Booking Holdings stock rises as Q3 bookings beat, Q4 growth slows

Booking Holdings reported its third-quarter results on Tuesday, November 3, after the US market close. The online travel company delivered stronger operating metrics than expected, but a Federal Trade Commission-related accounting effect reduced reported revenue and management pointed to a slower fourth quarter.

Booking Holdings stock traded at 139.55 euros on Lang & Schwarz at 13:30 CET on Wednesday, November 4, 3.03 percent above the Xetra close of Tuesday, November 3, at 135.45 euros. The calculation uses the previous Xetra session because the current quote was recorded before the Xetra close. The current quote is also available through the real-time quote of Booking Holdings stock.

Bookings Outpace Revenue Headline

Room nights increased 7 percent from a year earlier to 345 million, accelerating from 5 percent growth in the second quarter. Gross bookings rose 10 percent to 54.5 billion US dollars, while adjusted revenue increased 9 percent to 9.8 billion US dollars, according to the earnings call transcript.

Reported revenue fell 1 percent to 8.89 billion US dollars. Booking said a 900 million US dollar revenue reduction and a 100 million US dollar accrued loss related to an FTC matter affected the quarter. The company said the matter involved Priceline and a B2B affiliate partner. Morningstar, citing FactSet, reported adjusted earnings of 4.66 US dollars per share against an analyst expectation of 4.49 US dollars, while revenue expectations stood at 9.55 billion US dollars.

GAAP net income declined 1 percent to 2.72 billion US dollars, while adjusted net income rose 8 percent. Adjusted EBITDA increased 9 percent to approximately 4.6 billion US dollars, with the adjusted EBITDA margin expanding slightly to 47.0 percent including stock-based compensation as an expense. Adjusted earnings per share climbed 17 percent to 4.66 US dollars, helped in part by a 7.5 percent reduction in the average share count.

Travel Demand Loses Momentum

Chief Financial Officer Ewout Steenbergen said international travel improved during the quarter, particularly among bookers in Europe and Asia, while demand moderated toward the period's end. Constant-currency average daily rates rose approximately 3 percent. Alternative accommodations accounted for approximately 37 percent of Booking.com's room nights, and flight tickets increased 19 percent.

The company expects fourth-quarter room nights to rise 1 to 3 percent and gross bookings to increase 2 to 4 percent. Adjusted revenue is expected to grow 0 to 2 percent on a reported basis, while adjusted EBITDA is expected to be approximately flat year over year as Booking invests in flights, attractions, dining, artificial intelligence and technology infrastructure.

Booking maintained its full-year outlook for high-single-digit growth in gross bookings, adjusted revenue and adjusted EBITDA, with adjusted earnings per share growth in the low- to mid-teens. Management attributed the cautious near-term outlook to a difficult comparison, weaker international travel trends and disruptions linked to the conflict in the Middle East, including elevated airfares and reduced capacity on some routes.

AI Remains A Strategic Lever

Management highlighted early signs that artificial intelligence tools can improve engagement and conversion. Priceline's Penny and Agoda's AI Assistant users converted at approximately twice the rate of non-users in early tests, while Agoda users generated higher average booking values. Booking also continues to develop Vayo and Lola as separate AI-driven travel experiences.

The company generated 1.1 billion US dollars of free cash flow in the quarter and returned 2.4 billion US dollars to shareholders, including 2.1 billion US dollars of repurchases. For investors, the results show a business still expanding its core marketplace and adjacent travel categories, but facing a more demanding near-term demand environment and costs associated with long-term technology investment.

The broader S&P 500 market environment remains relevant for the US-listed travel platform.

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