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Why Is Booking Holdings (BKNG) Down 3.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Booking Holdings (BKNG - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.

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

Booking Holdings Q3 Earnings Beat Estimates, Revenues Rise Y/Y

Booking Holdings reported third-quarter 2025 earnings of $99.5 per share, beating the Zacks Consensus Estimate by 3.6%. The figure increased 18.6% year over year.

Revenues of $9.01 billion beat the Zacks Consensus Estimate by 3.12% and increased 12.7% year over year and about 8% on a constant currency (cc) basis. The growth exceeded the high end of company guidance by 4 percentage points, in line with the outperformance on gross bookings.

Revenues as a percentage of gross bookings were 18.1%, down about 30 basis points year over year, primarily due to a higher mix of flight bookings and increased merchandising contra-revenues, partly related to prior-period bookings. The decline was partially offset by higher revenues from payments.

In the third quarter of 2025, BKNG benefited from its ongoing Connected Trip vision, stronger loyalty programs, expanded AI-driven features and increased direct bookings. Growth momentum was further supported by solid performance in Asia and sustained demand for alternative accommodations.

BKNG’s Q3 Top Line in Detail

Merchant revenues were $6.13 billion (68.1% of the total revenues), up 23.3% on a year-over-year basis.

Agency revenues were $2.57 billion (28.5% of the total revenues), down 6.7% year over year.

Advertising & Other revenues were $308 million (3.4% of the total revenues), up 14.5% year over year.

Third-quarter room nights of 323 million, up 8.2% year over year, surpassed the high end of guidance. Growth was driven by robust demand across all major regions, with the United States showing high single-digit acceleration led by strong outbound travel and continued momentum in the B2B segment.

Alternative accommodations continue to be a strong long-term growth driver. Listings rose to over 8.6 million, up about 10% year over year, with double-digit room night growth. Steady demand across regions and a broad mix of hotels, homes and unique stays strengthen Booking Holdings’ competitive position in this segment.

Booking Holdings saw Connected Trip transaction growth of mid-20% year over year in the third quarter, and these connected transactions represent a low double-digit percentage of Booking.com’s total transactions.

BKNG’s Q3 Operating Results

Marketing expense, which is a highly variable expense line, increased 8.8% year over year. Marketing expense as a percentage of gross bookings was 4.7% in the reported third quarter, slightly lower than the 5% recorded in the third quarter of 2024.

Marketing expense as a percentage of gross bookings served as a key source of operating leverage, driven by changes in traffic mix and lower brand marketing expenses as a percentage of total gross bookings. The company also maintained disciplined investments in social media channels, achieving attractive ROIs.

Third-quarter sales and other expenses as a percentage of gross bookings were 2.1%, slightly higher than 2% in the prior year, primarily driven by an increasing merchant mix resulting in higher payment expenses, partially offset by increased efficiencies in customer service.

Adjusted fixed operating expenses increased 10% year over year, or mid-single digits after normalizing for changes in FX. The year-over-year increase was impacted by increased cloud costs.

Personnel expenses increased year over year by 9% in the third quarter, primarily due to an increase in salary expenses, as well as increases in bonus expense accruals.

Adjusted EBITDA rose 15% year over year to approximately $4.2 billion, exceeding the high end of guidance by 6 percentage points, driven largely by stronger revenue growth. Adjusted EBITDA margin expanded 110 basis points (bps) year over year to 47% in the reported quarter.

BKNG’s Q3 Balance Sheet

As of Sept. 30, 2025, the company’s cash and investments totaled $17.2 billion, down from $18.2 billion as of June 30, 2025. The decline primarily reflected a $2.4 billion reduction in Deferred Merchant Bookings and Other Current Liabilities.

Booking Holdings had $17 billion of total debt, down from $18.47 billion as of June 30, 2025.

Free cash flow was $1.4 billion compared with $3.1 billion reported in the previous quarter.

Booking Holdings’ Q4 & FY25 Guidance

For the fourth quarter of 2025, Room Night Growth is expected to be between 4% and 6%. Gross bookings are projected to grow 11-13%, benefiting from roughly two percentage points of uplift driven by higher flight ticket growth.

Fourth-quarter revenue growth is expected to be between 10% and 12%.

The company expects fourth-quarter adjusted EBITDA between $2 billion and $2.1 billion, suggesting growth of 14% year over year at the high end.

For the full year 2025, BKNG anticipates Room Night Growth to increase by around 7%, while gross bookings are projected to grow between 11% and 12%.

The company expects revenue growth of approximately 12% and adjusted EBITDA to rise between 17% and 18% for 2025.

EBITDA margins are expected to expand by approximately 180 basis points year over year, exceeding the company’s earlier projection of about 125 basis points.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

At this time, Booking Holdings has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

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

Outlook

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


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