Booking Holdings reports strong Q4 earnings, Confident in Leisure Travel Growth

$BKNG(BKNG)

Booking Holdings Inc., a leading travel company, reported strong Q4 earnings on Thursday, with revenue growth of 18% year-over-year and a significant increase in room nights booked. The company expressed confidence in the long-term growth of leisure travel and announced a quarterly cash dividend of $8.75 per share, payable on March 28, 2024. 

The stock is down 11% despite the solid results. Expectations were high and investors are slipping to the sidelines. The stock will test key support at the 50-sma ($3554) which sets it up as a nice bounce candidate for day traders on Friday. 

Key Financial Highlights: 

- Earnings per share of $32.00, excluding non-recurring items, beating the FactSet Consensus of $29.72 

- Revenue rose 18.2% year/year to $4.78 billion, in line with the FactSet Consensus 

- Gross travel bookings increased by 16% from the prior-year quarter, with room nights booked up by 9% 

- Booked 231 million room nights, with a year-over-year growth of 9.2% 

- Total gross bookings were $31.7 billion, marking a year-over-year growth of 16.1% 

Booking Holdings reported a revenue of $4.78 billion for Q4 2023, which represents an 18% year-over-year increase. This figure surpasses the market consensus estimate of $4.73 billion, reflecting the company's ability to generate significant revenue growth.

Marketing expenses for the quarter amounted to $1.43 billion, a rise of 9.1% compared to the previous year. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached $1.46 billion, showing an 18% increase from the prior-year quarter and slightly beating the estimated value of $1.45 billion.

Despite a marginal decrease in the adjusted EBITDA margin from 30.7% to 30.6% year-over-year, Booking Holdings continues to maintain a healthy profitability level. The adjusted earnings per share (EPS) for Q4 2023 came in at $32.00, significantly surpassing both the EPS of the previous year ($24.74) and the Street expectation of $29.62.

One of the key metrics for assessing Booking Holdings' performance is the number of room nights booked. In Q4 2023, the company experienced a 9% increase in room nights booked compared to the same quarter in the previous year, amounting to a total of 231 million room nights sold. 

Booking Holdings also witnessed substantial growth in rental car days sold and airline tickets sold. Rental car days sold in Q4 2023 reached 15 million, indicating a year-over-year growth of 10.7%.

The sale of airline tickets experienced remarkable growth, with 9 million tickets sold, representing a significant 45.8% increase from the previous year. These positive trends demonstrate the attractiveness of Booking Holdings' offerings and the strength of the travel market. 

In terms of gross travel bookings, which encompass the total dollar value of all travel services booked by customers, net of cancellations, Booking Holdings reported $31.7 billion for Q4 2023, marking a substantial 16% increase from the prior-year quarter. The growth in gross travel bookings signifies the company's ability to capture a larger market share and generate higher revenue across their various services.

While there was a minor decline in agency bookings by 5.3% compared to the previous year, merchant bookings saw significant growth of 53.5%, leading to an overall growth in total gross bookings of 16.1%. This data indicates a shift in consumer preferences towards merchant bookings, potentially demonstrating a change in customer behavior and a preference for accommodations rather than traditional agency bookings.

 

Booking Holdings Inc. demonstrated strong performance in Q4 2023, with significant growth in room nights booked and airline ticket sales. Despite a slight decrease in agency bookings, the company's merchant bookings and total revenues saw notable growth. With a confident outlook on the long-term growth of leisure travel, Booking Holdings Inc. is well-positioned to capitalize on the ongoing recovery and expansion of the travel industry. 

The company's announcement of a quarterly cash dividend and its commitment to pay a cash dividend on a quarterly basis going forward further strengthens its financial position and investor confidence. As the travel industry continues to recover and grow, Booking Holdings Inc. is poised to benefit from the increasing demand for travel services and experiences.