Expedia Group, Inc. (EXPE), Financial Analysis

1 Revenue & Business Model

• Storyline: Q3 2026 revenue grows 11.9% while costs grow 7.0%, so operating margin widens to 26.9%; B2B grows faster than B2C, and the B2C segment adjusted EBITDA margin rises while B2C direct marketing is flat. Chapters 2 to 4 cover the three revenue drivers: B2C brands (Expedia, Hotels.com, Vrbo and One Key); B2B (Expedia Partner Solutions); advertising and media, incl. trivago. The Q4 2026 outlook of +4.0% to 5.7% revenue growth compares with +11.9% in Q3 2026.
• Business model: Expedia earns merchant revenue when it collects payment from the traveller ($10.3bn in FY2025, 69.6% of revenue), agency commissions when the supplier collects payment ($3.18bn, 21.6%) and advertising, media and other revenue ($1.29bn, 8.8%). Lodging was 80% of FY2025 revenue (10-K FY2025).
• Segments: B2C (Expedia, Hotels.com, Vrbo and other consumer brands), B2B (Rapid API, white label templates and the TAAP agent tool) and trivago (majority owned, listed on Nasdaq). Revenue FY2021 $8.60bn to FY2025 $14.7bn, a 14.4% CAGR from a 2021 base affected by COVID travel limits; B2B $1.46bn to $4.84bn. TTM Q3 2026 revenue $16.2bn.
• Scale: gross bookings $119.6bn in FY2025, against an industry estimate of over $2tn of global travel spending in 2026 cited in the FY2025 Form 10-K; about 3.9m lodging properties at 30 Sep 2026, incl. about 2.5m Vrbo alternative accommodations; about 16,000 employees at 31 Dec 2025.
• Geography (point of sale): US $8.71bn (59.1%) and outside the US $6.02bn in FY2025; outside the US grew from 23.6% of revenue in FY2021. In Q3 2026 room nights grew in mid single digits in the US, low single digits in EMEA and mid teens in Rest of World (8-K Ex 99.2).
• Seasonality: bookings are highest in Q1 to Q3 and revenue is recognised at stay, so revenue and income are lowest in Q1 and highest in Q3; Vrbo bookings peak in Q1 for summer stays (10-Q Q3 2026).

2 B2C Brands: Expedia, Hotels.com and Vrbo, Adjusted EBITDA Margin 43.5%

• B2C gross bookings $22.9bn in Q3 2026, +7.1%; B2C revenue $3.07bn, +6.3%, after +9.6% and +7.5% gross bookings growth in Q1 and Q2 2026. B2C was 67.2% of gross bookings and 62.1% of revenue.
• Segment adjusted EBITDA margin 43.5% against 40.7%, which the presentation attributes to marketing leverage, overhead discipline and revenue mix; B2C direct marketing $1.03bn, flat year on year, 4.5% of B2C gross bookings against 4.8% (8-K Ex 99.2).
• Brands and loyalty: the B2C segment includes Expedia, Hotels.com, Vrbo, Orbitz, Travelocity, Wotif, ebookers, Hotwire and CarRentals.com. Expedia does not report revenue or gross bookings by brand, so Vrbo figures are limited to supply: about 2.5m Vrbo alternative accommodations at 30 Sep 2026 against 2.4m at 31 Dec 2025. One Key, the shared loyalty program of Expedia, Hotels.com and Vrbo, launched in the US in 2023 and the UK in 2024 and was extended to further Brand Expedia markets in 2025 (10-K FY2025); member counts are not filed.
• Channels and mix (8-K Ex 99.2): the Q3 2026 presentation attributes B2C gross bookings and revenue to continued strength in the US, B2C marketing leverage to marketing efficiency and improved returns across channels, and B2C gross bookings growth above revenue growth to higher air ticket prices.

How consumer travel distribution is changing

• Hotel chains push direct booking: the 10-Q states that some chains advertise lower rates on their own sites and apps and use loyalty programs and exclusive availability; Marriott Bonvoy had about 309m members and Hilton Honors 270m at Q3 2026 (Marriott and Hilton Forms 8-K).
• AI search and assistants: the 10-Q states that generative AI tools are used to create competing offerings such as AI powered planning, and the FY2025 10-K adds companies offering AI agents to its list of competitors; one of Expedia's three 2026 acquisitions is an AI trip planning company in the B2C segment (10-Q).
• Demand: Booking guided Q4 2026 room night growth to +1% to 3% after October demand was affected by Middle East disruption, higher airfares and unrest in some European cities (Booking 8-K, 3 Nov 2026); Marriott worldwide RevPAR +6.5% and Hilton comparable RevPAR +5.8% in Q3 2026.
• Peers: Booking gross bookings $54.5bn, +10%, in Q3 2026, with marketing at 4.8% of gross bookings; Airbnb nights and seats booked 148.3m, +10%, in Q2 2026, its latest filed quarter (Airbnb 8-K, 6 Aug 2026).

3 B2B: Expedia Partner Solutions, Gross Bookings Up 19%

• B2B gross bookings $11.1bn in Q3 2026, +18.8%; B2B revenue $1.71bn, +22.7%. B2B was 32.8% of group gross bookings against 30.5% and 34.6% of revenue; FY2025 B2B gross bookings $35.7bn, +20%, from $24.6bn in FY2023.
• Margin 27.5% against 28.9%: the presentation cites partner mix and the consolidation of acquisitions; B2B direct marketing, mainly partner commissions, $1.05bn, +23%. B2B revenue was 15.3% of B2B gross bookings in Q3 2026 against 13.4% for B2C.
• Growth sources (8-K Ex 99.2): double digit growth in all regions and elevated marketing activity by some of the largest partners. B2B gross bookings growth was +25.6% in Q3 2025, +23.9% in Q4 2025, +21.6% in Q1 2026 and +21.5% in Q2 2026 (8-K Ex 99.1).
• Acquisitions: two of the three 2026 acquisitions ($676m in total) are B2B travel companies (10-Q).

How B2B travel distribution is changing

• Competitors: the 10-K names consolidators and wholesalers, other online travel companies with B2B offerings and other technology and content providers; partners connect through the Rapid API, white label templates and the TAAP agent tool.
• Booking: Booking Holdings discloses no B2B segment; its merchant gross bookings, where it processes the traveller's payment, rose 13.9% to $40.7bn in Q3 2026, 75% of its gross bookings (Booking 8-K, 3 Nov 2026).
• Distribution systems: Sabre, one of Expedia's two global distribution system providers, reported Q3 2026 revenue $738m, +3%, flat marketplace bookings of 95m and hotel related revenue +14% (Sabre 8-K, 5 Nov 2026).
• Corporate travel: American Express Global Business Travel, which holds a ten year lodging supply agreement with Expedia from the 2021 Egencia sale, reported a change of control on 29 Sep 2026 (GBT 8-K).
• Supply: Marriott net rooms +4.6% and Hilton net units +6.0% in Q3 2026, the room base that wholesalers and online travel companies distribute.

4 Advertising and Media: EG Advertising and trivago

• Advertising and media revenue $371m in Q3 2026, +12.1%, 7.5% of revenue. EG Advertising, advertising sold on Expedia's own sites, $206m, +6.2%, against 13% to 20% in the prior six quarters (8-K Ex 99.1); trivago third party revenue $165m, +20.4%.
• trivago: majority owned; segment revenue $221m incl. $56m from Expedia brands that is eliminated on consolidation; segment adjusted EBITDA $19m in Q3 2026 against $17m. trivago's own Form 6-K reports revenue of EUR 192.5m, +16%, and adjusted EBITDA of EUR 18.7m.
• Referral mix at trivago (trivago 6-K, 3 Nov 2026): Expedia brands provided 27% of referral revenue in Q3 2026 against 30%, and Booking brands 38% against 44%; logged in members account for more than 35% of referral revenue.

How travel advertising and meta search are changing

• Search engines: the 10-Q states that Google prioritises its own travel products, Google Travel, Google Flights and Hotel Ads, in search results, and that airlines and lodging companies pursue direct online distribution.
• Meta search: TripAdvisor hotels revenue fell 23% to $109.7m and media and advertising revenue fell 23% to $27.7m in Q3 2026; it recorded a $369.5m goodwill impairment in Hotels and Other (TripAdvisor 8-K, 5 Nov 2026).
• Branded traffic: trivago reports that branded traffic grew faster than total traffic and that AI writes over 80% of the code in its key repositories (trivago 6-K, 3 Nov 2026).
• Booking: advertising and other revenues, mainly KAYAK and OpenTable, rose 7.8% to $332m in Q3 2026 (Booking 8-K, 3 Nov 2026). Airbnb reports no advertising revenue line.

5 Financial Analysis & Ratios

• Operating margin 26.9% in Q3 2026 against 23.5%, as revenue grew 11.9% and costs 7.0%; 9M 2026 operating income $2.38bn, +64% (10-Q). TTM operating margin 17.2%; FY2025 12.7%, FY2024 9.6%.
• Net income TTM $2.11bn, 13.0% of revenue; diluted EPS TTM $17.13. Q3 2026 effective tax rate 20.3% against 14.8%; adjusted EPS uses a 20% long term tax rate. Adjusted EPS grew 24.0% against adjusted EBITDA 16.6%, which the release attributes to share repurchases; diluted shares 122.3m against 131.0m.
• Free cash flow TTM $3.75bn, 23.1% of revenue; FY2025 $3.11bn. Cash flows in when travellers book and out when they stay, so free cash flow peaks in Q1 ($3.75bn in Q1 2026) and is negative in Q3 (($1.40bn) in Q3 2026). Deferred merchant bookings $12.6bn at 30 Sep 2026.
• Balance sheet at 30 Sep 2026: unrestricted cash and short term investments $5.57bn ($442m held outside the US), restricted cash $1.54bn; senior notes $5.46bn carrying value, principal $5.5bn, next maturity $750m in 2027; net cash $107m; $2.5bn revolver undrawn. Ratings Baa2 (positive), BBB and BBB (10-Q).
• Low equity: total equity $2.92bn incl. $1.26bn of non controlling interests, mainly trivago; Expedia stockholders equity $1.65bn after treasury stock of $18.5bn. ROE and ROIC are therefore not meaningful.
• Capital returns TTM $2.28bn, 61% of free cash flow: treasury stock purchases $2.05bn (incl. shares withheld for tax) and dividends $222m. Program repurchases 6.2m shares for $1.5bn in 9M 2026 at an average $239.47, of which 1.974m shares for $576m in Q3 2026; $5.1bn of authorization left at 30 Sep 2026.

Gross bookings, room nights and ADR

• Volume and price: booked room nights +6.9% in Q3 2026 against +11.1% in Q3 2025; ADR +2.5% to $215.0, after $210.1 for FY2025, +1% (10-K). Gross bookings +10.7%.
• Revenue as % of gross bookings 14.5% in Q3 2026 against 14.4%; it is highest in Q3 because revenue is recognised at stay while bookings are recorded when made; FY2023 to FY2025 12.3% each year (10-K).

Cost structure and profitability

• Costs $3.61bn in Q3 2026, +7.0%, against revenue +11.9%; costs fell to 73.1% of revenue from 76.5%.
• Direct selling and marketing $2.18bn, +10.5%, 60.5% of costs: B2B direct marketing, mainly partner commissions, $1.05bn, +23%; B2C direct marketing $1.03bn, flat, 4.5% of B2C gross bookings against 4.8% (8-K Ex 99.1).
• Cost of revenue $419m, +11.4%; technology and content $334m, +7.7%; G&A $194m, +4.3%. Restructuring $35m in Q3 2026; legal reserves and occupancy tax $13m against $86m, which included a $90m Italian withholding tax reserve.
• Free cash flow and returns: treasury stock purchases and dividends $726m in Q3 2026 against free cash flow of ($1.40bn); TTM $2.28bn returned against $3.75bn of free cash flow.

6 MD&A & Management Commentary

Q3 2026 results release, presentation and Form 10-Q

• Q3 2026 against the company's outlook (8-K Ex 99.1, 5 Aug 2026): gross bookings $34.0bn against $32.2bn to $32.8bn; revenue $4.94bn against $4.65bn to $4.75bn; adjusted EBITDA $1.69bn against $1.51bn to $1.56bn. The release states results exceeded the high end of guidance.
• Revenue by product (10-Q): lodging $3.99bn, +10.7%, 81% of revenue; air $93m, (7.9%); EG Advertising $206m, +6.2%; trivago $165m, +20.4%; other $483m, +28.5%, from insurance and activities. Merchant gross bookings $21.7bn, +14.9%; agency $12.4bn, +4.0%.
• Costs (10-Q): direct selling and marketing $2.18bn, +10.5%, from higher B2B partner commissions while B2C marketing fell; indirect marketing (0.9%); adjusted overhead $627m, +1%, 12.7% of revenue against 14.1% (8-K Ex 99.2).
• Trends (10-Q): events in the Middle East and Mexico late in Q1 2026 weighed on travel into Q2 2026, mainly in Europe, and the pressure eased in Q3 2026; Middle East events cut air capacity and raised air prices, and booked air tickets fell 6% in Q3 2026.
• Convertible notes: cash settlement was fixed on 12 Nov 2025 for the $1bn 0% convertible notes due Feb 2026; they were repaid in Feb 2026 for about $1.1bn incl. a $78m premium, together with the $750m 5.0% notes. 9M 2026 net expense $12m: a $46m gain on the conversion option in other, net and $58m of discount amortization in interest expense (10-Q).
• Other items (10-Q): restructuring $104m in 9M 2026, about $10m more expected; $71m of Canadian digital services tax accruals reversed after repeal; IRS proposed transfer pricing adjustments for 2011 to 2018 of up to about $1.2bn of federal tax plus interest, disputed by the company.

Management and CFO commentary

• CEO Ariane Gorin, 8-K Ex 99.1 of 4 Nov 2026: Q3 2026 results exceeded the high end of guidance; strategy centres on personalised consumer products, more supply and a one stop travel platform for B2B partners; AI raises internal productivity and creates new sources of growth.
• Presentation, 8-K Ex 99.2 of 4 Nov 2026: adjusted EBITDA margin expansion from revenue growth, B2C marketing leverage and overhead discipline; adjusted EPS growth of 24% above adjusted EBITDA growth of 17% due to share repurchases; trailing free cash flow $3.7bn and trailing capital return $2.0bn.
• Q4 2026 outlook (8-K Ex 99.1 and Ex 99.2, 4 Nov 2026): gross bookings +3.3% to 5.2% and revenue +4.0% to 5.7%, against +10.7% and +11.9% in Q3 2026; adjusted EBITDA of $830m to $880m equals 22.5% to 23.5% of the revenue range, against 23.9% in Q4 2025. The presentation states that all outlook figures include FX.
• Presentation, 8-K Ex 99.2 of 5 Aug 2026: B2C direct marketing $1.10bn, +1%, and adjusted overhead $638m, flat, against revenue +14% in Q2 2026; the B2C adjusted EBITDA margin gain of nearly 4 points is attributed to cost management, revenue mix and marketing leverage.
• CEO, 8-K Ex 99.1 of 7 May 2026: Q1 2026 was the most profitable Q1 in company history; a new $5bn share repurchase authorization was announced with the results.

7 Sector & Competitor Analysis

• Sector: online travel platforms. Expedia TTM revenue $16.2bn against Booking $28.1bn (TTM to Sep 2026), Airbnb $13.2bn and TripAdvisor $1.83bn (TTM to Jun 2026); Trip.com H1 2026 net revenue RMB31.9bn. Expedia FY2025 gross bookings $119.6bn against Booking $186.1bn.
• Growth: EXPE +11.9% in Q3 2026 against BKNG (1.3%) reported in Q3 2026 after its FTC revenue reduction, ABNB +16.5% in Q2 2026, TCOM +11.2% in H1 2026 (RMB) and TRIP (7.1%) in Q2 2026.
• Margins: EXPE TTM operating margin 17.2% against BKNG 32.8%, ABNB 20.8%, TCOM 7.8% (H1 2026, incl. the SAMR penalty) and TRIP 2.3%; free cash flow margin 23.1% against BKNG 32.8% and ABNB 36.9%.
• Valuation: EXPE 16.1x TTM P/E and 2.0x EV/Sales against BKNG 17.9x and 4.7x and ABNB 39.7x and 7.4x; market value $32.6bn against BKNG $128.6bn and ABNB $106.7bn.
• Balance sheet: EXPE net cash $107m with Expedia stockholders equity $1.65bn; BKNG net debt $3.9bn with negative equity; ABNB net cash $9.6bn excluding funds held for customers.

8 Material Events & Contracts

• Ten Forms 8-K in twelve months: four earnings releases (Q3 2025 to Q2 2026) plus the Q3 2026 release, the convertible notes settlement election, the credit facility, the senior notes offering, the CFO change and the annual meeting results. No Form 8-K/A was filed.
• Financing: $2.5bn unsecured revolving credit facility dated 27 Mar 2026, maturing 27 Mar 2031, interest at the term benchmark plus 1.00% to 1.75% by rating, leverage ratio capped at 4.00x; $1bn of 5.500% senior notes due 2036 in Apr 2026; $1bn 0% convertible notes and $750m 5.0% notes repaid in Feb 2026.
• CFO change: Scott Schenkel stepped down after 16 months and left on 16 May 2026; the 8-K states the departure is not the result of any disagreement. Derek Andersen became CFO on 11 May 2026: base salary $1.0m, signing bonus $2.5m, initial RSU grant valued at $17.0m and annual equity target $10.0m (Ex 10.1).
• Acquisitions in 2026: $676m for two B2B travel companies and one B2C AI trip planning company (10-Q).

9 Ownership, Voting Power & Annual Meeting

• Dual class control: common stock carries one vote and Class B ten votes. Barry Diller and related holders own all 5.52m Class B shares; Diller holds 32.6% of the votes and all directors and officers 33.0% (proxy statement, Apr 2026). After his departure, Diller related votes on extraordinary transactions are capped at 20% under a 2021 settlement, and a governance agreement bars Class B from taking a premium in a change of control (10-K).
• Annual meeting of 17 Jun 2026 (8-K, 22 Jun 2026): all 11 directors elected; Alexandr Wang received 53.2% of votes cast, Craig Jacobson 78.2% and Barry Diller 80.2%; say on pay 89.4%; Ernst & Young 96.8%. Three directors are elected by common holders only.
• Insider trades, 5 Nov 2025 to 5 Nov 2026 (Forms 4): no open market purchases; open market sales of about $8.5m by four insiders: Chief Legal Officer Robert Dzielak (about 18,900 shares, about $4.9m), director Craig Jacobson (6,133 shares, about $1.8m), Chief Accounting Officer Lance Soliday (about $1.55m) and director M. Moina Banerjee (1,000 shares, $0.26m). No sale carried the Rule 10b5 1 plan flag.
• Other insider transactions: shares withheld for tax on vesting about $29.7m; gifts by director Dara Khosrowshahi (17,500 and 15,000 shares) and CEO Ariane Gorin (1,500); Gorin received 39,650 PSUs and 49,163 RSUs on 9 Mar 2026; CEO Gorin, Chairman Diller and CFO Andersen had only vesting and tax withholding transactions.

2026 annual meeting

• Meeting of 17 Jun 2026: record date 20 Apr 2026, with 114.5m common and 5.5m Class B shares outstanding; three items (directors, say on pay, auditor), all passed. The filed record contains no management business remarks.

10 Risk Factors

• Scope: Item 1A of the FY2025 Form 10-K compared with the FY2024 Form 10-K: 31 factors became 32; 1 added (use of AI), none removed, 12 materially reworded. Agentic AI is mentioned for the first time, in the competition and fraud factors. The Forms 10-Q for Q1 to Q3 2026 report no change.

How risk factors changed

• Comparison: 10-K FY2025 filed 12 Feb 2026 acc 0001324424-26-000008 against 10-K FY2024 filed 6 Feb 2025 acc 0001324424-25-000008.
• AI is named in 10 of 32 risk factors in the FY2025 10-K against 5 of 31 a year earlier, and gets its own factor for the first time.
• Agentic AI appears for the first time, in the competition and fraud factors.
• Item 1A shrank from 12,085 to 11,026 words while adding one factor, mainly from cutting the competition factor by 813 words and the acquisitions factor by about 300 words.
• AWS dependence text moved from the system outage factor to the third party reliance factor, which nearly doubled in length.
• No risk factor was removed, and none of the three Forms 10-Q filed in 2026 reported a change.

11 Stock Price, Scenarios & Sensitivity

• EXPE traded at $275.05 intraday on 5 Nov 2026, the session after the Q3 2026 release, (12.9%) from the 4 Nov close of $315.88. The 52 week range is $184.57 to $342.00.
• Price path (month end closes): $95.29 in Oct 2023, $186.33 in Dec 2024, $283.31 in Dec 2025, $215.69 in Feb 2026, $317.12 in Aug 2026 and $285.93 in Oct 2026.
• Valuation: 16.1x TTM diluted EPS of $17.13; market value $32.6bn on 118.6m shares (common plus Class B); EV/Sales 2.0x TTM; dividend yield 0.7% on the $0.48 quarterly dividend; free cash flow yield 11.5%.
• Scenario model: revenue grows from TTM Q3 2026 $16.2bn for three years at the stated CAGR; operating margin as stated; net other expense $188m a year as in the TTM (interest expense less interest and other income); 20% tax rate; share count reduced by buybacks as stated; price equals TTM Q3 2029 EPS times exit P/E.

Critical factors and core assumptions

• Revenue base TTM Q3 2026 $16.2bn; operating income $2.80bn (17.2%); adjusted EBITDA margin 25.9%.
• Best case: 10% revenue CAGR, 22% operating margin, 20x P/E, shares 12% lower; B2B keeps growing in high teens, B2C in high single digits, marketing and overhead grow slower than revenue.
• Base case: 7% revenue CAGR, 19.5% margin, 16x P/E, shares 8% lower; B2B growth slows to low teens and B2C to mid single digits.
• Worst case: 3% revenue CAGR, 15% margin, 11x P/E, shares 3% lower; travel demand slows and AI agents and search platforms raise customer acquisition costs.
• Other inputs: revenue about 12.3% to 12.5% of gross bookings; tax rate 20%, the company's long term adjusted rate; D&A about $0.9bn and capex about $0.8bn a year; no large acquisition after 2026; trivago non controlling interest and dividends excluded.

Scenarios, three years forward

Sensitivity analysis

Disclaimer

This analysis is for information only and is not financial advice. It is derived from public SEC filings retrieved via sec-api.io and is not a publication of the U.S. Securities and Exchange Commission. Scenario values are model outputs under stated assumptions and are not forecasts. Data as of 5 November 2026.

Sources

All company figures are read from SEC filings retrieved through the sec-api.io MCP server. Management statements come from the earnings releases, presentations and other exhibits to the Forms 8-K and from the Forms 10-Q and 10-K. Industry figures are taken only from SEC filings of Expedia and its peers.