Report Date: Wednesday, August 5, 2026, after market close | Call: 1:30 p.m. PT / 4:30 p.m. ET
EXPE has been one of the stronger momentum stories in consumer internet heading into this print. Shares closed at $312.10 on August 4, a fresh 52-week high, after a run that has taken the stock from the high-$250s in late July to over $300 in a matter of days. A recent analyst update assigned an Outperform rating and a $334 price target, signaling notable upside from recent trading levels, and that optimism has been echoed repeatedly through late July: Expedia's price target was raised to $331 from $310 at BofA, to $322 from $262 at UBS, and to $300 from $290 at Morgan Stanley, while shares hit a new 52-week high after Truist Financial raised its price target on the stock from $246 to $309. Not everyone is chasing the move, though — Wells Fargo actually decreased its price target on Expedia from $307 to $303 and kept an Equal Weight rating, and the Street remains split, with a roughly even mix of Buy and Hold ratings rather than broad conviction.
That means the stock is arriving at earnings priced for a solid quarter: Expedia is up 13.3% over the past month and is heading into earnings with an average analyst price target of $293.71 versus a current share price of $302.23 — i.e., the stock now trades above the average Street target, raising the bar for what "good" needs to look like tomorrow.
These estimates sit at or slightly above the top end of management's own Q2 guidance issued in May: gross bookings of $32.5–33.1B (+7–9%) and revenue of $4.11–4.19B (+9–11%), with Adjusted EBITDA margin expansion of 50–100bps. A print in-line with consensus would essentially mean EXPE delivers at the high end of its own guide — consistent with its recent pattern of modest beats.
Q1 was strong on the surface but revealed real macro sensitivity beneath it. We had a strong first quarter underpinned by solid execution as well as progress on our strategic priorities — bookings grew 13%, revenue 15%, and EBITDA margin expanded by nearly 6 points, marking the highest first quarter margin in 15 years. But the quarter had a rough middle: momentum from late 2025 carried through February... In March, we hit a more challenging macro environment with the conflict in the Middle East and travel advisories in Mexico. Management quantified the hit: excluding these impacts, both bookings and room night growth would have been approximately 2 points higher for the quarter, and B2B (~2/3 non-U.S.) bore the brunt, with elevated cancellations across Europe and Asia. Management said trends had stabilized by April, but flagged that Q2 guidance already embedded caution: given the volatility we have seen recently and the ongoing geopolitical and macroeconomic uncertainty, we believe it is prudent to maintain our current full year outlook and provide an update when we report Q2 earnings.
This is the single most important thing to watch tomorrow. What was a contained regional disruption in Q1 has escalated materially into Q2. Since May, the U.S.–Israel war on Iran has intensified into a full-blown macro shock: the 2026 Iran war, including the closure of the Strait of Hormuz, has led to what the International Energy Agency has characterized as the "largest supply disruption in the history of the global oil market". The travel-specific effects have been severe: Bahrain, Iraq, Israel, Kuwait, Qatar, Syria and the UAE closed their airspace, and Iran's airspace was largely empty of civilian aircraft, while airspace closures in the UAE, Qatar, Kuwait, Bahrain and other Gulf states have led to over 4,000 daily flight cancellations, stranding hundreds of thousands of passengers. Jet fuel costs have spiked accordingly — jet fuel prices have rapidly doubled in the span of weeks, and airlines are already responding, with fares expected to rise 5–10%. This is showing up in peer results: Lufthansa's Q2 profit collapsed year-over-year and it narrowed 2026 guidance attributing the adjustment to expected drag from volatile kerosene prices, while IAG noted it flattened its capacity growth outlook due to the Middle East conflict, even as British Airways benefited from additional demand from corporate travelers rerouting to avoid the region. Domestically, gas prices are elevated as well, with drivers struggling with gas prices averaging more than $4 for a gallon of regular amid the oil shortage from the war.
Why this matters for EXPE specifically: management already disclosed that B2B (heavily international) and outbound EMEA/APAC corridors were disproportionately hit last quarter. If this conflict has persisted and even escalated through Q2 (April–June), investors should expect: (1) another explicit callout of bookings/room-night drag tied to the Middle East and possibly Mexico; (2) commentary on air ticket pricing and elasticity/bundling given rising fares; (3) whether cancellation rates re-elevated versus the "stabilized" April trend cited on the Q1 call. There are tentative signs of de-escalation — Iran and Oman are working toward a deal to reopen the disputed Strait of Hormuz — but that news is from this week, so it's unlikely to have benefited Q2 results and will mostly matter for the outlook commentary.
B2B deceleration should continue. On the Q1 call, management was explicit that the elevated partner-promotional tailwind was fading: API was again the largest contributor to growth and B2B continued to benefit from the elevated promotional activity... but it's at a decelerating rate of growth. And so the contribution to growth for B2B from that is less this quarter and we expect it to be a bit less next quarter. Watch for whether B2B growth (22% in Q1) has decelerated as flagged, and whether the new Uber exclusive hotel partnership and Bank of Montreal AIR MILES deal are starting to contribute.
Margin comps get harder from here. Management was candid that the extraordinary Q1 margin expansion (nearly 600bps) benefited from easy comps: as we look to the second half of the year, we expect marketing efficiency to moderate as we lap the elevated levels of leverage that we drove in the back half of '25. Q2 guidance of only 50–100bps of margin expansion (versus ~600bps in Q1) already reflects this moderation — the question is whether it undershoots or overshoots that.
AI costs are a real, if modest, headwind. CFO commentary flagged that token cost to go up... we're going to be adding back skills that we need to optimize our AI plans, and I think that will put some upward pressure on costs, offset by continued productivity gains across cost of sales and overhead.
This is the first full quarter under new CFO Derek Andersen (ex-Snap, ex-Amazon), who was appointed Chief Financial Officer effective May 11, 2026, succeeding Scott Schenkel. Investors will be listening for any shift in tone, capital-allocation philosophy, or disclosure style as Andersen settles into his first full quarterly report and full-year guidance update.
Management explicitly punted the full-year guidance update to this call. On Q1's call: given our first quarter performance and Q2 outlook, we would expect to come in at the high end of that range and we'll provide an update on our Q2 earnings call. Current FY26 guidance stands at gross bookings of $127–129B (+6–8%), revenue of $15.6–16.0B (+6–9%), and Adjusted EBITDA margin expansion of 100–125bps. Whether management raises, narrows, or reiterates this range — especially given the Iran-war overhang — will likely be the single biggest driver of the stock reaction, more so than the Q2 print itself.
Peer results this week suggest travel demand overall has stayed resilient despite the macro noise, but with clear deceleration signals: - Booking Holdings reported solid upside on all main KPIs, with bookings at $51B versus Street expectations of $49.7B and EPS at $2.54 versus $2.43, driven by resilient underlying travel demand despite geopolitical and macro uncertainty, but guided Q3 to constant FX revenue up 5% to 7% and gross bookings growth of 4% to 6% — a deceleration from prior growth rates that sets a cautious tone for the category into H2. - Vegas/leisure demand looks solid (MGM's Strip revenue rose on convention bookings and added flight capacity), while long-haul/Middle East-adjacent corridors are clearly impaired (Lufthansa, IAG).
Expect continued questions on generative AI disruption risk versus opportunity. Management's Q1 framing is likely to be reiterated: AI can be a powerful discovery layer but the actual booking and servicing is best handled by really a trusted, scaled provider, pointing to Answer Engine Optimization... now our fastest-growing channel and live integrations with ChatGPT and Claude. CEO Ariane Gorin also noted skepticism about AI-native checkout economics, referencing OpenAI's decision to scale back... a pullback in checkout reinforces our view that... the actual booking and servicing is best handled by a trusted, scaled provider — a talking point worth re-confirming given how fast this space is moving.
Expect continued emphasis on capital return: today, we announced that our Board approved a new $5 billion share repurchase authorization on top of the existing program, and the company has been active — since 2022, we have repurchased nearly 49 million shares, reducing our share count by 24% net of dilution. The balance sheet was also refreshed with a $2.5 billion revolving credit facility and a $1 billion of long-term debt issuance post-quarter, and the company maintains a $0.48/share quarterly dividend.
EXPE goes into this print with strong underlying momentum (record Q1 margins, resilient U.S. consumer, growing B2B partner network, buyback firepower) but also a materially escalated macro/geopolitical backdrop relative to Q1 — a real Iran war with airspace closures, doubled jet fuel costs, and a global oil shock, not merely "elevated cancellations." The stock has already re-rated sharply higher into the print (new highs, PT increases across the Street), which raises the bar: a simple beat-and-reiterate may not be enough to sustain the move, while any full-year guidance raise, continued margin durability, or evidence that B2B/international bookings have weathered the renewed Middle East disruption better than peers (Lufthansa, IAG) could be the difference between "sell the news" and further re-rating. Watch closely for: (1) the magnitude of any Middle East/Mexico bookings drag disclosed for Q2, (2) the FY26 guidance revision, (3) B2B growth deceleration pace, and (4) margin trajectory commentary into H2 as easy marketing-leverage comps roll off.