Expedia sees higher first-quarter margin, muted 2026

By Anshuman Tripathy and Aishwarya Jain

Feb 12 (Reuters) – Online travel platform Expedia forecast a higher first-quarter adjusted core profit margin on Thursday, helped by one-time gains ‌and betting on strong demand from business clients, but sounded cautious on ‌its full-year outlook.

Expedia shares fell more than 5% in extended trade, after the company said it remains “appropriately cautious ​due to ongoing macro uncertainty” as consumer spending remains uneven due to rising prices of goods amid a shifting U.S. trade policy.

While first-quarter margin expansion will see a boost from a reduction in headcount and marketing and cloud costs, the rest of the year ‌could be relatively muted, said ⁠Expedia’s finance chief, Scott Schenkel.

The company expects adjusted core profit margin to grow 3 to 4 percentage points in the first quarter of ⁠2026, compared with a rise of 1.05 percentage points in 2025.

However, for the full year, it expects adjusted core profit margin to slow down to a rise of 1 to ​1.25 percentage ​points, compared with an increase of 2.4 percentage ​points in 2025.

Despite the weak margin ‌forecast, the Vrbo parent’s full-year gross bookings projection of $127 billion to $129 billion is higher than analysts’ average estimate of $125.95 billion, according to data compiled by LSEG.

The business-to-business (B2B) segment, which includes customers such as airlines, offline travel agents, financial institutions, has benefited from the addition of new clients.

Fourth-quarter gross booking in its B2B division jumped 24%, compared with ‌5% in its direct-to-consumer unit.

Online travel agencies are ​also getting a lift from cost-conscious travelers seeking value ​through deals and discounts.

“We had 70% ​more partners participating on our Black Friday sales than we have ‌ever had,” CEO Ariane Gorin told Reuters, ​adding 30% of ​Expedia’s fourth-quarter bookings came from inventory that included deals.

The Hotels.com parent’s adjusted profit of $3.78 per share for the fourth quarter ended December 31 was up from $2.39 per ​share a year earlier. ‌Analysts, on an average, had expected $3.36 apiece.

Total revenue rose 11.4% to $3.54 billion, also ​beating estimates of $3.42 billion.

(Reporting by Anshuman Tripathy and Aishwarya Jain in Bengaluru; ​Editing by Sriraj Kalluvila and Subhranshu Sahu)