Booking (BKNG) Q3 Earnings call transcript Oct 30, 2024

In the third quarter of 2024, Booking Holdings reported a significant improvement in top-line trends, particularly in Europe, which resulted in room nights, gross bookings, and revenue all surpassing the high end of their prior expectations. This positive performance, combined with disciplined marketing spend and lower-than-expected fixed operating expenses, helped drive adjusted EBITDA that was 9% above the high end of their prior guidance range.

Financial Highlights

Booking Holdings reported room nights of 300 million, an increase of 8% year-over-year, with revenue of $8 billion growing by 9% compared to the same period last year. Adjusted EBITDA increased by 12% year-over-year, reaching $3.7 billion. Additionally, adjusted earnings per share grew by 16% year-over-year, thanks to their strong capital return program, which reduced their average share count by 6%.

Regional Performance

Europe saw an improvement in room night growth in the third quarter, which was the primary driver of the sequential increase in global room night growth. Asia continues to perform well, with another quarter of double-digit growth, and the company remains optimistic about its outlook for this region. In the U.S., growth in the travel industry remains stable, with Booking Holdings' business outpacing the broader accommodation industry.

Future Expectations

Looking ahead to the fourth quarter, Booking Holdings expects to continue to see healthy levels of room night growth, as demand for travel remains resilient. The company remains confident in the attractive growth profile of the travel industry, their competitive position, and their long-term growth and earnings model.

Initiatives and Strategies

Booking Holdings is making progress on several key initiatives, including growing alternative accommodations, advancing their connected trip vision, developing AI capabilities, and expanding in Asia. These initiatives are aimed at delivering a better planning, booking, and travel experience for their travelers, while also benefiting supplier partners. The company remains focused on being a trusted and valuable partner to all the combination properties on their platforms.

Alternative Accommodations

Booking.com continues to see more properties connected to their platform, with 7.9 million listings at the end of Q3, up about 10% from last year. This growing number of listings provides more accommodation choices for travelers, contributing to strong alternative accommodations room night growth of 14% in Q3. The company's unique approach of making all property types, including hotels and alternative accommodations, available on their platform sets them apart from competitors.

Connected Trip

Booking Holdings is taking steps towards their long-term vision of making the planning, booking, and travel experience easier, more personal, and more enjoyable for travelers. The company's growing merchant capabilities help bring the different elements of travel together in a more seamless booking experience. Additionally, their Genius loyalty program has expanded outside of accommodations into other travel verticals, delivering more value to travelers and supplier partners.

Flight Bookings

Air tickets booked on Booking Holdings' platforms increased by 39% year-over-year in the third quarter, driven primarily by the growth of Booking.com's flight offering and strong growth in Agoda's flight business. The company continues to see a healthy number of new customers coming to Booking.com through flight bookings.

Conclusion

Booking Holdings' third-quarter results demonstrate a strong performance, particularly in Europe, and a positive outlook for the future. The company's initiatives, including growing alternative accommodations, advancing their connected trip vision, and expanding in Asia, are aimed at delivering a better travel experience for their customers while also benefiting their supplier partners. With a strong capital return program and disciplined marketing spend, Booking Holdings remains confident in their ability to drive growth and deliver value to shareholders.