Expedia Inc (NASDAQ:EXPE) reported first-quarter results that topped Wall Street expectations, but the online travel company saw its shares fall roughly 9% in premarket trading Friday after investors reacted negatively to weaker-than-expected revenue and bookings guidance.
The company posted adjusted earnings per share of $1.96, surpassing analyst forecasts of $1.39 by $0.57. Revenue reached $3.43 billion, representing a 15% increase from the same period last year and exceeding consensus estimates of $3.35 billion.
Despite the stronger quarterly performance, Expedia reaffirmed its full-year 2026 revenue forecast of between $15.6 billion and $16 billion. The midpoint of the guidance, at $15.8 billion, came in below analyst expectations of $15.95 billion, contributing to the sharp decline in the stock.
Bookings growth remains solid but room nights miss expectations
Gross bookings increased 13% year over year to $35.5 billion during the first quarter. Business-to-business (B2B) gross bookings climbed 22%, while business-to-consumer (B2C) bookings rose 10%.
Adjusted EBITDA surged 83% from a year earlier to $542 million, with margins improving by 591 basis points.
During the quarter, Expedia repurchased approximately 3.3 million shares for $700 million and also announced a new $5 billion share buyback authorization.
“Our first quarter results marked a strong start to the year, as we delivered double-digit bookings and revenue growth and drove meaningful margin expansion despite a dynamic macroeconomic environment,” said Ariane Gorin, CEO of Expedia Group.
Booked room nights rose 5.8% compared with the prior year, missing analyst expectations of 8.5% growth. The company said the weaker figure was partly affected by U.S. travel advisories related to Mexico as well as disruptions tied to the Middle East conflict in March.
Average daily rates booked increased 7% to $228.10.
Analysts focus on weaker room night performance
Analysts at Bank of America described the weaker room night performance as “room night miss [is] a blemish on a good quarter.”
“While tougher 2H marketing comps will likely slow EBTIDA growth, we think better relative B2C growth while reducing reliance on marketing spend warrants multiple expansion toward OTA peers,” the analysts wrote.
Second-quarter guidance mixed
For the second quarter, Expedia forecast revenue between $4.11 billion and $4.19 billion. The midpoint of the range, at $4.15 billion, came in slightly above analyst expectations of $4.12 billion.
The company projected gross bookings of between $32.5 billion and $33.1 billion, representing growth of 7% to 9%. However, the midpoint of that range came in slightly below the analyst consensus forecast of $33 billion.
Expedia also announced a quarterly dividend of $0.48 per share, scheduled to be paid on June 18, 2026.