Earnings Hub
← Back to Transcript

AI-Generated Summary

EXPE Q3 2025 Earnings Call

Call Details

  • Call Title: Expedia Group, Inc. Q3 2025 Earnings Call
  • Date: October 30, 2025
  • Management Team:
    • Ariane Gorin, CEO
    • Scott Schenkel, CFO
    • Rob Befegny, VP Investor Relations

Call Summary

Financial Performance

  • Bookings increased by 12% year-over-year, reaching $30.7 billion, with a 1% benefit from foreign exchange.
  • Revenue grew 9% to $4.4 billion, benefiting by 2.5% from foreign exchange, which was 1% higher than expected.
  • Adjusted EBITDA was $1.4 billion, resulting in a margin of 33%, with a 2% expansion compared to the previous year.
  • Booked room nights rose 11%, marking the strongest growth in the U.S. in over three years, with high single-digit growth domestically and over 20% growth in Asia.
  • B2B bookings surged 26%, marking the 17th consecutive quarter of double-digit growth, while advertising revenue increased by 16%.
  • Adjusted EPS was $7.57, reflecting a 23% increase, driven by share repurchases.
  • Free cash flow for the trailing twelve months was $3 billion, indicating strong operational performance.

Guidance

  • For Q4 2025, management expects gross bookings and revenue growth of 6% to 8%, with a 1% benefit from foreign exchange.
  • Full-year guidance was raised, with expectations for gross bookings to increase by approximately 7% and revenue to grow by 6% to 7%.
  • Adjusted EBITDA margins are anticipated to expand by approximately two points for the full year.
  • Management expressed confidence in maintaining momentum into Q4, despite potential challenges from economic indicators and a government shutdown.

Capital Allocation

  • The company ended Q3 with $6.2 billion in unrestricted cash and short-term investments.
  • Share repurchases totaled $451 million in the quarter, with $1.8 billion remaining in the repurchase program.
  • Management reiterated a commitment to maintaining debt levels consistent with an investment-grade rating.
  • The demand environment improved, with longer lengths of stay and booking windows indicating stronger consumer confidence.
  • The U.S. market showed acceleration, with high single-digit growth in room nights, while EMEA experienced low double-digit growth.
  • The Asia-Pacific region saw over 20% growth in room nights, reflecting a robust recovery trend.
  • Cancellation rates remained stable, supporting overall demand.
  • The company reported strong performance across all regions, with notable growth in Europe and Asia.
  • Inbound travel to the U.S. is nearly back to last year's levels, with improvements noted in travel from Canada as the quarter progressed.
  • The geographic mix remains diverse, with 65% of B2B business coming from outside the U.S.

Competition & Market Share

  • Management noted that B2B bookings growth outpaced the market, driven by strong partnerships and technology enhancements.
  • The competitive landscape remains dynamic, with ongoing investments in technology and marketing to maintain market share.
  • The company is focused on enhancing its value proposition to partners and travelers, leveraging AI and personalized experiences.

Notable Quotes

  • Ariane Gorin, CEO: "Our third quarter results exceeded both our top and bottom line expectations, reflecting an improved demand environment, disciplined execution, and progress on our strategic priorities."
  • Scott Schenkel, CFO: "Bookings growth exceeded revenue growth primarily due to book-to-stay timing, as the majority of our revenues are recorded at the time of stay, not when the booking takes place."
  • Ariane Gorin, CEO: "B2B had another fantastic quarter. We grew share with existing partners and added new partners."
  • Scott Schenkel, CFO: "We expect gross bookings to be up approximately 7%, revenue up approximately 6% to 7%, and EBITDA margins to be up approximately two points versus last year."
  • Ariane Gorin, CEO: "We're making good progress on answer engine optimization, even as traffic today remains small."
  • Scott Schenkel, CFO: "Our booked room nights were up 11%, driven by our strongest U.S. night growth in over three years."
  • Ariane Gorin, CEO: "We're confident that they'll ultimately choose to book with the brand they trust and know will be with them along their whole journey."
  • Scott Schenkel, CFO: "We saw significant leverage in our B2C business with direct sales and marketing down 4%, leveraging over half a point as a percentage of gross bookings."
  • Ariane Gorin, CEO: "We believe we maintained or perhaps even grew our market share in the U.S."
  • Scott Schenkel, CFO: "The market remains dynamic, and in the U.S., just to be clear, we haven't seen a change in trend yet, but we're watching very carefully."

Q&A Summary

Q: Eric Sheridan (Goldman Sachs)
Asked about the medium-term growth of B2B and how to maintain competitiveness in the category.

A: Ariane Gorin, CEO
Responded that B2B had an exceptional quarter, with consistent double-digit growth driven by strong supply and technology. She emphasized the importance of both signing new partners and growing existing ones.

Q: Mark Mahaney (Evercore ISI)
Inquired about the sources of margin expansion and the potential for AI to enhance personalization in travel.

A: Scott Schenkel, CFO
Outlined that margin expansion would come from sales and marketing optimization, cost of sales management, and overhead control. He noted that AI is already improving personalization and conversion rates.

Q: Anthony Post (Bank of America)
Questioned the growth of Vrbo relative to market trends and the impact of potential government shutdowns on Q4 guidance.

A: Ariane Gorin, CEO
Confirmed that Vrbo grew bookings and maintained market share in the U.S. Scott Schenkel added that Q4 guidance reflects stable trends but acknowledged the potential impact of external factors.

Q: Naved Khan (B Reilly Securities)
Asked about the competitive dynamics in the alternative accommodation market and the integration of hotels and vacation rentals.

A: Ariane Gorin, CEO
Stated that Vrbo is positioned as a trusted vacation rental brand and that integration with hotels is being approached carefully to ensure a positive traveler experience.

Q: Connor Cunningham (Mellius Research)
Inquired about the direct booking percentage and its sustainability.

A: Ariane Gorin, CEO
Noted that about two-thirds of B2C bookings are direct, with improvements in conversion rates. Scott Schenkel added that traffic and marketing efficiencies are driving positive trends.

Q: Ken Gorowski (Wells Fargo)
Asked about the normalization of travel dynamics from Canada and the overall international travel outlook.

A: Ariane Gorin, CEO
Indicated that inbound travel to the U.S. is nearly back to last year’s levels, with improvements noted in travel from Canada as the quarter progressed.

Q: Tom Champion (Piper Sandler)
Requested an update on international travel dynamics, particularly from Canada.

A: Ariane Gorin, CEO
Confirmed that inbound travel from Canada remains pressured but showed improvement as the quarter progressed, with healthy demand across all corridors.

On This Page