• Revenue: $3.2 billion, grew 10% year-over-year.
• Gross Bookings: $24.4 billion, grew 13% year-over-year.
• EBITDA: $643 million, up 21% with a margin of 20.2%.
• Gross Margin: Nearly 90%, up 125 basis points.
• Direct Sales and Marketing Expense: $1.5 billion, up 13%.
• Overhead Expenses: $643 million, decreased by 1%.
• Net Income (EBIT): $338 million, with a margin of 10.6%.
• Free Cash Flow: $2.3 billion, up 26% year-over-year.
• Unrestricted Cash and Short-term Investments: $4.5 billion.
• Share Repurchase: $1.6 billion or 12.1 million shares in 2024.
• Dividend: Reinstated at $0.40 per share starting March 2025.

• Warning! GuruFocus has detected 4 Warning Signs with EXPE.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Expedia Group Inc (NASDAQ:EXPE) reported double-digit growth in room nights, gross bookings, and revenue, exceeding expectations.
• The company's B2B business experienced a stellar quarter with a 24% increase in bookings, driven by strong international demand.
• Advertising revenue grew by 25% in the quarter, showcasing the strength of this high-margin business.
• Expedia Group Inc (NASDAQ:EXPE) achieved a 7% growth in global active membership in its loyalty program, with a significant increase in member repeat rates.
• The company successfully expanded its EBITDA margin, reflecting disciplined cost management and operational efficiencies.

Negative Points

• Despite improvements, Vrbo and Hotels.com are still recovering from past disruptions and require further work to regain lost travelers.
• The company faces foreign exchange headwinds, impacting revenue growth projections for 2025.
• There is a noted softening in travel demand in early Q1 2025 compared to the strong Q4 2024 performance.
• Expedia Group Inc (NASDAQ:EXPE) anticipates flat to slightly better EBITDA margins in Q1 2025, indicating limited margin expansion in the short term.
• The company is still assessing the impact of its loyalty program changes, particularly the drag on bookings for Hotels.com.

Q & A Highlights

Q: Can you discuss the sustainability of the recovery for Vrbo and Hotels.com into 2025 and the initiatives that have driven their turnaround? A: Ariane Gorin, CEO, explained that Vrbo's recovery was driven by improvements in product, supply, and marketing. Despite past disruptions, they are focused on enhancing product and supply further in 2025. For Hotels.com, the brand was impacted by tech migration and loyalty program changes, but they have plans to reinvigorate it in 2025.

Q: What are the headwinds affecting Q1 guidance, and how do you view long-term margin improvements compared to peers? A: Scott Schenkel, CFO, noted that Q1 guidance reflects FX headwinds and the leap year effect. They observed some softening from Q4 but believe the travel environment remains stable. Long-term, they aim for margin improvements by balancing growth and cost efficiencies, with a focus on marketing and overhead reductions.

Q: What is driving the strength in the B2B segment, particularly in APAC, and what are the growth drivers for 2025? A: Ariane Gorin highlighted strong partnerships and market growth in APAC as key drivers. For 2025, they plan to enhance existing partnerships, sign new ones, and focus on unique supply offerings. The quality of supply is crucial for B2B growth.

Q: How is the newly added Vrbo inventory performing, and what is the outlook for advertising revenue growth? A: Ariane Gorin stated that the new urban inventory contributed to Vrbo's recovery. For 2025, they aim to enhance supply flexibility and quality. Advertising revenue has grown significantly, and they see continued opportunities through new advertisers, product innovations, and ad types.

Q: Can you elaborate on potential AI partnerships and their impact on customer acquisition and internal capabilities? A: Ariane Gorin discussed using AI to enhance products for travelers and partners, adapting to changing search behaviors, and exploring partnerships with AI-native travel startups. They see AI as a tool for improving internal processes and customer experiences.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.