Expedia's Recent Financial Performance
Expedia Group delivered impressive results, surpassing Wall Street estimates for both revenue and earnings. Despite achieving double-digit booking growth, boosting its dividend, and conducting a substantial stock repurchase of $1.7 billion, the stock experienced a drop of nearly 7% in premarket trading. This decline was attributed to forecasts that suggest a more cautious outlook for the upcoming years, particularly in 2026.
Earnings Overview
The company reported a remarkable 11% year-over-year increase in revenue, totaling $3.55 billion, exceeding analysts' expectations of $3.419 billion. Furthermore, it achieved a significant 32% surge in adjusted EBITDA year-over-year, amounting to $848 million. The EBITDA margin also demonstrated considerable growth, expanding by 368 basis points to reach 23.9% in the fourth quarter.
Adjusted earnings per share (EPS) rose sharply by 58% year-over-year, reaching $3.78, significantly above the anticipated $3.33. The company also generated impressive operating cash flow of $304 million and free cash flow of $119 million during the quarter, showcasing its robust financial health.
By the end of the fiscal year, Expedia held unrestricted cash and short-term investments totaling $5.7 billion, underpinning its strong liquidity position.
Key Performance Metrics
Booking growth remained solid, with room nights booked increasing by 9% year-over-year. Total gross bookings also rose by 11% in the fourth quarter, driven by effective execution and sustained momentum in the market. Business-to-consumer (B2C) gross bookings increased by 5%, while business-to-business (B2B) gross bookings surged by an impressive 24%. Lodging gross bookings specifically rose by 13% during the quarter, indicating strength in this segment.
In terms of shareholder value, Expedia repurchased approximately 9 million shares for $1.7 billion in 2025. Additionally, the company raised its quarterly dividend by an impressive 20%, declaring a new dividend of 48 cents per share.
Future Outlook
Looking ahead, Expedia expects sales to range between $15.600 billion and $16.000 billion, slightly above the consensus estimate of $15.691 billion for the year 2026. For the first quarter of fiscal year 2026, the company anticipates sales between $3.320 billion and $3.370 billion, exceeding the consensus forecast of $3.225 billion.
On the earnings call, the CFO of Expedia Group, Scott Schenkel, expressed that the upper end of their sales range indicates stability and growth on a foreign-exchange-neutral basis. Conversely, he cautioned that the lower end of the range reflects a more conservative perspective amidst the rapidly changing macroeconomic environment.
Moreover, while first-quarter margins are anticipated to improve due to lower staffing levels and reduced marketing and cloud expenses, Schenkel indicated that the remainder of the year may present more muted performance.
EXPE Price Analysis: During premarket trading, Expedia Group shares fell by 6.71%, reaching a price of $212.00, indicating market sensitivity to its cautious outlook. This reaction underscores the importance of maintaining a balance between growth expectations and real-world economic conditions.
Frequently Asked Questions
What are Expedia's recent earnings results?
Expedia surpassed estimates with an 11% revenue increase to $3.55 billion and a 58% rise in adjusted EPS to $3.78.
How did the stock perform after the earnings announcement?
The stock fell nearly 7% in premarket trading, attributed to a cautious outlook for the coming years.
What is the outlook for Expedia in 2026?
Expedia expects sales between $15.600 billion and $16.000 billion, slightly above consensus estimates for 2026.
What dividend changes did Expedia announce?
Expedia raised its quarterly dividend by 20%, declaring a new dividend of 48 cents per share.
How has Expedia's gross bookings performed?
Gross bookings rose 11% year-over-year, with significant increases in both B2C and B2B sectors.
