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    EXPE
    Earnings call· Jun 2026(Q2 FY26)

    Expedia Group Q2 FY26 earnings call EXPE

    Aug 5, 2026 Source

    Executive summary

    Expedia Group Q2 FY26 — Strong Performance Driven by B2B Momentum and Marketing Leverage

    Expedia Group delivered a solid second quarter, surpassing expectations with strong financial results driven by robust B2B growth, improved consumer marketing returns, and disciplined cost management. The company continues to advance its strategic priorities, including product innovation with AI, expanding marketplace supply, and building a comprehensive B2B travel platform. While facing some regional pressures and tougher comparisons ahead, management raised its full-year outlook, signaling confidence in sustained operational efficiency and market demand.

    Highlights

    5

    • Exceeded top and bottom line expectations for the fifth consecutive quarter, with bookings up 12%, revenue up 14%, and adjusted EBITDA up 23%.

    • Market-leading B2B team delivered its 20th consecutive quarter of double-digit growth.

    • Adjusted EPS grew 36% year-over-year, reflecting strong earnings and accretive share repurchases.

    • Expanded adjusted EBITDA margin by nearly 2 points to 25.9% in Q2 FY26, driven by cost efficiencies and consumer marketing leverage.

    • Achieved full coverage of U.S. commercial airlines by becoming the first OTA to distribute Allegiant flights, reinforcing market position.

    Concerns

    3

    • Europe remained pressured, particularly outbound travel, due to macro headwinds and reduced air capacity weighing on demand, resulting in low single-digit room night growth in EMEA.

    • Q3 margin expansion expected to moderate, with adjusted EBITDA margin guided to 32.5% to 32.8%, due to lapping prior year cost actions, ongoing investment in B2B growth, and unfavorable net FX impacts.

    • Tougher comparisons in the second half of the year for bookings and room nights growth rates, with Q3 bookings growth guided to 5% to 7%.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full Year Gross Bookings
    $129.5B to $130.8B
    high materiality
    High
    Full Year Gross Bookings Growth
    8% to 9%
    high materiality
    High
    Full Year Revenue
    $16.05B to $16.22B
    high materiality
    High
    Full Year Revenue Growth
    9% to 10%
    high materiality
    High
    Full Year Adjusted EBITDA Margin Expansion
    150 to 175 basis points
    high materiality
    High
    Q3 Gross Bookings
    $32.2B to $32.8B
    high materiality
    High
    Q3 Gross Bookings Growth
    5% to 7%
    high materiality
    High
    Q3 Revenue
    $4.65B to $4.75B
    high materiality
    High
    Q3 Revenue Growth
    5% to 8%
    high materiality
    High
    Q3 Adjusted EBITDA
    $1.51B to $1.56B
    high materiality
    High
    Q3 Adjusted EBITDA Margin
    32.5% to 32.8%
    high materiality
    High
    Q4 Adjusted EBITDA Margin Expansion
    approximately 50 basis points
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    B2B
    Market-leading B2B team delivered its 20th consecutive quarter of double-digit growth, underscoring the durability and momentum of this business.
    Consecutive quarters of double-digit growth: 20
    		—double-digit growth——
    Consumer
    Consumer bookings were up 8%, driven by our fastest U.S. growth in 15 quarters.
    U.S. growth: fastest in 15 quarters
    		—8%——
    U.S.
    Total booked room nights were up 6%, with mid-single digits in the U.S.
    		—mid-single digits——
    EMEA
    Total booked room nights were up 6%, with low single digits in EMEA. Europe remained pressured, particularly outbound travel as macro headwinds and reduced air capacity weighed on demand.
    		—low single digits——
    Rest of World
    Total booked room nights were up 6%, with low double digits in the rest of the world. APAC rebounded from the disruption related to the Middle East.
    		—low double digits——

    Operational metrics

    19
    Bookings Growth
    12%YoY
    Q2 FY26

    Exceeded the high end of expectations.

    Revenue Growth
    14%YoY
    Q2 FY26

    Exceeded expectations. Foreign exchange was a tailwind, contributing 4 points to revenue growth.

    Adjusted EBITDA
    $1.1B
    Q2 FY26

    Exceeded the high end of expectations.

    Adjusted EBITDA Growth
    23%YoY
    Q2 FY26

    Exceeded the high end of expectations.

    Adjusted EBITDA Margin
    25.9%up nearly 2 points
    Q2 FY26

    Improvement driven by cost efficiencies, consumer marketing leverage, and flow-through of higher volume.

    Adjusted EPS Growth
    36%YoY
    Q2 FY26

    Reflects strong earnings growth and accretive impact of share repurchases.

    Share Repurchases
    $200M
    Q2 FY26

    Part of ongoing capital allocation strategy.

    Share Repurchases
    $900Mroughly in line with first half of last year
    YTD FY26

    Part of ongoing capital allocation strategy.

    Room Night Growth
    6%YoY
    Q2 FY26

    Driven by healthy consumer spending and World Cup demand.

    Average Daily Rate (ADR) Growth
    5%YoY
    Q2 FY26

    Contributed to gross bookings growth.

    FX Impact on Bookings Growth
    0.5 pointstailwind
    Q2 FY26

    Foreign exchange was a tailwind for the business.

    FX Impact on Revenue Growth
    4 pointstailwind
    Q2 FY26

    Foreign exchange was a tailwind for the business.

    Active Loyalty Members Growth
    low single digitsYoY
    Q2 FY26

    Indicates continued engagement with loyalty program.

    Vrbo Bookings with Partner-Funded Offers
    over 40%
    Q2 FY26

    Demonstrates strength of two-sided marketplace.

    May Sale Bookings
    $1Bfirst campaign to exceed this value
    May 2026

    For participating properties, clear proof point of marketplace strength.

    Organic Search Traffic
    stable to slightly up
    Q2 FY26

    Team focused on improving performance through testing and AI.

    Overheads Growth
    flatYoY
    Q2 FY26

    Achieved even as revenue rose 14%, contributing to margin expansion.

    B2B Marketing Spend Growth
    1%YoY
    Q2 FY26

    Leveraged marketing spend while B2B bookings grew 8%.

    B2B Partners Count
    over 70,000
    current

    Company is looking to grow this base through new lines of business and enhanced product capabilities.

    Industry KPIs

    1
    MetricValueDetails
    Gross bookings value room nights—

    Deals & partnerships

    3
    LelaAI conversational planning app

    Acquisition of Lela, an AI conversational planning app, to capture new types of travelers and integrate learnings into core business.

    CarTrawlerleading B2B car rental and insurance platform

    Announced intent to acquire CarTrawler, the leading B2B car rental and insurance platform, as part of building a one-stop B2B travel shop.

    Allegiantdistribution of Allegiant flights

    Expedia became the first OTA to distribute Allegiant flights, achieving full coverage of U.S. commercial airlines.

    Risks & headwinds

    5
    Europe outbound travel pressureQ2 FY26

    low single digits

    Mitigation: Geographically balanced business allows leaning into areas with more demand; long-term view of demand rebound.

    Deceleration of bookings and room night growth rates due to tougher comparisonsH2 FY26

    Q3 bookings growth of 5% to 7%

    Mitigation: Incorporated into Q3 and full year guidance; structural improvements in marketing and ongoing efficiency initiatives are expected to endure.

    Moderation in Q3 adjusted EBITDA margin expansionQ3 FY26

    Q3 adjusted EBITDA margin of 32.5% to 32.8%

    Mitigation: Expected to improve in Q4 as specific pressures ease and efficiency initiatives continue; full year margin expansion guidance raised.

    Unfavorable net FX impactsQ3 FY26

    estimated 1 point FX headwind

    Mitigation: Considered in Q3 guidance; full year guidance still assumes FX tailwinds.

    Secondary impacts from Middle East conflict (e.g., jet fuel prices)ongoing

    impacting jet fuel prices, which have an impact on airline prices and ticket prices

    Mitigation: Direct business impact in the region is relatively small; overall travel market remains resilient.

    What to watch in Q3 FY26

    4

    Adjusted EBITDA Margin Expansion

    Q4 FY26
    CurrentQ3 FY26 expected to moderate (32.5% to 32.8% margin)
    TargetImprovement in Q4 FY26 (approx. 50 bps expansion)

    Why it matters

    Management expects margin expansion to improve in Q4 after Q3 moderation, indicating the effectiveness of ongoing efficiency initiatives.

    We expect the pace of margin expansion to improve in Q4 as some of these pressures ease and as we continue to drive operating efficiency across the business.

    Q&A highlights

    6

    How does Expedia balance AI-native channels (off-platform), AI solutions on-platform, and traditional advertising for driving return on ad spend and conversion?

    Ariane Gorin explained that AI is used in product for better recommendations, ranking, and personalization, showing immediate conversion impacts. AI also helps accelerate product development. New natural language experiences like Vrbo search are not yet driving conversion but provide deeper traveler intent data. Off-platform AI experiences (ChatGPT, Claude, Google AI) are seen as new opportunities for brand visibility, though it's early and fast-moving.

    “There's what we're doing with AI in our product right now that is delivering results in our core business. And then the second is what we're doing in our product that's not necessarily delivering conversion right now, what we know is helping us better understand travelers and is going to have compounding benefits over time.”

    asked by Eric Sheridan · answered by Ariane Gorin

    2 min read6 chapters

    Detailed Narrative

    01

    AI-Driven Product Innovation

    Expedia Group is leveraging AI to enhance traveler experiences, introducing conversational search on Vrbo and updating AI-powered features like Property Expert and AI Compare for hotels. These innovations aim to simplify trip planning, personalize recommendations, and deepen traveler engagement, leading to improved conversion and attach rates on platforms like Expedia. The company also uses AI to accelerate product development and manage token costs thoughtfully.

    02

    Strategic Growth Investments

    The company is strategically investing in high-return growth opportunities, including newer marketing channels like AI and social platforms, which are among its fastest-growing. Deepening partnerships with leading AI platforms, such as ChatGPT and Google's AI services, and the acquisition of Lela, an AI conversational planning app, are key to capturing new traveler segments and integrating learnings into core operations.

    03

    B2B Segment Momentum and Expansion

    The B2B segment continued its strong performance with its 20th consecutive quarter of double-digit growth, underscoring its durability. Expedia is building a 'one-stop travel shop' for partners, exemplified by the announced intent to acquire CarTrawler, a B2B car rental and insurance platform, and the acquisition of tickets. This expansion aims to offer a complete suite of components from supply and technology to servicing, enhancing its value proposition in a competitive market.

    04

    Operating Efficiency and Margin Expansion

    Expedia Group achieved significant margin expansion in Q2, driven by tight expense management and marketing leverage. The company's focus on operating efficiency has led to a 4-point margin expansion and more than doubled trailing 12-month free cash flow over the past two years. Efforts include Agentic voice solutions for partner inquiries on Vrbo, demonstrating faster resolution and lower contact propensity.

    05

    Geographic Performance and Demand Trends

    Consumer spending remained healthy, particularly in the U.S., with travelers prioritizing longer stays and booking windows despite rising prices. Total booked room nights increased 6%, with strong growth in the U.S. and rest of the world. Europe, however, faced pressure from macro headwinds🌐 and reduced air capacity, while APAC rebounded from Middle East-related disruptions, highlighting the geographically balanced nature of the business.

    06

    Marketplace Supply and Value Proposition

    The company reinforced its marketplace position by becoming the first OTA to distribute Allegiant flights, achieving full coverage of U.S. commercial airlines. On lodging, supplier-funded promotions expanded, with over 40% of Vrbo bookings including such offers, and a May sale exceeding $1 billion in bookings. These initiatives demonstrate the strength of Expedia's two-sided marketplace in providing value to travelers and incremental demand to partners.

    AI-generated summary of the company’s earnings call. Not investment advice.