Expedia Group, Inc. (EXPE) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A reveal positive aspects: raised full-year guidance, strong financial metrics, and optimistic outlooks in B2B growth, AI investments, and advertising. Despite unclear responses on some specifics, the overall sentiment is positive, supported by a significant adjusted EPS growth and strong free cash flow. These factors suggest a likely positive stock price movement in the short term.
Key Financial Performance
Bookings and Revenue Growth Bookings and revenue grew by 11% year-over-year. This growth was attributed to sustained market strength and disciplined execution across the company.
Margins Margins expanded by nearly 4 points year-over-year. This was driven by operational discipline, volume leverage, and marketing efficiency.
Booked Room Nights Booked room nights increased by 9% year-over-year, with high single-digit growth in the U.S. and low double-digit growth in EMEA and the rest of the world. Consumer spending remained healthy, with longer booking windows and lengths of stay compared to 2024.
B2B Bookings B2B bookings grew by 24% year-over-year. This growth was driven by increased marketing activity from large partners and the addition of new partners.
Advertising Revenue Advertising revenue increased by 19% year-over-year. This was attributed to the expansion of ad placements and the introduction of new ad formats, including video ads.
Consumer Brands Bookings Consumer Brands bookings grew by 5% year-over-year, with double-digit growth outside the U.S. This growth was supported by sharper brand positioning, product improvements, and better execution.
Lodging Property Count Lodging property count grew by more than 10% year-over-year. This was driven by sourcing more promotional rates and increased partner-funded promotions.
B2C Gross Bookings and Revenue B2C gross bookings grew by 5% to $18.3 billion, and B2C revenue grew by 4% to $2.2 billion. The growth was primarily due to book-to-stay timing and marketing leverage.
B2B Gross Bookings and Revenue B2B gross bookings grew by 24% to $8.7 billion, and B2B revenue grew by 24% to $1.3 billion. This growth was driven by Rapid API and increased marketing activities with large partners.
Cost of Revenue Cost of revenue was $342 million, up 3% year-over-year, but leveraging 1 point as a percentage of revenue due to efficiencies in payments and customer service.
Direct Sales and Marketing Expenses Direct sales and marketing expenses were $1.7 billion, up 10% year-over-year. Significant leverage was seen in the B2C business, with direct sales and marketing down 5%.
Overhead Expenses Overhead expenses were $640 million, roughly flat year-over-year, while leveraging over 2 points on revenue. This was due to cost reductions implemented in the prior year.
Adjusted EBITDA Adjusted EBITDA was $848 million, with a margin of 24%, representing nearly 4 points of margin expansion year-over-year. This was driven by revenue growth, expense leverage, and cost reductions.
Adjusted EPS Adjusted EPS was $3.78, growing by 58% year-over-year. This growth outpaced EBITDA growth due to share repurchases and a lower tax rate.
Free Cash Flow Free cash flow for the year was $3.1 billion, reflecting the strength of the operating model and disciplined execution of strategic priorities.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
AI-driven personalized experiences: Expedia has integrated AI to deliver more personalized experiences across all brands, including refined recommendation models for Brand Expedia, resulting in the best Q4 attach rates ever.
VrboCare expansion: VrboCare was expanded to enhance differentiation and provide peace of mind for travelers.
New payment options: Upgraded checkout paths and added new payment options to provide more flexibility for travelers.
Cancel for Any Reason assurance product: Launched a new assurance product to provide flexibility for travelers.
B2B growth: B2B bookings grew by 24% with double-digit growth across all regions, gaining share with existing partners and adding new ones.
Advertising revenue growth: Advertising revenue grew by 19%, with the introduction of video ads on Expedia's homepage and search results.
Geographic performance: High single-digit growth in the U.S. and low double-digit growth in EMEA and the rest of the world for booked room nights.
Margin expansion: Margins expanded by nearly 4 points due to operational discipline and volume leverage.
AI for internal operations: AI is being used internally to improve product design, inventory onboarding, and customer service, resulting in reduced wait times and faster issue resolution.
Marketing efficiency: Improved targeting and measurement capabilities, reduced inefficient spend, and reallocated resources to high-return areas.
AI integration for growth: Expedia is leveraging generative AI for trip discovery and integrating with major platforms to capture traveler demand.
Direct engagement focus: Two-thirds of bookings now come from direct channels, which are growing faster than indirect channels.
Tiqets acquisition: Announced intent to acquire Tiqets to broaden activity offerings for partners and travelers.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Geopolitical Issues in Asia: Growth in the rest of the world slowed due to geopolitical issues in Asia, impacting multiple quarters.
Dynamic Macro Environment: The company remains cautious due to ongoing macroeconomic uncertainties, which could impact bookings and revenue growth.
B2B Margin Pressure: Investments to support future growth in the B2B segment may weigh on near-term margins.
Foreign Exchange Variability: Foreign exchange rates added variability to bookings and revenue growth, with potential future impacts.
Seasonal Variability in Bookings: The company experienced variability in bookings during 2025 and expects a more seasonal cadence in 2026, which could affect revenue predictability.
Cost Structure Adjustments: While cost reductions have been implemented, the company acknowledges the need for further adjustments to maintain efficiency and profitability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Growth: For Q1 2026, gross bookings growth is expected to be between 10% to 12%, with revenue growth of 11% to 13%. For the full year 2026, gross bookings growth is projected at 6% to 8%, and revenue growth is expected to be 6% to 9%, including 1 to 2 points of FX tailwind.
EBITDA Margins: For Q1 2026, EBITDA margins are expected to increase by 3 to 4 points. For the full year 2026, EBITDA margins are projected to expand by 100 to 125 basis points.
Seasonal Cadence: The 2026 outlook assumes a more seasonal cadence similar to 2024, with variability in bookings expected.
Cost Management and Investments: The company plans to maintain cost discipline while selectively reinvesting in growth initiatives, including AI and machine learning.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Quarterly Dividend Increase: The company announced a 20% increase in its quarterly dividend, raising it to $0.48 per share.
Share Repurchase Program: The company repurchased $255 million worth of shares in Q4, totaling 1.1 million shares. Since 2022, over 45 million shares have been repurchased, reducing the share count by 22% net of dilution.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What features is Expedia rolling out to enhance the travel planning process and capture more users?
A:Expedia is focusing on marketing to target and personalize messages for travelers, ensuring relevance when they land on their brands. They are also working on product enhancements like AI agents, natural language flows, and tools for trip planning and booking. Current AI solutions include AI filters and property Q&A, with plans to expand natural language and AI capabilities later this year.
Q:How much leverage is there in B2C marketing, and what strategies are being used?
A:Expedia has leveraged about 50 basis points as a percentage of GBV in B2C marketing through strong discipline, efficiency improvements, and reallocating spend to higher-performing channels. They have improved targeting, measurement, and creative campaigns, such as the Hotels.com relaunch and Brand Expedia's Super Bowl campaign, which increased awareness and consideration.
Q:What is the current competitive positioning of Expedia's consumer-facing brands?
A:Expedia has positioned its brands as follows: Expedia as a one-stop shop, Hotels.com as a hotel pure play with a strong loyalty proposition, and Vrbo as a trusted vacation rental marketplace. They have expanded supply, improved speed, and focused on international growth, with room nights growing faster outside the U.S. than within.
Q:What is the vision for Expedia's margin trajectory over the medium term?
A:Expedia expects continued margin expansion driven by effective execution, marketing efficiency, and scale. They see growth potential in B2C, B2B, new business lines, and AI-driven ads. Lodging properties grew by 10% in Q4, and they are adding more supply and partners, which supports confidence in growth.
Q:How has Expedia's supply growth progressed, and what is the impact of large language models?
A:Expedia added 10% more lodging properties in Q4 and continues to grow supply, especially internationally. AI has sped up property onboarding by 70%. They are working with large language models like ChatGPT and Google to ensure their brands show up well and benefit suppliers by driving demand.
Q:Is Expedia seeing changes in traffic from Google due to advanced AI features?
A:No material changes have been observed. Expedia is experimenting with AI and working closely with Google and others to adapt to new interfaces. They see AI search as an opportunity to better target and convert travelers.
Q:What are the drivers of robust growth in Expedia's B2B business?
A:Growth is driven by winning wallet share with partners, supply work, increased participation in promotions, and innovations like the Travel Agent Affiliate Program (TAAP) and assurance offerings. They are also investing in new products and lines of business to sustain growth.
Q:What are Expedia's product development efforts on AI experiences?
A:Expedia is using AI for personalization, better recommendations, and natural language engagement. They are leveraging their data and working on both existing flows and new natural language capabilities. The platform is evolving to support these advancements without requiring a major transformation.
Q:What is the uptake of alternative lodging on Brand Expedia?
A:Alternative lodging is growing on Brand Expedia but has not reached its maximum potential. In 2025, they improved the UX, added inventory, and enhanced the servicing experience to drive more vacation rentals.
Q:What is the impact of the Tiqets acquisition on Expedia's business?
A:Tiqets is positioned to enhance Expedia's B2B offerings but will also contribute to the B2C side by leveraging its expertise in experiences.
Q:Review of Unclear Management Responses
A:Management avoided directly answering questions about the specific margin trajectory for B2B in the long term and the exact impact of large language models on supply dynamics. They also provided limited details on the uptake of alternative lodging and the specific investments required for AI capabilities.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI ad
AI expectation
AI experience
AI eye
AI inventory
AI traveler
BB Cancel
BB advertising
BB digit
Bevegni VP
Black Friday
Brand Expedia
Cancel Reason
Consumer spending
EMEA world
Expedia homepage
Friday sale
Hotelscom Brand
President Investor
Scott
ability
activity partner
advantage
brand booking
channel
cloud
gen AI
issue
journey
learning
model
property
record
site
targeting
team AI
tool
traveler product
trip
video
volume
EXPE Transcript
Expedia Group, Inc. (EXPE) Q4 2025 Earnings Call Transcript
Positive2-12
The earnings call summary and Q&A reveal positive aspects: raised full-year guidance, strong financial metrics, and optimistic outlooks in B2B growth, AI investments, and advertising. Despite unclear responses on some specifics, the overall sentiment is positive, supported by a significant adjusted EPS growth and strong free cash flow. These factors suggest a likely positive stock price movement in the short term.
Expedia Group, Inc. (EXPE) Q3 2025 Earnings Call Transcript
Positive11-6
The earnings call summary and Q&A session indicate strong financial performance, optimistic guidance, and strategic growth plans, particularly in B2B and advertising. The raised guidance, AI integration, and international growth are positive indicators. Some concerns in B2B competition and unclear responses slightly temper the sentiment, but overall, the outlook is positive.
Expedia Group, Inc. (EXPE) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call summary reveals positive developments across multiple areas, including improvements in product offerings, marketing leverage, international growth, and loyalty programs. Despite some unclear management responses, the overall sentiment is bolstered by strategic initiatives in AI, B2B, and brand expansion. These factors, coupled with optimistic guidance and a shareholder return plan, suggest a positive stock price movement over the next two weeks.
Earnings call transcript: Expedia beats Q4 2024 expectations, stock rises
Positive2-6
The earnings call indicates strong financial performance with 13% growth in gross bookings and 10% revenue growth. The reinstated dividend and significant share repurchases are positive for shareholders. Although there are some concerns about Q1 softening and vague responses on Vrbo and advertising growth, the overall sentiment is positive due to strong financial metrics, improved EBITDA margins, and optimistic guidance.
EXPE Slides
EXPE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
