In the second quarter of the year, Expedia Group again outperformed its expectations, seeing a 6% increase year over year in booked room nights and a 12% increase in total gross bookings.
"We exceeded the high end of both our top- and bottom-line expectations for the fifth quarter in a row, growing bookings 12%, revenue 14% and adjusted [earnings before interest, tax, depreciation and amortization] 23%," said CEO Ariane Gorin. "Based on our first-half results and the ongoing trends we're seeing, we're raising our full-year guidance."
Derek Andersen, who joined Expedia as chief financial officer in April, said Expedia's adjusted EBITDA was $1.1 billion. Driving operating cost efficiencies was a top goal for Expedia last quarter, Gorin said, and the company expanded margins by 2 points.
"The margin expansion was driven by a combination of cost efficiencies, consumer marketing leverage and the flow-through of higher volume," Andersen said. "We continue to generate strong free cash flow, which reached $4.5 billion on a trailing 12-month basis, and this has fueled the return of capital to shareholders."
He added that Expedia's raised outlook now includes full-year gross bookings growth of 8% to 9%, which is in the range of $129.5 billion to $130.8 billion.
Expedia continues to invest in artificial intelligence, and Gorin said the company's approach includes focusing on two categories for the technology.
"There's what are we doing with AI and our product right now that is delivering results in our core business," she said. "And then the second is what are we doing in our product that's not necessarily delivering conversion right now, but we know is helping us better understand travelers and is going to have compounding benefits over time."
Expedia is staying at the forefront of adopting new AI services and recently acquired Layla, a conversational travel planning app, Gorin said. The company also launched an agentic voice solution with VRBO.
"More broadly, our agentic technology stack is allowing us to design and ship products faster, ultimately unlocking new capabilities for both travelers and partners," Gorin said. "As we scale these capabilities, we're managing token costs thoughtfully while giving broad access to our teams."
Expedia's B2B unit continues to lead its overall outperformance, and this past quarter was the company's 20th consecutive quarter of double-digit growth for B2B with a 23% increase in B2B revenue and 21% increase in gross B2B in gross bookings.
Gorin said it's a priority for Expedia to continue to invest in its B2B business. In May, the company announced it would acquire car rental and insurance platform CarTrawler.
"There's investments going into the B2B segment to drive that one-stop shop and build out our lines of business," Andersen said.
By the numbers
Expedia Group's revenue rose 14%, led by B2B's 23% year-over-year growth, according to the company's earnings release.
During the second quarter, Expedia repurchased approximately 880,000 shares for $200 million.
As of press time, Expedia’s stock was trading at $319.66 per share, up 13% year to date. The NASDAQ Composite was up 13.5% for the same period.