Expedia's (NASDAQ:EXPE) stock saw a nice little pop at the end of last week, after the company released its Q2 results. It beat the average analyst estimate for revenue, although it came up a bit short on the bottom line. Here's how the quarter played out for the big online travel agency.

Room for growth

For the quarter, Expedia's top line rose a meaty 18% on a year-over-year basis to nearly $2.59 billion, on gross bookings that increased 12% to $22.84 billion. Adjusted net income improved by 10% to just under $141 million, or $0.89 per share.

On average, analysts were projecting $2.54 billion on the top line, and a per-share earnings figure of $0.93.

Breaking down the results further, the company's "core" operations -- generally the older brands in its big portfolio, anchored by its namesake travel portal -- saw a 12% increase in revenue, matching the growth of gross bookings. On a conference call discussing the results, CEO Dara Khosrowshahi attributed this to "good momentum, evidenced by faster room night growth in every major region."

Two tourists at Tower Bridge look at an unfolded paper map.


Room night growth is a key driver of the company's results; 66% of its revenue during the quarter derived from accommodation bookings.

The core's top-line improvement was outpaced by several outlying company divisions. HomeAway, the rent-your-place-to-tourists service, grew its revenue by 30%. Trivago (NASDAQ:TRVG), recently spun off in an IPO yet still majority-held by Expedia, saw its top line expand by 62% and gross profit by 57%. Business-travel specialist Egencia, meanwhile, had more modest improvements.

These three units are still relatively small when matched against Expedia's core operations -- HomeAway brought in $409 million in revenue during the quarter, Trivago's top line was $399 million, and Egencia reaped $257 million. Still, as in quarters past, their hotter top-line growth is helping juice overall revenue.

The "good momentum" Khosrowshahi spoke of is providing a helpful lift to Expedia's results. But we should keep in mind that the online travel business, although it's dominated by Expedia and arch-rival Priceline Group, is a big space with a great many smaller operators jockeying for business.

That, plus the large-and-growing-ever-larger portfolio of both Expedia and Priceline, make it necessary to spend generously on publicizing and selling the services of its brands. In Q2, Expedia sacrificed over $1.4 billion on these efforts. On both an absolute basis and as a percentage of overall revenue, this amount was higher than in Q2 2016; it grew by 25% year over year to comprise 56% of the top line.

Double-digit delight

Investors like when their company posts double-digit improvements in key line items, no matter if it falls just short or comes in a bit over expectations. Such was the case with Expedia, which is doing a good job riding the momentum of a healthy global travel industry. 

If I were a shareholder, I'd be particularly optimistic about the performance of the HomeAway subsidiary; Expedia is clearly taking advantage of the DIY trend in accommodation just now. It's also good to see the robust growth of Trivago -- the Europe-based hotel search-engine operator boosts its parent's take in a crucial international market and reduces its reliance on U.S. business.

In all, it was a fine quarter for the company, which can hopefully keep riding that good momentum through the summer season -- the most crucial part of the year for travel operators. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.