Expedia Group NASDAQ: EXPE reported first-quarter 2026 results that exceeded management’s expectations, with CEO Ariane Gorin citing “solid execution” and progress on strategic priorities despite what she described as a “mixed macro environment.” CFO Scott Schenkel said results came in “above the high end of our guidance range,” driven by double-digit bookings and revenue growth as the company continued to realize operating leverage.
First-quarter results top guidance as margins expand
Gorin said Expedia grew bookings 13% and revenue 15% in the quarter, while expanding EBITDA margin by nearly six points. Schenkel provided additional detail, reporting gross bookings of $35.5 billion, up 13%, and revenue of $3.4 billion, up 15%. He said foreign exchange was a meaningful tailwind, contributing about three points to bookings growth and nearly five points to revenue growth, roughly one point higher than the company had anticipated.
On profitability, Schenkel said adjusted EBITDA was $542 million, representing a 15.8% margin—“our highest Q1 in 15 years”—with nearly six points of adjusted EBITDA margin expansion year over year. He attributed roughly one point of that expansion to favorable foreign exchange, with the remainder reflecting “stronger than expected marketing leverage, revenue flow-through, and cost efficiencies.” Adjusted EPS was $1.96, which he said grew “approximately 4x,” reflecting earnings growth and the impact of share repurchases.
Demand trends: strong start, volatility in March, improvement in April
Management described a quarter that began with momentum but became more volatile in March. Gorin said Expedia’s best first-quarter start in three years carried through February, before a “more challenging macro environment” in March tied to the conflict in the Middle East and travel advisories in Mexico. She said the Middle East represented less than 2% of total bookings, but the company saw elevated cancellations across Europe and Asia.
Schenkel said booking windows and lengths of stay were modestly higher year over year early in the quarter, but higher cancellations and more moderate booking trends emerged late in the period. He estimated that excluding impacts from the Mexico advisories and the Middle East conflict, “both bookings and room night growth would have been approximately two points higher for the quarter.” In response to a later question, he also characterized March as roughly a five-point impact for the month.
Both executives said trends improved in April. Gorin said cancellation rates stabilized in early April and booking activity “re-accelerated throughout the month.” Schenkel echoed that cancellations normalized and bookings improved in April, while noting the company’s outlook assumes continued volatility.
Segment performance: consumer accelerates; B2B grows 22% with March disruption
Expedia reported growth in both consumer and B2B. Schenkel said consumer gross bookings were $24.8 billion, up 10%, with revenue of $2.1 billion, up 8%. He noted bookings growth outpaced revenue growth due primarily to a higher mix of air. Consumer EBITDA margins were approximately 20%, up nine points year over year, which he attributed to marketing leverage and cost controls. Gorin said consumer brands posted 10% bookings growth, the “fastest pace in 12 quarters,” and highlighted mid-single-digit growth in active loyalty members, with faster growth in higher tiers.
B2B gross bookings increased 22% to $10.7 billion, with revenue up 25% to $1.2 billion. Schenkel said Rapid API was the largest contributor to growth, while template and TAAP also delivered “healthy growth,” each in at least the mid-teens. B2B EBITDA margin was 22.7%, roughly flat year over year. He reiterated that the company expects B2B investments to weigh on near-term margins as Expedia prioritizes that segment’s growth.
In the Q&A, Gorin noted that about two-thirds of B2B bookings are outside the U.S., making it more exposed to the Middle East disruption. She said B2B saw more cancellations in Europe and Asia in March but recovered as cancellations eased in April. Both executives also referenced a moderation in promotional activity from certain large B2B partners compared to the fourth quarter, which had been more elevated.
Strategic initiatives: promotions, supply growth, partnerships, and vacation rentals
Gorin pointed to execution against three stated priorities: delivering more value to travelers, investing where the company sees the greatest growth opportunities, and driving operating efficiencies and margin expansion. She said Expedia achieved its highest first-quarter margin in 15 years and remains focused on additional cost efficiencies and marketing productivity in the consumer business.
On supply, Gorin said Expedia works with nearly 3.7 million properties, including 800,000 that are exclusive, and that the company grew lodging property count by 10% in the quarter with its fastest growth outside the U.S. She also said supplier-funded promotions are expanding, with 25% more hotels participating in Expedia’s March sale than last year and more than a third of Vrbo bookings in the quarter coming from supplier-funded promotions.
Gorin also highlighted a milestone for vacation rentals on Expedia’s flagship brand, saying vacation rentals on Expedia reached an annualized run rate of $1 billion in bookings, excluding Vrbo.
On partnerships, Gorin said Expedia signed an exclusive partnership with Bank of Montreal AIR MILES and “just last week became the exclusive hotel partner for Uber,” adding that Uber will also be integrated within the Expedia app. Asked about the Uber arrangement, Gorin framed it as an example of Expedia’s B2B value proposition and said the deal expands the marketplace while providing incremental demand to hotel partners through Expedia’s existing connectivity. She said the partnership will launch in the U.S. and expand over time, including into regions where Uber is strong and Expedia’s consumer brands are less so.
AI focus: personalization, servicing automation, and new acquisition channels
Gorin devoted a significant portion of prepared remarks to AI, calling it a “significant growth opportunity” that reinforces Expedia’s advantages in trust, scale, supply quality, and partner relationships. She outlined AI use cases across the traveler journey, including personalization and ranking models trained on “hundreds of millions of travelers interactions,” and said AI-powered conversational experiences are helping improve patterns and recommendations. Gorin said the quarter saw higher conversion at Vrbo and “record attach rates” on Expedia, and she identified an AI servicing agent and AI-powered filters as two widely adopted features.
On customer support, Gorin said Expedia handles more than 250 million service interactions annually, with over half resolved through self-service, and that more than 30% of self-service interactions are powered by AI. She said AI is helping shorten wait and handling time for human agents and that the company is automating conversation summaries in more than 30 languages, reducing new agent onboarding time by about 60%.
On marketing and distribution, Gorin said roughly two-thirds of bookings come through direct channels, but AI-driven platforms create an opportunity to grow through indirect channels. She said “answer engine optimization is now our fastest-growing channel,” and that Expedia went live with ChatGPT ads in February. While traffic and bookings from AI-driven channels remain small, she said the company is encouraged by new user mix, conversion, and average purchase size. Schenkel and Gorin also said AI-enabled tools are improving testing and marketing productivity, with Gorin citing “hundreds of millions of dollars in realized marketing value” from productivity and workflow automation.
Asked about potential AI-related costs, Schenkel said the company expects AI usage and associated costs—including “token costs”—to increase and anticipated some upward pressure on costs in the second half as Expedia adds skills needed to execute AI plans. He said prior cost reductions left room to absorb those investments while still delivering margin expansion, although he expects moderation in the back half of the year.
Capital return, balance sheet actions, and updated outlook
Schenkel said Expedia ended the quarter with $5.8 billion of unrestricted cash and short-term investments and remains committed to maintaining debt levels consistent with an investment-grade rating. He said the company retired $1.75 billion of short-term debt during the quarter, secured a $2.5 billion revolving credit facility, and issued $1 billion of long-term debt after quarter end.
On shareholder returns, Schenkel said trailing 12-month free cash flow was $4.1 billion. Expedia repurchased $700 million of stock in the first quarter, buying 3.3 million shares at an average price of $212. Since 2022, he said the company has repurchased nearly 49 million shares, reducing share count by 24% net of dilution. Expedia also announced a new $5 billion share repurchase authorization, with Schenkel saying the company intends to continue opportunistic repurchases in 2026 at a pace similar to recent years.
For the second quarter, Schenkel guided to gross bookings growth of 7% to 9% and revenue growth of 9% to 11%, including foreign exchange tailwinds of about 0.5 point to bookings and four points to revenue at current rates. He said Expedia expects second-quarter EBITDA margins to rise 50 to 100 basis points, while noting that full-year margin expansion should moderate as the company laps lower marketing spend and cost actions from last year. Expedia reiterated its full-year outlook for gross bookings growth of 6% to 8%, revenue growth of 6% to 9%, and EBITDA margin expansion of 100 to 125 basis points, with Schenkel saying the company expects to land at the high end of that margin range given first-quarter performance and the second-quarter outlook, while remaining cautious due to recent volatility and geopolitical and macro uncertainty.
Gorin also noted a CFO transition, thanking Schenkel for his contributions and saying Derek Andersen will become the company’s next CFO.
About Expedia Group NASDAQ: EXPE
Expedia Group NASDAQ: EXPE is a global travel technology company that operates an online marketplace connecting consumers, travel suppliers and third‑party partners. The company's platform enables search, comparison and booking of travel products and services, including hotels, airline tickets, vacation rentals, car rentals, cruises and packaged travel. Its portfolio comprises consumer-facing travel brands as well as corporate travel solutions and technology services that serve both leisure and business travelers.
Key offerings include consumer booking platforms and mobile apps that aggregate inventory from hotels, vacation rental managers, airlines and car rental companies, alongside ancillary travel services such as trip insurance and activities.
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