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)

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