Expedia Group, Inc. EXPE

Expedia Group reported Q4 FY24 results exceeding expectations, with double-digit growth in room nights, gross bookings, and revenue. Total gross bookings reached $24.4 billion, up 13% year-over-year. This strong finish contributed to a solid full year 2024, where gross bookings were $111 billion and revenue was nearly $14 billion, both up 7%. The company noted a significant acceleration in its consumer business bookings, from negative 3% in Q1 to 9% in Q4, and B2B bookings grew 21% for the full year, accounting for 27% of total bookings.

The company outlined three overarching priorities for 2025: delivering more value for travelers, investing in high-growth opportunities, and continuing to drive operational efficiencies and margin expansion. For travelers, this means more member rates, self-service options, and personalized product features. Growth investments will focus on the three core consumer brands (Expedia, Hotels.com, Vrbo), targeted international expansion, and sourcing unique supply for B2B partners. The company aims to expand profit margins further through efficiencies in variable and fixed costs.

AI is viewed as a key accelerator for all three strategic priorities. Expedia is exploring AI to enhance product experiences across discovery, shopping, and post-booking journeys, driving loyalty and growth. AI also presents opportunities for customer acquisition by meeting travelers in new GenAI-native search experiences and for new partnership opportunities with AI-native travel startups. Internally, AI is expected to boost team productivity and allow for more strategic focus, with early results seen in customer support, technology, marketing, and commercial teams.

Vrbo and Hotels.com, which were significantly impacted by replatforming and loyalty program changes, showed signs of recovery. Vrbo's bookings growth accelerated sequentially in Q4, benefiting from product, supply, and marketing efforts, including the addition of 1 million urban properties. Hotels.com returned to slight growth, driven by international momentum. Management expressed conviction in both brands, acknowledging ongoing work is needed in product, supply, and marketing optimization to sustain growth and win back travelers.

The B2B business had a stellar Q4 with 24% bookings growth, driven by strong international demand, particularly in APAC, and successful partner relationships. B2B accounted for 27% of full-year bookings. The advertising business also performed strongly, with 25% revenue growth in Q4 and 32% for the full year, contributing 5% to overall revenue. This high-margin business is expanding through more advertisers, new ad types (like video), and enhanced partner tools, with significant future innovation potential.

Expedia Group generated $2.3 billion in free cash flow in 2024, up 26%. The company ended the quarter with $4.5 billion in unrestricted cash and short-term investments. Capital allocation priorities include maintaining a target leverage ratio of 2x, with plans to repay and refinance debt. The company repurchased $1.6 billion (12.1 million shares) in 2024, with $3.2 billion remaining on its authorization. A quarterly dividend of $0.40 per share, yielding approximately 1% annually, was reinstated starting March 2025, balancing shareholder returns with investment flexibility.