Even with some global travel demand disruptions, Expedia Group executives said first quarter financial results exceeded both top and bottom line expectations.
During the company's first-quarter earnings call, Expedia CEO Ariane Gorin said it grew bookings by 13% year over year, revenue by 15% and expanded earnings before interest, taxes, depreciation and amortization by nearly 6 points.
“Momentum from late 2025 carried through February, delivering our best first quarter start in three years,” she said. “In March, we hit a more challenging macro environment with the conflict in the Middle East and travel advisories in Mexico.”
While the Middle East represents less than 2% of Expedia’s total bookings, it saw elevated traveler cancellations across Europe and Asia, she said. Cancellation rates stabilized in early April, and booking activity reaccelerated throughout the month.
Total booked roomnights in the first quarter were up 6%, including 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, she said.
Domestic U.S. roomnight growth remained stable but was partially offset by travel advisories in Mexico and less promotional activity by select business-to-business partners, she said. B2B delivered a healthy performance, with bookings up 22%.
Last week, Expedia became the exclusive hotel partner for rideshare company Uber, she said, adding Uber will now be available in Expedia’s app.
Expedia’s consumer brands grew bookings by 10%, its fastest pace in 12 quarters, Gorin said. Active loyalty members grew by mid-single digits, and the company expects to see faster growth in its higher tiers.
For the first time in the company’s history, vacation rentals on Expedia reached an annualized run rate of $1 billion, she said. Twenty-five percent more hotels participated in the company’s March sale this year, and more than a third of Vrbo bookings from the quarter came through supplier-funded solutions.
“Our strong performance was a direct result of the progress we've made on our three strategic priorities: Delivering more value to travelers; investing where we see the greatest opportunities for growth; and driving operating efficiencies and margin expansion,” she said, adding on that last point that Expedia achieved its highest first-quarter margin in 15 years.
Putting AI to work
Expedia has been using artificial intelligence to improve the experience for both its partners and travelers, including both existing and new customers, Gorin said.
AI enables better personalization at scale in Expedia’s products as the company is using data from hundreds of millions of travelers, including things such as shopping, reviews, servicing and more, to continuously improve its ranking and recommendation model, she said.
“AI-powered conversational experiences provide even richer data, and coupled with more advanced models, enable us to uncover deeper patterns,” she said, adding that translated to higher conversions for its Vrbo vacation rentals and record attach rates on Expedia.
Travelers who use Expedia’s AI filters return more often and convert at higher rates, she said.
Expedia works with nearly 3.7 million properties, of which 800,000 are exclusive to the company, Gorin said. AI allows the company to onboard its partners faster. Last quarter, the company grew its lodging property count by 10%, with its fastest growth coming from outside the U.S.
A deeper understanding of travelers through AI is allowing Expedia to deliver greater value to its partners through more powerful insights, advertising and promotion, she added.
Expedia handles more than 250 million service interactions a year, and more than half of those are through self-service, she said. More than 30% of those are powered by AI, and that number keeps increasing. When human support is necessary, AI shortens the customers’ wait and handling time.
“We're automating conversation summaries in over 30 languages, enabling seamless handoffs with context across our global workforce and reducing new agent onboarding time by about 60%,” she said. “As flights were canceled across the Middle East, AI helped us handle surging volumes at speed, allowing our human agents to focus on more complex, time-sensitive issues.”
AI is also strengthening Expedia’s ability to capture demand more effectively, Gorin said. Roughly two-thirds of bookings come through direct channels, AI platforms are an opportunity for Expedia to grow bookings through indirect channels. The company moved early in this area, and answer engine optimization is now Expedia’s fastest-growing channel. In February, it went live with ChatGPT ads.
“Traffic and bookings from AI-driven channels remained small, but we’re encouraged by the mix of new users, conversion and average purchases,” she said. “This is a long-term opportunity to reach a large engaged audience while diversifying our marketing investment.”
By the numbers
For the first quarter, Expedia reported revenue of $3.4 billion, up 15% year over year, according to its earnings release. It reported a net loss of $12 million as compared to a net loss of $197 million in the first quarter of last year.
Expedia achieved adjusted EBTIDA of $542 million during the quarter, an increase of 83% year over year. Its adjusted EBITDA margin was 15.8%, up from 9.9% a year ago.
The company entered the first quarter with $5.8 billion in unrestricted cash and short-term investments, Chief Financial Officer Scott Schenkel said. During the quarter, it retired $1.75 billion of short-term debt, including its convertible and short-term notes. It secured a $2.5 billion revolving credit facility, and subsequent to the quarter, it issued $1 billion of long-term debt. On a trailing 12-month basis, free cash flow is $4.1 billion.
During the quarter, Expedia repurchased approximately 3.3 million shares for $700 million. The company’s board authorized a new $5 billion share repurchase program.
As of press time, Expedia’s stock was trading at $231.79 per share, down 18.08% year to date and up 37.16% year over year. The NASDAQ Composite was up 11.96% and 45.10% for the same respective periods.