Q2 2026 Expedia Group, Inc. Earnings Call Transcript
Key Points
- Expedia Group Inc (EXPE) exceeded the high end of its Q2 2026 guidance for the fifth consecutive quarter, with bookings up 12%, revenue up 14%, and adjusted EBITDA up 23%.
- The B2B segment delivered its 20th consecutive quarter of double-digit growth, underscoring the durability and momentum of this business.
- Consumer bookings grew 8%, driven by the fastest U.S. growth in 15 quarters, with strong performance from top-tier loyalty members.
- The company achieved record attach rates on Expedia, driven by AI-powered personalization and improved product experiences, enhancing traveler value.
- Expedia Group Inc (EXPE) raised its full-year 2026 guidance, now expecting bookings growth of 8-9% and revenue growth of 9-10%, with adjusted EBITDA margin expansion of 150-175 basis points.
- The company expanded margins by nearly 2 points in Q2, driven by tight expense management, consumer marketing leverage, and cost efficiencies, with overheads flat year-over-year despite 14% revenue growth.
- Expedia Group Inc (EXPE) became the first OTA to distribute Allegiant flights, achieving full coverage of U.S. commercial airlines, reinforcing its position as the most complete travel marketplace in the U.S.
- The company is investing in high-growth channels like AI and social, with AEO and social being two of the fastest-growing channels, and is an early adopter of ChatGPT's latest ad product.
- Expedia Group Inc (EXPE) announced the acquisition of Lela, an AI conversational planning app, and CarTrawler, a leading B2B car rental and insurance platform, to expand its one-stop travel shop vision.
- The company generated strong free cash flow of $4.5 billion on a trailing 12-month basis, and repurchased $200 million in shares during the quarter, returning capital to shareholders.
- Europe remained pressured, particularly outbound travel, due to macro headwinds and reduced air capacity, weighing on demand.
- The company faces tougher comparisons in the second half of 2026, leading to expected moderation in bookings and room night growth in Q3.
- Q3 margin expansion is expected to moderate due to lapping prior year cost actions, ongoing investment in B2B growth, and unfavorable net FX impacts.
- The B2B segment's margins are impacted by partner mix, with strong partner promotional activity, and investments in building out new lines of business, which could pressure near-term profitability.
- SEO traffic has remained soft, though stabilized, and the company faces a fast-changing landscape with algorithm and search page changes occurring more frequently.
- The World Cup generated only modest incremental demand late in Q2, with a lot of bookings occurring after the tournament began, and the impact was relatively modest overall.
- Foreign exchange is expected to be a headwind for bookings in Q3, with an estimated one point negative impact at current rates.
- The company's guidance assumes a healthy macro environment, but there are secondary impacts from the Middle East conflict, including higher jet fuel prices affecting airline ticket prices.
- The acquisition of tickets and other investments in B2B are weighing on costs and margins in the near term, as the company digests these acquisitions.
- While AEO is a fast-growing channel, it remains small, and the company acknowledges it is early days, with no clear winner yet in terms of visibility and conversion.
Good day everyone, and welcome to the Expedia Group Q2 2026 Financial Results Teleconference. My name is [Collie], and I will be the operator for today's call. (Operator Instructions)
For opening remarks, I will now turn the call over to VP Investor Relations, Rob Bevegni. Rob, please go ahead.
Good afternoon, and welcome to Expedia Group's Second Quarter 2026 Earnings Call. I'm pleased to be joined on today's call by our CEO, Ariane Gorin; and our CFO, Derek Andersen. As a reminder, our commentary today will include references to certain non-GAAP measures.
Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in our earnings release. Unless otherwise stated, all growth rates are on a year-over-year basis and any reference to expenses exclude stock-based compensation.
We will also be making forward-looking statements during the call, which are predictions, projections and other statements about future events. These statements
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