A month has gone by since the last earnings report for Booking Holdings (BKNG Quick QuoteBKNG - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Booking Holdings due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Booking Holdings Inc. before we dive into how investors and analysts have reacted as of late.

Booking Holdings Q2 Earnings Beat Estimates, Revenues Grow Y/Y

Booking Holdings reported second-quarter 2025 earnings of $55.4 per share, beating the Zacks Consensus Estimate by 8.82%. The figure increased 32.2% year over year.

Revenues of $6.8 billion beat the Zacks Consensus Estimate by 3.56% and increased 16% year over year and about 12% on a constant-currency (cc) basis. The rally exceeded the high end of company guidance by 4 percentage points, driven by higher revenues from facilitating payments and lower merchandising spend. FX favorably impacted growth rates by roughly four percentage points.

Revenues as a percentage of gross bookings of 14.5% were up about 40 basis points year over year, fueled by the timing impact from the Easter calendar shift and higher revenues from payments.

In the second quarter of 2025, BKNG benefited from expanding alternative accommodations, enhancing Genius loyalty, advancing AI and Connected Trip initiatives, and driving superior traveler experiences and incremental demand for partners.

BKNG’s Q2 Top Line in Detail

Merchant revenues were $4.46 billion (65.6% of the total revenues), up 29.3% on a year-over-year basis. Agency revenues were $2.04 billion (30.1% of the total revenues), down 4.7% year over year.

Advertising & Other revenues were $297 million (4.4% of the total revenues), up 10.4% year over year.

Second-quarter room nights of 309 million, up 7.7% year over year, exceeded the high end of prior expectations, led by strong growth across Europe and Asia, with Asia posting low double-digit gains and supporting a positive long-term outlook.

For travelers, the company expanded its supply of alternative accommodations. At the end of the second quarter, there were approximately 8.4 million such listings on Booking.com, representing an 8% year-over-year increase. This growth enhanced traveler choice and drove a 10% year-over-year increase in alternative accommodation room nights for the second quarter, outpacing growth in the core hotel segment.

Booking Holdings saw Connected Trip transaction growth of 30% year over year in the second quarter, and these connected transactions represent a low double-digit percentage of Booking.com’s total transactions.

BKNG Q2 Operating Results

Marketing expense, which is a highly variable expense line, increased 10.3% year over year. Marketing expense as a percentage of gross bookings was 4.6% and was about in line with expectations. Marketing expense as a percentage of gross bookings was slightly lower than the 4.7% reported in the second quarter of 2024.

Marketing expense as a percentage of gross bookings provided leverage compared to the second quarter of 2024, driven by lower brand marketing expenses and a higher direct mix, partly offset by increased social media investment delivering strong incremental ROIs.
Second-quarter sales and other expenses as a percentage of gross bookings were 1.9%, in line with last year, despite an increasing merchant mix, as higher payment expenses were offset by increased efficiencies in customer service as well as lower transaction taxes and bad debt provisions.

Adjusted fixed operating expenses increased 11% year over year, or 7% on a constant currency basis. The year-over-year increase was caused by higher performance-based compensation accruals, increased cloud costs and a legal settlement in the second quarter.

Personnel expenses increased year over year by 11% in the second quarter, primarily due to an increase in salary expenses, as well as increases in bonus expense accruals.

Adjusted EBITDA rose 28% year over year to approximately $2.4???billion, exceeding the high end of guidance by 12 percentage points, driven largely by stronger revenue growth. Adjusted EBITDA margin expanded 330 basis points (bps) year over year to 35.6% in the reported quarter.

BKNG Q2 Balance Sheet

As of June 30, 2025, the company’s cash and investments totaled $18.2 billion, up from $16.1 billion as of March 31, 2025. The increase reflected $3.1???billion in quarterly free cash flow and $700???million in FX gains, partly offset by capital return activities, including $1.3???billion in share repurchases and $300???million in dividends.

Booking Holdings had $18.47 billion of total debt, down from $16.02 billion as of March 31, 2025.

Free cash flow was $3.1 billion compared with $3.2 billion reported in the previous quarter. Free cash flow in the second quarter benefited by over $800 million from changes in working capital, driven primarily by the seasonal increase in deferred merchant bookings balance.

Booking Holdings’ Q3 Guidance

For the third quarter of 2025, Room Night Growth is expected to be between 3.5% and 5.5%. Gross bookings are projected to grow 8-10%, with approximately 2 percentage points of the increase driven by stronger flight ticket demand.

Third-quarter revenue growth is expected to be between 7% and 9%.

The company expects third-quarter adjusted EBITDA between $3.9 billion and $4 billion, suggesting growth of 9% year over year at the high end.

For the full year of 2025, the company anticipates low double-digit growth in gross bookings and revenues.

Adjusted EBITDA is expected to increase in the mid-teens, with year-over-year margin expansion of roughly 125 basis points.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Booking Holdings has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Booking Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.