Expedia Grew Revenue 12% to $4.9 Billion as AI Deal Economics Stay Open

Expedia Group reported third-quarter revenue of $4.9 billion, up 12% year over year, with net income of $1.03 billion, a 7% increase — and used the earnings call to frame AI platforms as a customer acquisition channel whose pricing has not yet been set.

CEO Ariane Gorin said Wednesday that the commercial terms of Expedia's partnerships with Meta's Muse and Google's AI Overviews are still under negotiation. "The economics of the partnerships are being worked out," she said. "We have a track record of being able to work with big advertising platforms or tech platforms to use them as channels to acquire customers at attractive economics, and that's what I think we'll see."

The comment carries weight because of Expedia's history with the channel it may be replacing: Google Search. In past years, Expedia executives repeatedly complained about the high cost of Google marketing. Whether AI platforms deliver customers at lower acquisition costs is now the open question for the online travel agency sector.

Gorin said the Muse integration is imminent, and that Expedia leads in U.S. citation share — how often its brands appear as a source cited by AI chatbots. She described the integrations as a learning tool: Expedia is studying how AI agents make decisions and which customers rely on them. Travelers who use agentic AI for discovery, she added, still want to book with a trusted brand.

What does this change for Expedia's P&L?

In the near term, little. The AI channel is still experimental and unpriced. The quarter's growth came from elsewhere.

• Revenue rose 12% to $4.9 billion
• Net income rose 7% to $1.03 billion
• Room nights grew 7%, matching Booking Holdings
• B2B revenue climbed 23% to $1.7 billion
• Consumer brands — Expedia, Hotels.com and Vrbo — grew 6%

Gorin tied the B2B outperformance to the CarTrawler and Tiqets acquisitions, which expanded the segment faster than the consumer portfolio for a second consecutive quarter of divergence.

Guidance up, fourth quarter softer

Expedia raised its full-year outlook. Gross bookings guidance moved to 10% growth from a prior 8-9%, and revenue guidance moved to 11-12% from 9-10%.

CFO Derek Andersen flagged a deceleration ahead, saying the fourth-quarter environment is softer than the third. He cited disruptions in the Middle East and unrest in some European cities as drags on travel demand.

The tension for operators and investors is straightforward: core consumer growth of 6% is modest, B2B and acquisitions are doing the heavy lifting, and the AI channel that Gorin is betting on has no settled price tag. If Muse and AI Overviews replicate the cost structure of Google Search, the margin benefit will be limited; if they undercut it, customer acquisition economics improve industry-wide.

Gorin's answer is that Expedia's history of striking favorable deals with dominant platforms will hold. Until the negotiation concludes, the market will watch whether the Muse integration, expected imminently, produces bookable traffic at attractive cost.