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    BKNG
    Earnings call· Sep 2025(Q3 FY25)

    Booking Holdings Inc. BKNG

    Oct 28, 2025 Source

    Executive summary

    Booking Holdings Inc. Q3 FY25 — Strong Performance Driven by U.S. Acceleration and Strategic Initiatives

    Booking Holdings delivered a strong Q3 FY25, surpassing expectations across key metrics, fueled by robust global travel demand and accelerated U.S. growth. The company is making significant progress on strategic priorities including the Connected Trip, Genius loyalty program, and Gen AI integration, which are enhancing customer value and partner engagement. Management remains optimistic about future growth, leveraging scale and technology amidst a dynamic market.

    Highlights

    5

    • Room nights grew 8% year-over-year to 323 million, exceeding the high end of prior expectations.

    • Gross bookings increased 14% year-over-year, and revenue grew 13% year-over-year, both above prior guidance.

    • Adjusted EBITDA reached $4.2 billion, up 15% year-over-year, exceeding the high end of guidance by 6 percentage points.

    • Adjusted EPS grew 19% year-over-year to $99.50 per share.

    • Transformation Program in-year savings for 2025 increased to over $225 million, with annual run rate savings enabled of approximately $450 million.

    Concerns

    2

    • Q3 revenue as a percentage of gross bookings was lower by 30 basis points year-over-year due to an increased mix of flight bookings and merchandising contra-revenue.

    • U.S. continued to see slightly lower ADRs and a shorter length of stay versus the prior year, indicating thoughtful discretionary spending.

    Guidance & targets

    17
    CategoryTargetConfidence
    Room Night Growth
    4% to 6%
    high materiality
    High
    Gross Bookings Growth
    11% to 13%
    high materiality
    High
    Revenue Growth
    10% to 12%
    high materiality
    High
    Adjusted EBITDA
    $2.0 billion to $2.1 billion
    high materiality
    High
    Adjusted EBITDA Margins
    slightly higher than last year
    medium materiality
    High
    Room Night Growth
    up about 7%
    high materiality
    High
    Gross Bookings Growth
    up about 11% to 12%
    high materiality
    High
    Revenue Growth
    up about 12%
    high materiality
    High
    Adjusted EBITDA Growth
    up about 17% to 18%
    high materiality
    High
    Adjusted EBITDA Margins Expansion
    expand year-over-year by about 180 basis points
    high materiality
    High
    Adjusted EPS Growth
    up slightly more than 20%
    high materiality
    High
    Gross Bookings Growth (constant currency)
    at least 8%
    high materiality
    High
    Revenue Growth (constant currency)
    at least 8%
    high materiality
    High
    Adjusted EPS Growth (constant currency)
    15%
    high materiality
    High
    Constant Currency Accommodation ADRs
    about in line with last year
    medium materiality
    High
    Asia Travel Market Growth
    high single digits
    medium materiality
    High
    Booking Holdings Growth in Asia
    grow even faster than the market
    medium materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Europe
    Room night growth in Q3 FY25.
    		—high single digits——
    U.S.
    Room night growth in Q3 FY25, accelerated from Q2. Outpaced broader U.S. accommodations industry.
    		—high single digits——
    Asia
    Room night growth in Q3 FY25.
    		—low double digits——
    Rest of World
    Room night growth in Q3 FY25.
    		—low double digits——
    Alternative Accommodations
    Room night growth in Q3 FY25, outpacing overall business in each major region. Listings grew to over 8.6 million, up approximately 10% year-over-year.
    Global mix of room nights: 36% (up 1 percentage point from Q3 FY24)
    		—about 10%——

    Operational metrics

    36
    Room nights
    323 million8% year-over-year increase
    Q3 FY25

    Exceeded the high end of prior expectations.

    Gross bookings
    $50 billion14% year-over-year increase
    Q3 FY25

    Exceeded the high end of guidance by about 4 percentage points.

    Revenue
    $9 billion13% year-over-year growth
    Q3 FY25

    Exceeded the high end of guidance by about 4 percentage points.

    Adjusted EBITDA
    $4.2 billion15% year-over-year growth
    Q3 FY25

    About 6 percentage points faster than the high end of guidance.

    Adjusted EPS
    $99.5019% year-over-year growth
    Q3 FY25

    Helped by a 4% lower average share count.

    FX benefit to growth rates
    400 to 500
    Q3 FY25

    Benefited growth rates for adjusted EPS.

    Connected Trip transactions growth
    mid-20%year-over-year
    Q3 FY25

    Transactions include more than one travel vertical.

    Connected Trip transactions as % of Booking.com total
    low double-digit percentage
    Q3 FY25

    Represents total transactions for Booking.com.

    Flight tickets growth
    32%year-over-year
    Q3 FY25

    Across platforms.

    Attractions tickets growth
    nearly 90%year-over-year
    Q3 FY25

    From a relatively smaller base.

    Genius Levels 2 and 3 members as % of active base
    over 30%
    Q3 FY25

    Refers to active customers.

    Genius Levels 2 and 3 members as % of Booking.com room nights
    mid-50% rangeincreasing from last year's levels
    last 4 quarters

    Refers to room nights over the last 4 quarters.

    Partners participating in Genius
    over 850,000
    end of Q3 FY25

    At the end of the third quarter.

    B2C direct mix
    mid-60% rangeup versus the low 60% range 1 year ago
    last 4 quarters

    Refers to B2C direct mix over the last 4 quarters.

    Mobile app mix of room nights
    mid-50% rangeup from the low 50% range 1 year ago
    last 4 quarters

    Refers to mobile app mix of room nights over the last 4 quarters.

    Total merchant gross bookings growth
    26%year-over-year
    Q3 FY25

    Merchant gross bookings.

    Merchant gross bookings total transaction value
    $123 billion
    last 4 quarters

    Surpassed $123 billion in total transaction value.

    Merchant gross bookings as % of total gross bookings
    68%increase from about 61% 1 year ago
    last 4 quarters

    Represents total gross bookings.

    Airline tickets booked
    over 17 millionincrease of 32% year-over-year
    Q3 FY25

    Across platforms.

    Revenue as a percentage of gross bookings
    18.1%lower by about 30 basis points year-over-year
    Q3 FY25

    Lower due to mix shift and merchandising.

    Marketing expense growth
    9%year-over-year
    Q3 FY25

    Highly variable expense line.

    Adjusted fixed operating expenses growth
    10%year-over-year
    Q3 FY25

    Impacted by increased cloud costs.

    Average share count reduction
    4%
    Q3 FY25

    Helped adjusted EPS growth.

    Transformation Program in-quarter savings
    $70 million
    Q3 FY25

    Realized in-quarter savings.

    Transformation Program in-year savings
    exceed $225 millionsurpassing prior expectations
    FY25

    Estimated for full year 2025.

    Transformation Program annual run rate savings enabled
    $450 millionsurpassing prior expectations
    annual

    Enabled approximately $450 million in annual run rate savings.

    Transformation Program full program run rate savings
    $500 million to $550 million
    full program

    Expected to deliver for the full program.

    Transformation costs incurred
    $105 million
    Q3 FY25

    Excluded from adjusted results.

    Reinvestment above baseline
    $170 million
    2025

    To support strategic priorities for long-term value creation.

    Cash and investments balance
    $17.2 billioncompared to $18.2 billion (Q2 FY25)
    end of Q3 FY25

    Ending balance.

    Share repurchases
    $700 million
    Q3 FY25

    Executed in the third quarter.

    Dividends paid
    $300 million
    Q3 FY25

    Paid in the third quarter.

    Debt redemption
    $1.5 billion
    Q3 FY25

    Redeemed high coupon debt originally due in 2030.

    Global ADRs (constant currency)
    up about 1%year-over-year
    Q3 FY25

    Improvement from the second quarter.

    Global average length of stay
    similar to last year
    Q3 FY25

    Remained similar to last year.

    Customer service costs
    downyear-over-year
    Q3 FY25

    Down in absolute terms despite volume growth of close to 10%.

    Industry KPIs

    1
    MetricValueDetails
    Gross bookings value room nights$50 billionUSD

    Product announcements

    8
    ProductTypeDetails
    Ryanair partnershipexpansion
    Southwest partnershipexpansion
    Agoda AI-powered chatbotlaunch
    KAYAK AI Modelaunch
    Booking.com app new featuresupdate
    Booking.com Gen AI tools for partners (Smart Messenger and Auto-Reply)launch
    OpenTable Regulars loyalty programupdate
    OpenAI ChatGPT app store integrationmilestone

    Deals & partnerships

    3
    RyanairFlight supply partnership

    New partnership to broaden flight supply in Europe for Booking.com.

    SouthwestFlight supply partnership

    New partnership to broaden flight supply in the U.S. for Booking.com.

    OpenAIAI platform integration and app store presence

    Booking Holdings was a launch partner for OpenAI's Operator platform and one of the first apps in OpenAI's ChatGPT app store.

    Risks & headwinds

    3
    Macroeconomic and geopolitical uncertaintyQ4 FY25 and beyond

    Not quantified

    Mitigation: Closely monitoring the travel environment for any changes.

    U.S. consumer discretionary spending cautionQ3 FY25

    Slightly lower ADRs and shorter length of stay in U.S. versus prior year.

    Mitigation: Diversified offerings across economic strata (economy to luxury) and continued execution on value proposition.

    Competitive intensity from new and existing playersNext 2-3 years

    Not quantified

    Mitigation: Continuous improvement of services, leveraging scale, proprietary data, AI capabilities, Connected Trip vision, and Genius loyalty program to create competitive advantages.

    What to watch in Q4 FY25

    5

    Room Night Growth

    Q4 FY25
    Current8% (Q3 FY25)
    Target4-6% (Q4 FY25 guidance)

    Why it matters

    To verify if the expected moderation in growth due to booking window normalization materializes as guided.

    We currently expect fourth quarter room night growth to be between 4% and 6%. We expect growth to moderate from the third quarter as we expect the booking window to be less expanded in the fourth quarter.

    Q&A highlights

    6

    Can you elaborate on the U.S. acceleration in Q3, specifically regarding B2B initiatives and the key drivers for B2C growth?

    Management expressed satisfaction with U.S. acceleration across both B2B and B2C. They noted winning B2B contracts and efforts to improve efficiency across B2B units. For B2C, they highlighted improved product, increased brand awareness (e.g., baseball advertising), and enhanced customer service. The growth of the direct channel in the U.S. was particularly emphasized as a payoff of brand investments.

    “what we are seeing is clearly a payoff of our brand awareness that is getting stronger in the U.S., more familiarity and therefore more customers coming now direct to us in the U.S. So that is really something that has seen quite a step-up in the third quarter, and we see that as a really positive trend.”

    asked by Kevin Kopelman · answered by Ewout Steenbergen

    2 min read6 chapters

    Detailed Narrative

    01

    Connected Trip Vision Progress

    Booking Holdings is advancing its Connected Trip vision, enabling travelers to book accommodations, flights, rental cars, pre-booked rides, and attractions on its platforms. Connected Trip transactions, involving more than one travel vertical, grew mid-20% year-over-year in Q3 FY25 and now represent a low double-digit percentage of Booking.com's total transactions. The company notes that travelers booking multi-vertical trips show higher return rates for future bookings.

    02

    Genius Loyalty Program as a Differentiator

    The Genius loyalty program is highlighted as a core differentiator, designed to reward loyal customers and provide benefits for partners. In Q3 FY25, travelers in Genius Levels 2 and 3 comprised over 30% of the active base and accounted for a mid-50% range of Booking.com's room nights over the last four quarters. Over 850,000 partners participate in Genius, benefiting from increased property visibility and optimized occupancy, particularly during off-peak periods.

    03

    Strategic Integration of Generative AI

    Booking Holdings is strategically integrating Gen AI to enhance both traveler and partner experiences. Examples include Agoda's AI-powered chatbot for hotel-specific answers, KAYAK's AI Mode for natural language search, and new app features on Booking.com for planning inspiration. For partners, Gen AI tools like Smart Messenger and Auto-Reply streamline communication with guests, leading to increased partner satisfaction and differentiated value.

    04

    Growth in Alternative Accommodations and Asia Market

    Alternative accommodation listings grew to over 8.6 million in Q3 FY25, an approximate 10% year-over-year increase, with double-digit room night growth. Asia remains a significant growth driver, with the industry expected to grow in high single digits over the next several years. Booking Holdings aims to outpace this market growth by leveraging the complementary strengths of Agoda (local player) and Booking.com (global reach) in the region.

    05

    U.S. Market Acceleration and Direct Channel Strength

    The U.S. market experienced accelerated room night growth in Q3 FY25, reaching high single digits, primarily driven by stronger outbound travel and momentum in the B2B business. The B2C direct channel in the U.S. also saw a significant step-up, attributed to increased brand awareness and continuous product improvements. Management noted that their growth outpaced the broader U.S. accommodations industry.

    06

    Transformation Program and Cost Efficiencies

    The company's Transformation Program is generating substantial cost savings. In-year savings for 2025 are now estimated to exceed $225 million, and approximately $450 million in annual run rate savings have been enabled, surpassing prior expectations. The full program is projected to deliver $500 million to $550 million in run rate savings, with aggregate transformation costs estimated at approximately 1x the run rate savings.

    AI-generated summary of the company’s earnings call. Not investment advice.