EXPE · Q4 2025 Earnings

Cautious

Expedia Group

Reported February 12, 2026

30-second summary

Expedia beat its own Q4 FY2025 guide on every metric — revenue +11% YoY to $3.547B versus 6–8% guided, gross bookings $27.0B (+13% lodging, +24% B2B), and Q4 FY2025 adj. EBITDA margin of 23.9% (+368bps YoY) well above the ~2pts expansion guide — and closed FY2025 at 8% revenue growth versus the 6–7% raised guide. The 2026 setup is the tell: full-year revenue guided +6–9% with adj. EBITDA margin expansion of just +1.0–1.25pts (versus the +240bps actually delivered in 2025, itself above the ~200bps guide), and Q1 FY2026 alone is guided to +3–4pts of margin expansion — meaning the remaining nine months imply roughly flat-to-negative margin expansion as 2025 cost actions lap. Bookings momentum is real (B2B +24% Q4 FY2025 sustains the +26% Q3 FY2025 run rate; all three core brands now growing two quarters in a row), but the margin curve has visibly bent.

Headline numbers

EPS

Q4 FY2025

$3.78

Revenue

Q4 FY2025

$3.55B

+11.0% YoY

Free cash flow

Q4 FY2025

$0.12B

Operating margin

Q4 FY2025

11.9%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$3.55B	+11.0%	$4.41B	-19.6%
EPS	$3.78	—	$7.57	-50.1%
Operating margin	11.9%	—	23.5%	-1160bps
Free cash flow	$0.12B	—	$-0.69B	+117.3%

Guidance

Company beat Q4 and full-year FY2025 guidance across

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	Q4 FY2025	6-8% YoY	11% YoY	+3-5pts above guide	Beat
Gross Bookings Growth	Q4 FY2025	6-8% YoY	$27.003B	materially above guide	Beat
Adjusted EBITDA Margin Expansion	Q4 FY2025	~2 points	23.9%	above guide	Beat
Revenue	FY 2025	6-7% YoY	8% YoY	+1-2pts above guide	Beat
Gross Bookings Growth	FY 2025	~7% YoY	reported $53.006B total	above guide	Beat
Adjusted EBITDA Margin Expansion	FY 2025	~2 points	reported at elevated levels	above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q1 FY2026	$3.32 - $3.37B	+11-13%
Gross Bookings	Q1 FY2026	$34.6 - $35.2B	+10-12%
Adjusted EBITDA Margin Expansion	Q1 FY2026	+3 - 4pts	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2026	$16.04 - $16.81B (implied from 6-7% guidance)	$15.6 - $16.0B	-0.44 to -0.81B at midpoint	Lowered
Gross Bookings Growth	FY 2026	~7%	+6 - 8%	-1pt at midpoint	Lowered
Adjusted EBITDA Margin Expansion	FY 2026	~2 points	+1 - 1.25pts	-0.75 to -1pt	Lowered

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
B2C Gross Bookings	$18.344B	+5.0%
B2B Gross Bookings	$8.659B	+24.0%
Lodging Gross Bookings	$19.455B	+13.0%
Non-Lodging Gross Bookings	$7.548B	+4.0%
B2C Revenue	$2.156B	+4.0%
B2B Revenue	$1.294B	+24.0%

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Booked Room Nights	94.0 million
Total Gross Bookings	$27.003 billion
Average Daily Rate (ADR) Booked	$207.0
Booked Air Tickets	12.8 million
Unrestricted Cash and Short-term Investments	$5.7 billion

Profitability

Q4 FY2025

Segment	Q4 FY2025
Adjusted EBITDA Margin	23.9%
Revenue Margin	13.1%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
U.S. Points of Sale Revenue	$2.039B	+7.4%
Non-U.S. Points of Sale Revenue	$1.508B	+17.3%
Share Repurchases	9.0 million shares for $1.7 billion	—

Management tone

Customer optimization hangover → AI experiments → AI-driven re-acceleration → AI as embedded operating model.

The margin narrative has visibly shifted from "more to come" to "Q1 carries the year." Through Q2 and Q3 FY2025, management framed margin expansion as a multi-year compounding story driven by marketing leverage, mix shift, and cost discipline. This quarter the framing collapsed into a single quarter — Scott explicitly described an extra three to four points of margin rate expansion for Q1 with the rest of 2026 expected to be somewhat muted versus that 3–4 point number. That is a meaningful concession that the +240bps 2025 cadence was largely restructuring-driven and the structural underlying margin leverage is closer to +1pt annually.

AI moved from "experimental high-converting traffic" in Q2 to "embedded operating tool" by Q4. Two quarters ago Mark Mahaney asked about GenAI lead quality and the answer was "small but high-converting." This quarter management volunteers specific operational metrics: "AI-powered property onboarding is 70% faster than before...our service team is using AI to resolve traveler issues faster and more effectively." The shift from defensive ("we're testing") to operational ("we're running on it") is the most concrete tone change in the call.

Direct bookings reframed from defensive moat to structural advantage. The Q2 framing of LLM/AI traffic was cautious — Expedia was the upstream platform competing for routed traffic. This quarter management asserts: "Today, two-thirds of our bookings come from travelers who begin their planning journey directly with our brands, and those direct bookings are growing faster than bookings from indirect channels." That repositions the GenAI risk as already-contained rather than an emerging threat. Whether this holds as ChatGPT/Gemini commerce features mature is the open question.

Marketing leverage went from open admission of underperformance to victory lap and forward commitment. Q2 was the unusually blunt "three quarters of no leverage." Q3 was "half a point of leverage." Q4 makes it a thesis: "we've improved our targeting and measurement capabilities, reduced our least efficient spend, and reallocated dollars to where we see the highest incremental returns...50 basis points of GBV leverage achieved...with expectations for more in 2026." The narrative arc completed in three quarters.

Confidence on B2C breadth hardened. "For the second consecutive quarter, all three core brands delivered year-over-year bookings growth." Two consecutive quarters does not yet make a structural pattern — but management is now treating the Vrbo/Hotels.com recovery as established rather than provisional, which is a meaningful upgrade from the Q2 admission that "platform improvements have not yet translated to consumer growth."

Recurring themes management leaned on this quarter:

AI-driven operational efficiency and product personalizationAll three core consumer brands returning to growth simultaneouslyDirect bookings outpacing indirect channels as structural moatMarketing leverage and cost discipline delivering margin expansionB2B double-digit growth across all regionsSupply-side flywheel with partner-funded promotions acceleration

Risks management surfaced:

Ongoing macro uncertainty and dynamic macro environmentGeopolitical issues in Asia weighing on rest-of-world growthVariability in bookings cadence during 2025Potential moderation in margin expansion pace as prior cost actions lapForeign exchange volatility (though currently a tailwind)

Q&A highlights

Mark Mahaney · Evercore ISI

What product features is Expedia rolling out to enhance travel planning and capture more customers up the funnel? How much additional marketing leverage is available in B2C going forward, and what other sources of leverage exist?

Management emphasized that marketing effectiveness starts with personalization and targeting across channels, followed by product conversion optimization. They detailed specific product initiatives including AI agents, natural language search, and AI filters. On marketing leverage, they noted 50 basis points of GBV leverage achieved through improved targeting, measurement, and channel reallocation, with expectations for more in 2026. They highlighted the Super Bowl campaign achieving 200M YouTube views as an example of creative effectiveness.

50 basis points of B2C marketing leverage achieved as percentage of GBVSuper Bowl ad was most watched on YouTube with over 200 million viewersAI-powered property onboarding is 70% faster than beforeAI agents performing best with point solutions like AI filters and property Q&A

Eric Sheridan · Goldman Sachs

How would you characterize current competitive positioning of consumer brands and how much realignment work remains for normalized growth levels in 2026?

Management expressed confidence in brand positioning completed over the last 12-18 months: Expedia as one-stop shop, Hotels.com as hotel pure play with loyalty value, and Vrbo as trusted vacation rental marketplace. They highlighted recent initiatives including Hotels.com loyalty relaunch (Save Your Way), Vrbo promotion suite expansion (November), and VrboCare trust features. Management indicated positioning is solid but growth potential remains through more effective marketing, international expansion, and supply expansion.

Room nights growing faster outside U.S. than domesticallyHotels.com relaunched loyalty program with Save Your Way positioningVrbo expanded VrboCare program in November for increased traveler trustPositioning work completed over last 12-18 months

Jed Kelly · Oppenheimer & Co.

What is the medium-term margin trajectory for the business, and where could margins potentially expand?

Management declined to provide specific margin targets but stated 'there is more to come' with full-year guidance showing margin expansion. They emphasized confidence driven by B2C marketing leverage, B2B partner growth, new lines of business (Southwest, Ryanair, Tickets), supply expansion (10% property growth Q4), and ads business potential with AI. For Q1 2026, they guided 3-4 points of margin expansion, with rest of year more muted due to cumulative benefits from 2025 cost actions (headcount, marketing, cloud) hitting Q1 strongly. Management emphasized continuous operational improvement culture of 'doing more with less.'

Q1 2026 expected to show 3-4 points of margin expansionRest of 2026 margin expansion expected to be muted relative to Q1Q4 2025 lodging property growth of 10%Added Southwest and Ryanair airlines to platform last year

Connor Cunningham · Mellius Research

How has the 10% supply growth from Q4 trended into Q1 2026? How is Expedia addressing competition from large language models and hotels going direct? Can you break down branded vs. non-branded hotel growth?

Management stated they continue adding properties and expect ongoing supply growth, noting AI has accelerated property onboarding by 70%. They acknowledged LLM competition but expressed confidence that continuous business growth, ongoing work with Google and ChatGPT, and efforts in answer engine optimization, native integrations, and agentic browsers are sufficient. They emphasized that as long as Expedia maintains strong brand value propositions and traveler trust, and delivers value to B2B partners, market expansion will continue. Management did not provide specific breakdown between branded and non-branded growth.

Property onboarding 70% faster with AI implementationWorking with large language models (ChatGPT, Google) on brand visibilityInvesting in answer engine optimization and agentic browser integrationContinuing to add airlines and rate plans to platform

Ken Goralski · Wells Fargo

Can you detail B2B concentration and specific drivers of robust growth? What factors should we consider for B2B top line in 2026? What margin dynamics should we expect, and should 2025 B2B margins be the baseline for long-term outlook?

Management emphasized 18 consecutive quarters of double-digit B2B growth driven by supply expansion, partner wallet share wins, increased Black Friday participation, higher property counts, partner marketing investments, strong TAP travel agency platform performance, expanded loyalty program, and improved template configurability. They noted new product innovation including first assurance offering. On margins, they stated investments in new B2B product lines and initiatives will temporarily weigh on margins in near term but are factored into Q1 and 2026 guidance. They declined to provide specific business unit margin guidance, positioning 2025 margins as a point in trajectory rather than baseline.

18 consecutive quarters of strong double-digit growth in B2BTemporary margin pressure from investments in new B2B products and lines of businessTAP travel agency platform performed very wellLaunched first assurance offering for partners

Answers to last quarter's watch list

Whether Q4 FY2025 bookings land at or above the 8% high end — Resolved positively. Q4 FY2025 gross bookings of $27.0B materially exceeded the 6–8% guide, and Q4 FY2025 revenue grew 11% versus the 6–8% guide. October momentum from the Q3 FY2025 commentary translated into a clean beat across both bookings and revenue.

Resolved positively

B2B bookings deceleration or continued acceleration off the +26% Q3 FY2025 base — Resolved positively. Q4 FY2025 B2B gross bookings grew 24% YoY and full-year B2B bookings closed at +24% — essentially sustaining the Q3 run rate rather than mean-reverting. Management characterized B2B as having sustained 18 consecutive quarters of strong double-digit growth. The +26% was not a Q3-specific event.

Resolved positively

2026 margin expansion pace versus the 2025 mark — Resolved negatively. 2026 adj. EBITDA margin expansion guided to +1.0–1.25pts — roughly half the +240bps 2025 cadence — with Q1 FY2026 carrying +3–4pts and the rest of the year guided "muted." Management's own framing in Q&A confirms structural margin leverage is closer to ~+1pt absent restructuring tailwinds.

Resolved negatively

B2C direct marketing as a % of gross bookings — Resolved positively. Management quantified 2025 B2C marketing leverage at 50bps of GBV with "more in 2026" expected. Direct bookings now two-thirds of total and growing faster than indirect channels. The structural-vs-restructuring debate tilted toward structural.

Resolved positively

B2B contract renewal disclosure — Continue monitoring. Management again declined to provide specific renewal win/loss data, instead emphasizing wallet-share wins, Black Friday participation, TAP platform performance, and partner marketing investments. The granularity Jed Kelly asked for in Q3 FY2025 still hasn't surfaced.

Continue monitoring

What to watch into next quarter

Whether Q1 FY2026 actuals deliver the implied +3–4pts of margin expansion — the entire FY2026 margin guide of +1.0–1.25pts is mathematically dependent on Q1 carrying the year. Sub-3pts in Q1 would force a mid-year FY guide cut; the asymmetry is severe.

B2B bookings growth versus the +24% Q4 FY2025 run rate — Q1 FY2026 consolidated bookings guided +10–12%, implying B2C around mid-single digits and B2B still doing the heavy lifting. Any B2B deceleration below +20% would expose the consolidated guide.

B2B segment margin trajectory — Q4 FY2025 came in at -59bps YoY as new lines of business and the assurance offering weighed. Watch whether the compression deepens or stabilizes as the investment cycle progresses.

Direct-bookings share trajectory as LLM commerce matures — management's "two-thirds direct" disclosure is the new line in the sand. Watch whether this holds or compresses as ChatGPT and Gemini roll out booking features beyond answer engines.

Vrbo and Hotels.com bookings growth into Q1 FY2026 — "second consecutive quarter" of three-brand growth is the live thesis. A third consecutive quarter validates the 12–18 month positioning work; a regression at either brand reopens the structural question.

U.S. points of sale revenue acceleration — at +7.4% in Q4 FY2025 versus +17.3% non-U.S., the gap remains wide but stable. Watch whether the higher-end U.S. consumer strength flagged in mid-2025 commentary persists or whether the gap widens again.

Whether non-lodging bookings (+4% Q4 FY2025) accelerate or fade further — air and ancillaries are the underperforming segment. With Southwest and Ryanair now on the platform a full year, Q1 FY2026 is the first clean comp to test whether airline expansion is moving the needle.

Sources

Expedia Group Q4 2025 Earnings Release, filed with SEC: https://www.sec.gov/Archives/edgar/data/1324424/000132442426000005/earningsrelease-q42025.htm
Expedia Group Q4 2025 earnings call, Q&A commentary (transcript inputs)

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