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Expedia Group, Inc. (EXPE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a clean beat on the top and bottom line: revenue up 6% to $3.786B and Adjusted EPS up 21% to $4.24; Adjusted EBITDA rose 16% to $908M with ~190 bps margin expansion, while GAAP diluted EPS fell 11% to $2.48 due to higher “Other, net” losses .
  • Mix and geography drove the outperformance: B2B gross bookings +17% and Advertising revenue +19%, with non‑U.S. points of sale +13% vs U.S. +3%; booked room nights +7% and lodging revenue +6% .
  • Guidance raised: FY 2025 gross bookings and revenue growth ranges lifted to 3–5% (from 2–4%), and Q3 2025 outlook calls for bookings +5–7%, revenue +4–6%, and EBITDA margin expansion of 50–100 bps .
  • Capital return and catalysts: $627M repurchases (~3.8M shares) and a declared $0.40 dividend payable Sept 18, 2025; management highlighted international strength/B2B momentum, AI-driven conversion gains, and expected 2H cost benefits—key narrative drivers for the stock .

What Went Well and What Went Wrong

  • What Went Well

    • Strong B2B and Advertising engines: B2B revenue +15%, B2B bookings +17%; Advertising & Media EG +19% with record partner engagement .
    • International outperformance: Non‑U.S. revenue +13%, room nights mid‑teens in RoW and ~20% growth in Asia (Rapid API strength); Brand Expedia was largest and fastest-growing consumer brand with record attach rates .
    • Margin expansion and discipline: Adjusted EBITDA margin up ~190 bps to 24.0%; B2C EBITDA margin up ~255 bps to 29.4% on product/advertising mix and cost control .

  • What Went Wrong

    • GAAP earnings compression: GAAP net income −14% YoY and diluted EPS −11% due to “Other, net” losses including equity investment marks and hedges; free cash flow −29% YoY to $921M .
    • Softer U.S. consumer and Vrbo softness: U.S. travel demand muted with shorter booking windows and higher cancellations; Vrbo bookings declined amid lower ADRs, shorter stays, and higher cancellations .
    • Hotels.com still early in recovery: brand relaunched in April; bookings only slightly improved, with ongoing work on product and international re‑ramp .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$3.558 $2.988 $3.786
GAAP Diluted EPS ($)$2.80 $(1.56) $2.48
Adjusted EPS ($)$3.51 $0.40 $4.24
Operating Income ($USD Millions)$451 $(70) $485
Adjusted EBITDA ($USD Millions)$786 $296 $908
Adjusted EBIT ($USD Millions)$475 $(21) $583
Net Income Attributable ($USD Millions)$386 $(200) $330
Net Income Margin %10.8% (6.7%) 8.7%

Segment/Revenue Mix and Profitability

MetricQ2 2024Q2 2025
B2C Gross Bookings ($USD Billions)$21.290 $21.565
B2B Gross Bookings ($USD Billions)$7.547 $8.844
B2C Revenue ($USD Billions)$2.432 $2.479
B2B Revenue ($USD Billions)$1.049 $1.209
Advertising & Media – EG Revenue ($USD Millions)$152 $182
Advertising & Media – trivago Revenue ($USD Millions)$77 $98
B2C Adjusted EBITDA ($USD Millions)$654 $728
B2B Adjusted EBITDA ($USD Millions)$263 $331
B2C EBITDA Margin %26.8% 29.4%
B2B EBITDA Margin %25.1% 27.3%

KPIs and Geography

KPIQ2 2024Q1 2025Q2 2025
Booked Room Nights (Millions)98.9 107.7 105.5
ADR Booked ($USD)$209.8 $213.9 $209.3
Lodging Revenue ($USD Billions)$2.862 $2.289 $3.040
U.S. Points of Sale Revenue ($USD Billions)$2.246 $1.831 $2.303
Non-U.S. Points of Sale Revenue ($USD Billions)$1.312 $1.157 $1.483
Free Cash Flow ($USD Millions)$1,307 —$921

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Bookings GrowthFY 20252–4% 3–5% Raised
Revenue GrowthFY 20252–4% 3–5% Raised
Adjusted EBITDA Margin ExpansionFY 202575–100 bps 100 bps Raised to high end
Gross Bookings GrowthQ3 2025—5–7% New
Revenue GrowthQ3 2025—4–6% New
Adjusted EBITDA Margin ExpansionQ3 2025—50–100 bps New
DividendQ3 2025 declaration—$0.40 per share, payable Sept 18, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesAI to enhance discovery, shopping, servicing; partnerships and internal productivity; margin expansion focus AI filters improve conversion; insurance attach at highs; CS NPS at records; developer cycle times −20% in some teams; working with Google, OpenAI, Meta, Microsoft; GenAI traffic converts better Broadening deployment and external integrations
B2B momentumAPAC strength, 21% FY bookings; strong partner wins; testing new products B2B bookings +17%; revenue +15%; strong Asia/Europe; Rapid API driving ~30% Asia growth; margins +227 bps Accelerating growth and margin
U.S. consumer/macroHealthy Q4; early Q1 softening; FX headwinds; strong holiday promos pull-forward Muted U.S. demand; shorter windows, higher cancellations; sequential uptick in July demand U.S. softer; signs of improvement
Brand performanceExpedia packages/attach and air merchandising helped Q4; Hotels.com slight growth; Vrbo accelerating with added inventory Brand Expedia fastest growing; record multi‑item attach; Hotels.com relaunch; Vrbo room nights in line with U.S. market but bookings down on ADR/LOS/cancels Expedia strong; Hotels.com recovering; Vrbo mixed
International expansionB2C bookings outside U.S. accelerating; targeted country focus Non‑U.S. revenue +13%; U.K., Northern Europe strong; Japan/Brazil >20% growth; focus markets by brand Sustained outperformance ex‑U.S.
Marketing leverage/efficiencyOverhead leverage; pursuing marketing leverage across brands/channels B2C marketing leverage improving; direct/app traffic strength; disciplined redeployments expected in 2H Improving leverage into 2H
Supply/partnershipsAdding relevant supply (air/NDC, VR), merchandising tools Southwest partnership (~5% of SW passenger volume in Q2); Premier Inn, Ryanair added; Vrbo promotions incl. last‑minute deals Strengthened differentiated supply

Management Commentary

  • “Our second quarter results exceeded both our top and bottom line expectations… driven by continued strength across B2B and Advertising and further progress on our key priorities.” — CEO Ariane Gorin .
  • “We beat the high end of our bookings and revenue guidance by a point and our adjusted EBITDA margin expansion guidance by a point… booked room nights up 7%, gross bookings up 5%, revenue up 6%.” — CFO Scott Schenkel .
  • “Brand Expedia was once again our largest and fastest growing consumer brand with multi item attach rates at their highest level since the pandemic.” — CEO Ariane Gorin .
  • “AI… leveraging our vast first party data to create better, more personalized experiences… record high Net Promoter Scores while helping us reduce costs.” — CEO Ariane Gorin .
  • “We expect gross bookings growth of 5% to 7% and revenue growth of 4% to 6% [in Q3];… For the full year, we expect… adjusted EBITDA margin expansion of a full point.” — CFO Scott Schenkel .

Q&A Highlights

  • Strategic alignment and traffic/conversion: Management emphasized strong direct and app traffic, rising social traffic, and AI partnerships to capture GenAI traffic; portfolio mix across B2C/B2B aids diversification .
  • Hotels.com recovery: April relaunch boosting awareness and direct traffic; new hotel‑specific features (price alerts/insights) and international re‑acceleration expected to support next 12 months .
  • Promotional environment/all‑in pricing: More supplier‑driven promos amid price sensitivity; Expedia optimizes across marketing/loyalty/promotions; “all‑in pricing” impacts as expected without adverse conversion .
  • Vrbo execution: Addressing foundational supply gaps with last‑minute deals and multi‑unit urban inventory; launching categorical recommendations to improve matching .
  • International focus and booking windows: Shorter Q2 windows and higher cancels; re‑bookings seen into Q3; focus markets (Japan/Brazil >20% growth; Northern Europe strong) for outsized gains .
  • Marketing leverage and 2H margin drivers: Redeploy spend by country/brand/channel to balance growth and productivity; 2H benefits from early‑Q2 cost actions .

Estimates Context

  • Q2 2025 vs Wall Street consensus (S&P Global):
    • Revenue: Actual $3.786B vs Consensus $3.711B* → beat .
    • Primary EPS: Actual $4.24 vs Consensus $4.13* → beat .
    • EBITDA: S&P Global Actual $754M* vs Consensus $853M* → miss using S&P EBITDA definition; note company reported Adjusted EBITDA of $908M (+16% YoY) .
      Values retrieved from S&P Global.
MetricConsensus (Q2 2025)Actual (Q2 2025)Surprise
Revenue ($USD)$3,710,635,630*$3,786,000,000 +$75.4M / +2.0%
Primary EPS ($)$4.13172*$4.24 +$0.11 / +2.6%
EBITDA ($USD)$852,831,710*$754,000,000*−$98.8M / −11.6%

Next quarter snapshot (consensus):

  • Q3 2025: Revenue $4.281B*, EPS $6.95*, EBITDA $1.349B*, with 30 revenue estimates and 21 EPS estimates outstanding; company guides bookings +5–7%, revenue +4–6%, margin expansion 50–100 bps .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mix shift remains favorable: B2B (+17% bookings, +15% revenue) and Advertising (+19%) underpin growth and margin expansion; exposure outside the U.S. provides incremental resilience .
  • International narrative strengthening: Non‑U.S. points of sale +13% with Asia and Northern Europe particularly strong; expect continued outperformance ex‑U.S. through focused market strategy .
  • Margin expansion durable into 2H: Company raised FY margin expansion guidance to 100 bps and flagged 2H benefits from cost actions and B2C marketing leverage; watch 2H execution .
  • GAAP vs non‑GAAP optics: GAAP EPS down on “Other, net” losses, while Adjusted EPS/EBITDA rose strongly—model both sets to capture volatility from FX/equity marks/hedges .
  • Vrbo/Hotels.com are rebuilding: Expect gradual improvements as supply/product gaps close and brand work matures; near‑term variability likely given ADR/LOS and cancellation dynamics .
  • Capital return is a support: Buybacks ($627M in Q2) and $0.40 dividend provide downside support; $2.3B repurchase capacity remains .
  • Trading setup: Near‑term catalysts include Q3 delivery vs raised guidance and evidence of B2C marketing leverage; watch international growth momentum and Advertising trajectory .