Expedia’s innovative success in travel markets

We have been investors in Expedia Group (NASDAQ: EXPE) for more than a decade, and it was really exciting to see the stock’s exponential take-off in the last two years, tripling in value to the current USD274. We have been patient investors in Expedia Group, buying the stock for Profeta’s clients when it was valued at USD 94, just a few years ago, and now we are witnessing its strong, synergistic growth driven by its proprietary technology, a diverse global platform, strong partnerships and a great executive team.

While most of the market has been focused on investing in hardware companies powering the AI theme, we believe there are many high-quality technology companies in software and online, that are being neglected by the market. Expedia has been growing its earnings per share (EPS) by over 25% p.a. over the past 3 years. Its EPS is expected to grow another 20% in 2026, doubling from 2023 levels, yet is still only trades on a PE of 13.5x FY26.

At Profeta, we have conducted extensive research on the company. We have been using Expedia’s backend technology, which generally only accommodation providers use to upload their hotel rooms onto Expedia’s websites. We have witnessed the key improvements they have made for accommodation providers over the past few years, and their loyalty program has benefitted both customers as well as accommodation providers in generating more bookings. We have also noticed Expedia making small improvements to their front-end platform, such as showing the size of the hotel room, which makes for a better customer experience. This is starting to deliver better than expected results in their earnings.

Expedia Group manages 20+ brands, including Expedia, Hotels.com, Vrbo, Travelocity, Wotif, and CarRentals.com. Its wide brand diversification covers the entire travel spectrum, ranging from flights, hotels, and vacation rentals, all built on Expedia’s unrivalled technology platform. Expedia’s brand diversity provides holistic B2C travel services through its core brands alongside loyalty programs, machine learning, AI and efficient operational models.

During the past two years, the group migrated Brand Expedia, Hotels.com and Vrbo as a one front-end technology platform, collapsing 13 Machine Learning engines, 7 loyalty stacks and 17 CRM systems into one holistic system that shares services such as payments, fraud, and customer support. Its platform aims to help customers build a better travel experience. Expedia’s technology platform used to be less advanced than Booking.com, but right now, it has built its own travel technology empire that rivals Booking.com.

The company is now embedding GenAI through integrating with OpenAI Operator, Microsoft Copilot Actions and Instagram Trip Matching, boosting its market presence, especially in emergent AI-native search surfaces. It also has a rich dataset of 300 m+ traveller profiles, allowing its Machine Learning models to personalise user experience such as search, shopping and post-booking flows.

The B2B market has been an interesting segment that has skyrocketed. Expedia has 70k+ business customers globally, with a consistent annual growth of ~30% during the past two years. Its business partnerships are diverse and global due to Expedia’s wide range of platforms, covering airlines, destinations, hospitality, content and influencers, sports and events, tech, advertising and travel hubs. Notable collaborations include airline companies like Delta and Turkish Airlines, travelling marketing organisations like Tourism and Events Queensland in Australia, and hospitality brands like Ikyu in Japan. Expedia also works with sports and music entities, such as Liverpool FC, where they created “Travel Hubs” connecting fans with handpicked travel experiences and deals.

B2B partnerships are maintained through Expedia’s expertise in providing solutions through APIs, advertising, and special promotions. The B2B mix grew to 30% of group revenue (up from 22% in 2022). Its wholesale model carries lower marketing spend, with bookings experiencing +14 % YoY in Q1 25.

Recognised for its innovative travel solutions, Expedia’s platform leverages its rich dataset to provide competitive advantages through artificial intelligence and machine learning. It has provided 1B+ trips in the last ten years, achieved 10M+ average daily visitors across websites and apps. 800B+ predictions processes are made annually on their platform. They are innovating smarter shopping experiences and service capabilities, while investing in improving their B2B distribution.

Leadership is another reason why we are investing in Expedia. Expedia is currently led by CEO Ariane Gorin, who accelerated Expedia’s B2B success and operational unification. Ariane stepped into the CEO position last year but has worked as a senior executive for over 11 years at Expedia, with previous experience at Microsoft and BCG in Paris and San Francisco.

Additionally, Expedia is under an owner-led model, guided by chairman-founder Barry Diller. Diller has quite a reputation, having been the CEO of Paramount Pictures in the 1970s and 1980s, and having founded and led InterActiveCorp (IAC). This provides him with decades of experience across entertainment, media and internet-based businesses. Currently, Diller holds around 27% of Expedia’s voting power.

Financially, Expedia gained strong results from the post-pandemic rise in travel numbers. For Q3 25, Expedia’s revenue reached $13.69 bn with +6% YoY, with net EBITDA increasing 9% YoY to $2.93 bn. Long-term debt has decreased to $5.49 bn, making Expedia one of the least leveraged among large global online travel platforms. The group just bought back $1.6bn shares in 2024, cumulating $4 bn since 2022, with only $3.2 bn remaining outside its authority. Expedia’s PE ratio of 15.6 is relatively discounted compared to the S&P 500’s average of 22.6 PE.

Expedia’s international presence, multi-brand strength, technological edge, and distinct owner leadership make it one of the most attractive investments in online travel. The company has been in our fund at Profeta for the past couple of years, where it has been a consistent performer with a strong management team, tripling its earnings over the past decade and maintaining its strong market position in online travel globally. We believe the company is positioned for sustained growth in both B2C and especially B2B, with a resilient platform supporting further operational expansion and retaining strong cash flow.