Expedia's Q1 Earnings Miss Expectations, Revenues Increase Y/Y

Expedia Group EXPE reported first-quarter 2025 adjusted earnings of 40 cents per share, which missed the Zacks Consensus Estimate by 4.76%. The figure increased 90.5% year over year.

EXPE’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average earnings surprise being 5.48%.

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Revenues of $2.98 billion rose 3.4% year over year. The figure missed the Zacks Consensus Estimate by 1.27%.

B2B revenues increased 13.7% year over year to $947 million. B2C decreased 1.5% year over year to $1.96 billion. 

Advertising revenues jumped 20% year over year. 

Expedia Group, Inc. Price, Consensus and EPS Surprise

Expedia Group, Inc. price-consensus-eps-surprise-chart | Expedia Group, Inc. Quote

EXPE’s Gross Bookings Rise Y/Y

Total gross bookings were $31.5 billion, which increased 4% year over year. B2C gross bookings grew 1% and B2B gross bookings rose 14%, given the segment’s greater international exposure.

Lodging gross bookings grew 5% year over year to $23.03 billion, with hotel bookings climbing 6%, driven by resilience at B2B and Brand Expedia.

Strength in booked room nights, which rose 6% from the year-ago quarter to 107.7 million, was a positive

EXPE’s Operating Details

Adjusted EBITDA was $296 million in the reported quarter, up 16.1% year over year.

Direct sales and marketing expenses were $1.75 billion, up 6.5% year over year. Overhead expenses were $604 million, down 1.1% year over year.

Adjusted EBIT decreased 65% year over year to negative $21 million.

EXPE’s Balance Sheet

As of March 31, 2025, cash and cash equivalents and short-term investments were $6.1 billion, up from $4.5 billion as of Dec. 31, 2024.

Long-term debt was $4.465 billion as of March 31, 2025, compared with $5.223 billion as of Dec. 31, 2024.

The gross leverage ratio has remained the same at 2.1.

Net cash provided by operating activities was $2.95 billion in the reported quarter, and Expedia’s free cash flow was $2.76 billion.

Expedia Offers Positive Q2 and 2025 Guidance

EXPE expects gross bookings to be in the 2-4% range for second-quarter 2025. Revenue growth is expected to be in the band of 3-5%.

It expects first-quarter adjusted EBITDA margins to increase 75-100 basis points (bps) year over year. 

For 2025, EXPE expects gross bookings and revenue growth in the 2% to 4% range. Revenue growth is expected to be 2-4%. Expedia expects adjusted EBITDA margin expansion of 75-100 bps year over year.

Zacks Rank and Stocks to Consider

Currently, EXPE carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Retail-Wholesale sector are Alibaba BABA, Costco Wholesale COST and Canada Goose GOOS, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Alibaba have gained 48.4% year to date. It is set to report fourth-quarter fiscal 2025 results on May 15.

Shares of COST have gained 10% year to date. It is slated to report third-quarter fiscal 2025 results on May 29.

Shares of GOOS have lost 14% year to date. It is set to report fourth-quarter fiscal 2025 results on May 21.

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This article originally published on Zacks Investment Research (zacks.com).

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