The Top 5 Analyst Questions From Expedia's Q1 Earnings Call
Is now the time to buy EXPE? Find out in our full research report (it's free).
Revenue: $2.99 billion vs analyst estimates of $3.01 billion (3.4% year-on-year growth, 0.8% miss)
Adjusted EBITDA: $296 million vs analyst estimates of $269.7 million (9.9% margin, 9.7% beat)
Operating Margin: -2.3%, up from -3.8% in the same quarter last year
Room Nights Booked: 107.7 million, up 6.5 million year on year
Market Capitalization: $21.71 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Justin Post (Bank of America) asked if Expedia could have increased marketing spend to drive bookings and about the Hotels.com turnaround. CEO Ariane Gorin said marketing is calibrated to profitable growth, and while Hotels.com remains challenged, recent rebranding brings optimism for improvement.
Deepak Mathivanan (Cantor Fitzgerald) questioned the B2B unit's resilience to macro headwinds and the drivers behind margin guidance. Gorin highlighted B2B's geographic and segment diversification, while CFO Scott Schenkel attributed margin improvement to recent restructuring and ongoing discretionary cost controls.
Naved Khan (B. Riley Securities) inquired about consumer demand trends and social media initiatives. Gorin noted continued softness in U.S. bookings, shifting traveler preferences toward discounted rate plans, and described early traction for social booking tools like Expedia Trip Matching on Instagram.
Trevor Young (Barclays) asked about investment in experiences and attractions, as well as specifics on the scale of employment reductions. Schenkel confirmed a 4% staff reduction and $75 million in expected savings, while Gorin said growing the experiences segment is a priority, but no major new initiatives were disclosed.
Lee Horowitz (Deutsche Bank) pressed for clarity on the B2C outlook and loyalty program changes. Schenkel acknowledged ongoing pressure on the consumer business, while Gorin said loyalty remains important but programs are being tailored by brand and region to improve returns.
In upcoming quarters, the StockStory team will be watching (1) continued growth momentum in the B2B and advertising segments, (2) the impact of restructuring and cost control actions on profit margins, and (3) signs of stabilization or recovery in U.S. travel demand, particularly for direct-to-consumer brands. Additionally, we are tracking the adoption and monetization of new AI-powered features and the effectiveness of international expansion strategies.
Expedia currently trades at $170.98, up from $169.17 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it's free).
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