Expedia Soars: Q3 Net Income Jumps 40% on Strong Revenue Growth

Ticker: EXPE · Form: 10-Q · Filed: 2025-11-07T00:00:00.000Z

Sentiment: bullish

Topics: Travel Industry, Online Travel Agencies, Earnings Growth, Revenue Growth, Cash Flow, Dividends, Market Share

Related Tickers: EXPE, BKNG, ABNB

TL;DR

**Expedia's Q3 numbers are a clear buy signal, showing strong travel demand and impressive profit growth.**

AI Summary

Expedia Group, Inc. reported a robust financial performance for the three and nine months ended September 30, 2025. Revenue for the three months increased by 8.7% to $4.412 billion from $4.060 billion in the prior year, while net income attributable to Expedia Group, Inc. surged by 40.2% to $959 million from $684 million. Diluted earnings per share also saw a significant rise to $7.33 from $5.04. For the nine-month period, revenue grew by 6.5% to $11.186 billion from $10.507 billion, and net income attributable to Expedia Group, Inc. increased by 16.5% to $1.089 billion from $935 million. Operating income for the three months ended September 30, 2025, was $1.036 billion, a substantial increase from $762 million in the same period of 2024. The company's cash and cash equivalents significantly increased to $5.826 billion as of September 30, 2025, from $4.183 billion at December 31, 2024. Deferred merchant bookings, representing advance cash payments, grew to $11.140 billion from $8.517 billion, indicating strong future revenue potential. Selling and marketing direct costs increased to $1.976 billion for the three months, up from $1.855 billion, reflecting continued investment in customer acquisition. The company also paid dividends of $0.40 per share for the quarter, totaling $49 million.

Why It Matters

Expedia's strong Q3 performance, with a 40.2% jump in net income and 8.7% revenue growth, signals robust demand in the travel sector, benefiting investors through increased profitability and dividends. This positive trend suggests a healthy consumer travel market, which could impact competitors like Booking Holdings and Airbnb by intensifying competition for market share. Employees may see increased job security and potential for growth within a thriving company. For customers, continued investment in technology and marketing, as evidenced by increased selling and marketing direct costs, could lead to improved user experiences and more competitive offerings in the online travel agency space.

Risk Assessment

Risk Level: medium — While Expedia shows strong financial performance, the 'Other, net' income (expense) line item for the nine months ended September 30, 2025, shows a significant swing to a net expense of ($133) million from a net income of $103 million in the prior year, indicating potential volatility in non-core operations. Additionally, the company's current maturities of long-term debt increased to $1.748 billion from $1.043 billion at December 31, 2024, which could impact liquidity if not managed effectively.

Analyst Insight

Investors should consider increasing their exposure to EXPE, given the strong Q3 net income growth of 40.2% and robust deferred merchant bookings of $11.140 billion, indicating future revenue. Monitor the 'Other, net' income (expense) line for continued volatility and assess the company's strategy for managing its increased current maturities of long-term debt of $1.748 billion.

Financial Highlights

revenue
$4.412B
operating Margin
23.5%
net Income
$959M
eps
$7.33
cash Position
$5.826B
revenue Growth
+8.7%

Revenue Breakdown

SegmentRevenueGrowth
Total Revenue$4.412B+8.7%

Key Numbers

Key Players & Entities

FAQ

What were Expedia Group's key financial highlights for the third quarter of 2025?

Expedia Group's revenue for the three months ended September 30, 2025, increased by 8.7% to $4.412 billion, up from $4.060 billion in the prior year. Net income attributable to Expedia Group, Inc. surged by 40.2% to $959 million, compared to $684 million in the same period of 2024.

How did Expedia Group's earnings per share perform in Q3 2025?

Diluted earnings per share attributable to Expedia Group, Inc. for the three months ended September 30, 2025, increased to $7.33, a significant rise from $5.04 reported in the third quarter of 2024.

What is the strategic outlook for Expedia Group based on its deferred merchant bookings?

Expedia Group's deferred merchant bookings, representing advance cash payments for future travel, increased to $11.140 billion as of September 30, 2025, from $8.517 billion at December 31, 2024. This substantial increase indicates strong future revenue potential and continued consumer confidence in booking travel through Expedia's platforms.

What are the primary risks identified in Expedia Group's 10-Q filing?

A primary risk identified is the significant swing in 'Other, net' income (expense) for the nine months ended September 30, 2025, which moved to a net expense of ($133) million from a net income of $103 million in the prior year. Additionally, current maturities of long-term debt increased to $1.748 billion from $1.043 billion, posing a potential liquidity management challenge.

What should investors consider regarding Expedia Group's stock based on this filing?

Investors should note the strong Q3 net income growth of 40.2% and the robust deferred merchant bookings of $11.140 billion, which suggest a positive outlook. However, they should also monitor the volatility in 'Other, net' income (expense) and the increased current maturities of long-term debt of $1.748 billion.

How has Expedia Group's cash position changed?

Expedia Group's cash and cash equivalents significantly increased to $5.826 billion as of September 30, 2025, from $4.183 billion at December 31, 2024. This represents a substantial improvement in the company's liquidity.

What new accounting guidance will impact Expedia Group's future disclosures?

The FASB issued new guidance in December 2023 to improve income tax disclosure requirements, effective for annual periods beginning after December 15, 2024. Additionally, new guidance in November 2024 expands disclosure requirements for certain income statement expenses, effective for fiscal years beginning after December 15, 2026.

How does seasonality affect Expedia Group's revenue and income?

Expedia Group generally experiences seasonal fluctuations, with traditional leisure travel bookings highest in the first three quarters. Since revenue is recognized when travel takes place, revenue typically lags bookings. Revenue and income are usually lowest in the first quarter and highest in the third quarter due to variable cost alignment with booking volumes and stable fixed costs.

What was Expedia Group's total comprehensive income for the nine months ended September 30, 2025?

Expedia Group's comprehensive income attributable to Expedia Group, Inc. for the nine months ended September 30, 2025, was $1.127 billion, an increase from $950 million in the same period of 2024.

Did Expedia Group pay dividends to its stockholders in Q3 2025?

Yes, Expedia Group paid dividends to stockholders, declared at $0.40 per share, totaling $49 million for the three months ended September 30, 2025.

Risk Factors

Industry Context

The online travel agency (OTA) market remains highly competitive, driven by technological advancements and evolving consumer preferences. Expedia Group operates within this dynamic landscape, facing competition from global OTAs, metasearch engines, and direct booking channels. The industry is characterized by significant marketing spend to acquire and retain customers, and a continuous need for innovation in platform features and user experience.

Regulatory Implications

Expedia Group must navigate a complex web of regulations, including those related to consumer protection, data privacy, and taxation (such as occupancy and excise taxes). Changes in these regulations, or the interpretation and enforcement thereof, could materially impact the company's operations and financial results.

What Investors Should Do

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Key Dates

Glossary

Deferred Merchant Bookings
Represents cash payments received by Expedia Group in advance of fulfilling its performance obligations to customers or suppliers. (A significant indicator of future revenue, showing strong customer commitment and booking activity. The balance grew to $10.0 billion as of September 30, 2025.)
Non-controlling interests
Represents the portion of equity in a subsidiary that is not attributable to the parent company. In this filing, it refers to a small net loss of $5 million for the three months ended September 30, 2025. (Indicates ownership stakes in subsidiaries that do not fully belong to Expedia Group, Inc.)
Stock-based compensation
Compensation provided to employees in the form of stock options, restricted stock units, or other equity awards. (A component of operating expenses, with significant amounts allocated to Selling and marketing ($20 million for Q3 2025) and Technology and content ($34 million for Q3 2025).)
Prepaid merchant bookings
Payments made to suppliers in advance of the performance obligations being met, recorded as an asset. (Represents a short-term asset, with a balance of $320 million as of September 30, 2025.)
Operating income
Profitability from a company's core business operations before accounting for interest and taxes. (Expedia Group reported a strong operating income of $1.036 billion for Q3 2025, up from $762 million in the prior year.)

Year-Over-Year Comparison

Expedia Group demonstrated significant year-over-year improvement in its Q3 2025 results compared to Q3 2024. Revenue grew by 8.7% to $4.412 billion, and net income surged by 40.2% to $959 million, with diluted EPS rising to $7.33 from $5.04. Operating income also saw a substantial increase to $1.036 billion. The company's cash position strengthened considerably, with cash and cash equivalents rising to $5.826 billion from $4.183 billion at the end of 2024, and deferred merchant bookings grew significantly, indicating robust future revenue potential.

Filing Stats: 4,714 words · 19 min read · ~16 pages · Grade level 18 · Accepted 2025-11-06 17:36:12

Key Financial Figures

Filing Documents

Financial Information

Part I Financial Information

Consolidated Financial Statements

Item 1 Consolidated Financial Statements Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 2 Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 3 Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 4 Consolidated Statements of Stockholders Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 5 Consolidated Statements of Cash Flows for the Nine Months Ended Sep tember 30, 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 23

Quantitative and Qualitative Disclosures about Market Risk

Item 3 Quantitative and Qualitative Disclosures about Market Risk 37

Controls and Procedures

Item 4 Controls and Procedures 38

Other Information

Part II Other Information

Legal Proceedings

Item 1 Legal Proceedings 39

Risk Factors

Item 1A Risk Factors 40

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 40

Other Information

Item 5 Other Information 40

Exhibits

Item 6 Exhibits 41 Signature 42 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue $ 4,412 $ 4,060 $ 11,186 $ 10,507 Costs and expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) (1) 376 388 1,110 1,108 Selling and marketing - direct 1,976 1,855 5,653 5,298 Selling and marketing - indirect (1) 211 197 623 580 Technology and content (1) 310 320 955 992 General and administrative (1) 186 229 563 595 Depreciation and amortization 225 211 667 626 Impairment of intangible assets — 33 — 33 Legal reserves, occupancy tax and other 86 59 88 100 Restructuring and related reorganization charges (1) 6 6 76 72 Operating income 1,036 762 1,451 1,103 Other income (expense): Interest income 69 67 197 185 Interest expense ( 62 ) ( 61 ) ( 178 ) ( 184 ) Other, net 88 106 ( 133 ) 103 Total other income (expense), net 95 112 ( 114 ) 104 Income before income taxes 1,131 874 1,337 1,207 Provision for income taxes ( 167 ) ( 190 ) ( 248 ) ( 284 ) Net income 964 684 1,089 923 Net (income) loss attributable to non-controlling interests ( 5 ) — — 12 Net income attributable to Expedia Group, Inc. $ 959 $ 684 $ 1,089 $ 935 Earnings per share attributable to Expedia Group, Inc. available to common stockholders: Basic $ 7.76 $ 5.28 $ 8.63 $ 7.07 Diluted 7.33 5.04 8.18 6.75 Shares used in computing earnings per share (000's): Basic 123,699 129,758 126,246 132,393 Diluted 131,014 135,732 133,188 138,655 _______ (1) Includes stock-based compensation as follows: Cost of revenue $ 3 $ 3 $ 10 $ 9 Selling and marketing 20 19 63 61 Technology and content 34 40 111 120 General and administrative 33 85 106 167 Restructuring and related reorganization charges — — 3 8 See accompanying notes. 2 Table of Contents EXPEDIA GROUP, INC. CON

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements September 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 an

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. In September 2025, the FASB issued new guidance related to accounting for internal-use software, which updates the cost capitalization threshold for internal-use software development costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. The effective date is for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early application is permitted as of the beginning of an annual reporting period and the transition method may be prospective, modified, or retrospective. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements and 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 supp

Notes to Consolidated Financial Statements – (Continued)

Notes to Consolidated Financial Statements – (Continued) September 30, 2025 December 31, 2024 (in millions) Cash and cash equivalents $ 5,826 $ 4,183 Restricted cash and cash equivalents 1,436 1,391 Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statements of cash flows $ 7,262 $ 5,574 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 nine months ended September 30, 2025, we recorded approximately $ 37 million of incremental allowance for expected uncollectible accounts, offset by $ 18 million of write-offs. Note 3 – Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis as of September 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 $ 196 $ 196 $ — Term deposits and certificates of deposit 161 — 161 U.S. agency securities 7 7 Commercial p

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

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