Expedia penalized, despite beating quarterly expectations

Expedia Group shares fell approximately 5% in after-hours trading, despite reporting quarterly results that exceeded expectations. The online travel group posted Q1 revenue of $3.43bn, up 15% y-o-y, compared to a consensus near $3.35bn. Adjusted EPS reached $1.96, significantly above the $1.41 expected by the market.

In a context where the market had already priced in part of the group's operational improvement, the decision to maintain full-year guidance seems to have overshadowed the quality of the reported figures. Expedia continues to target annual revenue between $15.6bn  and $16bn, along with gross bookings growth of 6% to 8%.

On the operational front, gross bookings increased by 13% to $35.5bn, driven by continued momentum in the B2B segment, which includes travel services provided to partners such as agencies, banks, or third-party platforms. This business unit recorded a 22% increase in bookings, while the consumer division grew more moderately (+10%).

The primary point of concern stems from room nights booked, which rose by 6%, compared to 9% in the previous quarter. A portion of the growth is therefore reliant on the increase in the average daily rate, up 7%, rather than on volumes. The market will now be watching to see if Expedia can convert this strong start to the year into a guidance upgrade, particularly as the summer season approaches.