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Expedia Group, Inc. (EXPE - Free Report) raised its 2026 outlook following stronger-than-expected third-quarter results, supported by resilient travel demand, B2B growth and improved operating efficiency. However, management cautioned that growth would moderate in the fourth quarter.
The earnings call emphasized expanding B2B capabilities, strengthening direct consumer engagement and using artificial intelligence to improve customer experiences and productivity.
Expedia Raises 2026 Outlook Despite Q4 Headwinds
EXPE reported quarterly earnings of $9.39 per share, topping the Zacks Consensus Estimate of $8.77. Revenues of $4.94 billion also surpassed the Zacks Consensus Estimate of $4.73 billion.
Expedia Group, Inc. Price, Consensus and EPS Surprise
Chief financial officer Derek Andersen raised full-year gross bookings guidance to $131.4-$131.9 billion from $129.5-$130.8 billion. Revenue guidance increased to $16.37-$16.43 billion from $16.05-$16.22 billion.
Andersen also increased expected adjusted EBITDA margin expansion to 180-200 basis points from 150-175 basis points, reflecting stronger execution and operating leverage.
However, fourth-quarter gross bookings are projected at $27.9-$28.4 billion, with revenues of $3.69-$3.75 billion. Andersen cited election-related demand softness, geopolitical disruptions, tougher B2B comparisons and promotional timing as headwinds.
EXPE's B2B Growth Comes With Margin Pressure
CEO Ariane Gorin highlighted continued B2B momentum, with gross bookings increasing 19% and revenues rising 23%. Growth remained double-digit across all regions.
Responding to Goldman Sachs, Gorin identified additional business from existing partners, new customer relationships and expanded product offerings as key growth drivers. The company now serves approximately 75,000 B2B partners.
Andersen acknowledged near-term margin pressure from partner mix and strategic investments. B2B adjusted EBITDA margin declined 134 basis points to 27.5%, although management emphasized the segment's long-term growth opportunities.
Expedia Strengthens Consumer Engagement
Gorin reported 7% growth in consumer gross bookings, supported by accelerating U.S. demand. Expedia remained the company's fastest-growing consumer brand.
Management highlighted record third-quarter attach rates on Expedia, supported by improved recommendations. New dynamic packaging capabilities and Reserve Now, Pay Later offerings aim to increase flexibility and engagement.
Gorin also emphasized loyalty improvements, noting stronger growth among higher-tier members who book more directly. Approximately two-thirds of company bookings originate through direct channels.
EXPE Expands AI Across Travel and Operations
Gorin described AI as both a customer acquisition opportunity and an operational efficiency tool. Expedia expanded integrations with Google's AI Mode and Meta Muse while developing conversational experiences across its platforms.
During questioning from Evercore ISI and Bank of America, Gorin acknowledged that agentic traffic remains small, although it demonstrates strong purchase intent. Partnership economics are still developing, and management sees no discernible impact on direct traffic.
Operational applications offer more immediate benefits. Gorin reported that Vrbo's agentic voice experience resolves more than 15% of inbound contacts, while AI-assisted product development and marketing experimentation are improving productivity.
Expedia's Marketing Discipline Supports Margins
Third-quarter adjusted EBITDA increased 17% to $1.69 billion, with margin expanding 135 basis points to 34.2%.
Andersen attributed the improvement to stronger revenue growth, consumer marketing efficiencies and disciplined overhead spending. B2C adjusted EBITDA margin expanded 273 basis points to 43.5%.
Addressing Oppenheimer and Bank of America analysts, Andersen indicated that future marketing leverage would moderate after substantial efficiency gains over the past year. Nevertheless, improved spending measurement, automation and cost discipline remain priorities.
EXPE Maintains Focus on Long-Term Execution
Gorin emphasized expanding Expedia's travel ecosystem through acquisitions and technology investments. The CarTrawler acquisition and activities API strengthen the company's broader B2B platform.
Andersen reiterated capital allocation priorities spanning organic investment, disciplined acquisitions and shareholder returns. The company repurchased approximately $576 million in shares during the quarter.
Management's outlook balances continued growth investments and efficiency initiatives against softer near-term demand. Sustaining margin improvements while broadening the travel platform remains central to its strategy.
Expedia's Zacks Rank and Style Scores Signal
EXPE currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term outlook under the earnings estimate revision-based ranking system. Its Value Score of B, Growth Score of A and Momentum Score of B reflect favorable characteristics across all three investment styles. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also holds a VGM Score of A, combining its value, growth and momentum attributes. While these scores highlight favorable underlying characteristics, the Zacks Rank #3 carries a less favorable outlook than the top-ranked categories. The Zacks Rank remains subject to change as analysts revise earnings estimates following the reported results.
View the Zacks #1 Rank List
Image: Bigstock
EXPE Q3 Earnings Call Highlights Higher Outlook & Q4 Caution
Key Takeaways
Expedia Group, Inc. (EXPE - Free Report) raised its 2026 outlook following stronger-than-expected third-quarter results, supported by resilient travel demand, B2B growth and improved operating efficiency. However, management cautioned that growth would moderate in the fourth quarter.
The earnings call emphasized expanding B2B capabilities, strengthening direct consumer engagement and using artificial intelligence to improve customer experiences and productivity.
Expedia Raises 2026 Outlook Despite Q4 Headwinds
EXPE reported quarterly earnings of $9.39 per share, topping the Zacks Consensus Estimate of $8.77. Revenues of $4.94 billion also surpassed the Zacks Consensus Estimate of $4.73 billion.
Expedia Group, Inc. Price, Consensus and EPS Surprise
Expedia Group, Inc. price-consensus-eps-surprise-chart | Expedia Group, Inc. Quote
Chief financial officer Derek Andersen raised full-year gross bookings guidance to $131.4-$131.9 billion from $129.5-$130.8 billion. Revenue guidance increased to $16.37-$16.43 billion from $16.05-$16.22 billion.
Andersen also increased expected adjusted EBITDA margin expansion to 180-200 basis points from 150-175 basis points, reflecting stronger execution and operating leverage.
However, fourth-quarter gross bookings are projected at $27.9-$28.4 billion, with revenues of $3.69-$3.75 billion. Andersen cited election-related demand softness, geopolitical disruptions, tougher B2B comparisons and promotional timing as headwinds.
EXPE's B2B Growth Comes With Margin Pressure
CEO Ariane Gorin highlighted continued B2B momentum, with gross bookings increasing 19% and revenues rising 23%. Growth remained double-digit across all regions.
Responding to Goldman Sachs, Gorin identified additional business from existing partners, new customer relationships and expanded product offerings as key growth drivers. The company now serves approximately 75,000 B2B partners.
Andersen acknowledged near-term margin pressure from partner mix and strategic investments. B2B adjusted EBITDA margin declined 134 basis points to 27.5%, although management emphasized the segment's long-term growth opportunities.
Expedia Strengthens Consumer Engagement
Gorin reported 7% growth in consumer gross bookings, supported by accelerating U.S. demand. Expedia remained the company's fastest-growing consumer brand.
Management highlighted record third-quarter attach rates on Expedia, supported by improved recommendations. New dynamic packaging capabilities and Reserve Now, Pay Later offerings aim to increase flexibility and engagement.
Gorin also emphasized loyalty improvements, noting stronger growth among higher-tier members who book more directly. Approximately two-thirds of company bookings originate through direct channels.
EXPE Expands AI Across Travel and Operations
Gorin described AI as both a customer acquisition opportunity and an operational efficiency tool. Expedia expanded integrations with Google's AI Mode and Meta Muse while developing conversational experiences across its platforms.
During questioning from Evercore ISI and Bank of America, Gorin acknowledged that agentic traffic remains small, although it demonstrates strong purchase intent. Partnership economics are still developing, and management sees no discernible impact on direct traffic.
Operational applications offer more immediate benefits. Gorin reported that Vrbo's agentic voice experience resolves more than 15% of inbound contacts, while AI-assisted product development and marketing experimentation are improving productivity.
Expedia's Marketing Discipline Supports Margins
Third-quarter adjusted EBITDA increased 17% to $1.69 billion, with margin expanding 135 basis points to 34.2%.
Andersen attributed the improvement to stronger revenue growth, consumer marketing efficiencies and disciplined overhead spending. B2C adjusted EBITDA margin expanded 273 basis points to 43.5%.
Addressing Oppenheimer and Bank of America analysts, Andersen indicated that future marketing leverage would moderate after substantial efficiency gains over the past year. Nevertheless, improved spending measurement, automation and cost discipline remain priorities.
EXPE Maintains Focus on Long-Term Execution
Gorin emphasized expanding Expedia's travel ecosystem through acquisitions and technology investments. The CarTrawler acquisition and activities API strengthen the company's broader B2B platform.
Andersen reiterated capital allocation priorities spanning organic investment, disciplined acquisitions and shareholder returns. The company repurchased approximately $576 million in shares during the quarter.
Management's outlook balances continued growth investments and efficiency initiatives against softer near-term demand. Sustaining margin improvements while broadening the travel platform remains central to its strategy.
Expedia's Zacks Rank and Style Scores Signal
EXPE currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term outlook under the earnings estimate revision-based ranking system. Its Value Score of B, Growth Score of A and Momentum Score of B reflect favorable characteristics across all three investment styles. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also holds a VGM Score of A, combining its value, growth and momentum attributes. While these scores highlight favorable underlying characteristics, the Zacks Rank #3 carries a less favorable outlook than the top-ranked categories. The Zacks Rank remains subject to change as analysts revise earnings estimates following the reported results.