Expedia lifts 2026 outlook as B2B growth powers a stronger quarter

Expedia Group, Inc. (NASDAQ:EXPE) has raised its full-year 2026 outlook after a third quarter that exceeded the top end of its previous guidance, with growth strongest in its business-to-business division. Gross bookings rose 11% year on year to US$34.0 billion, revenue increased 12% to US$4.938 billion and adjusted EBITDA climbed 17% to US$1.689 billion.

B2B growth leads Expedia’s quarterly acceleration

The headline numbers were supported by a widening gap between Expedia’s two main operating channels. B2B gross bookings increased 19% to US$11.1 billion, while B2B revenue rose 23% to US$1.708 billion. Consumer bookings grew 7% to US$22.9 billion and consumer revenue increased 6% to US$3.065 billion.

Booked room nights rose 7% to 115.7 million, while the average daily rate booked increased 2% to US$215. Expedia said room-night growth was strongest in the rest of the world, at mid-teens levels, compared with mid-single-digit growth in the United States and low-single-digit growth in Europe, the Middle East and Africa.

Margin expansion adds weight to the guidance increase

GAAP operating income rose 28% to US$1.326 billion, while GAAP net income attributable to Expedia increased 7% to US$1.030 billion. Diluted GAAP earnings per share rose 15% to US$8.42.

On the company’s non-GAAP measure, adjusted EBITDA margin expanded 135 basis points to 34.2%. Expedia attributed the improvement to strong revenue growth, consumer marketing leverage and overhead discipline. Adjusted EPS rose 24% to US$9.39, helped in part by a lower share count following repurchases.

The improvement was not uniform across the business. B2C adjusted EBITDA margin expanded to 43.5%, from 40.7% a year earlier, while B2B margin fell to 27.5% from 28.9%. Expedia attributed the B2B pressure to partner mix and acquisition consolidation, even as the segment continued to grow faster than the consumer operation.

Full-year bookings and revenue targets move higher

Expedia now expects 2026 gross bookings of US$131.4 billion to US$131.9 billion, compared with its previous range of US$129.5 billion to US$130.8 billion. Revenue guidance increased to US$16.37 billion to US$16.43 billion from US$16.05 billion to US$16.22 billion, while expected adjusted EBITDA margin expansion was lifted to 1.8 to 2.0 percentage points from 1.5 to 1.75 points.

The fourth-quarter outlook calls for gross bookings of US$27.9 billion to US$28.4 billion, revenue of US$3.69 billion to US$3.75 billion and adjusted EBITDA of US$830 million to US$880 million. The company said its full-year guidance includes foreign-exchange impacts, while the forward adjusted EBITDA forecast cannot be reconciled to GAAP without unreasonable effort because of items including currency gains or losses and minority investment gains or losses.

Buybacks continue while quarterly cash flow turns negative

Expedia repurchased approximately two million shares for US$576 million during the quarter and declared another quarterly dividend of US$0.48 per share. The dividend is payable on December 10 to shareholders recorded at the close of business on November 18.

That capital return came alongside negative quarterly free cash flow of US$1.399 billion, compared with negative US$686 million a year earlier. For the first nine months, however, free cash flow remained positive at US$3.627 billion, up from US$2.991 billion. The contrast makes the timing and composition of fourth-quarter cash generation important, particularly as Expedia reported US$5.040 billion in cash and cash equivalents at September 30 and US$5.527 billion including short-term investments.

AI ambition meets a more immediate execution test

Chief executive Ariane Gorin said artificial intelligence was creating opportunities to improve internal productivity and develop new sources of growth, alongside Expedia’s push towards a one-stop travel platform for B2B partners. Those comments sit within a quarter where the measurable gains came from booking volume, revenue flow-through and consumer marketing efficiency rather than a separately quantified AI contribution.

The next test is whether B2B can sustain its double-digit expansion without further diluting segment margins, while the consumer business preserves its marketing leverage. The raised full-year targets improve the company’s starting point, but the quarter’s negative free cash flow leaves the quality and timing of cash conversion as a live question.