Expedia Group, Inc. (EXPE) Earnings & Analysis

Latest quarter

Expedia Group reported Q2 FY2026 revenue of $4.3 billion, up 14.0% from $3.8 billion a year earlier. Revenue, as the consensus counts it, was $4.3 billion against a consensus of $4.2 billion, or 3.13% above the consensus. Adjusted EPS, as the consensus counts it, was $5.76 versus the consensus of $5.45, or 5.69% above the consensus; diluted EPS was $7.16, compared with $2.48 in Q2 FY2025.

The company said revenue growth reflected higher bookings, including 6% growth in room nights and 5% growth in average daily rates on an FX-neutral basis. Expedia said B2B revenue rose 23.0% and B2B bookings increased 21.0%. Gross margin was 90.7%, versus 90.0% a year earlier, while operating margin was 18.5%, versus 12.8%. Free cash flow was $1.3 billion, compared with $921.0 million a year earlier. The company’s Q2 revenue growth of 14.0% was above its prior guidance of 9.00% to 11.0%.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Ariane Gorin said consumer spending was healthy in the second quarter, particularly in the U.S., as travelers took longer stays and booked further ahead despite higher air-ticket and hotel prices. She said total booked room nights rose 6%, with mid-single-digit growth in the U.S., low-single-digit growth in EMEA and low-double-digit growth in the rest of the world. Gorin said Europe, particularly outbound travel, remained pressured by macroeconomic headwinds and reduced air capacity, while APAC rebounded from Middle East-related disruption.

Gorin said consumer bookings rose 8%, supported by the company’s fastest U.S. growth in 15 quarters, and said B2B delivered its 20th consecutive quarter of double-digit growth. She said product improvements, supply expansion, loyalty-member performance and more targeted marketing contributed to consumer growth and marketing leverage. Gorin also said Expedia was investing in AI and social channels, while agentic traffic remained small; she said the company had expanded work with AI platforms and announced the acquisition of Layla.

On competition in B2B, Gorin said the market had long been competitive and that Expedia was building a one-stop travel-shop offering spanning supply, technology and servicing. She said Expedia would not comment on individual partners, and said individual partner developments would not be material to guidance. Gorin also said Expedia had announced its intent to acquire CarTrawler to add B2B car-rental and insurance capabilities.

Derek Anderson said Q2 margin expansion reflected cost efficiencies, consumer-marketing leverage and higher volume. In response to questions about the pace of margins, he said Expedia would begin to lap prior-year reductions in marketing and overhead costs, while B2B investment and net foreign-exchange effects would weigh on Q3 margins. Anderson said structural marketing-program improvements and further cost-structure work would continue. For the second half, Anderson said the company assumed healthy demand trends would persist, led by the U.S. domestic market, but expected bookings and room-night growth to decelerate against tougher comparisons.

Guidance

Expedia raised its FY2026 gross-bookings outlook from growth of 6.00% to 8.00% to gross bookings of $129.5 billion to $130.8 billion, representing growth of 8% to 9%. The company raised its FY2026 revenue outlook from growth of 6.00% to 9.00% to revenue of $16.05 billion to $16.22 billion, representing growth of 9% to 10%. Expedia also said it now expects adjusted EBITDA margin expansion of 150 to 175 basis points versus the prior year.