Expedia Group(US:EXPE) ZACKS·2025-11-07 16:56Core Insights - Expedia Group (EXPE) reported third-quarter 2025 adjusted earnings of $7.57 per share, exceeding the Zacks Consensus Estimate by 4.99% and reflecting a year-over-year increase of 23.5% [1] - Revenues reached $4.41 billion, an 8.7% year-over-year rise, also surpassing the Zacks Consensus Estimate by 2.61% [1] - B2B revenues grew by 18.2% year over year to $1.39 billion, while B2C revenues increased by 3.7% to $2.88 billion [1] - Advertising revenues saw a significant jump of 16% year over year [1] Gross Bookings - Total gross bookings amounted to $30.73 billion, marking a 12% year-over-year increase, with a 1-point benefit from foreign exchange [2] - B2C gross bookings grew by 7%, while B2B gross bookings surged by 26% year over year, achieving the 17th consecutive quarter of double-digit growth [2] - Lodging gross bookings increased by 13% year over year to $22.71 billion, driven by a 15% rise in hotel bookings [2] Operating Performance - Adjusted EBITDA for the quarter was $1.45 billion, up 15.9% year over year, with an adjusted EBITDA margin of 32.8%, expanding by 210 basis points [4] - Direct sales and marketing expenses were $1.98 billion, accounting for 44.8% of revenues, which is a 6.5% increase year over year [4] - Overhead expenses totaled $620 million, representing 14.1% of revenues, up 3% year over year [4] Profitability Metrics - Adjusted EBIT rose by 27.1% year over year to $1.13 billion, with an adjusted EBIT margin improving by 370 basis points to 25.7% [5] Balance Sheet Overview - As of September 30, 2025, cash and cash equivalents and short-term investments were $6.17 billion, down from $6.67 billion as of June 30, 2025 [6] - Long-term debt stood at $4.468 billion, slightly up from $4.466 billion as of June 30, 2025, with a gross leverage ratio of 1.9x [6] Cash Flow Situation - Net cash provided by operating activities was negative $497 million for the quarter, while free cash flow was negative $686 million, indicating continued cash outflows [7] Future Guidance - For Q4 2025, Expedia expects gross bookings growth in the range of 6-8% and revenue growth also in the 6-8% range [10] - The company raised its FY25 guidance, now projecting 7% gross bookings growth, up from the previous 3%-5% forecast [10] - Adjusted EBITDA margin is expected to expand by approximately 2% year over year, doubling the earlier projection of 1% [11]