Expedia shares plunge over 9% on reduced guidance

SEATTLE – Expedia (NASDAQ:) Group, Inc. (NASDAQ: EXPE) reported its first-quarter financial results, surpassing analyst expectations for earnings per share (EPS) but presenting a less optimistic outlook for topline growth. The travel platform reported an adjusted EPS of $0.21, significantly beating the analyst estimate of -$0.14. Revenue for the quarter was also higher than expected, coming in at $2.89 billion against the consensus estimate of $2.81 billion.

Despite the earnings beat, Expedia’s stock fell by 9% as investors reacted to EXPE reducing its topline growth outlook.

The company’s CEO, Peter Kern, acknowledged the mixed results, stating, “Our first quarter results met our guidance with a revenue and earnings beat but with less robust gross bookings.” He cited slower recovery for Vrbo™ following its recent re-platforming as a drag on gross bookings, which increased by only 3% compared to the same quarter last year.

The company’s lodging gross bookings rose by 4%, with hotel bookings up 12% from the previous year. However, the overall growth in gross bookings was muted, leading Expedia to adjust its full-year guidance to mid to high single-digit top-line growth, with margins expected to remain relatively in line with the previous year.

“The 2Q outlook was light across bookings, revenue and EBITDA, and EXPE walked back the full-year outlook (double to mid-to-high single digit topline growth),” BTIG analysts said in a note. 

“The soft guide and downtick in consensus numbers will certainly weigh on sentiment, but at 6x 2025E EBITDA we continue to see shares as attractively valued,” they added.

Kern expressed confidence in the underlying platform work and the company’s ability to leverage these capabilities for stronger growth in the future. “The underpinning of the work we have done on the platform is in place, and I have every confidence in the teams to continue to leverage these capabilities to drive even stronger growth,” he said.

Expedia’s financials also highlighted an 8% year-over-year (YoY) revenue growth and a 38% increase in adjusted EBITDA with a notable margin expansion. The company accelerated its share repurchases, buying back approximately 5.7 million shares for about $786 million year-to-date.

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