Expedia Group, Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This summary covers Expedia Group, Inc.'s (EXPE) unaudited financial results for the quarterly period ended June 30, 2026. Expedia Group operates as a global travel marketplace with reportable segments including B2C (Expedia.com, Hotels.com, Vrbo), B2B, and trivago. The company reported strong growth in revenue and operating income, driven by lodging demand and advertising revenue, despite macroeconomic headwinds affecting air travel capacity.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $4,315 million | $3,786 million | $7,741 million | $6,774 million |
| Operating Income | $800 million | $485 million | $1,051 million | $415 million |
| Net Income (Attributable to EXPE) | $878 million | $330 million | $872 million | $130 million |
| Diluted EPS | $7.16 | $2.48 | $7.05 | $0.96 |
| Operating Margin | 18.6% | 12.8% | 13.6% | 6.1% |
| Adjusted EBITDA | $1,119 million | $908 million | $1,661 million | $1,204 million |
| Cash from Operations (YTD) | $5,409 million (2026) vs $4,073 million (2025) | |||
| Total Debt (Long-term) | $5,459 million (as of June 30, 2026) | |||
| Cash & Equivalents | $6,682 million (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 14% year-over-year for both the quarter and six-month periods. Lodging revenue grew 13%, driven by higher Average Daily Rates (ADRs) and room nights. trivago advertising revenue surged 48%.
- Profitability Expansion: Operating income jumped 65% for the quarter and 153% year-to-date. This was driven by revenue growth outpacing operating costs and a significant reversal of Canadian Digital Services Tax (DST) liabilities ($71 million credit) in the first half of 2026.
- Non-Operating Items: "Other, net" income improved significantly due to a $125 million gain on minority equity investments (GBTG) and a $48 million gain related to the conversion option on Convertible Notes, offset by foreign exchange losses.
- Debt Restructuring: The company repaid $750 million in 5.0% senior notes and $1.1 billion in convertible notes in February 2026. In April 2026, it issued $1 billion in new 5.5% senior notes due in 2036.
- Air Travel: Air revenue declined 13% for the quarter due to reduced global air capacity and higher prices stemming from geopolitical events in the Middle East.
Guidance, Outlook, and Risks
- Outlook: Management highlighted sustained momentum in U.S. B2C and global B2B gross bookings (up 12% overall). The company continues to invest in AI integration and cost reduction initiatives.
- Capital Allocation: The company repurchased $900 million of stock in the first half of 2026. A new $5 billion share repurchase program was authorized in May 2026, with $5.7 billion remaining authorized as of June 30. Quarterly dividends were increased to $0.48 per share.
- Tax Contingencies: Significant uncertainty remains regarding IRS transfer pricing audits for tax years 2011–2018. Proposed adjustments could result in federal income tax liabilities ranging from approximately $988 million to $1.22 billion, excluding interest. The company disputes these adjustments.
- Restructuring: The company incurred $69 million in restructuring charges YTD 2026 and expects approximately $35 million in additional charges.
- Market Risks: Risks include geopolitical instability affecting travel demand, currency fluctuations, and aggressive tax enforcement globally (e.g., "pay-to-play" requirements).
Investor Verification Checklist
- Tax Exposure: Verify the status of the IRS transfer pricing audits and the potential cash impact of the proposed adjustments ($988M–$1.22B range).
- Debt Maturity Profile: Confirm the impact of the new 5.5% notes issuance on future interest expense and the successful repayment of the 2026 maturing debt.
- Adjusted EBITDA Reconciliation: Review the reconciliation of GAAP net income to Adjusted EBITDA, specifically the treatment of the Canadian DST reversal and foreign exchange gains/losses.
- Air Segment Performance: Monitor the trajectory of air revenue given the capacity constraints and price increases in the Middle East region.
- Share Repurchase Pace: Track the utilization of the new $5 billion repurchase authorization against market conditions.