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Booking Holdings Inc. (BKNG) Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered broad beats vs Street: revenue $4.76B (+8% YoY), adjusted EBITDA $1.09B (+21% YoY), and adjusted EPS $24.81 (+22% YoY), all above prior guidance; GAAP EPS was $10.07 due to FX and convertible-note marks . Street consensus was materially lower on EPS ($17.57), revenue ($4.59B), and EBITDA ($0.85B) — a clean beat across all three. Values retrieved from S&P Global.*
  • Room nights crossed 300M for the first time at 319M (+7% YoY); gross bookings rose to $46.7B (+7% YoY; +10% cc). Payments facilitation and disciplined fixed OpEx helped margins expand on an adjusted basis (Adj. EBITDA margin 22.9% vs 20.3% YoY) .
  • Management sees stable demand entering Q2 but widened full‑year ranges given macro/geopolitical uncertainty: FY 2025 cc gross bookings/revenue mid‑to‑high single digits (prior at least 8%), adjusted EPS low‑to‑mid‑teens, and adjusted EBITDA margin expansion of 50–100 bps; Q2 guide calls for revenue +10–12% and adjusted EBITDA $2.15–$2.20B .
  • Capital returns remain a catalyst: $1.8B buybacks in Q1 with $25.9B authorization remaining; dividend declared for Q2 at $9.60/share (June 30 pay date), sustaining shareholder yield while maintaining strong liquidity ($15.6B cash) .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and profit beats: revenue and adjusted EBITDA exceeded the high end of guidance, driven by payments revenues and better-than-expected fixed OpEx; adjusted EPS up 22% YoY .
  • Scale and diversification proving resilient: room nights 319M (+7% YoY) and gross bookings $46.7B (+7% YoY; +10% cc), supported by stable global demand and mix-shifts across corridors (e.g., Canada→Mexico) .
  • Strategic progress in flights and connected trip: airline tickets +45% YoY in Q1; connected-trip transactions +35% YoY; AI initiatives across brands (Booking.com smart filters/AI reviews; KAYAK.ai; Priceline Penny) enhancing conversion and customer support .

Management quotes:

  • “Both revenue and adjusted EBITDA exceeded the high end of our prior guidance ranges… adjusted earnings per share… grew 22% year-over-year.”
  • “We are currently seeing stable… travel demand despite rising geopolitical and macroeconomic concerns.”
  • “We saw connected trip transaction growth of 35% year-over-year… high single-digit percentage of Booking.com’s total transactions.”

What Went Wrong

  • GAAP optics weighed by non-operational items: GAAP net income $333M (-57% YoY) and GAAP EPS $10.07 (-55% YoY) due to FX remeasurement losses on euro bonds and mark-to-market on the convertible note; these were excluded from adjusted results .
  • U.S. softness and shorter stays: U.S. room-night growth low single digits with shorter length of stay, signaling more cautious consumer behavior vs Europe’s stability; bifurcation favoring higher-star hotels .
  • Slightly higher marketing ratio vs prior-year quarter: marketing expense 3.8% of gross bookings (vs 3.7% in Q1 2024), reflecting scaled social spend at attractive but lower incremental ROIs vs average; still within planned leverage trajectory .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Billions)$4.42 $5.47 $4.76
Gross Bookings ($USD Billions)$43.5 $37.2 $46.7
Room Nights (Millions)297 261 319
GAAP Net Income ($USD Billions)$0.776 $1.068 $0.333
GAAP EPS ($)$22.37 $31.95 $10.07
Adjusted EBITDA ($USD Billions)$0.898 $1.848 $1.088
Adjusted EBITDA Margin (%)20.3% 33.8% 22.9%
Net Income Margin (%)17.6% 19.5% 7.0%
Free Cash Flow ($USD Billions)$2.574 $0.644 $3.162
Cash & Cash Equivalents ($USD Billions)N/A$16.164 $15.578

Revenue breakdown by type:

Revenue Type ($USD Billions)Q1 2024Q4 2024Q1 2025
Merchant Revenues$2.388 $3.336 $2.918
Agency Revenues$1.763 $1.864 $1.564
Advertising & Other Revenues$0.264 $0.271 $0.280

KPIs and efficiency:

KPI / EfficiencyQ1 2024Q4 2024Q1 2025
Airline Tickets (Millions)11 14 16
Marketing Expense (% of Gross Bookings)3.7% 4.2% 3.8%
Constant Currency ADR change (%)N/A+2% +1%

Versus Wall Street consensus (S&P Global):

MetricQ1 2024Q4 2024Q1 2025
EPS Consensus vs Actual ($)14.14* vs 20.39 36.05* vs 41.55 17.57* vs 24.81
Revenue Consensus vs Actual ($B)4.256* vs 4.415 5.178* vs 5.471 4.590* vs 4.762
EBITDA Consensus vs Actual ($B)0.721* vs 0.898 1.648* vs 1.848 0.851* vs 1.088

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Room Nights Growth (%)Q2 2025N/A4–6% Initial issuance
Gross Bookings Growth (%)Q2 2025N/A10–12% (incl. flight lift; slight Easter impact) Initial issuance
Constant Currency Accommodation ADRsQ2 2025N/AAbout flat YoY Initial issuance
Revenue Growth (%)Q2 2025N/A10–12% (≈+3 ppt Easter benefit) Initial issuance
Adjusted EBITDA ($)Q2 2025N/A$2.15B–$2.20B Initial issuance
FX impact on reported growthQ2 2025N/A+~4 ppt Initial issuance
Adjusted EBITDA Margin ExpansionFY 2025Slightly below 100 bps (prior call) 50–100 bps Maintained range clarity
Gross Bookings (cc)FY 2025≥8% Mid–high single digits Widened (high end intact)
Revenue (cc)FY 2025≥8% Mid–high single digits Widened (high end intact)
Adjusted EPS GrowthFY 2025~15% cc Low–mid teens Widened
FX impact on FY reportedFY 2025~+3 ppt (prior) ~+2 ppt Lower FX tailwind
Targeted ReinvestmentsFY 2025~$170M ~$170M Maintained
Transformation Run-Rate SavingsFY 2025~$150M in-year; ~$400–$450M run-rate ~$150M in-year; ~$400–$450M run-rate Maintained
DividendQ2 2025N/A$9.60/share; payable 6/30/25; record 6/6/25 Initial issuance
BuybacksQ1 2025Remaining auth $7.7B at 12/31 + $20B add (Jan) $1.8B repurchased in Q1; $25.9B remaining auth at 3/31 Increased remaining authorization

Earnings Call Themes & Trends

TopicQ3 2024 (Prior Q-2)Q4 2024 (Prior Q-1)Q1 2025 (Current)Trend
AI/Generative AIBroad deployment across brands; Booking.com AI Trip Planner; Penny Voice; KAYAK tools; OpenTable AI voice bot Emphasis on agentic models; partnerships with leading LLM providers; cost efficiencies emerging (CS) Continued integration; Booking.com smart filters/AI review summaries; KAYAK.ai launch; Priceline product updates Expanding scope; early measurable efficiency gains
Connected TripConnected transactions +40% YoY; high single-digit % of transactions Continued progress; merchant mix foundational Connected transactions +35% YoY; flights +45% YoY Sustained growth; increased multi-vertical attach
Regional TrendsEurope re-accelerated; U.S. low single-digit Global double-digit Q4 room-nights; Europe, Asia robust U.S. cautious (shorter stays); Europe/Asia high single-digit; corridor shifts (less inbound to U.S.) Stable globally; U.S. softer
Marketing/ROIsHigher ROIs; leverage expected Marketing leverage; social channels becoming meaningful Marketing 3.8% of bookings; social scaled at attractive incremental ROIs Mix-optimized; social rising
Fintech/PaymentsMerchant mix 65% in Q3; payments support Merchant mix 59% FY; positive contribution margin Payments revenues drove revenue beat; sales & other % lower despite merchant mix Scaling; margin-positive
Alternative AccommodationsListings 7.9M; growth +14% Q4 AA room nights +19%; mix 33% Q1 AA room nights +12%; mix 37% (+1 ppt YoY) Sustained outgrowth vs hotels
Transformation/OpExFixed OpEx leverage focus New program; $150M 2025 savings; $400–$450M run-rate $32M costs; on track for $300M enabled savings; fixed OpEx -3% YoY Execution underway

Management Commentary

  • Glenn Fogel: “We saw a healthy growth in room nights and gross bookings… strong bottom line outperformance… both revenue and adjusted EBITDA exceeded the high end of our prior guidance ranges.”
  • Ewout Steenbergen: “Revenue… exceeded the high end of our guidance by 4 percentage points due to higher revenues from facilitating payments… adjusted fixed operating expenses decreased 3% YoY.”
  • On macro: “Stable level global leisure travel demand despite rising geopolitical and macroeconomic concerns.”
  • On U.S. dynamics: “Decrease in length of stay in the U.S., which could indicate… more careful… spending; higher-star hotels more resilient.”
  • On AI progress: “AI offerings driving faster search, improvements in conversion and fewer customer support contacts.”

Q&A Highlights

  • AI agents: Confidence in vertical-specific agents alongside hyperscaler partnerships (OpenAI Operator, Microsoft Copilot, Alexa Plus); aim to execute bookings and deliver seamless connected trips .
  • Geographic diversification: Traffic shifting away from U.S. inbound offset by corridors like Canada→Mexico; global demand stable; U.S. shorter stays .
  • Marketing mix: Social channels scaled with attractive incremental ROIs; experimentation improved performance in traditional channels; expect marketing leverage for 2025 .
  • Alternative accommodations economics: No adverse impact on ADRs or margins; AA growth outpaces hotels globally; AA mix 37% (+1 ppt YoY) .
  • Guidance rationale: Widened FY ranges due to uncertainty (consumer confidence risks); high end unchanged relative to long-term ambition .

Estimates Context

  • Q1 2025 vs consensus: EPS $24.81 vs $17.57 (beat), revenue $4.76B vs $4.59B (beat), EBITDA $1.09B vs $0.85B (beat). Values retrieved from S&P Global.* Actuals from company materials .
  • Prior quarters also showed beats: Q4 2024 EPS $41.55 vs $36.05*; revenue $5.47B vs $5.18B*; EBITDA $1.85B vs $1.65B*. Values retrieved from S&P Global.* Actuals from company materials .
  • Implication: Street likely revises upward near-term profitability assumptions (payments contribution, fixed OpEx control), while FY range-widening tempers top-line revisions given macro commentary .

Key Takeaways for Investors

  • Demand stable; BKNG’s diversification offsets corridor shifts. U.S. caution is manageable, with Europe/Asia strength sustaining room-night growth and gross bookings momentum .
  • Strong operational beat powered by payments and cost discipline; adjusted margins expanded despite macro noise — a quality print supportive of multiple .
  • Capital return remains aggressive (buybacks + dividend); ample authorization ($25.9B) and cash ($15.6B) underpin downside support .
  • AI and connected trip are increasingly tangible: flight growth (+45%), connected transactions (+35%), AI features rolling out (KAYAK.ai, Priceline Neighborhood Edition) — expect conversion and service benefits to compound .
  • Guidance prudent: Q2 growth strong, FY ranges widened — trade tactically on near-term beat/margin leverage while respecting macro headlines; watch Q2 execution vs elevated EBITDA guide .
  • Monitor U.S. cohort behavior (length of stay, star-rating skew) and marketing mix (social ROI) for signals on 2H consumer strength and acquisition costs .
  • Track transformation savings cadence and payments monetization; sustained fixed OpEx leverage and fintech contribution are key to medium-term margin expansion .

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