in the Asia-Pacific market through the acquisition of realholidays.com.au in Australia and addition of relevant global inventory of vacation listings from other HomeAway websites resulting in the largest vacation rental website in Australia.
Launch of the Reservation Manager product on two of HomeAway's leading websites, HomeAway.com and VRBO.com, aimed at streamlining the inquiry and payments processes, allowing property owners and managers to accept credit cards and eChecks through a secure and automated process and permitting travelers the convenience of paying online from a trusted site.
Transition to auto-renewal of subscriptions on HomeAway.com and VRBO.com websites, anticipated to maintain high and predictable renewal rates.
Improvements in social media features, including the introduction of the Traveler Favorite feature on HomeAway.com, which allows travelers to maintain an account on HomeAway.com with an option to login using Facebook Connect, where they can save, categorize and view properties previously viewed or liked during their travel-planning process. In addition, through HomeAway's acquisition of Second Porch in the second quarter, HomeAway provided its property owners and managers the ability to market vacation rentals to travelers through their social networks on Facebook.
Expansion of the mobile platform with the initial release of the HomeAway iPad application.
Key Business Metrics
Paid listings were 626,661, compared to 525,187 at the end of the second quarter of 2010 and 575,166 at the end of the first quarter of 2011. Paid listings increased 19.3% year-over-year, or 15.5% when excluding the impact of listings acquired as a result of the acquisition of realholidays.com.au completed in the second quarter of 2011.
Average revenue per listing was $339, compared to $298 during the second quarter of 2010 and $328 during the first quarter of 2011.
Renewal rate was 76.2%, compared to 75.1% at the end of the second quarter of 2010 and 76.1% at the end of the first quarter of 2011.
Historical Quarterly Business Metrics
|
|
3/31/10 |
6/30/10 |
9/30/10 |
12/31/10 |
3/31/11 |
6/30/11 |
|
Average Revenue Per Listing |
$290 |
$298 |
$314 |
$311 |
$328 |
$339 |
|
Ending Paid Listings |
498,895 |
525,187 |
511,667 |
527,535 |
575,166 |
626,661 |
Initial Public Offering
Subsequent to the close of its second quarter on June 30, 2011, on July 5, 2011, HomeAway completed its initial public offering of 9,200,000 shares of common stock, at $27.00 per share, before underwriting discounts and commissions. The company sold 5,931,335 shares and existing stockholders sold an aggregate of 3,268,665 shares, including 1,200,000 shares as a result of the underwriters' exercise of their over-allotment option to purchase additional shares. The initial public offering generated net proceeds to the company of approximately $148.9 million, after deducting underwriting discounts and estimated offering expenses payable by HomeAway. HomeAway did not receive any proceeds from the sale of shares by the selling stockholders. With the proceeds of the offering, the company redeemed its outstanding shares of Series A and B preferred stock as well as paid in full all accrued but unpaid dividends on its outstanding shares of Series C preferred stock, which totaled $97.9 million.
Sharples continues, "This is an exciting time for HomeAway and our initial public offering marks a significant milestone in our history. Despite our rapid growth to-date, we are most excited about the opportunities that lie ahead. With our global online platform, and our belief that consumer awareness of vacation rentals is on the rise, we are poised to capture an increasing share of the large and highly fragmented vacation rental marketplace as it transitions and consolidates online."
Business Outlook
HomeAway management currently expects to achieve the following results for its third quarter ended September 30, 2011 and the year ended December 31, 2011, as follows:
Third Quarter 2011
Total revenue is expected to be in the range of $57.0 to $58.0 million.
Adjusted EBITDA is expected to be in the range of $16.0 to $17.0 million.
Full Year 2011
Total revenue is expected to be in the range of $224.0 to $226.0 million.
Adjusted EBITDA is expected to be in the range of $62.0 to $63.0 million.
The above statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Information about HomeAway's use of non-GAAP financial measures and key business metrics is provided below under the captions "Use of Non-GAAP Financial Measures" and "Use of Key Business Metrics".
About HomeAway
Located in Austin, Texas, HomeAway, Inc. operates the world's largest online marketplace for the vacation rental industry. The HomeAway marketplace brings together millions of travelers seeking vacation rentals online with hundreds of thousands of owners and managers of vacation rental properties located in over 145 countries around the world. HomeAway's websites include HomeAway.com, VRBO.com and VacationRentals.com in the United States; HomeAway.co.uk and OwnersDirect.co.uk in the United Kingdom; HomeAway.de in Germany; Abritel.fr and Homelidays.com in France; HomeAway.es in Spain; AlugueTemporada.com.br in Brazil and HomeAway.com.au in Australia. In addition, HomeAway operates BedandBreakfast.com, a comprehensive global site for finding bed-and-breakfast properties, providing travelers with another source for unique lodging alternatives to chain hotels.
