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Expedia: Expedia Group's Q2 2025 Earnings: A Strong Beat with Room for Growth

Expedia Group's Q2 2025 financial results exceeded expectations, with 5% gross bookings growth, 6% revenue growth, and a nearly 2-point expansion in adjusted EBITDA margins. The company's leadership in the U.S. travel market was maintained, with low single-digit growth in booked room nights. Notably, Brand Expedia was the largest and fastest-growing consumer brand, with multi-item attach rates at their highest level since the pandemic. EPS came out at $4.24, relative to estimates at $4.14, demonstrating the company's ability to deliver on its financial commitments. As Scott Schenkel noted, "direct traffic is strong, and app traffic continues to grow with improving conversion."

EXPE

USD 285.59

0.98%

A-Score: 5.3/10

Publication date: August 7, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Outperformed Expectations: Q2 2025 saw 5% gross bookings growth, 6% revenue growth, and 2-point adjusted EBITDA margin expansion.
  • B2B & Advertising Strength: B2B and advertising revenue grew 17% and 19%, respectively, driven by geographic diversification and AI-driven innovations.
  • Brand Expedia Growth: Multi-item attach rates at pandemic-high levels, with the brand leading in U.S. travel and booking 8.5M room nights (low single-digit growth).
  • AI-Driven Efficiency: AI improved customer service NPS to record highs while reducing costs, alongside a 150-basis-point margin rate increase from cost restructuring.
  • Loyalty Program Expansion: One Key loyalty program grew members by high single digits, with Silver+ members outpacing nonmembers by 20%+ in engagement.

Leadership's Focus on Growth and Efficiency

Ariane Gorin emphasized the company's focus on direct traffic, supply, products, and loyalty programs to drive growth. In B2B, the business is diversified geographically and by partner type, with opportunities to power travel bookings through various channels. The company aims to deliver more value to travelers and partners, invest in growth areas like B2B and advertising, and expand margins. Gorin highlighted the importance of having strong supply, a great loyalty program, and a simple user experience, which will be crucial in driving future growth.

International Growth and B2B Opportunities

The company is taking a focused approach to international growth, understanding what travelers in specific markets want, and executing against it. Ariane Gorin noted that the B2B business is geographically diverse, exposed to fast-growing markets like Asia, and is winning share with partners. The company sees underpenetrated opportunities in vacation rentals and activities as future growth drivers. With the company's B2B business growing 17%, it's clear that this segment will continue to be a key driver of growth in the future.

Valuation Metrics

With a P/E Ratio of 21.49 and an EV/EBITDA of 9.53, Expedia Group's valuation appears reasonable given its strong growth prospects. The company's ROIC of 11.5% and ROE of 96.61% demonstrate its ability to generate strong returns on investment. With a Net Debt / EBITDA of 0.29, the company's balance sheet remains relatively healthy. As the company continues to deliver on its growth initiatives, we expect valuation multiples to expand further.

Expedia's A-Score