Expedia Group (EXPE) Q4 FY25 earnings call: guidance and Q&A

How is Expedia capturing more people up the funnel and keeping them there, beyond just being a booking site? And how much more marketing leverage is there in B2C?

Ariane emphasized starting with personalized marketing to resonate with travelers, then using AI for relevant product context, ideas, and natural language flows for trip planning. Scott noted 50 bps marketing leverage in B2C through discipline, improved targeting, and reallocation, expecting more of the same.

“It starts with marketing. And we're doing a lot of work to make sure we know travelers, we're targeting them. We're personalizing our marketing to them.”

asked by Mark Stephen Mahaney · answered by Ariane Gorin

How would management characterize the current competitive positioning of consumer-facing brands, and how much work remains to achieve normalized growth?

Ariane expressed confidence in the positioning of Expedia (one-stop shop), Hotels.com (hotel pure play with loyalty), and Vrbo (trusted vacation rental marketplace), citing recent product improvements and marketing efforts. She believes they are in a healthy place for growth, especially internationally.

“I feel very good about where we are in the positioning of each of the 3 brands. And that's been a lot of work over the last 12 to 18 months.”

asked by Eric Sheridan · answered by Ariane Gorin

What is the vision for the business's margin trajectory over the medium term, given recent consistent margin growth?

Ariane stated there is "more to come" in margin expansion, driven by effective execution, marketing, and scale. She highlighted growth potential in B2C, B2B (new partners, new lines of business), supply expansion, and advertising, with AI providing further confidence. Scott added that the culture of "more for less" and strategic reinvestment will continue.

“Look, all I -- what I will tell you is there is more to come.”

asked by Jed Kelly · answered by Ariane Gorin

How has the 10% supply growth trended into Q1 2026, especially considering hotels potentially going direct with LLMs? Can branded vs. unbranded hotel growth be parsed out?

Ariane stated that supply additions continue, with AI speeding up property onboarding by 70%. She noted that Expedia is working with LLMs to ensure brand visibility and believes AI search expands opportunities. She did not parse out branded vs. unbranded growth but emphasized Expedia's value proposition to suppliers and travelers.

“It's 70% faster than it was before. So I expect we will continue adding supply.”

asked by Conor Cunningham · answered by Ariane Gorin

Is Expedia seeing changes in traffic from Google's advanced AI features? What are the key drivers for the 27% YoY increase in B2B direct sales and marketing costs, and how will that play out?

Ariane stated no material changes from Google's AI yet, but Expedia is actively experimenting and partnering to ensure brand visibility. Scott clarified that B2B marketing costs are aligned with revenue (24% growth) and are more of a commission model recognized at the time of stay, not a marketing spend.

“Look, we're not seeing material changes right now. We are experimenting aggressively.”

asked by Jacob Seed · answered by Ariane Gorin

What are the specific drivers of robust B2B growth, and what factors should be considered for its top line in 2026? What drives temporary investment pressure on B2B margins, and should 2025 B2B margins be considered the long-term outlook?

Scott explained that B2B margin pressure is due to reinvesting savings from other parts of the company into B2B initiatives for future growth, which is factored into 2026 guidance. Ariane cited winning wallet share with existing partners, supply work, increased partner marketing, TAAP performance, and product innovation as B2B growth drivers.

“As we're redeploying a portion of the savings that we're delivering in other parts of the company, we're investing in B2B initiatives that will weigh in the short term -- on our near term, we'll be weighing on our margins there.”

asked by Kenneth Gawrelski · answered by Scott Schenkel

Does the 2026 outlook assume B2C accelerates relative to 5% growth, and how will this be achieved with reduced ad spend intensity? How urgent is it to invest more aggressively in loyalty given general purpose chatbots taking on more of the travel funnel?

Scott did not provide a specific B2C acceleration forecast but noted the Q1 guide implies strong momentum and stable growth. Ariane emphasized the urgency of delivering value and trust to travelers, highlighting proprietary reviews, servicing capabilities (e.g., quick call answer times during storms), and loyalty programs as key to maintaining deep customer relationships, especially as travel is a high-stakes purchase.

“We always feel a sense of urgency to make sure that we're delivering more value and more trust to our travelers.”

asked by Lee Horowitz · answered by Ariane Gorin