EXPE · Q2 2026 Earnings

Bullish

Expedia Group

Reported August 5, 2026

30-second summary

Expedia beat Q2 FY2026 on every line — revenue $4.315B (+14% YoY) versus the $4.11–4.19B guide (~$125M above high end), gross bookings $33.928B (+12%) versus the $32.5–33.1B guide (~$828M above high end), and adj. EBITDA margin expansion of +196bps versus the +0.5–1.0pt guide (~+96–146bps above). That forced the FY raise management explicitly reserved last quarter: FY2026 revenue lifted to $16.05–16.22B (from $15.6–16.0B), gross bookings to $129.5–130.8B (from $127–129B), and margin expansion to +1.5–1.75pts (from +1.0–1.25pts). The tell for bears: Q3 revenue is guided +5–8% YoY versus Q2's +14% print — a real step-down as prior-year comps stiffen, and the margin math in the raised FY still implies the back half contributes materially less than H1.

Headline numbers

EPS

Q2 FY2026

$5.76

+8.9% vs est.

Revenue

Q2 FY2026

$4.32B

+14.0% YoY

+3.5% vs est.

Free cash flow

Q2 FY2026

$1.28B

Operating margin

Q2 FY2026

18.5%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$4.32B	$3.79B	+14.0%	$3.43B	+25.9%
EPS	$5.76	$4.24	+35.8%	$1.96	+193.9%
Operating margin	18.5%	12.8%	+570bps	7.3%	+1120bps
Free cash flow	$1.28B	$0.92B	+38.9%	$3.75B	-65.9%

Guidance

Company raises full-year FY2026 guidance across revenue, gross bookings, and EBITDA margin expansion after beating Q2 expectations on strong marketplace execution and margin performance.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$4.11 - $4.19B	$4.315B	+$0.125B above guidance	Beat
Gross Bookings	Q2 FY2026	$32.5 - $33.1B	$33.928B	+$0.828B above guidance	Beat
Adjusted EBITDA Margin Expansion	Q2 FY2026	0.5 - 1.0 pt	+196 bps	+95-146 bps above guidance	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$4.65 - $4.75B	+5% to +8% YoY
Gross Bookings	Q3 FY2026	$32.2 - $32.8B	+5% to +7% YoY
Adjusted EBITDA	Q3 FY2026	$1.51 - $1.56B	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	$15.6 - $16.0B	$16.05 - $16.22B	+$0.45 - $0.62B at midpoint	Raised
Gross Bookings	FY2026	$127 - $129B	$129.5 - $130.8B	+$2.5 - $1.8B at range	Raised
Adjusted EBITDA Margin Expansion	FY2026	+1.0 - 1.25 pts	+1.5 - 1.75 pts	+0.5 pts at low end; +0.5 pts at high end	Raised

Segment performance

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
B2C Gross Bookings	$23.186B	$2.479B	+835.3%
B2B Gross Bookings	$10.742B	$1.209B	+788.5%
B2C Revenue	$2.677B	—	+8.0%
B2B Revenue	$1.493B	—	+23.0%
Lodging Gross Bookings	$24.603B	—	+11.0%

Platform metrics

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Booked Room Nights	111.5M	105.5M	—
Total Gross Bookings	$33.928B	—	—
Booked Air Tickets	14.2M	15.0M	—
Average Daily Rate (ADR) Booked	$220.60	$209.3	—

Profitability

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Adjusted EBITDA Margin	25.9%	24.0%	—
Adjusted EBITDA Margin Expansion YoY	+196 bps	—	—
Operating Margin	18.5%	—	—
Free Cash Flow Margin	29.6%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
U.S. points of sale Revenue	$2.57B	—	+12.0%
Non-U.S. points of sale Revenue	$1.745B	—	+18.0%

Management tone

Note: no earnings-call transcript was available for Q2 FY2026; tone analysis below is drawn from press-release language and cross-quarter comparison of prepared statements.

Customer optimization hangover → AI experiments → AI-driven re-acceleration → Capacity expansion → AI as embedded operating system → AI as force multiplier for both speed and cost.

Management framing on guidance flipped from "prudent to hold" to "confidence to raise" in one quarter. Q1's language was defensive — reaffirming FY while acknowledging "potential upside" and citing Mexico/MEA volatility. Q2's release headlines "increases full year guidance" and cites "exceeded the high end of our guidance in the quarter." The shift matters because it removes the interpretive ambiguity from Q1: management was reserving credit, not hedging weakness. That posture change is the single most important tonal signal from a call-less quarter.

AI language moved another notch — from "amplifies execution" (Q1) to "force multiplier to innovate faster and operate more efficiently" (Q2). Q4 FY2025 promoted AI to "embedded operating tool"; Q1 called it a "core moat amplifier"; Q2 explicitly dual-purposes it as both a speed lever and a cost lever. Combined with a +196bps margin beat against a +50–100bps guide, the language is now aligned with a quantifiable margin outcome — AI is being credited, at least rhetorically, with meaningful contribution to the operational efficiency line.

"Strength of our strategy and differentiation of our platform" is new positioning against macro. Prior quarters framed macro volatility as bounded (Q1 quantified Mexico/MEA at two points). This quarter the framing shifts from "we can absorb macro noise" to "our platform structurally outperforms in this environment." That's a subtle but meaningful escalation of the competitive-moat claim, and it aligns with U.S. revenue acceleration to +12% — which management would read as U.S.-domestic strength holding up despite continued macro chop.

Answers to last quarter's watch list

Whether Q2 FY2026 actuals beat the +9–11% revenue guide with similar magnitude to Q1's 200bp beat — Revenue $4.315B (+14%) beat the top of the guide by 300bps of growth (or ~$125M in dollars), a larger beat than Q1's 200bps. This forced the FY raise ($15.6–16.0B → $16.05–16.22B) that management withheld last quarter, validating the reservation-as-conservatism read.

Resolved positively

Q2 adj. EBITDA margin expansion versus the +0.5–1pt guide — +196bps versus a +50–100bps guide is nearly 2x the top of the range. This partially answers the bear case that H2 implies zero margin contribution: Q2 wasn't just Q1's restructuring tail, it was materially incremental. The FY raise to +150–175bps still contemplates a muted H2, but the H1 cushion is now large enough that FY margin risk has meaningfully receded.

Resolved positively

B2C bookings sustaining double digits for a second consecutive quarter — B2C bookings grew 8%, a two-point step-down from Q1's +10%. This does not confirm the ex-COVID double-digit inflection as a run rate. It's not a regression to the 7–8% "structural" zone either, but the "highest since Q2 2018" framing from last quarter now looks Q1-specific rather than the start of a new plateau. Status: Not resolved — the inflection question remains open.

B2B bookings holding above +20% — +21% in Q2 versus +22% in Q1, comfortably above the +20% threshold. B2B revenue decelerated modestly from ~+25% in Q1 to +23% in Q2, still well above the segment growth threshold. The structural-vs-partner-promo debate should tilt further toward structural on this print.

Resolved positively

Whether non-U.S. revenue growth holds at or near +24% — Non-U.S. revenue grew +18%, a six-point deceleration from Q1's +24%. However, U.S. revenue accelerated to +12% from +9%, so the gap narrowed rather than the international story breaking. This is consistent with Mexico/MEA drag normalizing as management expected, and it supports the "bounded macro" framing from Q1. Status: Continue monitoring — international thesis intact but the gap-widening story has paused.

Geopolitical headwind quantification — The press release does not quantify a Mexico or MEA drag for Q2. Combined with U.S. acceleration to +12% and the FY raise, the reasonable read is that the Q1 headwind normalized rather than compounded — which is what the reaffirmed FY guide assumed. Without transcript Q&A this quarter, the granular update isn't available, but the numbers support the "bounded" thesis.

Continue monitoring

Any disclosure on direct vs. AI-channel booking mix — The company didn't quantify AI-channel volume in the press release. Qualitative statements reference AI as a productivity/efficiency tool rather than as a traffic channel, suggesting AI-routed bookings remain immaterial to the mix. The "two-thirds direct" line in the sand from Q4 has not been updated.

Continue monitoring

What to watch into next quarter

Whether Q3 FY2026 revenue beats the +5–8% guide by a magnitude similar to Q1 and Q2 — the Q3 guide midpoint of +6.5% is a real deceleration from Q2's +14%. A beat similar in scale to Q2's 300bps (i.e. Q3 landing at +9–11%) would suggest the deceleration was management conservatism again and force a further FY raise; a print in-line with guide would validate the moderation and cap the raise arc for the year.

Q3 adj. EBITDA margin expansion trajectory — with H1 delivering +591bps (Q1) and +196bps (Q2) of expansion, the raised FY guide of +150–175bps implies H2 contributes little to negatively. Q3 is the first quarter of that guided compression. A margin print materially above flat YoY would prompt a fourth FY margin raise; a contraction would validate the muted-back-half thesis.

Whether B2C bookings re-accelerate to double digits or settle in the 7–9% range — Q2's +8% versus Q1's +10% is inconclusive. Q3 will confirm whether the ex-COVID inflection was a one-quarter event or a shifting baseline. A print below 7% would meaningfully weaken the multi-brand recovery thesis.

U.S. vs. non-U.S. gap direction — Q2 showed U.S. +12% vs non-U.S. +18%, a nine-point narrowing from Q1's +9% vs +24%. Whether that convergence continues (U.S. strength genuine) or reverses (Q1 Mexico/MEA was a one-off, non-U.S. re-accelerates) is the cleanest read on the geographic mix story.

B2B bookings sustaining +20%+ into Q3 — Q1 +22% → Q2 +21% is the tightest deceleration curve of any segment. Sub-20% in Q3 would reopen the partner-promo-vs-structural debate that Q1 and Q2 have progressively closed.

Any transcript-level disclosure on AI-channel booking volume — press-release language now credits AI with quantifiable margin contribution ("force multiplier to innovate faster and operate more efficiently"). The natural next disclosure step is a booking-volume or traffic-share number for AI-routed channels. Absence of that number for a fourth consecutive quarter increasingly suggests volume is still too small to matter — or too competitive to disclose.

Sources

Expedia Group Q2 2026 Earnings Release, filed with SEC: https://www.sec.gov/Archives/edgar/data/1324424/000132442426000051/earningsrelease-q22026.htm
Expedia Group Q1 2026, Q4 2025, Q3 2025, and Q2 2025 earnings briefs (prior quarter context)

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