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Booking Holdings Q3 Earnings Beat on Travel Growth, Revenues Miss
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Key Takeaways
BKNG's Q3 adjusted EPS jumped 17% to $4.66, beating estimates, while revenues fell 1.3% to $8.89 billion.
Room nights rose 6.7% to 345 million, while gross bookings climbed 9.6% to $54.46 billion on travel demand.
BKNG sees Q4 room nights rising 1%-3% as softer global travel and regional disruptions weigh on growth.
Booking Holdings Inc. (BKNG - Free Report) reported third-quarter 2026 adjusted earnings of $4.66 per share, beating the Zacks Consensus Estimate by 4.02%. The figure increased 17% year over year, supported by travel demand, cost discipline and a lower share count.
Reported revenues of $8.89 billion missed the consensus estimate by 7.01% and declined 1.3% year over year, reflecting an FTC-related revenue reduction. Room nights increased 6.7% to 345 million, while gross bookings rose 9.6% to $54.46 billion.
BKNG Sees Faster Room-Night Growth
Room-night growth accelerated from 5% in the second quarter, driven by improved international travel among European and Asian bookers. Domestic room nights grew high single digits globally, outpacing mid-single-digit international growth. Europe and Asia each posted high-single-digit gains, while the United States and Rest of World grew mid single digits.
Constant-currency average daily rates increased about 3%. Flight tickets rose 19% and attraction tickets grew 24%, reflecting expansion beyond accommodations. Alternative accommodation room nights at Booking.com increased 7% and represented approximately 37% of its room nights. Elevated airfares and limited capacity on some routes continued to weigh on long-haul demand.
Booking Holdings Inc. Price, Consensus and EPS Surprise
Connected Trip transactions, which involve bookings across multiple travel categories for one trip, grew almost 20% year over year and represented a low-double-digit share of Booking.com's transactions. Higher-tier Genius members accounted for a high-50% share of Booking.com room nights over the trailing year, up from the mid-50% range a year earlier.
Mobile apps contributed a high-50% share of total room nights over the trailing 12 months, also increasing from the mid-50% range. The business-to-consumer direct booking mix stayed in the mid-60% range. BKNG also expanded AI assistants across Booking.com, Agoda and Priceline while launching AI-native offerings Lola and Vayo to explore new travel-planning experiences.
BKNG's Merchant Business Drives Revenue Mix
Merchant revenues increased 14.1% to $7 billion, supported by accommodation bookings and Booking.com's shift from agency to merchant transactions. Agency revenues declined 4.1% to $2.46 billion, while advertising and other revenues rose 7.8% to $332 million, aided by growth at OpenTable and Booking.com advertising.
Merchant gross bookings accounted for roughly 75% of total gross bookings, compared with 72% a year ago. Higher payments revenues partly offset the effects of a larger flight-booking mix and differences between booking and travel dates. Separately, the FTC matter resulted in a $100 million loss accrual within general and administrative expenses.
Total operating expenses decreased 1% to $5.48 billion, aided by the absence of a $457 million impairment charge recorded a year earlier and lower transformation costs. Marketing expenses rose 11% to $2.59 billion, mainly reflecting faster growth in business-to-business affiliate marketing expenses. Sales and other expenses increased 7% to $1.1 billion.
Information technology expenses grew 25.2% to $302 million due to higher cloud computing, software and AI costs. Adjusted fixed operating expenses advanced 6% to $1.49 billion, below adjusted revenue growth. Adjusted EBITDA increased 9% to $4.61 billion, with its margin at 47%, roughly unchanged year over year. Management still targets $650 million in annual run-rate savings in 2027 under its Transformation Program.
BKNG’s Q3 Balance Sheet & Cash Flow
As of Sept. 30, cash and cash equivalents totaled $15.81 billion, compared with $17.2 billion at the end of 2025. Long-term debt increased to $18.07 billion from $16.86 billion.
BKNG had $12.4 billion remaining under its repurchase authorization and declared a dividend of $0.42 per share. The company returned $2.4 billion to its shareholders, including $2.1 billion through buybacks.
Free cash flow fell 22% to $1.07 billion, reflecting a seasonal $3.6 billion unwind of deferred merchant bookings. Operating cash flow declined 21% to $1.14 billion. However, trailing 12-month free cash flow rose 11% to $9.2 billion.
Booking Holdings Projects Slower Q4 Growth
For the fourth quarter of 2026, room nights are expected to increase 1% to 3% and gross bookings 2% to 4%. Adjusted revenues are projected to rise 0% to 2%, while adjusted EBITDA is expected to be about flat. Management anticipates an approximately two-percentage-point currency headwind to reported growth.
The outlook reflects softer international travel trends, Middle East disruptions and localized unrest in parts of Europe. For full-year 2026, management continues to expect high-single-digit growth in gross bookings, adjusted revenues and adjusted EBITDA, with adjusted earnings per share projected to rise in the low-to-mid-teens range.
BKNG’s Zacks Rank & Stocks to Consider
Currently, Booking Holdings carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Booking Holdings Q3 Earnings Beat on Travel Growth, Revenues Miss
Key Takeaways
Booking Holdings Inc. (BKNG - Free Report) reported third-quarter 2026 adjusted earnings of $4.66 per share, beating the Zacks Consensus Estimate by 4.02%. The figure increased 17% year over year, supported by travel demand, cost discipline and a lower share count.
Reported revenues of $8.89 billion missed the consensus estimate by 7.01% and declined 1.3% year over year, reflecting an FTC-related revenue reduction. Room nights increased 6.7% to 345 million, while gross bookings rose 9.6% to $54.46 billion.
BKNG Sees Faster Room-Night Growth
Room-night growth accelerated from 5% in the second quarter, driven by improved international travel among European and Asian bookers. Domestic room nights grew high single digits globally, outpacing mid-single-digit international growth. Europe and Asia each posted high-single-digit gains, while the United States and Rest of World grew mid single digits.
Constant-currency average daily rates increased about 3%. Flight tickets rose 19% and attraction tickets grew 24%, reflecting expansion beyond accommodations. Alternative accommodation room nights at Booking.com increased 7% and represented approximately 37% of its room nights. Elevated airfares and limited capacity on some routes continued to weigh on long-haul demand.
Booking Holdings Inc. Price, Consensus and EPS Surprise
Booking Holdings Inc. price-consensus-eps-surprise-chart | Booking Holdings Inc. Quote
Booking Holdings Expands Connected Trip Engagement
Connected Trip transactions, which involve bookings across multiple travel categories for one trip, grew almost 20% year over year and represented a low-double-digit share of Booking.com's transactions. Higher-tier Genius members accounted for a high-50% share of Booking.com room nights over the trailing year, up from the mid-50% range a year earlier.
Mobile apps contributed a high-50% share of total room nights over the trailing 12 months, also increasing from the mid-50% range. The business-to-consumer direct booking mix stayed in the mid-60% range. BKNG also expanded AI assistants across Booking.com, Agoda and Priceline while launching AI-native offerings Lola and Vayo to explore new travel-planning experiences.
BKNG's Merchant Business Drives Revenue Mix
Merchant revenues increased 14.1% to $7 billion, supported by accommodation bookings and Booking.com's shift from agency to merchant transactions. Agency revenues declined 4.1% to $2.46 billion, while advertising and other revenues rose 7.8% to $332 million, aided by growth at OpenTable and Booking.com advertising.
Merchant gross bookings accounted for roughly 75% of total gross bookings, compared with 72% a year ago. Higher payments revenues partly offset the effects of a larger flight-booking mix and differences between booking and travel dates. Separately, the FTC matter resulted in a $100 million loss accrual within general and administrative expenses.
Booking Holdings Contains Costs Amid Technology Spending
Total operating expenses decreased 1% to $5.48 billion, aided by the absence of a $457 million impairment charge recorded a year earlier and lower transformation costs. Marketing expenses rose 11% to $2.59 billion, mainly reflecting faster growth in business-to-business affiliate marketing expenses. Sales and other expenses increased 7% to $1.1 billion.
Information technology expenses grew 25.2% to $302 million due to higher cloud computing, software and AI costs. Adjusted fixed operating expenses advanced 6% to $1.49 billion, below adjusted revenue growth. Adjusted EBITDA increased 9% to $4.61 billion, with its margin at 47%, roughly unchanged year over year. Management still targets $650 million in annual run-rate savings in 2027 under its Transformation Program.
BKNG’s Q3 Balance Sheet & Cash Flow
As of Sept. 30, cash and cash equivalents totaled $15.81 billion, compared with $17.2 billion at the end of 2025. Long-term debt increased to $18.07 billion from $16.86 billion.
BKNG had $12.4 billion remaining under its repurchase authorization and declared a dividend of $0.42 per share. The company returned $2.4 billion to its shareholders, including $2.1 billion through buybacks.
Free cash flow fell 22% to $1.07 billion, reflecting a seasonal $3.6 billion unwind of deferred merchant bookings. Operating cash flow declined 21% to $1.14 billion. However, trailing 12-month free cash flow rose 11% to $9.2 billion.
Booking Holdings Projects Slower Q4 Growth
For the fourth quarter of 2026, room nights are expected to increase 1% to 3% and gross bookings 2% to 4%. Adjusted revenues are projected to rise 0% to 2%, while adjusted EBITDA is expected to be about flat. Management anticipates an approximately two-percentage-point currency headwind to reported growth.
The outlook reflects softer international travel trends, Middle East disruptions and localized unrest in parts of Europe. For full-year 2026, management continues to expect high-single-digit growth in gross bookings, adjusted revenues and adjusted EBITDA, with adjusted earnings per share projected to rise in the low-to-mid-teens range.
BKNG’s Zacks Rank & Stocks to Consider
Currently, Booking Holdings carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Retail-Wholesale sector are Alliance Laundry (ALH - Free Report) , Abercrombie & Fitch (ANF - Free Report) and Best Buy Co., Inc. (BBY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alliance Laundry’s shares have gained 9.1% year to date. ALH is set to report its third-quarter 2026 results on Nov. 10.
Abercrombie & Fitch’s shares have appreciated 25.2% year to date. ANF is slated to report its third-quarter 2026 results on Nov. 24.
Best Buy's shares have climbed 40.2% year to date. BBY is scheduled to report its third-quarter fiscal 2027 results on Nov. 24, 2026.