Expedia Group(EXPE) - 2025 Q2 - Quarterly Report

Part I. Financial Information Item 1. Consolidated Financial Statements Expedia Group's unaudited consolidated financial statements and detailed notes for specified periods are presented Consolidated Statements of Operations This statement details Expedia Group's revenue, operating income, net income, and earnings per share for specified periods | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,786 | $3,558 | $6,774 | $6,447 | | Operating income | $485 | $451 | $415 | $341 | | Net income | $322 | $375 | $125 | $239 | | Net income attributable to Expedia Group, Inc. | $330 | $386 | $130 | $251 | | Basic EPS | $2.61 | $2.92 | $1.02 | $1.88 | | Diluted EPS | $2.48 | $2.80 | $0.96 | $1.79 | - Revenue increased by 6.4% for the three months ended June 30, 2025, and by 5.1% for the six months ended June 30, 2025, compared to the same periods in 2024[8] - Net income attributable to Expedia Group, Inc. decreased by 14.5% for the three months ended June 30, 2025, and by 48.2% for the six months ended June 30, 2025, compared to the same periods in 2024[8] Consolidated Statements of Comprehensive Income (Loss) This statement presents net income and other comprehensive income components, including currency translation adjustments | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $322 | $375 | $125 | $239 | | Currency translation adjustments, net of tax | $40 | $(2) | $55 | $(17) | | Comprehensive income | $362 | $373 | $180 | $222 | | Comprehensive income attributable to Expedia Group, Inc. | $363 | $385 | $175 | $237 | - Currency translation adjustments significantly impacted comprehensive income, shifting from a net loss of $2 million in Q2 2024 to a gain of $40 million in Q2 2025, and from a loss of $17 million YTD 2024 to a gain of $55 million YTD 2025[10] Consolidated Balance Sheets This statement provides a snapshot of Expedia Group's financial position, detailing assets, liabilities, and equity | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | ASSETS | | | | Total current assets | $14,733 | $9,815 | | Total assets | $26,976 | $22,388 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total current liabilities | $19,614 | $13,611 | | Total liabilities | $24,890 | $19,578 | | Total stockholders' equity | $2,086 | $2,799 | - Total assets increased by $4,588 million (20.5%) from December 31, 2024, to June 30, 2025, primarily driven by a significant increase in cash and cash equivalents and deferred merchant bookings[14] - Total current liabilities increased by $6,003 million (44.1%) over the same period, largely due to a substantial rise in deferred merchant bookings[14] Consolidated Statements of Stockholders' Equity This statement tracks changes in stockholders' equity, including net income, dividends, and share repurchases | Metric (in millions) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :------------------- | :------------------------------- | :----------------------------- | | Net income (loss) | $330 | $130 | | Other comprehensive income, net of taxes | $33 | $45 | | Payment of dividends to stockholders | $(51) | $(102) | | Common stock repurchases | $(627) | $(957) | | Stock-based compensation expense | $132 | $248 | - Total stockholders' equity decreased from $2,799 million as of December 31, 2024, to $2,086 million as of June 30, 2025, primarily due to common stock repurchases and dividend payments, partially offset by net income and stock-based compensation[18] - The company reinstated quarterly common stock dividends in Q1 2025, with two payments of $0.40 per share totaling $102 million for the six months ended June 30, 2025[18][59] Consolidated Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $4,073 | $4,380 | | Net cash used in investing activities | $(220) | $(449) | | Net cash used in financing activities | $(1,180) | $(1,149) | | Effect of exchange rate changes on cash | $208 | $(81) | | Net increase in cash, cash equivalents and restricted cash | $2,881 | $2,701 | | Cash, cash equivalents and restricted cash at end of period | $8,455 | $8,362 | - Net cash provided by operating activities decreased by $307 million for the six months ended June 30, 2025, compared to the prior year, primarily due to lower working capital benefits[20][172] - Net cash used in investing activities decreased by $229 million, driven by sources of cash from currency forward contract gains in 2025 compared to losses in 2024[20][173] Notes to Consolidated Financial Statements This section provides detailed explanations and additional information supporting the consolidated financial statements Note 1 – Basis of Presentation This note outlines the basis for financial statement preparation, including GAAP adherence, estimates, and business seasonality - Expedia Group's business experiences seasonal fluctuations, with leisure travel bookings generally highest in the first three quarters. Revenue typically lags bookings by several weeks for hotels and several months for alternative accommodations[26] - On a consolidated basis, revenue and income are typically lowest in the first quarter and highest in the third quarter[26] Note 2 – Summary of Significant Accounting Policies This note details recent accounting policy updates, including new FASB guidance and revenue recognition principles - New FASB guidance on income tax disclosure is effective for annual periods beginning after December 15, 2024, requiring specific categories in rate reconciliation and additional information for significant reconciling items[27][28] - New FASB guidance expanding disclosure requirements for certain income statement expenses is effective for fiscal years beginning after December 15, 2026[29] | Revenue Recognition Item (in millions) | June 30, 2025 | December 31, 2024 | Recognized in H1 2025 | | :----------------------------------- | :------------ | :---------------- | :-------------------- | | Prepaid merchant bookings | $481 | $319 | N/A | | Deferred merchant bookings | $12,300 | $7,600 | $5,700 | | Deferred loyalty rewards | $1,100 | $937 | $431 | | Deferred revenue | $167 | $164 | $104 | Note 3 – Fair Value Measurements This note details financial assets and liabilities measured at fair value, including derivatives and investments | Financial Assets Measured at Fair Value (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------ | :---------------- | | Total assets measured at fair value on a recurring basis | $1,651 | $1,700 | | Total liabilities measured at fair value on a recurring basis | $15 | $2 | - As of June 30, 2025, the company held $5.6 billion in outstanding foreign currency forward contracts to hedge liability exposures, resulting in a net forward asset of $38 million[44] - During the six months ended June 30, 2025, the company recognized approximately $(223) million in losses from fair value changes of its equity investment in Global Business Travel Group, Inc., and a $2 million gain from the sale of Despegar.com, Corp[46][47] Note 4 – Debt This note details Expedia Group's outstanding debt, including notes, redemptions, issuances, and credit facility status | Debt Type (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | 6.25% senior notes due 2025 | $— | $1,043 | | 5.0% senior notes due 2026 | $750 | $749 | | 0% convertible senior notes due 2026 | $998 | $996 | | 5.4% senior notes due 2035 | $985 | $— | | Total debt | $6,213 | $6,266 | | Long-term debt, excluding current maturities | $4,466 | $5,223 | - In February 2025, Expedia Group early redeemed approximately $1 billion of 6.25% senior unsecured notes due May 2025[51] - In February 2025, the company issued $1 billion of 5.4% registered senior unsecured notes due February 2035, with net proceeds of approximately $985 million[53] - Expedia Group maintains a $2.5 billion revolving credit facility, with no outstanding borrowings as of June 30, 2025, and was in compliance with all covenants[57][58] Note 5 – Stockholders' Equity This note details common stock dividends, share repurchases, and accumulated other comprehensive income | Dividend Declaration | Per Share | Total Amount (in millions) | Payment Date | | :------------------- | :-------- | :------------------------- | :----------- | | February 4, 2025 | $0.40 | $51 | March 27, 2025 | | May 7, 2025 | $0.40 | $51 | June 18, 2025 | - During the six months ended June 30, 2025, Expedia Group repurchased 5.6 million shares for $957 million under its 2023 Share Repurchase Program, with $2.3 billion remaining authorized[61] - Accumulated Other Comprehensive Income (Loss) primarily consists of foreign currency translation adjustments[62] Note 6 – Earnings Per Share This note presents basic and diluted earnings per share and weighted-average shares outstanding for specified periods | EPS Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $2.61 | $2.92 | $1.02 | $1.88 | | Diluted EPS | $2.48 | $2.80 | $0.96 | $1.79 | | Shares (000's) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic | 126,453 | 131,948 | 127,541 | 133,724 | | Diluted | 132,809 | 137,832 | 134,296 | 140,131 | Note 7 – Restructuring and Related Reorganization Charges This note details restructuring actions, primarily headcount reductions, and associated charges for specified periods - Expedia Group recognized $70 million in restructuring and related reorganization charges during the six months ended June 30, 2025, an increase from $66 million in the same period of 2024[66] - These charges were predominately related to employee severance and benefit costs, with approximately $32 million included in accrued expenses and other current liabilities as of June 30, 2025[66] - The company expects approximately $20 million in additional reorganization charges based on current plans[66] Note 8 – Income Taxes This note provides effective tax rates, explains changes, and discusses IRS examinations and transfer pricing disputes | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 23.9% | 23.3% | 39.3% | 28.3% | - The change in effective tax rate for both periods was primarily due to nondeductible mark-to-market charges[68] - Expedia Group is under examination by the IRS for tax years 2017 to 2020 and is vigorously defending its position against prior IRS adjustments related to transfer pricing for tax years 2011-2013 and 2014-2016, totaling approximately $675 million in federal income tax[69] Note 9 – Commitments and Contingencies This note discusses legal proceedings, contingent matters, taxes, international VAT, and recent tax settlements - Management does not expect current lawsuits to have a material impact on liquidity, results of operations, or financial condition[70] - Expedia Group has established reserves for potential settlement of hotel occupancy and other taxes, which were not material as of June 30, 2025, and December 31, 2024[71] - The company reached an agreement with Italian tax authorities, paying $71 million for 2016-2022 VAT matters in November 2024, and an additional $33 million for 2023-2024 in July 2025[75] Note 10 – Segment Information This note defines Expedia Group's B2C, B2B, and trivago segments, detailing performance using Adjusted EBITDA - Expedia Group operates through three reportable segments: B2C (consumer brands), B2B (travel technology and supply solutions), and trivago (hotel metasearch)[77] - Adjusted EBITDA is the primary operating metric used by CODMs to allocate resources and assess segment performance[79] | Segment Revenue (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | B2C | $2,479 | $2,432 | $4,435 | $4,418 | | B2B | $1,209 | $1,049 | $2,156 | $1,882 | | trivago (Third-party) | $98 | $77 | $183 | $147 | | Total Revenue | $3,786 | $3,558 | $6,774 | $6,447 | | Segment Adjusted EBITDA (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | B2C | $728 | $654 | $945 | $869 | | B2B | $331 | $263 | $547 | $435 | | trivago | $(6) | $(5) | $(11) | $(14) | | Total Adjusted EBITDA | $908 | $786 | $1,204 | $1,041 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial performance, condition, and operational results Overview and Trends This section outlines Expedia Group's mission, industry trends, competitive landscape, and key operating metrics - Expedia Group's mission is to power global travel, leveraging its supply portfolio, platform, and technology across consumer brands and business partners[95] - Global macroeconomic and geopolitical pressures, including weaker than expected travel demand in the U.S. during Q1 and Q2 2025, are impacting the travel industry[97] - The online travel market is highly competitive, with challenges from generative AI tools, search engine companies (e.g., Google), metasearch companies, direct bookings by airlines/lodging, and the 'sharing economy' (e.g., Airbnb, Vrbo)[100] | Lodging Metric | Q2 2025 Growth | 2024 Growth | 2023 Growth | | :------------- | :------------- | :---------- | :---------- | | Room nights booked | 7% | 9% | 12% | | ADRs booked | Flat | -1% | -2% | - Air bookings grew 3% in Q2 2025 compared to Q2 2024, but continued to lag lodging business growth. Air revenue accounted for 3% of total worldwide revenue in Q2 2025[110][111] - Total advertising and media revenue accounted for 7% of total worldwide revenue in Q2 2025, with EG Advertising growing 19% and trivago Advertising growing 28% compared to Q2 2024[112][113][114] Business Strategy Expedia Group's strategy focuses on leveraging its brand, supply, and platform technology for customer relationships - Expedia Group's strategy focuses on leveraging its brand, supply, and platform technology to provide greater services and value to travelers, suppliers, and business partners, building longer-lasting direct customer relationships[115] - The company has unified its technology, product, data engineering, and data science teams to build scalable services and capabilities, completing the migration of core B2C brands onto a unified Brand Expedia technology front-end infrastructure[117][118] - One Key, a unified loyalty program, was launched in the U.S. and U.K., enabling travelers to cross-earn and cross-redeem rewards across Brand Expedia, Hotels.com, and Vrbo[119] Seasonality This section explains the seasonal nature of travel bookings, with revenue and income typically lowest in Q1 and highest in Q3 - Travel bookings are generally highest in the first three quarters, with revenue lagging bookings by several weeks for hotels and months for alternative accommodations[120] - Consolidated revenue and income are typically lowest in the first quarter and highest in the third quarter[120] Critical Accounting Policies and Estimates This section highlights critical accounting estimates requiring significant judgment impacting financial results - Critical accounting estimates require significant judgment and assumptions, where changes could materially impact financial condition or results of operations[122][123] Segments This section identifies Expedia Group's three reportable segments: B2C, B2B, and trivago - Expedia Group's reportable segments are B2C, B2B, and trivago[125] Operating Metrics This section presents key operating metrics, including gross bookings and revenue margin, for specified periods | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Gross Bookings | | | | | | | | B2C | $21,565 | $21,290 | 1% | $44,180 | $43,687 | 1% | | B2B | $8,844 | $7,547 | 17% | $17,680 | $15,314 | 15% | | Total gross bookings | $30,409 | $28,837 | 5% | $61,860 | $59,001 | 5% | | Revenue Margin | | | | | | | | B2C | 11.5% | 11.4% | | 10.0% | 10.1% | | | B2B | 13.7% | 13.9% | | 12.2% | 12.3% | | | Total revenue margin | 12.4% | 12.3% | | 10.9% | 10.9% | | - Gross bookings increased 5% for both the three and six months ended June 30, 2025, primarily driven by lodging gross bookings in the hotel business, with booked room nights increasing 7%[128] Results of Operations This section provides a detailed analysis of Expedia Group's revenue and expense performance for the reporting periods Revenue Revenue increased, driven by B2B and lodging growth, with strong advertising revenue and decreased air revenue | Revenue by Segment (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | B2C | $2,479 | $2,432 | 2% | $4,435 | $4,418 | 0% | | B2B | $1,209 | $1,049 | 15% | $2,156 | $1,882 | 15% | | trivago (Third-party) | $98 | $77 | 28% | $183 | $147 | 25% | | Total revenue | $3,786 | $3,558 | 6% | $6,774 | $6,447 | 5% | | Revenue by Service Type (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Lodging | $3,040 | $2,862 | 6% | $5,329 | $5,090 | 5% | | Air | $105 | $111 | (5)% | $212 | $226 | (6)% | | Expedia Group Advertising | $182 | $152 | 19% | $356 | $297 | 20% | | trivago Advertising | $98 | $77 | 28% | $183 | $147 | 25% | | Other | $361 | $356 | 1% | $694 | $687 | 1% | | Total revenue | $3,786 | $3,558 | 6% | $6,774 | $6,447 | 5% | | Revenue by Business Model (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :-------------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Merchant | $2,624 | $2,459 | 7% | $4,670 | $4,423 | 6% | | Agency | $852 | $838 | 2% | $1,504 | $1,516 | (1)% | | Advertising, media and other | $310 | $261 | 19% | $600 | $508 | 18% | | Total revenue | $3,786 | $3,558 | 6% | $6,774 | $6,447 | 5% | Cost of Revenue Cost of revenue remained consistent for the three and six months ended June 30, 2025, reflecting efficiencies | Cost of Revenue (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :---------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Direct costs | $302 | $284 | 6% | $588 | $564 | 4% | | Personnel and overhead | $75 | $78 | (4)% | $146 | $156 | (6)% | | Total cost of revenue | $377 | $362 | 4% | $734 | $720 | 2% | | % of revenue | 9.9% | 10.2% | | 10.8% | 11.2% | | Selling and Marketing - Direct and Indirect Selling and marketing expenses increased due to higher B2B commissions and increased salaries | Selling and Marketing (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :---------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Selling and marketing - direct | $1,920 | $1,793 | 7% | $3,677 | $3,443 | 7% | | % of revenue | 50.7% | 50.4% | | 54.3% | 53.4% | | | Selling and marketing - indirect | $213 | $197 | 8% | $412 | $383 | 7% | | % of revenue | 5.6% | 5.5% | | 6.1% | 5.9% | | - Direct selling and marketing costs increased due to higher B2B partner commissions supporting revenue growth[140] - Indirect selling and marketing costs increased primarily due to higher average salaries[140] Technology and Content Technology and content expense decreased due to lower personnel costs and cloud spending optimization initiatives | Technology and Content (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Personnel and overhead | $235 | $239 | (1)% | $472 | $489 | (3)% | | Other | $90 | $92 | (3)% | $173 | $183 | (6)% | | Total technology and content | $325 | $331 | (2)% | $645 | $672 | (4)% | | % of revenue | 8.6% | 9.3% | | 9.5% | 10.4% | | General and Administrative General and administrative expense increased due to higher personnel and overhead costs and miscellaneous business taxes | General and Administrative (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Personnel and overhead | $151 | $144 | 4% | $297 | $292 | 2% | | Professional fees and other | $46 | $36 | 27% | $80 | $74 | 7% | | Total general and administrative | $197 | $180 | 9% | $377 | $366 | 3% | | % of revenue | 5.2% | 5.1% | | 5.6% | 5.7% | | Depreciation and Amortization Depreciation increased from capitalized website development, while amortization decreased | Depreciation and Amortization (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Depreciation | $212 | $190 | 12% | $420 | $385 | 9% | | Amortization of intangible assets | $11 | $15 | (32)% | $22 | $30 | (29)% | | Total depreciation and amortization | $223 | $205 | 9% | $442 | $415 | 6% | Legal Reserves, Occupancy Tax and Other This expense category decreased significantly in 2025 due to prior year charges for digital service taxes and a donation | Legal Reserves, Occupancy Tax and Other (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amount | $2 | $21 | $2 | $41 | | % of revenue | 0.1% | 0.6% | 0% | 0.6% | - The higher charges in the six months ended June 30, 2024, included a $30 million charge for Canadian digital service taxes and a $20 million donation for public park revitalization in Seattle[147] Restructuring and Related Reorganization Charges Restructuring charges increased in H1 2025 due to expanded reorganization actions, primarily employee severance and benefits - Restructuring and related reorganization charges were $70 million for the six months ended June 30, 2025, up from $66 million in the prior year, due to expanded actions including headcount reductions[148] Operating Income Operating income increased due to revenue growth and lower legal charges, with Adjusted EBITDA growth | Operating Income (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :----------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Operating income | $485 | $451 | 8% | $415 | $341 | 22% | | % of revenue | 12.8% | 12.7% | | 6.1% | 5.3% | | | Adjusted EBITDA by Segment (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | B2C | $728 | $654 | 12% | $945 | $869 | 9% | | B2B | $331 | $263 | 26% | $547 | $435 | 26% | | trivago | $(6) | $(5) | 30% | $(11) | $(14) | (21)% | | Total Adjusted EBITDA | $908 | $786 | 16% | $1,204 | $1,041 | 16% | Interest Income and Expense Interest income increased from higher cash balances, while interest expense decreased due to new senior notes | Interest (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :--------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Interest income | $74 | $67 | 10% | $128 | $118 | 8% | | Interest expense | $(58) | $(61) | (6)% | $(116) | $(123) | (6)% | Other, Net Other, net shifted from a gain to a loss, primarily due to foreign exchange and minority equity investment changes | Other, Net (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Foreign exchange rate gains (losses), net | $28 | $(31) | $40 | $(61) | | Gains (losses) on minority equity investments, net | $(102) | $56 | $(258) | $47 | | Other | $(4) | $6 | $(3) | $11 | | Total other, net | $(78) | $31 | $(221) | $(3) | Provision for Income Taxes The effective tax rate increased due to mark-to-market charges; OBBBA impacts are under evaluation | Income Tax Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change | | :------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Provision for income taxes | $101 | $113 | (11)% | $81 | $94 | (14)% | | Effective tax rate | 23.9% | 23.3% | | 39.3% | 28.3% | | - The effective tax rate for the six months ended June 30, 2025, increased to 39.3% from 28.3% in the prior year, primarily due to nondeductible mark-to-market charges[158] - The company is evaluating the potential impacts and elections related to the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, which makes permanent key provisions of the Tax Cuts and Jobs Act of 2017 and introduces other tax changes[160] Definition and Reconciliation of Adjusted EBITDA This section defines Adjusted EBITDA as a non-GAAP measure and reconciles it to net income - Adjusted EBITDA is a non-GAAP measure used by management to evaluate business performance and is reconciled to net income attributable to Expedia Group, Inc[161][162] | Reconciliation Item (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to Expedia Group, Inc. | $330 | $386 | $130 | $251 | | Provision for income taxes | $101 | $113 | $81 | $94 | | Total other (income) expense, net | $62 | $(37) | $209 | $8 | | Operating income | $485 | $451 | $415 | $341 | | Stock-based compensation | $105 | $114 | $203 | $218 | | Depreciation and amortization | $223 | $205 | $442 | $415 | | Adjusted EBITDA | $908 | $786 | $1,204 | $1,041 | Financial Position, Liquidity and Capital Resources This section discusses Expedia Group's financial position, liquidity, capital resources, debt, and cash flow - Principal sources of liquidity include cash flows from operations, available credit facility, and cash and short-term investments, which totaled $6.7 billion at June 30, 2025[166] - In February 2025, the company issued $1 billion of 5.4% senior notes and redeemed approximately $1 billion of 6.25% senior notes[167][168] - Credit ratings as of June 30, 2025, were Baa2 (Moody's), BBB (S&P), and BBB (Fitch), all with a 'stable' outlook[169] - Net cash provided by operating activities decreased for the six months ended June 30, 2025, compared to the prior year, due to lower working capital benefits[172] - The company repurchased 5.6 million shares for approximately $957 million under its 2023 Share Repurchase Program during the six months ended June 30, 2025[175] - Quarterly cash dividends of $0.40 per share were paid in March and June 2025, totaling $102 million[176] Summarized Financial Information for Guarantors and the Issuer of Guaranteed Securities This section provides summarized financial information for the obligor group, including assets and liabilities | Obligor Group (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Current Assets | $12,774 | $7,996 | | Non-Current Assets | $10,363 | $10,495 | | Current Liabilities | $18,509 | $14,129 | | Non-Current Liabilities | $5,022 | $5,744 | | Obligor Group (in millions) | Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | | :-------------------------- | :----------------------------- | :--------------------------- | | Revenue | $5,130 | $10,520 | | Operating income | $242 | $915 | | Net income | $218 | $719 | Item 3. Quantitative and Qualitative Disclosures about Market Risk This section confirms no material changes in Expedia Group's market risk during the specified periods - No material changes in market risk occurred during the three and six months ended June 30, 2025[183] Item 4. Controls and Procedures This section confirms effective disclosure controls and no material changes to internal financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[184] - There were no material changes to internal control over financial reporting during the quarter ended June 30, 2025[185] Part II. Other Information Item 1. Legal Proceedings This section provides updates on specific legal proceedings, including favorable outcomes in the Helms Burton Litigation - In the Helms Burton Litigation, the Eleventh Circuit affirmed the dismissal in Del Valle and dismissed the Trinidad appeal, effectively ending those matters. A jury also returned a verdict in favor of Expedia in the CSL matter[186] Item 1A. Risk Factors This section refers to the Annual Report on Form 10-K for risk factors, noting no new material risks in this report - Readers should refer to the Annual Report on Form 10-K for a comprehensive discussion of risk factors, as no new material risks are presented in this report[187] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section summarizes share repurchase activity under the 2023 Share Repurchase Program for Q2 2025 | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid Per Share | | :--------------- | :-------------------------------------------- | :--------------------------- | | April 1-30, 2025 | 782 | $152.98 | | May 1-31, 2025 | 1,472 | $164.36 | | June 1-30, 2025 | 1,570 | $168.88 | | Total | 3,824 | | - As of June 30, 2025, $2.276 billion remained authorized for repurchase under the 2023 Share Repurchase Program[188] Item 5. Other Information This section confirms no Rule 10b5-1 trading arrangements by directors or executive officers during Q2 2025 - No Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or executive officers during Q2 2025[189] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including certifications and XBRL - Key exhibits include certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and XBRL formatted financial statements[191] Signature This section contains the official signature block for the Quarterly Report on Form 10-Q