Expedia Group Q2 Earnings Call Highlights

Expedia exceeded expectations in Q2, with gross bookings up 12%, revenue up 14% and adjusted EBITDA up 23%. Room nights increased 6%, while adjusted EBITDA reached $1.1 billion and free cash flow totaled $4.5 billion over the trailing 12 months. Growth remained broad but uneven: U.S. consumer bookings rose 8% and B2B delivered its 20th consecutive quarter of double-digit growth, while Europe faced macroeconomic and air-capacity pressures. Expedia also cited improving marketing efficiency and early conversion benefits from AI-powered search and personalization tools. The company raised its full-year outlook to $129.5 billion–$130.8 billion in gross bookings, $16.05 billion–$16.22 billion in revenue and 150–175 basis points of adjusted EBITDA margin expansion. Expedia repurchased about $200 million of shares during the quarter and $900 million year to date.

Expedia Group NASDAQ: EXPE reported second-quarter results above the high end of its outlook, citing healthy consumer travel demand, continued momentum in its business-to-business segment and improved marketing efficiency. The company also raised its full-year guidance for gross bookings, revenue and adjusted EBITDA margin expansion. CEO Ariane Gorin said gross bookings rose 12% year over year, revenue increased 14%, and adjusted EBITDA grew 23%. The company has exceeded the high end of its top- and bottom-line expectations for five consecutive quarters, she said.

“Consumers continued to prioritize travel with longer lengths of stay and longer booking windows, even as air ticket and hotel prices rose,” Gorin said. She added that the World Cup created modest incremental demand late in the quarter, with many bookings occurring after the tournament began.

Total booked room nights increased 6% during the second quarter. Growth was in the mid-single digits in the U.S., low single digits in Europe, the Middle East and Africa, and low double digits in the rest of the world. Gorin described the U.S. consumer environment as healthy, with Expedia’s consumer bookings increasing 8% and U.S. growth reaching its fastest pace in 15 quarters. Active loyalty members rose by a low-single-digit percentage, with faster growth among higher-tier members. Europe remained pressured, especially for outbound travel, as macroeconomic headwinds and reduced air capacity weighed on demand. Asia-Pacific rebounded from disruption connected to the Middle East, according to Gorin. She also said U.S.-Mexico travel had normalized following a security incident discussed during the prior quarter. The company’s B2B operation posted its 20th consecutive quarter of double-digit growth. Gorin said Expedia continues to pursue a strategy of becoming a “one-stop travel shop” for partners, providing supply, technology and servicing across travel categories. To support that effort, Expedia previously announced its intent to acquire B2B car rental and insurance platform CarTrawler. CFO Derek Andersen said the company’s earlier acquisition of Tiqets contributed to B2B expenses during the quarter as Expedia integrates the business and builds out additional lines of business.

Andersen said second-quarter gross bookings growth was driven primarily by 6% room-night growth and a 5% increase in average daily rates on an FX-neutral basis. Foreign exchange contributed nearly half a percentage point to gross bookings growth and four percentage points to revenue growth. Adjusted EBITDA was $...