Release Date: May 08, 2025

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

Positive Points

• Expedia Group Inc (EXPE, Financial) achieved 16% EBITDA growth and a 90% increase in earnings per share, surpassing bottom-line expectations.
• The B2B segment demonstrated strong performance with 14% bookings growth, significantly outperforming the industry.
• The advertising business experienced robust growth, with a 20% increase in revenue and a record number of $1 million-plus deals.
• Expedia's strategic partnerships, such as with Southwest Airlines and Ryanair, have successfully attracted new customers and enhanced supply offerings.
• The company is leveraging AI to enhance product experiences, streamline operations, and improve marketing effectiveness, positioning it well for future growth.

Negative Points

• Overall bookings and revenue growth were at the lower end of guidance due to weaker-than-expected travel demand in the US.
• The consumer business, particularly in the US, saw only 1% bookings growth, impacted by declining consumer sentiment.
• Hotels.com experienced negative growth due to softer US demand and foreign exchange headwinds.
• The US market softness and macroeconomic headwinds led to a revision of full-year guidance for gross bookings and revenue.
• Inbound travel to the US faced significant pressure, with bookings from Canada falling nearly 30%.

Q & A Highlights

Q: Could you discuss the marketing spend and whether you could have spent more to drive higher bookings? Also, how is the Hotels.com turnaround progressing? A: (Ariane Gorin, CEO) We are optimistic about Hotels.com, having relaunched the brand with a new visual identity and mascot. We are targeting specific countries for growth. (Scott Schenkel, CFO) We spent $1.8 billion on sales and marketing in Q1, slightly deleveraging by about 11 basis points. We focus on profitable growth, investing in marketing where opportunities exist.

Q: How is Expedia positioned to manage macroeconomic headwinds, particularly in B2B versus B2C? A: (Ariane Gorin, CEO) Our B2B business is geographically diverse and profitable, allowing us to manage macro headwinds effectively. We offer various tools to help hotel partners, such as member rates and packaging, to manage demand. (Scott Schenkel, CFO) Our margin expansion guidance is supported by employment actions and cost management, with further opportunities to optimize costs.

Q: Can you provide insights into monthly trends and consumer behavior changes? A: (Ariane Gorin, CEO) April was softer than March, partly due to Easter timing. We see pressure on travel into the US and a shift to lower ADR rate plans. Hotels are offering more discounts, and we are well-positioned to serve the demand.

Q: What are your strategic investments in AI over the next 12 to 18 months? A: (Ariane Gorin, CEO) AI is an accelerator across our business. We are enhancing products with AI, driving traffic to our brands, exploring new partnerships, and improving team effectiveness. AI is used in product experiences, marketing, and operational efficiencies.

Q: How is the international rollout performing, and what are the booking trends? A: (Scott Schenkel, CFO) We see a step down in intra-US and into-US dynamics, with some pressure on inbound travel. (Ariane Gorin, CEO) Internationally, B2B is strong, with 30% room night growth in Asia. Brand Expedia is growing in Western Europe, and we are investing surgically in regions with strong brand awareness.

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