Top-Line Growth
Gross bookings grew 13% to $35.5 billion and revenue increased 15% to $3.4 billion (FX contributed ~3 points to bookings and ~5 points to revenue).
Expedia
· EXPE
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- +3.92%
- Next Earnings Date:
- 2026-07-30
Earnings Call Sentiment
PositiveThe call presented a materially positive quarter: double-digit bookings and revenue growth, substantial margin expansion (nearly 6 points), strong free cash flow and balance sheet actions, meaningful AI-driven productivity gains, and solid consumer and B2B momentum. However, management was candid about near-term headwinds from geopolitical events (Middle East conflict, Mexico advisories) that elevated cancellations in March, moderating partner promotions in B2B, and rising AI-related investment costs. The company maintained a cautious but constructive outlook given ongoing macro volatility.
Company Guidance
Following a Q1 beat (gross bookings $35.5B, +13%; revenue $3.4B, +15%; adjusted EBITDA $542M, 15.8% margin), Expedia reiterated forward guidance: Q2 gross bookings growth of 7–9% and revenue growth of 9–11% (with current FX tailwinds of ~0.5 point to bookings and ~4 points to revenue) and Q2 adjusted EBITDA margins expected to be up 50–100 basis points; for the full year the company again expects gross bookings growth of 6–8% and revenue growth of 6–9% (including roughly 1 point and 2 points of FX tailwind to bookings and revenue, respectively) and total EBITDA margin expansion of 100–125 basis points (management expects to land at the high end of that range based on Q1/Q2 trends), while noting the outlook could have upside but is being prudently maintained given ongoing geopolitical and macro uncertainty.
Strong Profitability and Margin Expansion
Adjusted EBITDA was $542 million with a 15.8% margin, the highest Q1 in 15 years, representing nearly 6 points of adjusted EBITDA margin expansion year-over-year.
Significant Consumer and B2B Momentum
Consumer gross bookings grew 10% to $24.8 billion with consumer revenue of $2.1 billion and ~20% consumer EBITDA margin (up ~9 points). B2B gross bookings grew 22% to $10.7 billion and B2B revenue grew 25% to $1.2 billion.
Room Night and ADR Improvement
Total booked room nights increased 6% with ADR up 4% on an FX-neutral basis (U.S. domestic room nights mid-single-digit growth; mid-single-digit domestic booking growth noted).
Cash Flow, Deleveraging and Capital Return
Trailing 12-month free cash flow was $4.1 billion; unrestricted cash and short-term investments ended at $5.8 billion. The company retired $1.75 billion of short-term debt, issued $1 billion of long-term debt, repurchased $700 million of stock in the quarter, and announced a new $5 billion share repurchase authorization.
Supply and Product Gains
Lodging property count grew ~10% (fastest growth outside the U.S.), handling scale of nearly 3.7 million properties (800,000 exclusive). Vacation rentals on Expedia reached an annualized $1 billion run rate (bookings).
AI-Driven Operational and Marketing Benefits
AI adoption improved servicing (30%+ of service interactions using AI), reduced new-agent onboarding time by ~60%, increased conversion (record attach rates and higher Vrbo conversion), and drove 'hundreds of millions' in realized marketing value via productivity and automation.
Marketing Efficiency and Consumer Leverage
Direct sales and marketing expenses were down 7% in the consumer business, delivering significant leverage (consumer EBITDA margin expansion and improved marketing returns while consumer gross bookings grew 10%).
Operator
Good day, everyone and welcome to the Expedia Group Q1 2026 Financial Results Teleconference. My name is Jen and I will be the operator for today's call. [Operator Instructions] For opening remarks, I will now turn the call over to VP, Investor Relations, Rob Bevegni. Please go ahead.
Rob Bevegni
Good afternoon and welcome to Expedia Group's First Quarter 2026 Earnings Call. I'm pleased to be joined on today's call by our CEO, Ariane Gorin; and our CFO, Scott Schenkel. As a reminder, our commentary today will include references to certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in our earnings release. Unless otherwise stated, all growth rates are on a year-over-year basis and any reference to expenses exclude stock-based compensation. We will also be making forward-looking statements during the call, which are predictions, projections and other statements about future events. These statements are based on current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict. Actual results could materially differ due to factors discussed during this call and in our most recent Forms 10-Q, 10-K and other filings with the SEC.
Except as required by law, we do not undertake any responsibility to update these forward-looking statements. This call is being webcast on the Investor Relations section of our website at ir.expediagroup.com. A replay will be archived on our site. A slide deck containing financial highlights has also been posted on our IR website. For today's call, A...
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