Expedia Gaps Past Buy Point As Booking Growth Fuels Earnings Beat

Expedia Group, Inc. (EXPE) shares surged past their buy point on Friday, February 7, following the company's strong fourth-quarter earnings report. The online travel agency operator reported adjusted earnings per share (EPS) of $2.39, surpassing analysts' estimates of $2.09 by 14.4%. Revenues rose to $3.184 billion, exceeding the anticipated $3.070 billion. This robust performance was driven by higher demand in the travel sector, particularly in the fourth quarter.



Expedia's adjusted earnings per share (EPS) of $2.39 outpaced the forecast of $2.09 by 14.4%. Revenues rose to $3.184 billion, exceeding the anticipated $3.070 billion. This strong performance was attributed to higher demand in the travel sector. Overall, the quarter was positive, driven by strong travel bookings and strategic initiatives in Expedia's B2B segment.



During the quarter, Expedia saw a 12% increase in booked hotel room nights compared to the same quarter the previous year. This rise translated into gross bookings growth of 13% to $24.422 billion. Revenue in Q4 2024 grew by 10% year-over-year to $3.184 billion, surpassing the $2.887 billion recorded in Q4 2023. The company benefited from a strong increase in its B2B segment revenues, indicating a successful expansion strategy in partnership-driven sales channels. B2B bookings rose by 24%, reinforcing its strong position in the corporate travel market.

Profitability also improved substantially. Net income for the quarter surged by 126%, from $132 million in Q4 2023 to $299 million. Adjusted EBITDA increased by 21%, with a margin expansion of 175 basis points. That margin expansion was driven by the effective technology integration strategies in the platform model.

Despite the strong quarter, Expedia noted macroeconomic challenges and competition as potential risks for its future performance. However, it also reinstated its dividend (which it suspended in Q2 2020), announcing a $0.40 per share payout for March. That move signals management's confidence in the company's financial health and strategic direction.

Looking ahead, management did not offer specific guidance, but expressed confidence in Expedia's potential, backed by strategic initiatives like the expanded B2B offerings and the One Key loyalty program. For upcoming quarters, investors should monitor its strategic investments in international expansion and technology. Travel expansion, especially in the B2B segment, is anticipated to be a significant growth driver in upcoming periods.

In conclusion, Expedia Group's strong fourth-quarter earnings report, driven by robust travel demand and strategic initiatives, has positioned the company well for continued growth and success. With a strong focus on international expansion and technology, Expedia is well-equipped to maintain its competitive edge in the online travel market.