TenQ

The Expedia story

Expedia runs Expedia, Hotels.com and Vrbo and powers travel bookings for other businesses, with the central question whether faster B2B growth can translate into stronger margins alongside its consumer brands.

Written from Expedia's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $264.23share price, last close
  • $30.2Bmarket value
  • 25/36TenQ Score checks passed
  • -9.8%growth a year the price assumes

The story in brief

  • Partners drive growth. In the quarter to June 2026, B2B revenue grew 23%, compared with 8% for consumer brands, helping total revenue grow 14%.
  • Margins diverge. In the quarter to June 2026, consumer adjusted EBITDA margin rose to 33.2% from 29.4%, while B2B margin fell to 24.8% from 27.3%.
  • Cash supports returns. Expedia generated $4.5 billion of free cash flow over the last twelve months and repurchased $200 million of shares in the quarter to June 2026.

What drives the business

  • Expedia earns commissions through Expedia, Hotels.com and Vrbo, while its B2B business lets airlines, travel agencies, online retailers and financial institutions offer Expedia's travel inventory to their customers.
  • A technology migration begun in 2020 moved consumer and affiliate sites, processing and internal applications toward new platforms and greater use of public cloud services, primarily AWS.
  • Lodging is the economic core, contributing $3.4 billion of $4.3 billion in revenue, or 79%, in the quarter to June 2026.
  • B2B contributed $1.5 billion of revenue, or 35%, in the quarter to June 2026, with gross bookings growing 21% compared with 8% for consumer brands.
  • Trivago's advertising revenue grew 48% in the quarter to June 2026, while companywide adjusted EBITDA grew 23% with 196 basis points of margin expansion.

What the price assumes

At $264.23, the reverse DCF implies annual growth of -9.8% in free cash flow after stock pay for ten years, using a 10.2% discount rate.

Expedia delivered 13.6% annual growth in that measure over the last 10 years, while the TenQ check sets an 8.8% bar by slowing that record halfway to 4%.

The modeled price assumption therefore represents declining cash flow after stock pay, rather than a continuation of Expedia's historical growth.

Value EXPE on your own assumptions

What could change the story

  • B2B's growth is not translating proportionately into profit: its adjusted EBITDA grew 12% against 23% revenue growth in the quarter to June 2026, as its margin contracted.
  • The near-term liquidity ratio of 0.80 falls below the TenQ check's 1.50 bar, and payment delays or defaults by B2B and Vrbo partners could put additional pressure on cash.
  • Debt relative to equity was 4.52 compared with 4.11 five years earlier, failing the leverage and debt trend checks, although cash and short-term investments of $7.1 billion exceeded total debt of $5.5 billion.
  • Revenue growth of 12.0% over the last twelve months and 8.1% annually over the last three years missed the TenQ market comparison bars of 13.0% and 10.8%, respectively.
  • Technology migrations and AI investments can cost more than expected or disrupt services, while alternative accommodation registration requirements and listing restrictions can reduce Vrbo supply and raise compliance costs.

What to watch next

  • For the third quarter of 2026, Expedia expects gross bookings of $32.2 billion to $32.8 billion, revenue of $4.65 billion to $4.75 billion and adjusted EBITDA of $1.51 billion to $1.56 billion.
  • Its raised full year 2026 guidance calls for revenue of $16.05 billion to $16.22 billion and adjusted EBITDA margin expansion of 1.5 to 1.75 percentage points.
  • The next releases will show whether B2B revenue growth begins to produce matching profit growth, whether consumer margins keep improving, and whether cash generation continues to support capital returns.

Sources

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