Q1 2024 Expedia Group Inc Earnings Call

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Thank you for your patient stick specie, great Q1, 2021 not true results teleconference will begin shortly.

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Operator: Thank you for your patience. The Expedia Group Q1 2024 financial results teleconference will begin shortly. ?? Good day everyone and welcome to the Expedia Group Q1 2024 Financial Results Teleconference. My name is Lauren, and I will be the operator for today's call. If you wish to ask a question at the end of the presentation, please press star floating 1 on your telephone keypad. If you change your mind, please press star 432 to cancel your request. For opening remarks, I will turn the call over to SVP of Corporate Development Strategy and Investor Relations, Harshit Vaish. Please go ahead.

Good day, everyone and welcome to the Expedia Group Q1, 'twenty 'twenty four financial results teleconference.

Lauren: My name is Lauren and I'll be real creative to today's call.

Lauren: If you wish to ask a question at the end of the presentation. Please press star one on your telephone keypad.

Operator: If you change your mind, please crosstalk like buy two to cancel your request.

Harshit Vaish: For opening remarks, I will turn the call over to SVP corporate development strategy and Investor Relations. Please go ahead.

Harshit Vaish: Good afternoon, and welcome to Expedia Group's first quarter 2024 earnings call. I'm pleased to be joined on today's call by our CEO, Peter Kern, our CFO, Julie Whalen, and our incoming CEO, Ariane Gorin.

Harshit Vaish: Good afternoon, and welcome to Expedia group's first quarter earnings call I'm pleased to be joined on today's call by our CEO, Peter Cohen, our CFO Julie Whalen.

Harshit Vaish: Incoming CEO already on godaddy.

Harshit Vaish: As a reminder, our commentary today will include references to certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in our earnings release, and, unless otherwise stated, any reference to expenses excludes stock-based compensation. We will also be making forward-looking statements during the call, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict.

Harshit Vaish: As a reminder.

Harshit Vaish: Commentary David include references to certain non-GAAP measures.

Harshit Vaish: Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in our earnings release, and unless otherwise stated and he referenced VIX centers excludes stock based compensation.

Harshit Vaish: It will also be making forward looking statements during the call, which are predictions projections or other statements about future events.

Harshit Vaish: These statements are based on current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict actual results could materially differ due to factors discussed during this call and in our most recent forms 10-K, 10-Q and other filings with the SEC, except as required by law, we do not undertake any of this possibility to update these forward looking.

Harshit Vaish: Actual results could materially differ due to factors discussed during this call and in our most recent Forms 10-K, 10-Q, and other filings with the SEC. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. Our earnings release, SEC filings, and a replay of today's call can be found on our investor relations website at ir.expediagroup.com.

Harshit Vaish: Statements.

Harshit Vaish: Earnings release, SEC filings and a replay of today's call can be found on our Investor Relations website at IR Expedia group Dot com and with that let me turn the call over to Peter.

Peter Maxwell Kern: Good afternoon, and thank you all for joining us today. As you will know by now, this will be my last earnings call. I'm excited to be handing the reins over to Ariane, and we have reserved time for her to share some thoughts after Julie's so you can get a sense of her ambition for the company going forward. Ariane and I have been working closely these last few months to make sure she can take over without a hitch, and I just want to say I am truly excited to see how she and our team bring this company forward and accelerate on top of everything we have built over these last several years.

Speaker Change: Good afternoon, and thank you all for joining us today.

Peter Maxwell Kern: As you all know by now this will be my last earnings call I'm excited to be handing the reins over to Ari on and we have reserve time for her to share some thoughts after Julie So you can get a sense of her ambition for the company going forward.

Peter Maxwell Kern: And I've been working closely these last few months to make sure. She can take over without a hitch and I just want to say I'm truly excited to see how she and our team, bringing this company forward and accelerate on top of everything we have built over these last several years.

Peter Maxwell Kern: As for the quarter, we saw a healthy but more normalized market environment for travel globally. North America remains the slowest-growing geography relative to major international markets, but the gap is closing now that we are largely past the pandemic-driven recovery. Adjusting for geography and product mix, prices held up in general for lodging but were under continued pressure in the air and car business. Against this backdrop, our results for the first quarter of 2024 met our guidance with a revenue and EBITDA beat, but less robust gross bookings.

Peter Maxwell Kern: That's for the quarter, we saw a healthy but more normalized market environment for travel globally, North America remains the slowest growing geography relative to major international markets, but the gap is closing now that we're largely past the pandemic driven recovery adjusting for Geo and product mix prices held up in general for lodging, but were under continued pressure in the air.

Peter Maxwell Kern: Air and car business.

Peter Maxwell Kern: Against this backdrop our results for the first quarter of 'twenty four met our guidance with a revenue and EBITDA beat but less robust gross bookings Julia will get into the details, but revenue and EBITDA performance benefited from our mix of business a strong performance in our advertising business and our decision to invest more in pricing actions as opposed to direct marketing.

Peter Maxwell Kern: Julie will get into the details, but revenue and EBITDA performance benefited from our mix of businesses, a strong performance in our advertising business, and our decision to invest more in pricing actions as opposed to direct marketing. As for gross bookings, our B2B business continued its strong performance, and our B2C business, excluding Vrbo, was in line with our expectations. Unfortunately, that only partly made up for a slower-than-expected ramp-up for Vrbo post its technical migration. As we discussed last quarter, we had pulled back on Vrbo marketing in the second half of last year while we went through our migration.

Peter Maxwell Kern: As for gross bookings, our <unk> business continued its strong performance in our B to C business excluding per BOE was in line with our expectations. Unfortunately that only partly made up for a slower than expected ramp up for her about post its technical migration.

Peter Maxwell Kern: As we discussed last quarter, we had pulled back on verbal marketing in the second half of last year, while we went through our migration and while we have been ramping that spend on the product has been improving and we have seen a slower than expected recovery.

Peter Maxwell Kern: And while we have been ramping that spend, and the product has been improving, we have seen a slower-than-expected recovery. Based on this and the overall trends in our B2C business so far in Q2, we expect growth to be lower than what we had initially anticipated for 2024. We are therefore lowering our full-year guidance to a range of mid- to high-single-digit top-line growth with margins relatively in line with last

Peter Maxwell Kern: Based on this and the overall trends in our <unk> business. So far in Q2, we expect growth to be lower than what we had initially anticipated for 'twenty. Four we are therefore, lowering our full year guidance to a range of mid to high single digit topline growth with margins relatively in line with last year.

Peter Maxwell Kern: We still expect to see broad improvement across 24 in our B2C business, with the best early indicator being the conversion gains we have seen driven by higher test velocity and feature rollouts. Behind that, we will continue to invest in Vrbo and our international growth markets to reignite those flywheels to set us up for continued growth in the years to come. All in all, I'm pleased to say that while momentum is not yet back consistently in all the business lines, we are improving every day, learning to optimize all of our new capabilities, and I have tremendous faith in our team's ability to extract the full potential of what we have built.

Peter Maxwell Kern: We still expect to see broad improvement across 24 in our <unk> business.

Peter Maxwell Kern: With the best early indicator being the conversion gains we've seen driven by higher test velocity and future Rollouts behind that we will continue to invest in vivo and our international growth markets to reignite those flywheels to set us up for continued growth in the years to come all in all I'm pleased to say that while momentum is not yet back consistently in all the business lines, we are improving.

Peter Maxwell Kern: Moving everyday learning to optimize all of our new capabilities and I have tremendous faith in our teams ability to extract the full potential of what we've built.

Peter Maxwell Kern: With that, I will just close by expressing my profound appreciation to all our teams at Expedia for their dedication throughout our multi-year, often painful, transformation journey. When the returns from this work are fully realized, we will owe this determined bunch of people a great debt of gratitude. I also want to thank all of you, our existing shareholders, the analysts covering us, and the broader investor community who have been with us along this sometimes bumpy journey.

Speaker Change: With that I'll, just close by expressing my profound appreciation to all our teams at Expedia for their dedication throughout our multiyear often painful transformation journey when their turns from this work are fully realized we will over this determined bunch of people a great debt of gratitude I also want to thank all of you our existing shareholders the analysts covering us and the broader investor community.

Peter Maxwell Kern: Who have been with US a long list, sometimes bumpy journey. There was a reason most companies don't undertake transformation on this scale and it takes patience and a commitment to understanding that come along for this journey.

Peter Maxwell Kern: There is a reason most companies don't undertake transformation on this scale, and it takes patience and a commitment to understanding to come along for this journey. I'm very appreciative of all the constructive engagement over the years, and it has been a pleasure working with all of you.

Peter Maxwell Kern: I'm very appreciative of all the constructive engagement over the years and it has been a pleasure working with all of you so with that over to Julie.

Julie P. Whalen: Thank you, Peter, and good afternoon, everyone. Let me start with the key metrics for the first quarter. Total gross bookings of $30.2 billion were up 3% versus last year. Growth was driven primarily by total lodging gross bookings, which grew 4%, led by our hotel business growing 12%. This strong hotel growth was partially offset by the ongoing softness in our Vrbo business that, while improving, is taking longer than expected to fully recover.

Speaker Change: You Peter and good afternoon, everyone. Let me start with the key metrics for the first quarter total gross bookings of $30 2 billion were up 3% versus last year growth was driven primarily by total lodging gross bookings, which grew 4% led by our hotel business growing 12%. This strong hotel growth was partially offset by the ongoing soft.

Julie P. Whalen: And our variable business, while improving is taking longer than expected to fully recover.

Julie P. Whalen: Revenue of $2.9 billion grew 8% versus last year, led by B2B, Brand Expedia, and their advertising business. The revenue strength was driven by higher revenue margins, which increased over 50 basis points from a product and geo mix during the quarter, increased advertising revenue, which contributes to revenue, but not gross bookings, and Napoleon of Stays in Q1, driven by the Easter ship. Cost of sales was $356 million for the quarter and $55 million, or 13% lower versus last year, which combined with our strong revenue growth drove approximately 310 basis points of leverage as a percentage of revenue year over year.

Julie P. Whalen: Revenue of $2 9 billion and grew 8% versus last year led by BTB brand Expedia and our advertising businesses.

Julie P. Whalen: The revenue strength was driven by higher revenue margins, which increased over 50 basis points from a product and genomics during the quarter increased advertising revenue, which contributes to revenue, but not gross bookings.

Julie P. Whalen: And the pull in of stays in Q1, driven by the Easter shift.

Julie P. Whalen: Cost of sales was $356 million for the quarter and $55 million or 13% lower versus last year, which combined with our strong revenue growth drove approximately 310 basis points of leverage as a percentage of revenue year over year. We are pleased to see our ongoing initiatives delivering transactional efficiencies.

Julie P. Whalen: We are pleased to see our ongoing initiatives delivering transactional efficiency. Direct sales and marketing expense in the first quarter were $1.7 billion, which was up 11% versus last year. Sales and marketing deleveraged this quarter as a percentage of gross bookings primarily due to commissions to our partners as a result of our strong growth in our B2B business, with growth of 25%. As we have stated previously, commissions paid to our B2B partners are in our direct sales and marketing line and are more expensive as a percentage of revenue than our B2C business. However, because they are generally paid on a state basis at contractually agreed-upon percentages, the returns are more guaranteed and immediate.

Julie P. Whalen: Direct sales and marketing expense in the first quarter was $1 7 billion, which was up 11% versus last year sale.

Julie P. Whalen: Sales and marketing deleverage this quarter as a percentage of gross bookings primarily due to the commissions to our partners as a result of our strong growth in our <unk> business with growth of 25%.

Julie P. Whalen: As we have stated previously commissions paid to our <unk> partners are in our direct sales and marketing line and are more expensive as a percentage of revenue than our b to C business.

Julie P. Whalen: However, because they are generally paid on a state basis do you contractually agreed upon percentages that returns are more guaranteed kind of media.

Julie P. Whalen: In our B2C business, we also saw some marketing deleverage this quarter as we reinvested back into our Vrbo business to drive improving growth and increased investments to drive our global market expansion, one of our key strategic growth initiatives this year. Overall, overhead expenses were $611 million, an increase of $23 million versus last year, or 4%, leveraging 95 basis points. We were able to drive our costs below our revenue growth, particularly in our product and tech operations.

Julie P. Whalen: And our B to C business. We also saw some marketing deleverage this quarter as we reinvested back into our verbal business to drive improving growth and our increased investments to drive our global market expansion one of our key strategic growth initiatives. This year.

Julie P. Whalen: Overhead expenses were $611 million, an increase of $23 million versus last year, or 4% leveraging 95 basis points.

Julie P. Whalen: We were able to drive our cost below our revenue growth, particularly in our product and tech operations and now that we are done with the major boulders a platform migration, we remain committed to driving further efficiencies across our P&L.

Julie P. Whalen: And now that we are done with the major boulders of platform migration, we remain committed to driving further efficiencies across our P&L. To that end, in February, we announced cost actions that will impact approximately 1,500 employees this year.

Julie P. Whalen: To that end in February we announced cost actions that will impact approximately 500 employees through this year. We expect that these actions will unlock substantial savings on an annualized basis across capitalized labor cost of sales and overhead costs.

Julie P. Whalen: We expect that these actions will unlock substantial savings on an annualized basis across capitalized labor, cost of sales, and overhead costs. And as a result of all of these factors, we delivered strong first-quarter EBITDA of $255 million, which was up 38% year over year, with an EBITDA margin of 8.8%, expanding over 190 basis points year over year. This was higher than expected, given the higher revenue we delivered and the leverage to the P&L that it provided, along with lower cost of sales, both of which more than offset our marketing investments to drive future growth.

Julie P. Whalen: And as a result of all of these factors, we delivered strong first quarter EBITDA of $255 million, which was up 38% year over year with an EBITDA margin of eight 8% expanding over 190 basis points year over year.

Julie P. Whalen: This was higher than expected given the higher revenue, we delivered and the leverage to the P&L about provides along with lower cost of sales both of which more than offset our marketing investments to drive future growth.

Julie P. Whalen: It is also important to note that EBITDA also benefited from a decision we made to invest more in pricing actions as opposed to additional direct marketing. These pricing actions are reflected in the P&L when the stay occurs.

Julie P. Whalen: It is also important to note that EBITDA also benefited from a decision we made to invest more in pricing actions as opposed to additional direct marketing. These pricing actions are reflected in the P&L. When the stay occurs as a result, these investments will instead impact future quarters as contra revenue when the state has come in.

Julie P. Whalen: As a result, these investments will instead impact future quarters as contra revenue when the stay is coming. Starting this quarter, in addition to EBITDA, we are providing additional disclosure around our EBIT performance, which includes the impact of stock-based compensation, depreciation, and amortization. In the first quarter, EBIT was negative 59 million with a margin of negative 2.1 percent, an improvement of 51 million or 205 basis points versus last year. The additional approximately 15 basis points of expansion as compared to EBITDA are driven by leverage from stock-based compensation.

Julie P. Whalen: Starting this quarter. In addition to EBITDA, we are providing additional disclosure around our EBIT performance, which includes the impact of stock based compensation depreciation and amortization.

Julie P. Whalen: In the first quarter EBIT was negative $59 million with a margin of negative two 1% an improvement of $51 million or 205 basis points versus last year. The.

Julie P. Whalen: The additional approximately 15 basis points of expansion as compared to EBITDA is driven by leverage from stock based compensation.

Julie P. Whalen: Our first quarter EBITDA growth enabled us to generate another quarter of robust free cash flow at $2.7 billion. The year-over-year decline in free cash flow is associated with timing changes within working capital, which includes lower deferred merchant bookings primarily driven by the softness and Vrbo bookings this quarter. Moving on to our balance sheet, we ended the quarter with strong liquidity of $8.2 billion, driven by our unrestricted cash balance of $5.7 billion and our undrawn revolving line of credit of $2.5 billion. Our debt level remains at approximately $6.3 billion, with an average cost of only 3.7%.

Julie P. Whalen: Our first quarter EBITDA growth enabled us to generate another quarter of robust free cash flow at $2 7 billion the year over year decline in free cash flow is associated with timing changes within working capital, which includes lower deferred merchant bookings, primarily driven by the softness in verbal bookings this quarter.

Julie P. Whalen: Moving on to our balance sheet, we ended the quarter with strong liquidity of $8 2 billion driven by our unrestricted cash balance of $5 7 billion and our Undrawn revolving line of credit of $2 5 billion.

Julie P. Whalen: Our debt level remains at approximately $6 3 billion with an average cost at only three 7% our gross leverage ratio at a further reduced to three times continues to make progress towards our target gross leverage ratio of two times driven by our ongoing strong EBITDA growth.

Julie P. Whalen: Our gross leverage ratio, at a further reduced 2.3 times, continues to make progress towards our target gross leverage ratio of 2 times, driven by our ongoing strong EBITDA growth. Our strong cash position enabled us to continue repurchasing shares, with over 780 million, or approximately 5.7 million shares repurchased year-to-date. And we continue to believe that our stock remains undervalued and does not reflect our expected long-term performance of the business. As such, we will utilize the strong cash-generating power of our business and our remaining $4.1 billion share repurchase authorization to continue to buy back our stock opportunistically.

Julie P. Whalen: Our strong cash position enabled us to continue repurchasing shares with over $780 million or approximately five 7 million shares repurchased year to date and we continue to believe that our stock remains undervalued and does not reflect our expected long term performance of the business.

Julie P. Whalen: As such we will utilize our strong cash generating power of our business and our remaining $4 1 billion share repurchase authorization to continue to buy back our stock Opportunistically.

Julie P. Whalen: As far as our financial outlook is concerned, given the lower-than-expected growth in gross bookings in the first quarter and the trends we are seeing so far in the second quarter in our B2C business, in particular in Vrbo, we are lowering our full-year guidance to reflect the range of possible outcomes on the top line while we continue to invest in marketing to drive growth for Vrbo and international markets. As such, we believe our top-line growth will now be in the range of mid- to high-single-digit growth, with EBITDA and EBIT margins relatively in line with last year.

Julie P. Whalen: As far as our financial outlook, given the lower than expected growth in gross bookings in the first quarter and the trends we are seeing so far in the second quarter in our <unk> business in particular in verbal we are lowering our full year guidance to reflect the range of possible outcomes on the top line, while we continue to invest in marketing to drive growth for <unk> in international markets.

Julie P. Whalen: As such we believe our top line growth will now be in the range of mid to high single digit growth with EBITDA and EBIT margins relatively in line with last year.

Julie P. Whalen: In the shorter term, we expect our second quarter to deliver top-line growth in the mid-single digits, which reflects a sequential acceleration in gross bookings from the first quarter, as we expect Vrbo to continue to improve from our marketing investments. We expect revenue growth to be lower than the first quarter growth rate given the lower gross bookings in the first quarter, the pull-forward of Easter stays into the first quarter, and the contra revenue arising from pricing action.

Julie P. Whalen: In the shorter term, we expect our second quarter to deliver topline growth in the mid single digits, which reflects a sequential acceleration in gross bookings from the first quarter as we expect <unk> to continue to improve from our marketing investments, we expect revenue growth to be lower than the first quarter growth rate given the lower gross bookings in the first quarter the pull forward of Easter stay.

Julie P. Whalen: As into the first quarter and the Contra revenue arising from pricing actions and with this revenue growth along with our continued investments in marketing to drive growth. We expect some pressure in our second quarter, EBITDA and EBIT margins versus last year.

Julie P. Whalen: And with this revenue growth, along with our continued investments in marketing to drive growth, we expect some pressure on our second quarter EBITDA and EBIT margins versus last year. However, when combined with our first quarter outperformance, we expect EBITDA and EBIT margins to be relatively in line with last year to slightly above in the first half. In closing, despite the lower guidance, we remain committed to the long-term opportunity that our transformation has given us to deliver profitable growth and shareholder return. And with that, I will turn the call over to Ariane. Thanks, Julie.

Ariane: However, when combined with our first quarter outperformance, we expect EBITDA and EBIT margins to be relatively in line with last year, just slightly above in the first half.

Ariane: In closing despite the lower guidance, we remain committed to the long term opportunity that our transformation has given us to deliver profitable growth and shareholder returns.

Ariane: With that let me turn the call over to our young thanks, Julie and thank you Peter for your leadership over the last four years and for all I've learned working closely with you.

Ariane Gorin: Thanks, Julie, and thank you, Peter, for your leadership over the last four years and for all I've learned working closely with you. I joined our company 11 years ago and most recently led Expedia for Business. This includes our B2B and advertising businesses, both of which have consistently delivered double-digit growth. I also led our global supply teams that source inventory for our whole company, so I know our industry very well. And having lived in Europe for the last 23 years, I've seen firsthand the opportunity for us in international markets.

Ariane Gorin: I joined our company 11 years ago, and most recently led Expedia for business. This is.

Ariane Gorin: Includes our b to B and advertising businesses, both of which have consistently delivered double digit growth.

Ariane Gorin: I also led our global supply team has been horse inventory for our whole company. So I know our industry very well.

Ariane Gorin: And having lived in Europe for the last 23 years I've seen firsthand the opportunity for us and international markets.

Ariane Gorin: My immediate priority as CEO is to work with our teams to accelerate our growth and to sharpen the longer-term strategy for our consumer business. Since our leadership announcement in February, I've spent time getting to know our consumer business in more detail. It's undergone extreme transformation over the last few years, from technical migrations and changes in our loyalty program to changes in how our teams operate. So we've dealt with a lot of terms.

Ariane Gorin: My immediate priority as CEO is to work with our teams to accelerate our growth and to sharpen our longer term strategy for our consumer business.

Ariane Gorin: Since our leadership announcement in February I've spent time getting to know our consumer business in more detail.

Ariane Gorin: It's undergone extreme transformation over the last few years from technical migrations and changes in our loyalty program to changes in how our teams operate the business. So we've dealt with a lot of turbulence.

Ariane Gorin: While we built new capabilities like our common front end, we had less development capacity to build new features, and this, in turn, impacted the competitiveness of some of our brands and products. Expedia, which was our least disrupted brand, benefited a lot from our investments and has grown very well, while Hotels.com and Vrbo, which were the most impacted by our migrations, aren't where we'd like them to be.

Ariane Gorin: While we built new capabilities like our common front and we had less development capacity to build new features and this in turn impacted the competitiveness of some of our brands and products.

Ariane Gorin: Expedia, which was our least disrupted brand benefited a lot from our investments are growing very well.

Ariane Gorin: Tell us how common for a battle, which were the most impacted by our migrations aren't where we'd like them to me.

Ariane Gorin: To get the acceleration we want from our consumer business, we need to focus on driving traffic, increasing conversion, and expanding our margins through higher attach, take rates, and more efficient marketing. Ultimately, this is going to come down to having great products and great brand value properties. Our platform now allows us to innovate at scale, and we're running more tests and seeing the benefits of AI across all of our brands, which is great, but we're still learning how to use all of this most effectively.

Ariane Gorin: To get the acceleration, we want from our consumer business, we need to focus on the basics driving traffic, increasing conversion and expanding our margins through higher attach take rates and more efficient marketing.

Ariane Gorin: Ultimately this is going to come down to having great products and great brand value proposition.

Ariane Gorin: Our platform now allows us to innovate at scale and we're running more tests and seeing the benefits of AI across all of our brands, which is great.

Ariane Gorin: But we're still learning to use all of this most effectively.

Ariane Gorin: For example, a recommendation algorithm gets smarter faster because of our scale, but it has to be trained on the differences between a travel or shopping search on Vrbo compared to one on Expedia, and tests that work on one brand may behave differently on another.

Ariane Gorin: For example, our recommendation algorithm get smarter faster because of our scale, but it has to be trained on the differences between the traveler shopping on turbo compared to one on Expedia.

Ariane Gorin: And tests that work on one brand may behave differently on another.

Ariane Gorin: While we still have some work to fully complete our tech platform, moving forward, we'll dedicate more of our development capacity to building great traveler experiences and making up for lost time. Looking ahead, it's going to take somewhat longer than we'd anticipated to see the benefits come through in our numbers. The investments we've made in rebuilding our consumer business will pay off. Our new tech platform gives us a solid foundation to grow our business, and we also have other real strengths to build on. We're leaders in the B2B segment and just posted another fantastic quarter. And there's still a big opportunity to win share.

Ariane Gorin: While we still have some work to fully complete our tech platform moving forward will dedicate more of our development capacity to building, great traveler experiences and making up for lost time.

Ariane Gorin: Looking ahead, while it's going to take somewhat longer than we'd anticipated to see the benefits come through in our numbers.

Ariane Gorin: Estimates, we've made rebuilding our consumer business will pay off.

Ariane Gorin: Our new Tech platform gives us a solid foundation to grow our business.

Ariane Gorin: And we also have other real strengths to build on.

Ariane Gorin: We're leaders in the <unk> segment, and just posted another fantastic quarter, and Theres still a big opportunity to win share.

Ariane Gorin: Our advertising business is big, differentiated, and growing, and I equally see lots of opportunity ahead. We have strong relationships with our supply partners and great supply for our travelers. And of course, our consumer business is the market leader in the U.S. with well-recognized and loved brands, and we're starting to get traction as we move back into the international market. As you know, we're also focused on driving, and we'll continue to look carefully at every dollar we invest.

Ariane Gorin: Our advertising business is a big differentiator and growing and I equal and we see lots of opportunity ahead here.

Ariane Gorin: We have strong relationships with our supply partners and great supply for our travelers and of course, our consumer business as the market leader in the U S with well recognized and loved brands and we're starting to get traction as we move back into international markets.

Ariane Gorin: As you know we're also focused on driving efficiencies and we'll continue to look carefully at every dollar we invest.

Ariane Gorin: So, in closing, we have great consumer brands, a leading B2B business, a powerful platform, and what I think is the best team in travel. We have lots of work to do to realize our potential, and I couldn't be more excited about the opportunity ahead. And with that, I will open the call to questions.

Ariane Gorin: So in closing we have great consumer brands, our leading beauty business, our powerful platform and what I think is the best team in travel.

Ariane Gorin: We have lots of work to do to realize our potential and I couldn't be more excited about the opportunity ahead and with that let me open the call for questions.

Operator: As a reminder, if you would like to ask a question, please press star followed by 1 on your telephone keypad. If you would like to retract your question, please press star 102. Our first question comes from Eric Sheridan from Goldman Sachs. Please go ahead.

Speaker Change: As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.

Eric Sheridan: If you would like to retract your question. Please press Star Gucci.

Operator: Our first question comes from Eric Sheridan from Goldman Sachs. Please go ahead.

Eric Sheridan: Thanks so much for taking the questions and wishing you the best going forward Peter and congratulations on the new role Ariane. Peter, maybe we can come back to Vrbo for a minute and just what do you think about that asset compared to where the competitive landscape is across travel and shared accommodation specifically? And when you think about leaning into investments to potentially accelerate Vrbo and improve its positioning, what kind of signals are you guys as a team looking for to know it's the moment to sort of lean in behind some of those investments to get it back to more normalized growth? Thank you.

Eric Sheridan: Thanks, so much for taking the questions and wishing you the best going forward, Peter and congrats on the new role.

Eric Sheridan: Peter maybe can we come back to <unk> for a minute and just.

Eric Sheridan: How do you think about that asset compared to where the competitive landscape is.

Eric Sheridan: Travel and shared accommodation, specifically and when you think about leaning into investments to potentially accelerate <unk> and improve its positioning what kind of signals are you guys as a team looking for.

Eric Sheridan: To know what is the moment to sort of lean in behind some of those investments to get it back to more normalized growth. Thank you.

Peter Maxwell Kern: Sure. Thanks, Eric.

Eric Sheridan: Sure Thanks, Eric and for everyone's benefit a bad story on to chip in whereas where she'd like along with these questions.

Speaker Change: And to whatever you have specifically for her but specifically to <unk>.

Peter Maxwell Kern: And for everyone's benefit, I've asked Ariane to, you know, chip in where she'd like along with these questions, in addition to whatever you have specifically for her. But specifically to Vrbo, the way we see it is that we are very strong in our core business, Vrbo, which does not compete with shared accommodations. It does not compete directly with some of our competitors in some geographies and some cities. And we are really focused on just being excellent in our space, which is the whole home space in certain markets where we have the right to win and a strong brand and strong supply, et cetera.

Peter Maxwell Kern: You know the way we see it as a we are very strong in our core business of verbal which does not compete with shared accommodations that does not compete directly with some of our competitors in some in some geographies and some cities and we are really focused on just.

Peter Maxwell Kern: Being excellent in our space, which is the whole home space.

Peter Maxwell Kern: In certain markets, where we have the right to win in as strong a strong brand and strong supply et cetera. So that is our core focus for now we could always Oregon may expand that remained at some point, but that's where we focus now as far as what we're seeing as.

Peter Maxwell Kern: So that is our core focus for now. We could always – Ariane may expand that remit at some point, but that's where we're focused now. As far as what we're seeing, as we talked about before, our spend down in the back half of last year, the migration we've been through obviously had a lingering impact on the product. And the first quarter is an important quarter for Vrbo, so it's unfortunate that it wasn't as strong as we wanted there.

Peter Maxwell Kern: As we talked about before our spend down in the back half of last year. The migration. We've been through obviously you had a lingering impact on the product in first quarter is an important quarter for verbose. So it's unfortunate that it wasn't as strong as we wanted there, but we are seeing real improvement in the products.

Peter Maxwell Kern: But we are seeing real improvement in the products, and we're leaning into investment to sort of spin up the flywheel to just get it going again. So it's not so much that we see any flaws in it. It's just got to be re-spent on. And because Vr is not as performance marketing-driven, we don't have that ability to just go into meta and other places and ramp everything up.

Peter Maxwell Kern: We're leaning into investment to sort of spin up the flywheel to just get it going again, so it's not so much that we see any flaws in it. It's just got to be re spent into and because we are as not as performance marketing driven we don't have that ability to just go into a matter in other places and ramp everything up we've got to spend on brand and build it and that's <unk>.

Peter Maxwell Kern: We've got to spend on the brand and build it, and that's taking some time to lean back into, but we feel very good about the progress. We're hopeful that it will continue, obviously, and we feel really good about the product improvement. So we will continue to invest behind that, but what we're really looking for is we know the spend is working, we know we're driving improvement, and it's just a question of how far, how fast, and what the timing and the seasonality differences, et cetera. But that's what we're investing in this year to get it back on a growth trajectory. And I would just add, you know, again.

Peter Maxwell Kern: Taking some time to lean back into but we feel very good about the progress. We're hopeful that it continues obviously and we feel really good about the product improvement. So we will continue to invest behind that but what we're really looking for is we know that we know the spend is working we know we're driving improvement and it's just a question of how far how fast and whats.

Peter Maxwell Kern: The timing and the seasonality differences et cetera, but that's what we're spending into this year to get it back on a growth trajectory and I would just add.

Ariane Gorin: And I would just add, you know, again, yes, we have deep belief and conviction in Vrbo and also our other brands of Expedia and Hotels.com; we do sell some alternative accommodations on those brands, so we also have an opportunity to go after that market with those brands as well.

Ariane Gorin: Again, yes, we have deep belief and conviction in vivo and also our other brands of Expedia and hotels Dot com, we do sell some alternative accommodations on those brands. So we also have an opportunity to go after that market with those brands as well.

Speaker Change: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from Lee Horowitz from Deutsche Bank. Lee, please go ahead.

Speaker Change: Thank you.

Ariane Gorin: Next question comes from Lee Horowitz from Deutsche Bank. Please go ahead.

Lee Horowitz: Great. Thanks so much for taking the time to answer the question. I guess previously your guidance for the full year seemingly expected share gains across your largest business lines. Is there any change to that view given sort of the more cautious outlook for the full year, or is this really all Vrbo centric? And then relatedly, when you think about the acceleration you're seeing in your non-Vrbo B2C business, what's ultimately going on there? Is it the market, or is it just the stacking of the things that you're doing? And how do you get comfortable that that acceleration can sustain itself through the balance of the year?

Lee Horowitz: Great. Thanks, so much for taking my question.

Lee Horowitz: Yes, I guess previously you your guidance for the full year seemingly expected share gains across your largest business lines is there any change to that view given sort of the more cautious outlook for the full year or is this really all verbose centric and then relatedly. When do you think about the acceleration youre seeing in your non verbal b to C business.

Peter Maxwell Kern: Thanks so much.

Peter Maxwell Kern: Whats really going on there is it the market or is it just.

Peter Maxwell Kern: The stacking of the things that you're doing and how do you get comfortable that that acceleration can sustain through the balance of the year. Thanks. So much.

Peter Maxwell Kern: Yeah, so let me take a crack. Thank you, Lee. And then Ariane and Julie can jump in.

Speaker Change: Yeah. So let me let me take a crack thank you Lee.

Speaker Change: And then alright, and Julie can jump in but I would say that.

Peter Maxwell Kern: But I would say that... What we see in Vrbo and, sorry. So there were two questions, the non-Vrbo piece and the Vrbo piece. On the non-Vrbo piece, we've been making improvements in the product consistently. HCOM went through a migration a while ago, but we are still making improvements and getting it back to, you know, on the best footing we can.

Peter Maxwell Kern: What we see in vivo and.

Peter Maxwell Kern: Sorry.

Peter Maxwell Kern: Okay.

Peter Maxwell Kern: So there were two questions the non-verbal piece and the verb of piece and the non verbal piece, we've been making improvements in the product consistently it's gone went through migration, a while ago, but it's still we are making improvements and getting it back to you know on the best footing. We can so we are seeing continuous improvement.

Peter Maxwell Kern: So we are seeing continuous improvement in the product. We are seeing big wins across the platform, whether it's coming from machine learning or other areas that are, you know, that we can deploy much faster across the entire slate of apps and products. So we're getting wins, we're getting product wins, we're getting conversion wins. So that gives us confidence, and all of that ultimately leads to better conversion, more efficient marketing, and everything else.

Peter Maxwell Kern: And the product we are seeing big wins across the platform, whether it's coming from machine learning or other areas that are that we can deploy much faster across the entire slate of Av.

Peter Maxwell Kern: Abaxis products. So we're getting wins, we're getting product wins, we're getting conversion wins. So that's what gives us confidence in all of that ultimately leads to a better conversion more efficient marketing and everything else. So.

Peter Maxwell Kern: So, you know, we would like everything to go faster, but we are feeling good that we are making progress on the non-Vrbo business. On the first question, sorry, the first part about Vrbo again? Oh, share gains. I'm sorry.

Peter Maxwell Kern: We would like everything to go faster, but we are feeling good that we are making progress on the non weibo business.

Speaker Change: On the first question sorry, your first part about Carbo again.

Speaker Change: Can you repeat it.

Peter Maxwell Kern: I got it. I came back to it. On the share gain front, we're actually, other than Vrbo, seeing good share gains in our core hotel business across North America and all our major focus markets, or virtually all our major focus markets. So, in the hotel business, we're seeing really good product gains, and we feel quite good about that. Vrbo is its own thing. So, when you look at lodging all up, Vrbo has obviously given up share, and both Airbnb and Booking are both in the VR space, particularly in those city-centric other kinds of accommodations, much of which we don't compete in.

Peter Maxwell Kern: Oh share gains I'm, sorry, I got it I came back to it on the share gain front, we're actually other than verbose seeing good share gains in our core hotel business across North America in all our major focus markets are virtually all of our major focus market. So in the hotel business, we're seeing really good.

Peter Maxwell Kern: Product gains and we feel quite good about that Volvo is its own thing. So when you look at lodging all up Robo is obviously, giving up share in both both airbnb and booking are both in the VR space, particularly in those city centric other kinds of accommodation some much of which we don't compete in but if you just look at hotel lodging, we're making really strong.

Peter Maxwell Kern: But if you just look at hotel lodging, we're making really strong gains there. And in all our other product lines, again, we continue to improve on product. We continue to believe those products will pay off, and we feel good about where they're going.

Peter Maxwell Kern: Gains there and in all of our other product lines again, we continue to improve on product. We continue to believe those products will pay off and.

Peter Maxwell Kern: We feel good about where theyre going.

Operator: Thank you. Our next question comes from Richard Clarke from the Fernstein Society General Group. Richard, please go ahead.

Peter Maxwell Kern: Thank you. Our next question comes from Richard Clarke from Bernstein, just talk to your general Great. Richard. Please go ahead.

Richard J. Clarke: Thanks very much. Thanks for taking my question. Just as you mentioned, you're deciding now to pivot towards more price investment. Just wondering, is that backing up wonky? Is that going into loyalty? And maybe overall, what's just leading to that decision to do that rather than more marketing?

Richard J. Clarke: Thank you very much. Thanks for taking my question just because you mentioned, you're deciding now to pivot towards more price investment. Just wondering is that backing up one of the key is that going into the loyalty and maybe overall just leading to that decision to do that rather than more marketing. Thanks.

Peter Maxwell Kern: Thanks.

Speaker Change: Yeah, I'll take a piece and or I can jump in I would just say we've said it before but we look at all of our marketing.

Peter Maxwell Kern: Okay, I'll take a piece and Ariane can jump in. I would just say, we've said it before, but we look at all our marketing, all our things to drive consumer behavior as one big bucket of capital, so that's direct sales and marketing, it's the pricing work we do, merchandising work, and it's our loyalty spend. So what we saw was an opportunity, what we've been seeing is an opportunity to drive more into the pricing vein, where there have been good returns. We've seen good opportunities there, and this is basically just a way to modify prices, taking value out of our margins to drive more velocity, acquire more customers, and do it more efficiently. So it's really just a rebalancing a little bit towards pricing, and that's what we did Yeah, and I would just add.

Ariane Gorin: All our things to drive consumer behavior as one big bucket of capital So that's direct sales and marketing.

Ariane Gorin: Pricing work, we do merchandising work and it's our loyalty spend so what we saw was an opportunity where we've been seeing as an opportunity to drive more into the pricing thing where they've been good returns we've seen good opportunity there and this is basically just a way to modify prices taking value out of our margins to drive more velocity acquire more.

Ariane Gorin: Customers and do it more efficiently. So it's really just a yes.

Ariane Gorin: Rebalancing, a little bit towards pricing and that's what we've done and I would just add.

Ariane Gorin: And I would just add, as Peter said, we think about those buckets of pricing, of loyalty, and of marketing sort of as all buckets that we can use to invest where we see opportunities, and going forward, we'll continue to do that. So which of those three will drive the most growth, whether it's international or regardless of what brand it is, I think the teams have a very dialed-in view of where they can invest in order to get the best return.

Ariane Gorin: As Peter said, we think about those buckets of pricing of loyalty and marketing.

Ariane Gorin: All buckets that we can use to invest where we see opportunities and going forward. We will continue to do that so which of those three will drive the most growth whether its an international regardless of what brand. It is I think the teams have a very dialed in your view.

Ariane Gorin: They can invest in order to get the best return.

Peter Maxwell Kern: Maybe just to follow up on whether this is going into the One Key Programme disproportionately, maybe matching one of your peers which has a more, I guess, price-oriented loyalty program rather than a points loyalty program.

Speaker Change: Maybe just to follow up on whether this is going into the one key program.

Peter Maxwell Kern: Disproportion me, maybe matching one of your peers, which are the more I guess price oriented loyalty program, Ralph and points loyalty program.

Ariane Gorin: Well, what I would say is, you know, part of our One Key program does include tiered member discounts. So if you're a silver member or a gold member, you'll get better discounts. And those are actually supplier-funded discounts. Those are when our hotels, for example, want to get access to these more valuable members who travel more and who spend more. So I don't know if that's what you're referring to, but that program is a supplier-funded program, and it's one of the benefits of One Key.

Speaker Change: Well, what I would say as you know part of our one key program doesn't include per member discounts. So the purest silver member or a gold member you'll get better discounts and those are actually supplier funded discount those are when our hotels for example want to get access to the more valuable members to travel more and spend.

Ariane Gorin: Or so I don't know, if that's what you're referring to but that program.

Speaker Change: As a supplier funding program and it's one of the benefits that point, Yeah, I think Richard just to just to think about it as clearly as we can give it to you. There is three opportunities. There is what I. Just described which is we've been able to get our customers more benefit more tiered benefits all of that provided by our suppliers akin to some of what you've seen from some of our.

Peter Maxwell Kern: Yeah, I think, Richard, just to think about it as clearly as we can give it to you, there are three opportunities. There's what Ariane just described, which is we've been able to get our customers more benefits, more tiered benefits, all of that provided by our suppliers, akin to some of what you've seen from some of our competition. We also have discounting we do specifically that I mentioned to win on price and acquire customers efficiently.

Peter Maxwell Kern: We also have discounting we do specifically.

Peter Maxwell Kern: You mentioned two to win on price and acquire customers efficiently and then in <unk> itself. We have the opportunity now which is awesome to allow us to give benefit to one key customers to create.

Peter Maxwell Kern: In OneKey itself, we have the opportunity now, which is awesome, to allow us to give benefits to OneKey customers to create activity, create shopping, to give them incentives and other things. There is a bit of that that goes through that as well, but the big buckets are really the pricing and the core loyalty that are still strong, and those are the largest buckets of spend. Just to put a pin on it, obviously. We made the decision based on what is best.

Peter Maxwell Kern: Activity create shopping to give them incentives and other things. So there is a bit of that that goes through that as well, but the big buckets are really the pricing and the core loyalty, but are still strong and those are the largest buckets of spend and just to put a pin on it obviously, but we made the decision based on what is the best return.

Operator: and just to put a pin on it, obviously, www.larryweaver.com www.pnl.gov Thank you. Thank you. Our next question comes from Trevor Young from Barclays. Please go ahead.

Operator: The end of the day, that's what we do we look at everything and what are we going to get the best return for our spend and at this moment, we saw that the pricing actions, we're going to be better than any other option.

Trevor Vincent Young: They create some noise in the P&L that youre seeing.

Operator: But because it doesn't get impacted to the P&L until you actually have to stay for a little bit of a timing situation, but at the end of the day. That's what we're focused on is driving the best returns.

Trevor Vincent Young: Okay. Thank you.

Trevor Vincent Young: Thank you.

Operator: Question comes from Trevor Young from Barclays. Please go ahead.

Trevor Vincent Young: Great, thank you.

Trevor Vincent Young: Great. Thank you Alright, I think you've commented that hotels dot com isn't where you'd like it to be can you expand on that a little bit and what you hope to achieve with that brand and then bigger picture what are the areas or opportunities you get most excited about beyond the next few years is it something like experiences in a more holistic.

Trevor Vincent Young: Inter connected trip is it AI driving a better consumer experience or something else altogether. Thank you.

Ariane Gorin: Okay, Trevor, thank you for the question. Look, let me just start by reminding you that we run our consumer business as a whole portfolio. And so we invest in where we see the best return. And so in some cases, that may mean some brands versus others, and Hotels.com was the most impacted by our migration. And as I said, it's not where we want it to be. It's not growing.

Trevor Vincent Young: Okay. Trevor. Thank you for the question, let me just start by reminding you that we run our consumer business as a whole portfolio and so we invest behind where we see the best return and so in some cases that may be mean, some brands versus others and hotels dot com.

Ariane Gorin: The most impacted by our migration and as I said, it's not where we want it to be growing and.

Ariane Gorin: And again, it was impacted by a number of things. So, the first was the product migration, which, when we went through it, obviously had an impact on its performance. The second was that we made a big change to the loyalty program. We're very excited about what OneKey can and will deliver. But it's true that for Hotels.com, it is a bigger change in the loyalty program with less earning. Also, Hotels.com was the most international of our brands. So over the last few years, as hotels.com lean less into international, Hotels.com has been impacted.

Ariane Gorin: Again, it was impacted by a number of things. So the first was the product migration, which when we went through it obviously had an impact on its performance. The second was we made a big change in the loyalty program. We're very excited about what <unk> can and will deliver but it's true that for hotels dot com.

Ariane Gorin: Is it bigger change in the loyalty program with less earn.

Ariane Gorin: Also hotels dot com with the most international of our brands. So over the last 10 years as we've leaned left into international hotels Dot Com has been impacted and then as I said when you had the change in the product and we're getting better returns for example on Expedia so leaning in there.

Ariane Gorin: And then, as I said, when you had the change in the product, we were getting better returns, for example, on Expedia, so leaning. The good news is that, you know, one, we're seeing really great conversion gains on the lodging path, which, of course, benefits Hotels.com. And just, you know, in terms of what I get excited about, you know, look, there are a lot of things. I think probably AI and the opportunity with AI, and especially now with our platform, given that we have one platform across all of our brands, so we can move faster in the way that we're learning, I think AI is going to have a bigger opportunity than ever to deliver personalized experiences for travelers.

Ariane Gorin: The good news is that why not.

Ariane Gorin: Being really great conversion gains on the lodging path, which of course benefits hotels dot com too.

Ariane Gorin: As we go back into international because hotels Dot Com is our lead brand in a number of those countries, we're going to see good growth. There. So I think that the.

Ariane Gorin: The ambition is to get hotels dot com, obviously benefiting from the platform and the international growth.

Ariane Gorin: And just in terms of what I get excited about but there are a lot of things I think probably yeah.

Ariane Gorin: AI and opportunity with AI, and especially now with our platform given that we have one platform across all of our brands. So we can move.

Ariane Gorin: Faster in the way that we're learning.

Ariane Gorin: I think it's going to have a bigger opportunity than ever to deliver personalized experiences for travelers.

Ariane Gorin: So, of course, I can tell you I'm excited about advertising. I'm excited about B2B. There are a lot of parts to our businesses, but I think fundamentally it's this: how is technology going to allow us to deliver traveler experiences that are truly personalized?

Ariane Gorin: I can tell you I'm excited about advertising I'm excited about <unk>. There are a lot of parts of our business. It but I think fundamentally it's how is technology going to allow us to deliver a traveler experiences that are truly personalized and when we do that and as we're doing that I think that will really differentiate us.

Operator: And when we do that, and as we're doing that, I think that will really differentiate. Great, thank you. Thank you. Our next question comes from Conor Cunningham from Mellius Research, please.

Conor T. Cunningham: Great. Thank you.

Operator: Thank you. Our next question comes from Conor Cunningham from Relius Research. Please go ahead.

Conor T. Cunningham: Thank you.

Conor T. Cunningham: Next question comes from Conoco, Nick Cunningham from many is research. Please go ahead.

Conor T. Cunningham: Hi, everyone. Thank you.

Conor T. Cunningham: Back to <unk> for a second can you just level set with how thats performing today.

Conor T. Cunningham: Realize it's still really early but with the slower than expected results in vivo and in hotels Dot com is there any implications on a potential slower ramp on international as you look to do that this year maybe into next year as well. Thank you.

Conor T. Cunningham: So I'm, I'm happy to take you look at one key. As you know, we launched it last summer. And the goal

Conor T. Cunningham: So that'd be great I'm happy to take your look on one key as you know we launched it last summer and the goal was to get more members have them repeat more and see them shopping across our brands.

Ariane Gorin: I'm happy to take you. Look, on OneKey, as you know, we launched it last summer, and the goal was to get more members, have them repeat more, and see them shopping across our brand. You know, in terms of member growth on our loyalty programs, new membership is up 40% year-on-year, and we're really pleased with that. And we're seeing good repeat rates. And when it comes to cross-shopping, what we've actually seen is that 25% of people who have redeemed their one-key cash on Vrbo, who earned that cash on either Hotels.com or Expedia, are completely new to Vrbo.

Ariane Gorin: In terms of member growth on our loyalty programs.

Ariane Gorin: New membership is up 40% year on year, and we're really pleased with that.

Ariane Gorin: We're seeing good repeat rates and when it comes to cross shopping what we've actually seen is that 25% of people who have redeemed there one key cash on for Labelle, who had earned that cash on either hotels dot com or expedia are completely new to her about so I think that really.

Ariane Gorin: So I think that really sort of reassures us in this idea of being able to capture more trips from travelers because of the one-key program. And we will be, you know; we are looking to roll it out internationally later this year.

Ariane Gorin: Reassures us in this idea of being able to capture more trips from travelers because of the <unk> program and we will be we are looking to roll. It out internationally later this year.

Operator: Thank you. Our next question comes from Naved Khan from B Riley. Please go ahead.

Ariane Gorin: Thank you. Our next question comes from Robyn <unk> from BMO. Please go ahead.

Naved Ahmad Khan: Yeah, thanks a lot. So, two questions, maybe just on Vrbo. Can you maybe talk a little bit about if the issues you are kind of trying to solve for are more of a top line, sorry, top of the funnel traffic, or is that it conversion? What exactly are you kind of trying to refine? And what gives you the confidence that the rebound can ultimately come through on Vrbo? And the second question I had was about international markets. So I think you talked about kind of going into some new markets this year, and you've been spending dollars in those markets. I was wondering when we could start to see sort of the P&L contribution from those.

Naved Ahmad Khan: Yeah, Hi, Thanks, a lot.

Naved Ahmad Khan: So two questions maybe just talking about.

Naved Ahmad Khan: Can you maybe talk a little bit about.

Naved Ahmad Khan: If the.

Naved Ahmad Khan: If the issue is you're kind of trying to solve for more upfront.

Naved Ahmad Khan: Top line sorry at the top of the funnel traffic is that is it conversion.

Naved Ahmad Khan: What exactly are you kind of trying to refine.

Naved Ahmad Khan: And what gives you the confidence that the rebound.

Naved Ahmad Khan: Come through on mobile and the second question I had is on one international market. So.

Speaker Change: Thank you.

Naved Ahmad Khan: You talked about kind of going into some new markets. This year.

Naved Ahmad Khan: You've been spending.

Naved Ahmad Khan: And those markets wondering when we can start to see sort of the P&L contribution from those new markets.

Naved Ahmad Khan: Sure.

Speaker Change: Let me take that so first of all.

Peter Maxwell Kern: Sure, let me take that. So first of all, for Vrbo, it's largely a traffic issue. So, as I mentioned, we spent down last year while the product was going through migration. That has two effects, which is, you know, while it's migrating, it's not converting as well, and we weren't spending as much to build awareness during that time.

Peter Maxwell Kern: It's for <unk>, it's largely a traffic issue. So as I mentioned, we spent down last year, while the product was going through migration.

Peter Maxwell Kern: That has two effects, which as you know while it's migrating its not converting as well and we're not spending as much to build awareness through that time as we're now rebuilding awareness, we're seeing benefit there.

Peter Maxwell Kern: As we're now rebuilding awareness, we're seeing benefits. The product itself is actually converting very well and improving very quickly because it is getting the benefits, as Ariane mentioned, of the single stack, right? All the, many of the things that have won on our other products are winners for Vrbo, and so we're getting more benefit more quickly. So, conversion continues to improve and is in good shape. We've got to rebuild the traffic, and as Ariane said, one key is helping with that, but one key for itself in Vrbo. You know, Vrbo customers don't travel 10 times a year, typically. They travel once, if once a year, sometimes once every 18 months or two years.

Peter Maxwell Kern: Product itself is actually converting very well and improving very quickly because it is getting the benefits as already mentioned the single stack rate. Although many of those things that have won on our other on our other products are winners for <unk> and so we're getting more benefit more quickly. So conversion continues to improve.

Peter Maxwell Kern: Is in good shape, we've got to rebuild back the traffic and as <unk> said <unk> is helping with that but <unk> four itself in vivo turbo customers don't travel 10 times a year typically they travel once if once a year, sometimes once every 18 months or two years. So the benefits of the <unk> program, which we <unk>.

Peter Maxwell Kern: So, the benefits of the one key program, which we think is a key differentiator for Vrbo, take even longer to accumulate and create that flywheel over time. So, we're building those things into those things. We're focused on traffic and building just general awareness back and general traffic back, and we're making, you know, solid strides. It's just not as fast as we had expected. On the international side, we've seen quite good returns in all the places we've pushed into.

Peter Maxwell Kern: As a key differentiator for both take even longer to accumulate and create that flywheel over time. So we're building into those things we're focused on traffic and building just general awareness back in general traffic back and we're making solid strides it's just not as fast as we had expected.

Peter Maxwell Kern: On the international side, we've seen quite good returns in all the places we've pushed into we've tried a number of different ways in now that we have the product improved.

Peter Maxwell Kern: We've tried a number of different ways in now that we have, you know, the product improved, leaning more into performance marketing in some places, leaning more into branding in other places, but we're seeing broadly good response. We think it's contributing. It's just that North America is so large that it's hard to see in the numbers, but that's why, as Ariane said, we started building into it this year. We're pushing back into international, and it's meant to drive long-term growth for many years to come.

Peter Maxwell Kern: Winning more into performance marketing in some places anymore into brand and other places, but we're seeing broadly. Good response, we think it is contributing it's just that North America is so large that it's hard to see in the numbers, but that's why is already onset. We started building into it this year, we're pushing back into international and it's meant to drive long term growth for many years to come.

Peter Maxwell Kern: And, you know, as these markets succeed, we will continue to invest in more markets where we think we have the right to win and win back share. We have seen some short-term wins. I think Peter's right.

Peter Maxwell Kern: And as these markets succeed we will continue to invest in more markets, where we think we have the right to win and win back share we.

Ariane Gorin: We have seen some some short-term wins. I mean, Peter's right, it's going to take a while to really see it in the P&L from your perspective because there's an investment time period, and then you have to build it up to get to the long term. But in international markets and small ones like Brazil and Scandinavia, where we launched new campaigns, we did see double-digit growth for our brands there. So that's already reflected in our numbers, but they're not as small as the total, but we are seeing the benefit grow.

Peter Maxwell Kern: You have seen from some short term wins and Peter's right. It is going to take a while to really see it in the P&L.

Ariane Gorin: From your perspective.

Ariane Gorin: The time period, and then you have to build it up.

Ariane Gorin: In international markets, and small ones like Brazil in Scandinavia, where we launched new campaigns, we did see double digit growth.

Ariane Gorin: Hands there so that's already reflected in our numbers.

Ariane Gorin: We are seeing the benefit.

Ariane Gorin: Yeah.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Operator: Our next question comes from Kevin Kopelman from TD Securities. Please go ahead.

Ariane Gorin: Our next question comes from Kevin Kopelman from TD Securities. Please go ahead.

Kevin Campbell Kopelman: Hi, this is Jake Smith. Thank you for taking my question. For Ariane, on the BFB side, can you comment on customer concentration? With NB2B, how large are your top few customers, and how many customers do you have? And also, I wanted to know if there's any impact on regular torrent changes on Google, and if there's any positive benefits there. Okay.

Jake: Hi, This is Jake.

Kevin Campbell Kopelman: Thank you for taking my question.

Kevin Campbell Kopelman: Alright.

Kevin Campbell Kopelman: Could you comment on customer concentration.

Kevin Campbell Kopelman: Within <unk>, how large would you talk to your customer.

Kevin Campbell Kopelman: And how many customers do you have.

Kevin Campbell Kopelman: Also I wanted to know.

Kevin Campbell Kopelman: Impact from.

Kevin Campbell Kopelman: Richard.

Kevin Campbell Kopelman: Okay.

Speaker Change: Thank you.

Ariane Gorin: Okay, I think it was a little bit hard to hear, but I think the first question was about the B2B business and customer concentration, so let me take that one first. Look, we don't disclose information, obviously, about the sort of concentration of our customers, but what I will say is that the B2B business is quite a mix of some very large partners. Think of banks, think of some airlines, and also a very long tail of travel agencies, for example. I would say it's a well-balanced business.

Ariane Gorin: Okay, I think there's a little bit hard to hear but I think the first question was about the b to b business and customer concentration. So let me take that one first.

Ariane Gorin: But we don't.

Ariane Gorin: Disclose information, obviously about sort of the concentration of our of our customers, but what I will say is the <unk> business is quite a mix of some very large.

Ariane Gorin: Partners.

Ariane Gorin: Banks and got some airlines and also a very long tail of travel agencies for example.

Ariane Gorin: So I would say, it's a well balanced business one of the things that's really nice about the need of EBIT and it's not only balanced in terms of customers, but it's a very balanced geographically.

Ariane Gorin: You know, one of the things that's really nice about the B2B business is that it's not only balanced in terms of customers, but it's very balanced geographically and in terms of the types of partners we work with.

Ariane Gorin: And in terms of what types of partners, who can work with.

Ariane Gorin: I think the second part was about changes to Google. I would say, yeah, maybe.

Ariane Gorin: I think that's what was the second part was about.

Ariane Gorin: [inaudible]

Speaker Change: Changes to glide. Thank you Amit.

Speaker Change: Yes, sorry.

Ariane Gorin: It again.

Ariane Gorin: Yes.

Speaker Change: Are you seeing from that.

Ariane Gorin: The regulatory changes.

Ariane Gorin: Yeah.

Peter Maxwell Kern: in terms of our core B2C business, not really, no, I think. Yeah, I think Google is, you know, still trying to push back. They've introduced some new things in the hotel channel in the hotel funnel with carousels and other things. So as much as you know, we're hoping for help from regulators where, you know, we operate within the bounds of what they're doing, and they continue to operate pretty much the way they have in terms of looking for new ways to monetize, push SEO traffic down, et cetera. So no, no real, no real notice.

Ariane Gorin: In terms of our core <unk> business not really no.

Peter Maxwell Kern: Yeah, I think Google is.

Peter Maxwell Kern: Still trying to push back they've introduced some new things.

Peter Maxwell Kern: Hotel and the hotel.

Peter Maxwell Kern: Funnel with Cara cells and other things so as much as you know we're hoping for.

Peter Maxwell Kern: From regulators, where we operate within the bounds of what Theyre doing and they continue to operate pretty much how they have in terms of looking for new ways to monetize them.

Peter Maxwell Kern: Seo traffic down et cetera. So.

Peter Maxwell Kern: No no real no real noticeable impact.

Peter Maxwell Kern: That's one more. I'm sorry, it's really hard to hear in direct traffic. Is there any writing, any commentary on that? I don't think...

Speaker Change: Okay, one more.

Peter Maxwell Kern: Sure.

Peter Maxwell Kern: Patrick.

Peter Maxwell Kern: And where is it currently.

Speaker Change: I'm sorry.

Peter Maxwell Kern: Sure.

Peter Maxwell Kern: On direct traffic is there any any.

Peter Maxwell Kern: Any commentary on that.

Peter Maxwell Kern: I don't think we can provide commentary on that. I'd say about two-thirds of our business remains coming from direct traffic, and we've seen strong improvement and apt, which we think 600 basis points improvement in how much of our business came through the app. So that continues to be a vein we're pushing into. ,,,,,,,,, Thank you. Our next question comes from Ron Josey from Citigroup; please go ahead.

Peter Maxwell Kern: I don't think we can we provide commentary on that I'd say about two thirds of our business remains you know coming from direct traffic and we've seen strong improvement in App, which we as you probably recall, we've been pushing into for several years, I think 600 basis points improvement and how much of our business came through the app.

Peter Maxwell Kern: No.

Ronald Victor Josey: Continues to be a vein, we're pushing into and obviously something.

Ronald Victor Josey: Focused on for the future.

Ronald Victor Josey: In terms of just driving more and more direct traffic obviously at <unk>, we expect to help with that over time, so there's a lot of things going into driving that overtime, but.

Ronald Victor Josey: So far the improvement has been it's been good.

Ronald Victor Josey: Okay. Thank you.

Peter Maxwell Kern: <unk>.

Operator: Our next question comes from Ron Josey from Citigroup. Please go ahead.

Peter Maxwell Kern: Our next question comes from from JC from Citigroup. Please go ahead.

Operator: Hey, guys. This is Robert on for Ron.

Ronald Victor Josey: Thanks for taking the question.

Ronald Victor Josey: One question for you on journey.

Ronald Victor Josey: Can you just share some of the learnings maybe following launch.

Ronald Victor Josey: Easy lap last year.

Ronald Victor Josey: What are some of the products you guys are most excited about I guess at what point do you expect these products to come to market and start to change the way users search for travel.

Ronald Victor Josey: Yeah, thanks, Ron. We've done a lot of experimentation with GenAI, obviously user-facing as well as within the company from an efficiency standpoint, customer service, all kinds of places. And I won't steal any thunder, but Ariane and the team will be announcing a lot of really cool new things at our Explorer conference in 10 days or two weeks. But basically, it is early days as far as the search approach goes.

Ronald Victor Josey: Yeah. Thanks, Ron.

Ronald Victor Josey: We've done a lot of experimentation and Jenny.

Ronald Victor Josey: Obviously user facing as well as within the company from an efficiency standpoint from customer service all kinds of places I won't steal any thunder, but already on and the team will be announcing a lot of really cool new things at our explore conference in 10 days or two weeks.

Peter Maxwell Kern: It's still pretty modest in terms of how many people use it, certainly in terms of its impact on conversion or anything else, but early is good in the GenAI space because it gives you time to experiment and learn, and we've learned a lot, and that's going to guide a bunch of new things that our customers are going to see in the coming year. So there's a lot of new impact from it.

Ronald Victor Josey: But basically it is early days as far as the search approach goes it's still pretty modest in terms of how many people use it.

Peter Maxwell Kern: Certainly in terms of its impact on conversion or anything else, but.

Peter Maxwell Kern: Early is good and the Ginnie space because it gives you time to experiment and learn and we've learned a lot and that's going to guide to a bunch of new things that our customers are going to see in the coming year. So theres a lot of new impact from it. There's also a lot of impact as we've talked about before from old fashioned machine learning.

Peter Maxwell Kern: There's also a lot of impact, as we've talked about before, from old-fashioned machine learning driving all kinds of wins across the product. And, as I mentioned, much more at scale because it can be deployed much more readily across all brands and across different lines of business. So we're having really good, good wins, I would say, from ML and AI, but the coolest, newest things we really think will impact consumer behavior and experience are still coming, and Ariane and the team will get to tell the world about those in a week or so.

Peter Maxwell Kern: Driving all kinds of wins across the product and as I mentioned much more at scale because they can be deployed much more readily across all brands and across different lines of business. So we're.

Peter Maxwell Kern: We're having really good good.

Peter Maxwell Kern: <unk> I would say from ml and AI, but the coolest newest.

Peter Maxwell Kern: Things, we really think will impact consumer behavior and experience are still coming in or out of the team will get to.

Peter Maxwell Kern: The world about those in a week or so I would just add as Peter said.

Peter Maxwell Kern: Yep, I would just add, as Peter said, we're excited to share some things in a couple of weeks at our partner conference. And again, in addition to what we're doing for travelers, there's a lot of work that we're experimenting with for partners. How do we help partners use Gen AI to better show their inventory in our apps or in our brands? So there's work, as Peter said, with our customer support organization; how do they use it to be more effective?

Speaker Change: We're excited too.

Peter Maxwell Kern: There are some things in a couple of weeks at our partner Conference and again in addition to what we're doing for travelers.

Peter Maxwell Kern: There's a lot of work that we're experimenting with a partner you know how do we help partners use jet AI to better.

Peter Maxwell Kern: Show their inventory in our App store and our brands.

Peter Maxwell Kern: How do we.

Peter Maxwell Kern: Allow them to use gen AI to improve their advertising with us.

Peter Maxwell Kern: As Peter said with our customer support organization, how do they use it to be more effective our development teams. Even our commercial teams are looking at either pilots for how we can use those to be more effective as well. So I think it's really going to touch every part of the internal organization as well as how travelers.

Peter Maxwell Kern: Our development teams, even our commercial teams, are looking at are there pilots for how we can use those to be more effective as well? So I think it's really going to touch every part of the internal organization as well as how travelers search and pay.

Peter Maxwell Kern: Okay.

Speaker Change: Great. That's helpful. Thanks, a lot.

Speaker Change: Thank you.

Operator: Our next question comes from Mark Mahaney from Epicor ISI. Please go ahead.

Peter Maxwell Kern: Our next question comes from Mark Mahaney from Evercore ISI. Please go ahead.

Operator: Yeah.

Mark Stephen F. Mahaney: Can I ask you two questions? First, are there any new thoughts on further managing or paring down costs? Where are you in terms of kind of rethinking, reengineering the cost structure? It may well be that you've finished all that sort of work, but I'm just asking. And then secondly, I think it's been a while since you talked about what percentage of your products that are sold, units, and services that are sold are bundled. Do you have an update on that?

Mark Stephen F. Mahaney: Can I ask two questions first is any new thoughts on further managing or paring down.

Mark Stephen F. Mahaney: Costs, where are you in terms of.

Mark Stephen F. Mahaney: Rethinking reengineering the cost structure. It may well be that you've finished all that sort of work, but just asking and then secondly, I think it's been a while since you've talked about what percentage of your products that are sold units services that are sold they're bundled.

Mark Stephen F. Mahaney: Do you have an update on that.

Mark Stephen F. Mahaney: And what I'm particularly interested in is whether things like AI, particularly mobile apps, have really led to a greater ability to cross-sell travel products, to bundle travel products in a way that wasn't the case in the past.

Mark Stephen F. Mahaney: I'm, particularly interested in is whether things like AI, particularly mobile apps have really led to a greater ability to cross sell travel products to bundled travel products in a way that wasn't the case in the past. Thank you.

Julie P. Whalen: Thank you.

Julie P. Whalen: Hi Mark. Thanks for the question. I'll take the cost one.

Speaker Change: Hi, Mark Thanks for the question I'll take the last question I would say that literally we are just getting started.

Julie P. Whalen: I would say that literally, we are just getting started. So, I mean, we did have an announcement back in February where we affected about 1,500 associates. We're still on the journey of that. We haven't done all of that yet. You can see some of the savings already coming through in the P&L within cost of sales and within overhead and also within capitalized labor. And there's more of that to come. This should be substantial savings on an annualized basis.

Speaker Change: So I mean, we did have an announcement back in February.

Julie P. Whalen: Where we had impacted about 1500 associates were still on the journey of that and we haven't done all of that yes.

Julie P. Whalen: You can see some of the savings already coming through in the P&L within cost of sales with an overhead and also within capitalized labor.

Julie P. Whalen: And there is more about the comments should be substantial savings on an annualized basis.

Julie P. Whalen: Again, hitting all three of those lines, of course, cap labor you won't see in a P&L, or even an EBIT. [inaudible] to bring the cocktail. And I'm happy to take the second part about products that we bundle.

Julie P. Whalen: Again, hitting all three of those lines of course cap labor you won't see in the P&L even on EBIT.

Julie P. Whalen: Because the capitalized software is amortized over three years, but you'll see it build as we continue to move forward, but I think even though the ramp that we're looking at every single line to drive efficiencies and so we have.

Julie P. Whalen: Kicked off a few project to go through and really sort of push on the P&L. So we think there's incredible opportunity to drive cost efficiencies and obviously as we deprecate more systems, we come out of this other side of the migration side of it there's going to be a lot of opportunity to bring the cost down going forward and I'm happy to take the second part about.

Ariane Gorin: And I'm happy to take the second part about products that we bundle. Look, we don't disclose what percentage of our business comes from packages or cross-sell.

Ariane Gorin: <unk> products, and we bundle, but we don't disclose what percentage of our business comes from packages from cross sell but what I would tell you is one.

Ariane Gorin: But what I would tell you is, one unique value proposition of the brand Expedia is our package path and this ability to dynamically bundle, you know, an air ticket with a hotel and the like. And, you know, we're seeing really good results as we continue to lean into the package path. And we think it's a great value proposition. And then when you think about sort of the cross-sell and attach, which again has always been one of our strategies. I mean, for as long as I've been at Expedia Group, it has. It is true that with machine learning, you can get a lot smarter in understanding what is the next best thing. Thank you. Our next question comes from Ken Goralski from Wales Fargo. Please go ahead.

Ariane Gorin: Our unique value proposition.

Ariane Gorin: <unk> is our package path and this ability to dynamically bundle and.

Ariane Gorin: Air ticket with the hotel and the like and we're seeing really good results as we continue to lean into the package path and we think it's a great value proposition.

Ariane Gorin: And then when you think about sort of the cross sell and attach which again has always been one of our strategies I mean for as long as I've been at Expedia group It has been.

Ariane Gorin: It is true that with machine learning you can get a lot smarter and understanding what is the next best thing two proposed to a traveler what are they most likely to attach given what we know about them given what we know about what theyre doing and not trip plan. So I think we have lots of ambitions around cross sell and attach and what Ms.

Ariane Gorin: <unk> learning can do to help us there.

Ariane Gorin: Thank you.

Ariane Gorin: Yeah.

Ariane Gorin: Thanks.

Ariane Gorin: Our next question comes from Ken <unk> from Wells Fargo. Please go ahead.

Ariane Gorin: Yes.

Operator: Hey, this is Alec on for 10. I appreciate it.

Alec: <unk> is growing faster than the overall corporate growth rate for a while now a question we get from investors a lot is how to think about the long term growth rate. It seems like theres been some transient benefits to the business, whether it's been the recovery of corporate traveller exposure to EBIT.

Alec: And so when we normalize for those factors I guess, how do you think about <unk> growth over the medium to long term. Thanks.

Ariane Gorin: Ken, thanks for the question. Look, you know, we're not sharing projections of how we see things long term. I guess I would just, you know, remind everyone that there's a market out there for travel. And our B2B business serves a lot of different types of partners, whether they're airlines, whether they're, you know, banks. Last year, we launched a partnership with Walmart. We work with offline travel agencies.

Alec: Yeah, Ken Thanks for the question.

Ariane Gorin: We're not sharing projections at how we see things long term.

Ariane Gorin: I would just you know.

Ariane Gorin: Remind everyone that there is a huge market out there for travel and our <unk> business serves a lot of different types of partners, whether they're airlines whether there.

Ariane Gorin: We work all over the world. So I would just say, you know, even if it's certainly been growing at a very fast clip the last few years, we continue to have big ambitions for that business. And, you know, as we think about our investments in technology, in our supply chain, and, you know, and in our teams and our partner relationships, I think we've got really great assets to continue being. Thanks so much. Our next question comes from Jed Kelly from Oppenheimer. Please go ahead.

Jed Kelly: Thanks, so much.

Julie P. Whalen: Sure, I'll take the cost action question. We have not broken out in detail, you know, how much is impacting each line. As I mentioned, you can see it within, you know, cost of sales improvements. You can see it in the overhead improvements. You can kind of deduce, you know, how much of that is due to that, but you can also see it in our cap labor, in our capital expenditures, at least this quarter, how they've come down.

Julie P. Whalen: A significant portion of that is associated with capital labor. I think the reason why we didn't want to unpack it all, especially this year, is that there are a lot of moving parts. You know, like I said, hitting across three lines, cost of sales, overhead, and capital labor. Most of it, or a significant piece of it, is capital labor, and this is a partial year for the savings. And as you asked, we are going to be taking some of that savings, which is implied within our guidance, and reinvesting it back into marketing. But on an annualized basis, on a go-forward basis, it's substantial, and it'll hit across those three lines. Yeah, and I'll just jump in on the hotel segment. I mean, obviously.

Peter Maxwell Kern: Yeah and I'll just jump in on the hotel segment and obviously a couple things to keep in mind it's all our businesses as Ariane mentioned our B2B business has more exposure to international so that has some of the better tailwinds that have been in an international. Our international investments have been doing well but that's a fairly small part of our B2C business and all so the short answer is yes hotel segment is growing more outside the U.S. just because of tailwinds but we are growing it in the U.S. and we are taking share in the U.S. so both are good we'd obviously love it if the U.S. had tailwinds of 10% you know macro growth it doesn't but we are growing and we are growing share in the U.S. and as I mentioned growing share in most of our focus markets and then B2B benefits from a little more geographical diversity into Asia and LATAM and other places that are growing a bit faster.

Operator: Our next question comes from Anthony Post from Bank of America. Please go ahead.

Justin Post: Thank you. I just want to dive in a little bit more on Vrbo. Obviously, huge customer surge during the pandemic, and then it looked like your app strategy of getting apps distributed was working. So, just kind of, what's not meeting your expectations? Is it the paid channel, or is it reactivating customers to kind of higher repeat rates? And what's the plan to fix that? Second, can you provide any detail on the mix of Vrbo versus Core?

Peter Maxwell Kern: How is that trending? I think people are coming up with their own estimates whether it's down or not, but we would love some commentary to help us with that. Thank you. Yeah, well, I'll do the bad news first, where Kim...

Peter Maxwell Kern: Yeah, well, I'll do the bad news first. We can't help you with the splits, where we don't break out the business that way, but I'll talk about the beginning part, which is, yes, we saw a huge pandemic surge. That was great for customer acquisition. It was great for the Vrbo business. And to be clear, we are still well above 2019 levels, even as we sit today.

Peter Maxwell Kern: So the category has seen a boost, and it has sustained the boost. I think when you get to what we're not happy with now, as we've said many times, we had to go backwards to go forwards. For Vrbo, that meant changing the product, going through the migration.

Peter Maxwell Kern: And for us, it meant that we didn't think we could spend our money efficiently on Vrbo while we were going through that. So we are winning back customer behavior. We're winning back new customers with new marketing as we push in with investment. We have to get customers back who may have gone through the bumpy period of migration. But also, Vr is fairly flat in North America right now in terms of demand.

Peter Maxwell Kern: So again, we don't have the tailwinds of just a growth driver that was there. But now, we do believe we have the best product. We do believe 1Key makes it the most valuable. We do believe we have a great supply. And so it's really getting the customers back in. And 1Key, on that point, gives us a really good tool to attract not only Vrbo customers back, but, as Arianne mentioned, customers from Expedia and Hotels.com, where we have a much bigger base of total humans and customers in those pools to bring them into Vrbo and see the benefits of staying within our universe of products.

Peter Maxwell Kern: So we have a lot of tools to use. We're just really putting them to use now that we're past the migration, now that we know the product experience is what we want it to be, and we will keep making it better, but it's at a place where we're happy with it, and we can invest in it, and we know the returns will come through, and the product will be sticky when customers get to us.

Peter Maxwell Kern: So that's really, you know what we are. That's the backdrop, and we're just investing in that backdrop, and we've got to keep driving it. We gave up some ground clearly, and now we have to win it back.

Operator: Our last question comes from Tom Champion on Piper Sandler. Please go ahead.

Thomas Steven Champion: Hi, good afternoon. Thanks for taking the questions. Ariane, the business remains in transition, and it seems to be maybe a difficult period. I'm just curious how you would think about your priorities over the next quarter or two. Tactics, where are you going to allocate your time and really focus first? And then, for Julie, I'm wondering if you could just elaborate a little bit on the margin commentary for the full year and your expectations.

Thomas Steven Champion: There's a headcount reduction. The tech stack being migrated would seem to be a cost savings. Where are you going to be investing such that margins will be more similar to last year versus may be improving? Thank you.

Ariane Gorin: Thanks, Tom. Like in the next quarter or two, let me say, even if I've been in this business for 11 years, stepping into the CEO role is a new perspective, and so, you know, I will listen and learn with our teams over the months to come. You know, I think we have set really solid foundations, and as I said in my prepared remarks, one thing is helping the teams get back to the basics of traffic and conversion and delivering the acceleration that's implied in our guidance.

Ariane Gorin: Yep stepping into the CEO role is a new perspective and.

Ariane Gorin: So I will listen and learn with our teams over the months to come.

Ariane Gorin: I think we have set really solid foundations and as I said in my prepared remarks, one thing is helping the teams get back to the basics of traffic and conversion and delivering the acceleration that's implied in our guidance.

Ariane Gorin: So there's going to be, you know, a part of it which is, you know, helping the team focus on execution in the short term to deliver our acceleration, and then also sort of listening and learning and figuring out if there are places that we may need to adapt or adjust anything to really deliver on our long-term growth. So I would say, you know, lots of time with our teams internally. Obviously, always lots of time with partners and the like, and again, I think I'm, you know, fortunate that we have a really great team here that's all motivated to want to win, so I'm looking forward to spending time with them in a couple of weeks. And then on the margins question, you know, now going to be relatively in line with last year.

Ariane Gorin: Going to be a part of it which is helping the team focus on execution in the short term to deliver an acceleration and then also sort of listening and learning and figuring out. If there are places that we may need to adapt or adjust anything to.

Ariane Gorin: Can't really deliver on our long term growth so I would say.

Ariane Gorin: Lots of time with our teams internally, obviously, I always lots of time with partners and alike.

Ariane Gorin: And again I think.

Ariane Gorin: I'm looking forward to spending time with them in a couple of months to come.

Julie P. Whalen: And then on the margins question, you know, now going relatively in line with last year as opposed to margin expansion, it's really a function of where we end up in the range of possible outcomes on the top line. Because we're still generating cost of sales leverage, we're still generating overhead leverage, and we're still motivated, obviously, to get back to marketing leverage. It's just a function of where we see the ramp up in the back half and what, you know, spot on the top line we end up being at.

Julie P. Whalen: Because we are still generating cost of sales leverage we're still generating overhead leverage we're still motivated obviously to get back to marketing leverage. It's just a function of where we see the ramp up in the back half and what what spot on the topline we ended up being up.

Julie P. Whalen: And so we want to make sure we give ourselves enough room to be able to make the investments that we need to make in Vrbo to reinvigorate that brand, and in our international markets to obviously support our growth initiatives to expand outside the US. And so that gives us that opportunity.

Julie P. Whalen: And so we want to make sure we give ourselves enough room to be able to make the investments that we need to make in <unk> to reinvigorate that brand and in our international markets to obviously support our growth initiatives to expand outside the U S and so that gives us that opportunity.

Speaker Change: Thank you.

Speaker Change: Thanks, Tom.

Operator: Thank you, everybody. I think that's our last call. I appreciate it. Thank you, operator. I think we're finished.

Speaker Change: Thank you everybody I think that's our last call.

Operator: Yeah.

Operator: That concludes today's call. You may now disconnect your lines. Have a nice day.