Booking Holdings Reports Strong Q1 2025 Earnings and Revenues

Booking Holdings (BKNG) announced first-quarter 2025 earnings of $24.81 per share, surpassing the Zacks Consensus Estimate by 43.83%. This result marked a 21.7% increase compared to the previous year.

Notably, BKNG has outperformed the Zacks Consensus Estimate in all four previous quarters, with an average surprise of 18.98%.

Revenues reached $4.76 billion, exceeding the Zacks Consensus Estimate by 3.58%. This figure grew 8% year over year and approximately 10% on a constant currency basis. The performance surpassed the company’s guidance, driven by higher revenue from facilitating payments and minimal impact from foreign exchange rates.

The revenue as a percentage of gross bookings stood at 10.2%, slightly higher than anticipated due to elevated payment revenues.

During the first quarter of 2025, BKNG also harnessed its investments in AI-driven tools and personalized recommendations, enhancing user experience and improving operational efficiency.

Booking Holdings Inc. Price, Consensus, and EPS Surprise

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

In-Depth Look at BKNG’s Revenue Sources

Merchant revenues amounted to $2.91 billion, accounting for 61.3% of total revenue, marking a 22.2% year-over-year increase. Agency revenues reached $1.56 billion, comprising 32.8% of total revenue, reflecting an 11.3% decline year over year.

Advertising & Other revenues totaled $280 million, which is 5.9% of total revenues, indicating a 6.1% increase year over year.

In this quarter, Booking Holdings processed a record 319 million room nights, surpassing 300 million room nights for the first time. This reflects over 7% year-over-year growth.

Booking.com’s accommodation listings grew to approximately 31 million by the end of the first quarter. Listings for alternative accommodations increased by 9% year over year to about 8.1 million, benefiting from growth across all major regions. This expanded array of options contributed to a 12% rise in alternative accommodations room nights.

Additionally, BKNG saw Connected Trip transaction growth of 35% year over year, with these transactions representing a high single-digit percentage of Booking.com’s total transactions.

Financial Performance Overview

Marketing expenses, a variable cost, rose by 10% year over year. As a percentage of gross bookings, marketing expenses were 3.8%, aligning with expectations but slightly higher than the same period last year.

Effective spending on social media continues to deliver attractive returns on investment, while improvements in traditional marketing channels propelled increased booker volumes.

In terms of sales and other expenses, the percentage of gross bookings was 1.5%, a slight decrease from last year despite a higher merchant mix. This was due to offsetting lower bad debt provisions and enhanced efficiencies in customer service.

Adjusted fixed operating expenses fell by 3% year over year, primarily due to reduced general and administrative costs. Personnel expenses were slightly lower than anticipated, attributed to a $36 million reduction in pension accruals. BKNG maintains a disciplined approach to managing fixed costs.

Adjusted EBITDA reached approximately $1.1 billion, reflecting a 21% year-over-year increase and surpassing the upper limit of the guidance range by 28%. This growth was driven by increased revenue and better-than-expected adjusted fixed operating expenses.

BKNG’s Financial Position

As of March 31, 2025, the company reported cash and investments of $16.1 billion, down from $16.7 billion on December 31, 2024. This decrease was attributed to approximately $2.1 billion returned to shareholders through share repurchases and dividends, alongside a $1.5 billion debt repayment due in March. These reductions were partially countered by $3.2 billion in free cash flow generated during the quarter.

Booking Holdings’ total debt amounted to $16.02 billion, a decrease from $16.59 billion as of December 31, 2024.

Free cash flow for the quarter was $3.2 billion, significantly up from $0.6 billion in the previous quarter. This increase was largely driven by a $1.9 billion improvement in working capital, primarily due to seasonal growth in deferred merchant bookings.

Guidance for Q2

For the second quarter of 2025, BKNG anticipates room night growth between 4% and 6%, alongside gross bookings growth of 10-12%. Revenue growth is expected in the same range of 10% to 12%.

The company projects adjusted EBITDA for the second quarter to be between $2.15 billion and $2.2 billion, signifying a 16% year-over-year increase at the high end.

Zacks Rank and Alternatives

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

Carvana (CVNA), TripAdvisor (TRIP), and Alibaba Group (BABA) are other notable stocks within the broader Zacks Retail-Wholesale sector, each holding a Zacks Rank #2 (Buy).

Carvana shares have decreased by 5.9% year to date, with its first-quarter 2025 results set to be reported on May 7.

TripAdvisor shares are down 4.8% year to date, also scheduled to release first-quarter 2025 results on May 7.

Alibaba Group shares have appreciated by 5.7% year to date, with its first-quarter 2025 results set to be released on May 13.

This article originally published on Zacks Investment Research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.