Booking Holdings (BKNG) Q4 FY25 earnings call: guidance and Q&A

Why the marketing spend deleverage in Q4 2025 and will it continue in 2026?

Glenn Fogel explained the tactical approach of investing when attractive opportunities arise for long-term value, enabled by savings elsewhere. Ewout Steenbergen added that Q4 marketing spend was driven by attractive ROIs in traditional performance marketing, a 13% increase in social media investments, and higher brand marketing spend. Despite deleverage, Q4 saw 19% EBITDA growth and 80 bps margin expansion. For 2026, the aim is marketing leverage unless opportunistic moments arise.

“You know I always talk about look for the long term, and that's what we're doing here. It's especially nice -- you can do it if you're saving money in other places.”

asked by Mark Stephen Mahaney · answered by Glenn Fogel

What is the greatest economic uplift expected from agentic capabilities and what is the 2026 product rollout cadence?

Glenn Fogel emphasized the long-term vision of creating a digital personal travel agent through personalization and data, declining to give specific rollout times. Ewout Steenbergen noted early encouraging metrics from current agentic tools, including more engagement, faster search, better conversion, lower cancellation rates, and positive customer satisfaction. He also highlighted significant efficiency gains in customer service due to GenAI, leading to a 10% decline in cost per booking.

“GenAI is everywhere except for in the P&L. I'm very proud that we can point to a line item in the P&L where we actually do have meaningful results on the efficiency basis because as we said during the call, our absolute number in terms of customer service costs are down and our bookings are up approximately 10%.”

asked by Lee Horowitz · answered by Ewout Steenbergen

What signals are derived from the scaling Genius program and how will it be further invested in?

Glenn Fogel described Genius as a 'wonderful program' with significant future potential, emphasizing the importance of loyalty and its expansion beyond accommodations. Ewout Steenbergen highlighted that Genius Levels 2 and 3 customers' contribution to room nights increased to the high 50% level in 2025, correlating with direct bookings and higher frequency. The company plans to make the program even more attractive to encourage direct bookings by leveraging agentic tools and building trust.

“I think that Genius is a wonderful program, but it's not nearly what it can be and will be in the future.”

asked by Eric Sheridan · answered by Glenn Fogel

Update on partnerships with agentic businesses (LLMs) and their potential to become merchants of record.

Glenn Fogel stated it's very early with LLMs and no significant information to share. He strongly believes LLMs will not become merchants of record due to the immense complexity of the travel business, including managing 4 million+ independent properties, handling 100+ payment methods in 50+ currencies, and navigating extensive global regulations. He suggested LLMs might prefer an advertising model, similar to Google's successful approach with OTAs.

“Do we think that the large language models are going to be entering and want to enter down the funnel down to where we are? I don't think so.”

asked by Alex Brignall · answered by Glenn Fogel

Is paid search still growing, and where will the $700 million reinvestment for 2026 be allocated?

Glenn Fogel confirmed paid search is 'good' and a place for continued growth. Ewout Steenbergen detailed the $700 million reinvestment areas for 2026: core OTA (advertising, social media, US, Asia, loyalty, Connected Trip), generative AI, new verticals (attractions, OpenTable international expansion), and fintech (localization, FX products). He noted these expenses are largely self-funded by the Transformation Program's additional in-year savings, enabling faster top-line growth and EBITDA margin expansion.

“So we are very excited about these opportunities. We have a great track record in delivering and the execution of growth initiatives.”

asked by Lloyd Walmsley · answered by Ewout Steenbergen

Why is alternative accommodation growth slowing, and what's needed to reaccelerate it?

Glenn Fogel affirmed the importance of alternative accommodations and ongoing investments, despite not being explicitly highlighted as a new investment area. He acknowledged the need for product improvement and inventory expansion. Ewout Steenbergen added that alternative accommodation supply grew approximately 8% year-over-year to 8.6 million listings, with faster growth in the US, indicating significant future potential and contributing to the overall faster top-line growth guidance for 2026.

“So we believe that the alternative accommodation area is a very important area for us in the future.”

asked by Trevor Young · answered by Glenn Fogel