Expedia Group, Inc. Q3 FY2024 earnings call

• Strong execution across the company with exceeded expectations on gross bookings and earnings despite weather and currency headwinds.
• Consumer business accelerated, with Brand Expedia strong, Vrbo returning to growth, and international points of sale performing well.
• Advertising and B2B businesses outpaced industry with double-digit growth.
• Disciplined on costs with cost of sales and overheads declining YOY.
• Tech platform and AI contributing to better conversion (e.g., review summaries, smart filters) and enhanced customer service (e.g., virtual agents handling inquiries).
• Leadership updates: Julie Whalen stepping down as CFO, Ramana Thumu joining as CTO.

Consumer Business: Gross bookings were up 3% year-on-year, with Brand Expedia showing mid-teens room night growth and package bookings up 25% in Q3. Global app downloads for core brands were up nearly 10% YOY. Vrbo: Delivered first full quarter of bookings growth this year, with traffic and conversion growing despite Hurricane Helene; added nearly 1 million units from Brand Expedia. Advertising: Revenue up 32% YOY, with new product capabilities like video ads driving engagement. B2B: Bookings up 19% YOY, broad-based growth across partner segments and regions.

• Fourth quarter gross bookings growth expected 6%-8% YOY, revenue growth ~1 point lower, EBITDA and EBIT margins in line with last year due to marketing investments in Vrbo and international markets.
• Full-year 2024: Raised gross bookings growth to ~5% YOY, EBITDA and EBIT margins slightly up, revenue guidance at ~6% growth YOY.

• Macro trends, weather events, and FX as headwinds.
• Pricing pressure in air and car segments.
• Regulatory changes in alternative accommodations markets posing potential challenges.

Q: On marketing investments at Vrbo ex common international markets, how to think about aggregate marketing leverage?

A: From B2C business ex investments in Vrbo and international markets, leverage seen; as these businesses get back to needed levels, expect leverage going forward.

Q: Driver of strong growth in Media Solutions?

A: More partners participating in sponsored listings and display, easier sign-up process, testing new things like video ads driving effectiveness.

Q: What's required to accelerate Vrbo's growth?

A: Continue improving product, expanding supply, and great marketing; also, work on connecting brand value propositions to platform capabilities.

Q: Positive surprises and challenges since taking on role?

A: Positive surprise is passion and love for brands; tougher part is work needed to connect platform to brand value propositions for Hotels.com and Vrbo.

Q: Driver of adding 1 million rooms from Expedia to Vrbo?

A: Inventory different from existing Vrbo inventory, allows targeting urban and shorter stay markets; early days but aims to expand market reach.