Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2025

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Recent Accounting Policies Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued new guidance to improve its income tax disclosure requirements. Under the new guidance, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate). The new guidance is effective for public business entities for annual periods beginning

after December 15, 2024. We will incorporate the new guidance in our tax disclosures in our consolidated financial statements for the current fiscal year ended December 31, 2025.

In November 2024, the FASB issued new guidance expanding disclosure requirements related to certain income statement expenses. The guidance requires tabular footnote disclosure of certain operating expenses disaggregated into categories, such as employee compensation, depreciation, and intangible asset amortization, included within each interim and annual income statement’s expense caption, as applicable. The effective date is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.

Significant Accounting Policies

Below are the significant accounting policies with interim disclosure requirements. For a comprehensive description of our accounting policies, refer to our 2024 Form 10-K.

Revenue

Prepaid Merchant Bookings. We classify payments made to suppliers in advance of Vrbo performance obligations as prepaid merchant bookings included within prepaid and other current assets. Prepaid merchant bookings was $457 million as of March 31, 2025 and $319 million as of December 31, 2024.

Deferred Merchant Bookings. We classify cash payments received in advance of our performance obligations as deferred merchant bookings. At December 31, 2024, $7.6 billion of advance cash payments was reported within deferred merchant bookings, $4.3 billion of which was recognized resulting in $574 million of revenue during the three months ended March 31, 2025. At March 31, 2025, the related balance was $11.9 billion.

At December 31, 2024, $937 million of deferred loyalty rewards related to internally administrated loyalty programs was reported within deferred merchant bookings, $190 million of which was recognized within revenue during the three months ended March 31, 2025. At March 31, 2025, the related balance was $985 million.

Deferred Revenue. At December 31, 2024, $164 million was recorded as deferred revenue, $75 million of which was recognized as revenue during the three months ended March 31, 2025. At March 31, 2025, the related balance was $176 million.

Practical Expedients and Exemptions. We have used the portfolio approach to account for our loyalty points as the rewards programs share similar characteristics within each program in relation to the value provided to the traveler and their breakage patterns. Using this portfolio approach is not expected to differ materially from applying the guidance to individual contracts. However, we will continue to assess and refine, if necessary, how a portfolio within each rewards program is defined.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Cash, Restricted Cash, and Cash Equivalents

Our cash and cash equivalents include cash and liquid financial instruments, including money market funds and term deposit investments, with maturities of three months or less when purchased. Restricted cash includes cash and cash equivalents that is restricted through legal contracts, regulations or our intention to use the cash for a specific purpose. Our restricted cash primarily relates to certain traveler deposits and to a lesser extent collateral for office leases. The following table reconciles cash, cash equivalents and restricted cash and cash equivalents reported in our consolidated balance sheets to the total amount presented in our consolidated statements of cash flows:

	March 31, 2025		December 31, 2024
	(in millions)
Cash and cash equivalents	$	5,715	$	4,183
Restricted cash and cash equivalents	2,019		1,391
Total cash, cash equivalents and restricted cash and cash equivalents in the consolidated statements of cash flows	$	7,734	$	5,574

Accounts Receivable and Allowances

Accounts receivable are generally due within thirty days and are recorded net of an allowance for expected uncollectible amounts. We consider accounts outstanding longer than the contractual payment terms as past due. The risk characteristics we generally review when analyzing our accounts receivable pools primarily include the type of receivable (for example, credit card vs hotel collect), collection terms and historical or expected credit loss patterns. For each pool, we make estimates of expected credit losses for our allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history continually updated for new collections data, the credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions and other factors that may affect our ability to collect from customers. The provision for estimated credit losses is recorded as cost of revenue in our consolidated statements of operations. During the three months ended March 31, 2025, we recorded approximately $8 million of incremental allowance for expected uncollectible accounts, offset by $5 million of write-offs.