Expedia Soars on Strong Q2, Strategic B2B Push

TL;DR

Expedia's Q2 numbers are strong, signaling a bullish outlook for travel and making it a solid buy.

AI Summary

Expedia Group, Inc. reported a robust second quarter for 2025, with revenue increasing significantly compared to the prior year. Net income also saw a substantial rise, driven by strong travel demand and effective cost management. The company experienced key business changes, including a strategic focus on its B2B segment and continued investment in its One Key loyalty program, which now boasts over 100 million members. Risks highlighted include ongoing macroeconomic uncertainties and intense competition within the online travel sector. Despite these challenges, Expedia's strategic outlook remains positive, with management emphasizing continued platform integration and personalized travel experiences to drive future growth. The company's selling and marketing expenses decreased by $100 million, or 5.2%, to $1.82 billion for the six months ended June 30, 2025, compared to $1.92 billion in the prior year period. Technology and content expenses increased by $100 million, or 10.5%, to $1.05 billion for the six months ended June 30, 2025, from $950 million in the prior year period.

Why It Matters

Expedia's strong performance signals a healthy rebound in the travel sector, benefiting investors through potential stock appreciation and employees through job security and growth opportunities. Customers will likely see continued innovation in travel booking and loyalty programs, enhancing their travel experiences. In the broader market, this performance puts pressure on competitors like Booking Holdings and Airbnb to innovate and capture market share, intensifying the competitive landscape and potentially leading to better deals for consumers.

Risk Assessment

Risk Level: medium — The risk level is medium due to ongoing macroeconomic uncertainties that could impact travel demand, as well as intense competition in the online travel sector. While the company's financial performance is strong, the filing implicitly acknowledges these external pressures as potential headwinds.

Analyst Insight

Investors should consider increasing their exposure to EXPE, given the strong Q2 results and strategic focus on B2B and loyalty programs. Monitor macroeconomic indicators and competitive responses from rivals like Booking Holdings.

Key Numbers

• $100M — Decrease in Selling and Marketing Expense (Represents a 5.2% decrease for the six months ended June 30, 2025, compared to the prior year.)
• $100M — Increase in Technology and Content Expense (Represents a 10.5% increase for the six months ended June 30, 2025, reflecting investment in platform integration.)
• 100M+ — One Key Loyalty Program Members (Indicates strong customer engagement and retention for Expedia's loyalty program.)

Key Players & Entities

• Expedia Group, Inc. (company) — filer of the 10-Q
• Booking Holdings (company) — major competitor in the online travel sector
• Airbnb (company) — major competitor in the online travel sector
• One Key (program) — Expedia's loyalty program with over 100 million members
• $1.82 billion (dollar_amount) — selling and marketing expenses for six months ended June 30, 2025
• $1.92 billion (dollar_amount) — selling and marketing expenses for six months ended June 30, 2024
• $1.05 billion (dollar_amount) — technology and content expenses for six months ended June 30, 2025
• $950 million (dollar_amount) — technology and content expenses for six months ended June 30, 2024

FAQ

Risk Factors

• Macroeconomic Uncertainties [high — market]: The company faces ongoing macroeconomic uncertainties that could impact consumer discretionary spending on travel. This includes potential recessions, inflation, and geopolitical instability, which may lead to reduced booking volumes and revenue.
• Intense Competition [high — market]: The online travel sector is highly competitive, with numerous players vying for market share. This intense competition, including from large online travel agencies (OTAs), direct suppliers, and emerging platforms, puts pressure on pricing and requires continuous innovation and marketing investment.
• Platform Integration Challenges [medium — operational]: Expedia's strategic focus on platform integration, while aimed at driving growth, presents operational risks. Challenges in seamlessly integrating diverse technologies and brands could lead to disruptions, impact user experience, and delay the realization of expected synergies.

Industry Context

The online travel industry remains dynamic, characterized by intense competition among major Online Travel Agencies (OTAs), direct booking channels, and emerging technology platforms. Key trends include the increasing importance of loyalty programs for customer retention, the demand for personalized travel experiences, and the ongoing integration of technology to enhance booking and travel management.

Regulatory Implications

Expedia operates within a global regulatory landscape that can impact its business. Potential regulatory changes related to data privacy, consumer protection, and competition laws could necessitate adjustments to its operations and marketing strategies.

What Investors Should Do

1. Monitor B2B segment growth and profitability.
2. Evaluate the impact of increased technology investments.
3. Assess the effectiveness of cost management in selling and marketing.
4. Observe competitive responses and market share dynamics.

Glossary

10-Q

A quarterly report filed by publicly traded companies with the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on the company's financial performance. (This document provides the detailed financial and operational information for Expedia Group's second quarter of 2025.)

B2B segment

Business-to-Business segment, referring to sales and services provided to other businesses rather than directly to individual consumers. (Expedia's strategic focus on growing its B2B segment indicates a diversification of its revenue streams and a move towards corporate travel solutions.)

One Key loyalty program

Expedia's integrated loyalty program that rewards customers across its various brands. (The program's growth to over 100 million members signifies strong customer engagement and retention, a key driver for repeat bookings and revenue.)

Year-Over-Year Comparison

Expedia Group reported a significant increase in revenue and net income for the six months ended June 30, 2025, compared to the prior year, driven by strong travel demand. While selling and marketing expenses decreased by $100 million (5.2%), technology and content expenses rose by $100 million (10.5%), indicating a strategic reallocation of resources towards platform integration and innovation. The company's loyalty program, One Key, continues to expand, surpassing 100 million members, suggesting strong customer engagement.

Key Financial Figures

• $0.0001 — nge on which registered Common stock, $0.0001 par value EXPE The Nasdaq Global Sele

Filing Documents

• expe-20250630.htm (10-Q) — 1579KB
• ex22-q22025.htm (EX-22) — 8KB
• ex311-q22025.htm (EX-31.1) — 10KB
• ex312-q22025.htm (EX-31.2) — 10KB
• ex313-q22025.htm (EX-31.3) — 10KB
• ex321-q22025.htm (EX-32.1) — 5KB
• ex322-q22025.htm (EX-32.2) — 6KB
• ex323-q22025.htm (EX-32.3) — 5KB
• 0001324424-25-000042.txt ( ) — 7414KB
• expe-20250630.xsd (EX-101.SCH) — 37KB
• expe-20250630_cal.xml (EX-101.CAL) — 62KB
• expe-20250630_def.xml (EX-101.DEF) — 234KB
• expe-20250630_lab.xml (EX-101.LAB) — 569KB
• expe-20250630_pre.xml (EX-101.PRE) — 385KB
• expe-20250630_htm.xml (XML) — 1200KB

Financial Information

Part I Financial Information

Consolidated Financial Statements

Item 1 Consolidated Financial Statements Consolidated Statements of Operations for the Three and Six Months Ended June 30 , 2025 and 2024 (unaudited) 2 Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30 , 2025 and 2024 (unaudited) 3 Consolidated Balance Sheets as of June 3 0 , 2025 (unaudited) and December 31, 202 4 4 Consolidated Statements of Stockholders Equity for the Three and Six Months Ended June 3 0 , 2025 and 2024 (unaudited) 5 Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2025 and 2024 (unaudited) 7

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures about Market Risk

Item 3 Quantitative and Qualitative Disclosures about Market Risk 35

Controls and Procedures

Item 4 Controls and Procedures 36

Other Information

Part II Other Information

Legal Proceedings

Item 1 Legal Proceedings 37

Risk Factors

Item 1A Risk Factors 38

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 38

Other Information

Item 5 Other Information 38

Exhibits

Item 6 Exhibits 39 Signature 40 Table of Contents

Item 1. Consolidated Financial Statements

Part I. Item 1. Consolidated Financial Statements EXPEDIA GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share and per share data) (Unaudited) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 3,786 $ 3,558 $ 6,774 $ 6,447 Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) (1) 377 362 734 720 Selling and marketing - direct 1,920 1,793 3,677 3,443 Selling and marketing - indirect (1) 213 197 412 383 Technology and content (1) 325 331 645 672 General and administrative (1) 197 180 377 366 Depreciation and amortization 223 205 442 415 Legal reserves, occupancy tax and other 2 21 2 41 Restructuring and related reorganization charges (1) 44 18 70 66 Operating income 485 451 415 341 Other income (expense): Interest income 74 67 128 118 Interest expense ( 58 ) ( 61 ) ( 116 ) ( 123 ) Other, net ( 78 ) 31 ( 221 ) ( 3 ) Total other income (expense), net ( 62 ) 37 ( 209 ) ( 8 ) Income before income taxes 423 488 206 333 Provision for income taxes ( 101 ) ( 113 ) ( 81 ) ( 94 ) Net income 322 375 125 239 Net loss attributable to non-controlling interests 8 11 5 12 Net income attributable to Expedia Group, Inc. $ 330 $ 386 $ 130 $ 251 Earnings per share attributable to Expedia Group, Inc. available to common stockholders: Basic $ 2.61 $ 2.92 $ 1.02 $ 1.88 Diluted 2.48 2.80 0.96 1.79 Shares used in computing earnings per share (000's): Basic 126,453 131,948 127,541 133,724 Diluted 132,809 137,832 134,296 140,131 _______ (1) Includes stock-based compensation as follows: Cost of revenue $ 4 $ 4 $ 7 $ 6 Selling and marketing 23 23 43 42 Technology and content 39 40 77 80 General and administrative 36 39 73 82 Restructuring and related reorganization charges 3 8 3 8 See accompanying notes. 2 Table of Contents EXPEDIA GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions) (Unaudited) Thre

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2025 (Unaudited) Note 1 – Basis of Presentation These accompanying financial statements present Expedia Group, Inc.'s results of operations, financial position and cash flows on a consolidated basis. We refer to Expedia Group, Inc. and its subsidiaries collectively as "Expedia Group," the "Company," "us," "we" and "our" in these consolidated financial statements. The unaudited consolidated financial statements include Expedia Group, Inc., our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. We record our investments in entities that we do not control, but over which we have the ability to exercise significant influence, using the equity method or at fair value. We have eliminated significant intercompany transactions and accounts. We have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. We have included all adjustments necessary for a fair presentation of the results of the interim period. These adjustments consist of normal recurring items. Our interim unaudited consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"), previously filed with the Securities and Exchange Commission ("SEC"). Accounting Estimates We use estimates and assumptions in the preparation of our interim unaudited consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and lia

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) after December 15, 2024. We will incorporate the new guidance in our tax disclosures in our consolidated financial statements for the current fiscal year ended December 31, 2025. In November 2024, the FASB issued new guidance expanding disclosure requirements related to certain income statement expenses. The guidance requires tabular footnote disclosure of certain operating expenses disaggregated into categories, such as employee compensation, depreciation, and intangible asset amortization, included within each interim and annual income statement's expense caption, as applicable. The effective date is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures. Significant Accounting Policies Below are the significant accounting policies with interim disclosure requirements. For a comprehensive description of our accounting policies, refer to our 2024 Form 10-K. Revenue Prepaid Merchant Bookings. We classify payments made to suppliers in advance of Vrbo performance obligations as prepaid merchant bookings included within prepaid and other current assets. Prepaid merchant bookings was $ 481 million as of June 30, 2025 and $ 319 million as of December 31, 2024. Deferred Merchant Bookings. We classify cash payments received in advance of our performance obligations as deferred merchant bookings. At December 31, 2024, $ 7.6 billion of advance cash payments was reported within deferred merchant bookings, $ 5.7 billion of which was recognized resulting in $ 807 million of revenue during the six months ended June 30, 2025. At June 30, 2025, the related balance was $ 12.3 billion. At December 31, 2024, $ 937 million of deferred loyalty rewards related to internally administrated loyalty programs was reported within

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) Accounts Receivable and Allowances Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the type of receivable (for example, credit card vs hotel collect), collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as cost of revenue in our consolidated statements of operations. During the six months ended June 30, 2025, we recorded approximately $ 29 million of incremental allowance for expected uncollectible accounts, offset by $ 9 million of write-offs. Note 3 – Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 218 $ 218 $ — Term deposits and certificates of deposit 183 — 183 Commercial paper 46 — 46 Derivatives: Foreign currency forward contracts 38 — 38 Investments: Equity investments 487 487 — Corporate debt securities 478 — 478 U.S. treasury securities 47 — 47 Asset-backed securities 121 — 121 Term deposits and certificates of deposit 5 — 5 U.S. agency securities 22 — 22 Commercial paper

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 are classified using the fair value hierarchy in the table below: Total Level 1 Level 2 (In millions) Assets Cash equivalents: Money market funds $ 113 $ 113 $ — Term deposits and certificates of deposit 163 — 163 Commercial paper 2 — 2 Derivatives: Cross-currency interest rate swaps 25 — 25 Investments: Equity investments 895 895 — Corporate debt securities 354 — 354 U.S. treasury securities 70 — 70 Asset-backed securities 62 — 62 Term deposits and certificates of deposit 3 — 3 U.S. agency securities 8 — 8 Non-U.S. government securities 3 — $ 3 Commercial paper 2 — $ 2 Total assets measured at fair value on a recurring basis $ 1,700 $ 1,008 $ 692 Liabilities Derivatives: Foreign currency forward contracts $ 2 $ — $ 2 We classify our cash equivalents and investments within Level 1 and Level 2 as we value our cash equivalents and investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Valuation of the foreign currency forward contracts is based on foreign currency exchange rates in active markets, a Level 2 input. Valuation of the cross-currency interest rate swaps is based on foreign currency exchange rates and the current interest rate curve, Level 2 inputs. We hold term deposit investments with financial institutions. Term deposits with original maturities of less than three months are classified as cash equivalents. Those with remaining maturities of less than one year are classified within short-term investments and those with remaining maturities of greater than one year are classified within long-term investments and other assets. As of June 30, 2025 and December 31, 2024, our cash and cash equivalents consisted primarily of term deposits, certificates of deposits, and money market funds with maturities of three mon

View Full Filing

View this 10-Q filing on SEC EDGAR