EXPE

Expedia is quietly turning a slowing top line into a fast-improving bottom line. FY2025 revenue grew a moderate 7.6% to $14.7B — the fifth straight year of gains ($8.6B in 2021 to $14.7B in 2025) — but operating income jumped 41.8% to $1.87B and Adjusted EBITDA rose ~19% to $3.5B (from $2.93B), evidence of real operating leverage as the company laps restructuring and marketing discipline. Operating cash flow climbed 25.8% to $3.88B; against $770M of capex that leaves roughly $3.1B of free cash flow, a ~10% FCF yield on the $29.9B market cap. Management is funneling that cash back to owners — $1.93B of buybacks plus $200M of dividends in FY2025 — which shrank the share count 5.1% and lifted diluted EPS 9.6% to $9.81 even though net income only grew 4.9%. At $255.88 the stock trades at 26.1x earnings and 2.0x sales; that is a full-but-not-stretched multiple for a business compounding EBITDA in the high teens and steadily retiring stock.

The balance sheet supports the aggressive capital return. Long-term debt fell 14.4% to $4.47B and cash rose 29.4% to $5.41B, leaving the company roughly net-cash before the $1.69B current debt portion (up 62.2% — a refinancing/maturity item to watch). The sub-1.0 current ratio (0.73) looks alarming in isolation but is structurally normal for an OTA merchant model where customer prepayments and supplier payables sit in current liabilities. The 100.8% ROE is optically huge only because buybacks have ground book equity down to $1.28B, so it flatters rather than informs.