Online travel agency Expedia (NASDAQ:EXPE) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 14% year on year to $4.32 billion. Guidance for next quarter’s revenue was better than expected at $4.70 billion at the midpoint, 0.7% above analysts’ estimates. Its non-GAAP profit of $5.76 per share was 9.7% above analysts’ consensus estimates.
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Expedia (EXPE) Q2 CY2026 Highlights:
- Revenue: $4.32 billion vs analyst estimates of $4.17 billion (14% year-on-year growth, 3.5% beat)
- Adjusted EPS: $5.76 vs analyst estimates of $5.25 (9.7% beat)
- Adjusted EBITDA: $1.12 billion vs analyst estimates of $1.04 billion (25.9% margin, 8% beat)
- Revenue Guidance for Q3 CY2026 is $4.70 billion at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 18.5%, up from 12.8% in the same quarter last year
- Free Cash Flow Margin: 29.6%, down from 109% in the previous quarter
- Room Nights Booked: 111.5 million, up 6 million year on year
- Market Capitalization: $38.37 billion
Company Overview
Originally founded as a part of Microsoft, Expedia (NASDAQ:EXPE) is one of the world’s leading online travel agencies.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Expedia’s sales grew at a mediocre 8.6% compounded annual growth rate over the last three years. This fell short of our benchmark for the consumer internet sector and is a poor baseline for our analysis.
This quarter, Expedia reported year-on-year revenue growth of 14%, and its $4.32 billion of revenue exceeded Wall Street’s estimates by 3.5%. Company management is currently guiding for a 6.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 5.1% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Room Nights Booked
Booking Growth
As an online travel company, Expedia generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.
Over the last two years, Expedia’s room nights booked, a key performance metric for the company, increased by 8.1% annually to 111.5 million in the latest quarter. This growth rate is decent for a consumer internet business and indicates people enjoy using its offerings. 
In Q2, Expedia added 6 million room nights booked, leading to 5.7% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating booking growth just yet.
Revenue Per Booking
Average revenue per booking (ARPB) is a critical metric to track because it not only measures how much users book on its platform but also the commission that Expedia can charge.
Expedia’s ARPB has been roughly flat over the last two years. This isn’t great, but the increase in room nights booked is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Expedia tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether bookings can continue growing at the current pace. 
This quarter, Expedia’s ARPB clocked in at $38.70. It grew by 7.8% year on year, faster than its room nights booked.
Key Takeaways from Expedia’s Q2 Results
We were impressed by how significantly Expedia blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 2.5% to $322.45 immediately following the results.
Indeed, Expedia had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).