Booking Holdings Inc. (BKNG) Q2 2025 Earnings Summary

Executive Summary

BKNG delivered a clean beat in Q2: revenue $6.80B (+16% y/y; +12% cc) and adjusted EPS $55.40 (+32% y/y), with adjusted EBITDA $2.42B (+28% y/y) and margin expansion to 35.6% on payments contribution, direct mix gains, and fixed-cost discipline . Versus S&P Global consensus, revenue beat by ~+$0.24B and EPS by ~$5.0; 29 and 24 estimates, respectively (see Estimates Context) .*
GAAP EPS fell 38% y/y to $27.43 on large non-cash FX losses tied to euro-denominated debt and derivatives ($961M), while underlying operating metrics were robust (room nights +8%, bookings +13%) .
Guidance: Q3 revenue growth of 7–9% and adjusted EBITDA of $3.9–$4.0B; FY25 outlook raised at the midpoint with revenue/gross bookings “low double digits” reported and ~125 bps margin expansion; room-night growth expected to moderate on tougher Aug/Sep comps and macro/geopolitical uncertainty .
Strategic progress: “Connected Trip” transactions now low double-digit share of Booking.com transactions (+30%+ y/y); flight tickets +44% y/y; direct B2C mix mid‑60%, app mid‑50%, and alternative accommodations mix 37% of room nights .

What Went Well and What Went Wrong

What Went Well
- Clear top- and bottom-line beats: revenue +16% y/y to $6.80B; adjusted EPS +32% to $55.40; adjusted EBITDA +28% to $2.42B; adjusted EBITDA margin +320 bps y/y to 35.6% .
- Strategic flywheel gaining traction: “Connected Trip transactions…representing a low double-digit share of Booking.com’s total transactions and up over 30% year-over-year… flight tickets up 44%” (CEO) .
- Mix and leverage: marketing as % of gross bookings fell to 4.6% (4.7% LY); adjusted fixed opex +11% vs revenue +16%; ~$45M in-quarter transformation savings; dividend declared ($9.60/share) and $1.3B buybacks (auth. remaining $24.6B) .
What Went Wrong
- GAAP compression: net income margin fell to 13.2% (26.0% LY) on $961M FX remeasurement losses on euro debt and derivatives; GAAP EPS -38% y/y to $27.43 despite healthy operations .
- U.S. consumer softness: lower ADRs, shorter length of stay and booking window; U.S. room nights low-single-digit growth, below company average (CFO) .
- Cautious Q3 setup: Q3 room nights guided to 3.5–5.5%, revenue +7–9% (below some expectations), with merchandising timing set to weigh; tougher y/y comps in Aug/Sep flagged .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($B)	$5.47	$4.76	$6.80
GAAP Net Income ($B)	$1.07	$0.33	$0.90
GAAP EPS ($)	$31.95	$10.07	$27.43
Adjusted EPS ($)	$41.55	$24.81	$55.40
Adjusted EBITDA ($B)	$1.85	$1.09	$2.42
Net Income Margin (%)	19.5%	7.0%	13.2%
Adjusted EBITDA Margin (%)	33.8%	22.9%	35.6%
Room Nights (M)	261	319	309
Gross Bookings ($B)	$37.2	$46.7	$46.7

Estimates vs Actuals (S&P Global):

Metric (Q2 2025)	Actual	Consensus (S&P Global)	Surprise
Revenue ($B)	$6.80	$6.56*	+$0.24B / +3.7%*
Adjusted EPS ($)	$55.40	$50.40*	+$5.00 / +9.9%*
# EPS Estimates	—	24*	—
# Revenue Estimates	—	29*	—

Values marked with * retrieved from S&P Global.

Revenue Mix (by type):

Revenue Type ($B)	Q4 2024	Q1 2025	Q2 2025
Merchant	$3.34	$2.92	$4.46
Agency	$1.86	$1.56	$2.04
Advertising & Other	$0.27	$0.28	$0.30

KPIs and Operating Metrics:

KPI	Q1 2025	Q2 2025
Room nights (M)	319	309
Airline tickets (M)	16	16
Alternative accommodations mix (% room nights)	37%	37%
Direct B2C mix (last 4 qtrs)	Mid‑60%	Mid‑60%
App mix of room nights (last 4 qtrs)	Mid‑50%	Mid‑50%
Marketing expense as % of gross bookings	3.8%	4.6%
Revenue as % gross bookings (“take rate”)	10.2%	14.5%

Additional Q2 notes:

Constant-currency ADRs decreased ~1% (mix-driven: more Asia, less U.S.) .
Constant-currency revenue growth +12%; normalizing Easter timing, cc revenue growth ~+10% .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Room Nights Growth	Q3 2025	N/A	3.5%–5.5%	New
Gross Bookings Growth	Q3 2025	N/A	8%–10%	New
Revenue Growth	Q3 2025	N/A	7%–9%	New
Adjusted EBITDA	Q3 2025	N/A	$3.9–$4.0B	New
FX impact (Q3)	Q3 2025	N/A	~+4 ppt to reported growth (assumes EUR/USD 1.17)	New
FY Revenue & Gross Bookings (reported)	FY 2025	Prior CC: mid–high single digits; FX +~2 ppt; margin +50–100 bps	Low double digits; margin +~125 bps; adjusted EBITDA up mid‑teens; revenue > marketing & fixed opex	Raised at midpoint; wider margin expansion
Adjusted EPS Growth	FY 2025	Low–mid teens (CC)	High teens (reported)	Raised
Sales & Other Expenses	FY 2025	—	Grow similar to revenue	New color
Dividend	Q3 2025	$9.60 declared for Q2 payout	$9.60 declared, payable Sep 30, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
AI/Technology	Q1: Testing smart filters, AI review summaries; KAYAK.ai launched; partnerships with OpenAI, MSFT, AMZN	Expanded AI assistants (Priceline “Penny” enhancements; KAYAK.ai iterations; OpenTable AI Concierge live); lower live-agent contact rates; partner with LLM players incl. ChatGPT agents	Accelerating deployment
Connected Trip	Q1: Connected transactions grew 35% y/y; high-single-digit share	Connected Trip +30%+ y/y; low double-digit share of Booking.com transactions; flights +44% y/y; attractions >2x (modest base)	Scaling (share rising)
Regional Trends	Q1: Asia & Europe HSD; U.S. LSD; inbound to U.S. moderated	Asia low-DD growth; Europe HSD; U.S. LSD with ADR pressure, shorter LoS/booking window	Asia/Europe outpace U.S.
U.S. Consumer	Q1: Bifurcation; higher-star resilient; lower-star pressured	Similar: high-end resilient; domestic weaker than intl; ADR pressure	Continued bifurcation
Alternative Accommodations	Q1: +12% RN, 37% mix; 8.1M listings (+9% y/y)	+10% RN; ~37% mix; 8.4M listings (+8% y/y); nearing maturity but still outpacing hotels	Still outgrowing hotels
Payments/Fintech	Q1: Payments boosted take rate	Payments a “strategic underpinning” of Connected Trip; supports pricing and P&L	Strategic lever expanding
Marketing/Channels	Q1: Social spend scaling; ROI-positive; direct mix rising	Social spend +25% y/y; Google clicks holding; direct mid‑60%, app mid‑50%	Diversifying, leveraging direct
Transformation Program	Q1: ~$150M FY25 savings, $400–$450M cost; minimal Q1 savings	~$45M in-quarter Q2 savings; FY run-rate savings ~$350M; ~all costs excluded from adjusted metrics	Savings ramping

Management Commentary

“We reached a milestone with Connected Trip transactions…representing a low double-digit share of Booking.com’s total transactions and up over 30% year-over-year… flight tickets up 44%.” – Glenn Fogel, CEO .
“Revenue as a percentage of gross bookings of 14.5% was up ~40 bps y/y due to timing from the Easter calendar shift and higher revenues from payments, partially offset by an increased mix of flight bookings.” – Ewout Steenbergen, CFO .
“We currently expect third quarter adjusted EBITDA to be between $3.9 billion and $4.0 billion… adjusted EBITDA margins to be similar to last year.” – CFO .
“Payments… give us an opportunity to create value for partners and travelers… and it’s an added benefit to the P&L overall.” – CFO .
“Direct channel continues to grow… B2C direct mix now mid‑60%… app mix mid‑50%.” – CFO .

Q&A Highlights

AI/LLMs and channel diversification: Too early to quantify LLM-driven traffic, but BKNG is partnering with hyperscalers (e.g., ChatGPT agents) while expanding social channels (+25% y/y spend); Google clicks still growing; direct mix rising (mid‑60%) .
U.S. growth initiatives and consumer: Multipoint investments (product, supply, marketing, brands); share gains vs market; U.S. consumer bifurcation persists (high-end resilient, lower-end cautious), with lower ADRs and shorter windows .
Connected Trip economics: Single acquisition across multiple verticals improves unit economics; payments underpinning; Genius benefits extend across verticals to drive conversion and loyalty .
Guidance guardrails: Q3 moderation driven by tougher Aug/Sep comps; broader macro/geopolitical uncertainty flagged despite steady trends through July .
Transformation and reinvestment: ~$45M Q2 in-quarter savings; on track for ~$150M FY25 savings; reinvesting ~$170M in 2025 across AI, fintech, advertising, attractions .

Estimates Context

S&P Global consensus for Q2 2025: revenue $6.56B (29 est.) vs actual $6.80B; adjusted EPS $50.40 (24 est.) vs actual $55.40 – both beats. Management cited payments contribution and lower merchandising spend timing (to weigh on Q3) as drivers of revenue outperformance .*
Post-quarter, Street may lift FY25 EBITDA margin expansion assumptions (to ~+125 bps from +50–100 bps prior) and push up adjusted EPS (now guided high teens growth) given stronger Q2 print and raised FY margin outlook .*
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Quality beat, but cautious Q3 setup: Strong Q2 execution (payments, direct/app mix, fixed cost discipline) yet Q3 guide reflects tougher comps and merchandising timing; watch intra-quarter demand and mix (flights vs hotels) .
Underlying demand resilient ex-U.S.: Asia and Europe lead; U.S. remains a relative laggard with ADR pressure; BKNG’s global diversification and channel mix support continued share gains .
Structural drivers gaining momentum: Connected Trip penetration moved to low double digits with >30% y/y growth; flights +44% y/y; alternative accommodations mix holding at ~37% .
Margin trajectory improving: FY25 adjusted EBITDA margin expansion raised to ~125 bps on revenue outgrowing marketing and fixed opex; payments provides sustainable take-rate lift .
Cash returns and balance sheet: $1.3B buybacks in Q2; $9.60 dividend; authorization $24.6B remaining; cash/investments ended ~ $18.2B, providing optionality to lean in during macro softness .
GAAP vs non-GAAP gap is transitory: Large non-cash FX losses drove GAAP EPS decline; core profitability trends are solid with adjusted EPS +32% y/y .
Trading lens: The beat is clear; near-term stock moves may hinge on Q3 trends (Aug/Sep comps) and U.S. demand. Medium term, rising Connected Trip share, payments, and direct/app channel leverage underpin upside to margins and FCF .

Appendix: Additional Disclosures and Press Releases

OpenTable launched “Concierge,” a GenAI assistant embedded in restaurant profiles to speed diner decisioning (supports the ecosystem and cross-vertical engagement) .
Booking.com extended an 8-year commercial partnership with Etraveli Group to strengthen global flights offering (core to Connected Trip) .
Priceline released “Trip Intelligence: Neighborhood Edition” (AI-powered neighborhood discovery; integration with Turo) .
KAYAK launched KAYAK.ai as an AI-first conversational travel lab (features to migrate to Kayak.com as they mature) .

Stock reaction context (media): Reports highlighted a muted/volatile reaction as cautious Q3 growth tempered the Q2 beat; commentary cited “mixed” guide and tougher comps as drivers .

Sources:

Q2 2025 8-K and press release: metrics, financials, guidance, reconciliations .
Q2 2025 earnings call transcript: strategy, drivers, Q&A detail .
Prior quarters for trend analysis: Q1 2025 8-K and call ; Q4 2024 8-K .
Additional press releases (Q2 timeframe): OpenTable Concierge , Etraveli extension , Priceline Neighborhood Edition , KAYAK.ai .