The paragraph discusses the opening of Expedia Group's Q1 2025 financial results teleconference. The operator, Alex, introduces the Senior Vice President of Corporate Development, Strategy, and Investor Relations, Harshit Vaish, who welcomes attendees and mentions the participation of CEO Ariane Gorin and incoming CFO Scott Schenkel. Harshit explains that non-GAAP measures will be discussed and that forward-looking statements are subject to risks and uncertainties. An earnings deck will accompany the webcast, which will be available on their investor relations website. Ariane Gorin then begins her remarks, noting that in the first quarter, the company achieved bookings and revenue within their guidance range, with respective growth of 4% and 3%.

The paragraph discusses a company's financial performance, highlighting 16% EBITDA growth and 90% earnings per share growth despite lower-than-expected travel demand in the US. The company achieved these results through effective execution and cost management while advancing strategic priorities. Bookings growth was modest overall, with better performance internationally, particularly in their B2B business, which achieved 14% growth. Advertising revenue grew 20%, and Expedia was the fastest-growing brand in their consumer segment. The company focuses on three strategic priorities: delivering more value to travelers, investing in growth opportunities, and improving efficiencies. They have introduced Southwest Airlines inventory to their platform, showing promising results. AI is playing a role in enhancing their efforts in these areas.

The paragraph discusses Expedia's strategic efforts to attract new customers and enhance travel experiences. Expedia is successfully using partnerships with airlines like Southwest and Ryanair to draw new customers, benefiting hotel partners through bundled package offerings. By enhancing lodging options with more deals and flexible rates, and implementing AI-driven features to simplify booking processes, Expedia is improving user experience. Furthermore, Expedia is expanding its reach through partnerships with AI companies and social media platforms. These initiatives aim to drive growth by creating more value for travelers and expanding the company's customer base.

The paragraph discusses the growth and strategic efforts in a company's B2B and advertising sectors. The B2B business is expanding through supply technology, new partnerships, and geographic diversification. The company is also exploring AI partnerships and commercial incentives. Advertising revenue increased by 20%, supported by new products, more partners, and a rise in high-value deals. The introduction of video ads has doubled click-through rates, and AI-driven optimization is aiding advertisers. In the consumer business, Brand Expedia and Vrbo are showing positive performance, with record insurance attach rates and improved offerings for shorter stays, respectively. Hotels.com is undergoing a refresh with new features. Lastly, the focus is on enhancing operational efficiencies and margin expansion.

In the first quarter, the company achieved over one point of EBITDA margin expansion by simplifying its organization and adopting generative AI across various teams. Roles were eliminated and layers removed to enhance effectiveness. The company is critically assessing spending, including adjustments to its loyalty program. While active loyalty members, particularly in the Silver, Gold, and Platinum tiers, have shown significant growth, the base earn for Blue tier members on Vrbo was discontinued due to insufficient returns. Despite economic uncertainties, the company remains optimistic about its ability to deliver value for travelers, partners, and shareholders. Scott Schenkel highlights a successful quarter with growth in B2B bookings and advertising revenue, and mentions further updates to be shared at an upcoming partner conference.

In the latest quarter, B2C bookings saw a modest 1% increase due to a US-heavy mix, while B2B bookings demonstrated strong international performance, especially in the APAC region, resulting in a 6% overall growth in booked room nights. Brand Expedia also grew by 7%, with average daily rates slightly declining by 1%, but actually increasing by 1% on an FX neutral basis. Despite headwinds from foreign exchange rates and a softer demand in the US, the company achieved a 90% increase in non-GAAP EPS with an overall 4% rise in gross bookings to $31.5 billion. The revenue grew by 3% to $3 billion, but was impacted by a timing shift of Easter and unfavorable foreign exchange rates. Lodging bookings rose by 5%, but the revenue increased only by 3%, influenced by exchange rate variations. Overall, the business delivered strong results, outperforming its EBITDA margin guidance.

In the first quarter, non-lodging bookings reached $8.4 billion, growing by 2%, while advertising revenue increased by 20% to $174 million, showcasing strong growth prospects for the advertising business. B2C gross bookings were $22.6 billion, up 1%, but affected by demand pull-in from Q4, foreign exchange, and the leap year. Despite these pressures, Brand Expedia was the fastest-growing consumer brand, although hotel bookings faced challenges due to higher FX exposure internationally. Vrbo bookings remained positive, matching the US market. B2C revenue dropped 2% due to the Easter shift to Q2 and FX pressure, and EBITDA margins were consistent with the previous year at 11.1%. B2B gross bookings grew by 14% to $8.8 billion, exceeding market growth despite anticipated deceleration due to macro headwinds. B2B revenue and EBITDA margins also saw growth, aided by strong product differentiation and international exposure, especially in APAC. Overall, the company recorded an adjusted EBITDA of $296 million, with a margin of 9.9%, boosted by B2B's performance, and delivered $0.40 EPS, up 90% from the previous year, driven by B2B, advertising growth, and share repurchases.

The paragraph discusses the company's financial performance and cost management strategies. The cost of revenue remained steady at $354 million, while direct sales and marketing expenses increased by 6% to $1.8 billion due to a growing B2B mix. Overhead expenses decreased by 1% to $604 million, aided by recent restructuring efforts. The company ended the quarter with $6.1 billion in unrestricted cash and short-term investments and successfully refinanced $1 billion in debt, maintaining a total debt of $6.3 billion. As part of its capital allocation strategy, the company reinitiated a quarterly dividend of $0.40 per share and repurchased $330 million worth of shares. Overall, disciplined cost control supported profitable growth amid a cautious consumer environment.

The company plans to offset stock dilution and repurchase shares similarly to previous years. Looking ahead, they anticipate second-quarter gross bookings growth of 2% to 4% and revenue growth of 3% to 5%, with an expected EBITDA margin expansion of 75 to 100 basis points. Foreign exchange is expected to have minimal impact on bookings and a minor revenue headwind. The full-year guidance for growth remains at 2% to 4%, with an updated EBITDA margin expansion forecast of 75 to 100 basis points, increased from 50. The focus remains on profitable growth and disciplined capital allocation, with an emphasis on strategic initiatives and delivering shareholder value. The call is then opened for questions, with Justin Post from Bank of America inquiring about marketing spend.

In the paragraph, Ariane Gorin and Scott Schenkel discuss the performance and future plans for Hotels.com and sales and marketing expenses. Gorin expresses optimism about the Hotels.com turnaround, mentioning the brand's relaunch with a new visual identity and mascot. She acknowledges past challenges but is positive about future growth plans in targeted countries. Schenkel provides financial details, noting $1.8 billion spent on sales and marketing in Q1, with slight deleveraging. He emphasizes maintaining a focus on profitable growth and adjusting marketing investments based on opportunities. Gorin concludes by expressing confidence in the team’s growth strategy, despite not seeing growth in Q1.

In the paragraph, Deepak Mathivanan asks Ariane Gorin and Scott about Expedia's strategies to manage potential macroeconomic headwinds, especially how the B2B segment compares with B2C. He inquires about measures to assist hotels with demand management through bundling or pricing adjustments and the confidence in the company’s revised margin guidance. Ariane Gorin responds by highlighting Expedia's diverse and profitable B2B business, which spans corporate, leisure, and airline-bundled travel. She emphasizes the advantages for supply partners in accessing demand through various rate strategies and packaging, which tends to offer longer stays, bigger booking windows, and reduced cancellations.

The paragraph discusses a conference call where Scott Schenkel and Ariane Gorin address questions about the company's financial strategies and market trends. Scott highlights how recent employment actions and efforts on discretionary costs and marketing are expected to achieve a margin expansion of 75 to 100 basis points. Naved Khan from B. Riley Securities inquires about monthly consumer trends and the impact of consumer softness on factors like booking windows and lengths of stay. Additionally, he asks about the potential return on investment from using social media channels like Instagram for marketing. Ariane emphasizes the importance of social media for travel inspiration and the company's continued focus on ensuring their brands perform well on these platforms.

The paragraph discusses a new feature aimed at improving trip planning by utilizing insights from Instagram users who watch reels and wish to share them or create itineraries. The collaboration with Instagram allows users to generate itineraries, receive recommendations, and book services easily. The speaker also highlights changes in travel demand, noting a slowdown, especially in the U.S., influenced by Easter and overall pressure on travel into the U.S. There is a shift in European travelers opting for Latin America over the U.S. and a preference for lower ADR rate plans rather than higher star ratings, leading hotels to offer more discounts. Despite uncertainties, the company feels well-prepared to meet existing demand.

The paragraph addresses two main topics. First, it discusses the increasing focus on experiences and attractions, particularly by companies like Booking Holdings and Airbnb. The speaker, Ariane Gorin, highlights Brand Expedia's commitment to integrating activities into travel experiences as part of a broader strategy. Second, Scott Schenkel talks about employment restructuring within their company, detailing a 4% reduction in the workforce and a 7% decrease in contractors. This restructuring is aimed at simplifying operations and generating savings, with a projected $75 million benefit to EBITDA over the next three quarters. Some of these savings will be reinvested in strategic initiatives and cost-effective locations.

The paragraph discusses the strategic focus on AI within the company over the next 12 to 18 months, emphasizing its transformative impact similar to the introduction of mobile technology. Ariane Gorin outlines four main areas of AI application: enhancing products, driving traffic to brands, exploring new partnership opportunities, and improving team efficiency. In enhancing products, significant advancements have been made, such as launching an AI assistant and using AI to summarize reviews and highlight property features in the traveler shopping funnel.

The paragraph discusses the integration of AI chat experiences with existing product funnels, highlighting the potential for users to seamlessly transition between AI interactions and native application flows. It emphasizes the need for brands to adapt to changing search behaviors, such as the use of AI platforms like ChatGPT, to maintain visibility and drive traffic. The author notes the importance of partnerships within a rapidly evolving ecosystem and mentions that their B2B team's assets are particularly valuable. Additionally, the text describes how teams across the organization, including developers, sales, and marketing, are leveraging Generative AI technologies to improve efficiency, increase win rates, and enhance marketing efforts.

The paragraph is a discussion during a Q&A, focusing on booking trends and the company's international operations. Conor Cunningham from Melius Research asks about the booking curve and international rollout. Scott Schenkel mentions that there are no unusual changes in booking dynamics, noting a decline in inbound bookings to the US, with specific reductions from countries like Canada. Ariane Gorin adds that there is a slight increase in hotel booking windows, but a decrease for vacation rentals, depicting a mixed situation. She also highlights that their B2B business is significantly international.

Scott highlighted a 30% growth in room nights in Asia, indicating positive progress. The company is strategically investing in regions where Expedia and Hotels.com have strong brand awareness and supply, such as Western Europe, where Brand Expedia is experiencing mid-teens growth in room nights. They have also launched new points of sale in the Middle East. Hotels.com is focusing on growth in the Nordics, albeit from a smaller base. Regarding Vrbo, Ariane Gorin mentioned that despite softer demand in the US market, Vrbo continues to grow, and they are fine-tuning their product and supply quality. The company is monitoring market demand and marketing returns, with the flexibility to adjust marketing spend as needed.

In this paragraph, Lee Horowitz of Deutsche Bank questions the company about the outlook for their B2C business, noting that there is a possibility it might see negative growth this year, contrary to industry expectations. Scott Schenkel clarifies that while they aren't providing specific guidance on the mix between B2B and B2C, their B2B business is growing at a mid-teens rate, which implies pressure on the B2C side. Schenkel indicates that factors like advertising and intra-US dynamics will influence growth, while Ariane Gorin adds that pricing, affected by factors like FX and air ticket prices, is also a key consideration. Gorin emphasizes the importance of having strong brand value propositions for their B2C business.

The paragraph discusses Expedia's focus on investing in differentiated areas and ensuring these investments yield returns. Despite challenges in the US market, they emphasize maintaining value propositions with brands like Vrbo and Hotels.com by adding new features. Loyalty is highlighted as crucial, with Silver, Gold, and Platinum members accounting for nearly half of US room nights and growing quickly. Ariane Gorin discusses changes made to the loyalty program, specifically the introduction of tiered member deals nearly two years ago, which unify brand loyalty efforts and continually seek ways to enhance value for members.

In the paragraph, the speaker discusses strategic decisions related to Vrbo's "always on" investment and the loyalty program, emphasizing the need to align investments with the interests of travelers and supply partners. They highlight the differences in brand needs and the importance of making effective use of funds to expand margins. The speaker expresses confidence in the decisions made so far. Following this, an unidentified analyst asks about the company's B2B performance, particularly concerning Asia and US travel trends, and inquires about the impact of US market softness on the company's advertising business.

The paragraph discusses the performance and future prospects of the company's ads and B2B businesses. Despite challenges in B2C performance affecting growth, the ads business remains strong and promising, with new ad solutions and platforms like video and AI-driven bid optimization expected to enhance adoption and expansion. Ariane Gorin notes the B2B segment, primarily based in the US, also faced pressure, impacting Canadian partners. However, the business's global diversity helped sustain double-digit growth. Ariane concludes by thanking participants, highlighting the company’s successful results within guidance, and emphasizing their focus on strategic priorities amidst an uncertain macro environment.

The paragraph thanks participants for joining and indicates that they can now disconnect.

This summary was generated with AI and may contain some inaccuracies.