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HomeAway, Inc. Reports Third Quarter 2013 Financial Results

Stocks in this article: AWAY

Total revenue of $90.1 million, up 23.3% year-over-year

Adjusted EBITDA of $29.0 million, up 19.8% year-over-year

TTM Free cash flow generation of $91.5 million, up 16.9% year-over-year

AUSTIN, Texas, Nov. 6, 2013 (GLOBE NEWSWIRE) -- HomeAway, Inc. (Nasdaq:AWAY), the world's leading online marketplace for the vacation rental industry, today reported its financial results for the third quarter ended September 30, 2013.

Management Commentary

"The second half of 2013 is proving to be a very exciting time for HomeAway. In particular, the third quarter marked several advancements in pursuit of accelerating growth in listings and improving competitive positioning," says Brian Sharples, chief executive officer of HomeAway. "At the core of our business, HomeAway aims to be the most efficient online marketing channel for vacation rental owners and managers. With this in mind, we were thrilled to introduce our new pay-per-booking product during the quarter, providing HomeAway the opportunity to appeal to an even wider contingent of property owners and managers seeking to rent vacation properties on a short-term basis, test the marketplace or better manage their cash flows. We are very pleased with the initial response of pay-per-booking, which we expect to meaningfully contribute to revenue growth over the next several years."

Third Quarter 2013 Financial Highlights

  • Total revenue increased 23.3% to $90.1 million from $73.1 million in the third quarter of 2012. On an FX neutral basis, year-over-year revenue growth was 22.0%. Growth in total revenue primarily reflected an increase in average revenue per listing as a result of tiered pricing and bundled product offerings, an increase in new listings and the benefit of ancillary product and service revenue.
  • Listing revenue increased 23.0% to $75.5 million from $61.4 million in the third quarter of 2012. On an FX neutral basis, year-over-year listing revenue growth was 21.5%.
  • Other revenue, which is comprised of ancillary revenue from owners and travelers, advertising, software and other items, increased 24.8% to $14.7 million from $11.7 million in the third quarter of 2012. Growth in other revenue primarily reflected the introduction and enhanced distribution of value-added owner, manager and traveler products.
  • Adjusted EBITDA increased 19.8% to $29.0 million from $24.2 million in the third quarter of 2012. As a percentage of revenue, adjusted EBITDA was 32.2%.
  • Free cash flow decreased 0.7% to $17.0 million from $17.2 million in the third quarter of 2012.
  • Net income attributable to HomeAway was $8.5 million, or $0.10 per diluted share, compared to net income attributable to HomeAway of $5.2 million, or $0.06 per diluted share, in the third quarter of 2012.
  • Non-GAAP net income was $16.7 million, or $0.19 per diluted share, compared to non-GAAP net income of $12.1 million, or $0.14 per diluted share, in the third quarter of 2012.
  • Cash, cash equivalents and short-term investments as of September 30, 2013 were $352.4 million, or approximately $4.00 per diluted share.

Key Business Metrics

  • Paid listings at the end of the third quarter were 773,352, a year-over-year increase of 7.4% from 720,031 at the end of the third quarter of 2012. 
  • Average revenue per listing during the third quarter was $390, a 15.7% increase from $337 during the third quarter of 2012. Excluding the impact of FX and pay-per-lead listings, average revenue per subscription listing increased 15.3% year-over-year.
  • Renewal rate was 71.7% at the end of the third quarter, compared to 74.5% at the end of the third quarter of 2012 and 72.4% at the end of the second quarter of 2013.
  • Visits were 198 million during the third quarter, a year-over-year increase of 27%. During the fourth quarter of 2012, HomeAway began using a different tool for the measurement of visits for certain of its websites. On a comparable basis, HomeAway estimates that visits would have increased by 19% year-over-year.

Note: The recent ability of customers to consolidate listings and to purchase network product bundles impacts comparability of HomeAway's previously reported metrics for the third quarter of 2013, and for future periods. Absent this change, HomeAway estimates for the third quarter of 2013:

  • Year-over-year paid listings growth would have been approximately 12.7%;
  • Average revenue per listing would have been $372 and when excluding the impact of the same adjustments for consolidated listings and new bundled offerings, in addition to FX and pay-per-lead listings, average revenue per subscription listing would have been up 9.6% year-over-year; and
  • Renewal rate would have been 74.2%, compared to 74.5% at the end of the third quarter of 2012 and 74.5% at the end of the second quarter of 2013.

Business Outlook

HomeAway management currently expects to achieve the following results for fourth quarter and full year ending December 31, 2013:

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