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BH

Booking Holdings Inc. (BKNG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered double‑digit top-line growth and margin expansion, with room nights +13% y/y, gross bookings +17% (18% CC), revenue +14% (15% CC), and adjusted EBITDA +26% y/y; results exceeded the high end of company guidance on room nights, gross bookings, revenue, and adjusted EBITDA .
  • Mix shifts and timing lowered revenue as a percentage of gross bookings in Q4, but management expects a timing tailwind to benefit 2025 revenue; marketing leverage continued with marketing expense at 4.2% of gross bookings vs. 4.5% in Q4’23 .
  • 2025 framework: CC gross bookings and revenue growth targeted at ≥8%, CC adjusted EPS growth ≥15%; margin expansion slightly below 100 bps; Q1’25 guidance set at room nights +5–7%, gross bookings +5–7%, revenue +2–4%, adjusted EBITDA $800–$850mm; dividend raised 10% to $9.60 and new $20B buyback authorized .
  • Strategic catalysts: accelerating connected trip (+45% y/y transactions in Q4), expanding merchant payments (59% mix at Booking.com in 2024), and AI/agentic partnerships expected to drive efficiency and top-line opportunities over time .

What Went Well and What Went Wrong

  • What Went Well

    • Demand outperformed expectations across regions, with room nights above guidance and gross bookings/revenue exceeding the high end of ranges; adjusted EBITDA was ~12% above the high end .
    • Alternative accommodations accelerated: +19% room nights in Q4 vs. +14% in Q3; listings reached 7.9M (+~8% y/y), supporting share gains across regions .
    • Marketing leverage and direct mix gains: marketing expense 4.2% of gross bookings (−30 bps y/y); B2C direct mix in mid‑60s% and mobile app mix in mid‑50s% in 2024; “We are highly focused on … leveraging and deploying Generative AI technology to drive further value” .

  • What Went Wrong

    • Revenue as a percentage of gross bookings came in lower than expected due to timing effects and higher flight mix; management expects a positive timing impact in 2025 .
    • Q4 operating cash flow and FCF down y/y (OCF −46%, FCF −49%) on working capital seasonality (deferred merchant bookings reduction) .
    • Discrete items introduced volatility: $796mm loss related to convertible notes conversion option (embedded derivative), though excluded from adjusted results; impacted GAAP lines .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$5.859 $7.994 $5.471
Net Income ($USD Billions)$1.521 $2.517 $1.068
GAAP EPS ($)$44.38 $74.34 $31.95
Adjusted EPS ($)$41.90 $83.89 $41.55
Adjusted EBITDA ($USD Billions)$1.895 $3.665 $1.848
Net Income Margin (%)26.0% 31.5% 19.5%
Adjusted EBITDA Margin (%)32.4% 45.8% 33.8%

Segment revenue breakdown:

Revenue Segment ($USD Millions)Q2 2024Q3 2024Q4 2024
Merchant Revenues$3,446 $4,972 $3,336
Agency Revenues$2,144 $2,753 $1,864
Advertising & Other Revenues$269 $269 $271

KPIs and operating metrics:

KPIQ2 2024Q3 2024Q4 2024
Room Nights (Millions)287 299 261
Gross Bookings ($USD Billions)$41.4 $43.4 $37.2
Airline Tickets (Millions)11 13 14
Constant‑Currency ADR YoY~−1% ~−<1% (ex‑mix up <1%) +2% (ex‑mix ~+3%)
Alt Accom Room Night Growth YoY+12% +14% +19%
Marketing Expense / Gross Bookings4.7% 5.0% 4.2%
Booking.com Merchant Mix (%)58% 65% 59% (FY24)
Direct Mix (Total; B2C)Mid‑50%; Low‑60% Mid‑50%; Low‑60% Mid‑50%; Mid‑60% (FY24)
Mobile App Mix~53% Mid‑50% Mid‑50%
Genius Level 2/3 Share of Active Travelers~30% Mid‑50% of room nights (levels 2/3 mix) >30% of active travelers; mid‑50% of room nights

Year-over-year context (Q4 2024 vs Q4 2023) highlights: room nights +13%, gross bookings +17% (18% CC), revenue +14% (15% CC), adjusted EBITDA +26%, GAAP EPS +409%, adjusted EPS +30% .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Room Nights GrowthQ1 2025N/A+5% to +7%Introduced
Gross Bookings GrowthQ1 2025N/A+5% to +7% (incl. ~+2pp flights; ~+1pp ADR; ~−3pp FX; Easter shift)Introduced
Revenue GrowthQ1 2025N/A+2% to +4% (incl. ~−3pp FX; ~−3pp Easter shift)Introduced
Adjusted EBITDA ($)Q1 2025N/A$800–$850mm; down ~5% y/y at high end (Easter/FX impacts)Introduced
Gross Bookings (CC)FY 2025N/A≥8% growth (reported mid‑single digits at recent FX)Introduced
Revenue (CC)FY 2025N/A≥8% growth (reported mid‑single digits at recent FX)Introduced
Adjusted EBITDA MarginFY 2025N/AExpand slightly below 100 bpsIntroduced
Adjusted EPS (CC)FY 2025N/ALow‑double‑digit reported; mid‑teens CCIntroduced
FX ImpactFY 2025N/A~−3pp on gross bookings/revenue; ~−3.5pp on adj. EBITDA/EPSIntroduced
CapExFY 2025N/A~2% of revenue (similar to 2024)Introduced
Transformation SavingsFY 2025N/A~$150mm savings embedded; LT run‑rate $400–$450mm; costs similar to savings over 2–3 yearsIntroduced
DividendQ1 2025$8.75/qtr (2024)$9.60/qtr (+10%)Raised
Buyback Authorization2025$7.7B remaining (12/31/24)New $20B authorizationIntroduced

Q4 2024 prior guidance vs actual:

MetricPrior Guidance (Q3 call)Actual Q4 2024Result
Room Nights Growth+6% to +8% +13% Beat
Gross Bookings Growth+7% to +9% +17% (18% CC) Beat
Revenue Growth+7% to +9% +14% (15% CC) Beat
Adjusted EBITDA ($)$1.60–$1.65B $1.848B Beat

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/Agentic initiativesEarly deployments across brands (AI Trip Planner, Penny; CS summarization), productivity gains at Agoda Emphasis on ROI, efficiency, personalization; social ad effectiveness aided by AI AI central to connected trip; partnerships with leading agentic orgs; efficiency tailwinds expected in 2025 Accelerating scope and external partnerships
Connected trip+45% y/y connected transactions; high single‑digit share +40% y/y connected transactions; high single‑digit share >45% y/y in Q4; continued multi‑vertical attach including flights Momentum improving
Alternative accommodationsListings ~7.8M; +12% room night growth Listings 7.9M; +14% room night growth; 35% room night mix Listings 7.9M; +19% room night growth; broad‑based regional acceleration Accelerating growth
Payments/Merchant mixBooking.com merchant mix 58% Merchant mix 65%; payments revenue offset higher flight mix Booking.com merchant mix 59% FY; payments aiding revenue; incremental contribution margin dollars Sustained expansion with monetization
Marketing leverage/direct mixDirect mid‑50% total; B2C low‑60%; social spend rising Direct and mobile app mix rising; marketing as % GB 5.0% Direct mid‑50%; B2C mid‑60%; marketing as % GB 4.2% Improving leverage
Regional trendsAsia mid‑teens; U.S mid‑single digits Europe re‑accelerated; Asia double‑digit; U.S low single digits Europe low double digits; Asia mid‑teens; ROW ~20%; U.S ~10% Broad‑based strength
Transformation programFixed OpEx focus; hiring slowdown emerging Fixed OpEx leverage, reorgs, procurement/real estate $150mm 2025 savings; LT run‑rate $400–$450mm; costs similar to savings Formalized and quantified
Flights vertical+28% tickets; attach benefits +39% tickets; attach benefits +52% tickets; pacing accelerated; attach reinforces connected trip Accelerating growth

Management Commentary

  • “We are pleased to be reporting a strong finish to 2024 … leveraging and deploying Generative AI technology to drive further value to our travelers and partners.” — Glenn Fogel, CEO .
  • “Adjusted EBITDA of $1.8 billion was 26% higher … and 12% above the high end of our prior guidance range driven by revenue outperformance and lower‑than‑expected adjusted fixed OpEx.” — Glenn Fogel .
  • “We expect that agentic models will change the way some bookers discover and use our platforms … working with these models will be another attractive way … to deliver unique value.” — Glenn Fogel .
  • “We expect adjusted EBITDA to grow a couple of percentage points faster than revenue … and on a constant currency basis to increase low double digits [in 2025].” — Ewout Steenbergen, CFO .
  • “Marketing expense as a percentage of gross bookings was 4.2% … due to lower brand marketing expense and higher direct mix … partially offset by higher spend in social media channels at attractive incremental ROIs.” — Ewout Steenbergen .

Q&A Highlights

  • AI/Agentic competition and partnerships: Management believes scale, data, and economics favor partnering with agent developers; expects lower customer acquisition costs over time via multiple agents and vertical specialization .
  • Alternative accommodations: Growth outpacing hotels across regions; differentiated proposition from unified platform offering hotels and alt lodging; listings at 7.9M and strong consumer resonance .
  • Flights trajectory: +52% ticket growth in Q4; focus on attach and connected value rather than linear extrapolation; early operator/AI collaboration with limited near‑term economics .
  • Marketing and social: Continued leverage driven by higher direct mix and optimized algorithms; bespoke models with social platforms (notably Meta) delivering attractive incremental ROI .
  • Merchant mix and payments economics: Payments foundation enables cross‑vertical merchandising, local payment methods, FX/interchange efficiencies; contributing incremental margins while enhancing loyalty and repeat rates .

Estimates Context

  • Wall Street consensus via S&P Global for Q4 2024 EPS and revenue was unavailable at retrieval due to service rate limits; therefore, explicit comparisons to consensus are not provided (values would be retrieved from S&P Global). Management highlighted beats versus the high end of their internal guidance ranges on room nights, gross bookings, revenue, and adjusted EBITDA .

Key Takeaways for Investors

  • Execution beat: Q4 significantly exceeded company guidance on key metrics; momentum broad‑based by region, with ADRs stabilizing to modestly positive on a CC basis .
  • Structural tailwinds: Connected trip attach and payments merchantization provide multi‑year monetization levers; alternative accommodations accelerating with increasing listings density .
  • Margin path: Marketing leverage and fixed OpEx discipline underpin margin expansion; 2025 transformation savings ($150mm) and AI‑enabled efficiencies support further EBITDA/EPS growth despite FX headwinds .
  • Near‑term cadence: Q1 seasonally weakest for EBITDA and impacted by Easter timing/FX; normalize for calendar effects, management targets low double‑digit growth in gross bookings, revenue, and EBITDA .
  • Capital returns: 10% dividend increase and new $20B buyback authorization signal confidence in durable FCF and earnings power; $7.7B authorization remained at YE 2024 .
  • Watch the mix: Higher flights mix and booking‑window timing can lower revenue as % of gross bookings in‑period; management expects timing tailwind to boost 2025 revenue .
  • Strategic risk/reward: AI/agentic ecosystem presents both competitive dynamics and acquisition‑cost opportunities; BKNG’s scale/data and partnership approach position it to benefit as models mature .

Sources

  • Q4 2024 earnings press release and financials (Form 8‑K, Exhibit 99.1) .
  • Q4 2024 earnings call transcript (prepared remarks and Q&A) .
  • Prior quarters for trend analysis: Q3 2024 8‑K and transcript ; Q2 2024 8‑K and transcript .
  • Earnings event press releases (webcast/availability): Jan 22 and Feb 19 notices .