Nasdaq:EXPE
Expedia Group, Inc.
A premier global online travel agency connecting consumers with essential travel services including flights, hotels, and car rentals through a robust digital platform.
Key Metrics
Investment Thesis
Bull Case
Investors may favor Expedia due to its consistent top-line growth driven by the resurgence of leisure travel and successful cross-selling strategies across its diverse portfolio. The company's ability to generate free cash flow, evidenced by a strong operating cash flow of $3.88B, provides ample flexibility for strategic acquisitions and continued shareholder returns. Long-term digitalization trends in the travel industry position Expedia as a dominant player with high barriers to entry against new competitors.
Bear Case
The heavy reliance on marketing expenses totaling $7.35B creates pressure on operating margins, making profitability vulnerable to any slowdown in customer acquisition costs or conversion rates. High levels of goodwill at $6.87B and significant long-term debt obligations present potential balance sheet risks if the company faces prolonged periods of low travel demand. Economic downturns could disproportionately affect the company's discretionary spending model, leading to sharper declines in revenue compared to essential sectors.
About Expedia Group, Inc.
Expedia Group operates as a leading global online travel company, facilitating bookings for hotels, car rentals, vacation packages, and cruises across its website and mobile app. Serving millions of travelers worldwide, the company leverages advanced technology to provide seamless booking experiences while managing substantial marketing investments to drive revenue growth.
Analysis
Management Discussion
Expedia Group demonstrated strong operational performance with revenue growing from $13.69B in 2024 to $14.73B in the latest period, reflecting robust demand for travel services. Net income improved from $1.22B in 2024 to $1.30B in the current year, supported by efficient cost management despite heavy marketing expenses of $7.35B. The company strengthened its balance sheet with cash and equivalents rising to $6.98B while returning significant capital to shareholders through $1.93B in share repurchases.
Industry Overview
The online travel agency industry is characterized by high competition among major players like Booking Holdings and TripAdvisor, yet remains resilient due to the essential nature of travel services for both leisure and business travelers. Market consolidation continues as smaller agencies struggle to compete with the scale and technology investments required to maintain a relevant digital presence. Growth in emerging markets and the rise of experiential travel offer new avenues for expansion and diversification for established industry leaders.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $11.67B | $12.84B | $13.69B | $14.73B |
| Cost of Revenue | $1.66B | $1.57B | $1.44B | $1.46B |
| Gross Profit | $10.01B | $11.27B | $12.25B | $13.28B |
| Operating Expenses | $8.93B | $10.23B | $10.93B | $11.41B |
| Operating Income | $1.08B | $1.03B | $1.32B | $1.87B |
| G&A | $748.0M | $771.0M | $805.0M | $765.0M |
| Marketing | $6.10B | $6.11B | $6.85B | $7.35B |
| Stock-Based Comp | $374.0M | $413.0M | $458.0M | $398.0M |
| D&A | $792.0M | $807.0M | $838.0M | $887.0M |
| Depreciation | $704.0M | $748.0M | $781.0M | $847.0M |
| Amortization | $88.0M | $59.0M | $57.0M | $40.0M |
| Other OpEx | $2.08B | $3.35B | $3.28B | $3.29B |
| Non-Operating Income | $-547.0M | $-15.0M | $223.0M | $-280.0M |
| Interest Expense | $277.0M | $245.0M | — | — |
| Interest Income | $60.0M | $207.0M | $235.0M | $255.0M |
| Pre-Tax Income | $538.0M | $1.02B | $1.54B | $1.59B |
| Income Tax | $195.0M | $330.0M | $318.0M | $290.0M |
| Continuing Ops | $343.0M | $688.0M | $1.22B | $1.30B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $343.0M | $688.0M | $1.22B | $1.30B |
| Minority Interest | $-9.0M | $-109.0M | $-10.0M | $7.0M |
| Net to Common | $352.0M | $797.0M | $1.23B | $1.29B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $8.79B | $9.23B | $9.81B | $12.20B |
| Cash & Equivalents | $4.10B | $4.22B | $4.18B | $5.41B |
| Marketable Securities | $48.0M | $28.0M | $300.0M | $320.0M |
| Accounts Receivable | $2.08B | $2.79B | $3.21B | $4.17B |
| Prepaid Expenses | $774.0M | $708.0M | $689.0M | $699.0M |
| Other Current Assets | $1.79B | $1.48B | $1.43B | $1.60B |
| Long-Term Assets | $12.77B | $12.41B | $12.57B | $12.25B |
| PP&E (Net) | $2.21B | $2.36B | $2.41B | $2.45B |
| Intangibles | $1.21B | $1.02B | $817.0M | $819.0M |
| Goodwill | $7.14B | $6.85B | $6.84B | $6.87B |
| Operating Leases | $363.0M | $357.0M | $305.0M | $296.0M |
| LT Investments | — | — | $202.0M | $280.0M |
| Other LT Assets | $1.84B | $1.82B | $1.99B | $1.54B |
| Total Assets | $21.56B | $21.64B | $22.39B | $24.45B |
| Current Liabilities | $10.78B | $11.78B | $13.61B | $16.66B |
| Current Debt | $0 | — | $1.04B | $1.69B |
| Current Leases | $77.0M | $66.0M | $63.0M | $61.0M |
| Deferred Revenue | $163.0M | $164.0M | $164.0M | $163.0M |
| Taxes Payable | $21.0M | $26.0M | $51.0M | $56.0M |
| Other Current Liab | $9.73B | $10.78B | $11.52B | $13.66B |
| Long-Term Liabilities | $7.05B | $7.07B | $5.98B | $5.25B |
| Long-Term Debt | $6.24B | $6.25B | $5.22B | $4.47B |
| LT Operating Leases | $312.0M | $314.0M | $265.0M | $254.0M |
| Other LT Liab | $503.0M | $506.0M | $490.0M | $525.0M |
| Total Liabilities | $17.83B | $18.86B | $19.59B | $21.91B |
| Shareholders' Equity | $3.73B | $2.79B | $2.80B | $2.55B |
| Retained Earnings | $-1.41B | $-632.0M | $602.0M | $1.70B |
| AOCI | $-234.0M | $-209.0M | $-232.0M | $-191.0M |
| Total L&E | $21.56B | $21.64B | $22.39B | $24.45B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $343.0M | $688.0M | $1.22B | $1.30B |
| Non-Cash Adjustments | $2.11B | $1.35B | $1.43B | $1.45B |
| Working Capital Changes | $988.0M | $653.0M | $435.0M | $1.13B |
| Cash from Operations | $3.44B | $2.69B | $3.08B | $3.88B |
| Capital Expenditures | $662.0M | $846.0M | $756.0M | $770.0M |
| Cash from Investing | $-580.0M | $-800.0M | $-1.26B | $-531.0M |
| Debt Repayments | $2.14B | $0 | $0 | $1.04B |
| Share Buybacks | $607.0M | $2.14B | $1.84B | $1.93B |
| Dividends Paid | — | — | — | $200.0M |
| Cash from Financing | $-2.62B | $-2.10B | $-1.75B | $-2.14B |
| FX Effect | $-190.0M | $16.0M | $-165.0M | $189.0M |
| Net Change in Cash | $46.0M | $-190.0M | $-87.0M | $1.40B |
| Beginning Cash | $5.80B | $5.85B | $5.66B | $5.57B |
| Ending Cash | $5.85B | $5.66B | $5.57B | $6.98B |
Frequently Asked Questions
How does Expedia Group, Inc. make money?
The company's revenue is primarily derived from its Online Travel Agency segment which includes commissions on hotel bookings, rental cars, cruises, and vacation packages sold via Expedia.com. Additional segments include the Booking Technology group offering SaaS solutions to independent travel agencies, and its own-brand experiences such as Hotels.com and Vrbo for vacation rentals.
What are the main risks for EXPE?
The travel industry is highly sensitive to macroeconomic conditions, including inflation and interest rate hikes that can reduce discretionary travel spending. Regulatory changes regarding data privacy and advertising standards in key markets like the US and EU could impact marketing effectiveness and operational costs. Geopolitical instability or global health crises can cause sudden demand contractions, leading to significant inventory write-downs and revenue volatility.
What is EXPE's competitive advantage?
Expedia possesses a massive first-party data advantage that allows for personalized pricing and targeted marketing campaigns at scale. The company benefits from high switching costs within the user ecosystem where loyalty programs and saved preferences retain customers across multiple booking categories. Its proprietary technology infrastructure enables real-time inventory management and dynamic pricing strategies that improve margins and customer conversion rates.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.