What happened
Expedia Group (EXPE 2.01%) reported a larger-than-expected quarterly loss but also said it is seeing strong and sustainable demand for its travel services. Investors are focused on the future and sent shares of Expedia up as much as 10% on Friday.
So what
The travel industry has experienced a wild few years. A pandemic-induced drop-off in demand reversed as vaccines became more readily available. Airlines and hotels have continued to see strong bookings even as the economy has shown signs of weakening.
Expedia, one of the largest online travel agencies, is going along for the ride. The company said total gross bookings rose 20% to $29.4 billion, leading to a first-quarter company record of $2.67 billion in revenue and $2.9 billion in free cash flow.
"The first quarter saw strong travel demand driven by increasing international travel, major city travel, and the reopening in Asia," CEO Peter Kern said.
Expedia actually lost $0.20 per share in the quarter, which was significantly worse than the $0.04-per-share loss analysts had expected. But the market appears not to be concerned with that miss, because Expedia invested in areas like technology, customer loyalty, and growing its business-to-business platform.
Now what
Expedia also discussed its testing and deployment of artificial intelligence tools, including its recent integration of ChatGPT into its iOS platform. In a quarter during which investors are focused on AI, the discussion likely provided some added strength to the share price.
But the stock move also appears to be a bit of a relief rally. Expedia shares, despite the strong travel market, were about flat for the year heading into earnings. The stock has significantly trailed that of rival Booking Holdings (BKNG 1.41%), which was up about 35% year to date heading into earnings season.
If nothing else, Expedia's results indicate the business is taking its fair share of the market and benefiting from strong travel demand. That's enough for a strong step higher on Friday.
