HomeAway (NASDAQ:AWAY) -- a leading online marketplace for vacation rentals worldwide -- reported second-quarter results after the market closed last Thursday churning in solid top-line, listings, and free cash flow growth. In addition, the company unveiled a new marketing strategy aimed to drive growth in the coming years. 

Highlights from a strong quarter
Total revenue for HomeAway increased 31.9% year-over-year to $114.3 million, of which listing revenue increased 28.7% to $114.3 million. Most notably, however, was the significant growth in HomeAway's "other revenue" segment, which grew 49.7% year-over-year to $19.7 million thanks to increased customer adoption of the company's owner, manager, and traveler product add-ons.

Average revenue per subscription listing was $473 in the quarter, a year-over-year increase of 13.7%, boosted in large part by the increased adoption of HomeAway's add-on products. Paid listings at the end of the second quarter totaled 1.04 million, up 34.2% year-over-year. Approximately 72% of these were subscription listings (paid in advance by property owners), with the remaining 28% made up of performance-based listings (where property owners only pay commissions on traveler bookings, fees, or traveler inquiries). 

HomeAway's performance held up closer to the bottom line as well, as  adjusted EBITDA increased 32.7% year-over-year to $33 million. Meanwhile, operating cash flow expanded 110.6% year-over-year to $45.9 million.

The renewal rate of HomeAway's subscription listings was 72.8% at the end of the second quarter, up slightly from the 72.4% renewal rate at the end of the second quarter in 2013 but still down from the 73.1% renewal rate at the end of the first quarter of 2014. "Renewal rates in the U.S. are steady," said co-founder and CEO Brian Sharples, "while Europe has seen some pressure in a few markets."

Finally, HomeAway's websites attracted 229.5 million visits during the quarter, an increase of 14.2% year-over-year. This was a strong quarter for HomeAway in terms of growth of revenue, revenue per subscription, and overall paid listings. 

An expanding marketing strategy 
On July 24, the same day second-quarter earnings were released, HomeAway announced the hiring of Mariano Dima as chief marketing officer -- a new executive position at HomeAway. Dima brings more than 20 years of experience with Visa Europe, PepsiCo Latin America, Levi Strauss & Co., and Vodafone. In the second quarter conference call, Sharples shared his vision for what Dima brings to the table for HomeAway: 

Mariano is a seasoned marketing leader who understands the value of developing a consistent and impactful global integrated marketing program to enhance traffic, brand awareness and conversion, including a combination of brand advertising, performance marketing, SEO [search engine optimization], PR and database marketing. He's also highly experienced globally and particularly in Europe, which is one of our most important and certainly one of our most competitive markets.

In 2013, Europe accounted for 36.5% of HomeAway's total sales. An across-the-board expansion of HomeAway's marketing efforts, guided by Dima, will be taking place over the next several years. The reasoning behind this, as shared by Sharples on the conference call, is that over the past several years HomeAway has particularly focused on investing in the development of its vacation rental formula and technology. "With much of that work behind us," said Sharples, "we're now planning to invest a good portion of that operating leverage in integrated marketing." 

Dima -- who officially comes on board as chief marketing officer in  September -- will help develop an integrated marketing strategy aimed to expand HomeAway's brand equity, improve customer conversion, and increase customer traffic in a profitable manner. Sharples believes that this marketing campaign can occur without denting HomeAway's margins in a significant way, although he did warn that the company may see some margin compression in the second part of 2014 and 2015.

The key question for investors is whether these ramped up marketing initiatives will lead to strong top-line and bottom-line growth. Remember that Sharples has been with HomeAway as co-founder and CEO since 2004. Carl Shepherd, HomeAway's second co-founder, also remains with the company as chief strategy & development officer. These two have been with HomeAway for the long haul since the company's inception, and I don't anticipate that changing anytime soon. There is a long-term vision and strategy at work here.

Foolish final thoughts 
HomeAway's mission, in the words of Sharples, is "to make booking a vacation rental as easy as booking a hotel." There is no question that the business itself continues to expand in the areas that count, including listings and revenue per subscription. HomeAway carries a total of $792.5 million in cash and short-term investments, well offsetting the $307.4 million of debt on the company's books, providing ample fuel for the company to continue its expansion strategy in the coming years.

HomeAway has built an effective platform, now with over 1 million total listings, that appears poised to expand even further thanks to a coordinated marketing effort set to take off in the remaining months of 2014. Investors will want to watch closely to be sure that these marketing efforts are indeed paying off with higher sales growth, listings, and revenue per subscription in the coming years.

Based on the stock's nearly 9% jump following earnings, the market certainly liked what it saw this quarter. While the stock looks somewhat pricey trading at a price/sales ratio around 8, should the company's marketing strategy succeed HomeAway will likely be able to deliver market-beating returns to investors over the next three to five years.

David Kretzmann has no position in any stocks mentioned. You can follow David on Twitter @David_KretzmannThe Motley Fool recommends HomeAway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.