It has been about a month since the last earnings report for Booking Holdings (BKNG Quick QuoteBKNG - Free Report) . Shares have added about 7.2% in that time frame, outperforming 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? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Booking Holdings Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Booking Holdings reported fourth-quarter 2025 earnings of $48.8 per share, beating the Zacks Consensus Estimate by 1.18%. The figure increased 16.1% year over year.

Revenues of $6.35 billion beat the Zacks Consensus Estimate by 3.87% and increased 16.1% year over year and about 11% on a constant currency (cc) basis. The growth exceeded the high end of company guidance by approximately 400 basis points (bps), driven in part by stronger-than-expected room night volumes as well as higher-than-anticipated payments revenue.

Revenues as a percentage of gross bookings were 14.8% in the fourth quarter of 2025, up slightly from 14.7% in the fourth quarter of 2024, primarily reflecting a benefit from higher payment revenues while underlying accommodation take rates remained stable.

In the fourth quarter of 2025, BKNG benefited from its ongoing Connected Trip vision, continued momentum in the Genius loyalty program, broader deployment of AI-driven agentic capabilities and increased direct bookings. Growth was further supported by accelerating performance in Asia and the United States, as well as a more expanded booking window than anticipated.

BKNG’s Q4 Top Line in Detail

Merchant revenues were $4.25 billion (66.9% of total revenues), up 27.4% year over year.

Agency revenues were $1.79 billion (28.2% of total revenues), down 3.9% year over year, reflecting the continued structural shift toward the merchant model.

Advertising & Other revenues were $309 million (4.9% of total revenues), up 14.1% year over year.

Fourth-quarter room nights of 285 million grew 9% year over year, exceeding the high end of guidance by 300 bps. Growth was driven by healthy demand across all major regions, with Asia and the United States each delivering low double-digit growth and Europe and the Rest of World up high single digits.

Alternative accommodation room nights at Booking.com grew 9% year over year, with total listings reaching 8.6 million, up 8% year over year.

Merchant gross bookings grew 27.2% year over year to $30.8 billion, with merchant gross bookings representing 72% of total gross bookings, up from 65% in the previous-year quarter.

Approximately 18 million airline tickets were booked across Booking Holdings' platforms in the fourth quarter, witnessing a 27.7% year-over-year increase.

BKNG’s Q4 Operating Results

Marketing expense increased 22.3% year over year. Marketing expense as a percentage of gross bookings was 4.5% in the fourth quarter of 2025 compared to 4.2% in the prior-year period. The year-over-year deleverage of approximately 30 bps reflected opportunistic investments in traditional performance marketing and social media channels at attractive ROI levels, alongside higher brand marketing spend versus a comparatively lower base a year ago.

Sales and other expenses were $830 million, up 10.7% year over year. As a percentage of gross bookings, sales and other expenses declined to 1.93% from 2.02% in the fourth quarter of 2024, a source of year-over-year leverage driven by increased efficiencies in customer service, partially offset by an increasing merchant mix resulting in higher payment expenses.

Adjusted fixed operating expenses increased 10% year over year, or low single digits after normalizing for changes in FX and a $44 million accrual for an indirect tax matter. The increase was caused by adverse foreign exchange impacts, the indirect tax matter and higher cloud computing costs.

Personnel expenses increased to $869 million in the fourth quarter, up approximately 1.9% year over year, a meaningful moderation consistent with the efficiency gains from the Transformation Program.

Adjusted EBITDA rose 19% year over year to approximately $2.2 billion, exceeding the high end of guidance by approximately 500 bps, driven primarily by stronger-than-expected revenue growth. Adjusted EBITDA margin expanded 80 basis points year over year to 34.6%. On a constant currency basis, adjusted EBITDA grew approximately 14%.

BKNG’s Q4 Balance Sheet

As of Dec. 31, 2025, the company's cash and investments totaled $17.8 billion, up from $17.2 billion as of Sept. 30, 2025, primarily reflecting $1.7 billion of long-term debt raised in Nov. and $1.4 billion in free cash flow, partially offset by $2.4 billion of capital return.

Booking Holdings had $16.9 billion of total long-term debt, down from $17 billion as of Sept. 30, 2025.

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

The company approved a 9.4% increase to the quarterly cash dividend per share to $10.50, payable March 31, 2026, as well as a 25-for-1 stock split effective April 2.

Booking Holdings’ Q1 & 2026 Guidance

For the first quarter of 2026, room night growth is expected between 5% and 7%, with gross bookings and revenues each projected to grow 14% to 16%, benefiting from approximately 700 bps of FX tailwind. First-quarter adjusted EBITDA growth is expected between 10% and 14%.

For the year 2026, the company targets low double-digit reported gross bookings and revenue growth, with adjusted EBITDA growing faster than revenues and margins expanding approximately 50 basis points year over year. Adjusted EPS is expected to grow at a mid-teens rate.

The company plans to reinvest approximately $700 million above its baseline in 2026 across generative AI capabilities, the Connected Trip vision, U.S. and Asia expansion, its advertising business, OpenTable's international expansion and fintech and loyalty offerings, expected to generate approximately $400 million in incremental revenues with a net adjusted EBITDA impact of approximately $300 million. The Transformation Program is expected to deliver in-year savings of $500 million to $550 million in 2026, more than $250 million higher than in 2025, largely offsetting the net investment impact and supporting continued margin expansion.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -5.23% due to these changes.

VGM Scores

At this time, Booking Holdings has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. 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. Interestingly, Booking Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.