Booking Holdings Inc (BKNG)

“We expect that there will be a little bit less of an impact than we have seen in the second quarter because I think of the normalization.”

“We estimate changes in FX will weigh on our third quarter reported U.S. dollar growth rates by about 1 percentage point for gross bookings and revenue.”

“We currently expect third quarter room nights to increase between 3% and 5% and for gross bookings, revenue and adjusted EBITDA to each increase between 4% and 6%.”

“We expect airline industry capacity to gradually come back over the next few months.”

“For the full year, we estimate changes in FX will positively impact full year reported growth rates by about 1.5 percentage points for gross bookings and about 1 percentage point for revenue.”

“On a reported basis, our full year expectation is for gross bookings, revenue and adjusted EBITDA to each be up high single digits and for adjusted EPS to be up low to mid-teens.”

“We expect the approximately $100 million of incremental annual run rate savings to be realized primarily in 2027.”

“Yes. Sure, Kevin. This is Ewout. Let me give you a little bit more color on those aspects, what we are seeing in the Middle East and what we have assumed for the second quarter. So in terms of the headwind from a numbers perspective, approximately 3 points of headwind in the second quarter.”

“While our 2026 outlook is impacted by the situation in the Middle East, we remain firmly committed to our long-term constant currency growth ambition of at least 8% gross bookings growth, 8% revenue growth and 15% adjusted EPS growth for future years.”

“I would like also to point out to the full year guidance because despite, I think, this impact in the second quarter, it's important to highlight that actually, I would say our full year guidance remains still solid. And if you look at gross bookings and EPS, we're still actually from a range perspective, at the high end, still at the level of the original guidance for 2026.”

“We remain firmly on track to deliver our previously stated goal of $500 million to $550 million of in-year savings from our transformation program for 2026.”

“Because we recognize revenues at the time of travel, we expect the associated impact on revenue from the conflict will not be fully realized until future quarters.”

“Assuming recent FX rates remain steady for the remainder of the year, we estimate changes in FX will positively impact these full year reported growth rates by about 2 percentage points for gross bookings, about 1.5 percentage points for revenue and by about 1 percentage point for adjusted EBITDA and adjusted EPS.”

“To support these targets, we aim to grow revenue faster than both marketing and adjusted fixed operating expenses, while maintaining sales and other expenses as a flat percentage of gross bookings year-over-year.”

“Adjusted EPS to be up low to mid-teens.”

“adjusted EBITDA margins to expand between 0 and 25 basis points year-over-year.”

“revenue to be up high single digits, adjusted EBITDA to grow slightly faster than revenue and adjusted EBITDA margins to expand between 0 and 25 basis points year-over-year.”

“On a reported basis, our expectation for the full year is as follows: gross bookings to be up high single digits to low double digits, revenue to be up high single digits, adjusted EBITDA to grow slightly faster than revenue and adjusted EBITDA margins to expand between 0 and 25 basis points year-over-year.”

“Our planning assumption is that the direct and indirect impact from the conflict in the Middle East continues through the end of June, followed by a recovery in bookings in the second half of the year, reflecting the assumption that the direct and indirect impacts from the situation in the Middle East continues for 4 months or 1/3 of the year and this is followed by a recovery period, we're lowering our guidance ranges at the midpoint.”

“We estimate changes in FX will positively impact our first quarter reported growth rates by about 7 percentage points for gross bookings and revenue and by about 8 percentage points for adjusted EBITDA.”

“So this has been input in terms of our 2026 guidance for overall faster top line growth metrics for this year. So definitely, you should interpret here that we are quite optimistic about the outlook for alternative accommodations.”

“please note that for 2026, what we have said is that we aim to achieve marketing leverage again unless, of course, we find those really great opportunistic moments that we can lean in again in this year.”

“On a reported basis, for the full year, we expect gross bookings to be up low double digits, revenue to be up low double digits, adjusted EBITDA to grow faster than revenue and adjusted EBITDA margins to expand year-over-year by about 50 basis points, revenue to grow faster than both marketing and adjusted fixed operating expenses, sales and other expenses as a percentage of gross bookings to be flat year-over-year and adjusted EPS to be up mid-teens.”

“This framework supports a constant currency adjusted EPS growth trajectory in line with our long-term growth ambition of 15%.”

“We expect the reinvestments in 2025 and 2026 will help us to deliver constant currency gross bookings and revenue growth that is about 100 basis points faster than our long-term growth ambition of 8% while expanding adjusted EBITDA margins by approximately 50 basis points.”

“We expect these initiatives to contribute approximately $400 million in incremental revenue in 2026, resulting in a net impact of about $300 million to adjusted EBITDA for the year.”

“We expect the Transformation Program to deliver in-year savings of $500 million to $550 million in 2026 or more than $250 million higher than in 2025.”

“We expect to deliver these run rate savings by the end of 2026.”

“Assuming 2026 travel industry growth is in line with recent years, we are targeting full year constant currency top line growth of approximately 100 basis points ahead of our long-term growth algorithm while keeping bottom line performance firmly in line with that framework.”

“On a constant currency basis, our latest expectations are above our long-term growth ambition of at least 8% growth bookings and revenue growth and 15% adjusted EPS growth.”

“On a reported basis, for the full year, we now expect room nights to be up about 7%, gross bookings to be up about 11% to 12%, revenue to be up about 12%, adjusted EBITDA to be up about 17% to 18%, adjusted EBITDA margins to expand year-over-year by about 180 basis points higher than our prior expectation of about 125 basis points, revenue to grow faster than both marketing and adjusted fixed operating expenses, sales and other expenses to grow similar to revenue and adjusted EPS to be up slightly more than 20%.”

“As we enter the fourth quarter, we continue to observe stable levels of global leisure travel demand.”

“we would like to, of course, to see that total gross bookings will grow faster than room nights on average over time.”

“Revenue will grow faster than both marketing and adjusted fixed operating expenses, sales and other expenses to grow similar to revenue and adjusted EPS to be up high teens.”

“On a constant currency basis, our current expectations continue to be aligned with our long-term growth ambition of at least 8% gross bookings and revenue growth and 15% adjusted EPS growth.”

“We currently expect third quarter adjusted EBITDA margins to be similar to last year.”

“We expect growth to moderate from the second quarter as the third quarter has a tougher prior year growth comparison.”

“We continue to estimate the aggregate transformation cost will be about $400 million to $450 million, which is similar to onetime the run rate savings we anticipate from executing the program.”

“We expect the actions we have taken so far will enable approximately $350 million in annual run rate savings of which about $150 million is forecasted to be realized this year, consistent with our prior expectations.”

“The lower merchandising spend is driven by timing, which we anticipate will impact revenue in the third quarter.”

“So we're still forecasting marketing leverage for the second quarter and for the full-year 2025 as a company.”

“Moreover, we will continue to see our direct channel expanding. That's our expectation for the rest of the year.”

“I would say, don't look too much into this because, yes, this is happening during the first quarter. But for example, on the social media channels, we're lapping that during the second quarter. So that impact won't show up so much anymore.”

“Additionally, we also continue to expect to make targeted reinvestments across the organization of about $170 million in 2025.”

“We continue to expect leverage in our marketing expenses and adjusted fixed operating expenses due to our disciplined management approach.”

“We continue to estimate the aggregate transformation costs will be about $400 million to $450 million, which is similar to the run-rate savings we ultimately expect to achieve from the program.”

“For the first quarter, we realized a very small amount of in-quarter savings from the Transformation Program, however, we have already taken actions that we expect will enable approximately $300 million in annual run-rate savings, of which about $150 million is forecasted to be realized this year, consistent with our prior expectations.”

“At the start of the second quarter, we are currently seeing stable levels of global leisure travel demand despite rising geopolitical and macroeconomic concerns.”

“Finally, we remain focused on managing our capital expenditures and we expect that CapEx will be about 2% of revenue similar to 2024.”

“As a result, 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.”

“Additionally, we expect revenue to grow faster than adjusted fixed operating expenses in line with our prior commitment for 2025, which we communicated at the start of last year.”

“At recent FX rates, we expect changes in FX will impact our reported growth rates by about 3 percentage points for gross bookings and revenue and by about 3.5 percentage points for adjusted EBITDA and adjusted EPS.”

“We're targeting full year constant currency growth rates that would reach our long term growth ambition of at least 8% growth for gross bookings and revenue and 15% growth for adjusted earnings per share.”

“Normalizing for the impacts of Easter timing, changes in FX and the leap year, our expectation for our fourth quarter gross bookings, revenue and adjusted EBITDA is for low double digits growth at the high end of each of those ranges.”

“Also, we expect a calendar shift of Easter from March in 2024 to April in 2025 to be a small tailwind to room nights and growth bookings growth and a larger headwind to revenue and profitability growth in the first quarter.”

“We expect the comparison to the extra day in February 2024 to be about 1 percentage point headwind to our first quarter growth rates.”

“We expect the impact from timing in the fourth quarter will benefit our revenue in 2025.”

“we believe generative AI has the potential to drive improvements and operational efficiency, which would contribute to a further deceleration of our fixed expense growth in 2025.”

“With respect to marketing, we expect marketing leverage to continue in the fourth quarter as a result of the continued growth of our direct channels.”

“With respect to your question on the outlook, merchandising as a percentage of growth bookings, we expect it to be more or less flat compared to last year for each of the quarters of 2024 and for the full year.”

“In addition, we expect it to improve operational efficiency, which will contribute to a deceleration of our fixed expense growth in the future.”

“As well as we continue to focus on growing our fixed OpEx at a lower level than the topline growth in 2025.”

“If you look at deleverage in the third quarter, that mostly relates to SNO and fixed OpEx. Marketing, actually, we expect leverage -- to see leverage in the second half of this year and also from a longer-term perspective because we expect to continue to see some benefit from the expansion in the direct mix.”

“We continue to expect adjusted EBITDA margins to expand year-over-year by a bit less than 8 percentage point.”

“We continue to expect about 1 percentage point of negative impact from changes in FX on our topline growth rates while reducing our fixed OpEx growth expectation to low double digits as we continue to focus on bringing this growth rate down over time.”

“We expect accommodation ADRs will be about flat to down slightly on a constant currency basis.”

“We expect that this will result in some deceleration in room night growth compared to Q2.”

“I very much believe that we will be able to grow in the future faster than GDP.”

“But as we have said, we are targeting to lower the growth of fixed OpEx from 2025 onwards. And you will see more operating leverage from that over the next few years.”

“In terms of the comps that you are referring, actually, first quarter and second quarter comps are a bit tougher for us. And the second half of the year, the comps will become easier. So that is actually going to be a benefit during the course of 2024.”

“We continue to expect 2024 to be a strong year for the company.”

“We expect our more fixed OpEx to grow faster than revenue in the second quarter due primarily to faster IT expense growth as we have been investing in new tech platforms and in line with the full year guidance we provided last quarter.”

“We expect marketing to be a source of slight deleverage in the quarter. But if you adjust for Easter timing, we expect marketing as a percentage of revenue to be neutral year-over-year.”

“Adjusted for the changes in FX, we expect second quarter revenue growth to be in line with second quarter gross bookings growth as the negative impact from the shift in Easter timing is offset by increasing revenues associated with payments.”

“However, we expect a more negative impact in the second quarter given the geopolitical situation in April.”

“Note that we expect the first quarter will be our seasonally lowest EBITDA quarter for the year.”

“We recognize that this fixed expense growth is elevated as we invest in the business but are fully focused on driving operating leverage from our more fixed expenses and targeting a much lower OpEx growth level in 2025.”

“While we see paid marketing channels becoming a gradually smaller proportion of our business over time, we think it's important for us to remain proactive in these channels in order to bring new travelers to our platforms, so long as we're able to do so at attractive ROIs.”

“We continue to see resiliency in global leisure travel demand, including healthy growth for travel on the books that's scheduled to take place during our peak summer travel season”

“As we’ve discussed previously, in a more normalized market environment, we’re aiming to achieve constant currency growth rates for gross booking revenue and earnings per share that are higher than what we achieved in 2019. This would remain growing above 8% for each of the top line metrics and about 15% for earnings per share.”

“And as we said, we would expect therefore, February and March to have a lower growth rate, in January, essentially consistent with our prior guidance of expecting deceleration during the quarter.”

“It did benefit, we believe, slightly maybe in the range of about 1% from the shift of Chinese New Year this year, which we expect to be offset in February.”

“In closing, we are pleased with our Q4 results, our Q1 outlook and our expectation in 2024 to grow faster than 2019 across gross bookings, revenue, adjusted EBITDA and EPS with exceeding EBITDA margin year-over-year. We expect 2024 to be another strong year for us.”

“We expect 2024 adjusted EBITDA will grow slightly faster than revenue, largely due to expectations for an increased direct mix.”

“We expect revenue for the year to grow at similar rate to our gross bookings growth.”

“We expect EBITDA margin to bank from market expenses growing slower than revenue and growing similar to gross bookings, which we expect will more than offset our fixed OpEx growth growing slightly faster than revenue.”

“We expect there will be some increase in our pension plan costs in the Netherlands going forward, but we do not expect these to be material.”

“We reiterate our previously stated gross leverage target 2x, and our goal to move to a 1x net leverage over time.”

“We continue to expect to complete the $24 billion share repurchase authorization we announced early 2023 within 4 years where we started, which would be before the end of 2026.”

“As we look to the year ahead, we see strong growth on the books for travel that’s scheduled to take place in 2024, which gives early indications of potentially another record summer travel season.”

“we're still committed to our milestones we gave you and said we will continue to grow faster post COVID than we were before on the top line and bottom line and consequently basis, that was 8% bookings on revenue, 8% on bookings, 8% on revenue, 15% earnings per share or constant currency growth rates in 2019.”

“We continue to expect that our adjusted EBITDA margins will expand by a couple of percentage points versus 2022.”

“We manage our more fixed costs very carefully and continue to expect our more fixed expenses next year to grow at an appreciably lower rate than this year.”

“We continue to expect full year marketing and merchandising as a percentage of gross bookings to be slightly below 2022, and for our more fixed expenses to grow around 25% year-over-year.”

“We currently expect full year gross bookings growth of over 20% year-on-year.”

“Given current trends, we expect customers and consumers will continue to prioritize travel over other discretionary spend in 2024.”

“we see strong growth on the books for travel that will take place in the first quarter of next year, though a high percentage of these bookings are cancellable.”

“We remain comfortable with our ability to complete the full $24 billion of share repurchases within 4 years from when we started the program at the beginning of this year, assuming no major downturn in the travel environment.”

“we believe that we can continue to improve margins, a little bit from where they were in 2023, but we're not trying to walk them all the way back to where they were in 2019.”

“We continue to expect our adjusted EBITDA margin to expand by a couple of percentage points versus 2022.”

“We manage our more fixed expenses very carefully and continue to expect our more fixed expenses next year to grow at an appreciably lower rate than this year.”

“We currently expect our more fixed expenses to grow about 25% up from our previous expectation to around 20%.”

“We expect these will be partially offset by a higher mix of flights and increased merchandising spend some of which is related to bookings we received earlier in the year.”

“We expect accommodation constant currency ADRs to be about in line with Q3 2022 including a couple of points of pressure from the changes in regional mix.”

“We remain comfortable with our ability to complete the full $24 billion of share repurchases within four years from when we started the program at the beginning of this year assuming no major downturn in the travel environment.”

“Remember, next year, we said that we do expect our fixed cost to grow more slowly next year than we expect them to grow this year and that continues to be the case.”

“We'd also expect to be able to do better from a leverage on our more fixed costs going forward.”

“We continue to expect that our adjusted EBITDA margin will expand by a couple of percentage points versus 2022.”

“Compared with 2019, we'd expect future room night growth in 2023 to be just over 20%, assuming some moderation from growth from the first quarter in April when room nights were helped by more bookings we expected for the summer.”

“Our comments on the second quarter make the assumption that room night growth will be up mid-single digits year-over-year.”

“We currently see very strong growth of bookings received for travel during our peak summer period in quarter 3.”

“And then we said that over the next 4 years, we expect to be able to complete the full authorization.”

“This could also result in higher-than-expected marketing expense in the quarter.”

“We may see less of an increase in our take rate if booking trends exceed our expectations, especially in the high percentage of these bookings [indiscernible] stays in future quarters.”

“We will keep the combined investments in marketing and merchandising in 2023 at about the same level as it was in 2022.”

“We believe that over the kind of medium term, we can still increase margins from where we are today into 2023.”

“We do expect to be able to increase even the margins from this level.”

“We expect these more fixed expenses to grow more slowly in future years.”

“We expect the negative impact on timing to mostly go away in 2023, and we also expect that our payments mix will continue to add to take rates.”

“While there continues to be uncertainty around the month-to-month trends, our comments for the first quarter made the assumption that room night growth for the fourth quarter will be over 30% year-on-year.”

“Given these considerations and our current outlook for the business, we expect our annual total return on capital to shareholders to be at least equal to our free cash flow over the next few years.”

“However, we plan on moving gradually through addition our positive net leverage targeting about 1x net leverage over time.”

“We will target maintaining a gross leverage ratio of about 2%, which is about in line with the historic levels.”

“We expect this to increase our available cash position by about $1.4 billion.”

“We're not really -- so the 28 points of constant currency ADR mix we saw in Q3, and we saw continued roughly same level into October was 26 points from rates and only 2 percentage points from mix. So as ADR continues to rebound, we'll lose that 2-point of mix, which is really what's driving right now, the fact that Asia had a lot of mix down it used to be. So that will go away.”

“We believe we're industry-leading profitability and margins. Because of the mix factors, we do not have a -- we believe that medium term, the margin will be a little bit lower than they were in 2019, but we'll have a faster growing business with more EBITDA, more earnings per share that's growing faster than the top line and bottom line, we think that's the most important thing.”

“On the marketing and merchandising side combined, that's where we've been leading in this year to really take advantage of a recovering marketplace. We certainly will be deleveraging on those lines further next year.”

“Going forward, room night has not changed. So we do expect to turn to profitability in that combination of payments platform, a combination of revenues, less sales and expenses in 2023.”

“For the full year, we expect our revenue as a percentage of gross bookings to be just over 14%, lower than our prior expectations for mid-14% range, due primarily to timing differences between gross bookings and revenue recognition, driven by stronger bookings than previously expected, some of which are related to travel expected to occur in 2023.”

“We are maintaining our full year adjusted EBITDA margin commentary and still expect EBITDA margin for 2022 to be a few points higher than in 2021.”

“We expect Q4 marketing expense as a percentage of gross bookings to be a bit higher than in Q4 2019 as we expect to continue to invest in capturing demand and increasing awareness due to continued global recovery of travel demand.”

“We expect the strength in ADRs we've seen in recent months to generally continue for the remainder of the fourth quarter as well as continued growth in by bookings.”

“As we take an early look at demand into 2023 at Booking.com, we see strong growth in gross bookings on the books for travel that will take place in the first quarter of next year, though I note that a high percentage of these bookings are cancellable.”

“And the combination of that and some things will also add in 2023 on top of that will move us into a positive position relative to getting a return from payments platform next year.”

“We expect to roll it out a little bit more fully in 2023.”

“And we expect to start seeing some positive returns to the payments platform in aggregate in 2023.”

“We expect to run our payments platform very close to breakeven this year.”

“We expect, in total, that leaning in on marketing to be a little less impactful on the P&L than we did for the full year and been on our merchandising to be a little more, but we will still have both of them turn up pretty high in the third quarter.”

“We now expect marketing spend as we’re saying to gross bookings to be about the same as it was in 2019 and expect to spend more on merchandising.”

“We are maintaining the full year EBITDA margin commentary we provided in February and May, and we still expect EBITDA margin for 2022 to be a few points higher than in 2021.”

“We expect IT expenses to increase year-over-year at a similar rate to what we saw in Q2.”

“For the remainder of the summer period through the end of Q3, we see higher gross bookings on the books than at this point in 2019, which we believe will result in a record revenue for the third quarter, which is our seasonally largest revenue quarter.”

“And we know -- we continuing to stay above where the market is in 2022, from a recovery point of view.”

“So we're still expecting to see some level of deleverage during the year and also increased spending on merchandising, sales and others, we still expect that to be about 50 bps for the year that's tied to payments.”

“We do expect some deleverage in marketing to gross bookings for the year.”

“As we said before, we expect to complete our remaining authorization within the next three years.”

“If not impacted timing our expectations for full year EBITDA margins will be a few points higher than our guidance for the year.”

“We expect the underlying accommodation take rates will remain stable.”

“Our current best estimates of take rates in 2022 is just below 15%, which is lower than 2019 primarily due to timing.”

“We believe this partnership will help reduce further expense growth and enable a more efficient ramp up of our customer service function.”

“We currently anticipate finalizing sponsorship around the middle of the year.”

“We expect IT to increase year-over-year at similar rates to what we saw in Q1.”

“In 2023, I don't think you're going to see huge numbers from all things I just talked about. But you will see incremental improvement.”

“So we think that ADR is likely to be as high in '22 as we were in '21 compared to 2019.”

“Market entry where you might see any impact will be more into the 2023-2024 time frame.”

“As Glenn noted, we expect that the Etraveli acquisition will close later this year which will result in a minor impact to the P&L in 2022.”

“Also, we expect our acquisition of Getaroom to have a small positive impact on our P&L in 2022.”

“We do not anticipate much of an impact on adjusted EBITDA in 2022 from this initiative and we'll update you again in May.”

“We expect that G&A and IT will both grow faster than personnel driven by a number of factors, including digital services taxes, returning to a hybrid work environment and the investments to enhance our customer and partner-facing and internal systems.”

“We expect personnel expenses to be about 10% higher than in 2021.”

“We expect our personnel expenses to be impacted by higher-than-average annual wage increases, especially in the product and technology areas; and by planned headcount increasing in key areas, including product and technology and bond-related functions.”

“Turning to sales not expenses; we expect these to be up 50 basis points higher than in 2021 as a percentage of gross bookings.”

“In 2022, we expect this timing to be less of an impact than it was in 2021.”

“Starting with revenue as a percentage of gross bookings, we expect this to be higher in 2022 than it was in 2021 but lower than in 2019.”

“However, we do expect continued volatility in our top line trends driven by COVID.”

“We expect sales and other expense in Q1 as a percentage of gross bookings to be about the same as it was in Q4.”

“We expect margin expenses in Q1 will trend about in line with gross bookings compared to Q1 2019.”

“Assuming that travel recovery continues, we still expect to complete our remaining organization within the next three years.”

“In November, we announced our intention to acquire Etraveli for €1.6 billion and we expect to close the transaction later this year pending regulatory approvals.”

“We will continue to lean into performance marketing channels at appropriate ROIs as we look to bring more customer demand to our platform during the recovery.”

“So, they will come back with some efficiency over time, but there will be some pressure on the personnel line.”

“This also means we expect Q4 revenue to have a greater sequential decrease from Q3, that we saw in 2019, and we expect Q4 revenue to decline more than it did in Q3.”

“We expect Q4 revenue to decline more than gross bookings due to a couple of factors.”

“However, we're increasingly confident in the potential for these channels. And as we see positive results, we expect to raise our level of participation there.”