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Expedia Group (EXPE) is plummeting lower as its Q4 outlook points to sharply slower growth and lower margins, reversing strength after shares surged following Booking Holdings’ (BKNG) Tuesday-night report. Although EXPE raised full-year guidance and matched BKNG’s Q3 room-night growth, promotional timing, tougher comparisons, and rising investment temper the implications of its strong quarter.

• Adjusted EPS of $9.39 exceeded the $8.85 FactSet Consensus, while revenue increased 11.9% to $4.94 bln versus $4.73 bln expected. Adjusted EBITDA rose 17% to $1.689 bln, with margin expanding 135 bps to 34.2%, compared with BKNG’s 9% EBITDA growth and approximately stable 47% margin.
• Room nights increased 7% at both companies, while EXPE’s gross bookings rose 11% to $34.0 bln versus BKNG’s 10% increase to $54.5 bln. EXPE’s revenue growth exceeded BKNG’s 9% adjusted revenue growth. BKNG’s reported revenue declined 1.2%, reflecting a $900 mln FTC-related reduction.
• B2B bookings increased 19% and revenue rose 23%, but EBITDA margin contracted 134 bps to 27.5% as partner compensation tiers and investment weighed. B2C bookings grew 7%, while approximately flat direct marketing spending helped expand EBITDA margin 273 bps to 43.5%. Management expects further marketing efficiencies at a slower pace.
• EXPE guided bookings growth of 3.3-5.2% and revenue growth of 4.0-5.7%, versus BKNG’s 2-4% bookings and 0-2% adjusted revenue growth. EXPE’s $830-$880 mln EBITDA outlook implies roughly flat growth at the midpoint and a 22.5-23.5% margin versus 23.9% last year. BKNG also expects approximately flat EBITDA. EXPE anticipates positive but more modest room-night growth, while BKNG guided 1-3%.
• EXPE cited election-related uncertainty, EMEA travel disruptions, tougher B2B promotional comparisons, and an earlier fall sale that shifted bookings into Q3. Acquisition costs and strategic investment add margin pressure. BKNG likewise cited geopolitical disruption and investment, but faces a larger currency headwind.

Briefing.com Analyst Insight

The contrasting stock reactions between EXPE and BKNG obscure broadly similar expectations for slower Q4 bookings and approximately flat EBITDA. EXPE’s earlier promotion boosted Q3 while reducing Q4 growth, making the sequential slowdown an imperfect measure of underlying demand. Its stronger B2C efficiency is encouraging, but B2B margin compression shows that rapid partner growth does not translate proportionately into profit. Sustaining earnings growth requires further marketing savings and customer retention to offset investment spending as revenue growth moderates.