Expedia Group (NASDAQ:EXPE) said it finished the fourth quarter of 2025 ahead of its expectations, posting 11% year-over-year growth in both gross bookings and revenue and expanding margins by nearly four points, as the company pointed to strength across its B2B and advertising businesses alongside improved performance in its consumer brands.
Q4 performance and demand trends
CEO Ariane Gorin said the company “accelerated both bookings and revenue growth” and “expanded margins by over two points,” adding that Expedia returned Vrbo and Hotels.com to growth while sustaining performance at Brand Expedia, B2B, and advertising.
Management also cited consumer behavior shifts versus 2024, with Gorin pointing to “longer booking windows and lengths of stay” and describing consumer spending as healthy.
Segment results: B2B and advertising stand out
Expedia’s B2C gross bookings rose 5% to $18.3 billion, with B2C revenue up 4% to $2.2 billion. Schenkel said bookings growth continued to outpace revenue growth due primarily to book-to-stay timing, since most revenue is recorded at the time of stay. B2C EBITDA margins were 31.5%, up roughly six points, driven largely by marketing leverage, with additional support from overhead discipline and growth in advertising revenue.
B2B remained a key growth driver. B2B gross bookings grew 24% to $8.7 billion and revenue also grew 24% to $1.3 billion, with “continued double-digit growth across all regions,” Schenkel said. Rapid API was again the largest contributor, helped by increased marketing activity from some of Expedia’s largest partners. B2B EBITDA margins were 24%, down about one point, as the company reiterated that it is prioritizing investments to support future growth even if they weigh modestly on near-term margins.
On advertising, Gorin said the company re-accelerated growth, with advertising revenue up 19% in Q4 and the year ending with a record number of active partners. She highlighted the expansion of new ad formats, including video ads in search results launched earlier in 2025 and video ads added to Expedia’s homepage in the fourth quarter.
Strategic priorities: product, supply, and efficiency
Gorin framed progress around three strategic priorities: delivering more value to travelers, investing in the biggest growth opportunities, and driving operating efficiencies.
- Product and traveler experience: Gorin said Expedia’s sites and apps are 30% faster than a year ago, with an upgraded checkout path and added payment options. The company is also using AI for personalization; she cited improved recommendation models at Brand Expedia that drove the company’s “best fourth quarter attach rates ever.”
- Service and trust: Expedia expanded Vrbo Care and enhanced help center and servicing capabilities across brands, driving “record traveler self-service levels,” according to Gorin. For complex issues, she said advanced agent tools helped materially reduce wait times, even during peak periods. In Q&A, Gorin added that during winter storms and a government shutdown, Expedia answered calls on average between one and three minutes, which she said the company believes was best in the industry.
- Supply expansion and promotions: Gorin said lodging property count rose more than 10% versus 2024. Partner-funded promotions represented over 30% of bookings in Q4, up more than 10 points from the third quarter, and nearly 70% more properties participated in the company’s Black Friday sale than previously. She later added that AI has helped speed up property onboarding, saying the process is now 70% faster than before.
On the efficiency front, Schenkel detailed expense leverage and cost discipline. Cost of revenue was $342 million, up 3% but improving as a percentage of revenue due to efficiencies in payments and customer service. Total direct sales and marketing expenses were $1.7 billion, up 10%, though B2C direct sales and marketing declined 5% year over year, which Schenkel said reflected improved efficiency and leverage; the increase was driven by B2B expense tied to partner commissions recognized at the time of stay. Overhead expenses were $640 million, roughly flat year over year, leveraging over two points on revenue.
AI focus and “up-the-funnel” trip planning
Executives repeatedly pointed to AI as both a product opportunity and an internal productivity driver. Gorin said Expedia is working with major platforms to ensure its brands show up in generative AI searches and function with “agentic browsers,” describing the company as “experimenting aggressively” even as volumes remain small.
Addressing questions about capturing travelers earlier in the planning process, Gorin said efforts begin with marketing personalization and targeting to ensure travelers see relevant messages during discovery, then experience relevant context once they land on Expedia’s sites. She also pointed to potential AI-driven planning tools, such as helping travelers plan within a budget, search by themes, and use natural language flows from trip planning through booking. She noted the company already has an AI agent in Hotels.com and said point solutions such as AI filters and property Q&A have worked best so far, with more to share later in 2026 on broader natural-language planning-to-booking experiences.
Capital return and outlook
Expedia reported adjusted EBITDA of $848 million for Q4, with a 24% margin. Adjusted EPS was $3.78, up 58%, which Schenkel said was helped by share repurchases and a lower tax rate. The company ended the quarter with $5.7 billion in unrestricted cash and short-term investments. Free cash flow for 2025 was $3.1 billion.
In Q4, Expedia repurchased $255 million of stock, buying back 1.1 million shares. Schenkel said that since 2022, Expedia has repurchased more than 45 million shares, reducing share count by 22% net of dilution. The company also raised its quarterly dividend by 20% to $0.48 per share.
For guidance, Expedia said it expects first-quarter 2026 gross bookings growth of 10% to 12% and revenue growth of 11% to 13%. At current exchange rates, management expects FX tailwinds of roughly three points to bookings growth and four points to revenue growth. EBITDA margins are expected to increase three to four points in Q1, which Schenkel said reflects that the first quarter is typically Expedia’s lowest EBITDA quarter and will see an outsized impact from prior cost actions.
For full-year 2026, Expedia guided for gross bookings growth of 6% to 8% and revenue growth of 6% to 9%, including one to two points of FX tailwinds. The company expects EBITDA margins to expand 100 to 125 basis points, with Schenkel noting expansion should moderate as the company laps benefits from 2025 headcount reductions and marketing optimization while selectively reinvesting for growth.
About Expedia Group (NASDAQ:EXPE)
Expedia Group (NASDAQ: EXPE) is a global travel technology company that operates an online marketplace connecting consumers, travel suppliers and third‑party partners. The company’s platform enables search, comparison and booking of travel products and services, including hotels, airline tickets, vacation rentals, car rentals, cruises and packaged travel. Its portfolio comprises consumer-facing travel brands as well as corporate travel solutions and technology services that serve both leisure and business travelers.
Key offerings include consumer booking platforms and mobile apps that aggregate inventory from hotels, vacation rental managers, airlines and car rental companies, alongside ancillary travel services such as trip insurance and activities.
