Good day. And welcome to the Expedia Group Incorporated Quarter One 2020 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Michael Senno, Vice President of Investor Relations. Please go ahead sir.

Good afternoon. And welcome to Expedia Group’s financial results conference call for the first quarter year ended March 31, 2020. I am pleased to be joined on the call today by our Vice Chairman and CEO, Peter Kern; and our CFO, Eric Hart. The following discussion including responses to your questions, reflect management’s views as of today, May 20th, 2020 only. We do not undertake any obligations to update or revise this information. As always, some of the statements made on today’s call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate, we are optimistic or confident that, or similar statements. Please refer to today’s earnings release and the company’s filings with the SEC for information about factors, which could cause our actual results to differ materially from these forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in our earnings release, which is posted on the company’s Investor Relations website at ir.expediagroup.com. And I encourage you to periodically visit our IR website for other important content including today’s earnings release. Unless otherwise stated, all references to cost of revenue, selling and marketing expense, general and administrative expense and technology and content expense, excludes stock-based compensation and all comparisons on this call will be against our results for the comparable period of 2019. Please note that depreciation expense is now reported in a separate line item and prior periods have been restated to reflect this change. Starting the first quarter, we have updated our segment reporting to reflect our platform operating model and align our reporting with customer segments. Our new segments are, retail, which includes our consumer-facing brands, B2B, which includes Expedia Partner Solutions and Egencia, trivago and corporate. Services provided by our technology platform and supply organization are primarily allocated to the retail and B2B segments. Please see the 8-K we issued earlier this week for restated segment data for the prior two years. And with that, let me turn the call over to Peter.

Thanks very much Michael and good afternoon everyone. I hope you are all safe wherever you are and your families, and loved ones or likewise. Let me start by saying this is our first virtual earnings call. So, if we have any technical difficulties, apologies in advance and likewise apologies that our Chairman will not be joining us. Eric and I will do our best to be as informative and transparent, but we may not be quite as quote worthy. So, I hope you can live with that. As for Eric and I, we are doing our first formal call today. And I want to first say that the company is lucky to have Eric in his seat as CFO. He’s been with the company for quite a long time in a number of roles and has been a great partner for Barry and I, as we set up on this journey late last year in trying to simplify and reorganize the company to be as effective as possible and we are lucky to have him. And as for me, first of all, I am grateful to the Board for their support, for putting me in the role. I am really excited about the opportunities ahead of us. I am not crazy. I know it seems like an odd time to take on running a travel company, but the opportunities I saw, as Barry and I dug into the business, are just tremendous and I think great things are ahead for us and looking forward to telling you more about that. First off, I’d like to talk about COVID and our response to it. It goes without saying that as a company and as human beings, we are obviously keenly aware of the health and societal impact of the virus. And of course, that is the most important thing going on in the world. But the human side goes beyond that because many of our partners, people in the lodging business and the travel industry are suffering mightily. And in addition to the health issues, we have got a lot of partners and friends with issues of their business survival, their jobs etcetera and we have been trying to do whatever we can to help, however many people we can. Our primary focus is initially was of course on the health of our people and on our customers and our supply partners, we did everything we could to try to make that easy on everyone as possible, though, of course, it was not easy on anybody. We saw enormous cancellation levels come in as did the entire travel industry. We had customers stranded. We had supply partners who had all kinds of issues with cancellations and policy issues and we were scrambling like everybody else. But our teams did tremendous work, I would say on a number of fronts, not least of all, trying to help the customers. I would just point out, we had levels of cancellations that were many multiples of our highest cancellation levels on any day ever experienced, and at the same time, at certain points just because of government closures and the inability for our teams to get to the office and our service people to get to the phone centers, we had as low as 30% of our available call center capabilities. So it was a real struggle. But our teams on the technology side did a great job of helping to solve that and quickly put in place a number of cancellation tools, self-cancel tools. We deployed our voice platform more widely and really helped a lot of people took the burden off of our customer service representatives, and frankly, installed, in a very short time, a lot of great work that will pay huge dividends down the road for us. We have also been working closely with our supply partners and I would commend them all in working through a terrible difficult time with us. We are trying to smooth the customer experience and make the policies work in a really unheard of time, when no one knew exactly what to do. We were not perfect. We certainly learned a lot from this. I don’t think any company could have been prepared for this. And it is frustrating that we could not make every customer perfectly happy or service everybody at the speeds we wanted. But I think we learned a lot and we will be in much, much better shape for the future. And as I say, we will reap a lot of benefit from what was done. And finally, our other sort of immediate response to the virus was to raise additional capital. You all saw our announcement last month, we raised close to $4 billion of incremental capital, which we believe gives us ample resource to survive whatever might come from the virus. I am not going to belabor the first quarter. I know you have seen the numbers. Suffice it to say that, the first couple first couple of months we are looking pretty good. We were feeling quite good about the business. From a performance standpoint, we were installing a new cost plan to take out significant costs. And then the virus became quite real for us as it stated to shut down the globe and we, of course, suffered like everybody else as those shutdowns sort of dominoed through the globe. But as it spread, the numbers started to become less and less meaningful. And really, the response was the only thing that mattered and so I would encourage you not to get terribly caught up in the noise of the first quarter. Only that we were in a good spot before it happened. The virus has been painful. We will talk a little bit about how much damage it did and where the trough was, but I’d encourage you not to focus too much on those numbers. On the plus side, we had begun, as we mentioned in our last conversation at the end of last year to make changes to simplify the company. We have done a large re-org of our tech capabilities and created a platform to serve both our consumer and business-to-business facing enterprises. And that work has been terrific. Our teams have done a great job. We are already starting to see significant benefit from that. And that’s not just on the bottom line, on cost savings, but that’s also in capabilities. Our data teams have done remarkable work. And again, all of those things will be hugely powerful on the other side of this virus. But we were ahead of the game, because we also, as I mentioned in February again installing our plan to save on the cost side. You will remember that this was a plan that went across the waterfront. It was people, real estate licenses, you name it. We were looking at every part of the business. And at the time, we have scoped that at about a $300 million to $500 million annualized savings. And all, I would say about that is that since the virus hit, it obviously created even more urgency and focus in the organization. And I would say our ambition has increased significantly and our speed has increased significantly and let me just head off questions for later. We are not going to put a new number on it. We are focused on going as fast as we can and taking out as much as we can wherever access exits but we are not going to re-scope that number for you this quarter. And when we know more, you will know more about the scale of that opportunity. We also began pushing the organization to drive change as fast as it could. What we saw was, as everyone has seen that our volumes have been significantly impacted. And we have had a history of being quite careful about changing technology, pushing technology changes through as one would expect with very high volumes and very high throughput all the time. But since we have had these lower levels of throughput, we felt the unique opportunity to try to push through significant technology change and things that might have taken months and months or years to push through and put them on an agenda to push then through much more quickly. So the company is just way more focused on changing, changing quickly and getting to the other side of a lot of what had been thorny technology issues as rapidly as we can. We also, last week, announced that we were reorganizing our retail group. This is the next stage in our simplification. It’s a big step for us. You all know that, we have operated as brands for a long time. And beginning last week, we are operating as one retail facing organization. We will have a marketing group that is focused entirely on marketing the whole suite of brands in the most effective way possible all over the globe and we have a product and tech group on retail, which is focused entirely on building the best products, the best consumer interfaces and the best tools for our consumers that can be marketed down through the retail group. So we have taken down those boundaries. Again, we think there’s efficiency there. But as much as there maybe efficiency, we think there’s this huge opportunity to have the product teams working together to build the best products, deploying them as widely as possible across our consumer-facing fronts. And we think that our marketing teams will have a great opportunity to stop competing with each other and start optimizing for the group of brands instead of -- for a single brand against another. You will note, as Michael said, that we have changed our segment reporting to reflect that our real view of things today is that there’s consumer facing retail business, there’s a B2B-facing business and then there’s the platform and the corporate organization that serves all of that. And I will say, for the record, we believe that all of those revenues and all those pockets of demand are equally valuable. We think both businesses filling gaps in the market. And we think that we can reach as the most demand possible by having those big chunks of business in retail and B2B to find all the demand all over the globe. On the marketing point, I just want to amplify. You have heard a lot of conversation about direct customer relationships. It’s a nice thing to say. We believe in it. But this is more than just an emphasis point. This is about building better products, doing better brand and direct marketing, better merchandising, which has not been a great strength of ours. And in general, using the data we have, which again had never been pulled together as a company and has only been together for the last few months to power our ability to do all of those things, to understand our customer better, to serve them better, to serve up choices for them better, everything. So we believe we have huge opportunities on that front. And we have been overly reliant and we have heard this before on been performance marketing. We have not been disciplined about it. We have chased on healthy growth over the years. And Google and other performance marketing channels have tried to dis-intermediate us and we have made some not terribly smart choices along the way. We believe that this reset of the virus will give us an opportunity. I mean, we have been talking about this for a while, but as we wave back into the marketplace to be much more disciplined to only chase real growth, real valuable growth, healthy growth and not be stuck chasing performance marketing and entering into dis-economic auctions. So we intend to be much better about that. We intend to keep those customers longer. We intend to serve them better and keep those direct relationships going strong. And finally, I am sure you are all interested in the recent business trends. Like some of the other companies in our space, you probably heard that late March into April was the trough of the business. That is true for us. We saw gross bookings, new lodging bookings down about 85% year-on-year, which of course was terrible. And cancellations were extremely high. Since then, I am pleased to say, but I would not get overly excited about it, that we have seen nice growth coming into May. And essentially, what we have seen is both growing out green shoots in the areas you would expect, places where movement has become possible, where people can now start to think about their summer holidays, et cetera. We see that very quickly when that happens and cancellations have settled down. They are still at elevated levels, but they have stabilized. So the combination of those things has may looking considerably better than the trough. We are not making any predictions. We, of course, cannot control the virus. So we are merely adapting to it as it comes and trying to be smart about where the business is. What we can do to help the business along in places where it exists and be smart again about how we attract the demand that is out there. I’d say it’s important to keep in mind that, because we have a global footprint and because we are essentially in every line of travel business that’s significant. We get demand wherever it lives, so I know there’s been a lot of questions about international versus domestic, local, regional, et cetera. The truth is we have a way to capture whatever demand is out there, wherever it exists in the world and wherever it is local, regional, domestic or international, we have a way to participate. So I would say we are well-hedged against however it comes back. And what we are seeing clearly is what you have been hearing that local, regional, domestic is certainly coming back stronger sooner. And I would just point out a bright spot for us has been Vrbo, where we have seen really markedly better performance and that clearly seems to be around people who have been stuck in their city dwellings or wherever and are looking forward to being able to get away from those cities to some place for a vacation with their families this summer. And we are pleased to see the demand. It’s clear that the Vrbo focus on the whole home experience is a real advantage over the competition right now. Vrbo is not big in cities. It’s not big in rooms in other homes and those kinds of things that is really a fort wall whole home experience and we have seen some really nice signal out of that vacation rental business. So with that, I would pass it over to Eric and say thank you for your time. Again, don’t get too focused on the quarterly numbers, I don’t think they are meaningful. We are entirely internally focused right now, trying to do the most good we can to both navigate the situation, help our customers, help our partners reignite their businesses, and most importantly, from our perspective, get our business right and our product right and our offerings right. So when we come out of this, as tired as it is, we will be stronger and better than we were before. So with that, Eric?

Great. Thank you, Peter. I appreciate it and the kind words as well. So before I get started, I also wanted to echo Peter’s comments around thanking the employees. It’s a very stressful time. It’s quite difficult. And I have seen heroic efforts across the organization to tackle some pretty difficult problems for fellow employees and customers and partners as well. So thank you to all those involved and that have really put in tons of effort and very stressful time and I just want to say thank you on behalf of myself and TLT and Peter and Barry as well. So thank you. Coming into the year, and as I mentioned in Q1, driving margin expansion and improving unit economics were key priorities for us. And with COVID hitting, we moved with even more urgency on these efforts and took additional actions, further improve our cost structure and preserve capital in the near-term. I want to tick through the major cost items, just to give you a sense for what we are seeing and some of the actions that we are taking. So from overhead perspective, the cost savings initiative that we started earlier this year is driving significant savings in overhead costs and it’s putting us on a path to reset our fixed cost basis. And then in addition to that, shifting to the platform operating model that Peter talked about, really positions us to scale the business far more efficiently going forward. So during COVID, we have made additional cost cuts to help preserve capital, but that’s within the context of trying to reset the cost basis of our business. From a cost of revenue standpoint, those are mostly variable or semi-variable expenses. So as you can imagine, as our volumes have decreased, there’s a natural offset due to COVID and those reduced volumes. We have unlocked significant cloud savings through optimization efforts, benefiting from centralization -- centralizing the cloud management in our platform, which we talked about last quarter. We have also made temporary changes to lower cost -- the cloud costs as well during COVID and now expect cloud costs for 2020 to be well below 2019 levels for this year. We are also accelerating progress on vertical agent and self-service tools to make customer service more efficient and if you take the cloud plus the customer service efficiencies, we do expect those to continue to contribute to better unit economics as volume comes back. From a direct marketing standpoint, it’s clearly our largest expense and it’s almost entirely variable. Starting in mid March we cut expense to nearly 0. Now as we started to see green shoots and as we expect the market to go down and we start marketing efforts we will remain very disciplined and run performance marketing channels at much higher ROIs going forward, as Peter mentioned. Regarding cash burn, the headcount reduction that we have talked about previously as part of the overall cost plan, it does -- it also drives savings and capitalized labor. So that’s incremental to the P& L benefit. And in addition, we did defer several real estate capital projects, another nonessential CapEx to preserve liquidity. However, we recently restarted construction on our new headquarters, since it is more efficient to do so and we now expect it to complete in the first half of 2021. Across overhead, CapEx and interest expense a pro forma for the recent debt issuances, we expect our monthly cash usage during the COVID crisis to be below $275 million within the next couple of months. If COVID were to have a protracted impact, we do have additional cost waiver that we can pull and will do so at the appropriate time. Our Q1 results did not fully reflect this cost structure given the impact of COVID and timing of our cost initiatives. So a couple of specific areas I want to call out. Costs of revenues grew 28% to a higher provision for bad debt related to future collection risk from the impact of COVID-19 on customers, as well as inorganic impact from bodybuilding.com and higher cloud expenses. We recently sold bodybuilding.com as part of our simplification effort and savings as I mentioned previously, those benefits will roll in through the year. Overhead costs were roughly flat in Q1 as the benefit from our cost savings initiative did not kick in until March. We expect overhead expenses to decline at a double-digit percent starting in Q2. So turning to cash flow and the balance sheet, free cash flow was negative $1 billion in Q1, primarily due to the use of cash for working capital. The working capital charge largely related to lower merchant account payables from the significant stayed room night decline late in the quarter and an increase in prepaid assets, including deposits to fund future refunds. Deferred margin bookings increased modestly in the quarter due to an increase in Vrbo merchant bookings. And our typical seasonal pattern, deferred merchant bookings, they increased in the first half of the year as customers book, travel and then decline in the second half of the year as more customers are staying than actually traveling. This year, started with a similar pattern through mid-to-late February and then as new bookings dramatically decline and calculations spiked in March, deferred merchant bookings declined significantly. This dynamic continued in April as customers canceled travel plans, mostly for near-term travel dates that were impacted by COVID-19. And as of the end of April, our total deferred merchant booking balance is $4.3 million and excluding deferred loyalty, the balance was approximately $3.5 million. As we manage through this near-term liquidity capital headwind, in addition to cost cuts, we have taken step to preserve in both the equity, we suspended REIT purchases and dividends and we also closed few transactions which totaled nearly $4 billion in capital. The $1.2 billion preferred equity investments Apollo and Silver Lake has a dividend that can be paid in time, first three years as well as redemption options. We also issued a total of 8.4 million warrants as part of that transaction. We also raised $2.75 billion in unsecured to senior notes. The notes were issued in two tranches, one of which is callable after two years. We plan to use proceeds from this debt race to repay the $750 million senior notes that mature in August, performing for these transactions, as of the end of April our total cash balance was $6.5 billion. In addition to cash, across restricted cash, accounts receivable and prepaid in current assets, we held amounts covering 40% of outstanding deferred merchant bookings, excluding deferred loyalty. As travel begins to recover on booking trends rebound further, we expect to see immediate cash flow benefits from the merchant model, even with new booking levels well below 2019. We believe our liquidity affords us flexibility to navigate a prolonged impact from COVID and position a leader as travel recovers. While we have a higher debt balance and pro forma a leverage that we historically carried, we remained committed to investment-grade credit ratings and fully intend to work back toward our historical leverage levels as the business recovers. In addition to the $750 million notes due this year, we have a tranche of notes maturing in 2022, notes callable in 2022 and the borrowings under our revolver, all of which gives us a lot of flexibility to quickly get on a path back to desired capital structure in the coming years. Given the uncertain environment, we are not providing guidance for 2020. In the second quarter, we currently expect revenue declines to more closely mirror recent booking trends and our adjusted EBITDA loss to be significantly higher than in Q1 as we will have a full quarter of the global impact from COVID. While we remain optimistic that travel will bounce back, we know it could take time to return to prior levels. We are going to keep driving efficiencies and we are going to position the business to operate faster and more effectively in the past, as Peter talked earlier. And when travel demand returns, we expect to emerge with better margins and be in position to drive the level of growth we plan for as we enter 2020. Operator, we are ready to take our first question.

Thank you. [Operator Instructions] And we will take our first question from Mark Mahaney with RBC. Please go ahead.

So that May was looking considerably better than the trough. I mean, can you try to quantify that for us? That would be -- that would be helpful. And then secondly, you talk about taking a fresh look at the business cutting back potentially on some performance based marketing spend Google spend, that obvious been a key part of the OTA story, I don’t know, for two decades. Your level of conviction that you can -- how you -- just talk about how you hedge against the possibility that the alternative marketing channels won’t be as efficient as that? When do you think you will really get visibility? I know, it’s a hard time to run marketing experiments in this environment. Is this something that is probably going to take you a year or more to really figure out how to better optimize your marketing if really can optimizing away from performance marketing. Thanks a lot.

Sure. Thanks, Mark. So first of all, on May, no, I am not going to give you much to quantify that, except to say that we have seen week-by-week improvement. Again, we are a many product business. So some businesses like Vrbo are considerably off the bottom. Others are more modestly off the bottom, all the assumptions and all the prognosticators about the comeback of travel locally recently. Is it vacation rental or hotels? I think we are seeing improvement everywhere. We are seeing more marked improvement in vacation rental right now. And I would say we are fortunate in that we are relatively heavily weighted towards the U.S. and the U.S. is relatively stronger. But of course, there are places all over the world that are beginning to open up, be it parts of APAC, parts of EMEA, et cetera. So I think we are seeing week-by-week improvement. It’s encouraging, but we are still at greatly reduced levels. And the numbers candidly are not terribly meaningful right now. Directionally, they are meaningful and they are hopeful. But the delta between minus 85% and minus some other big percent is not really terribly telling. I think the question will be how long does sustain itself? Does it continue to grow? And frankly, do all of us do our part to make travel safe so that we don’t end up with any future constraints that stopped the improvement. So I think that’s all I can really give you on May. As far as the bigger cutting back marketing OTA story. I recognize, as Google and others have pushed their way into the -- to intermediate all of us. That has created challenges. I think there’s also been challenges as we have all tried to continue to drive growth and weren’t finding other ways to drive it as effectively. I would say the things that give me encouragement are, first of all, while we don’t have the volumes to test it right now, we do have an opportunity of an entire reset, because we have essentially gone to virtually no marketing. And as we weigh back in, we are able to be more precise, be more constrained, watch and learn and grow into it and not just dive back in head first and spend back to the levels we were at. I also think we have not done our job on a couple of fronts. One is, as I mentioned, as our own brands competed, whether that’s broadly or locally, we were creating our own dynamics in the marketplace, but I think we probably never fully understood. We are now an integrated marketing team, led by two great executives who will figure out how to make sure that we will spend appropriately and not be pushing price against ourselves. Secondly, we have done precious little with all the data we have and all the merchandising capabilities we have and we haven’t done an exceptional job of retaining our customers and giving them reasons to want to come back directly to us, directly to our app, et cetera. It has been a growing area of business. We have done a good job, but if you think about not having all the data on your customers aligned in one place, not having the tools to tell them, hey, you went to Vegas last year. At this time, would you like to go to Vegas again? We just have a lot we can do to continue to drive the business without the only idea being, how about we spend a little more in performance marketing. So I think we have a lot of opportunity there. We have also seen that as we have gone through these very low levels of performance marketing that our brand is quite effective. People come back looking for our brands because our brands have import and it’s an imprecise science, but knowing what your brands can drive themselves without performance is an important part of this. So I think this low will give us more insight into that as we climb out.

Okay. Thank you very much, Peter.

You bet.

And our next question comes from Naved Khan with SunTrust. Please go ahead.

Hi. Thanks a lot. Just a couple of questions. Can you maybe talk a little bit about what the integrated marketing effort does in terms of the trade up between growth versus just marketing more effectively and profitably? And then, if I had to just think about the margins in the business over the medium term or maybe longer term. And considering what you have done over the last several months in terms of just cost takeout and streamlining, where do you think margins can be in the business?

I will let Eric take the second part of that. But I would say the trade-up on marketing growth, it’s one of the benefits of having this giant reset is we are not sitting there with a run rate number. And saying, do we go for profit, do we go for growth, do we go for whatever? I think we are trying to just be smarter overall as we climb back into the market and I think we want to clearly be focused. We have clearly said to the company, we will be focused on simplicity and profitability and efficiency, but that is not to say that we do not want to keep growing. We believe we can keep growing on a more profitable base in a more healthy way, retain customers more, have lifetime value increase, all those basic building blocks. So I think we are hopeful that we can drive both. We certainly won’t -- as I said, we won’t be headlong into driving top line growth just for the hell of it. We will drive top line growth where we think it makes sense. And listen, it may turn out that as we get better and better at retaining customers and creating longer-term stickiness and lifetime value, we will have yet another approach to performance marketing as we think about how many customers we keep for the long-term. So these things are evolving and we are going to no doubt we are in a lot. And all I can say is I am not telling you it so. I am telling you what we are going to do and you will judge us on whether we deliver it or not. But that is the orientation of the company and that is how we are going to approach the market. And as for the margins, I will let Eric talk about that. But I would just point out that a lot of the work we are doing is not only about efficiency, it’s about unlocking real opportunities. So these data things -- many of the things we have done and will do, that will unlock efficiency will also unlock opportunity on the top line, I believe.

Yeah. And then from a margin standpoint, listen, we are not giving guidance at this point, that includes what the ultimate margin profile will look like. But we are going after every cost in the company in one form or another and if you think about how the business was run historically, which was independent brands competing out in the marketplace, you can imagine that we were doing the same thing in multiple places in the organization. And there wasn’t a lot of central management of areas that arguably should. So just to give you an example on the unit economic side, I talked a bit about it already, but we centralized the cloud management team and especially given COVID, that team has ferociously gone after that expense. And I think the profile of that spend is materially different coming out the other side of COVID. Customer service, we started the journey of using more technology to help solve questions from customers and delivering their needs with COVID. We have accelerated that. We are putting real investment behind it. The teams are energized. We are seeing great returns from that and customers really love it as well. Our NPS scores, when they engage with those tools, are quite positive too. So to Peter’s point, there’s cost efficiencies, there’s margin opportunities and we are actually stepping up the customer experience at the same time. Peter has already talked about marketing, so I won’t get into detail there. But on the fixed cost basis, we are still working through, the plan we have executed large parts of it. We continue to push that forward and as we have gotten into COVID and just generally peeling the layers back. We just continue to find opportunities to work with vendors where we have multiple contracts to get to a single global contract and work through a lot of those details to push our costs lower and to be more efficient while we are doing it. We will come out the other side of this we will be leaner, we will be more nimble and we will -- we believe have more attractive and higher margins on the other side.

Great. Thank you, Peter. Thank you, Eric.

Thank you.

And our next question comes from Eric Sheridan with UBS. Please go ahead.

Thanks so much. Maybe a long-term question on supply. Peter, you already mentioned sort of continuing to work with suppliers through this difficult period. What are some of the long-term goals about aligning your goals with supplier goals? And how do you see the supplier landscape evolving and what that might mean for the OTA business over the medium long-term? And then maybe a second part, historically, the OTAs have generally benefited from returns to normal from economic shocks as suppliers are looking to sort of fulfil yield and inventory? Do you expect that this time as well? Thanks so much.

Yeah. Thanks, Eric. I will sort of take that in reverse order. I do think there’s no reason to assume it won’t be similar to historic events and that suppliers, broadly defined, we will look to platforms like ours to drive as much volume as they can to fill up their planes and hotels and everything else. It’s hard to say how -- I think -- I don’t really have a view yet on how that market will shape up or shape out. I think it clearly depends on how long the virus persists. How deep it all goes and how things come back. But I do think from our focus standpoint, there’s a few areas that we are keen to collaborate better with our partners on. One is on the service end of things. Both Eric and I have talked about the opportunity to make the service side more seamless to improve the customer experience. Some of that is our own fault. Some of that has to do with how we interact with partners. And I think we have all learned a lot from that and can do better. So I hope we take the opportunity to do better. I also think this has been a time when we have been focused on how can we help our supply partners come back better from a product standpoint, from an offering standpoint, from an data and information standpoint to help our suppliers optimize their performance on our platforms and present themselves in the best way and take as much opportunity of the demand that is out there. So I think we have used this downtime to work with lots of supply side partners in terms of just simple basic things like you need better pictures, you don’t have all your rates loaded. There’s issues like that. I think we will try to help everybody with that. I think we are going to build better tools to work better with our suppliers and I believe we will build better tools for the customer. We know our suppliers want to upsell more. We know they want to make sure there’s clarity around right now their safety practices, but in the future, other things. And we have to do as good a job as we can do to show all that make the customer experience better and allow our suppliers to succeed more. So I think between our improvements in data, our improvement in supply side tools, our improvement in consumer-facing tools. And look, that’s all work we have to do still, but we are pushing it hard. I think we will -- we hope to help the entire industry come back as quickly as possible.

And we will take our next question from Deepak Mathivanan with Barclays. Please go ahead.

Great. Thanks for taking the questions. Two questions from us. So first, historically, Expedia has benefited being a full-service OTA. Now coming out of COVID-19 shock, as we think about travel rebounding first to a more local or even regional basis, do you think you are a little bit of a disadvantage from a market standpoint, from a consumer awareness and recognition areas? For certain Expedia brands, if we were in this, an intermediate phase, where air travel remains muted for a long time? And then I was going to ask second question about the retail versus B2B business. Some of the B2B assets have been strong growth opportunities for you in the more recent few years, like particularly the partner for Solutions area. And as we come out of COVID, do you expect to see a trajectory difference between retail and also the B2B assets? Thank you.

Sure. Thank you, Deepak. Yeah. I think on your first question, I think Expedia, I would argue, probably hasn’t benefited as much as it could have from being a full-service OTA. In fact, in the minds of many consumers, whether you are just looking for a hotel, they might look at Expedia bookings, hotels.com, Travelocity as all quite similar opportunities. So I think we are doing a lot of work to try to differentiate our brands. That’s why we brought our brand group together into one so that we could be more clear, in terms of the brand proposition, the offering, how we express it to the public, et cetera. But I think being in the full-service OTA business long-term is a great place to be. For sure, air travel maybe -- or international air travel maybe more challenged, domestic, a little less, whatever. But I think over the long-term, being really the only folks who took on full-service OTA as a real undertaking and have kept to it and there’s a lot of harry stuff that goes on in providing all those services, give brand Expedia a strong consumer proposition in the market place, might it be a little slower, because the air part doesn’t comeback, instead of maybe. But again, we are indifferent to which brand or which line of business can grow fast enough. We just want to power and allocate capital and resource and human resource the best we can to drive wherever the fastest pockets of growth are. So if that’s in the near-term, if that’s domestic or local or Vrbo, we are going to drive that and over the longer term -- but over the longer term, we believe each of our brands, at least as currently constructed, we will have an opportunity to succeed. And certainly, the full-service OTA model will have an opportunity to succeed. As far as the B2B business grows, it has particularly our partner services business has enjoyed quite strong growth over the last few years. One of the main sort of underpinnings of our strategy longer-term is getting our own teams away from the idea that retails somehow better than B2B, or one brand is more important than another brand, there a $1 worth of profit wherever it comes from is $1 worth of profit. So we see the B2B model as a great opportunity to fill in pockets of demand and reach pockets of demand that we are not reaching or cannot reach through our retail brands. So that might be geographically focused, that might be offline travel agents, that’s all kinds of things frankly. And our B2B business, particularly that partner services business has been very strong. We think it will has tons of opportunity and can continue to be strong. There will no doubt just like in the lodging and other businesses, there may be some shakeouts, because business environment is tough and some of our partners said we may not make it. I mentioned that in the beginning. There’s a human cost to all this business disruption, but we believe longer-term that our B2B business has lots of legs, is an important leg in our stool and will continue to drive it with as much energy and urgency as we drive our retail business.

Okay. That’s helpful. Thank you very much.

Sure. Thank you.

Our next question comes from Justin Post with Bank of America. Please go ahead, sir.

Great. Thank you. A couple of quick questions, maybe I will start with a high level strategy. When you made your comments about becoming more efficient, are you thinking about maybe Expedia being a little smaller market share, but much higher margins or do you think you can have it all where you kind of maintain your share, but also get the margins up? I know you are not going to give us a target, but how are you thinking about that? And then secondly, I am just wondering, when you look back to last year, how inventory-constrained were you, were there markets where you just didn’t have any inventory availability? And going forward, do you think a lot of that would open? And would you see start seeing some really good deals or maybe unique deals on Expedia. Thank you.

Yeah. Sure. I don’t believe we have to give up share to be more profitable. We will be -- if we were just at the same volumes as before, we would be much more profitable today than we were a year ago. Now my hope is that as we have that benefit, as we get more benefit even than we have gotten so far and as we improve our marketing efficiencies, our product efficiencies, conversion and everything else, then in fact we will be able to continue to grow certainly at pace to maintain and hopefully grow share. And still be more relatively profitable. So I don’t think it’s a trade-off. I think we have a lot of work to do on ourselves to get to the right place. But this isn’t about, okay, everything has been optimized to the nth degree. And now we are just deciding if we would like to make an extra dollar and give up a dollar of revenue. I do not believe we are at that place or even close to that place. We have a ton of opportunity to be more efficient throughout the process, throughout the product, throughout our own internal operating features. And if we do all of that, that should give us more margin, more ability to invest in growth, whether that may not be performance marketing growth, that may be brand, there may be other tools, that maybe merchandising and all kinds of things, but I believe there’s no reason we should assume that one has to give up growth to get greater margins. Now, can it be bumpy? Well, is it a straight-line from here to there? Probably not, but over the course of coming out of the virus and everything else, everything is going to be bumpy. So we believe we can play for both. As far as the inventory question goes, I don’t think we were inventory-constrained last year. I would say, though, that there’s always opportunity and gaps and this is as much an information question as it is just a cooperation question. So hotels very often may not have all their rates in every place. They may not have -- they may think they have a deal on offer, but it’s only in one place or they may have a deal on offer somewhere that gets into the wild and is offered in places they didn’t intend it to. So I think our issue is not about not getting the inventory we want, but getting all of the opportunities that a supply side company has to win in our market. So if they have some rates for loyalty or something else where we are not participating, those are all opportunities. So I think we did not feel inventory-constrained as in we were bumping up against nothing to sell. I don’t think that was the issue at all. I think it’s really just our supply partners participating in every way they could. And going forward, can they get more out of our platform, if we are giving them better information and they are responding more rapidly and everybody can take the best advantage of it that they can.

Thank you.

We will take our next question from Kevin Kopelman with Cowen. Please go ahead, sir.

Thanks a lot. I had a quick update, a quick follow-up question on working capital dynamics. Given May has been considerably better, has the working capital outflows stabilize at this point? And how do you see that playing out? Thanks.

Yeah. I will take that one, Peter. So May is improved. We obviously aren’t going into details on where that’s falling quite yet. But I would say we are still on the -- I would think about it still being in the zone, we are in survival COVID mode focused also on recovery. So we are still at a stage where we are still burning cash, if you will. Peter, anything that you would add to that?

I mean, I -- ultimately, I am trying to get away from giving you specific numbers associated with it, but we are still off a very small base. We are seeing green shoots that ultimately gives us optimism for to be able to push into marketing and getting confidence that consumers are coming back. I think those are all great things, but we are not out of the woods yet.

Okay. Thanks. That’s very helpful.

Yeah. I would just add, Kevin, when I say it’s considerably better, it’s obviously percentage improvement off the low number is considerably better, though not awesome. We would rather have double and triple-digit improvements. So it’s not better is better and we are glad to see the trends. The working capital issue, obviously, a lot to do with what’s happening on cancellations, what’s happening on the nature of the bookings and whether they are merchant or agency, et cetera, but -- and there have been some mix changes in the short-term. But I would say, it’s definitely improving. But for Eric and I and the company, we still are on fairly defensive posture as we watch it play out. And we are glad to have the incremental capital on the balance sheet to protect us.

Thanks.

Thank you.

And our next question comes from Lloyd Walmsley with Deutsche Bank. Please go head.

Thanks. Two questions, if I can. First trivago suggested on their call that they expect paid search marketing to be structurally less competitive going forward. So curious, beyond your company specific plans to increase ROI targets as kind of part of a broad brand consolidation. Do you think there can be structural performance marketing advantages coming out of this across the broader OTA space? And then secondly, you talked about already starting to see the benefit of the tech re-org. I was wondering if you can just give us some examples of some things you have been able to achieve, as we think about the ability overtime that continue to squeeze benefit out of that?

Yeah. So on the first point, I guess I would say that, I certainly can’t speak for the rest of the industry. It does seem logical to me that all of us in travel have been somewhat capital-constrained by the virus, in some cases highly capital-constrained. And therefore, the robust performance marketing auction environment we saw before may take a while to come back because people just don’t have the money for direct marketing. I don’t know if that will be the case, but I could imagine that be the case and perhaps that is what trivago is speaking to. Certainly, we will take our own discipline to it. We will do what’s right for us, I am sure everybody will do the same. But there could be a difference in the number of players and the available capital to invest in direct relationships in the near-term for some of the other players and direct hotel and other kinds of players. So I guess that would be my perspective on that. In terms of the benefit of the platform, honestly, their myriad and many of them are in the weeds. But Eric talked about the work our team has done across optimizing for cloud, right? We honestly had barely done anything to optimize for cloud before. It just wasn’t an urgent push. The greater urgency was to move to the cloud. And we took a huge opportunity run by our team in our platform to drive a level of clinical approach to cloud that we just haven’t had before. And that went across not just the platform but the entire enterprise. And the savings there are meaningful, really meaningful. So we are doing that across many things that’s kind of on the cost side. I mentioned on the data side, we have had -- we probably have as much more data than virtually anybody in the travel industry, but we have never compiled it in one place. So we had bunches of different data storage that’s put aside that, that’s not terribly efficient. And it means everybody is rotating on different data and learning on different data, but all our algorithms, all our learnings, all our stuff was against pockets of data instead of all of the data. So when you get all the data together and you simplify it and you standardize it, now everybody can use it. The algorithms and machine learning tools can learn much faster and we can just apply it across a much broader breadth of our business more quickly. So I think we are going to see a lot of those. They are really hard to put numbers on. They are not like, hey, we took these people and these people and these people and put them together and we saved 3 people and we took out a tool. Those are -- that’s simple math and there are some opportunities that exist like that we’ve obviously gotten after a lot of them. But I think that probably the bigger opportunity and the one that’s hard to define is all of these unlocks that exist for us. And for a huge organization, we were complicated. We didn’t make it easy on ourselves. We didn’t make it easy to do things. And as I say, I believe there’s great opportunity in the merchandising front, but we have work that’s going on in earnest on our CRM tools. We have work that’s going on around data. All those things have to happen to unlock that opportunity, but it’s there and it’s big and we are going to get after it.

Thank you.

Yeah. Hope that helps.

Our next question comes from Stephen Ju with Credit Suisse. Please go ahead.

Commentary in merchandising better to your customers, presumably this means better cross-selling of products and packaged tours and things of that nature. But I think some of your consumers are used to shopping on Expedia in a certain way. So do you think this requires any sort of retraining or awareness marketing efforts to reeducate folks? Or do you think you will be able to just take advantage of existing behavior? Thanks.

Yeah. I would kind of break that -- Stephen, thank you for the question -- into two bits, which is, one is we can just be stronger at the blocking and tackling. We can be better in our core product. We can be better in helping people find their way through our product. We talked a little bit about our voice platform. We even think there’s opportunity for -- and that’s been principally used as a service tool, but we think there may be opportunities to use the underlying technology there to help people through the buying journey, help them make the right decision for them, potential help upsell and so forth. So this isn’t about necessarily reinvention, I mean, our product should be as good as it can be, but this isn’t about, hey, you are used to going on entering a date and doing this and now you are going to enter a dream and a place and something like, I don’t think it has to be re-imagined. I think there’s a lot of it that’s just core functionality, creating great products that are really engaging with the customer and helpful for the customer and their journey. So I think that’s, at its core, what are our consumer offerings will be online. Merchandising, I think, is not necessarily a separate piece, but another piece, which is once you really understand your customer, once you understand their journey, you know where they have been on your site, what they have done, what they have bought before, what their predilections are in the future, you have a real opportunity to I think, change the game for them and that goes everything from the -- letting them know about deals that are out there that might be interesting to them, whether that’s through email, text, whatever, all the kinds of usual CRM tools that exist in the world and/or when they come to the site that, the sort is particular to them, or certain things are particular to them, because you understand them and they have logged in and you know what they have done before. There’s just lots of opportunity to do better there and I think we are at the beginning of our journey, frankly, for that, because until you could understand where the customer was and where they have been and have all the data in one place and everything else, it was really hard to do any of that. So we are maybe even before the early days. We do some of this, but it’s hard for us to do. It’s not efficient for us to do and we have to get to a place where we can really do it at scale, kind of scale we operate at. And I think we can drive a lot of business separate and apart from the core. I go to Expedia and I type in my date and an airline. I think there’s just a lot more out there for us.

Thank you.

Yeah.

At this time, I would like to now hand the call back over to management for any closing remarks.

Yeah. Well, thank you, everybody. I hope Eric and I covered as much territory as we could in an hour, obviously, again, I think our first quarter numbers don’t mean a whole lot. And frankly, our numbers for a while won’t mean a whole lot. We have got a lot of work to do to come out of this in a great place. We think it’s there for us, as you have heard and that’s what we are focused on and we are honestly not trying to talk anybody into anything. We are just trying to focus on what we can affect and you will have to judge us by what we deliver. But in the meantime, we wish you all safe and happy and same time through the virus and be careful out there and wear a mask and we look forward to talking to you again. Thank you.

Thank you, everyone.

This concludes today’s call. Thank you for your participation. You may now disconnect.