Expedia Group, Inc. (EXPE) had one of those classic "good news, bad news" moments on Friday. The online travel platform crushed fourth-quarter expectations, posted double-digit booking growth, and even boosted its dividend. Wall Street's response? A 7% premarket selloff.

The issue wasn't what happened last quarter. It was what management said about the quarters ahead.

Strong Quarter, Cautious Tone

Revenue climbed 11% year over year to $3.55 billion, comfortably above the $3.42 billion analysts were expecting. Adjusted earnings per share jumped 58% to $3.78, beating estimates of $3.33. Adjusted EBITDA rose 32% to $848 million, with margins expanding nearly 370 basis points to 23.9%.

Gross bookings grew 11% for the quarter, driven by strong execution across the business. Booked room nights increased 9%, while lodging gross bookings surged 13%. The B2B segment was particularly robust, with gross bookings up 24% compared to 5% growth in the consumer-facing B2C segment.

Expedia ended the year with $5.7 billion in unrestricted cash and short-term investments. The company repurchased roughly 9 million shares for $1.7 billion during 2025 and raised its quarterly dividend by 20% to 48 cents per share, declared on February 12.

The Guidance Issue

For 2026, Expedia expects revenue between $15.6 billion and $16.0 billion, roughly in line with consensus of $15.69 billion. First-quarter revenue is projected at $3.32 billion to $3.37 billion, slightly above the $3.23 billion estimate.

But it was CFO Scott Schenkel's commentary that caught investors' attention. "The upper end of our range implies stability and growth on an FX neutral basis, while the lower end of the range reflects a more cautious view, given the dynamic macro environment," he said on the earnings call.

Translation: things could go either way, and management isn't willing to make bold promises.

Schenkel added that first-quarter margins should benefit from lower staffing levels and reduced marketing and cloud expenses, but the rest of the year could see relatively muted margin expansion. For a company that just posted 370 basis points of margin improvement, that's a noticeable shift in tone.

EXPE Price Action: Expedia Group shares traded down 6.71% at $212.00 during premarket trading on Friday.