Expedia (EXPE) Stock: B2B Business Powers Strong Q4 Results

TLDR

• Expedia reported Q4 revenue of $3.55 billion, up 11% year-over-year, beating analyst estimates of $3.42 billion with adjusted EPS of $3.78 versus $3.35 expected
• B2B division drove growth with 24% jump in gross bookings to $8.7 billion and now accounts for 38% of total revenue, up from 33% a year ago
• Company returned Hotels.com and Vrbo to growth in Q4 after declining throughout 2024, while booked room nights increased 9%
• Expedia repurchased $255 million in stock during Q4 and raised quarterly dividend 20% to $0.48 per share
• Full-year 2026 guidance calls for gross bookings growth of 6-8% and revenue growth of 6-9%, with EBITDA margins expected to expand 100-125 basis points

Expedia posted fourth-quarter earnings that topped Wall Street expectations. Revenue climbed 11% to $3.55 billion, ahead of the $3.42 billion analysts had forecast.

The company’s B2B division emerged as the star performer. B2B gross bookings surged 24% to $8.7 billion. That growth rate dwarfed the 5% increase in consumer bookings.

The division now represents 38% of total revenue, up from 33% in the prior-year period. B2B revenue also jumped 24% to $1.3 billion.

Expedia Group, Inc., EXPE

Adjusted earnings per share came in at $3.78, beating the consensus estimate of $3.35. Net income fell to $205 million, or $1.60 per share, compared with $299 million, or $2.20 per share, a year earlier.

Consumer Brands Return to Growth

Hotels.com and Vrbo declined throughout 2024 but returned to growth in the fourth quarter. Total booked room nights rose 9% during the period. Gross bookings increased 11% to $27 billion.

The company’s consumer-facing B2C segment saw gross bookings rise 5% to $18.3 billion. B2C revenue climbed 4% to $2.2 billion. B2C EBITDA margins reached 31.5%, up roughly six percentage points year-over-year.

Advertising revenue jumped 19% in Q4. The company ended the year with a record number of active advertising partners. Expedia launched video ads in search results and added video ads to its homepage during 2025.

CFO Scott Schenkel said foreign exchange added slightly over one point to bookings growth. Geopolitical issues in Asia weighed on growth in the rest-of-world segment across multiple quarters.

AI and Product Improvements

The company is experimenting with AI across multiple platforms. It was among the first to launch as an app within ChatGPT. Users can book travel directly in the chatbot.

Lodging property count increased more than 10% versus 2024. AI tools helped speed up property onboarding by 70%. Partner-funded promotions represented over 30% of bookings in Q4, up more than 10 percentage points from Q3.

Nearly 70% more properties participated in the Black Friday sale compared to previous years. Expedia expanded Vrbo Care and enhanced customer service capabilities, achieving record traveler self-service levels.

Capital Return and Share Buybacks

Expedia repurchased $255 million of stock in Q4, buying back 1.1 million shares. Since 2022, the company has repurchased more than 45 million shares, reducing share count by 22% net of dilution.

The board raised the quarterly dividend 20% to $0.48 per share. Free cash flow for 2025 totaled $3.1 billion. The company ended the quarter with $5.7 billion in unrestricted cash and short-term investments.

Adjusted EBITDA reached $848 million in Q4, representing a 24% margin. B2B EBITDA margins came in at 24%, down about one percentage point as the company invests for future growth.

Cost of revenue rose 3% to $342 million but improved as a percentage of revenue. B2C direct sales and marketing expenses declined 5% year-over-year. Overhead expenses remained roughly flat at $640 million.

2026 Outlook

Expedia expects first-quarter 2026 gross bookings growth of 10-12% and revenue growth of 11-13%. At current exchange rates, foreign exchange should provide tailwinds of roughly three points to bookings growth and four points to revenue growth.

First-quarter EBITDA margins are expected to increase three to four points. For full-year 2026, the company guided for gross bookings growth of 6-8% and revenue growth of 6-9%, including one to two points of FX tailwinds.

EBITDA margins should expand 100 to 125 basis points for the full year. Schenkel said expansion will moderate as the company laps benefits from 2025 headcount reductions while selectively reinvesting for growth.

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