Expedia Q2 Earnings & Revenues Beat Estimates, Q3 Guidance Raised

Core Insights - Expedia Group (EXPE) reported second-quarter 2025 adjusted earnings of $4.24 per share, exceeding the Zacks Consensus Estimate by 2.42% and reflecting a year-over-year increase of 20.8% [1] - Revenues reached $3.79 billion, a 6.4% year-over-year rise, also surpassing the Zacks Consensus Estimate by 1.94% [1] - B2B revenues grew by 15% year over year to $1.21 billion, while B2C revenues increased by 2% to $2.48 billion [1] Gross Bookings - Total gross bookings amounted to $30.4 billion, marking a 5% year-over-year increase [2] - B2C gross bookings rose by 1%, while B2B gross bookings surged by 17%, achieving the 16th consecutive quarter of double-digit growth [2] - Lodging gross bookings increased by 6% year over year to $22.07 billion, with hotel bookings climbing by 8% [2] Operating Performance - Adjusted EBITDA for the quarter was $908 million, up 15.5% year over year, with an adjusted EBITDA margin of 24%, expanding by 190 basis points [3] - Direct sales and marketing expenses were $1.92 billion, representing 50.7% of revenues, an increase of 7.1% year over year [3] - Overhead expenses totaled $637 million, accounting for 16.8% of revenues, up 5.1% year over year [3] Profitability Metrics - Adjusted EBIT increased by 22.7% year over year to $583 million, with an adjusted EBIT margin improving by 200 basis points to 15.4% [4] Balance Sheet Overview - As of June 30, 2025, cash and cash equivalents and short-term investments were $6.7 billion, up from $6.1 billion as of March 31, 2025 [5] - Long-term debt stood at $4.466 billion, slightly up from $4.465 billion as of March 31, 2025 [5] - The gross leverage ratio was maintained at 2x, aligning with the target to uphold an investment-grade rating [5] Cash Flow - Net cash provided by operating activities was $1.12 billion for the quarter, with free cash flow amounting to $921 million [6] Future Guidance - For Q3 2025, EXPE expects gross bookings growth in the range of 5-7% and revenue growth between 4-6% [7] - The company anticipates adjusted EBITDA margins to increase by 50-100 basis points year over year for Q3 [9] - For the full year 2025, EXPE projects gross bookings and revenue growth in the 3-5% range, with adjusted EBITDA margin expansion of more than 100 basis points year over year [9]