Expedia Posts Record Q1 Profit as AI Investments Pay Off
Expedia Group reported its highest first-quarter profitability on record, with adjusted EBITDA rising 83% year over year to $542 million. The travel company's AI overhaul is now delivering measurable financial results.
Gross bookings reached $35.5 billion, up 13% compared to Q1 2025. Revenue totaled $3.4 billion, a 15% increase. The company booked 113.9 million room nights, up 6% from the prior year.
Net loss narrowed to $6 million, down 97% from a $200 million loss in the same quarter last year. CEO Ariane Gorin attributed the results to "double-digit bookings and revenue growth and meaningful margin expansion."
Where AI Moved the Needle
Expedia trained its AI models on hundreds of millions of traveler interactions. The company is using the technology to improve personalization, conversion rates, and customer service operations.
Two features saw the widest adoption: an AI-powered servicing agent and AI-driven filters. Travelers using the AI filters return more often and convert at higher rates. Vrbo saw higher conversion, while Expedia achieved record attach rates.
The company handled more than 250 million service interactions in the quarter. Over 30% of those were resolved through AI-powered self-service, a number Gorin said continues to grow. During Middle East flight cancellations, AI helped the company manage surging volumes while human agents focused on complex issues.
On the supply side, Expedia's property network grew 10% in the quarter, reaching 3.7 million listings. The company onboarded partners faster with AI assistance, with fastest growth outside the U.S.
Marketing and New Distribution Channels
AI-enabled marketing tools generated hundreds of millions in realized marketing value through workflow automation and improved productivity, Gorin said.
Answer engine optimization is now Expedia's fastest-growing channel. The company went live with ChatGPT ads in February and has integrations with ChatGPT and Claude. Traffic and bookings from AI-driven channels remain small, but the company sees promise in the conversion rates and purchase sizes from new users.
The company views answer engines as a long-term opportunity to reach engaged audiences across Google's Gemini, OpenAI's ChatGPT, and Anthropic's Claude.
B2B Growth and the Uber Deal
Expedia Group's B2B segment grew 25% to $1.2 billion in revenue. EBITDA margins in B2B held steady at 22.7% year over year.
Last week, Uber and Expedia announced a partnership bringing Expedia's hotel inventory to Uber's platform, with Vrbo short-term rentals to follow. Expedia is also integrating Uber into its own platform. Gorin said Uber is strong in regions where Expedia's brands have less presence, giving the company access to new demand.
The company plans to continue investing in B2B partnerships to support future growth, which Gorin said will weigh on near-term margins.
CFO Scott Schenkel steps down May 11 and will be succeeded by Derek Andersen.
For finance leaders assessing AI's business impact, Expedia's results provide concrete metrics: an 83% EBITDA increase tied directly to AI implementation, with specific breakdowns of conversion improvements, cost reductions in customer service, and new revenue channels. The company's B2B focus and partnership strategy show how AI extends beyond direct consumer benefits to create business-to-business opportunities.
Learn more about AI's financial implications in the CFO Learning Path or explore ChatGPT's business applications.
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