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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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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