Booking Holdings Q1 Earnings Beat Estimates, Revenues Rise Y/Y

Booking Holdings BKNG reported first-quarter 2025 earnings of $24.81 per share, beating the Zacks Consensus Estimate by 43.83%. The figure increased 21.7% year over year.

BKNG’s earnings beat the Zacks Consensus Estimate in each the trailing four quarters, the average surprise being 18.98%.

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Revenues of $4.76 billion beat the Zacks Consensus Estimate by 3.58% and increased 8% year over year and about 10% on a constant currency (cc) basis. The growth exceeded the high end of company guidance by four percentage points due to higher revenues from facilitating payments, as well as less than one percentage point of benefit from changes in FX relative to our expectations.

Revenues as a percentage of gross bookings of 10.2% were slightly higher than expected due to the higher revenues from payments.  

In the first quarter of 2025, BKNG also benefited from its investments in AI-driven tools and personalized recommendations, which enhanced the user experience and streamlined operations.

Booking Holdings Inc. Price, Consensus and EPS Surprise

Booking Holdings Inc. price-consensus-eps-surprise-chart | Booking Holdings Inc. Quote

BKNG’s Top Line in Detail

Merchant revenues were $2.91 billion (61.3% of the total revenues), up 22.2% on a year-over-year basis. Agency revenues were $1.56 billion (32.8% of the total revenues), down 11.3% year over year.

Advertising & Other revenues were $280 million (5.9% of the total revenues), up 6.1% year over year.

First-quarter room nights of 319 million (the first quarter BKNG has ever exceeded 300 million room nights in a single quarter) slightly exceeded the high end of prior expectations and grew more than 7% year over year.

With growth across both traditional hotels and alternative accommodations, Booking.com’s total accommodation listings reached about 31 million by the end of the first quarter. For alternative accommodations at Booking.com, listings at the end of the first quarter were about 8.1 million and increased 9% year over year, with growth in every major region. The increase in accommodation choices for travelers helped contribute to solid alternative accommodations room night growth of 12% in the first quarter.

Booking Holdings saw Connected Trip transaction growth of 35% year over year in the first quarter, and these connected transactions continued to represent a high single-digit percentage of Booking.com’s total transactions. 

Operating Results of BKNG

Marketing expense, which is a highly variable expense line, increased 10% year over year. Marketing expense as a percentage of gross bookings was 3.8% and was about in line with expectations. Marketing expense as a percentage of gross bookings was slightly higher than the figure reported in the first quarter of 2024. 

Social media channel spend continues to scale at attractive incremental ROIs, while successful experimentation has led to improved performance in some of the traditional marketing channels. Those improved marketing channels helped drive increased booker volumes at comparable ROIs.

First-quarter sales and other expenses as a percentage of gross bookings were 1.5%, slightly lower than last year despite the higher merchant mix, as higher payment expenses were offset by lower bad debt provisions and increased efficiencies in customer service.

Adjusted fixed operating expenses decreased 3% year over year, which was better than our prior expectation, primarily due to lower G&A expenses. Personnel expenses came in slightly below our expectations for the quarter due to a $36 million reduction of a pension accrual. BKNG continued to take a disciplined approach toward managing fixed expenses. 

Adjusted EBITDA of approximately $1.1 billion grew 21% year over year and exceeded the high end of the guidance range by 28%, largely due to the higher revenue as well as the better-than-expected adjusted fixed operating expenses.  

BKNG Q1 Balance Sheet

As of March 31, 2025, the company’s cash and investments totaled $16.1 billion, down from $16.7 billion as of Dec. 31, 2024, due to about $2.1 billion of capital return, including share repurchases and dividends, a pay down of about $1.5 billion for debt that matured in March, as well as about $500 million in additional share repurchases to satisfy employee withholding tax obligations, partially offset by about $3.2 billion in free cash flow generated in the quarter. 

Booking Holdings had $16.02 billion of total debt, down from $16.59 billion as of Dec. 31, 2024.

Free cash flow was $3.2 billion compared with $0.6 billion reported in the previous quarter. Free cash flow in the first quarter benefited by about $1.9 billion from changes in working capital, driven primarily by the seasonal increase in our deferred merchant bookings balance.

Booking Holdings Offers Guidance for Q2

For the second quarter of 2025, Room Night Growth is expected to be between 4% and 6%. Gross Bookings growth is expected to be in the 10-12% range.

Second-quarter growth in revenues is expected to be between 10% and 12%.

The company expects second-quarter adjusted EBITDA between $2.15 billion and $2.2 billion, suggesting growth of 16% year over year at the high end.

BKNG Zacks Rank & Stocks to Consider

Currently, Booking Holdings carries a Zacks Rank #3 (Hold).

Carvana CVNA, TripAdvisor TRIP and Alibaba Group BABA are some better-ranked stocks that investors can consider in the broader Zacks  Retail-Wholesale sector. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Carvana shares have lost 5.9% year to date. CVNA is set to report its first-quarter 2025 results on May 7.

TripAdvisor shares have lost 4.8% year to date. TRIP is set to report its first-quarter 2025 results on May 7.

Alibaba Group shares have gained 5.7% year to date. BABA is slated to report its first-quarter 2025 results on May 13.

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