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Expedia Group, Inc. (EXPE)·Q3 2025 Earnings Summary

Executive Summary

  • Expedia delivered a high-quality quarter: gross bookings up 12% to $30.7B, revenue up 9% to $4.41B, GAAP diluted EPS $7.33 and Adjusted EPS $7.57; Adjusted EBITDA rose 16% to $1.45B with 208 bps margin expansion, driven by B2B acceleration and B2C marketing leverage .
  • Results beat S&P Global consensus on revenue, EPS, and EBITDA; revenue $4.41B vs $4.28B consensus, Primary EPS $7.57 vs $6.95, and EBITDA $1.35B vs $1.35B; management also raised FY25 guidance and guided Q4 gross bookings/revenue growth of 6–8% with ~200 bps EBITDA margin expansion . Values retrieved from S&P Global.*
  • B2B was the standout: gross bookings +26% to $9.38B and revenue +18% to $1.39B, with Rapid API the fastest-growing product; B2C bookings grew 7% with margin up ~4 pts on improved marketing efficiency .
  • Catalysts: raised FY25 top-line and margin guidance, continued B2B momentum (17th consecutive double-digit quarter), and commentary pointing to October strength and AI-driven product improvements .

What Went Well and What Went Wrong

What Went Well

  • B2B momentum: 17th straight quarter of double-digit growth; gross bookings +26% and revenue +18%; Rapid API fastest-growing product; broad-based regional strength .
  • Marketing leverage and margin expansion: Adjusted EBITDA margin up 208 bps to 32.9%; B2C EBITDA margin ~41% (+~4 pts y/y) on disciplined marketing optimization and cost control .
  • U.S. nights accelerated: booked room nights +11% y/y, with U.S. up high single digits (fastest in 3+ years), EMEA low double digits, APAC >20%; management cited longer booking windows and stronger consumer signs .
  • Quote: “We’re raising our full-year guidance…we grew room nights in the U.S. at the fastest pace in over three years” — CEO Ariane Gorin .

What Went Wrong

  • Book-to-stay timing muted revenue vs bookings: FX helped revenue ~2.5 pts, but revenue growth (9%) lagged bookings (12%) due to stay timing .
  • Air softness: air revenue fell 4% y/y to $101M; inbound Canada-to-U.S. remained pressured, and management flagged macro/lapping headwinds into Q4 .
  • Elevated legal reserves and other items: “Legal reserves, occupancy tax and other” expense rose to $86M in Q3; overhead increased modestly to $620M (up 3%) even as it leveraged on revenue .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Gross Bookings ($USD Billions)$31.45 $30.41 $30.73
Revenue ($USD Billions)$2.99 $3.79 $4.41
GAAP Diluted EPS ($)($1.56) $2.48 $7.33
Adjusted EPS ($)$0.40 $4.24 $7.57
Adjusted EBITDA ($USD Billions)$0.296 $0.908 $1.449
Adjusted EBITDA Margin (%)9.9% 24.0% 32.9%
Net Income Attributable ($USD Millions)($200) $330 $959
Q3 2025 Actual vs S&P Global ConsensusConsensusActualSurprise
Revenue ($USD)$4,281,394,510*$4,412,000,000*+3.0%*
Primary EPS ($)$6.946*$7.57*+9.0%*
EBITDA ($USD)$1,348,845,460*$1,353,000,000*+0.3%*
Values retrieved from S&P Global.*

Segment performance (USD Millions):

Segment MetricQ1 2025Q2 2025Q3 2025
B2C Gross Bookings$22,615 $21,565 $21,343
B2B Gross Bookings$8,836 $8,844 $9,384
B2C Revenue$1,956 $2,479 $2,883
B2B Revenue$947 $1,209 $1,392
Other Revenue (incl. trivago)$85 $98 $137

KPIs and mix:

KPIQ1 2025Q2 2025Q3 2025
Booked Room Nights (Millions)107.7 105.5 108.2
ADR Booked ($)$213.9 $209.3 $209.8
Lodging Revenue ($USD Millions)$2,289 $3,040 $3,604
Air Revenue ($USD Millions)$107 $105 $101
Advertising & Media – EG ($USD Millions)$174 $182 $194
U.S. Points of Sale Revenue ($USD Millions)$1,831 $2,303 $2,537
Non-U.S. Points of Sale Revenue ($USD Millions)$1,157 $1,483 $1,875

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Bookings GrowthFY 20253–5% ~7% Raised
Revenue GrowthFY 20253–5% ~6–7% Raised
Adjusted EBITDA Margin ExpansionFY 2025~100 bps ~200 bps Raised
Gross Bookings GrowthQ4 2025—6–8% New
Revenue GrowthQ4 2025—6–8% New
Adjusted EBITDA Margin ExpansionQ4 2025—~200 bps New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Product PersonalizationIntroduced AI filters, property Q&A, review summaries; higher conversion and insurance attach; developer productivity +20% in some teams AI driving attach and personalized ranking; virtual agents resolve >50% of traveler queries; integrations with Google/OpenAI/Perplexity progressing Improving
Marketing Leverage (B2C)Aim to leverage in H2; disciplined redeployments; Q2 B2C margin 29.4% (+~3 pts) Fourth consecutive quarter of improved marketing productivity; B2C EBITDA margin ~41% (+~4 pts) Improving
B2B MomentumDouble-digit growth; Asia strength; adding car API; strong Rapid adoption Gross bookings +26%; revenue +18%; Rapid API fastest-growing; diversified partners/geographies Accelerating
International Inbound to U.S.Inbound into U.S. down ~7% in Q1; Canada down ~30% Inbound nearly back to last year; Europe/APAC corridors recovered; Canada still pressured Improving but mixed
Loyalty (One Key)Active members growing; tuning brand/geography rollouts; Hotels.com relaunch Member deals on Vrbo; “Save Your Way” on Hotels.com; more repeat/direct bookings Improving
Vrbo/Alt AccommodationsAdded multi-unit inventory; shorter-stay features; categorical recommendations Launched VrboCare and “Loved by Guests” badge; stricter Premier Host criteria; AI review summaries Quality rising

Management Commentary

  • “We grew bookings 12% and revenue 9%…we’re raising our full-year guidance.” — CEO Ariane Gorin .
  • “B2C EBITDA margins were 41%…driven by significant marketing leverage and growth in high-margin advertising and insurance.” — CFO Scott Schenkel .
  • “Rapid API was our fastest-growing product and the largest contributor to B2B growth.” — CFO Scott Schenkel .
  • “Our virtual agents resolve over 50% of traveler queries…reducing our service cost per transaction.” — CFO Scott Schenkel .

Q&A Highlights

  • B2B outlook and competition: growth built on diversified partners and geographies; continued investment and product expansion into car, insurance, advertising; confidence in share gains despite competition .
  • Margin drivers: continued B2C sales/marketing optimization, cost of sales efficiencies (including AI), and overhead management underpin multi-year margin expansion; 2026 margin expansion expected but moderated vs 2025 .
  • Direct traffic and conversion: ~two-thirds of B2C bookings are direct; conversion improving in apps/sites with traffic ahead of Q1/Q2; readiness to “lean in” if ROI supports .
  • U.S. nights and Q4 setup: U.S. nights strongest in three years; October strong; Q4 moderated by tough comps and macro watch (government shutdown/air risks), but outlook absorbs potential air impacts .

Estimates Context

  • Q3 2025 beats vs S&P Global: revenue $4.41B vs $4.28B consensus (+3%), Primary EPS $7.57 vs $6.95 (+9%), EBITDA $1.353B vs $1.349B (+0.3%); 21 EPS estimates and 30 revenue estimates underpin consensus. Beat on revenue, EPS, and EBITDA . Values retrieved from S&P Global.*
  • Implication: Street likely raises Q4/FY25 revenue/EPS models modestly given stronger-than-expected U.S. demand, B2B acceleration, and margin leverage; management guided Q4 gross bookings/revenue growth of 6–8% and ~200 bps margin expansion . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • B2B is the growth engine: +26% bookings, +18% revenue, Rapid API momentum; diversified across partners and regions reduces cyclicality and supports sustained double-digit growth .
  • Structural margin story continues: B2C marketing leverage and AI-enabled efficiencies lifted EBITDA margin 208 bps y/y to 32.9%; management targets further margin expansion in 2026 (at a moderated pace) .
  • Demand indicators healthy: room nights +11% with the strongest U.S. growth in 3+ years; longer stays and booking windows suggest resilient consumer; October trends supportive .
  • Advertising/insurance are high-margin mix tailwinds: EG advertising +16% y/y and continued monetization opportunities, contributing to B2C margin gains .
  • Guidance raised across FY25 bookings/revenue/margins; Q4 outlook solid despite tough comps; watch for macro and air/travel corridor developments (Canada inbound) .
  • Product differentiation: AI-driven personalization and servicing, VrboCare enhancements, and loyalty innovations (member deals; Save Your Way) strengthen brand value and repeat/direct mix .
  • Trading lens: narrative of consistent B2B growth + margin expansion + raised FY guide is constructive; monitor execution on AI/product attach, B2C international growth, and any Q4 macro impacts (government shutdown/air) for near-term volatility .