Expedia Group · 10-Q · Item 2 MD&A

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “goal,” “intends,” “likely,” “may,” “plans,” “potential,” “predicts,” “projected,” “seeks,” “should” and “will,” or the negative of these terms or other similar expressions, among others, generally identify forward-looking statements; however, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements reflect the views of our management regarding current expectations and projections about future events and are based on currently available information.

Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, but not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, Part I, Item 1A, “Risk Factors,” as well as those discussed elsewhere in this report. Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition and results of operations. Accordingly, readers should not place undue reliance on these forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, because of new information, future events, or otherwise.

The information included in this management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

Expedia Group is the global travel marketplace with one purpose: to help travelers explore the world, one journey at a time. We connect travelers, partners, and advertisers throughout our trusted brands, leading technology, and rich first-party data, delivering predictive, personalized experiences that shape the future of travel. We make available, on a stand-alone and package basis, travel services provided by numerous lodging properties, airlines, car rental companies, activities and experiences providers, cruise lines, alternative accommodations property owners and managers, and other travel product and service companies. We also offer travel and non-travel advertisers access to a potential source of incremental traffic and transactions through our various media and advertising offerings on our websites.

All percentages within this section are calculated on actual, unrounded numbers.

Trends

The Company continues to operate in an increasingly complex business environment and global macroeconomic and geopolitical pressures, including trade disruptions, currency fluctuations and energy price volatility, contributed to this environment for the travel industry. For example, T1events in the Middle East and Mexico late in the first quarter of 2026 negatively affected the travel industry, and that pressure continued into the second quarter, particularly in Europe, where macro headwinds and reduced air capacity weighed on demand. If these pressures are intensified or sustained, travel behaviors may be impacted and any associated decrease in overall demand would negatively impact our business. In addition, our suppliers, business and service partners could also be impacted, thereby increasing our risk of credit losses and service level or other disruptions. Our future operational results may be subject to volatility, particularly in the short-term, due to the impact of the aforementioned trends.

These broader economic and regulatory uncertainties also extend to the global tax environment in which we operate. T2Domestic and international taxing authorities have in recent years become increasingly focused on ways to increase tax revenue, including the enactment of new taxes such as digital services taxes, and have become more aggressive in their interpretation and enforcement of existing tax laws, rules and regulations. We are in various stages of inquiry or audit with various tax authorities, some of which may require that we prepay any assessed taxes prior to contesting the validity of the assessment (“pay-to-play”) which will be repaid if we prevail in our challenge. However, any significant pay-to-play payment or litigation loss could negatively impact our liquidity.

Other events that could have a negative impact on the travel industry and our businesses in the future are discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, Part I, Item 1A, Risk Factors – “Declines or disruptions in the travel industry could adversely affect our business and financial performance.”

Online Travel

The market opportunity for online travel is broad and highly competitive. Online penetration of travel expenditures is higher in the U.S. and Western European markets with online penetration rates in some emerging markets, such as Latin

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America and Eastern European regions, lagging behind those regions. Emerging markets continue to present an attractive growth opportunity for our business, while also attracting many competitors to online travel. Technological developments in generative artificial intelligence (“AI”) tools are increasingly being used to create competing offerings, such as AI powered digital planning and assistance, further increasing competition.

In addition to the growth of online travel agencies, we have seen continued interest in the online travel industry from search engine companies such as Google, evidenced by continued product enhancements, and prioritizing its own AdWords and metasearch products such as Google Travel, Google Flights and Hotel Ads, in search results. Competitive entrants such as “metasearch” companies, including Kayak.com (owned by Booking Holdings), trivago (in which Expedia Group owns a majority interest) as well as TripAdvisor, introduced differentiated features, pricing and content compared with the legacy online travel agency companies, as well as various forms of direct or assisted booking tools. Further, airlines and lodging companies are aggressively pursuing direct online distribution of their products and services.

In addition, the increasing popularity of the “sharing economy,” accelerated by online penetration, has had a direct impact on the travel and lodging industry. Businesses such as Airbnb, Vrbo and Booking.com have emerged as the leaders, bringing incremental alternative accommodation inventory to the market. Other competitors have arisen, including alternative accommodation property managers, who operate their own booking sites in addition to listing on Airbnb, Vrbo, and Booking.com. Additionally, traditional consumer ecommerce players have expanded their local offerings by adding hotel offers to their websites. Ride sharing app Uber has added transportation and experience offerings to its app via partnerships with other travel providers. Our B2B business has grown significantly but faces competition from other online travel agencies (“OTAs”) with B2B offerings, as well as other competitors such as independent B2B providers.

The online travel industry also saw the development of alternative business models and variations in the timing of payment by travelers and to suppliers, which in some cases place pressure on historical business models. In particular, the agency hotel model saw rapid adoption in Europe. Expedia Group facilitates both merchant (Expedia Collect) and agency (Hotel Collect) hotel offerings with our hotel supply partners through both agency-only contracts as well as our hybrid Expedia Traveler Preference (“ETP”) program, which offers travelers the choice of whether to pay Expedia Group at the time of booking or pay the hotel at the time of stay.

Lodging

Lodging includes both hotel and alternative accommodations. As a percentage of our total worldwide revenue in the second quarter of 2026, lodging accounted for 79%. Room nights booked grew 6% in the second quarter of 2026, as compared to growth of 8% in 2025 and 9% in 2024. Average Daily Rates (“ADRs”) booked for Expedia Group increased 5% in the second quarter of 2026, increased 1% in 2025 and decreased 1% in 2024.

As of June 30, 2026, our global lodging marketplace had approximately 3.9 million total lodging properties available, including approximately 2.6 million online bookable alternative accommodations through Vrbo and approximately 1.3 million hotels and alternative accommodations through our other brands.

Hotel. We generate the majority of our revenue through the facilitation of hotel reservations (stand-alone and package bookings). Our relationships and overall economics with hotel supply partners have been broadly stable in recent years. As we continue to expand the breadth and depth of our global hotel offering, in some cases we have reduced our economics in various geographies based on local market conditions. These impacts are due to specific initiatives intended to drive greater global size and scale through faster overall room night growth. Additionally, increased promotional activities such as growing loyalty programs, discounting, and couponing have contributed to declines in revenue per room night and profitability in certain cases.

Further, while the global lodging industry remains very fragmented, there has been consolidation in the hotel space among chains as well as ownership groups. In the meantime, certain hotel chains have been focusing on driving direct bookings on their own websites and mobile applications by advertising lower rates than those available on third-party websites as well as incentives such as loyalty programs, increased or exclusive product availability and complimentary benefits.

Alternative Accommodations. Over the past decade, we expanded into the alternative accommodations market. Vrbo is a leader, specializing in unique whole home inventory, primarily in North American leisure markets, and represents an attractive growth opportunity for Expedia Group.

Vrbo has transitioned from a listings-based classified advertising model to an online transactional model that optimizes for both travelers and homeowner and property manager partners, with a goal of increasing monetization and driving growth through investments in marketing as well as in product and technology. Vrbo primarily offers pay-per-booking service model and generates revenue from a traveler service fee for bookings, as well as insurance products.

Since our hotel and alternative accommodation supplier agreements are generally negotiated on a percentage basis, any increase or decrease in ADRs has an impact on the revenue we earn per room night. In the future, we could see macroeconomic

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factors influence ADR trends, including rising living costs due to inflation and higher interest rates. Other factors that could lead to moderating ADRs include growth in hotel supply and the increase in alternative accommodation inventory.

Advertising & Media

Expedia Group (“EG”) Advertising is responsible for generating advertising revenue on our global online travel brands through a variety of digital marketing solutions. In the second quarter of 2026, we generated $206 million of advertising revenue from EG Advertising, a 13% increase from the same period in 2025.

We also generate advertising revenue from trivago, a leading hotel metasearch website. In the second quarter of 2026, we generated $145 million of third-party revenue from trivago, a 48% increase from the same period in 2025.

As a percentage of our total worldwide revenue in the second quarter of 2026, total advertising and media accounted for 8%.

Air

During 2026, events in the Middle East reduced global air capacity and drove a material increase in prices, which adversely affected our booked air ticket volume, while having a less pronounced impact on total booked value. Our air bookings grew in the second quarter of 2026 compared to the same period in 2025 in line with growth in our lodging business.

In the future, we could encounter pressure on air remuneration as air carriers combine, more air carriers shift to our “direct connect” technology, certain supply agreements renew, and as we continue to add airlines to ensure local coverage in new markets.

Booked air tickets decreased 5% in the second quarter of 2026, increased 3% in 2025 and increased 6% in 2024. As a percentage of our total worldwide revenue in the second quarter of 2026, air accounted for 2%.

Business Strategy

As we endeavor to power global travel for everyone, everywhere our focus is to leverage our brand, supply and platform technology strength to provide greater services and value to our travelers, suppliers and business partners, and build longer-lasting direct relationships with our customers. T3We continue to integrate artificial intelligence across our platform, including in traveler-facing experiences, customer service operations and internal processes, with the goal of improving conversion, personalization and operational efficiency. We also collaborate with leading AI platforms to enhance our capabilities and accelerate innovation.

We believe the strength of our core brand portfolio and consistent enhancements to product and service offerings, combined with our global scale and broad-based supply, drive increasing value to customers and customer demand. With our significant global audience of travelers, and our deep and broad selection of travel products, we are also able to provide value to supply partners seeking to grow their business through sophisticated technology, a better understanding of travel retailing and reaching consumers in markets beyond their reach. Our deep product and supply footprint allows us to tailor offerings to target different types of consumers and travel needs, employ geographic segmentation in markets around the world, and leverage brand differentiation, among other benefits. We also market to consumers through a variety of channels, including internet search, metasearch and social and digital media.

We have coordinated our technology, product, data engineering, and data science teams in order to build services and capabilities that can be leveraged across our business units to provide value-add services to our travel suppliers and serve our end customers. The synergies in our team structure enable us to deliver more scalable services and operate more efficiently with our core B2C brands benefiting from a unified technology front-end infrastructure. Going forward, we expect to continue to cement our leadership in the B2B segment as our B2B business also benefits from all the work we have done in product and technology for our B2C brands.

As we continue to mature our shared platform infrastructure, our focus is on developing configurable technical capabilities that support various travel products while using simpler, standard architecture and common applications and frameworks. We believe this strategy will enable us to: simultaneously build pieces of technology that work in tandem; ship new capabilities and features faster; create a foundation for more innovative solutions; and achieve greater economies of scope and scale. Ultimately, we believe this will result in more product improvements faster and therefore better traveler experiences. All of our transaction-based businesses now benefit from our shared platform infrastructure, including customer servicing and support, data centers, search capabilities, payment processing, and fraud operations.

We launched One Key in the United States and United Kingdom, which serves as a unified loyalty program for Brand Expedia, Hotels.com and Vrbo, enabling travelers to cross-earn and cross-redeem rewards across these brands and our range of products such as air, hotels and alternative accommodations. During the second half of 2025, One Key was expanded to a number of new Brand Expedia markets across the globe with the majority of Expedia Rewards members now migrated to the

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program.

Seasonality

We generally experience seasonal fluctuations in the demand for our travel services. For example, traditional leisure travel bookings are generally the highest in the first three quarters as travelers plan and book their spring, summer and winter holiday travel. The number of bookings typically decreases in the fourth quarter. Since revenue for most of our travel services, including merchant and agency hotel, is recognized as the travel takes place rather than when it is booked, revenue typically lags bookings by several weeks for our hotel business and can be several months or more for our alternative accommodations business. Historically, Vrbo has seen seasonally stronger bookings in the first quarter of the year, with the relevant stays occurring during the peak summer travel months.

The seasonal revenue impact is exacerbated with respect to income by the nature of our variable cost of revenue and direct sales and marketing costs, which we typically realize in closer alignment to booking volumes, and the more stable nature of our fixed costs. As a result, on a consolidated basis, revenue and income are typically the lowest in the first quarter and highest in the third quarter.

The growth in our B2B segment, international operations, advertising business or a change in our product mix, among others, may also influence the typical trend of seasonality in the future.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those that we believe are important in the preparation of our consolidated financial statements because they require that we use judgment and estimates in applying those policies. We prepare our consolidated financial statements and accompanying notes in accordance with generally accepted accounting principles in the United States (“GAAP”). Preparation of the consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as revenue and expenses during the periods reported. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions.

There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if:

•It requires us to make an assumption because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate; and

•Changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations.

For additional information about our critical accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2025 as well as updates in the current fiscal year provided in Note 2 – Summary of Significant Accounting Policies in the notes to the consolidated financial statements.

Segments

We have the following reportable segments: B2C, B2B, and trivago. Our B2C segment provides a full range of travel and advertising services to our worldwide customers primarily through our three flagship brands, Expedia.com, Hotels.com, and Vrbo. Our B2B segment fuels a wide range of travel and non-travel companies including airlines, offline travel agents, online retailers, corporate travel management and financial institutions, who leverage our leading travel technology and tap into our diverse supply to augment their offerings and market Expedia Group rates and availabilities to their travelers. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites.

Operating Metrics

Our operating results are affected by certain metrics, such as gross bookings and revenue margin, which we believe are necessary for understanding and evaluating us. Gross bookings generally represent the total retail value of transactions booked for agency and merchant transactions, recorded at the time of booking reflecting the total price due for travel by travelers, including taxes, fees and other charges, and are reduced for cancellations and refunds. Revenue margin is defined as revenue as a percentage of gross bookings.

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Gross Bookings and Revenue Margin

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Gross Bookings

B2C

$

$

8

%

$

$

9

%

B2B

%

%

trivago (1)

—

—

N/A

—

—

N/A

Total gross bookings

$

$

%

$

$

%

Revenue Margin

B2C

%

%

%

%

B2B

%

%

%

%

trivago (1)

N/A

N/A

N/A

N/A

Total revenue margin (1)

%

%

%

%

____________________________

(1)trivago, which is comprised of a hotel metasearch business that differs from our transaction-based websites, does not have associated gross bookings or revenue margin. However, third-party revenue from trivago is included in revenue used to calculate total revenue margin.

Gross bookings increased 12% for both the three and six months ended June 30, 2026, compared to the same periods in 2025. B2C gross bookings growth was driven by sustained momentum in the U.S. T4B2B gross bookings grew globally with Rapid API the largest contributor to growth. Booked room nights for our lodging business increased 6% for both the three and six months ended June 30, 2026, which was led by continued strength at B2B.

Results of Operations

Revenue

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Revenue by Segment

B2C

$

$

8

%

$

$

8

%

B2B

%

%

trivago (Third-party revenue)

%

%

Total revenue

$

$

%

$

$

%

Revenue increased 14% for both the three and six months ended June 30, 2026, compared to the same periods in 2025, driven by lodging growth in both our B2B and B2C segments.

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Revenue by Service Type

Lodging

$

$

%

$

$

%

Air

%

(7)

%

EG Advertising

%

%

trivago Advertising

%

%

Other

%

%

Total revenue

$

$

%

$

$

%

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T5Lodging revenue increased 13% for both the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily driven by higher ADRs stayed and an increase in room nights stayed in our hotel business.

T6Air revenue decreased for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily driven by lower revenue per ticket, as well as 5% lower air tickets sold during the three months ended June 30, 2026.

EG Advertising revenue increased 13% for both the three and six months ended June 30, 2026, compared to the same periods in 2025, driven by our sponsored listing business. trivago Advertising revenue increased 48% for both the three and six months ended June 30, 2026, compared to the same periods in 2025, driven by its strategic focus on brand rebuilding in recent years.

All other revenue, which includes insurance, car, cruise and activities, increased 23% and 20% for the three and six months ended June 30, 2026, compared to the same periods in 2025 primarily due to higher insurance and activities revenue.

In addition to the above segment and product revenue discussion, our revenue by business model is as follows:

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Revenue by Business Model

Merchant

$

$

%

$

$

%

Agency

2

%

3

%

Advertising, media and other

%

%

Total revenue

$

$

%

$

$

%

The increase in merchant revenue for the three and six months ended June 30, 2026, compared to the same periods in 2025, was primarily due to an increase in merchant lodging revenue. Agency revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in 2025, primarily due to increase in activities and insurance revenue. Advertising, media and other increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to healthy growth in both trivago revenue and EG Advertising.

Cost of Revenue

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Direct costs

$

$

9

%

$

$

7

%

Personnel and overhead

—

%

1

%

Total cost of revenue

$

$

7

%

$

$

6

%

% of revenue

%

%

%

%

Cost of revenue primarily consists of direct costs to support our customer operations, including our customer support and telesales as well as fees to air ticket fulfillment vendors; credit card processing, including merchant fees, fraud and chargebacks; and other costs, primarily including data center and cloud costs to support our websites, supplier operations, destination supply, certain transactional level taxes as well as related personnel and overhead costs, including stock-based compensation.

Cost of revenue increased $26 million and $46 million during the three and six months ended June 30, 2026 compared to the same periods in 2025, but decreased as a percentage of revenue during the period driven by continued efficiencies in payments.

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Selling and Marketing - Direct and Indirect

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Selling and marketing - direct

$

$

%

$

$

8

%

% of revenue

%

%

%

%

Selling and marketing - indirect

2

%

2

%

% of revenue

%

%

%

%

Selling and marketing - direct costs primarily include traffic generation costs from search engines and internet portals, television and print spending, private label and affiliate program commissions, public relations and other costs. Selling and marketing - indirect costs include personnel and related overhead in our various brands and global supply organization as well as stock-based compensation costs.

Selling and marketing - direct increased $199 million and $298 million during the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily driven by an increase in B2B partner commissions to support revenue growth. The increase in the year-to-date period was partially offset by a decrease in marketing spend at B2C, which had significant marketing leverage. Selling and marketing - indirect costs remained relatively consistent during the three and six months ended June 30, 2026, compared to the same periods in 2025.

Technology and Content

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Personnel and overhead

$

$

(7)

%

$

$

(5)

%

Other

%

%

Total technology and content

$

$

—

%

$

$

1

%

% of revenue

%

%

%

%

Technology and content expense includes product development and content expense, as well as information technology costs to support our infrastructure, back-office applications and overall monitoring and security of our networks, and is principally comprised of personnel and overhead, including stock-based compensation, as well as other costs including cloud expense and licensing and maintenance expense.

T7Technology and content expense remained relatively consistent during the three and six months ended June 30, 2026, compared to the same periods in 2025 as higher license and maintenance costs and cloud costs were mostly offset by lower personnel costs in connection with previously announced cost saving initiatives.

General and Administrative

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Personnel and overhead

$

$

5

%

$

$

3

%

Professional fees and other

(2)

%

%

Total general and administrative

$

$

4

%

$

$

6

%

% of revenue

%

%

%

%

General and administrative expense consists primarily of personnel-related costs, including our executive leadership, finance, legal and human resource functions and related stock-based compensation as well as fees for external professional services.

General and administrative expense increased during the three and six months ended June 30, 2026, compared to the

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same periods in 2025, primarily due to higher stock-based compensation. In addition, the current year to date period was also impacted by higher miscellaneous items, including charitable contributions.

Depreciation and Amortization

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Depreciation

$

$

2

%

$

$

4

%

Amortization of intangible assets

4

%

%

Total depreciation and amortization

$

$

2

%

$

$

3

%

Depreciation increased $5 million and $18 million during the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily as a result of increased capitalized website development costs. Amortization of intangible assets remained consistent during the three months ended June 30, 2026 and decreased $4 million during the six months ended June 30, 2026, compared to the same periods in 2025.

Legal Reserves, Occupancy Tax and Other

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Legal reserves, occupancy tax and other

$

6

$

2

%

$

2

N/A

Legal reserves, occupancy tax and other primarily consists of increases in our reserves for court decisions and the potential and final settlement of issues related to hotel occupancy and other taxes, expenses recognized related to monies paid in advance of occupancy and other tax proceedings (“pay-to-play”) as well as legal reserves and certain other items.

The net credit in legal reserves, occupancy tax and other for the six months ended June 30, 2026 was primarily due to the reversal of Canadian digital service taxes (“DST”). On March 26, 2026, the government of Canada enacted legislation as part of its 2026 federal budget that repealed the Digital Services Tax Act, with retroactive effect to June 20, 2024.

We had previously recognized, during 2024 and 2025, accruals for anticipated Canadian DST liabilities related to certain digital services revenues, based on enacted law at that time and guidance then available from the Canada Revenue Agency. In connection with the repeal, during the six months ended June 30, 2026, we reversed $71 million of previously recognized Canadian DST liabilities, covering in-scope periods from January 1, 2022 through December 31, 2025. As of June 30, 2026, the Company no longer has an obligation related to the Canadian DST.

Restructuring and Related Reorganization Charges

We have continued to recalibrate resources and expand the restructure efforts that began in 2024 due to the significant completion of the Company’s organizational and technological transformation. As a result, we recognized $69 million and $70 million in restructuring and related reorganization charges during the six months ended June 30, 2026 and 2025, which were predominately related to employee severance, stock-based compensation and benefits costs. Based on current plans which are subject to change, we expect approximately $35 million in additional reorganization charges. We continue to evaluate additional cost reduction efforts, and should we make additional decisions in future periods to take further actions we may incur additional reorganization charges.

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Operating Income

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Operating income

$

$

%

$

$

%

% of revenue

%

%

%

%

During the three and six months ended June 30, 2026, the increase in operating income in the current year periods was primarily due to a growth in revenue in excess of operating costs.

Adjusted EBITDA by Segment

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

B2C

$

$

%

$

$

%

B2B

%

%

trivago

1

(6)

N/A

(6)

%

Segment Adjusted EBITDA

Unallocated corporate and other expenses

(3)

%

3

%

Total Adjusted EBITDA (1)

$

$

%

$

$

%

____________________________

(1) Adjusted EBITDA is a non-GAAP measure. See “Definition and Reconciliation of Adjusted EBITDA” below for more information.

Adjusted EBITDA is our primary segment operating metric. See Note 10 – Segment Information in the notes to the consolidated financial statements for additional information on intersegment transactions, unallocated corporate and other costs and for a reconciliation of Adjusted EBITDA by segment to income (loss) before income taxes for the periods presented above.

Our B2C segment Adjusted EBITDA increased during the three and six months ended June 30, 2026, compared to the same periods in 2025 as a result of revenue growth and disciplined cost management, particularly in direct selling and marketing in the year-to-date period. Our B2B segment experienced an increase in Adjusted EBITDA during the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily as a result of strong revenue growth, partially offset by a prioritization of investments to support future growth. Our trivago segment Adjusted EBITDA returned to positive during the three months ended June 30, 2026 and its Adjusted EBITDA loss decreased during the six months ended June 30, 2026, compared to the same periods in 2025, as a result of revenue growth, partially offset by higher operating costs, including direct selling and marketing expenses.

Interest Income and Expense

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Interest income

$

$

(1)

%

$

$

4

%

Interest expense

5

%

%

Interest income decreased slightly for the three months ended June 30, 2026, compared to the same period in 2025. Interest income increased for the six months ended June 30, 2026, compared to the same period in 2025, as a result of higher average cash and investment balances, partially offset by lower rates of return.

Interest expense increased for the three months ended June 30, 2026, compared to the same period in 2025, as a result of higher average senior notes outstanding in the current year period. The interest expense increase for the six months ended June 30, 2026 was also due to the amortization of the debt discount related to our Convertible Notes that matured in February 2026 as discussed in Note 4 – Debt in the notes to the consolidated financial statements.

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Other, Net

Other, net is comprised of the following:

Three months ended June 30,

Six months ended June 30,

($ in millions)

Foreign exchange rate gains (losses), net

$

$

$

$

Gains (losses) on minority equity investments, net

Gain related to the conversion option on Convertible Notes

—

—

—

Other

(4)

(3)

Total other, net

$

$

$

$

For further information on our gains (losses) on minority equity investments, net, see Note 3 – Fair Value Measurements in the notes to the consolidated financial statements. For further information on the gain related to the conversion option on our Convertible Notes, see Note 4 – Debt in the notes to the consolidated financial statements.

Provision for Income Taxes

Three months ended June 30,

Six months ended June 30,

% Change

% Change

($ in millions)

($ in millions)

Provision for income taxes

$

$

%

$

$

%

Effective tax rate

%

%

%

%

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate. We record any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs, including discrete items.

For the three months ended June 30, 2026, the effective tax rate was 14.8%, compared to 23.9% for the three months ended June 30, 2025. For the six months ended June 30, 2026, the effective tax rate was 17.9%, compared to 39.3% for the six months ended June 30, 2025. The change in the effective tax rate for both periods was primarily due to nontaxable mark-to-market gains.

We are subject to taxation in the United States and foreign jurisdictions. Our income tax filings are routinely examined by federal, state, and foreign tax authorities. Prior to June 30, 2026, for tax years 2011 to 2013 and 2014 to 2016, the IRS issued adjustments related to transfer pricing with our foreign subsidiaries. The 2011 to 2013 and the 2014 to 2016 adjustments would result in federal income tax of approximately $244 million and $431 million, respectively, subject to interest. These audit cycles have remained in administrative procedures with the IRS.

Subsequent to June 30, 2026, the IRS replaced the prior adjustments and issued new adjustments for tax years 2011 to 2016 that apply a different method of adjusting transfer pricing with our foreign subsidiaries. The IRS also issued adjustments for 2017 and 2018. The adjustments, as proposed, would result in a federal income tax of approximately $287 million to $313 million for tax years 2011 to 2013, approximately $488 million to $531 million for tax years 2014 to 2016, and approximately $213 million to $380 million for tax years 2017 to 2018, subject to interest. We do not agree with these adjustments and will continue to vigorously defend our position through administrative procedures. The IRS has indicated that adjustments for this matter are not relevant for tax years 2019 to 2020.

Definition and Reconciliation of Adjusted EBITDA

We report Adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA is among the primary metrics by which management evaluates the performance of the business and on which internal budgets are based. Management believes that investors should have access to the same set of tools that management uses to analyze our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Adjusted EBITDA has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations.

We endeavor to compensate for the limitation of the non-GAAP measure presented by also providing the most directly comparable GAAP measure and a description of the reconciling items and adjustments to derive the non-GAAP measure. Adjusted EBITDA also excludes certain items related to transactional tax matters, which may ultimately be settled in cash, and we urge

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investors to review the detailed disclosure regarding these matters included above, in the Legal Proceedings section, as well as the notes to the financial statements. The non-GAAP financial measure used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Adjusted EBITDA is defined as net income (loss) attributable to Expedia Group, Inc. adjusted for (1) net income (loss) attributable to non-controlling interests; (2) provision for income taxes; (3) total other expenses, net; (4) stock-based compensation expense, including compensation expense related to certain subsidiary equity plans; (5) acquisition-related impacts, including (i) amortization of intangible assets and goodwill and intangible asset impairment, (ii) gains (losses) recognized on changes in the value of contingent consideration arrangements, if any, and (iii) upfront consideration paid to settle employee compensation plans of the acquiree, if any; (6) certain other items, including restructuring; (7) items included in legal reserves, occupancy tax and other; (8) that portion of gains (losses) on revenue hedging activities that are included in other, net that relate to revenue recognized in the period; and (9) depreciation.

The above items are excluded from our Adjusted EBITDA measure because these items are noncash in nature, or because the amount and timing of these items is unpredictable, not driven by core operating results and renders comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA is a useful measure for analysts and investors to evaluate our future on-going performance as this measure allows a more meaningful comparison of our performance and projected cash earnings with our historical results from prior periods and to the results of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments.

In addition, we believe that by excluding certain items, such as stock-based compensation and acquisition-related impacts, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of our business, from which capital investments are made and debt is serviced.

The reconciliation of net income attributable to Expedia Group, Inc. to Adjusted EBITDA is as follows:

Three months ended June 30,

Six months ended June 30,

(In millions)

Net income attributable to Expedia Group, Inc.

$

$

$

$

Net income (loss) attributable to non-controlling interests

(3)

(8)

(9)

(5)

Provision for income taxes

Total other (income) expense, net

(1)

Operating income

Gain (loss) on revenue hedges related to revenue recognized

Restructuring and related reorganization charges, excluding stock-based compensation

Legal reserves, occupancy tax and other

6

2

2

Stock-based compensation

Depreciation and amortization

Adjusted EBITDA

$

$

$

$

Financial Position, Liquidity and Capital Resources

Our principal sources of liquidity are typically cash flows generated from operations, cash available under our credit facility as well as our cash and cash equivalents and short-term investment balances, which were $7.1 billion and $5.7 billion at June 30, 2026 and December 31, 2025. As of June 30, 2026, the total cash and cash equivalents and short-term investments held outside the United States was $398 million ($220 million in wholly-owned foreign subsidiaries and $178 million in majority-owned subsidiaries).

New Revolving Credit Facility. On March 27, 2026, we entered into a new revolving credit facility with aggregate commitments of $2.5 billion, which replaced our previous credit facility with the same commitment level and matures in March 2031. The revolving credit facility was essentially untapped at June 30, 2026.

5.5% Senior Notes Issuance. In April 2026, we issued $1 billion of registered senior unsecured notes, which bear interest at 5.5% and are due in April 2036 (the “5.5% Notes”). The 5.5% Notes were issued at 99.384% of par resulting in a discount, which is being amortized over their life. Interest is payable semi-annually in arrears in April and October of each year, beginning October 15, 2026. We used or expect to use the net proceeds of this offering of approximately $986 million for

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general corporate purposes, which may include, but not limited to: (i) repayment, prepayment, redemption or repurchase of outstanding debt, (ii) dividends and stock repurchases, and (iii) funding for working capital, capital expenditures and acquisitions.

Redemption of our 5.0% Senior Notes and 0% Convertible Notes. In February 2026, our $750 million in senior unsecured notes that bore interest at 5.0% (the “5.0% Notes”) matured and the balance was repaid along with applicable accrued and unpaid interest. Also in February 2026, upon maturity of the Convertible Notes, we paid approximately $1.1 billion in cash to repay the principal amount and settle our payment obligations in connection with conversion elections of the holders thereof, which included a conversion premium of approximately $78 million.

Our credit ratings are periodically reviewed by rating agencies. As of June 30, 2026, Moody’s rating was Baa2 with an outlook of “positive,” S&P’s rating was BBB with an outlook of “stable” and Fitch’s rating was BBB with an outlook of “stable.” Changes in our operating results, cash flows, financial position, capital structure, financial policy or capital allocations to share repurchase, dividends, investments and acquisitions could impact the ratings assigned by the various rating agencies. Should our credit ratings be adjusted downward, we may incur higher costs to borrow and/or limited access to capital markets and interest rates on our 4.625% senior notes as well as our 2.95% senior notes will increase, which could have a material impact on our financial condition and results of operations.

As of June 30, 2026, we were in compliance with the covenants and conditions in our revolving credit facility and outstanding debt as detailed in Note 4 – Debt in the notes to the consolidated financial statements.

Under the merchant model, we receive cash from travelers at the time of booking and we record these amounts on our consolidated balance sheets as deferred merchant bookings. We pay our airline suppliers related to these merchant model bookings generally within a few weeks after completing the transaction. For most other merchant bookings, which is primarily our merchant lodging business, we generally pay after the travelers’ use and, in some cases, subsequent billing from the hotel suppliers. Therefore, generally we receive cash from the traveler prior to paying our supplier, and this operating cycle represents a working capital source of cash to us. Typically, the seasonal fluctuations in our merchant hotel bookings have affected the timing of our annual cash flows.

Generally, during the first half of the year, hotel bookings have traditionally exceeded stays, resulting in much higher cash flow related to working capital. During the second half of the year, this pattern typically reverses and cash flows are typically negative.

Our cash flows are as follows:

Six months ended

$ Change

(In millions)

Cash provided by (used in):

Operating activities

$

$

$

Investing activities

Financing activities

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents

For the six months ended June 30, 2026, net cash provided by operating activities increased compared to the prior year period due to higher working capital benefits driven mostly from an increase in deferred merchant bookings and merchant accounts payable as well as higher operating income after adjusting for impacts of depreciation and amortization.

For the six months ended June 30, 2026, net cash used in investing activities was $1.2 billion compared to $220 million used in the prior year period. The change was primarily due to net purchase of investments in the current year compared to net sales and maturities of investments in the prior year, uses of cash for the settlement of currency forward contract losses in the current year compared to sources of cash for gains in the prior year as well as cash used for acquisitions in the current year.

For the six months ended June 30, 2026, net cash used in financing activities primarily included $1.8 billion of payments related to the redemption of our 5.0% Notes and our 0% Convertible Notes in February 2026 as discussed above as well as $1.1 billion of cash paid to acquire shares, including the repurchased shares under the authorization discussed below and for treasury stock activity related to the vesting of equity instruments as well as cash dividend payments of $116 million, partially offset by proceeds from the issuance of 5.5% senior notes with net proceeds of $986 million. For the six months ended June 30, 2025, net cash used in financing activities primarily included the February 2025 redemption of approximately $1 billion of our 6.25% senior notes, $1.1 billion of cash paid to acquire shares, and cash dividend payments of $102 million, partially offset by the

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February 2025 issuance of 5.4% senior notes with net proceeds of $985 million as well as $25 million of proceeds from the exercise of options and employee stock purchase plans.

In November 2023, the Executive Committee of the Board of Directors, pursuant to a delegation of authority from the Board, authorized an additional program to repurchase up to $5 billion of our common stock (“2023 Share Repurchase Program”). In May 2026, the Audit Committee of the Board of Directors, pursuant to a delegation of authority from the Board, authorized a program to repurchase up to an additional $5 billion of our common stock (“2026 Share Repurchase Program”). During the six months ended June 30, 2026, we repurchased, through open market transactions, 4.2 million shares under 2023 Share Repurchase Program for a total cost of approximately $900 million, excluding transaction costs and excise tax due under the Inflation Reduction Act of 2022.

As of June 30, 2026, $5.7 billion remained authorized for repurchase under the 2023 and 2026 Share Repurchase Programs. Our 2023 and 2026 Share Repurchase Programs do not have fixed expiration dates and do not obligate the Company to acquire any specific number of shares. Under the programs, shares may be repurchased in the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will be subject to the discretion of the Company and depend on a variety of factors, including the market price of Expedia Group’s common stock, general market and economic conditions, regulatory requirements and other business considerations.

The Executive Committee, acting on behalf of the Board of Directors, declared and we paid the following dividends during the period presented:

Declaration Date

Dividend

Per Share

Record Date

Total Amount

(in millions)

Payment Date

$

$

$

$

$

$

$

$

In addition, in August 2026, the Executive Committee, acting on behalf of the Board of Directors, declared a quarterly cash dividend of $0.48 per share of outstanding common stock payable on September 17, 2026 to stockholders of record as of the close of business on August 27, 2026. Future declarations of dividends are subject to final determination by our Board of Directors.

Foreign exchange rate changes resulted in a decrease of our cash and restricted cash balances denominated in foreign currency during the six months ended June 30, 2026 of $36 million reflecting a net depreciation in foreign currencies relative to the U.S. dollar compared to $208 million increase in the prior year period reflecting a net appreciation in foreign currencies relative to the U.S. dollar.

Other than discussed above, there have been no material changes outside the normal course of business to our contractual obligations and commercial commitments since December 31, 2025.

In our opinion, our liquidity position provides sufficient capital resources to meet our foreseeable cash needs. There can be no assurance, however, that the cost or availability of future borrowings, including refinancings, if any, will be available on terms acceptable to us.

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Part I. Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk Management

There have been no material changes in our market risk during the three and six months ended June 30, 2026. For additional information, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in Part II of our Annual Report on Form 10-K for the year ended December 31, 2025.

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Part I. Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our Chairman and Senior Executive, Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Chairman and Senior Executive, Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in internal control over financial reporting.

There were no changes to our internal control over financial reporting that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Item 1. Legal Proceedings

In the ordinary course of business, Expedia Group and its subsidiaries are parties to legal proceedings and claims involving property, tax, personal injury, contract, alleged infringement of third-party intellectual property rights and other claims. A discussion of certain legal proceedings can be found in the section titled “Legal Proceedings,” of our Annual Report on Form 10-K for the year ended December 31, 2025 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. The following are developments regarding, as applicable, such legal proceedings and/or new legal proceedings:

Helms Burton Litigation. On June 18, 2026, the court in Echevarria II stayed the case pending resolution of the appeal in Echevarria I.

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Part II. Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. These are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In November 2023, the Executive Committee of the Board of Directors, pursuant to a delegation of authority from the Board, authorized a program to repurchase up to $5 billion of our common stock. T8In May 2026, the Audit Committee of the Board of Directors, pursuant to a delegation of authority from the Board, authorized a program to repurchase up to an additional $5 billion of our common stock. A summary of the repurchase activity for the second quarter of 2026 is as follows:

Period

Total Number of

Shares Purchased

Average Price

Paid Per Share

Total Number of

Shares

Purchased as

Part of Publicly

Announced

Plans or

Programs

Maximum

Dollar Value of

Shares that

May Yet Be

Purchased

Under Plans or

Programs

(In thousands, expect per share data)

—

$

—

—

$

Total

Part II. Item 5. Other Information

During the quarter ended June 30, 2026, none of our directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

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Part II. Item 6. Exhibits

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.

Exhibit

No.

Exhibit Description

Filed

Herewith

Incorporated by Reference

Form

SEC File No.

Exhibit

Filing Date

Certification of the Chairman and Senior Executive pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

Certification of the Chief Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002

X

Certification of the Chairman and Senior Executive pursuant Section 906 of the Sarbanes-Oxley Act of 2002

X

Certification of the Chief Executive Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002

X

Certification of the Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002

X

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

X

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Expedia Group, Inc.

By:

/s/ Derek Andersen

Derek Andersen

Chief Financial Officer