Expedia Group (NASDAQ:EXPE) raised its full-year 2026 outlook after third-quarter bookings and revenue grew by double digits, though executives expect growth to moderate in the fourth quarter as travel disruptions, tougher comparisons and the timing of a promotion weigh on results.
Gross bookings rose 11% year over year and revenue increased 12% in the third quarter, CFO Derek Andersen said. Adjusted EBITDA reached $1.7 billion, with a 34.2% margin, an improvement of more than one percentage point from a year earlier. Adjusted earnings per share increased 24%.
CEO Ariane Gorin said travel demand remained healthy, particularly in the U.S., with continued strength among more affluent consumers. Booked room nights grew 7% globally, including mid-single-digit growth in the U.S., low-single-digit growth in Europe, the Middle East and Africa, and mid-teens growth in the rest of the world.
Full-year outlook rises, but fourth-quarter growth expected to slow
Expedia now expects full-year gross bookings of $131.4 billion to $131.9 billion, representing approximately 10% growth, and revenue of $16.37 billion to $16.43 billion, up approximately 11% to 12%. The company also raised its forecast for full-year adjusted EBITDA margin expansion to 180 to 200 basis points.
Andersen said the updated outlook puts Expedia on track to exceed the top ends of the bookings, revenue and margin-expansion ranges it provided at the beginning of the year.
For the fourth quarter, the company expects gross bookings of $27.9 billion to $28.4 billion, or growth of approximately 3.3% to 5.2%. It forecast revenue of $3.69 billion to $3.75 billion and adjusted EBITDA of $830 million to $880 million, implying a margin of 22.5% to 23.5%.
Andersen attributed the expected slowdown in part to softer demand around the U.S. election cycle and geopolitical events disrupting travel in the Middle East and Europe, including long-haul routes through those regions. Expedia is also comparing its business-to-business results with a period of strong partner promotional activity a year earlier.
The company moved its fall sale forward by a few weeks, shifting more of the event into the third quarter than in the prior year. Gorin said the September sale generated more than $1 billion in bookings, the third consecutive Expedia sales event to surpass that mark.
B2B growth remains strong as investment pressures margins
Business-to-business bookings grew 19% in the third quarter, while consumer bookings rose 7%, Gorin said. She described B2B growth as broad-based, with double-digit increases across all regions.
Expedia is investing in a broader range of services for partners. During the quarter, it closed its acquisition of CarTrawler, launched an activities API and expanded its relationship with Qantas, which became the first partner to use Expedia’s new agentic template. Gorin said the company also acquired Tiqets as part of its effort to become a one-stop travel platform for partners.
Andersen said B2B margins faced near-term pressure primarily because growing partners move into higher tiers, with recent investments contributing a smaller effect. CarTrawler closed near the end of the third quarter and had a relatively minor impact on that period’s results, he said.
AI traffic remains small as Expedia tests new channels
Expedia is working with technology platforms as travelers increasingly use artificial intelligence tools to discover trips. Gorin said the company partnered with Google in AI Mode and announced an integration with Meta Muse.
Traffic from agentic AI remains small but is high intent, Gorin said. The economics of the partnerships are still being worked out, and it is too early to determine whether that traffic is incremental or comes from other paid channels. She said Expedia has not seen it affect direct traffic.
Within Expedia’s own products, Gorin said AI-powered recommendations contributed to record third-quarter attach rates for the Expedia brand. An activity agent introduced after booking has also shown early signs of engagement: users were twice as likely to book an activity within seven days of using it, she said.
Expedia is using AI in customer service as well. Gorin said an agentic voice experience on Vrbo was resolving more than 15% of inbound contacts in its first two months, with higher satisfaction scores and lower costs.
Capital returns and advertising
Expedia repurchased approximately two million shares for $576 million during the third quarter, bringing year-to-date repurchases to approximately $1.5 billion. Trailing 12-month free cash flow reached $3.7 billion, up 25% year over year.
Advertising growth slowed to 7% in the third quarter from 13% in the preceding quarter, Andersen said. He said Expedia is making product improvements intended to give advertisers better campaign-management capabilities and support more AI-enabled tools.
Gorin also said recent changes to Vrbo’s commission fee are intended to simplify the experience for travelers and are not expected to affect the overall take rate.
About Expedia Group (NASDAQ:EXPE)
Expedia Group, Inc is an online travel company that connects travelers with a broad range of travel products and services. Its offerings include hotel and vacation-rental accommodations, flights, car rentals, cruises, activities, and travel packages. The company serves consumers through its online travel brands and also provides technology, distribution, and marketing solutions to travel suppliers and other business partners.
Expedia Group’s consumer brands include Expedia, Hotels.com, Vrbo, Orbitz, Travelocity, Wotif, ebookers, CheapTickets, Abritel, and FeWo-direkt, among others.
