Expedia Group Inc (EXPE) Q3 2025 Earnings Call Highlights: Strong Growth in Bookings and ...

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Bookings Growth: Up 12% year-over-year. Revenue Growth: Increased by 9% year-over-year to $4.4 billion. EBITDA Margin Expansion: Expanded by over 2 points, reaching a margin of 33%. Booked Room Nights: Increased by 11% globally. B2B Bookings Growth: Up 26% year-over-year. Advertising Revenue Growth: Increased by 16% year-over-year. B2C Gross Bookings: $21.3 billion, up 7% year-over-year. B2C Revenue: $2.9 billion, up 4% year-over-year. B2C EBITDA Margin: 41%, up approximately 4 points from last year. B2B Revenue Growth: Increased by 18% year-over-year. Adjusted EBITDA: $1.4 billion. Adjusted EPS: $7.57, grew 23% faster than EBITDA. Cost of Revenue: $373 million, down 3% year-over-year. Free Cash Flow: $3 billion on a trailing 12-month basis. Share Repurchase: $451 million used to repurchase 2.3 million shares. Cash Position: $6.2 billion in unrestricted cash and short-term investments.

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Release Date: November 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Expedia Group Inc (NASDAQ:EXPE) exceeded both top and bottom line expectations for Q3 2025, with bookings up 12% and revenue up 9%. The company expanded its EBITDA margin by over 2 points, demonstrating strong operational discipline and volume leverage. B2B bookings increased 26%, marking the 17th consecutive quarter of double-digit growth, with advertising revenue also up 16%. Expedia Group Inc (NASDAQ:EXPE) saw significant growth in room nights, with high single-digit growth in the US and over 20% growth in Asia. The integration of AI into products has driven engagement and improved customer experiences, contributing to growth in vacation rentals and record attach rates.

Negative Points

The company faces a dynamic macro environment, with potential economic uncertainties that could impact future performance. Despite strong performance, the competitive landscape in the B2B sector remains challenging, requiring continuous innovation and value delivery. The integration of vacation rentals into the lodging flow is being approached cautiously to ensure a positive traveler experience, indicating potential challenges in execution. While the company has seen improvements, conversion rates in direct channels are not yet at desired levels, indicating room for further enhancement. The potential impact of a government shutdown and flight cancellations poses risks to Q4 performance, although the company has factored these into its guidance.

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Q & A Highlights

Q: How should we think about the medium-term growth for Expedia's B2B segment, considering the competitive environment? A: Ariane Gorin, CEO, explained that the B2B segment has consistently grown faster than the market, driven by great supply, strong technology, and long-term partnerships. Future growth will come from signing new partners and expanding existing ones, with lodging as the core business and potential in other areas like car rentals and advertising. The B2B business is geographically diverse, with 65% outside the US, and has significant growth potential in the $3 trillion travel industry.

Q: What are the biggest sources of margin expansion for Expedia in the coming years? A: Scott Schenkel, CFO, highlighted several initiatives for margin expansion, including optimizing B2C sales and marketing, leveraging AI for cost efficiency, managing overhead costs, and improving the mix of high-margin products like advertising and insurance. These efforts are expected to drive cost reductions and increase margins.

Q: How is Expedia leveraging AI to enhance personalization and drive growth? A: Ariane Gorin noted that AI is already helping Expedia achieve more personalization, leading to growth. AI-driven changes in product flows and stronger recommendations have resulted in record attach levels. AI is also being used in marketing and partner experiences to improve targeting and content, which enhances the overall customer experience and drives more trips.

Q: How is the replatforming process helping Expedia compete better, and what is the outlook for Vrbo and Hotels.com? A: Ariane Gorin explained that the replatforming has allowed Expedia to leverage capabilities across brands, such as a common data platform and lodging path. This has enabled quick learnings and improvements in conversion rates. The replatforming has also facilitated the rollout of a unified loyalty program. Vrbo and Hotels.com have shown strong performance due to these platform enhancements and brand repositioning efforts.

Q: What is Expedia's strategy for integrating alternative accommodations with hotels, and how is Vrbo positioned in this market? A: Ariane Gorin stated that Vrbo remains a vacation rental pure play, with new features strengthening its value proposition. Brand Expedia is integrating vacation rentals into its lodging flow, ensuring a great traveler experience. Vrbo's inventory is also being distributed through B2B partners, expanding its reach and demand.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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