Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Summary of Our Domestic and Foreign Income (Loss) Before Income Taxes

The following table presents a summary of our domestic and foreign income before income taxes for the periods presented:


	Year Ended December 31,
	2025		2024		2023
	(in millions)
Domestic	$	26	$	61	$	95
Foreign		19		26		30
Income (loss) before income taxes	$	45	$	87	$	125

Summary of the Components of Our Provision (Benefit) for Income Taxes

The components of our provision (benefit) for income taxes consisted of the following for the periods presented:


	Year Ended December 31,
	2025			2024			2023
	(in millions)
Current income tax expense (benefit):
Federal	$	(1	)	$	129		$	94
State		—			29			25
Foreign		8			(62	)		21
Current income tax expense (benefit)		7			96			140
Deferred income tax expense (benefit):
Federal		(2	)		(13	)		(9	)
State		(2	)		2			6
Foreign		2			(3	)		(22	)
Deferred income tax expense (benefit)		(2	)		(14	)		(25	)
Provision (benefit) for income taxes	$	5		$	82		$	115

Summary of Deferred Tax Assets and Deferred Tax Liabilities

The significant components of our deferred tax assets and deferred tax liabilities consisted of the following as of the dates presented:


	December 31,
	2025			2024
	(in millions)
Deferred tax assets:
Stock-based compensation	$	9		$	9
Net operating loss carryforwards		127			93
Provision for accrued expenses		8			10
Lease financing obligation		10			12
Foreign advertising spend		14			13
Tax credit carryforward		18			8
Capitalized research expenses		87			71
Interest carryforward		33			40
Other		9			8
Total deferred tax assets	$	315		$	264
Less: valuation allowance		(122	)		(106	)
Net deferred tax assets	$	193		$	158
Deferred tax liabilities:
Intangible assets	$	(43	)	$	(42	)
Property and equipment		(1	)		(2	)
Prepaid expenses		(4	)		(3	)
Building - corporate headquarters		(9	)		(10	)
Other		—			(1	)
Total deferred tax liabilities	$	(57	)	$	(58	)
Net deferred tax asset (liability)	$	136		$	100

Reconciliation of the Provision for Income Taxes

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:


	Year Ended December 31,
	2025
	(in millions)			Percent
Income tax expense at the federal statutory rate	$	9			21.0	%
Domestic federal
Tax Credits
Research credits		(3	)		(6.7	)%
Foreign tax credits		(3	)		(6.7	)%
Alternative energy tax credits (1)		(3	)		(6.7	)%
Nontaxable and nondeductible items
Stock-based compensation		10			22.2	%
Executive compensation		3			6.7	%
Acquisition costs		(2	)		(4.4	)%
Cross-border tax laws
GILTI		(1	)		(2.2	)%
FDII		(11	)		(24.4	)%
Other		1			2.2	%
State and local income taxes, net of federal income tax effect (2)		—			0.0	%
Foreign tax effects
United Kingdom
Nontaxable and nondeductible items		2			4.4	%
Statutory tax rate difference		(1	)		(2.2	)%
Stock-based compensation		2			4.4	%
Other		1			2.2	%
Australia
Statutory tax rate difference		1			2.2	%
France
Changes in valuation allowance		4			8.9	%
Statutory tax rate difference		(1	)		(2.2	)%
Italy
Nontaxable and nondeductible items		2			4.4	%
Singapore
Nontaxable and nondeductible items		(1	)		(2.2	)%
Other Foreign Jurisdictions
Statutory tax rate difference		1			2.2	%
Other		1			2.2	%
Worldwide changes in unrecognized tax benefits		(6	)		(14.2	)%
Provision (benefit) for income taxes	$	5			11.1	%

(1)

During the year ended December 31, 2025, pursuant to provisions allowable under the Inflation Reduction Act, the Company purchased $22 million of alternative energy federal tax credits from an unrelated third party. The Company anticipates utilizing the majority of these tax credits in 2025, while using any remaining credits in 2026. During the year ended December 31, 2025, the Company recorded a $3 million income tax benefit upon the purchase of these federal tax credits.

(2)

The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include Illinois, California, Massachusetts, New York state and city.

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:


	Year Ended December 31,
	2024			2023
	(in millions)
Income tax expense at the federal statutory rate	$	18		$	26
State income taxes, net of effect of federal tax benefit		5			6
Unrecognized tax benefits and related interest		4			27
IRS audit settlements		42			31
Additional IRS audit impacts (1)		6			—
Transfer pricing reserve adjustment		(4	)		24
FDII, GILTI and other provisions		(7	)		(9	)
Research tax credit		(6	)		(4	)
Stock-based compensation		15			22
Change in valuation allowance		(1	)		(6	)
Executive compensation		4			2
Other, net		6			(4	)
Provision (benefit) for income taxes	$	82		$	115

(1)

Amount relates to incremental interest associated with the 2009 through 2011 tax years IRS audit period with Expedia. See below for further information regarding this IRS audit settlement.

Reconciliation of the Beginning and Ending Amount of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows during the periods presented:


	December 31,
	2025			2024			2023
	(in millions)
Balance, beginning of year	$	99		$	136		$	157
Increases to tax positions related to the current year		1			2			8
Increases to tax positions related to the prior year		—			34			17
Decreases due to lapsed statute of limitations		—			—			—
Decreases due to tax positions related to the prior year		—			(3	)		(6	)
Settlements during current year		(8	)		(70	)		(40	)
Balance, end of year	$	92		$	99		$	136

Schedule of Income Taxes Paid

The amount of cash income taxes paid by the Company were as follows:


	Year Ended December 31,
	2025
	(in millions)
Federal	$	17
State and local		1
Foreign
Australia		2
Italy		6
Portugal		2
All other foreign		1
Income taxes, net of amounts refunded	$	29