Booking Holdings Q4 FY25 earnings call BKNG

Booking Holdings has been an early adopter of AI for over a decade, now leveraging generative AI to enhance both traveler and partner experiences. In 2025, the company focused on rolling out agentic capabilities across its brands to improve discovery, planning, booking, and support, extending these to other verticals and incorporating voice functionality. For 2026, the strategy is to further connect these capabilities for a unified, personalized experience, collaborating with leading AI companies like OpenAI, Google, Microsoft, and Amazon. Early metrics show encouraging results, including increased engagement, faster search, better conversion, and improved customer satisfaction, alongside significant efficiency gains in customer service, leading to a 10% decline in cost per booking.

The company continues to make measurable progress on its Connected Trip strategy, aiming to make the travel experience more personalized, seamless, and enjoyable. In 2025, Connected Trip transactions grew in the high 20% range and represented a low double-digit percentage of Booking.com's total transactions. Flights remain a critical component, with 68 million airline tickets booked across platforms, up 37% year-over-year, representing $16.8 billion in gross bookings. The Genius loyalty program is a cornerstone of this vision, with Level 2 and 3 members representing over 30% of the active base and accounting for a high 50% share of room nights in 2025, driving higher direct booking rates and frequency.

Asia continues to be a key growth opportunity, with Booking Holdings achieving low double-digit room night growth in the region in 2025, leveraging the complementary strengths of Agoda's local presence and Booking.com's global reach. The U.S. market also demonstrated strong acceleration in room night growth, improving from low single digits in the first half of 2025 to low double digits in the fourth quarter, supported by targeted investments in brands and performance marketing, as well as momentum in the B2B business. The company aims to grow faster than the market in Asia over time^⏳.

Booking Holdings emphasizes its two-sided marketplace, where independent partners drive almost 90% of Booking.com's room nights. The company provides comprehensive technological capabilities, global marketing expertise, data-driven insights, and integrated payment solutions supporting over 100 payment methods and 50 currencies. Dedicated partner services teams work globally to ensure effective partnerships. Management highlighted the immense complexity of connecting with 4 million+ independent properties, managing dynamic inventory, and navigating extensive global regulations across 200+ countries, suggesting that large language models are unlikely to enter this operational domain and become merchants of record.

The Transformation Program, launched in November 2024, successfully achieved $550 million in annual run rate savings by year-end 2025, meeting the high end of previous guidance. These savings, along with broader operational efficiencies, created capacity to reinvest $170 million above baseline in 2025 into strategic priorities such as GenAI, Connected Trip, fintech, and advertising. For 2026, the program is expected to deliver $500-$550 million in in-year savings, enabling $700 million in reinvestments for initiatives projected to contribute $400 million in incremental revenue, resulting in a net $300 million impact to adjusted EBITDA.

Booking Holdings generated $9.1 billion in free cash flow in 2025, marking a 15% increase from 2024. The company returned a total of $8.2 billion to shareholders in 2025, including $5.9 billion in share repurchases and $1.2 billion through its quarterly cash dividend program. Since restarting its repurchase program in early 2022, the company has repurchased $29 billion in stock, leading to a 22% reduction in share count. The Board approved a 9.4% increase to the quarterly cash dividend, raising it to $10.50 per share, and authorized a 25-for-1 stock split effective April 2, 2026.