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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “goal,” “intends,” “likely,” “may,” “plans,” “potential,” “predicts,” “projected,” “seeks,” “should” and “will,” or the negative of these terms or other similar expressions, among others, generally identify forward-looking statements; however, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements reflect the views of our management regarding current expectations and projections about future events and are based on currently available information. Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, but not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1A, “Risk Factors,” as well as those discussed elsewhere in this report. Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition and results of operations. Accordingly, readers should not place undue reliance on these forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, because of new information, future events, or otherwise.
The information included in this management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
Expedia Group's mission is to power global travel for everyone, everywhere. We believe travel is a force for good. Travel is an essential human experience that strengthens connections, broadens horizons and bridges divides. We help reduce the barriers to travel, making it easier, more enjoyable, more attainable and more accessible. We bring the world within reach for customers and partners around the globe. We leverage our supply portfolio, platform and technology capabilities across an extensive portfolio of consumer brands, and provide solutions to our business partners, to empower travelers to efficiently research, plan, book and experience travel. We make available, on a stand-alone and package basis, travel services provided by numerous lodging properties, airlines, car rental companies, activities and experiences providers, cruise lines, alternative accommodations property owners and managers, and other travel product and service companies. We also offer travel and non-travel advertisers access to a potential source of incremental traffic and transactions through our various media and advertising offerings on our websites.
All percentages within this section are calculated on actual, unrounded numbers.
Trends
Global macroeconomic and geopolitical pressures, including trade disruptions, currency fluctuations and energy price volatility, have contributed to an increasingly complex business environment and uncertainty for the travel industry. During the first quarter of 2025, we experienced weaker than expected travel demand in the U.S, and we saw continued pressure in domestic travel demand during the second quarter of 2025. If these pressures are intensified or sustained, travel behaviors may be further impacted and any associated decrease in overall demand would negatively impact our business. In addition, our suppliers, business and service partners could also be impacted, thereby increasing our risk of credit losses and service level or other disruptions. Our future operational results may be subject to volatility, particularly in the short-term, due to the impact of the aforementioned trends.
In addition, domestic and international taxing authorities have in recent years become increasingly focused on ways to increase tax revenue, including the enactment of new taxes such as digital services taxes, and have become more aggressive in their interpretation and enforcement of existing tax laws, rules and regulations. We are in various stages of inquiry or audit with various tax authorities, some of which may require that we prepay any assessed taxes prior to contesting the validity of the assessment (“pay-to-play”) which will be repaid if we prevail in our challenge. However, any significant pay-to-play payment or litigation loss could negatively impact our liquidity.
Other events that could have a negative impact on the travel industry and our businesses in the future are discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 1A, Risk Factors – “Declines or disruptions in the travel industry could adversely affect our business and financial performance.”
Online Travel
The market opportunity for online travel is broad and highly competitive. Online penetration of travel expenditures is higher in the U.S. and Western European markets with online penetration rates in some emerging markets, such as Latin America and Eastern European regions, lagging behind those regions. Emerging markets continue to present an attractive growth opportunity for our business, while also attracting many competitors to online travel. Technological developments in generative artificial intelligence (“AI”) tools is increasingly being used to create competing offerings, such as AI powered digital planning and assistance, further increasing competition. In addition to the growth of online travel agencies, we have seen continued interest in the online travel industry from search engine companies such as Google, evidenced by continued product enhancements, and prioritizing its own AdWords and metasearch products such as Google Travel, Google Flights and Hotel Ads, in search results. Competitive entrants such as “metasearch” companies, including Kayak.com (owned by Booking Holdings), trivago (in which Expedia Group owns a majority interest) as well as TripAdvisor, introduced differentiated features, pricing and content compared with the legacy online travel agency companies, as well as various forms of direct or assisted booking tools. Further, airlines and lodging companies are aggressively pursuing direct online distribution of their products and services. In addition, the increasing popularity of the “sharing economy,” accelerated by online penetration, has had a direct impact on the travel and lodging industry. Businesses such as Airbnb, Vrbo and Booking.com have emerged as the leaders, bringing incremental alternative accommodation inventory to the market. Other competitors have arisen, including alternative accommodation property managers, who operate their own booking sites in addition to listing on Airbnb, Vrbo, and Booking.com. Additionally, traditional consumer ecommerce players have expanded their local offerings by adding hotel offers to their websites. Ride sharing app Uber has added transportation and experience offerings to its app via partnerships with other travel providers. Our B2B business has grown significantly but faces competition from other online travel agencies (“OTAs”) with B2B offerings, as well as other competitors, such as independent B2B businesses.
The online travel industry also saw the development of alternative business models and variations in the timing of payment by travelers and to suppliers, which in some cases place pressure on historical business models. In particular, the agency hotel model saw rapid adoption in Europe. Expedia Group facilitates both merchant (Expedia Collect) and agency (Hotel Collect) hotel offerings with our hotel supply partners through both agency-only contracts as well as our hybrid Expedia Traveler Preference (“ETP”) program, which offers travelers the choice of whether to pay Expedia Group at the time of booking or pay the hotel at the time of stay.
Lodging
Lodging includes both hotel and alternative accommodations. As a percentage of our total worldwide revenue in the second quarter of 2025, lodging accounted for 80%. Room nights booked grew 7% in the second quarter of 2025, as compared to growth of 9% in 2024 and 12% in 2023. Average Daily Rates (“ADRs”) booked for Expedia Group were flat in the second quarter of 2025, decreased 1% in 2024 and decreased 2% in 2023.
As of June 30, 2025, our global lodging marketplace has over 3.5 million total lodging properties available. Our Vrbo brand has over 2.5 million online bookable alternative accommodations listings. Our other brands have approximately 1 million hotels and alternative accommodations.
Hotel. We generate the majority of our revenue through the facilitation of hotel reservations (stand-alone and package bookings). Our relationships and overall economics with hotel supply partners have been broadly stable in recent years. As we continue to expand the breadth and depth of our global hotel offering, in some cases we have reduced our economics in various geographies based on local market conditions. These impacts are due to specific initiatives intended to drive greater global size and scale through faster overall room night growth. Additionally, increased promotional activities such as growing loyalty programs, discounting, and couponing have contributed to declines in revenue per room night and profitability in certain cases.
Further, while the global lodging industry remains very fragmented, there has been consolidation in the hotel space among chains as well as ownership groups. In the meantime, certain hotel chains have been focusing on driving direct bookings on their own websites and mobile applications by advertising lower rates than those available on third-party websites as well as incentives such as loyalty programs, increased or exclusive product availability and complimentary benefits.
Alternative Accommodations. Over the past decade, we expanded into the alternative accommodations market. Vrbo is a leader, specializing in unique whole home inventory, primarily in North American leisure markets, and represents an attractive growth opportunity for Expedia Group.
Vrbo has transitioned from a listings-based classified advertising model to an online transactional model that optimizes for both travelers and homeowner and property manager partners, with a goal of increasing monetization and driving growth through investments in marketing as well as in product and technology. Vrbo primarily offers pay-per-booking service model and generates revenue from a traveler service fee for bookings, as well as insurance products.
Since our hotel and alternative accommodation supplier agreements are generally negotiated on a percentage basis, any increase or decrease in ADRs has an impact on the revenue we earn per room night. In the future, we could see macroeconomic
factors influence ADR trends, including rising living costs due to inflation and higher interest rates. Other factors that could lead to moderating ADRs include growth in hotel supply and the increase in alternative accommodation inventory.
Air
In early 2024, U.S. domestic air capacity exceeded demand, putting pressure on domestic airfares, but this rationalized by September 2024 with domestic fares inflecting back to growth. Our air bookings grew in the second quarter of 2025 compared to the same period in 2024 but continued to lag the growth in our lodging business.
In the future, we could encounter pressure on air remuneration as air carriers combine, more air carriers shift to our “direct connect” technology, certain supply agreements renew, and as we continue to add airlines to ensure local coverage in new markets.
Booked air tickets increased 3% in the second quarter of 2025, 6% in 2024 and 4% in 2023. As a percentage of our total worldwide revenue in the second quarter of 2025, air accounted for 3%.
Advertising & Media
Expedia Group (“EG”) Advertising is responsible for generating advertising revenue on our global online travel brands through a variety of digital marketing solutions. In the second quarter of 2025, we generated $182 million of advertising revenue from EG Advertising, a 19% increase from the same period in 2024.
We also generate advertising revenue from trivago, a leading hotel metasearch website. In 2023, trivago adapted its marketing strategy and launched a new logo and visual identity, part of a push to rejuvenate its brand, demonstrate the relevance of its offerings and drive long-term growth. During the fourth quarter of 2024, trivago returned to revenue growth. In the second quarter of 2025, the growth continued and we generated $98 million of third-party revenue from trivago, a 28% increase from the same period in 2024.
As a percentage of our total worldwide revenue in the second quarter of 2025, total advertising and media accounted for 7%.
Business Strategy
As we endeavor to power global travel for everyone, everywhere our focus is to leverage our brand, supply and platform technology strength to provide greater services and value to our travelers, suppliers and business partners, and build longer-lasting direct relationships with our customers.
We believe the strength of our core brand portfolio and consistent enhancements to product and service offerings, combined with our global scale and broad-based supply, drive increasing value to customers and customer demand. With our significant global audience of travelers, and our deep and broad selection of travel products, we are also able to provide value to supply partners seeking to grow their business through sophisticated technology, a better understanding of travel retailing and reaching consumers in markets beyond their reach. Our deep product and supply footprint allows us to tailor offerings to target different types of consumers and travel needs, employ geographic segmentation in markets around the world, and leverage brand differentiation, among other benefits. We also market to consumers through a variety of channels, including internet search, metasearch and social and digital media.
During 2020, Expedia Group unified its technology, product, data engineering, and data science teams to build services and capabilities that can be leveraged across our business units to provide value-add services to our travel suppliers and serve our end customers. The unified team structure enables us to deliver more scalable services and operate more efficiently. We have also completed the migration of our core B2C brands onto a unified Brand Expedia technology front-end infrastructure, having migrated Hotels.com onto the infrastructure in 2022 and Vrbo in 2023. Going forward, we expect to continue to cement our leadership in the B2B segment as our B2B business also benefits from all the work we have done in product and technology for our B2C brands.
As we continue to mature our shared platform infrastructure, our focus is on developing configurable technical capabilities that support various travel products while using simpler, standard architecture and common applications and frameworks. We believe this strategy will enable us to: simultaneously build pieces of technology that work in tandem; ship new capabilities and features faster; create a foundation for more innovative solutions; and achieve greater economies of scope and scale. Ultimately, we believe this will result in more product improvements faster and therefore better traveler experiences. In addition, over time, as we execute on our streamlined application development framework, we believe we can unlock additional platform service opportunities beyond the scope of our internal brands and business travel partners. All of our transaction-based businesses now benefit from our shared platform infrastructure, including customer servicing and support, data centers, search capabilities, payment processing, and fraud operations.
We also launched One Key in the United States and United Kingdom, which serves as the unified loyalty program under Brand Expedia, Hotels.com and Vrbo, enabling travelers to cross-earn and cross-redeem rewards across these brands and our range of products such as air, hotels and alternative accommodations.
Seasonality
We generally experience seasonal fluctuations in the demand for our travel services. For example, traditional leisure travel bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The number of bookings typically decreases in the fourth quarter. Since revenue for most of our travel services, including merchant and agency hotel, is recognized as the travel takes place rather than when it is booked, revenue typically lags bookings by several weeks for our hotel business and can be several months or more for our alternative accommodations business. Historically, Vrbo has seen seasonally stronger bookings in the first quarter of the year, with the relevant stays occurring during the peak summer travel months. The seasonal revenue impact is exacerbated with respect to income by the nature of our variable cost of revenue and direct sales and marketing costs, which we typically realize in closer alignment to booking volumes, and the more stable nature of our fixed costs. As a result on a consolidated basis, revenue and income are typically the lowest in the first quarter and highest in the third quarter.
The growth in our B2B segment, international operations, advertising business or a change in our product mix, among others, may also influence the typical trend of seasonality in the future.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates are those that we believe are important in the preparation of our consolidated financial statements because they require that we use judgment and estimates in applying those policies. We prepare our consolidated financial statements and accompanying notes in accordance with generally accepted accounting principles in the United States (“GAAP”). Preparation of the consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as revenue and expenses during the periods reported. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions.
There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if:
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It requires us to make an assumption because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate; and
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Changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations.
For additional information about our critical accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2024 as well as updates in the current fiscal year provided in Note 2 – Summary of Significant Accounting Policies in the notes to the consolidated financial statements.
Segments
We have the following reportable segments: B2C, B2B, and trivago. Our B2C segment provides a full range of travel and advertising services to our worldwide customers through a variety of consumer brands including: Expedia.com, Hotels.com, Vrbo, Orbitz, Travelocity, Wotif Group, ebookers, CheapTickets, Hotwire.com and CarRentals.com. Our B2B segment fuels a wide range of travel and non-travel companies including airlines, offline travel agents, online retailers, corporate travel management and financial institutions, who leverage our leading travel technology and tap into our diverse supply to augment their offerings and market Expedia Group rates and availabilities to their travelers. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites.
Operating Metrics
Our operating results are affected by certain metrics, such as gross bookings and revenue margin, which we believe are necessary for understanding and evaluating us. Gross bookings generally represent the total retail value of transactions booked for agency and merchant transactions, recorded at the time of booking reflecting the total price due for travel by travelers, including taxes, fees and other charges, and are reduced for cancellations and refunds. Revenue margin is defined as revenue as a percentage of gross bookings.
Gross Bookings and Revenue Margin
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Gross Bookings | |||||||||||||||||||||||||||||||||||
| B2C | $ | 21,565 | $ | 21,290 | 1 | % | $ | 44,180 | $ | 43,687 | 1 | % | |||||||||||||||||||||||
| B2B | 8,844 | 7,547 | 17 | % | 17,680 | 15,314 | 15 | % | |||||||||||||||||||||||||||
| trivago (1) | — | — | N/A | — | — | N/A | |||||||||||||||||||||||||||||
| Total gross bookings | $ | 30,409 | $ | 28,837 | 5 | % | $ | 61,860 | $ | 59,001 | 5 | % | |||||||||||||||||||||||
| Revenue Margin | |||||||||||||||||||||||||||||||||||
| B2C | 11.5 | % | 11.4 | % | 10.0 | % | 10.1 | % | |||||||||||||||||||||||||||
| B2B | 13.7 | % | 13.9 | % | 12.2 | % | 12.3 | % | |||||||||||||||||||||||||||
| trivago (1) | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||
| Total revenue margin (1) | 12.4 | % | 12.3 | % | 10.9 | % | 10.9 | % |
(1)trivago, which is comprised of a hotel metasearch business that differs from our transaction-based websites, does not have associated gross bookings or revenue margin. However, third-party revenue from trivago is included in revenue used to calculate total revenue margin.
Gross bookings increased 5% for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by lodging gross bookings in our hotel business. Booked room nights for our lodging business increased 7% for both the three and six months ended June 30, 2025 primarily driven by growth outside of the U.S.
Results of Operations
Revenue
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| Revenue by Segment | |||||||||||||||||||||||||||||||||||
| B2C | $ | 2,479 | $ | 2,432 | 2 | % | $ | 4,435 | $ | 4,418 | — | % | |||||||||||||||||||||||
| B2B | 1,209 | 1,049 | 15 | % | 2,156 | 1,882 | 15 | % | |||||||||||||||||||||||||||
| trivago (Third-party revenue) | 98 | 77 | 28 | % | 183 | 147 | 25 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 3,786 | $ | 3,558 | 6 | % | $ | 6,774 | $ | 6,447 | 5 | % |
Revenue increased 6% and 5% for the three and six months ended June 30, 2025, compared to the same periods in 2024, on growth in our B2B segment resulting from increased lodging revenue and its stronger international exposure.
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| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Revenue by Service Type | |||||||||||||||||||||||||||||||||||
| Lodging | $ | 3,040 | $ | 2,862 | 6 | % | $ | 5,329 | $ | 5,090 | 5 | % | |||||||||||||||||||||||
| Air | 105 | 111 | (5) | % | 212 | 226 | (6) | % | |||||||||||||||||||||||||||
| Expedia Group Advertising | 182 | 152 | 19 | % | 356 | 297 | 20 | % | |||||||||||||||||||||||||||
| trivago Advertising | 98 | 77 | 28 | % | 183 | 147 | 25 | % | |||||||||||||||||||||||||||
| Other | 361 | 356 | 1 | % | 694 | 687 | 1 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 3,786 | $ | 3,558 | 6 | % | $ | 6,774 | $ | 6,447 | 5 | % |
Lodging revenue increased 6% and 5% for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by an increase in room nights stayed in our hotel business.
Air revenue decreased 5% and 6% for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to lower revenue per ticket, partially offset by higher air tickets sold.
EG Advertising revenue increased 19% and 20% for the three and six months ended June 30, 2025, compared to the same periods in 2024, due to strong momentum across all of our core product offerings, the addition of new partners and delivery of new offerings. trivago Advertising revenue increased 28% and 25% for the three and six months ended June 30, 2025, compared to the same periods in 2024, driven by its strategic focus on brand rebuilding in the past two years.
All other revenue, which includes insurance, car, cruise and activities, remained relatively consistent during the three ended and six months ended June 30, 2025, compared to the same periods in 2024.
In addition to the above segment and product revenue discussion, our revenue by business model is as follows:
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| Revenue by Business Model | |||||||||||||||||||||||||||||||||||
| Merchant | $ | 2,624 | $ | 2,459 | 7 | % | $ | 4,670 | $ | 4,423 | 6 | % | |||||||||||||||||||||||
| Agency | 852 | 838 | 2 | % | 1,504 | 1,516 | (1) | % | |||||||||||||||||||||||||||
| Advertising, media and other | 310 | 261 | 19 | % | 600 | 508 | 18 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 3,786 | $ | 3,558 | 6 | % | $ | 6,774 | $ | 6,447 | 5 | % |
The increase in merchant revenue for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily due to an increase in merchant lodging revenue. Agency revenue remained relatively consistent for the three and six months ended June 30, 2025, as compared to the same periods in 2024. Advertising, media and other increased for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to an increase in EG Advertising and trivago advertising revenue.
Cost of Revenue
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| Direct costs | $ | 302 | $ | 284 | 6 | % | $ | 588 | $ | 564 | 4 | % | |||||||||||||||||||||||
| Personnel and overhead | 75 | 78 | (4) | % | 146 | 156 | (6) | % | |||||||||||||||||||||||||||
| Total cost of revenue | $ | 377 | $ | 362 | 4 | % | $ | 734 | $ | 720 | 2 | % | |||||||||||||||||||||||
| % of revenue | 9.9 | % | 10.2 | % | 10.8 | % | 11.2 | % |
Cost of revenue primarily consists of direct costs to support our customer operations, including our customer support and telesales as well as fees to air ticket fulfillment vendors; credit card processing, including merchant fees, fraud and chargebacks; and other costs, primarily including data center and cloud costs to support our websites, supplier operations, destination supply, certain transactional level taxes as well as related personnel and overhead costs, including stock-based compensation.
Cost of revenue remained consistent during the three and six months ended June 30, 2025, compared to the same periods in 2024, as ongoing initiatives continued to drive transactional efficiencies, particularly in customer service.
Selling and Marketing - Direct and Indirect
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| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
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| Selling and marketing - direct | $ | 1,920 | $ | 1,793 | 7 | % | $ | 3,677 | $ | 3,443 | 7 | % | |||||||||||||||||||||||
| % of revenue | 50.7 | % | 50.4 | % | 54.3 | % | 53.4 | % | |||||||||||||||||||||||||||
| Selling and marketing - indirect | 213 | 197 | 8 | % | 412 | 383 | 7 | % | |||||||||||||||||||||||||||
| % of revenue | 5.6 | % | 5.5 | % | 6.1 | % | 5.9 | % |
Selling and marketing - direct costs primarily include traffic generation costs from search engines and internet portals, television and print spending, private label and affiliate program commissions, public relations and other costs. Selling and marketing - indirect costs include personnel and related overhead in our various brands and global supply organization as well as stock-based compensation costs.
Selling and marketing - direct increased $127 million and $234 million during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by an increase in B2B partner commissions to support revenue growth. Selling and marketing - indirect costs increased during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by an increase in average salaries.
Technology and Content
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| Personnel and overhead | $ | 235 | $ | 239 | (1) | % | $ | 472 | $ | 489 | (3) | % | |||||||||||||||||||||||
| Other | 90 | 92 | (3) | % | 173 | 183 | (6) | % | |||||||||||||||||||||||||||
| Total technology and content | $ | 325 | $ | 331 | (2) | % | $ | 645 | $ | 672 | (4) | % | |||||||||||||||||||||||
| % of revenue | 8.6 | % | 9.3 | % | 9.5 | % | 10.4 | % |
Technology and content expense includes product development and content expense, as well as information technology costs to support our infrastructure, back-office applications and overall monitoring and security of our networks, and is principally comprised of personnel and overhead, including stock-based compensation, as well as other costs including cloud expense and licensing and maintenance expense.
Technology and content expense decreased $6 million and $27 million during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to lower salary and personnel costs as well as initiatives to optimize cloud spending.
General and Administrative
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| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Personnel and overhead | $ | 151 | $ | 144 | 4 | % | $ | 297 | $ | 292 | 2 | % | |||||||||||||||||||||||
| Professional fees and other | 46 | 36 | 27 | % | 80 | 74 | 7 | % | |||||||||||||||||||||||||||
| Total general and administrative | $ | 197 | $ | 180 | 9 | % | $ | 377 | $ | 366 | 3 | % | |||||||||||||||||||||||
| % of revenue | 5.2 | % | 5.1 | % | 5.6 | % | 5.7 | % |
General and administrative expense consists primarily of personnel-related costs, including our executive leadership, finance, legal and human resource functions and related stock-based compensation as well as fees for external professional services.
General and administrative expense increased during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to higher personnel and overhead as well as an increase in miscellaneous business taxes.
Depreciation and Amortization
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| Depreciation | $ | 212 | $ | 190 | 12 | % | $ | 420 | $ | 385 | 9 | % | |||||||||||||||||||||||
| Amortization of intangible assets | 11 | 15 | (32) | % | 22 | 30 | (29) | % | |||||||||||||||||||||||||||
| Total depreciation and amortization | $ | 223 | $ | 205 | 9 | % | $ | 442 | $ | 415 | 6 | % |
Depreciation increased $22 million and $35 million during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily as a result of increased depreciation related to capitalized website development costs. Amortization of intangible assets decreased $4 million and $8 million during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to the completion of amortization related to certain intangible assets.
Legal Reserves, Occupancy Tax and Other
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Legal reserves, occupancy tax and other | $ | 2 | $ | 21 | N/A | $ | 2 | 41 | N/A | ||||||||||||||||||||||||||
| % of revenue | 0.1 | % | 0.6 | % | — | % | 0.6 | % |
Legal reserves, occupancy tax and other primarily consists of increases in our reserves for court decisions and the potential and final settlement of issues related to hotel occupancy and other taxes, expenses recognized related to monies paid in advance of occupancy and other tax proceedings (“pay-to-play”) as well as legal reserves and certain other items.
Legal reserves, occupancy tax and other for the three and six months ended June 30, 2024, primarily included a $30 million charge related to digital service taxes for fiscal years 2022 and 2023 retroactively enacted by Canada in June 2024**,** partially offset by net reductions to our reserve related to hotel occupancy and other taxes. In addition, the six months ended June 30, 2024 also included our donation of $20 million as part of a public-private partnership project to revitalize public parks along the Elliot Bay waterfront in Seattle.
Restructuring and Related Reorganization Charges
In February 2024, we committed to restructuring actions to recalibrate resources as most of the Company’s organizational and technological transformation is now completed, which have resulted in headcount reductions. During the first half of 2025, we made the decision to expand these actions. As a result, we recognized $70 million and $66 million in restructuring and related reorganization charges during the six months ended June 30, 2025 and 2024, which were predominately related to employee severance and benefits costs. Based on current plans which are subject to change, we expect approximately $20 million in additional reorganization charges. These costs could be higher or lower should we make additional decisions in future periods that impact our reorganization efforts.
Operating Income
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Operating income | $ | 485 | $ | 451 | 8 | % | $ | 415 | $ | 341 | 22 | % | |||||||||||||||||||||||
| % of revenue | 12.8 | % | 12.7 | % | 6.1 | % | 5.3 | % |
During the three and six months ended June 30, 2025, the increase in operating income in the current year periods was primarily due to a growth in revenue in excess of operating costs as well as lower legal reserve, occupancy and other charges in the current year periods.
Adjusted EBITDA by Segment
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| B2C | $ | 728 | $ | 654 | 12 | % | $ | 945 | $ | 869 | 9 | % | |||||||||||||||||||||||
| B2B | 331 | 263 | 26 | % | 547 | 435 | 26 | % | |||||||||||||||||||||||||||
| trivago | (6) | (5) | 30 | % | (11) | (14) | (21) | % | |||||||||||||||||||||||||||
| Unallocated overhead costs (Corporate) | (145) | (126) | 16 | % | (277) | (249) | 12 | % | |||||||||||||||||||||||||||
| Total Adjusted EBITDA (1) | $ | 908 | $ | 786 | 16 | % | $ | 1,204 | $ | 1,041 | 16 | % |
(1) Adjusted EBITDA is a non-GAAP measure. See “Definition and Reconciliation of Adjusted EBITDA” below for more information.
Adjusted EBITDA is our primary segment operating metric. See Note 10 – Segment Information in the notes to the consolidated financial statements for additional information on intersegment transactions, unallocated overhead costs and for a reconciliation of Adjusted EBITDA by segment to net income (loss) attributable to Expedia Group, Inc. for the periods presented above.
Our B2C segment Adjusted EBITDA increased during the three and six months ended June 30, 2025, compared to the same periods in 2024 as a result of revenue growth and continued operational efficiencies. Our B2B segment experienced an improvement in Adjusted EBITDA during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily as a result of strong revenue growth and margin expansion. Our trivago segment Adjusted EBITDA loss increased during the three months ended June 30, 2025, compared to the same period in 2024, as a result of higher direct selling and marketing expenses, partially offset by revenue increases. Our trivago segment Adjusted EBITDA loss decreased during the six months ended June 30, 2025, compared to the same period in 2024, as a result of revenue increases, partially offset by higher direct selling and marketing expenses.
Interest Income and Expense
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Interest income | $ | 74 | $ | 67 | 10 | % | $ | 128 | $ | 118 | 8 | % | |||||||||||||||||||||||
| Interest expense | (58) | (61) | (6) | % | (116) | (123) | (6) | % | |||||||||||||||||||||||||||
Interest income increased for the three and six months ended June 30, 2025, compared to the same periods in 2024, as a result of higher average cash and investment balances, partially offset by lower rates of return. Interest expense decreased for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to the February 2025 senior notes issuance with a lower interest rate than the senior notes paid off during the year-to-date period.
Other, Net
Other, net is comprised of the following:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||||
| Foreign exchange rate gains (losses), net | $ | 28 | $ | (31) | $ | 40 | $ | (61) | |||||||||||||||
| Gains (losses) on minority equity investments, net | (102) | 56 | (258) | 47 | |||||||||||||||||||
| Other | (4) | 6 | (3) | 11 | |||||||||||||||||||
| Total other, net | $ | (78) | $ | 31 | $ | (221) | $ | (3) |
Provision for Income Taxes
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||||||||
| Provision for income taxes | $ | 101 | $ | 113 | (11) | % | $ | 81 | $ | 94 | (14) | % | |||||||||||||||||||||||
| Effective tax rate | 23.9 | % | 23.3 | % | 39.3 | % | 28.3 | % |
Our tax provision for interim periods is determined using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs, including discrete items.
For the three months ended June 30, 2025, the effective tax rate was 23.9%, compared to 23.3% for the three months ended June 30, 2024. The change in the effective tax rate was primarily due to nondeductible mark-to-market charges, partially offset by other discrete items.
For the six months ended June 30, 2025, the effective tax rate was 39.3%, compared to 28.3% for the six months ended June 30, 2024. The change in the effective tax rate was due to nondeductible mark-to-market charges.
We are subject to taxation in the United States and foreign jurisdictions. Our income tax filings are regularly examined by federal, state, and foreign tax authorities. For tax years 2011 to 2013 and 2014 to 2016, the IRS issued final adjustments related to transfer pricing with our foreign subsidiaries. The 2011 to 2013 adjustments would result in federal income tax of approximately $244 million, subject to interest. The 2014 to 2016 adjustments would result in federal income tax of approximately $431 million, subject to interest. We do not agree with these adjustments and will continue to vigorously defend our position through administrative procedures. We are also under examination by the IRS for tax years 2017 to 2020.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA makes permanent key provisions of the Tax Cuts and Jobs Act of 2017, provides for immediate expensing of domestic U.S. research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. The legislation has multiple effective dates with certain provisions effective in 2025 and other implemented through 2027. The Company is currently evaluating the potential impacts and elections to be considered in connection with this comprehensive legislation.
Definition and Reconciliation of Adjusted EBITDA
We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA is among the primary metrics by which management evaluates the performance of the business and on which internal budgets are based. Management believes that investors should have access to the same set of tools that management uses to analyze our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Adjusted EBITDA has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations. We endeavor to compensate for the limitation of the non-GAAP measure presented by also providing the most directly comparable GAAP measure and a description of the reconciling items and adjustments to derive the non-GAAP measure. Adjusted EBITDA also excludes certain items related to transactional tax matters, which may ultimately be settled in cash, and we urge investors to review the detailed disclosure regarding these matters included above, in the Legal Proceedings section, as well as the notes to the financial statements. The non-GAAP financial measure used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Adjusted EBITDA is defined as net income (loss) attributable to Expedia Group, Inc. adjusted for (1) net income (loss) attributable to non-controlling interests; (2) provision for income taxes; (3) total other expenses, net; (4) stock-based compensation expense, including compensation expense related to certain subsidiary equity plans; (5) acquisition-related impacts, including (i) amortization of intangible assets and goodwill and intangible asset impairment, (ii) gains (losses) recognized on changes in the value of contingent consideration arrangements, if any, and (iii) upfront consideration paid to settle employee compensation plans of the acquiree, if any; (6) certain other items, including restructuring; (7) items included in legal reserves, occupancy tax and other; (8) that portion of gains (losses) on revenue hedging activities that are included in other, net that relate to revenue recognized in the period; and (9) depreciation.
The above items are excluded from our Adjusted EBITDA measure because these items are noncash in nature, or because the amount and timing of these items is unpredictable, not driven by core operating results and renders comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA is a useful measure for analysts and investors to
evaluate our future on-going performance as this measure allows a more meaningful comparison of our performance and projected cash earnings with our historical results from prior periods and to the results of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments. In addition, we believe that by excluding certain items, such as stock-based compensation and acquisition-related impacts, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of our business, from which capital investments are made and debt is serviced.
The reconciliation of net income attributable to Expedia Group, Inc. to Adjusted EBITDA is as follows:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Net income attributable to Expedia Group, Inc. | $ | 330 | $ | 386 | $ | 130 | $ | 251 | ||||||||||||||||||
| Net loss attributable to non-controlling interests | (8) | (11) | (5) | (12) | ||||||||||||||||||||||
| Provision for income taxes | 101 | 113 | 81 | 94 | ||||||||||||||||||||||
| Total other (income) expense, net | 62 | (37) | 209 | 8 | ||||||||||||||||||||||
| Operating income | 485 | 451 | 415 | 341 | ||||||||||||||||||||||
| Gain (loss) on revenue hedges related to revenue recognized | 52 | (15) | 75 | (32) | ||||||||||||||||||||||
| Restructuring and related reorganization charges, excluding stock-based compensation | 41 | 10 | 67 | 58 | ||||||||||||||||||||||
| Legal reserves, occupancy tax and other | 2 | 21 | 2 | 41 | ||||||||||||||||||||||
| Stock-based compensation | 105 | 114 | 203 | 218 | ||||||||||||||||||||||
| Depreciation and amortization | 223 | 205 | 442 | 415 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 908 | $ | 786 | $ | 1,204 | $ | 1,041 |
Financial Position, Liquidity and Capital Resources
Our principal sources of liquidity are typically cash flows generated from operations, cash available under our credit facility as well as our cash and cash equivalents and short-term investment balances, which were $6.7 billion and $4.5 billion at June 30, 2025 and December 31, 2024. As of June 30, 2025, the total cash and cash equivalents and short-term investments held outside the United States was $482 million ($351 million in wholly-owned foreign subsidiaries and $131 million in majority-owned subsidiaries). Our revolving credit facility with aggregate commitments of $2.5 billion was essentially untapped at June 30, 2025.
5.4% Senior Notes Issuance. In February 2025, we issued $1 billion of registered senior unsecured notes that bear interest at 5.40% and are due in February 2035 (the “5.40% Notes”). The 5.40% Notes were issued at a price of 99.316% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in February and August of each year, beginning August 15, 2025. We used or expect to use the net proceeds of this offering for general corporate purposes, which may include, but not limited to: (i) repayment, prepayment, redemption or repurchase of outstanding debt, (ii) dividends and stock repurchases, and (iii) funding for working capital, capital expenditures and acquisitions.
Redemption of 6.25% Senior Notes. In February 2025, we early redeemed all of our approximately $1 billion senior unsecured notes that bore interest at 6.25% and were due in May 2025 (the “6.25% Notes”), which resulted in the recognition of an immaterial loss on debt extinguishment from the write-off of debt issuance costs.
Our credit ratings are periodically reviewed by rating agencies. As of June 30, 2025, Moody’s rating was Baa2 with an outlook of “stable,” S&P’s rating was BBB with an outlook of “stable” and Fitch’s rating was BBB with an outlook of “stable.” Changes in our operating results, cash flows, financial position, capital structure, financial policy or capital allocations to share repurchase, dividends, investments and acquisitions could impact the ratings assigned by the various rating agencies. Should our credit ratings be adjusted downward, we may incur higher costs to borrow and/or limited access to capital markets and interest rates on our 4.625% senior notes as well as our 2.95% senior notes will increase, which could have a material impact on our financial condition and results of operations.
As of June 30, 2025, we were in compliance with the covenants and conditions in our revolving credit facility and outstanding debt as detailed in Note 4 – Debt in the notes to the consolidated financial statements.
Under the merchant model, we receive cash from travelers at the time of booking and we record these amounts on our consolidated balance sheets as deferred merchant bookings. We pay our airline suppliers related to these merchant model
bookings generally within a few weeks after completing the transaction. For most other merchant bookings, which is primarily our merchant lodging business, we generally pay after the travelers’ use and, in some cases, subsequent billing from the hotel suppliers. Therefore, generally we receive cash from the traveler prior to paying our supplier, and this operating cycle represents a working capital source of cash to us. Typically, the seasonal fluctuations in our merchant hotel bookings have affected the timing of our annual cash flows. Generally, during the first half of the year, hotel bookings have traditionally exceeded stays, resulting in much higher cash flow related to working capital. During the second half of the year, this pattern typically reverses and cash flows are typically negative.
Our cash flows are as follows:
| Six months ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | $ Change | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Cash provided by (used in): | ||||||||||||||||||||
| Operating activities | $ | 4,073 | $ | 4,380 | $ | (307) | ||||||||||||||
| Investing activities | (220) | (449) | 229 | |||||||||||||||||
| Financing activities | (1,180) | (1,149) | (31) | |||||||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | 208 | (81) | 289 |
For the six months ended June 30, 2025, net cash provided by operating activities decreased compared to the prior year period due to lower working capital benefits.
For the six months ended June 30, 2025, we had net cash used in investing activities of $220 million compared to $449 million in the prior year period. The change was primarily due to sources of cash for the settlement of currency forward contract gains in the current year period compared to uses of cash for losses in the prior year.
For the six months ended June 30, 2025, net cash used in financing activities primarily included the February 2025 redemption of approximately $1 billion of our 6.25% senior notes, $1.1 billion of cash paid to acquire shares, including the repurchased shares under the authorization discussed below and for treasury stock activity related to the vesting of equity instruments, and cash dividend payments of $102 million, partially offset by the February 2025 issuance of 5.4% senior notes with net proceeds of $985 million as well as $25 million of proceeds from the exercise of options and employee stock purchase plans. For the six months ended June 30, 2024, net cash used in financing activities primarily included $1.2 billion of cash paid to acquire shares, including the repurchased shares under repurchase programs and for treasury stock activity related to the vesting of equity instruments, partially offset by $48 million of proceeds from the exercise of options and employee stock purchase plans.
In 2023, the Executive Committee of the Board of Directors, pursuant to a delegation of authority from the Board, authorized an additional program to repurchase up to $5 billion of our common stock (“2023 Share Repurchase Program”). During the six months ended June 30, 2025, we repurchased, through open market transactions, 5.6 million shares under 2023 Share Repurchase Program for a total cost of approximately $957 million, excluding transaction costs and excise tax due under the Inflation Reduction Act of 2022. As of June 30, 2025, $2.3 billion remain authorized for repurchase under the 2023 Share Repurchase Program. Our 2023 Share Repurchase Programs does not have fixed expiration dates and does not obligate the Company to acquire any specific number of shares. Under the program, shares may be repurchased in the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will be subject to the discretion of the Company and depend on a variety of factors, including the market price of Expedia Group’s common stock, general market and economic conditions, regulatory requirements and other business considerations.
During the first quarter of 2025, the Board of Directors approved the reinstatement of quarterly common stock dividends. The Executive Committee, acting on behalf of the Board of Directors, declared and we paid the following dividends during the period presented:
| Declaration Date | Dividend Per Share | Record Date | Total Amount (in millions) | Payment Date | |||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| February 4, 2025 | $ | 0.40 | March 6, 2025 | $ | 51 | March 27, 2025 | |||||||||||||||||
| May 7, 2025 | $ | 0.40 | May 29, 2025 | $ | 51 | June 18, 2025 |
In addition, in August 2025, the Executive Committee, acting on behalf of the Board of Directors, declared a quarterly cash dividend of $0.40 per share of outstanding common stock payable on September 18, 2025 to stockholders of record as of the close of business on August 28, 2025. Future declarations of dividends are subject to final determination by our Board of Directors.
Foreign exchange rate changes resulted in an increase of our cash and restricted cash balances denominated in foreign currency during the six months ended June 30, 2025 of $208 million reflecting a net appreciation in foreign currencies relative to the U.S. dollar compared to $81 million decrease in the prior year period reflecting a net depreciation in foreign currencies relative to the U.S. dollar.
Other than discussed above, there have been no material changes outside the normal course of business to our contractual obligations and commercial commitments since December 31, 2024.
In our opinion, our liquidity position provides sufficient capital resources to meet our foreseeable cash needs. There can be no assurance, however, that the cost or availability of future borrowings, including refinancings, if any, will be available on terms acceptable to us.
Summarized Financial Information for Guarantors and the Issuer of Guaranteed Securities
Summarized financial information of Expedia Group, Inc. (the “Parent”) and our subsidiaries that are guarantors of our debt facility and instruments (the “Guarantor Subsidiaries”) is shown below on a combined basis as the “Obligor Group.” The debt facility and instruments are guaranteed by certain of our wholly-owned domestic subsidiaries and rank equally in right of payment with all of our existing and future unsecured and unsubordinated obligations. The guarantees are full, unconditional, joint and several with the exception of certain customary automatic subsidiary release provisions. In this summarized financial information of the Obligor Group, all intercompany balances and transactions between the Parent and Guarantor Subsidiaries have been eliminated and all information excludes subsidiaries that are not issuers or guarantors of our debt facility and instruments, including earnings from and investments in these entities.
| June 30, 2025 | December 31, 2024 | ||||||||||
| (In millions) | |||||||||||
| Combined Balance Sheets Information: | |||||||||||
| Current Assets(1) | $ | 12,774 | $ | 7,996 | |||||||
| Non-Current Assets | 10,363 | 10,495 | |||||||||
| Current Liabilities (1) | 18,509 | 14,129 | |||||||||
| Non-Current Liabilities | 5,022 | 5,744 | |||||||||
| Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | ||||||||||
| Combined Statements of Operations Information: | |||||||||||
| Revenue | $ | 5,130 | $ | 10,520 | |||||||
| Operating income(2) | 242 | 915 | |||||||||
| Net income | 218 | 719 | |||||||||
| Net income attributable to Obligors | 223 | 729 |
(1)Current assets include intercompany receivables with non-guarantors of $336 million as of June 30, 2025 and current liabilities include intercompany payables of $1.2 billion as of December 31, 2024.
(2)Operating income includes net intercompany income with non-guarantors of $370 million for the six months ended June 30, 2025 and $710 million for the year ended December 31, 2024.
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