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Expedia Group, Inc. (EXPE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered double-digit growth in room nights (+12%), gross bookings (+13%), and revenue (+10%) with meaningful margin expansion; Adjusted EBITDA rose 21% and Adjusted EBIT rose 50% year over year .
  • Management reinstated a $0.40 quarterly dividend starting March 2025 and framed FY25 as another record EBITDA year with ~50 bps margin expansion; Q1 guidance calls for gross bookings +4–6% and revenue +3–5% amid FX and holiday timing headwinds .
  • Strength broadened: B2B revenue +21% YoY, advertising revenue +25% YoY, and Brand Expedia mid-teens room night growth; international outpaced U.S., with Europe low-double digits and “high teens” in Rest of World for room nights .
  • Catalysts: dividend reinstatement, sustained B2B and advertising momentum, and FY25 margin expansion target; near-term watch items include FX headwinds, holiday timing, and pacing normalization after promotional pull-forward .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based acceleration: B2C bookings growth accelerated to 9% and B2B to 24% in Q4; “our fourth quarter results exceeded our expectations” (CEO) .
    • Mix/efficiency: Gross margin neared 90% (+125 bps YoY) and overhead fell 1%, driving 175 bps Adjusted EBITDA margin expansion to 20.2% .
    • Capital returns/Balance sheet: $1.6B buybacks in 2024 (12.1M shares) and dividend reinstatement; ~$4.5B unrestricted cash & ST investments; May ’25 notes targeted for repayment with leverage ~2x .

  • What Went Wrong

    • Seasonality/normalization: Q4-to-Q1 sequential softening vs strong Q4 (highest-ever bookings in post-Thanksgiving window) and promotional pull-forward; Q1 revenue growth guided 3–5% (FX and Easter shift impact) .
    • Vrbo/HCOM still mid-recovery: Management acknowledged past disruptions from replatforming/loyalty changes; progress ongoing with more work on product, supply, and brand reinvigoration in 2025 .
    • FX headwinds: ~2 points FX drag embedded in Q1 and FY25 top-line guidance; also lapping leap year/Easter timing adds noise to reported growth .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$2.887 $4.060 $3.184
Diluted EPS ($)$0.92 $5.04 $2.20
Net Income Margin (%)4.6% 16.9% 9.4%
Adjusted EBITDA ($USD Millions)$532 $1,250 $643
Adjusted EBITDA Margin (%)18.5% 30.8% 20.2%
Adjusted EPS ($)$1.72 $6.13 $2.39

Actual vs. Consensus (Q4 2024)

  • S&P Global consensus estimates were unavailable at this time due to API limits. We will update when accessible. Values retrieved from S&P Global were unavailable.

Segment Revenue (Q4)

SegmentQ4 2023 ($MM)Q4 2024 ($MM)
B2C1,958 2,076
B2B864 1,042
trivago (third-party)65 66
Total2,887 3,184

KPIs and Selected Drivers

KPI / DriverQ4 2023Q3 2024Q4 2024
Booked Room Nights (MM)77.4 97.4 86.4
Total Gross Bookings ($MM)21,672 27,498 24,422
Lodging Gross Bookings ($MM)15,253 20,027 17,152
Advertising & Media – EG Revenue ($MM)140 167 175

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Bookings GrowthQ1 2025N/A+4% to +6% (≈+7–9% ex-FX/leap year) New
Revenue GrowthQ1 2025N/A+3% to +5% (timing of Easter; ≈+7–9% ex-FX/leap/Easter) New
EBITDA MarginQ1 2025N/AFlat to slightly better YoY (seasonally lowest EBITDA quarter) New
Gross Bookings GrowthFY 2025N/A+4% to +6% (≈2 pts FX headwind) New
Revenue GrowthFY 2025N/A+4% to +6% (≈2 pts FX headwind) New
EBITDA MarginFY 2025N/A~+50 bps YoY; “another record year of EBITDA” New
DividendOngoingSuspended since 2020Reinstated $0.40 per share quarterly, first payable 3/27/25 Reinstated
Capital AllocationFY 2025$3.2B remaining auth. not previously reiteratedPlan to remain opportunistic on buybacks; target leverage ~2x Maintained/clarified

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Consumer momentumRoom nights +10%; noted July softening; adjusted full-year outlook B2C bookings +3% and accelerating; revenue in-line B2C bookings +9% with 5-pt sequential accel; Brand Expedia mid-teens Improving sequentially
B2B growthB2B revenue +22% B2B revenue +18% B2B bookings +24% seq accel; revenue +21% Strong, accelerating
AdvertisingEG ads growing; strength noted Continued double-digit growth +25% YoY; high-margin, innovation roadmap Sustained high growth
International vs U.S.International expansion a focus —International room nights outpaced U.S.; EU low-double digits; ROW high-teens International > U.S.
Vrbo/Hotels.comRecovery initiatives; prior disruption acknowledged —Bookings improved; Hotels.com slight growth; more work on product/supply/loyalty Recovering, ongoing work
AI/TechnologyPlatform/ops investments noted —AI to drive personalization, servicing, traffic, B2B partnerships, and productivity Expanding use cases
Macro/FXJuly demand softening FX -2 pts on revenue ~2 pts FX headwind embedded in Q1/FY25 guides FX a modest drag
Capital returnsBuybacks ongoing Buybacks YTD $1.6B Reinstated $0.40 dividend; ~$3.2B buyback capacity remaining More shareholder-friendly

Management Commentary

  • “Our fourth quarter results exceeded our expectations… disciplined cost management and top line outperformance resulted in strong EBITDA growth with margin expansion.” — CEO Ariane Gorin .
  • “Bookings during [post-Thanksgiving promotional] period were our highest ever.” — CFO Scott Schenkel .
  • “Advertising revenue grew 32% in 2024 and drove 5% of our overall revenue… high-margin, high-growth business.” — CEO .
  • “We expect 2025 gross bookings and revenue growth in the 4% to 6% range [with] another record year of EBITDA with margin expansion of 50 basis points.” — CFO .
  • “We are reinstating our quarterly dividend starting in March of 2025 with a dividend of $0.40 per share.” — CFO .

Q&A Highlights

  • Vrbo and Hotels.com recovery: Management detailed 2024 work on product, supply, and marketing; acknowledged prior disruptions from replatforming/loyalty and outlined further 2025 plans to reinvigorate, with conviction in both brands .
  • Q1 pacing and margin: Guidance reflects FX and timing impacts and some pull-forward from December promotions; margins planned flat to slightly better in seasonally weakest quarter; FY25 margins +50 bps targeted .
  • B2B/APAC: Strength driven by deepening partnerships and market growth; focus on unique supply and new products; supply quality highlighted as critical .
  • Advertising sustainability: Management sees a long runway via more advertisers, product innovation, and new ad types; remains a high-margin vector .
  • AI strategy: Three-pronged focus on product experience, meeting travelers in GenAI-native search surfaces, and partnering with AI-native travel startups; internal productivity gains across functions .
  • Capital returns: Opportunistic buybacks with ~$3.2B authorization remaining, target leverage ~2x, dividend restarted at $0.40; M&A optionality maintained .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024, Q1 2025, and FY 2025 (Revenue, EPS, EBITDA) but the request limit was exceeded at the time of analysis. As a result, explicit consensus comparisons are not included here. We will update with S&P Global consensus once available. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

  • Positive mix and efficiency: Q4 delivered double-digit top-line growth with EBITDA margin expanding 175 bps; FY25 guides to another margin step-up (~50 bps) .
  • Durable growth vectors: B2B and advertising continued to outgrow consolidated revenue and should buffer macro variability; international outperformance broadens growth .
  • Brand repair progressing: Vrbo and Hotels.com are recovering with tangible product/supply improvements and a 2025 plan, but execution remains key .
  • Near-term setup: Q1 growth tempered by FX and holiday timing; watch for normalization after December pull-forward and continued marketing/overhead leverage .
  • Capital return inflection: Dividend reinstatement plus sizable buyback capacity provide downside support and signal confidence in FCF durability .
  • Balance sheet: Ample liquidity and active liability management support flexibility while targeting ~2x leverage .
  • Monitor: FX trends, Vrbo/Hotels.com trajectory, ad growth sustainability, and delivery on FY25 margin expansion target .