Q2 2024 Expedia Group Inc Earnings Call

Elliot: Good day everyone and welcome to the Expedia Group Q2 2024 Financial Results Teleconference. My name is Elliot and I'll be your operator for today's call. If you wish to ask a question at the end of the presentation please press star followed by one on your telephone keypad. If you change your mind please press star followed by two to cancel your request.

Operator: If you wish to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two to cancel your request. For opening remarks, I will turn the call over to Senior Vice President, Corporate Development, Strategy, and Investor Relations, Harshit Vaish. Please go ahead.

Harshit Vaish: For opening remarks, I will turn the call over to Senior Vice President, Corporate Development, Strategy and Investor Relations, Harshit Vaish. Please go ahead.

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

Speaker Change: Good afternoon and welcome to Expedia Group's second quarter 2024 earnings call. I'm pleased to be joined on today's call by our CEO Ariane Gorin and our CFO Julie Whalen.

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 report. And, unless otherwise stated, any reference to expenses excludes stock-based compensation.

Speaker Change: 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.

Speaker Change: 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.

Harshit Vaish: 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. 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 obligation 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. And with that, I will turn the call over to Ariane.

Speaker Change: 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.

Operator: or Financial Results Teleconference. My name is Elliot and I will be your operator for today's call. If you wish to ask a question at the end of the presentation, please press staff all by one on your teleprinting pad. If you change your mind, please press staff all by two to cancel your request.

Speaker Change: Except as required by law, we do not undertake any responsibility to update these forward-looking statements.

Harshit Vaish: For opening remarks, I will send a call over to Senior Vice President Corporate Development Strategy and Investor Relations, Harshit Vaish, please go ahead. Good afternoon and welcome to Expedia Group's second quarter of 2020. I am pleased to be joined on today's call by our CEO, Ariane Gorin and our CEO, Julie Whalen. As a reminder, our commentary today will include references to certain non-gap measures. Reconciliation of these non-gap measures to the most comparable gap measures are included in our earnings release. 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.xpediagroup.com.

Speaker Change: Our earnings release, SEC filings, and a replay of today's call can be found on our Investor Relations website at ir.expediagroup.com. And with that, let me turn the call over to Ariane.

Ariane Gorin: Thanks, Harshit, and thank you all for joining us today. I've been CEO for about a quarter now, and I've spent most of my time on three areas. First, refocusing our team on the basics and execution to accelerate growth in our consumer business. Second, sharpening our long-term strategy.

Ariane: Thanks Harshit, and thank you all for joining us today.

Ariane Gorin: And third, making sure we have the right leadership team in place, all with the goal of delivering better experiences to travelers and more value to our partners. I'm really pleased to already see signs of progress, as demonstrated by our second quarter results. We grew room nights by 10% and grew gross bookings and revenue by 6% versus last year. This was at the high end of our expectations and was driven by substantial improvement in Vrbo, as well as continued strength in Grand Expedia, in our advertising business, and in our B2B segment.

Ariane: I've been CEO for about a quarter now, and I've spent most of my time in three areas. First, refocusing our team on the basics and execution to accelerate growth in our consumer business.

Ariane: Second, sharpening our long-term strategy. And third, making sure we have the right leadership team in place.

Ariane: All with the goal of delivering better experiences to travelers and more value to our partners.

Ariane: I'm really pleased to already see signs of progress as demonstrated by our second quarter results.

Ariane: We grew room nights by 10% and grew gross bookings and revenue by 6% versus last year.

Ariane: This was at the high end of our expectations and was driven by substantial improvement in Vrbo, as well as continued strength in Grand Expedia, in our advertising business, and in our B2B segment.

Ariane Gorin: We also executed well in controlling our costs, with cost of sales and overhead both declining year over year. The travel environment was healthy in the second quarter, and like the last few quarters, we saw stronger demand internationally relative to the U.S. Compared to last year, we grew room nights by mid-single digits in the U.S., low double digits in Europe, and in the high teens for the rest of the world.

Ariane: We also executed well in controlling our costs, with cost of sales and overheads both declining year over year.

Ariane Gorin: And with that, let me turn the call over to Ariane.

Ariane Gorin: Thanks, Harshit, and thank you all for joining us today. I've been CEO for about a quarter now, and it's been most of my time in three areas. First, refocusing our team on the basics and execution to accelerate growth in our consumer business.

Ariane: The travel environment was healthy in the second quarter, and like the last few quarters, we saw stronger demand internationally relative to the U.S.

Ariane Gorin: Second, sharpening our long-term strategy, and third, making sure we have the right leadership team in place. All with the goal of delivering better experiences to travelers and more value to our partners. I'm really pleased to already see signs of progress as demonstrated by our second quarter results. We grew room nights by 10% and grew growth bookings in revenue by 6% versus last year. This was at the high end of our expectations and was driven by substantial improvement as well as continued strength in grant expedia in our advertising business and in our B2B segment.

Ariane: Compared to last year, we grew room nights mid-single digits in the U.S., low double digits in Europe , and in the high teens for the rest of the world.

Ariane Gorin: Prices held up for both hotel and vacation rentals, but we saw continued pricing pressure for air and car. In terms of trends so far in the third quarter, we've seen some softness in demand, and Julie will provide more details on this in a few minutes. But regardless of the market environment, we're focused on executing what's in our control and what we know will drive long-term value. Now, let me talk a little bit about the second quarter results themselves.

Ariane: Prices held up for both hotel and vacation rentals, but we saw continued pricing pressure for air and car.

Ariane: In terms of trends so far in the third quarter, we've seen some softness in demand, and Julie will provide more details on this in a few minutes. But regardless of the market environment, we're focused on executing what's in our control and what we know will drive long-term value.

Ariane Gorin: In our consumer business, we grew gross bookings by 1%, which was an improvement of nearly 400 basis points in the first quarter. Our focus on the base. Traffic, Conversion, Attach Rates, and Marketing Efficiency are showing solid early results. The traffic growth across our three core brands, which are Expedia, Hotels.com, and Vrbo, accelerated sequentially by roughly 500 basis points, and conversion rates continue to improve. The percent of bookings through our apps also increased by over 500 basis points year on year.

Julie: Now, let me talk a little bit about the second quarter results themselves.

Julie: In our consumer business, we grew gross bookings by 1%, which was an improvement of nearly 400 basis points in the first quarter. Our focus on the basics.

Ariane Gorin: We also executed well in controlling our costs with cost of sales and overheads both declining year over year. The travel environment was healthy in the second quarter, and like the last few quarters, we saw stronger demand internationally relative to the US. Compared to last year, we grew room nights mid-single digits in the US, low double digits in Europe, and in the high teens for the rest of the world. Price has held that for both hotel and vacation rentals that we saw continued pricing pressure for air and car. In terms of trends so far in the third quarter, we've seen some softness in demand and Julie will provide more details on this in a few minutes.

Julie: traffic, conversion, attach rates, and marketing efficiency is showing solid early results.

Ariane Gorin: But regardless of the market environment, we're focused on executing what's in our control and what we know will drive long-term balance.

Ariane: The traffic growth across our three core brands, which are Expedia, Hotels.com, and Vrbo, accelerated sequentially by roughly 500 basis points, and conversion rates continue to improve.

Ariane: The percent of bookings through our apps also increased, up over 500 basis points year on year.

Ariane Gorin: And in terms of ATT&CK, multi-item trips grew by 9% compared to last year. And this is important because when travelers buy more than one product from us, they're getting more value, so they're more likely to request it. On marketing, excluding our investments in Vrbo and international markets, our consumer business showed some year-on-year marketing leverage in the second quarter.

Ariane: And in terms of attach, multi-item trips grew by 9% compared to last year. And this is important, because when travelers buy more than one product from us, they're getting more value, so they're more likely to repeat.

Julie: On marketing, excluding our investments in Vrbo and international markets, our consumer business showed some year-on-year marketing leverage in the second quarter.

Ariane Gorin: Brand Expedia continued its strong performance with booked room nights up nearly 20% while Vrbo improved meaningfully from its Q1 low point and exited the quarter back to modest growth. Vrbo's recovery came from higher marketing spend, better supply, and Vrbo-specific product releases. Look, we certainly have more product work to do on Vrbo, in particular on our app, but we're encouraged with our progress and the sequential improvement in the business. Vrbo also benefits from more cross shoppers from our 1Q loyalty program. Nearly 30% of travelers that earned 1Q cash on either Brand Expedia or Hotels.com and then redeemed it on Vrbo were completely new to Vrbo.

Ariane Gorin: Now, let me talk a little bit about the second quarter results themselves. In our consumer business, we grew gross bookings by 1%, which was an improvement of nearly 400 basis points in the first quarter. Our focus on the basics, traffic, conversion, conversion, attach rates, and marketing efficiency is shown solid early results. The traffic growth across our three or brands, which are Expedia, hotel.com and Gorbo, accelerated sequentially by roughly 500 basis points, and conversion rates continue to improve.

Julie: Brand Expedia continued its strong performance with booked room nights up nearly 20% while Vrbo improved meaningfully from its Q1 low point and exited the quarter back to modest growth.

Ariane: Vrbo's recovery came from higher marketing spend, better supply, and Vrbo-specific product releases.

Ariane: Look, we certainly have more particles to do on Vrbo, in particular on our app, but we're encouraged with our progress and with sequential improvement in the business.

Ariane: Vrbo also benefited from more cross shoppers from our OneCube loyalty program.

Ariane Gorin: The percent of bookings through our apps also increased up over 500 basis points year on year. And in terms of attach, multi-item trips grew by 9% compared to last year. And this is important because when travelers buy more than one product from us, they're getting more value, value, so they're more likely to repeat. On marketing, excluding our investments in Gorbo and international markets, our consumer business showed some year on year marketing leverage in the second quarter.

Ariane: Nearly 30% of travelers that earned 1Key Cash on either Brand Expedia or Hotels.com and then redeemed it on Vrbo were completely new to Vrbo. So 1Key is a great source of new travelers for the brand.

Ariane Gorin: So 1Q is a great source of new travelers for the brand. Also, 1Q hit its first year anniversary in the U.S. this summer. We're super pleased to see our large and growing member base enjoy the flexibility to earn and burn one key cash across our three core brands and get great tiered member discounts. Customers who redeem 1Key Cash will use member discounts for Pete more often. So this gives us a lot of confidence that the benefits of 1Key will build further over time. This summer, we're hitting two more milestones in the program.

Ariane: Also, one key hit it's first year anniversary in the U.S. this summer. We're super pleased to see our large growing number base, enjoy the flexibility to earn number and one key cash across out to recordings, and get great pure member discounts.

Ariane Gorin: Brand Expedia continued its strong performance with book through nights up nearly 20%. While Gorbo improved meaningfully from its Q1 low point and exited the quarter back to modest growth. Gorbo's recovery came from higher marketing spend that are supply and build a specific product releases. Look, we certainly have more product work to do on Gorbo in particular on our app, but we're encouraged with our progress and the sequential improvement in the business.

Speaker Change: Customers who redeem 1Key Cash or use member discounts repeat more often, so this gives us a lot of confidence that the benefits of 1Key will build further over time.

Ariane Gorin: In July, we launched a co-branded credit card with Wells Fargo and MasterCard in the US, and expect this to reinforce the value proposition of OneKey. We're also launching 1Key in the UK in the third quarter. Like the U.S., the UK is a market where all three of our big consumer brands are present. Beyond the UK, though, we're pausing further international rollout of 1G.

Ariane: This summer, we're hitting two more milestones in the program.

Speaker Change: In July , we launched a co-branded credit card with Wells Fargo and MasterCard in the U.S. and expect this to reinforce the value proposition of one key.

Speaker Change: We're also launching 1Key in the UK in the third quarter. Like the US, the UK is a market where all three of our big consumer brands are present.

Ariane Gorin: Gorbo also benefited from more cross shoppers from our one key loyalty program, the early 30% of travelers that earned one key cash on either brand Expedia or hotel.com. And then redeemed on Gorbo will completely need to verbo. So one key is a great source of new travelers for the brand. Also, one key hit its first year anniversary in the US this summer. We're super pleased to see our large growing member base enjoy the flexibility to earn and burn one key cash across our three core brands and get great tiered member discounts. Customer to redeem one key cash or use number discounts for keep more often. So this gives us a lot of confidence that the benefits of one key will build further over time.

Speaker Change: Beyond the UK though, we're pausing further international rollout of 1G. Most international markets have only either Brand Expedia or Hotels.com operating at scale with limited Vrbo presence.

Ariane Gorin: Most international markets have only either Brand Expedia or Hotels.com operating at scale with limited Vrbo presence. So we're going to take the time to tailor our value proposition for these marks. In addition, this should minimize further near-term disruption to Hotels.com, which was the brand most impacted by 1Q's U.S. rollout. And, more importantly, and as a reminder, all our loyalty members worldwide on our Legacy, Expedia, and Hotels.com programs continue to benefit from the improved member discounts that we launched last summer. Finally, we made good progress on our international expansion. As an example, in May, we launched Expedia Point of Sale in the UAE and Saudi Arabia.

Speaker Change: So we're going to take the time to tailor our value proposition for these markets.

Speaker Change: In addition, this should minimize further in the return disruption to hotel.com, which was the brand and most impacted by one GVUS rollout.

Speaker Change: More importantly, and as a reminder, all our loyalty members worldwide on our Legacy, Expedia, and Hotels.com programs continue to benefit from the improved member discounts that we launched last summer.

Ariane Gorin: This summer, we're hitting two more milestones in the program. In July, we launched a co-branded credit card with Wells Fargo and master card in the US and expect this to reinforce the value proposition of one key. We're also launching one key in the UK in the third quarter. Like the US, the UK is a market where all three of our big consumer brands are present. Beyond the UK, though, we're causing further international roll out of one key.

Speaker Change: Finally, we made good progress on our international expansion. As an example, in May, we launched Expedia Pointing to Sale in UAE and Saudi Arabia. Though it's early days, we've been pleased with the results so far.

Ariane Gorin: Though it's early days, we've been pleased with the results so far. Turning to B2B, we had another strong quarter with bookings growing 20%, so like last quarter, this was a 200 basis point deceleration. All of our partner segments grew well.

Speaker Change: Turning to B2B, we had another strong quarter with bookings growing 20%, so like last quarter, this was a 200 basis point deceleration.

Ariane Gorin: And as always, while we onboarded new partners, a significant portion of the quarter's growth came from existing partners. A couple of highlights from the quarter were the renewal of our lodging deal with Trip.com and a new partnership with Cathay Pacific using our white label template. Moving on to supply, which powers both our consumer and B2B segments, we continue to improve our offerings. For flights, we just signed a partnership with Ryanair, and we'll soon add their supply to our market. In vacation rentals, we grew our supply by double digits while removing properties that weren't providing acceptable guest experiences.

Speaker Change: All of our partner segments grew well. And as always, while we onboarded new partners, a significant portion of the quarter's growth came from existing partners.

Ariane Gorin: Most international markets have only either brand Expedia or hotel.com operating at scale with limited vervo presents. So we're going to take the time to tailor our value proposition for these markets. In addition, this should minimize further near term disruption to hotel.com, which was the brand most impacted by one key US roll out.

Speaker Change: A couple of highlights from the quarter were the renewal of our lodging deal with trip.com and a new partnership with Kathy Pacific using our light label template.

Speaker Change: Moving on to supply, which powers both our consumer and B2B segments, we continue to improve our offerings. For flights, we just signed a partnership with Ryanair and will soon add their supply to our marketplace.

Ariane Gorin: More importantly, and as a reminder, all our loyalty members worldwide on our legacy Expedia and hotel.com programs continue to benefit from the improved member discounts that we launched last summer.

Speaker Change: In vacation rentals, we grew our supply double digits while removing properties that weren't providing acceptable guest experiences, and we sourced more listings with flexible cancellation policies and discounts.

Ariane Gorin: And we sourced more listings with flexible cancellation policies, and all of this reinforces the Vrbo value proposition. We're also investing in more powerful tools, what we call our visibility boosters, to help our supply partners attract the travelers they want. More hotels are using these tools to fill their rooms, and our revenues from these products grew over 40% in the first half of this year. And that's a great win-win.

Ariane Gorin: Finally, we made good progress on our international expansion. As an example, in May, we launched Expedia points of sale in UAE and Saudi Arabia. Though it's early days, we've been pleased with the results so far. Turning to B2B, we had another strong quarter with bookings growing 20%, though like last quarter, this was a 200 basis point to acceleration. All of our partner segments grew well and as always, while we onboarded new partners, a significant portion of the quarter's growth came from existing partners. A couple of highlights from the quarter were the renewal of our lodging deal with Trip.com and a new partnership with Cafe Pacific using our light label template.

Speaker Change: All of this reinforces the Vrbo value proposition.

Speaker Change: We're also investing in more powerful tools, what we call our visibility boosters, to help our supply partners attract the travelers they want.

Speaker Change: More hotels are using these tools to fill their rooms, and our revenue from these products grew over 40% in the first half of this year. And that's a great win-win.

Ariane Gorin: Before I turn the call over to Julie to talk about our financial results and guidance, I want to touch on our path forward and where I'm focusing our team. Improving the performance of our consumer business remains our biggest priority. Capitalizing on our tech investments over the last few years, while at the same time, digging into what product capabilities and configurations we need to strengthen Vrbo and the Hotel.com brand. We're getting surgical and identifying drivers of repeat behavior in addition to loyalty and app usage, whether it's burning one key cache or adopting AI-enabled products like price prediction.

Speaker Change: Before I turn the call over to Julie to talk about our financial results and guidance, I want to touch on our path forward and where I'm focusing our teams.

Ariane Gorin: Moving on to supply, which powers both our consumer and B2B segments, we continue to improve our offerings. The flights, we just find a partnership with Ryanair and will soon add their supply to our marketplace. In vacation rentals, we grew our supply double digits while removing properties that weren't providing acceptable guest experiences. And we sourced more listings with flexible cancellation policies and discounts. All of this reinforces the verbal value proposition. We're also investing in more powerful tools.

Speaker Change: Improving the performance of our consumer business remains our biggest priority. We're capitalizing on our tech investments the last few years, while at the same time, digging into what product capabilities and configurations we need to strengthen Vrbo and the Hotel.com brand.

Speaker Change: We're getting surgical and identifying drivers of repeat behavior in addition to loyalty and app usage, whether it's burning one key cache or adopting AI-enabled products like price prediction.

Ariane Gorin: We want all of our core brands, Expedia, Hotels.com, and Vrbo, to have clear value propositions and drive healthy growth. And we're making adjustments to ensure we have the right focus. In B2B, after 12 quarters of over 20% booking growth, we expect continued normalization, and we'll continue to invest in our technology, supply, and partnerships to extend our lead in this sector. Finally, we continue to execute with cost discipline everywhere. On cost of sales, we've reduced spend and improved growth margins substantially over the last several quarters.

Speaker Change: We want all of our core brands, Expedia, Hotels.com, and Vrbo, to have clear value propositions and drive healthy growth, and we're making adjustments to ensure we have the right focus.

Ariane Gorin: What we call our visibility boosters to help our supply partners attract the travelers they want. More hotels are using these tools to fill their rooms and our revenues from these products grew over 40% in the first half of this year. And that's a great win win.

Speaker Change: In B2B, after 12 quarters of over 20% booking growth, we expect continued normalization and will continue to invest in our technology, supply, and partnerships to extend our lead in this segment.

Ariane Gorin: Before I turn the call over to Julie to talk about our financial results and guidance, I want to touch on our path forward and where I'm focusing our teams. Improving the performance of our consumer business remains our biggest priority. We're capitalizing on our tech investments the last few years while at the same time digging into what product capabilities and configurations we need to strengthen verbo and the hotel.com brand. We're getting surgical and identifying drivers of repeat behavior in addition to loyalty and app usage, whether it's going in one key cache or adopting AI enabled products like price prediction.

Speaker Change: Finally, we continue to execute with cost discipline everywhere. On cost of sales, we've reduced spend and improved growth margins substantially over the last several quarters.

Ariane Gorin: We're exploring additional opportunities to rationalize our marketing spend, and on overhead, we're using technology and AI to further boost productivity. In closing, I'm encouraged by our second-quarter results, and I'm incredibly proud of and thankful to our employees who've rallied together and are working tirelessly to deliver on our ambition to help travelers around the world experience great trips and create lifelong memories. And with that, I will hand it over to Julie. Thank you, Ariane.

Speaker Change: For exploring additional opportunities to rationalize on marketing spend, I said on overhead, we're using technology and AI to further boost productivity.

Speaker Change: In closing, I'm encouraged by our second quarter results, and I'm incredibly proud of and thankful to our employees who've rallied together and are working tirelessly to deliver on our ambition to help travelers around the world experience great trips and create lifelong memories.

Ariane Gorin: We want all of our core brands, Expedia, hotel.com and verbo, to have clear value proposition and drive healthy growth and we're making adjustments to ensure we have the right focus. In V2B, after 12 quarters of over 20% looking growth, we expect continuing normalization and we'll continue to invest in our technology, supply, and partnerships to extend our reading this segment. Finally, we continue to execute with cost discipline everywhere. On cost of sales, we reduce spend and improve growth margin substantially over the last several quarters. We're exploring additional opportunities to rationalize our marketing spend and on overhead, we're using technology and AI to further boost productivity.

Julie Whalen: Thank you, Ariane, and good afternoon everyone. We are pleased with our second quarter results, including double-digit room-night growth, a sequential acceleration in our B2C business, driving gross bookings to 6%, and EBITDA margins expanding approximately 70 basis points in the first half. As far as the financial details for the second quarter, total gross bookings of $28.8 billion were up 6% versus last year, driven by total lodging gross bookings, which grew 8%, led by our hotel business growing 11% and the improvement in our Vrbo business. We were happy to see that we have held or grown hotel gross booking share in virtually all of our key markets.

Speaker Change: And with that, let me hand it over to Julie.

Julie: Thank you Ariane and good afternoon everyone. We are pleased with our second quarter results, including double digit room night growth, a sequential acceleration in our B2C business, driving gross bookings to 6%, and EBITDA margins expanding approximately 70 basis points in the first half.

Speaker Change: As far as the financial details for the second quarter,

Speaker Change: Total Gross Bookings of 28.8 billion, we're up 6% versus last year driven by total lodging gross bookings which grew 8% led by our hotel business growing 11% and the improvement in our verbal business.

Speaker Change: We were happy to see that we have held or grown hotel gross booking share in virtually all of our key markets.

Julie Whalen: In our Vrbo business, we saw significant acceleration as we moved through the quarter, which drove our total gross booking sequential acceleration of approximately 300 basis points from the first quarter. Revenue of $3.6 billion grew 6% versus last year, led by our B2B business, Brand Expedia, and our advertising business. Total revenue margin was flat year-over-year, as the uplift from advertising growth was offset by fewer stays given the lower gross bookings in the first quarter, the shift of Easter stays into the first quarter, and the contra revenue arising from pricing action.

Speaker Change: In our verbal business, we saw a significant acceleration as we move through the quarter, which drove our total gross booking sequential acceleration of approximately 300 basis points from the first quarter.

Ariane Gorin: In closing, I'm encouraged by our second quarter of the results and I'm incredibly proud of and thankful to our employees who've rallied together and are working tirelessly to deliver on our ambition to help travelers around the world experience great trips and create lifelong memories.

Speaker Change: Revenue of $3.6 billion grew 6% versus last year, led by our B2B business, brand Expedia, and our advertising business.

Julie Whalen: And with that, let me hand it over to Julie.

Speaker Change: Total revenue margin was flat year of year, as the uplift from advertising growth was offset by fewer stays given a lower gross bookings in the first quarter, the shift of Easter stays into the first quarter, and the contra revenue arising from pricing actions.

Julie Whalen: Thank you, Ariane, and good afternoon everyone. We are pleased with our second quarter results, including double digit room night growth, a sequential acceleration and our B to C business driving gross bookings to 6% and EBITDA margins expanding approximately 70 basis points in the first half. As far as the financial details for the second quarter total gross bookings of 28.8 billion were up 6% versus last year driven by total lodging gross bookings.

Julie Whalen: As a reminder, pricing actions from prior periods negatively impacted both revenue and revenue margins this quarter, as it is recorded as contra revenue at the time of this day. Cost of sales was $358 million for the quarter and $45 million, or 11% lower versus last year, which combined with our strong revenue growth, drove approximately 190 basis points of leverage as a percentage of revenue year over year. We continue to see that our ongoing initiatives are delivering transactional efficiency.

Speaker Change: As a reminder, pricing actions from prior periods negatively impacted both revenue and revenue margins this quarter, as it is recorded as contra revenue at the time of this day.

Speaker Change: Compfted sales was 358 million for the quarter and 45 million or 11% lower versus last year, which combined with our strong revenue growth drove approximately 190 basis points of leverage as the percentage of revenue year over year.

Julie Whalen: Which grew 8% led by our hotel business growing 11% and the improvement in our verbal business. We were happy to see that we have held or grown hotel gross bookings share and virtually all of our key markets. In our verbal business, we saw significant acceleration as we moved through the quarter, which drove our total gross bookings sequential acceleration of approximately 300 basis points from the first quarter. Revenue of 3.6 billion grew 6% versus last year led by our B to B business brand Expedia and our advertising business.

Speaker Change: We continue to see our ongoing initiatives are delivering transactional efficiencies.

Julie Whalen: Direct sales and marketing expense in the second quarter was $1.8 billion, which was up 14% versus last year. However, sales and marketing de-leveraged this quarter as a percentage of gross bookings, primarily due to higher commissions to our partners from the strong growth in our B2B business, which grew over 20%, as well as the planned ramp in marketing spend in Vrbo and international markets to drive incremental growth. As we have stated previously, commissions paid to our B2B partners are in our direct sales and marketing lines 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.

Speaker Change: Direct sales and marketing expense in the second quarter was 1.8 billion, which was up 14% versus last year.

Speaker Change: Sales and marketing delivered to this quarter as a percentage of gross bookings primarily due to higher commissions to our partners from the strong growth in our B2B business which grew over 20% as well as the planned ramp in marketing spend in Vrbo and international markets to drive incremental growth.

Julie Whalen: Total revenue margin was flat year over year as the uplift from advertising growth was offset by fewer stays given the lower gross bookings in the first quarter, the shift of Easter stays into the first quarter and the contra revenue arising from pricing actions. As a reminder, pricing actions from prior periods negatively impacted both revenue and revenue margins this quarter as it is recorded as contra revenue at the time of the day.

Speaker Change: As we've stayed previously, commissions paid to our V2B partners are in our direct sales and marketing line and are more expensive as a percentage of revenue than our V2B business. However, because they are generally paid on a paid basis to contractually agreed upon percentages, the returns of more guaranteed and in the media.

Julie Whalen: In our B2C business, we saw some deleverage this quarter as we reinvested back into our Vrbo business and our international markets to drive improving growth and global market expansion. Excluding these investments, we saw some marketing leverage in our B2C business in the second quarter. Overall, overhead expenses were $606 million, a decrease of $21 million versus last year or 3%.

Speaker Change: In our B2C business, we saw some deleverage this quarter as we reinvested back into our Vrbo business and our international markets to drive improving growth and global market expansion. Excluding these investments, we saw some marketing leverage in our B2C business in the second quarter.

Julie Whalen: Cost of sales was 358 million for the quarter and 45 million or 11% lower versus last year, which combined with our strong revenue growth drove approximately 190 basis points of leverage as the percentage of revenue year over year. We continue to see our ongoing initiatives are delivering transactional efficiencies direct sales and marketing expense in the second quarter was 1.8 billion, which was up 14% versus last year. Sales and marketing delivered this quarter as a percentage of gross bookings primarily due to higher commissions to our partners from the strong growth in our B to B business, which grew over 20% as well as the planned ramp and marketing spend in verbo and international markets to drive incremental growth.

Speaker Change: Overhead expenses were $606 million, a decrease of $21 million versus last year, or 3%.

Julie Whalen: This resulted in approximately 165 basis points of leverage, primarily driven by lower people costs in product and tech due to our actions to rationalize our headcount, as well as the timing of both new hires and other salary-related costs across our key growth areas of the business. We remain committed to driving efficiencies across our P&L, and we're pleased to see that the cost actions we have taken, as previously announced, continue to drive savings across capitalized labor, cost of sales, and overhead costs.

Speaker Change: This resulted in approximately 165 basis points of leverage, primarily driven by lower people costs in product and tech from our actions to rationalize our headcount, as well as the timing of both new hires and other salary related costs across our key growth areas of the business.

Speaker Change: We remain committed to driving efficiencies across our P&L, and we're pleased to see that the cost actions we have taken, as previously announced, continue to drive savings across capitalized labor, cost of sales, and overhead costs.

Julie Whalen: As we have stated previously, commissions paid to our B to B partners are in our direct sales and marketing line and are more expensive as the percentage of revenue than our B to C business. However, because they are generally paid on a state basis to contractually agreed upon percentages, the returns are more guaranteed and immediate. In our B to business, we saw some deliveries this quarter as we reinvested back into our verbo business and our international markets to drive improving growth and global market expansion, excluding these investments, we saw some marketing leverage in our B to C business in the second quarter.

Julie Whalen: On the bottom line, we delivered strong second quarter EBITDA of $786 million, which was up 5% year-over-year, with an EBITDA margin of 22.1%, leveraging slightly for approximately 15 basis points year-over-year. However, our first half EBITDA margins, however, expanded by approximately 70 basis points year over year, which exceeded our expectations due to strong expense management despite the impact of our pricing actions and our investments in markets. As far as our EBIT performance, which includes the impact of stock-based compensation, depreciation, and amortization, we delivered $475 million of EBIT with a margin of 13.3%, delivering approximately 20 basis points of expansion year-over-year in the second quarter and 95 basis points of expansion in the first half.

Speaker Change: On the bottom line, we delivered strong second quarter EBITDA of $786 million, which was up 5% year-over-year, with an EBITDA margin of 22.1%, leveraging slightly, or approximately 15 basis points year-over-year.

Speaker Change: Our first half EBITDA margins, however, expanded by approximately 70 basis points year-over-year, which exceeded our expectations due to strong expense management, despite the impact from our pricing actions and our investments in marketing.

Julie Whalen: Overhead expenses were 606 million, a decrease of 21 million versus last year or 3%. This resulted in approximately 165 basis points of leverage, primarily driven by lower people costs and product and tech from our actions to rationalize our headcount as well as the timing of both new hires and other salary related costs across our key growth areas of the business. We remain committed to driving efficiencies across our P and L and we're pleased to see that the cost actions we have taken as previously announced, continue to drive savings across capitalized labor cost of sales and overhead costs.

Speaker Change: As far as our Egypt performance, which includes the impact of stop-based compensation, depreciation, and amortization, we delivered 475 million of Egypt with a margin of 13.3% delivering approximately 20 basis points of expansion year over year in the second quarter, and 95 basis points of expansion in the first half.

Julie Whalen: The additional 25 basis points of expansion as compared to EBITDA is driven by leverage from stock-based compensation from flat year-over-year costs, as well as leverage from depreciation that grew slower than revenue. Our year-to-date free cash flow remained robust at $4 billion, up 4% year over year, driven by our strong first half EBITDA growth and lower capital expenditures. Moving on to our balance sheet, we ended the quarter with strong liquidity of $8.7 billion, driven by our unrestricted cash balance of $6.2 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 3.7 percent.

Speaker Change: The additional 25 basis points of expansion, as compared to Eva Daw, is driven by leverage from stock-based compensation from flat, year-of-year cost, as well as leverage from depreciation that we're slower than revenue.

Speaker Change: Our year-to-date free cash flow remained robust at 4 billion, up 4% year-over-year, driven by our strong first half EBITDA growth and lower capital expenditures.

Julie Whalen: Yes. On the bottom line, we delivered strong second quarter EBITDA of 786 million, which was up 5% year-over-year with an EBITDA margin of 22.1% to the leveraging slightly for approximately 15 basis points a year-over-year. Our first half EBITDA margins, however, expanded by approximately 70 basis points a year-over-year, which exceeded our expectations due to strong expense management, despite the impact from our pricing actions and our investments in marketing. As far as our EBITDA performance, which includes the impact of stock-based compensation, depreciation, and amortization, we delivered 475 million of EBITDA with a margin of 13.3%, delivering approximately 20 basis points of expansion year-over-year in the second quarter, and 95 basis points of expansion in the first half.

Speaker Change: We would be going to our balance sheet. We ended the quarter with strong liquidity of 8.7 billions driven by our unrestricted cash balance of 6.2 billion and our undrawn revolving line of credit of 2.5 billion.

Speaker Change: Our debt level remains at approximately $6.3 billion, with an average cost of 3.7%. 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.

Julie 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. In addition, our strong cash position has enabled us to repurchase 1.2 billion, or 9.2 million shares, through to date. We continue to believe that our stock remains undervalued and does not reflect our expected long-term performance of the business. As such, we expect to utilize the strong cash-generating power of our business and our remaining 3.6 billion share repurchase authorization to continue to buy back our stock opportunistically.

Julie Whalen: The additional 25 basis points of expansion, as compared to EBITDA, is driven by leverage from stock-based compensation from flat year-over-year costs, as well as leverage from depreciation that grew slower than revenue. Our year-to-date free cash flow remained robust at $4 billion, up 4% year-over-year, driven by our strong first half EBITDA growth and lower capital expenditures. Moving on to our balance sheet, we ended the quarter with strong liquidity of 8.7 billion driven by our unrestricted cash balance of 6.2 billion, and our undrawn revolving line of credit of 2.5 billion.

Speaker Change: In addition, our strong cash position enabled us to repurchase 1.2 billion, or 9.2 million shares through to date.

Speaker Change: We continue to believe that our stock remains undervalued and does not reflect our expected long-term performance of the business. As such, we expect to utilize the strong cash-generating power of our business and our remaining $3.6 billion share repurchase authorization to continue to buy back our stock opportunistically.

Julie Whalen: Moving now to our outlook for the rest of the year. While we accelerated our gross bookings throughout Q2, entering the third quarter, we have seen a more challenging macro environment and a slowdown in travel demand, consistent with recent commentary from others in the travel industry. And while we saw flat ADRs on a like-for-like basis in Q2, we saw a decline in July stemming from FX headwinds and from consumers trading down to lower priced properties.

Speaker Change: Moving now to our outlets for the rest of the year. While we accelerated our gross bookings throughout Q2, entering the third quarter we have seen a more challenging macro environment and a slowdown in travel demand, consistent with recent commentary from others in the travel industry.

Speaker Change: And while we saw flat ADRs on a like-for-like basis in Q2, we saw a decline in July stemming from FX headwinds and from consumers trading down to lower-priced properties. And we have also seen more continued softness in air ticket prices.

Julie Whalen: And we have also seen more continued softness in air ticket prices. In addition, we have seen some headwinds from new pricing display regulations that kicked off on July 1st in California, and we are monitoring them closely.

Julie Whalen: Our debt level remains at approximately 6.3 billion with an average cost of 3.7%. Our gross leverage ratio at a further reduced 2.3 times continues to make progress towards our target gross leverage ratio of two times driven by our ongoing strong EBITDA growth. In addition, our strong cash position enabled us to repurchase 1.2 billion or 9.2 million shares through today. We continue to believe that our stock remains undervalued and does not reflect our expected long-term performance of the business. As such, we expect to utilize the strong cash generating power of our business and our remaining 3.6 billion sharing purchase authorization to continue to buy that our stock opportunistically.

Speaker Change: In addition, we have seen some headwinds from new pricing display regulations that kicked off on July 1st in California, and we are monitoring it closely.

Julie Whalen: These factors collectively drove weaker than expected growth across both our consumer and B2B businesses in July and are influencing our outlook for Q3 and the full year. Given this backdrop, we expect third quarter gross bookings and revenue growth to be in the range of 3 to 5% versus last year. And as a result of the range of possible top-line growth and our marketing investments in Vrbo and our international markets, we expect approximately 100 basis points of de-leverage in our third quarter EBITDA and EBIT margins versus last year.

Speaker Change: These factors collectively drove weaker-than-expected growth across both our consumer and B2B businesses in July and are influencing our outlook for Q3 in the full year.

Speaker Change: Given this backdrop, we expect third quarter gross bookings and revenue growth to be in the range of 3 to 5 percent versus last year.

Speaker Change: and as a result of the range of possible top-line growth and our marketing investments in Vrbo and our international markets. We expect approximately 100 basis points of due leverage to our third quarter EBITDA and EBITDA and EBITDA and margins versus last year.

Julie Whalen: Moving now to our outlet for the rest of the year, while we accelerated our gross bookings throughout 2.2, entering the third quarter, we have seen a more challenging macro environment and a slowdown in travel demand consistent with recent commentaries from others in the travel industry. While we saw flat ADRs on a like for like basis in Q2, we saw decline in July stemming from FX headlamps and from consumers trading down to lower price properties.

Julie Whalen: As for the full year, we expect gross bookings to be at the low end of our previously communicated range of mid to high single digits, at approximately 4%, and revenue growth to be two points higher, at approximately 6%, with our earnings outlook holding at EBITDA and EBIT margins relatively in line with last year. In closing, we are pleased with our performance and the acceleration we saw in our Vrbo business during the second quarter.

Speaker Change: As for the full year, we expect gross booking to be at the low end of our previously communicated range of mid to high single digits at approximately 4%, and revenue growth to be two points higher at approximately 6%, with our earnings outlook holding at EBITDA and EBIT margins relatively in line with last year.

Julie Whalen: We have also seen more continued softness in air ticket prices. In addition, we have seen some headwinds from new pricing display regulations that kicked off on July 1st in California, and we are monitoring it closely. These factors collectively drove weaker than expected growth across both our consumer and V2B businesses in July and are influencing our outlook for Q3 in the full year. Given this backdrop, we expect third quartered gross bookings and revenue growth to be in the range of 3-5% versus last year.

Speaker Change: In closing, we are pleased with our performance and the acceleration we saw in our Vrbo business during the second quarter.

Julie Whalen: And while the more recent market environment is challenging, it is this ongoing execution of our growth initiatives, combined with our strong financial position, that gives us confidence in our long-term opportunity to deliver profitable growth. And with that, I will open the call to questions.

Speaker Change: And while the more recent market environment is challenging, it is this ongoing execution against our growth initiatives, combined with our strong financial position, to give us confidence in our long-term opportunity to deliver profitable growth. 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 one on your keypad. If you would like to retract your question, please press star followed by two. Our first question comes from Mark Mahaney with Evercore ISI. Your line is open, please go ahead. Okay, thank you.

Speaker Change: As a reminder, if you would like to ask a question, please press star followed by one on your keypad. If you would like to retract your question, please press star followed by two.

Julie Whalen: And as a result of the range of possible top-line growth and our marketing investments in verbo and our international markets, we expect approximately 100 basis points of due leverage to our third quarter EBITDA and EBIT margins versus last year. As for the full year, we expect gross bookings to be at the low end of our previously communicated range of mid to high single digits at approximately 4% and revenue growth to be 2 points higher at approximately 6% with our earnings outlook holding at EBITDA and EBIT margins relatively on the line with last year.

Speaker Change: Our first question comes from Mark Mahaney with Evercore ISI. Your line is open, please go ahead.

Unknown Executive: Okay, thanks. Two questions, please. First on Vrbo, it sounds like that's started to recover to growth exiting the quarter. Any thoughts on what that trajectory is like? And I know you've got headwinds going into the back half of the year, but if you can isolate them out of the headwinds, just talk about what that growth recovery path looks like, and then a real quick hit on advertising revenue, expectations for how that's trending. Are you able to kind of maintain the growth you've had there? And I think that was sort of a solid 20%. Thanks.

Mark Mahaney: Q2. First on Vrbo, it sounds like that's started to recover to growth exiting the quarter. Any thoughts on what that trajectory is like? And I know you've got headwinds going into the back half of the year, but if you can isolate out of the headwinds, just talk about what that growth recovery path looks like. And then real quick hit on advertising revenue, expectations for how that's trending. Are you able to kind of maintain the growth you've had there? And I think that was sort of solid 20%. Thanks.

Julie Whalen: Chair. In closing, we are pleased with our performance and the acceleration we saw in our verbal business during the second quarter. And while the more recent market environment is challenging, it is this ongoing execution against our growth initiatives combined with our strong financial position to give us confidence in our long term opportunity to deliver profitable growth.

Unknown Executive: Yeah, I mean, for Vrbo, obviously, it's hard to make that call right now because we're staring at this, you know, July trends. But certainly, our expectation is to drive that business to growth and get it back to where it used to be. And so, as we said, we saw substantial, you know, acceleration as they moved from the beginning of the year till, you know, basically, as we ended the quarter with some modest growth.

Speaker Change: Yeah, I mean, for Vrbo, obviously it's hard to make that call right now because we're staring at this, you know, July trends, but certainly our expectation is to drive that business to growth and get it back to where it used to be. And so as we said, we saw some substantial, you know, celebration was a move in the beginning of the year until, you know, at basically as we ended the quarter with some modest growth. But now we're in this moment in July, where it's a little bit hard to read the business, but certainly long term, that is our expectation. We're in this moment, we're in this moment, we're in this moment.

Operator: And with that, let me open the call for questions. As a reminder, if you would like to ask a question, please press start followed by one on your keypad. If you would like to retract your question, please press start followed by two.

Mark Mahaney: Our first question comes from Mark Mahaney with Evercore ISI. Your line is open, please go ahead. Okay, thanks.

Unknown Executive: But now we're in this moment in July, where it's a little bit hard to read the business. But certainly, long term, that is our expectation. As far as the advertising business is concerned, I mean, that business is on fire. We have got a lot of opportunity with that business to continue to drive its growth. I mean, if you think you look back, it's been at least in the high 20s for a while now. And we don't have any reason to believe that that's going to significantly change going forward. And I would just add that to the advertising business.

Speaker Change: As far as the advertising business, I mean, that business is on fire. We have got a lot of opportunity with that business to continue to drive its growth. I mean, if you think you look back, it's been at least in the high 20s for a while now, and we don't have any reason to believe that that's going to significantly change going forward.

Ariane Gorin: Two questions, please. First on verbal, it sounds like that's started to recover the growth exiting the quarter. Any thoughts on what that trajectory is like? I know your headwinds going into the back half of the year, but if you can isolate out of the headwinds, just talk about what that growth recovery path looks like.

Unknown Executive: And I would just add that in the advertising business, you know, when the market gets soft, actually, you could imagine that some of our supply partners will want to spend more on advertising where they know that the travel demand is going to be. So, you know, as we're looking at how the market evolves, obviously, I think, our teams will be looking at how we can help our supply partners get involved.

Speaker Change: And I would just add that on the advertising business, you know, when the market gets soft,

Ariane Gorin: And then real quick hit on advertising revenue, expectations for how that's trending. Are you able to kind of maintain the growth you've had there? And I think that was sort of solid 20%.

Ariane Gorin: Thanks. Yeah, I mean, for verbal obviously it's hard to make that call right now because we're staring at this, you know, July trends, but certainly our expectation is to drive that business to growth and get it back to where it used to be. And so as we said, we saw substantial, you know, acceleration was a move in the beginning of the year until, you know, basically as we ended the quarter with some modest growth, but now we're in this moment in July, where it's a little bit hard to read the business, but certainly long term, that is our expectation.

Operator: Our next question comes from Eric Sheridan with Goldman Sachs. Your line is open, please go ahead.

Speaker Change: Our next question comes from Eric Sheridan with Goldman Sachs. Your line is open, please go ahead.

Unknown Executive: Thanks so much. Maybe two questions if I could, a bit more of a bigger picture nature. In terms of the role of CEO that you've now had for a couple of months, I wanted to know if we could just reflect on some of the key learnings you've had and go a little bit deeper on the turnaround of some of the brands like Vrbo and Hotels.com and what you've learned about the ability to possibly speed up some of that recovery or some of the aspects that might take longer pieces of time to sort of implement, leaving aside or isolating some of the macro variables from your insights there.

Eric Sheridan: Thanks so much. Maybe two questions if I could, a bit more of a bigger picture nature. In terms of the role of CEO that you've now had for a couple of months, I wanted to know if we could just reflect on some of the key learnings you've had and go a little bit deeper on the turnaround of some of the brands like Vrbo and hotels.com. And what you've learned about the ability to possibly speed up, some of that recovery or some of the aspects that might take longer pieces of time, just sort of implement, leaving aside or isolating so the macro variables from your insights there. And then the second, you know, you come out of the B to B business. As you continue to move out of B to B and into this broader CEO role, what do you think remains relatively under-appreciated or misunderstood about the B to B?

Ariane Gorin: As far as the advertising business, I mean that business is on fire and have got a lot of opportunity with that business to continue to drive its growth. I mean, if you think you look back, it's been at least in the high 20s for a while now, and we don't have any reasonably that that's going to significantly change going forward. And I would just add that on the advertising business, you know, when the market gets soft, actually you could imagine that some of our supply partners will want to spend more and advertising, where they know that the travel is going to be. So, you know, as we're looking at how the market evolves, obviously, I think our teams will be looking at how can we help our supply partners in getting involved.

Unknown Executive: And then, you know, you come out of the B2B business, as you continue to move out of B2B and into this broader CEO role, what do you think remains relatively underappreciated or misunderstood about the B2B business now that it sits inside Expedia? Thank you.

Speaker Change: Business. Now it sits inside Expedia. Thank you.

Unknown Executive: Thanks for the questions, Eric. In terms of the consumer business, you know, as I stepped in, I think I always appreciated the work that we had done on the platform that was going to allow us to accelerate innovation across the board. So, for example, in the second quarter, we were able to release flexible date search in all three of our big brands at the same time. And we wouldn't have been able to do that had we not done the platform.

Speaker Change: Thanks for the questions, Eric.

Speaker Change: In terms of the consumer business, you know, as I stepped in, I think I had always appreciated the work that we had done on the platform that was going to allow us to accelerate innovation across the board.

Eric Sheridan: Our next question comes from Eric Sheridan with Goldman Sachs. Your line is open. Please go ahead. Thanks so much. Maybe two questions if I could a bit more of a bigger picture nature. In terms of the role of CEO that you've now had for a couple of months, what does it know? We could just reflect on some of the key learnings you've had and go a little bit deeper on the turnaround of some of the brands like Verbo and Hotels.com.

Speaker Change: So for example, in the second quarter, we were able to release flexible date search in all three of our big brands at the same time. And we wouldn't have been able to do that had we not done the platform work.

Unknown Executive: That being said, when we did the work to move Vrbo and Hotels.com onto our common front end, we did give up some of the things that made those brands a bit more unique. You know, on Vrbo, collaboration was a big deal; it was sort of something that was used a lot in Vrbo. And when we migrated it, the good thing was we got the trip planning collaboration onto Brand Expedia, but we lost some of the functionality in Vrbo.

Eric Sheridan: And what you've learned about the ability to possibly speed up some of that recovery or some of the aspects that might take longer pieces of time to sort of implement, leaving the side or isolating some of the macro variables from your insights there. And then the second, you know, you come out of the B2B business, as you continue to move out of B2B and into this broader CEO role, what do you think remains relatively underappreciated or misunderstood about the B2B business? Now it sits inside Expedia.

Speaker Change: That being said, when we did the work to move Vrbo and Hotels.com on to our common front end,

Speaker Change: We did give up some of the things that made those brands a bit more unique.

Speaker Change: You know on Vrbo.

Speaker Change: Collaboration was a big, it was sort of something that was used a lot in Vrbo, and when we migrated it, the good thing was we got the trip planning collaboration onto Brand Expedia, but we lost some of the functionality in Vrbo.

Unknown Executive: Now, the good news is that we've added a bunch of it back, and there's still work to be done. But it just meant that we went through a period of time in the migration where we moved back.

Ariane Gorin: Thank you. Thanks for the questions, Eric. In terms of the consumer business, you know, as I stepped in, I think I had always appreciated the work that we had done on the platform that was going to allow us to accelerate innovation across the board. So, for example, in the second quarter, we were able to release flexible date search in all three of our big brands at the same time. And we wouldn't have been able to do that had we not done the platform work.

Speaker Change: Now the good news is we've added a bunch of it back and there still work to be done, but it just meant that we went through a period of time in the migration where we moved back. Similarly with hotel.com when we moved to one key.

Unknown Executive: Similarly, with Hotels.com, when we moved to one key, Unknown Speaker 0 downplayed an advantage that Hotels.com had; it had a really big differentiator and its loyalty program. So the good news is that both of those brands have great brand awareness and have people who love to come back to them. But, you know, I've just realized it's going to take work to get them back to where we want them. And so as I think about sort of the months and the quarters ahead, it's how do we take all the capabilities that we've built in the platform across the board on a horizontal basis and sort of figure out what needs to be configured or built differently for Vrbo and Hotels.com. But, you know, overall, I feel good about that. It's just, you know, it's going to take some time to get there.

Speaker Change: We sort of downplayed an advantage that Hotels.com had, it had a really big differentiator in its loyalty program.

Speaker Change: So the good news is that both of those brands have great brand awareness, have people who love to come back to them, but, you know, I've just realized it's going to take work to get them back to where we want.

Ariane Gorin: That being said, when we did the work to move Vrbo and hotels calm onto our common front end, we did give up some of the things that made those brands a bit more unique, you know, on Vrbo collaboration was a big, it was sort of something that was used a lot in Vrbo and when we migrated it. The good thing was we got the trip planning collaboration on to brand Expedia, but we lost some of the functionality in Vrbo.

Speaker Change: And so, as I think about sort of the months and the quarters ahead, it's how do we take all the capabilities that we've built in the platform across the board in a horizontal basis

Speaker Change: and sort of figure out what needs to be configured or built differently for Vrbo and Hotels.com. But you know, overall, I feel good about that. It's just, you know, it's going to take some time to get there.

Unknown Executive: And I would also add for Hotels.com, it will benefit as we go back into international. Hotels.com is a brand that's got great brand recognition in places like the Nordics and elsewhere. And what we've seen in these early days of leaning back into some of those international markets is that we're seeing good results. In terms of the B2B business and what's maybe misunderstood or underappreciated, you know, it's funny when I took on the business about 10 years ago, I remember thinking, "What are the moats around it?" What's differentiated around it?

Ariane Gorin: Now, the good news is we've added a bunch of it back and there's still work to be done, but it just meant that we went through a period of time and migration where we went back. Similarly, with hotel calm, when we moved to one key, we sort of downplayed an advantage that hotels calm had, it had a really big differentiator and it's loyalty program. So, the good news is that both of those brands have great brand awareness, have people who love to come back to them, but, you know, I've just realized it's going to take work to get them back to where we want.

Speaker Change: Um...

Speaker Change: Amex!

Speaker Change: I would also add for Hotels.com, it will benefit as we go back into international. Hotels.com is a brand that's got great brand recognition in places like the Nordics and elsewhere. And what we've seen in these early days of leaning back into some of those international markets is that we're seeing good results.

Speaker Change: In terms of the BBB business and what's...

Speaker Change: Maybe misunderstood or underappreciated.

Speaker Change: You know, honey, when I took on the business about 10 years ago, I remember thinking...

Unknown Executive: And what I sort of have concluded over the years is it's a combination of things. You have to have a really great supply. And we have a great lodging supply. We're doing a lot of work to get B2B specific lodging supply. You have to have great technology, an excellent sales team, super partner relationships, and be very hungry and aggressive and open to a lot of partnership. So I just, you know, I guess the way I think of it is, there is a massive travel industry, what is it $2.3 trillion?

Speaker Change: What are the moats around it? What's differentiated around it? And what I sort of have concluded over the years is it's a combination of things.

Ariane Gorin: And so, as I think about sort of the months and the quarters ahead, it's how do we take all the capabilities that we've built in the platform across the board and a horizontal basis and sort of figure out what needs to be configured or built differently for Vrbo and hotel calm, but, you know, overall, I feel good about that it's just, you know, it's going to take some time to get there. And I would also add for hotel calm, it will benefit as we go back into international hotel calm is a brand that's got great brand recognition in places like the Nordics and elsewhere and what we've seen in these early days of leaning back into some of those international markets is that we're seeing good results.

Speaker Change: We have to have really great supplies.

Speaker Change: And we have great watching supplies, we're doing a lot of work to get B2B specific lodging supply. You left there have great technology.

Speaker Change: and excellent sales team, super partner relationships, and very hungry and aggressive, and be open to a lot of partnership.

Unknown Executive: Our own brands are a small part of it. And so with a B2B business, we can really look at all the innovation we have in our company that can help power all of the other travel players out there.

Speaker Change: So, I guess the way I think it is, there is a massive travel industry, what is it $2.3 trillion?

Speaker Change: Our own brands have a small part of it, and so with a B2B business, we can really look to what is all the innovation we have in our company that can help power all of the other travel players out there.

Ariane Gorin: In terms of the B2B business and what's maybe misunderstood or under appreciated, you know, funny when I took on the business about 10 years ago, I remember thinking what are the modes around it, what's differentiated around it and what I sort of has concluded over the years is it's a combination of things. You have to have really great supply and we have great lodging supply we're doing a lot of work to get B2B specific lodging supply.

Speaker Change: Great, thank you.

Operator: Our next question comes from Lee Horowitz of Deutsche Bank. Your line is open, please go ahead.

Speaker Change: Thanks for the questionnaire. Our next question.

Speaker Change: Our next question comes from Lee Horowitz with Deutsche Bank. Your line is open, please go ahead.

Unknown Executive: Great, thanks. Two if I could.

Lee Horowitz: Thanks, too, if I could. So you clearly have a number of marketing priorities ahead of you as you look to take share in Vrbo, lean back into international markets, while also facing some building ADR pressures, as you call that.

Speaker Change: Which have their own margin impacts. I guess with that in mind, how do you think about the levers that you have at your disposal?

Ariane Gorin: You have to have great technology and excellent sales team, super partner relationships and be very hungry and aggressive and be open to a lot of partnerships. So I just, you know, I guess the way I think of it is there is a massive travel industry, what is it 2.3 trillion dollars our own brands have a small part of it. And so with the B2B business, we can really look to what is all the innovation we have in our company that can help power all of the other travel players up. Yeah. Great. Thank you. Thanks for the question, Eric.

Speaker Change: to drive margin expansion, sort of on a go-for basis, giving those investment priorities. And then maybe Ariane, another one to be the business.

Speaker Change: I guess, how do you think about sort of the interplay between B2B and B2C?

Ariane: Is there a world where the success of your B2B business can actually prove categoristic to your B2C business?

Speaker Change: You know, if you help partners create, you know, super compelling travel rewards programs, presumably that's a piece of the pie that, you know, core speed it is not back to 20 more. How do you think about managing those two in that sort of environment? Thanks a lot.

Unknown Executive: So you clearly have a number of marketing priorities ahead of you as you look to take share in Vrbo, lean back into international markets, while, you know, also facing some, you know, building ADR pressures, as you call them out, which have their own margin impacts. I guess with that in mind, how do you think about the levers that you have at your disposal to drive margin expansion sort of on a go forward basis, given those investment priorities?

Speaker Change: Okay, thanks for the question. Julie, you want to take the first one and I'll take the second? Sure. So from a leverage perspective, obviously, we have been able to do a really great job with cost of sales where costs have actually been

Julie Whalen: Our next question comes from Lee Horowitz with Deutsche Bank. Your line is open. Please go ahead. Great. Thanks to the good. So you clearly have a number of marketing priorities ahead of you as you look to take Sharon Verbo, lean back into international markets, while also facing some building ADR pressures, as you call that, which have their own margin and paths. I guess with that in mind, how do you think about the levers that you have at your disposal to drive margin expansion, sort of on a go forward basis, given those investment priorities.

Ariane: You know, balance here over here, much less leveraging and, you know, while over time, that all can start to moderate, because obviously that can't go on in perpetuity, we still have respect to drive incredible leverage on that line. We've got a lot of opportunities to continue to drive efficiencies there. You know, across our, you know, merchant fees and our operations, whether it's AI and technology and all sorts of things that we're looking at to further drive efficiencies there. At the same time, you can see although this course a little bit of anomaly, we did have, you know, overhead that was down to last year as well. And so we're still, you know, we did, you know, several cost actions as we, you know, announced earlier in the year. And so we're benefiting from those that's helping that line drive leverage.

Julie Whalen: And then maybe, Ariane, another one to be the business. I guess, how do you think about sort of the interplay between B2B and B2C? Is there a world where the success of your B2B business can actually prove cannibalistic to your B2C business? You know, if you help partners create, you know, super compelling travel reward programs, presumably that's a piece of the pie that, you know, core speed is not actually to anymore.

Ariane: to help the total P&L. And certainly we are very focused on looking at every line in the P&L to see what the opportunity is and how we can go after it, so we can take that money either delivered to the bottom or to reinvest it in the business.

Julie Whalen: How do you think about managing those two in that sort of environment? Thanks so much. Thanks for the question. Do you want to take the first one? I'll take the second. So from a leverage perspective, obviously, we have been able to do a really great job with cost of sales. We're cost of actually been, you know, down year over year, much less leveraging. And, you know, while over time, that'll start to moderate because obviously that can't go on in perpetuity.

Ariane: We did say this year, however, that, you know, as you alluded to, we are making the investments in marketing, in Vrbo, and in international markets because we want to reinvigorate those businesses, and clearly by what we saw in the second quarter, it works.

Speaker Change: So it's important that we continue to do that and keep that momentum going and so as we, you know, guided to and as we said, you know, this year we don't expect much leverage, but longer term, we're certainly not, you know, guiding to 25 at this time, but longer term, we absolutely expect to have a margin leverage going forward because all the things that we're investing in and we're driving towards to bring in more direct traffic.

Julie Whalen: We still expect to drive incredible leverage on that line. We've got a lot of opportunities to continue to drive efficiencies there, you know, across our, you know, merchant fees and operations, whether it's AI and technology and all sorts of things that we're looking at to further drive efficiencies there. At the same time, you can see, although this port is a little bit of anomaly, we did have, you know, overhead that was, you know, down to last year as well.

Julie Whalen: And so we're still, you know, we did, you know, several cost actions as we, you know, announced earlier in the year. And so we're benefiting from those that's helping that line drive leverage. To, you know, help the total PNL. And certainly we are very focused on looking at every line in the PNL to see what the opportunity is and how we can go after it. So we can take that money, either deliver it to the bottom or to reinvest it in the business.

Ariane: should enable us to get more leverage on the marketing line in addition to all the good work we're doing on cost of sales.

Ariane: and overhead. And if I think I said before, if you could see the brand Expedia PNL, who is the least disrupted brand, it's doing just that. And we've got strong top-of-lying growth, and we've got strong marketing leverage. And so it's something that we're working towards with the other brands to get there over time.

Unknown Executive: And then maybe Ariane, another one on the B2B business, I guess. What do you think about sort of the interplay between B2B and B2C? Is there a world where the success of your B2B business can actually prove catabolistic to your B2C business? You know, if you help partners create, you know, super compelling travel reward programs, presumably, that's a piece of the pie that, you know, Core Expedia doesn't have access to anymore. How do you think about managing those two in that sort of environment?

Julie Whalen: We did say this year, however, that, you know, as you alluded to, we are making the investments in marketing in verbo and international markets because we want to reinvigorate those businesses and clearly by what we saw in the second quarter, it works. So it's important that we continue to do that and keep that momentum going. And so as we've, you know, guided to and as we said, you know, this year, we don't expect much leverage.

Ariane: And then on your second question on B2B and B2C, so I would say in the geography, there are certain geographies in which our B2C brands aren't very present, and so it's obvious that anything we're doing in B2B there is going to be incremental.

Ariane: But it's true that there are many geographies in which we have both businesses.

Ariane: and...

Speaker Change: Consumers go to many different places for travel.

Julie Whalen: But longer term, we're certainly not, you know, guiding to 25 at this time. But longer term, we absolutely expect to have margin leverage going forward because all the things that we're investing in and driving towards to bring in more direct traffic should enable us to get more leverage on the marketing line. And in addition to all the good work we're doing on cost of sales and overhead. And if I think I said before, if you could see the brand expedient PNL, who is the least disrupted brand, it's doing just that we've got strong top of line growth and we've got strong marketing leverage.

Ariane: Of course, I think any travel company would love to have consumers only come to them, but consumers sometimes will shop for personal travel on their favorite OTA, hopefully one of ours.

Ariane: You know, they might have business travel where they're using their corporate, you know, travel booking tool. They may be in an airline program that has loyalty points and want to spend those points. And so we need to see the opportunity to power the technology and inventory in every one of those cases.

Ariane: And it's actually a big value driver that we bring to our supply partners, because we make it easier for them to reach demand not only to us, but also to our BDP partners. And we have fundamentally adding that it just forces our own BDC brands to be even more competitive and to up our vein.

Julie Whalen: And so it's something that we're working towards with the other brands to get there over time. And then our second question on B2B and B2C. So I would say in the geography, there are certain geographies in which are B2C brands aren't very present. And so it's obvious that anything we're doing in B2B there is going to be incremental. But it's true that there are many geographies in which we have both businesses and consumers go to many different places for travel.

Unknown Executive: Thanks so much.

Speaker Change: Really helpful, thank you.

Speaker Change: Our next question comes from Trevor Young with Barclays. Your line is open, please go ahead.

Trevor Young: Great, thanks. First question, can you just expand a bit on the cadence of growth throughout the quarter? Was it steady and then July saw the step down and was there any nuance around that step down and July across geos?

Julie Whalen: Of course, I think any travel company would love to have consumers only come to them, but consumers sometimes will shop for personal travel on their favorite OTA, hopefully one of ours. They might have business travel where they're using their corporate travel booking tool. They may be in an airline program and have loyalty points and want to spend those points. And so we see the opportunity to power the technology and inventory in every one of those cases.

Speaker Change: And then second question, more of a bigger picture one, we're now a few quarters in from the completion of the tech platform migration. What gives you confidence that all the transformation work that you've done in the past few years is working and will pay off?

Unknown Executive: Thanks for the question. Julie, do you want to take the first one and I'll take the second? Sure.

Unknown Executive: So from a leverage perspective, obviously, we have been able to do a really great job with the cost of sales, where costs have actually been, you know, down year over year, much less leverage. And, you know, while over time, that'll start to moderate because obviously, that can't go on in perpetuity, we still expect to drive incredible leverage on that line. We've got a lot of opportunities to continue to drive efficiencies there, you know, across our merchant fees and our operations, whether it's AI and technology and all sorts of things that we're looking at to further drive efficiencies there. At the same time, you can see that although this quarter is a little bit of an anomaly, we did have, you know, overhead that was, you know, down to last year as well.

Unknown Executive: And so we're still, you know, we did, you know, several cost actions, as we announced earlier in the year. And so we're benefiting from those, that's helping that line drive leverage to, you know, help the total P&L. And certainly, we are very focused on looking at every line in the P&L to see what the opportunity is and how we can go after it. So we can take that money, either deliver it to the bottom, or reinvest it in the business.

Speaker Change: Julie, do you want to take the first one or take the second? Yeah, sure. In the second quarter, we basically saw comps accelerating, and that's because, as we've said, the main acceleration driver was Vrbo. And so we basically came from a low, so to speak, at the beginning of the year and accelerated by a quarter.

Unknown Executive: We did say this year, however, that, as you alluded to, we are making the investments in marketing, in Vrbo, and international markets, because we want to reinvigorate those businesses. And clearly, from what we saw in the second quarter, it works.

Unknown Executive: And so it's important that we continue to do that and keep that momentum going. And so, as we've, you know, guided to, and as we said, you know, this year, we don't expect much leverage, but longer term, we're certainly not guiding to 25 at this time. But longer term, we absolutely expect to have margin leverage going forward because all the things that we're investing in and driving towards to bring in more direct traffic should enable us to get more leverage on the marketing line, in addition to all the good work we're doing on the cost of sales and overhead.

Julie Whalen: And it's actually a big value driver that we bring to our supply partners because we make it easier for them to reach demand not only to us, but also to our B2B partners. And we have fundamentally adding that it just forces our own B2C brands to be even more competitive and to up our game. Very helpful. Thank you. Thanks.

Unknown Executive: And as I said before, if you could see the brand Expedia P&L, which is the least disrupted brand, it's doing just that. And we've got strong top-line growth, and we've got strong marketing leverage. And so it's something that we're working towards with the other brands to get there. And then on the second question...

Unknown Executive: And then on the second question about B2B and B2C. So, I would say in geography that there are certain geographies in which our B2C brands aren't very present. And so it's obvious that anything we're doing in B2B there is going to be incremental. But it's true that there are many geographies in which both businesses and consumers go to many different places for travel. Of course, I think any travel company would love to have consumers only come to them, but consumers sometimes will shop for personal travel on their favorite OTA, hopefully one of ours. They might have business travel where they're using their corporate travel booking tool. They may be in an airline program and have loyalty points and want to use those points.

Speaker Change: and was the main driver to drive the full acceleration of the business. So we saw accelerating comps in Q2.

Unknown Executive: And so we see the opportunity to power the technology and inventory in every one of those cases. And it's actually a big value driver that we bring to our supply partners because we make it easier for them to reach demand, not only through us, but also through our B2B partners. And fundamentally, I think that it just forces our own B2C brands to be even more competitive and to up our game.

Speaker Change: And then, you know, like I said, in July, there's just a lot going on.

Operator: Really helpful. Thank you. Thank you. Our next question comes from Trevor Young with Barclays. Your line is open. Please go ahead. Great.

Speaker Change: That's hard to understand with precision, and so we saw sort of this noise in the P&L in our business. And really, when you look at it from a geo perspective, to answer your question, it's a lot in U.S. that we're seeing. We're seeing a couple other areas, but mostly it's U.S.-focused.

Trevor Young: Our next question comes from Trevor Young with Barclays. Your line is open. Please go ahead. Great. Thanks. First question.

Operator: Our next question comes from Trevor Young with Barclays. Your line is open, please go ahead.

Unknown Executive: Julie, do you want to take the first one? I'll take the second. Yeah, sure. In the second quarter, we basically saw comps accelerating. And that's because, as we've said, the main acceleration driver was Vrbo. And so we basically came from a low, so to speak, at the beginning of the year and accelerated by quarter, and that was the main driver to drive the full acceleration of the business. So we saw accelerating comps in Q2. And then, like I said, in July, there was just a lot going on that's hard to understand with precision. And so we saw sort of this noise in the P&L in our business.

Unknown Executive: And really, when you look at it from a geo-political perspective, to answer your question, it's mostly the US that we're seeing. We're seeing a couple other areas, but mostly, it's US focused. In terms of the replatforming, you know, as I said earlier, it's really unlocked a lot of capabilities that we didn't have before. One of them, for example, is our testing platform. You know, already this year, we've done more tests on Vrbo than we did all of last year. So our test velocity has really gone up.

Julie Whalen: Can you just expand a bit on the cadence of growth throughout the quarter? Was it steady and then July saw the step down? And were there any nuance around that step down in July across Geo's?

Speaker Change: In terms of the re-platforming,

Speaker Change: I love that.

Ariane Gorin: And then second question, more a bigger picture one. We're now a few quarters in from the community. The completion of the platform migration. What did you confident that all the transformation work that you've done in the past few years is working and will pay off? Julie, do you want to take the first one? I'll take the second. Yes, sure. I mean, in the second quarter, we basically saw a comps accelerating. And that's because as we said, the main acceleration driver was Vrbo.

Speaker Change: As I said earlier, it's really unlocked a lot of capabilities that we couldn't have before. One of them, for example, is our testing platform. You know, already this year we've done more tests on Vrbo than we did all this last year. So our test velocity is really going up.

Unknown Executive: Because of the platform migrations, we've been able to put something like OneKey in place where we have a view of a customer across all of our brands. And we, as I said, are able to release the ability to use flexible date shopping in the second quarter across all of our brands. So there are a number of, I would say, e-commerce basics that we're able to roll out across all of our brands without having to do the work multiple times.

Speaker Change: Because of the platform migrations, we've been able to put something like one key in place where we have a view of a customer across all of Iran.

Ariane Gorin: And so we basically came from a, you know, a low, so to speak at the beginning of the year and accelerated by quarter and and was the main driver to drive this little acceleration in the business. So we saw accelerating comps in Q2. And then, you know, like, like I said in July, there's just a lot going on that's hard to understand with precision. And so we saw sort of this noise in the in the in the PNL in our business. And really, when you look at it from a geo perspective to answer your question, it's a lot in US that we're seeing. We're seeing a couple of other areas, but mostly it's US focus.

Speaker Change: and we, as I said, were able to release.

Speaker Change: The ability to use flexible date shopping in the second quarter of all of our brands. So there are a number of, I would say, newcomers basics that were able to roll out across all of our brands without having to do the work multiple times.

Unknown Executive: Now, going forward, what we're digging into is, where are there configurations or maybe even some brand-specific features that we need to build on top? Because it's true that in the last few years, so much of our capacity went to sort of rebuilding some of the foundations and to migrations.

Speaker Change: Now, going forward, what we're digging into is...

Speaker Change: Where are their configurations, or maybe even some brand specific features that we need to build on top? Because it's true that the last few years, so much of our capacity, went to sort of rebuilding some of the foundations and to migrations.

Ariane Gorin: In terms of the platforming, you know, as I said earlier, it's really unlocked a lot of capabilities that we didn't have before. One of them, for example, is our testing platform. You know, already this year, we've done more tests on Vrbo, then we did all of last year. So our test velocities has really gone up. Because of the platform migrations, we've been able to put something like one key in place, where we have a view of a customer across all of our brands.

Unknown Executive: Great, thank you both. Thanks, Trevor. Our next question comes from Conor Cunningham with Melliotts Research. Your line is open. Please go ahead.

Speaker Change: Great, thank you both.

Operator: Our next question comes from Conor Cunningham with Meliots Research. Your line is open, please go ahead.

Trevor Young: Thanks, Trevor.

Speaker Change: Our next question comes from Conor Cunningham with Melliot Research. Your line is open, please go ahead.

Conor Cunningham: Hi everyone, thank you for the time. Just on B2B, I think your growth in the quarter was, you know, over 20% on a pretty tough comp, so that's impressive, but I think in the prepared remarks, you mentioned the deceleration. Just curious if you could unpack that a little bit, what's driving the slowdown. And then just on the implied guide for fourth quarter, I realize that you don't have a lot of visibility, but can you just talk about how you see the booking window kind of evolving from here? Thank you.

Ariane Gorin: And we, as I said, were able to release the ability to use flexible date shopping in the second quarter across all of our brands. So there are a number of, I would say newcomers basics that were able to roll out across all of our brands without having to do the work multiple times. Now going forward, what we're digging into is where are their configurations or maybe even some brand specific features that we need to build on top. Because it's true that the last few years, so much our capacity went to sort of rebuilding some of the foundations and to migrations. Great. Thank you both. Thanks, Tyler.

Unknown Executive: So yeah, so on B2B, yes, we've seen a little bit of a deceleration. And, as you alluded to, of course, we're still at 20%.

Speaker Change: So I just want B to be, yes, we've seen a little bit of deceleration as you alluded to, of course we're still at 20% so it's still really a strong business and we alluded to the fact that as you know global demand normalizes that you know that business would see some of that growth come down as it also normalizes so that's not you know too unusual for us to see obviously in this July period that we've alluded to they also are impacted by a lot of the dynamics that I mentioned. And as far as what's going on in July and so you know they can have a little bit more of an impact and what was sort of just the global normalization but we're really excited about that business you know Ariane spoke about it there's just so much opportunity there and given our leadership position and all the you know opportunities.

Unknown Executive: So it's still really a strong business, and we alluded to the fact that as, you know, global demand normalizes, that businesses would see some of that growth come down as it also normalizes. So that's not, you know, too unusual for us to see, obviously, in this July period that we've alluded to; they are also impacted by a lot of the dynamics that I mentioned, as far as what's going on in July.

Unknown Executive: And so, you know, they can have a little bit more of an impact than just the global normalization. But we're really excited about that business. You know, Ariane spoke about it; there's just so much opportunity there.

Julie Whalen: Our next question comes from Connor Cunningham with Malia's research. Your line is open. Please go ahead. Everyone, thank you for the time. Just on B2B. I think your growth in the quarter was, you know, over 20% and other pre-top calms up in process. But I think in the prepared remarks, you mentioned a deceleration. Just curious if you could unpack that a little bit what's driving slow down and then just on the implied guide for fourth quarter, I realize that you don't have a lot of visibility, but could you just talk about how you see the booking window kind of evolving from here.

Ariane: The underlying health of the business is incredibly strong.

Unknown Executive: And given our leadership position and all the, you know, opportunities we see going forward, it should continue to drive strong growth. It's just that we've got this, you know, moment right now where we're seeing some of this macro impacting it, but the underlying health business is incredibly strong. As far as the booking windows go, it's interesting we have seen for a while now in our B2C hotel business that the windows have actually been expanding slightly, you know, year over year.

Speaker Change: As far as the booking windows, it's interesting, we have been seeing for a while now in our B2C hotel business that the windows have actually been expanding slightly, you know, year over year.

Julie Whalen: Thank you. So yeah, so on B2B, yes, we've seen a little bit of deceleration as you alluded to. Of course, we're still at 20% so it's still really a strong business. And we alluded to the fact that as, you know, global demand normalizes that. You know, that business would see some of that growth come down as it also normalizes. So that's not, you know, too unusual for us to see obviously in this July period that we've alluded to.

Speaker Change: But as we entered July , they actually, or during the month of July , they actually shortened

Speaker Change: Just a little, not a lot, but just a little bit in that month. And that's the first time we've seen that in a while. On the Vrbo side, they've been shortening for a while and they're kind of just doing the similar, you know, similar thing. So there wasn't anything material that changed in July , but we did see a little bit of that in the hotel side of things.

Unknown Executive: But as we entered July, they actually, or during the month of July, they actually shortened just a little, not a lot, but just a little bit in that month. And that's the first time we've seen that in a while. On the Vrbo side, they've been shortening for a while, and they're kind of just doing the same, you know, similar thing. So there wasn't anything material that changed in July. But we did see a little bit of that on the hotel side of things.

Julie Whalen: They also are impacted by a lot of the dynamics that I mentioned as far as what's going on in July. And so, you know, they can have a little bit more of an impact on what was sort of just the global normalization, but we're really excited about that business. You know, Arion spoke about it. There's just so much opportunity there and given our leadership position and all the, you know, opportunities we see going forward, it should continue to drive strong growth.

Unknown Executive: And maybe I'll just add a little bit on the first part about B2B. As Julie said, you know, B2B is a much more geographically diverse business than our consumer business. And so over the last few quarters, it's really benefited from a lot of travel demand, in particular in Asia. And so the deceleration we've seen for the last couple of quarters, which still wasn't very strong growth, was coming from the normalization of that growth, in particular in Asia. Now, as Julie said, as we headed into July, we saw some slowdown, and that was more with the U.S. part of the business.

Julie: And maybe I'll just add a little bit on the first part on B2B, as Julie said, you know, B2B is a much more geographically diverse business than our consumer business.

Speaker Change: and so over the last few quarters, it's really benefited from.

Julie: from a lot of the travel demand in particular in Asia.

Julie Whalen: It's just that we've got this moment right now where we're seeing some of this macro impacting it, but the underlying health business is incredibly strong. As far as the booking windows, it's interesting. We have, when seeing for a while now in our B to C hotel business, that the windows have actually been expanding slightly, you know, year over year. But as we entered July, they actually are during the month of July, they actually shortened just just a little not a lot, but just a little bit in that month.

Julie: And so the deceleration we've seen for the last couple of quarters, which still was a very strong growth.

Julie: was coming from the normalization of that growth in particular in Asia.

Julie: Now, as Julie said, as we headed into July , we saw some slowdown, and that was more with the U.S. part of the business.

Speaker Change: Appreciate the detail. Thank you.

Operator: Our next question comes from Naved Khan with B Riley. Your line is open, please go ahead.

Julie: Thank you.

Julie Whalen: And that's the first time we've seen that in a while on the verb outside. They've been shortening for a while and it kind of just doing the similar, you know, similar thing. So there wasn't anything material that changed in July, but we did see a little bit of that in the hotel side of things. And maybe I'll just add a little bit on the first part on B to B is Julie said, you know, B to B is a much more geographically diverse business and our consumer business.

Unknown Executive: Yeah, thanks a lot. I just wanted to double click on the annual guide a little bit. So I think the prior guidance was mid to high single digits for both bookings and revenue. And now we're getting to revenue of 6%, and bookings were 4%. So, and we also noted, you know, some weakening in the airfare. So I'm just trying to figure out how I should think about the lodging business.

Speaker Change: Yeah, thanks a lot. I just wanted to double-click on the Annual Guide, Julie, a little bit, so...

Speaker Change: I think the prior guidance was mid to high single digit for both bookings and revenue.

Speaker Change: and now I've got into revenue of 6% and bookings through the 4%.

Julie Whalen: And so over the last few quarters, it's really benefited from a lot of the travel demand in particular in Asia. And so the deceleration we've seen a couple of court for the last couple of quarters, which still was at very strong growth was coming from the normalization of that growth in particular in Asia. Now, as Julie said, as we headed into July, we saw some slowdown and that was more with the US part of the business. Thank you.

Speaker Change: So, and you also noted, you know, some weakening in the airfare. So, I'm just trying to figure out how I should think with the lodging business. You've talked about ADR, weakening. So, I remember it's going to grow faster then.

Unknown Executive: You talked about ADR weakening, so room nights are going to grow faster than maybe the 6%, or just give us some goalposts there. Or just, just your thoughts on how to think about the lodging business and room nights and ADR.

Speaker Change: Maybe the 6% or just give us some goalposts there, or just your thoughts on how to think about the lodging business and room nights and ADRs.

Unknown Executive: Yeah, I mean, fortunately, we haven't guided to that level by the line item. And obviously, all of that has been assumed in the numbers that we have presented here for the full year. But certainly, you know, everything I mentioned impacts the lodging business. So there will be an impact on that, you know, on all those metrics for the lodging business, but we're not providing guidance on those right now.

Speaker Change: Yeah, I mean, fortunately, we haven't, we don't guide to that level by the line item. And obviously, all of that has been assumed in the numbers that we have presented here for the for the full year. But certainly, you know, everything I mentioned impacts the lodging business. So there will be an impact to that, you know, on all those metrics for the lodging business, but we're not providing guidance on those right now.

Naved Khan: Our next question comes from Naved Khan with B-Royling. Your line is open. Please go ahead. Yeah, thanks a lot. I just wanted to double click on the end on the guy Julie a little bit. So, I think with the prior guidance was mid to high single visits for both bookings and revenue and and I got into revenue of 6% and bookings with 4%. So, and you also noted some weakening in the airfare.

Unknown Executive: Okay, and then I have a follow-up on the cost side of things. So of the, you know, restructuring that you announced earlier this year, how much of that has been implemented, and how much has yet to follow in the second half?

Speaker Change: Amex GBT, Julie Whalen, Vrbo,

Speaker Change: Okay, and then I have a follow-up on the cost side of things. So of the, you know, restructuring that you announced earlier this year, how much of that has been action and how much has yet to follow in the second half?

Unknown Executive: Yeah, the majority of that has been action. There were some that we took action on in Q1, and some that we took action on in Q2. And so that's why you're seeing the favorability and overhead because you're getting a full quarter of the Q1 action, and then you're getting the additional Q2 action that's coming through. There's a little bit that's left on that, but not significant. But of course, it doesn't mean we're stopped looking at every single line and where we can find efficiencies elsewhere. It's just on that particular cost action that we mentioned; we're almost through it.

Unknown Executive: Understood. Thank you. Yes.

Naved Khan: So, I'm just trying to figure out how I should think about the lodging business. You talked about ADR weakening. So, a room that's going to grow faster than maybe the 6% or just give us some gold posters or just just use cards on how to think about the lodging business and room nights and ADRs. Yeah, I mean, fortunately, we haven't we don't guide to that level by the line item and obviously all of that has been assumed in the numbers that we have presented here for the for the full year. But certainly, you know, everything I mentioned impacts the lodging business.

Speaker Change: Yeah, the majority of that has been action. There were some that we took action on in Q1, some that we took action on in Q2.

Speaker Change: And so that's why you're seeing the favorability and overhead, because you're getting a full quarter of the Q1 action, and then you're getting the additional Q2 action that's coming through. There's a little bit that's left on that, but not significant. But of course...

Speaker Change: It doesn't mean we'll stop looking at every single line and where we can find efficiencies elsewhere, it's just on that particular cost action that we mentioned, we're almost through it.

Operator: Our next question comes from Kevin Kopelman with TD Securities. Your line is open, please go ahead.

Speaker Change: I just told, thank you.

Speaker Change: Our next question comes from Kevin Kopelman with TD Securities. Your line is open, please go ahead.

Julie Whalen: So, there will be an impact of that, you know, on all those metrics for the lodging business, but we're not providing guidance on those right now.

Unknown Executive: Just one so quickly on the macro, you called out ADR softness. Are you seeing any softness in nights? And then could you just give more color on how you're managing your B2C advertising expenses in the second half, given the backdrop.

Kevin Kopelman: Thanks a lot.

Kevin Kopelman: Just one, so quickly on the macro, you called out ADR softness, are you seeing any softness in nights? And then could you just give more color on how you're managing the B2C advertising expenses in the second half, given the backdrop?

Julie Whalen: Okay, and then I have a follow up on the cost side of things. So, off the, you know, refrigeration that you announced earlier this year, how much of that has been action and how much has yet to follow on the second half? Yeah, the majority of that has been action. There were some that we took action on in Q1 some that we took action on in Q2. And so that's why you're seeing the favorability and overhead because you're getting the full quarter of the Q1 action and then you're getting the additional Q2 action that's coming through.

Unknown Executive: I'm sorry; we said it could repeat the person.

Speaker Change: Sorry, can you repeat the first part of the question?

Unknown Executive: The first part was on the macro softness that you're seeing quarter to date, you called out the ADR softness, but are you also seeing a slowdown in kind of underlying night activity? Yes. Yes, we are. In particular, Stays, you said. Well, just kind of, you know, just to be kind of separating out the window versus, How much do they actually look like they're going to be traveling?

Speaker Change: The first part was on the macro softness that you're seeing quarter-to-day you called out the ADR softness but are you also seeing a slowdown and kind of underlying nights activity?

Julie Whalen: There's a little bit that's left on that, but not significant. But of course, it doesn't mean we're stop looking at every single line where we can find efficiencies elsewhere. It's just on that particular cost, cost action that we mentioned where we're almost through it. Thank you. Yep.

Speaker Change: Yeah, that's what it was saying. Yes, we are.

Speaker Change: In particular, Stays, you said?

Speaker Change: Well, it's just kind of, you know, it's a big kind of separating out the window versus how much of the action look like they're going to be traveling.

Unknown Executive: Yeah, no, we're definitely seeing a reduction in nights. I mean, it's not just a booking window play, if that's what you're talking about, or just an ADR play. Yeah, definitely, as we said, there's been some softening in travel demand, which is impacting the transactions side of it. But it's a combination of all that, right? I mean, certainly all those other factors are also true.

Kevin Kopelman: Our next question comes from Kevin Copeland with TD securities. Your line is open. Please go ahead. Thanks a lot. Just one so quickly on the macro, you call out ADR softness. Are you seeing any softness and nights and then could you just give more color on how you're managing the B2C advertising expenses and second half given the backdrop. Thanks. Sorry, you said you repeat the first part of the question. The first part was on the macro softness that you're seeing quarter today that you called out the ADR softness, but you also seeing a flow down and kind of underlying nights activity.

Speaker Change: Yeah, no, we're definitely seeing a reduction in nights. I mean, it's not just a booking window play, if that's what you're talking about, or just an ADR play. Yeah, there's definitely, as we said, there's been some softening.

Unknown Executive: As far as your B2C advertising expense question, I mean, obviously, that's what our plans are assumed within the guidance that we gave. And we said that we were guiding to on the year EBITDA margins to be relatively in line with last year. So we're managing to do that while still investing in Vrbo International markets. And so, you know, certainly, we will be looking at advertising, seeing what makes sense relative to the top line.

Speaker Change: In Travel Demand, which is impacting the transactions side of it. But it's a combo of all that, right? I mean, there's certainly all those other factors are also true.

Speaker Change: As far as your B2C advertising expense question, I mean, obviously, that's what our plans are going to assume within the guidance that we gave and we said that we are guiding to on the year EBITDA margins to be relatively in line with last year so we're managing to that.

Speaker Change: while still investing in Vrbo international markets. And so, you know, certainly we will be looking at advertising, seeing what makes sense relative to the top line.

Kevin Kopelman: Yes, we are. Okay. In particular stage, you said. Well, it's just kind of, you know, just a big kind of separating out the window versus how much of the actually look like they're going to be traveling. Yeah, no, we're definitely seeing a reduction in nights. I mean, it's not just a booking window play if that's what you're talking about or just an ADR play. Yeah, there's definitely as we said, there's been some stocking in travel demand, which is impacting the transactions side of it.

Speaker Change: and any of the variable costs associated with that, depending on where that top line goes. But what we're managing to is the full year EBITDA margins relative in line with last year.

Unknown Executive: And I would just remind you, as Julie said, obviously looking very closely at what are the macro trends, what are the demand trends, where do we want to spend on marketing and advertising? And we look at marketing, promotions, pricing, and loyalty all sort of in the same bucket to then say, which of these is going to be most effective given the environment? And then even within marketing, are we going to put more money into performance or into social or into other channels?

Unknown Executive: And any of the variable costs associated with that, depending on where that top line goes, but that what we're managing to achieve is the full year EBITDA margins relatively in line with last year.

Speaker Change: And I would just remind you, as Julie said, obviously looking very closely at what are the macro trends, what are the demand trends, where do we want to spend in marketing and advertising.

Speaker Change: and we look at marketing promotions and pricing and loyalty, all sort of in the same bucket to then say which of these is going to be most effective given the environment. And then even within marketing, you know, are we going to put money more into performance?

Kevin Kopelman: But it's a combo of all right, I mean, there's certainly all those other factors are also true. As far as your B2C advertising expense question, I mean, obviously that's what, you know, what our plans are been assumed within the guidance that we gave and we said that we are guiding to on the year. Even dot margins to be relatively in line with last year, so we're managing to that while still investing in verb of international markets.

Speaker Change: or into social into other channels. And I, you know, I know, I spent a lot of time with our marketing team, just looking at where we're getting the best returns, where we're leaning in, where do we need to pull back and the like.

Unknown Executive: And I know I spend a lot of time with our marketing team just looking at where we are getting the best returns, where we are leaning in, where we need to pull back, and the like.

Unknown Executive: And you noted maybe rationalizing some marketing spend; what were you referring to there? If you could share any more color? It was, I mean, one of the things

Speaker Change: And you noted maybe rationalizing some marketing spend. What were you referring to there, if you could share any more color?

Kevin Kopelman: And so, you know, certainly, we will be looking at advertising, seeing what makes sense, relatives at the top line. And any of the variable costs associated with that, depending on where that top line goes, but that what we're managing to is the full year. Even dot margins also been mine last year. And I would just remind me, as Julie said, obviously looking very looking very closely at what are the macro trends, what are the demand trends, where do we want to spend in marketing and advertising.

Unknown Executive: It was so we I mean, one of the things we've been doing in the last bit of time is really interrogating every dollar of our marketing spend. And, you know, for example, looking at non-working versus working marketing spend, understanding the returns on each because, you know, especially when going into an environment that is a bit more volatile, it's just so important that every dollar, we understand the returns when we're investing more in international and Vrbo, we need to be making that proficiency elsewhere.

Speaker Change: It was so we, I mean, one of the things we've been doing the last bit of time is.

Speaker Change: Really interrogating every dollar of our marketing spend.

Speaker Change: And, you know, for example, looking at non-working versus working marketing spend, understanding the returns on each.

Speaker Change: Because we, especially if we're going into an environment that is a bit more volatile, it's just so important that every dollar, we understand the returns. When we're investing more in international and Vrbo, we need to be making that proficiency elsewhere.

Kevin Kopelman: And you know, we look at marketing promotions and pricing and loyalty all sort of in the same bucket to then say which of these is going to be most effective given the environment. And then even within marketing, you know, are we going to put money more into performance or into social or to other channels. And you know, I know I spent a lot of time with our marketing team just looking at where we're getting the best returns, where we're leaning in, where do we need to pull back and the light.

Speaker Change: Thank you.

Operator: Our next question comes from Ken Gawrelski with Wells Fargo. Your line is open, please go ahead.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Ken Gorelski with Wells Fargo. Your line is open, please go ahead.

Unknown Executive: Thank you so much. Two, if I may. First, could you talk a lot about your marketing plans and not your advertising and media plans, I should say, not your marketing plans, sorry. Could you talk about opportunities, not necessarily in the short term but over the kind of next one to two years, how you can continue to grow that business robustly and what the opportunities look like? And then the second is just more tactical.

Ken Gorelski: Thank you so much. Two, if I may. First...

Ken Gorelski: Could you, you talked to the Explorer Conference in May a lot about your marketing plans, your advertising and media plans, I should say, not your marketing plans, sorry. Could you talk about opportunities, not necessarily in the short term, but over the kind of next one to two years, how you can continue to grow that business robustly and what the opportunities look like? The second is just more tactical. As you think about...

Kevin Kopelman: I think. And you noted, baby, rationalizing some marketing spend. What were you referring to there if you could share any more color? You know, so we, I mean, one of the things we've been doing the last bit of time is really interrogating every dollar or marketing spend. And, you know, for example, looking at non working versus working marketing spend understanding your returns on each. Because, you know, we especially for going into an environment that is a bit more volatile. It's just so important that every dollar, we understand the returns. When we're investing more in international and Vrbo, you need to be making that for efficiency elsewhere. Thank you. Thanks.

Unknown Executive: As you think about the one key expansion to the UK, do you expect that to be material? How material do you expect it to be on Hotels.com in the back half of the year? Thank you.

Speaker Change: The one key expansion to the UK, do you expect that to be a material, and how much material do you expect that to be on hotels.com in the back after the year? Thank you.

Unknown Executive: Thanks for the question. Let me start with the first one.

Unknown Executive: So you're right, we talked about the travel media network at Explore. And we're really excited about the opportunity to grow advertising and to bring value to our advertisers. Today, a lot of our advertising business happens in the shopping and booking moments of the travel funnel. So when someone's in the search results, or when they're in the booking process, there's not as much when they're in the dreaming and very upper funnel, and there isn't as much, for example, in post booking.

Speaker Change: Thanks for the question. Let me start with the first one. So you're right, we talked about the travel media network at Explore, and we're really excited about the opportunity to grow advertising and to bring value to our advertisers.

Unknown Executive: Our next question comes from Ken Gorelski with Wells Fargo. Your line is open. Please go ahead. Thank you so much to if I may. First, could you talk to the Explorer conference and may a lot about your marketing plans and not your advertising and media plans, I should say, not your marketing plan, sorry. Can you talk about opportunities, not necessarily in the short term, but over the kind of next one to two years, how you can continue to grow that business robustly and what the opportunities look like.

Speaker Change: Today, a lot of our advertising business happens on the shopping and booking moments of the travel funnel. So, when someone's in the search results or when they're in the booking process.

Ken Gorelski: There's not as much sort of when they're in the dreaming and very upper funnel, and there isn't as much, for example, in post-booking. So we think that there's an opportunity there.

Unknown Executive: So we think that there's an opportunity there. We also think that there is an opportunity to expand the number of partners who are using our advertising tools. So whether it's the sponsored listings and having more hotels or airlines using sponsored listings, or new products that we can bring to destination management organizations, we think that there's a lot of growth and opportunity there as well. I'd also call out that we're doing some interesting work on providing more tools to these advertisers.

Ken Gorelski: We also think that there's an opportunity to expand in the number of partners who are using our advertising tools. So, you know, whether it's the sponsored listings and having more hotels or airlines using sponsored listings, or new products that we can bring to destination management organizations.

Unknown Executive: And then second is just a more tactical as you think about the one key expansion to the UK. Do you expect that to be a material any how expert, how material do you expect that to be on hotels.com in the back half of the year. Thank you. Thanks for the question.

Ken Gorelski: We think that there's a lot of growth and opportunity there as well.

Ken Gorelski: I'd also call out that, you know, we're doing some interesting work on providing more tools to these advertisers. So making it easier for them to...

Unknown Executive: So making it easier for them to sort of self-serve on some of our advertising products, self-serve on sort of getting, letting us do more of the targeting for them. We're about to introduce some video into our ads, which we think will make those perform better. So I would just say, sort of long term, we think there's a lot of opportunity here. On the question about one key and the expansion of the UK, I don't think it's going to have a material impact at the company level.

Ariane Gorin: Let me start with the first one. So you're right. We talked about the travel media network at Explorer and, you know, we're really excited about the opportunity to grow advertising and to bring value to our advertisers. Today, a lot of our advertising business happens on the shopping and booking moments of the travel funnel. So when someone's in the search results or when they're in the booking process. There's not as much sort of when they're in the dreaming and very upper funnel and there isn't as much, for example, in host booking.

Ken Gorelski: You know, sort of self-serve on some of our advertising products, self-serve on sort of getting, letting us do more of the targeting for them. We're about to introduce some video into our ads, which we think will make those perform better.

Ken Gorelski: So I would just say for the long term, we think there's a lot of opportunity here.

Speaker Change: On the question about one key in expansions of U.K., I don't think it's going to have a material impact at the company level, certainly you learned from the one key rule out in the U.S.

Unknown Executive: Certainly, we learned from the one key rollout in the US on how to treat the sort of higher-value Hotels.com customers who might feel like they're getting a sort of down step in their value, and we're using that in the UK, but I think at a company level, it's not material.

Ariane Gorin: So we think that there's an opportunities there. We also think that there's an opportunity to expand in the number of partners who are using our advertising tools. So, you know, whether it's the sponsored listings and having more hotels or airlines using sponsored listings or new products that we can bring to destination management organizations. We think that there's a lot of growth and opportunities there as well. I'd also call out that, you know, we're doing some interesting work on providing more tools to these advertisers.

Ken Gorelski: on how to treat the sort of higher value hotels.com customers who might feel like they're getting a sort of down step in their value. And we're using that in the UK. But I think at a company level, it's not material.

Operator: Our next question comes from Richard Clarke with the Bernstein Society General Group. Your line is open, please go ahead.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Richard Clark with Bernstein Society General Group. Your line is open, please go ahead.

Unknown Executive: All right, thanks for taking my question. Just a question on the pause in the rollout of Wonky. Does that mean that the hotels.com buy 10 nights, get one free promotion will remain in all markets apart from North America and the UK? And is that awkward for your sort of supply partners, that they've got to deal with you in multiple different loyalty schemes? And what does it mean for your sort of B2B rollout?

Ariane Gorin: So making it easier for them to, you know, sort of self serve on some of our advertising products self serve on sort of getting letting us do more of the targeting for them. We're about to introduce some video into our ads, which we think will make those perform better. So I would just say sort of long term. We think there's a lot of opportunity here.

Speaker Change: Alright, thanks for taking my question. Just a question on the pause on the rollout as one key. Does that mean that the hootails.com?

Richard Clark: buy 10 nights, get one free. That will remain in all markets apart from North America and the UK. Is that awkward for your sort of supply partners that they've got to deal with you in multiple different loyalty schemes? And what does it mean for your sort of B2B rollout? I think Wonky was one of the things you were offering as part of the B2B rollout. So how would that affect the rollout of B2B in sort of non-US, non-UK markets?

Unknown Executive: I think Wonky was one of the things you were offering as part of the B2B rollout. So how will that affect the rollout of B2B in sort of non-US, non-UK markets? Yep. Okay. Thanks for the question.

Ariane Gorin: On the question about one key and expansion of the UK. I don't think it's going to have a material impact at the company level. Certainly you learned from the one that one key will out in the US. On how to treat the sort of higher value of hotels.com customers who might feel like they're getting it sort of down step in their value and we're using that in the UK. But I think at a company level, it's not material. Thank you.

Unknown Executive: Yep, okay, thanks for the question. In terms of whether the Hotels.com 10-for-1 will remain the same outside of the US and UK, the answer is yes. It's a simple program for now, and it's remaining that way, as we work to figure out what the path forward be.

Speaker Change: Thanks for the question. In terms of whether the Hotels.com 10-for-1 will remain the same outside of the U.S. and U.K., the answer is yes. It's a simple program. For now, it's remaining that way. As we work to figure out what would the path forward be.

Unknown Executive: For our supply partners, our hotels, for example, it's completely transparent to them. They participate in member deals where they provide different levels of discounts for different tiers of members. And we actually translate that into our Hotels.com rewards program. So if I'm a hotel, I'm able to reach those Hotels.com reward members, whether they're in a country that has the existing 10 for 1 stamps or whether they're in the U.S. In terms of B2B, actually, 1Key is not rolled out to the B2B business yet.

Richard Clarke: Our next question comes from Richard Clarke with Bernstein Society General Group. Your line is open, please go ahead. All right thanks for taking my question.

Speaker Change: For our supply partners, our hotels, for example.

Richard Clark: It's completely transparent to them. They participate in member deals where they provide different levels of discount for different tiers of members.

Ariane Gorin: Just a question on the pause on the rollout of Wang Yi. Does that mean that the hotel's dot com by 10 nights get one free? That will remain in all markets, apart from North America and the UK. Is that awkward for your sort of supply partners that they've got to deal with you in? Multiple different loyalty schemes. And what does it mean for your sort of B2B rollout? I think Wang Yi was one of the things you were offering as part of the B2B rollout. So how would that affect the rollout of B2B in sort of non-US, non-UK markets?

Richard Clark: and we actually translate that into our hotels.com rewards program. So if I'm a hotel, I'm able to reach those hotels.com rewards, members, whether they're in a country that has the existing 10-4-1 stamps or whether they're in the US.

Unknown Executive: That's a business where we're providing inventory and technology, but a lot of our partners have their own loyalty programs. You may be thinking about, we've talked about rolling out 1Key to our advertising partners and allowing them to use some of their advertising dollars to accelerate 1Key earnings for their hotels. That again won't really make a difference. They can do that in the US and the UK. It won't be something they can do outside of that.

Speaker Change: In terms of B to B, actually one key is not rolled out to the B to B business.

Richard Clark: That's the business where we're providing inventory and technology, but a lot of our partners have their own loyalty program.

Ariane Gorin: Yep, thanks for the question. In terms of whether the hotel's dot com 10 for one will remain the same outside of the US and UK, the answer is yes. It's a simple program for now. It's remaining that way as we work to figure out what would the path forward be for our supply partners or hotels, for example, it's completely transparent to them. They participate in member deals where they provide different levels of discount for different tiers of members and we actually translate that into our hotel's dot com rewards program.

Speaker Change: You may be thinking about, we've talked about rolling out OneKey to our advertising partners and allowing them to use some of their advertising dollars to accelerate OneKey Earn.

Richard Clark: for their hotels.

Richard Clark: And that, again, won't really make a difference. You know, they can do that in the U.S. and the U.K. It won't be something they can do outside of that. But again, this is why we are going to take the time to think about what is the value proposition for our loyalty programs in countries where we only have one big brand at scale.

Unknown Executive: But again, this is why we are going to take the time to think about what the value proposition is for our loyalty programs in countries where we only have one big brand at scale. Thanks, thanks. Thank you. Yeah, thanks for the question. Our next question comes from John Colantuoni with Sheffreys. Your line is open, please go ahead.

Ariane Gorin: So if I'm a hotel, I'm able to reach those hotels dot com reward members whether they're in a country that has the existing 10 for one stamps or whether they're in the US. In terms of B2B, actually, one key is not rolled out to the B2B business. That's a business where we're providing inventory and technology, but a lot of our partners have their own loyalty program. You may be thinking about we've talked about rolling out one key to our advertising partners and allowing them to use some of their advertising dollars to accelerate one key earn for their hotels and that again won't really make a difference as they can do that in the US and the UK.

Richard Clark: Thank you.

Speaker Change: Thanks for watching!

Speaker Change: Our next question comes from John Talantoning with Jeffries. Your line is open, please go ahead.

John Talantoning: Great, thanks for taking my questions. Two quick ones for me. First on the three cue outlook, does your outlook for the third quarter assume there's a recovery in night?

Speaker Change: in August and September relative to July . And second question, just talk to some of the pricing reductions you started making last quarter and how that impacted conversion. And now that you're seeing some trade down, whether you might have to lean in a little bit more there. Thanks.

Unknown Executive: Yeah, as far as the first question on the 3Q outlook, we have not sort of baked in any, you know, upside or something in September. You know, we've obviously run our various scenarios and the information that we have based on what's happening in July and run that out as to, you know, where we think the quarter will land. Certainly, you also have to take into consideration, for revenue, at least, what happened in prior quarters because then the states, you know, come to fruition in the third quarter.

Speaker Change: Yeah, as far as the first question on the 3Q Outlook, we have not sort of baked in any, you know,

Ariane Gorin: It won't be something that can do outside of that, but again, this is, this is why we are going to take the time to think about what is the value proposition for our loyalty programs in countries where we only have one big brand at scale.

Speaker Change: Upside or something in September, you know, we've looked at obviously run our various scenarios and what the information that we have based on what's happening in July and ran that out as to, you know, where we think the core will land certainly it's also.

Speaker Change: You know, you have to take into consideration for revenue, at least, what happened in prior quarters, because then the states, you know, come to fruition in the third quarter, so we already have some of that data, and that's just going to play out, but certainly based on all the new data in July , we've, you know, just run our scenarios and, you know, let it play out for Q3 accordingly, but there isn't any sort of

Ariane Gorin: Thank you. Thanks for the question.

Unknown Executive: So, we already have some of that data, and that's just going to play out. But certainly, based on all the new data in July, we've, you know, just run our scenarios and, you know, let it play out for Q3 accordingly. But there wasn't any sort of step up in September that we assumed. As far as the pricing actions, yes, we had made a call, you probably remember from last quarter that we had done some pricing actions towards the end that then we're going to be coming in to this quarter. We did see that come in.

John Colantuoni: Our next question comes from John and Helen Tony with Jeffries. Your line is open. Please go ahead. Great. Thanks to my questions. Two quick ones for me. First on a three-cue outlook.

Unknown Executive: And we only do those pricing actions if we get the returns. And so certainly, they are driving conversion for us. And so we're, you know, as we have been doing, we're going to continue with that going forward, as it is, you know, a good return marketing lever for us.

Speaker Change: Step up in September that we assumed.

Julie Whalen: Does your outlook for the third quarter assume there's a recovery and night in August and September relative to July? And second question. Just talk to the some of the pricing reductions you started making last quarter and how that impacted conversion. And now that you're seeing some trade down, whether you might have to lean in a little bit more there. Thanks. Yeah, as far as the first question on the three-cue outlook, we have not sort of baked in any, you know, upside or something in September.

Speaker Change: As far as the pricing actions, yes, we had made a call. You probably remember from last quarter that we had done some pricing actions towards the end that then we're going to be coming in to this quarter. We did see that time in and we only do those pricing actions if we get the returns, and so certainly they are driving conversions for us. As we have been doing, we're going to continue with that going forward as it is a good returning marketing lover for us.

Julie Whalen: We've looked at obviously run our various scenarios and what the information that we have based on what's happening in July and ran that out as to where we think the quarter will land. Certainly it's also, you know, you have to take into consideration for revenue, at least what happens in prior quarters, because then the states come to fruition in the third quarter. So we already have some of that data and that's just going to play out.

Operator: Our next question comes from Jed Kelly with Oppenheimer. Your line is open, please go ahead.

Speaker Change: Our next question comes from Jed Kelly with Oppenheimer. Your line is open, please go ahead.

Unknown Executive: Hey, great. Thanks for taking my question. Just going back to the B2B opportunity, is there any way you can sort of, you know, give us a backlog or just frame the amount of contracts you think are up, you know, that could potentially drive growth there? And then on Vrbo, just thinking of the fourth quarter marketing strategy, it's usually when you have a large brand campaign. If this softness continues, can you just talk about how that impacts your marketing strategy? Thanks.

Jed Kelly: Hey, great. Thanks for taking my question. Just going back to the B to B opportunity. Is there any way you can sort of give us a backlog or just frame like the amount of contract you think are up?

Julie Whalen: But certainly based on all the new data in July, we've just run our scenarios and let it play out for Q3 importantly, but there isn't any sort of. Let's get up in September that we assume. And, as far as the pricing actions, yes, we had made a call. You probably remember from last quarter that we had done some pricing actions towards the end that then we're going to be coming in to this quarter.

Jed Kelly: that can potentially drive growth there. And then just on Vrbo, just thinking of the fourth quarter marketing strategy, that's usually when you have like a large brand campaign. If this softness continues, can you just talk about how that impacts your marketing strategy? Thanks.

Unknown Executive: So on the first one, thanks for the questions. On the first one, you know, I'm not going to share details about the pipeline. What I will say is, you know, we're thoughtful about which deals we want to bid for. I think often when you have a B2B team, it's as important which deals you decide not to bid for as which ones you decide to bid for. And we have a super experienced team, a great business development team that's being thoughtful about where do we want to play and where do we not.

Julie Whalen: We did see that come in and we only do those pricing actions if we get the returns. And so certainly they are driving conversion for us. And so we're, you know, as we have been doing, we're going to continue with that going forward as it is, you know, a good returning. Marketing lover for us.

Speaker Change: So, on the first one, so thanks for the questions, on the first one,

Unknown Executive: Okay, thank you.

Speaker Change: Yeah, I'm not going to share details about the pipeline. What I will say is...

Speaker Change: You know, we're thoughtful about which deals we want to bid for. I think often when you have a B2B team, it's as important which deals you decide not to bid for as which ones you decide to bid for.

Chad Kelly: Our next question comes from Chad Kelly with Oppenheimer. Your line is open. Please go ahead. Hey, great. Thanks for taking my question. It's just going back to the B2B opportunity. Is there any way you can sort of give us a backlog or just frame like the amount of contracts you think are up. You know, that can potentially drive growth there. And then just just on Vrbo, just thinking of, you know, the fourth quarter marketing strategy. It's usually when you have like a large brand campaign. You know, if this softness continues, can you just talk about, you know, how that impacts your marketing strategy. Thanks.

Speaker Change: And we have a super experienced team, a great business development team that's being thoughtful about where do we want to play and where do we not.

Unknown Executive: I'd also say that, you know, growth can come from finding new partners, but growth also comes from our existing partners. So sometimes you might have a partner that we're powering three of their points of sale, and then they decide that they're going to expand into another couple of countries. And it's incumbent on our team to make sure that we're the ones powering them as they're growing their business. So when you think about the B2B business, it's not just what sort of the pipeline of new business, it's also what are all the actions we're doing. In our existing partners, in order to either win share or to just grow along with them. As far as the Vrbo marketing strategy.

Speaker Change: I'd also say that...

Jed Kelly: You know, growth can come from finding new partners.

Jed Kelly: But growth also comes from our existing partners. So sometimes you might have a partner that we're powering three of their points of sale, and then they decide that they're going to expand into another couple of countries. And it's incumbent on our team to make sure that we're the ones powering them as they're growing their business.

Jed Kelly: So when you think about the BDB business, it's not just what sort of the pipeline is new business, it's also what are all the actions we're doing in our existing partners in order to either we share or to just grow along with them.

Ariane Gorin: So on the first one, so thanks for the questions. On the first one, you know, I'm not going to share details about the, the, the pipeline. What I will say is, you know, we're thoughtful about which deals we want to bid for. I think often when you have a B2B team, it's as important, which deals you decide not to bid for as which ones you decide to bid for. And we have a super experienced team, a great business development team that's being thoughtful about where do we want to play and where do we not.

Unknown Executive: As far as the Vrbo marketing strategy, certainly, we learned from last year that you don't want to pull back too much on the marketing spend because Q1, and as you're entering Q1, it's a really big time for Vrbo. So that's part of the reason why we're even guiding in Q3 to pressure on EBITDA because we want to continue investing in Vrbo for that very reason, because we're investing for the longer term.

Speaker Change: As far as we know, you know, marketing strategy, certainly we learned for the last year that you don't want to pull back too much on the marketing spend, because Q1 and you know, for us, as you're entering Q1 is a really big time for Vrbo. So that's part of the reason why we're, you know, even guiding in Q3.

Speaker Change: to pressure on EBITDA because we want to continue investing in Vrbo for that very reason, because we're investing for the longer term. And so we would continue to invest in Vrbo. I mean, obviously it depends that there's some massive level of softness and all things are up to table, but I do not expect that that is not how we've been guided.

Unknown Executive: And so we would continue to invest in Vrbo. I mean, obviously, it depends if there's some massive level of softness, then all things are off the table. But we're not expecting that. That is not how we've been guided. And so our expectation is that we continue to invest in Vrbo, and that's assumed, obviously, within our margin guidance for the year to be relatively in line with last year.

Ariane Gorin: I'd also say that, you know, growth can come from finding new partners. But growth also comes from our existing partners. So sometimes you might have a partner that we're powering three of their points of sale. And then they decide that they're going to expand into another couple of countries. And it's incumbent on our team to make sure that we're the ones powering them as they're growing business. So when you think about the B2B business, it's not just what sort of the pipeline of new business. It's also what are all the actions we're doing in our existing partners in order to either we share or to just grow along with them.

Speaker Change: Guiding and so our expectations we continue to invest in Vrbo and that's assumed obviously within our margin guidance on the year to be relatively in line with last year.

Speaker Change: Thank you.

Operator: Our final question comes from Ron Josey with Citigroup. Your line is open, please go ahead.

Speaker Change: Amex GBT, Julie Whalen, Ariane Gorin,

Speaker Change: Thank you.

Speaker Change: Our final question comes from Ron Josie with Citigroup. Your line is open, please go ahead.

Unknown Executive: Great, thanks for taking the question. Maybe, Ariane, a follow up to your comment there on investing in marketing. I thought the 20% growth in room heights and the brand Expedia was a really key highlight. And so I want to understand just the drivers here, maybe a little more on geographic mix, and really the benefits from the advertising side of the brand as it continues to evolve. And then I think I heard you say conversion rates improved in the quarter as in multi-product attach rates. And so, again, just want to dive a little bit deeper on the product to hear how the fund and how transactions are going on Expedia overall. Thank you. Yep, thanks.

Ron Josie: Thanks for taking the question. Maybe Ariane, I'll follow up to your comment there on investing marketing. I thought the 20% growth and roommates in brand expedient was a really key highlight. So I want to understand just the drivers here, maybe a little more on geographic mix.

Julie Whalen: And as far as the, you know, marketing strategy, certainly we learned from last year that you don't want to pull back too much on the marketing spend because Q one. And you know, sorry, I should enter into one is a really big time for Verbo. So that's part of the reason why we're, you know, even guiding and Q three to pressure on EBITDA because we want to continue investing in Verbo for that very reason because we're investing for the longer term.

Ron Josie: And really, the benefits from the advertising side of the brand continues to evolve. And then I think I heard you say conversion rates improved in the quarter as did multi-product attach rates. And so, again, just want to dive a little bit deeper on the product to hear how the funnel, how transactions are going on Expedia overall. Thank you.

Julie Whalen: And so we would continue to invest in Verbo. I mean, obviously it depends if there's some massive level of softness and all things are up table, but I we're not expecting that that is not how we've been guided guiding and so our expectations we continue to invest into Verbo and that's assumed obviously within our margin guidance on the year to be relatively in line with last year. Thank you.

Unknown Executive: Yep, thanks, John, for the question. As you said, the brand Expedia has been a great highlight for us. And, you know, it also gives me confidence because it was the least disrupted of all of our brands. And it's the brand that's got all of our innovation going into it. We've also, over a number of years, really built up the brand value there. We've spent quite a bit on marketing over time, and now we're seeing leverage with it, because we have a great app install base, strong repeat, a great member base, and the value proposition on Brand Expedia for shopping and booking multi-item trips, whether it's directly through the package path or buying a flight and then later coming back and buying a hotel at a discounted rate is really strong for travelers.

Speaker Change: Yes, thanks so much for the question. As you said, I mean, EXPRENT EXPEELIA has been a great highlight for us.

Speaker Change: And, you know, it's also what gives me confidence, because it was the least disrupted of all of our brands, and it's the brand that's gotten all of our innovation going into it.

Speaker Change: We've also, over a number of years, really built up the brand value there. We've spent quite a bit in marketing over time, and now we're seeing leverage with it because we have a great app install base.

Ariane Gorin: Our final question comes from Ron Josie with City Group. Your line is open. Please go ahead. Thanks for taking the question. Maybe Ariane, I'll follow up to your comment there on investing marketing. I thought the 20% growth in roommates and brand Expedia was a really key highlight. And so I want to understand just the drivers here, maybe a little more on geographic mix. And really the benefits from the advertising side of the brand continues to evolve.

Speaker Change: strong repeat, a great member base, and the value proposition on brand Expedia 2.

Speaker Change: Shopping and booking multi-item trips whether it's directly through the package path or buying a flight and then later coming back and buying a hotel at a discounted rate.

Ariane Gorin: And then I think I heard you say conversion rates improved in the quarter as in multi product attach rates. And so again, just want to dive a little bit deeper on the product. And I would like to hear how how the final action is actually going on on Expedia overall. Thank you. Thanks for the question. As you said, I mean, expert Expedia has been a great highlight for us. And you know, it's also what gives me confidence because it was the least disrupted of all of our brands.

Unknown Executive: So I would just say, in general, we feel good about it. It's still, to my liking, too U.S. focused. I mean, you know, as our whole consumer business, we'd like to see more growth internationally. But, you know, as you say, Expedia is really a highlight. So thank you for the question.

Speaker Change: is really strong for travelers. So I would just say, in general, she'll good about it. It's still to my liking to US focus. I mean, as a whole consumer business, we'd like to see more growth internationally.

Julie Whalen: Amex GBT, Julie Whalen,

Unknown Executive: I will now hand the call back over to Ariane Gorin for her closing remarks. Okay.

Speaker Change: So, thank you for the question.

Ariane Gorin: And it's the brand that's gotten all of our innovation going into it. We've also over a number of years really built up the brand value there. We spent quite a bit in marketing over time. And now we're seeing leverage with it because we have a great app installed base, strong repeat, a great member base. And the value proposition on brand Expedia to shopping and booking multi item trips, whether it's directly through the package path or buying a flight.

Julie Whalen: I will now hand the call back over to Ariane Gorin for closing remarks.

Ariane Gorin: Okay, well, so I just want to thank you all again for joining us. Julie and I appreciate the questions and just want to leave you with the thought that we know the environment is becoming more volatile, but regardless, we believe we have a lot of opportunities ahead. We have great consumer brands that travelers love, a differentiated B2B business, diverse supply that's the strongest it's ever been, and a really powerful tech platform. So as we look to the future, we're going to use these assets to drive optimal growth.

Ariane Gorin: Okay, well, so I just want to thank you all again for joining us. Julie and I appreciate the questions and just want to leave you with the thought that we know the environment is becoming more volatile.

Speaker Change: But regardless, we believe we have a lot of opportunity ahead. We have great consumer brands, the Travelers Love, a differentiated BB business.

Speaker Change: diverse supply, the strongest it's ever been, and a really powerful tech platform. So as we look to the future, we're going to use these assets to drive optimal growth. Thank you all.

Ariane Gorin: And then later coming back and buying a hotel at a discounted rate is really strong for travelers. So I would just say in general, you're good about it. It's still to my liking to us focus. I mean, you know, as a whole consumer business, we'd like to see more growth internationally. But you, as you say, Expedia is really highlight. So thank you for the question.

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

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

Ariane Gorin: I want to hand the call back over to Ariane Goren for closing remarks. Okay, well, so I just want to thank you all again for joining us. Julie and I appreciate the questions and just want to leave you with the thought that we know the environment is becoming more volatile. But regardless, we believe we have a lot of opportunity ahead. We have great consumer brands that travelers love, a differentiated BB business, diverse supply that's the strongest it's ever been and a really powerful tech platform.

Speaker Change: Amex GBT, Julie Whalen, Amex GBT, Julie Whalen,

Ariane Gorin: So as we look to the future, we're going to use these assets to drive the global growth. Thank you all. That concludes today's call. You may not just connect your lines. Have a nice day. Thank you.