Shares in Expedia (NASDAQ: EXPE) traded 15% higher overnight to US$217.90 after the online travel agency’s second-quarter results beat expectations on the back of its strengthening enterprise business and improving demand from U.S. consumers.
After revenue and gross bookings in the second quarter beat Wall Street’s estimates - rising 6% to $3.79 billion and 5% to $30.41 billion, respectively – the travel giant raised its full-year annual revenue target by 3% to 5%, up from a previous guidance of 2% to 4%.
Guidance for gross bookings is also expected to grow between 3% to 5%.
During the quarter, the company completed the buyback of $627 million of shares and declared a dividend of $0.40 per share.
Expedia is looking for earnings margin expansion for the full year of 100 basis points, an increase from the previous 75 to 100 basis points.
After investing in its B2B travel platform, which powers travel bookings for partners including airlines, banks, and loyalty programs, the Seattle-based company’s B2B gross bookings rose 17% year-over-year — outpacing the 1% growth in its consumer (B2C) business.
Ariane Gorin, CEO of Expedia Group, told the market the company had delivered a solid second quarter, surpassing our top and bottom line expectations while navigating a dynamic environment.
“Our performance was driven by continued strength across B2B and Advertising and further progress on our key priorities,” Expedia CEO Ariane Gorin said.
“Based on our first half and ongoing trends, we have increased our annual guidance… we will continue to capitalise on our brands, supply, and technology to help travellers create memories and partners grow their businesses.”
The gross booking value across Expedia's platforms – which include Hotels.com, Vrbo and Expedia.com – grew 5% to $30.41 billion.
Other key takeaways from the Q2 earnings report:
- Advertising and media revenue increased 19% to $182 million, helping diversify the company’s revenue beyond core travel bookings.
- Booked room nights rose 7%, fuelled primarily by international demand.
- Revenue outside the U.S. grew 13%, compared to just 3% growth domestically.
- Lodging gross bookings grew 6%.
- Hotel bookings were up 8%, driven by B2B and Brand Expedia.
- Net income decreased 14% while adjusted net income grew 16%, year on year.
Meanwhile, other travel companies that have reported results in recent weeks also noted weaker demand in the U.S. and had to trim forecasts, including Marriott earlier this week.
Earnings from rival Airbnb (ABNB) on Wednesday beat expectations, but ABNB stock fell on concerns about the costs of its expansion plans.
Then there’s online travel agency Booking Holdings (BKNG) gave slightly cautious commentary on U.S.-related demand when it reported earnings last week.
