Booking Holdings · Earnings release

Booking Holdings Reports Financial Results for 3rd Quarter 2024

NORWALK, CT – October 30, 2024. . . Booking Holdings Inc. (NASDAQ: BKNG) (the "Company," "we," "our," or "us") today reported its third quarter 2024 financial results:

•Room nights booked increased 8% from the prior-year quarter.

•Gross travel bookings, which refers to the total dollar value, generally inclusive of taxes and fees, of all travel services booked by our customers, net of cancellations, were $43.4 billion, an increase of 9% from the prior-year quarter.

•Total revenues were $8.0 billion, an increase of 9% from the prior-year quarter.

•Net income was $2.5 billion, which was in line with the prior-year quarter.

•Net income per diluted common share (EPS) was $74.34, an increase of 7% from the prior-year quarter.

•Adjusted Net income was $2.8 billion, an increase of 9% from the prior-year quarter.

•Adjusted Net income per diluted common share (Adjusted EPS) was $83.89, an increase of 16% from the prior-year quarter.

•Adjusted EBITDA was $3.7 billion, an increase of 12% from the prior-year quarter.

During the quarter, the Company recorded a $365 million accrual related to the proposed settlement of certain Italian indirect tax matters, which has been excluded from Adjusted Net income and Adjusted EBITDA. In addition, the Company recorded a reduction of $250 million to income tax expense based upon a recent U.S. Tax Court decision, which has been excluded from Adjusted Net income. For more information regarding these matters, see Notes 11 and 13 to the Unaudited Consolidated Financial Statements to be filed with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

The section below under the heading "Non-GAAP Financial Measures" provides definitions and information about the use of non-GAAP financial measures in this press release, including Adjusted Net income, Adjusted EPS, and Adjusted EBITDA, and the attached financial and statistical supplement reconciles non-GAAP financial results with Booking Holdings' financial results under GAAP.

"We are pleased to report third quarter room night growth of 8%, which exceeded our prior expectations, driven primarily by stronger performance in Europe," said Glenn Fogel, Chief Executive Officer of Booking Holdings. "We continue to make progress against our strategic initiatives while driving cost efficiency in our business, which I believe will position our company well for the long term."

Fourth Quarter Dividend

Our Board of Directors declared a cash dividend of $8.75 per share, payable on December 31, 2024, to stockholders of record as of the close of business on December 6, 2024.

1

Non-GAAP Financial Measures

The Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results.

To supplement the Unaudited Consolidated Financial Statements, the Company uses the following non-GAAP financial measures: Adjusted Net income (loss), Adjusted EPS, Adjusted EBITDA, and Free cash flow (Net cash provided by (used in) operating activities less capital expenditures). The Company also uses information on (i) the impact of the adjustments required to compute Adjusted Net income (loss) and Adjusted EBITDA on Sales and other expenses, General and administrative expenses, Depreciation and amortization expenses, Interest and dividend income, Other income (expense), net, and Income tax expense, as reported in the Company's consolidated statements of operations, as applicable, and (ii) Adjusted fixed operating expenses, which is Total operating expenses, as reported in the Company's consolidated statements of operations, adjusted to exclude (a) certain operating expenses which are generally more likely to vary based on changes in business volumes and (b) amounts which are excluded in the computation of Adjusted EBITDA.

The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

The Company uses non-GAAP financial measures for financial and operational decision-making and as a basis to evaluate performance and set targets for employee compensation programs. The Company believes that these non-GAAP financial measures are useful for analysts and investors to evaluate the Company's ongoing operating performance because they facilitate comparison of the Company's results for the current period and projected next-period results to those of prior periods and to those of its competitors (though other companies may calculate similar non-GAAP financial measures differently from those calculated by the Company). These non-GAAP financial measures, in particular Adjusted Net income (loss), Adjusted EBITDA and Free cash flow, are not intended to represent funds available for Booking Holdings' discretionary use and are not intended to represent or to be used as a substitute for Operating income (loss), Net income (loss) or Net cash provided by (used in) operating activities as measured under GAAP.

The items excluded from these non-GAAP measures, but included in the calculation of their closest GAAP equivalent, are significant components of the Company's consolidated statements of operations and cash flows and must be considered in performing a comprehensive assessment of overall financial performance.

Adjusted Net income (loss) is Net income (loss) with the following adjustments:

•excludes accruals related to the Netherlands pension fund matter (recorded during the year ended December 31, 2023),

•excludes accruals related to the fine imposed by the Spanish competition authority,

•excludes accruals related to settlements of certain indirect tax matters,

•excludes the termination fee related to an acquisition agreement,

•excludes amortization expense of intangible assets,

•excludes gains and losses on equity securities with readily determinable fair values,

• excludes the impact, if any, of significant gains and losses on the sale of and impairment and credit losses on investments in available-for-sale debt securities and significant gains and losses on the sale of and impairment and other valuation adjustments on investments in equity securities without readily determinable fair values,

•excludes foreign currency transaction gains and losses on the remeasurement of Euro-denominated debt and accrued interest that are not designated as hedging instruments for accounting purposes and debt-related foreign currency derivative instruments used as economic hedges,

•excludes accruals related to the Canadian digital services taxes for the years ended December 31, 2022 and 2023 enacted in June 2024 with retrospective effect,

•excludes interest received on tax payments refunded pursuant to settlement with authorities,

•excludes adjustments to the one-time deemed repatriation income tax liability resulting from the U.S. Tax Cuts and Jobs Act ("Tax Act") enacted in December 2017,

•excludes the impact of net unrecognized tax benefits related to certain income tax matters, and

2

• the income tax impact of the non-GAAP adjustments mentioned above and changes in tax estimates, as applicable.

In the event the Company reports a GAAP Net income but an Adjusted Net loss, dilutive shares that are included in the GAAP weighted-average number of diluted common shares outstanding are excluded from the non-GAAP weighted-average number of diluted common shares outstanding. In the event the Company reports a GAAP Net loss but an Adjusted Net income, anti-dilutive shares that are excluded from the GAAP weighted-average number of diluted common shares outstanding are included in the non-GAAP weighted-average number of diluted common shares outstanding.

In addition to the adjustments listed above regarding Adjusted Net income (loss), Adjusted EBITDA excludes depreciation expense, interest expense, and to the extent not included in the adjustments listed above, interest and dividend income, and income tax expense (benefit).

We evaluate certain operating and financial measures on both an as-reported and constant-currency basis. We calculate constant currency based on the predominant transactional currency in each country, converting our current-year period results in currencies other than U.S. Dollars using the corresponding prior-year period monthly average exchange rates.

The attached financial and statistical supplement includes reconciliations of our financial results under GAAP to non-GAAP financial information for the three and nine months ended September 30, 2024 and 2023. We are not able to provide a reconciliation between forward-looking Adjusted EBITDA and GAAP Net income (loss) because we cannot predict certain components of such reconciliation without unreasonable effort as they arise from events in future periods.

Information About Forward-Looking Statements

This press release contains forward-looking statements, which reflect the views of the Company's management regarding current expectations based on currently available information about future events. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, such as: adverse changes in market conditions for travel services; the effects of competition; the Company's ability to manage growth and expand; adverse changes in relationships with third parties on which the Company depends; success of the Company's marketing efforts; rapid technological and other market changes; the Company's ability to attract and retain qualified personnel; impacts of impairments and changes in accounting estimates; and other business and industry changes.

Other risks and uncertainties relate to cyberattacks and information security; taxes; laws and regulations; the Company's facilitation of payments; foreign currency exchange rates; the Company's debt levels and stock price volatility; and the success of the Company's investments and acquisition strategy. For a detailed discussion of these and other risk factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements included in this press release, refer to the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequently filed Quarterly Reports on Form 10-Q. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

We will be posting our prepared remarks and a summary earnings presentation to the Booking Holdings investor relations website after the conclusion of the earnings call.

3

About Booking Holdings Inc.

Booking Holdings (NASDAQ: BKNG) is the world's leading provider of online travel and related services, provided to consumers and local partners in more than 220 countries and territories through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK and OpenTable. The mission of Booking Holdings is to make it easier for everyone to experience the world. For more information, visit BookingHoldings.com and follow us on X @BookingHoldings.

###

For Press Information: Leslie Cafferty communications@bookingholdings.com

For Investor Relations: John Longstreet ir@bookingholdings.com

#BKNG_Earnings

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Booking Holdings Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

$

Short-term investments (Available-for-sale debt securities:

—

Accounts receivable, net (Allowance for expected credit losses of $131 and $137, respectively)

Prepaid expenses, net

Other current assets

Total current assets

Property and equipment, net

Operating lease assets

Intangible assets, net

Goodwill

Long-term investments

Other assets, net

Total assets

$

$

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

Accounts payable

$

$

Accrued expenses and other current liabilities

Deferred merchant bookings

Short-term debt

Total current liabilities

Deferred income taxes

Operating lease liabilities

Long-term U.S. transition tax liability

Other long-term liabilities

Long-term debt

Total liabilities

Commitments and contingencies

Stockholders' deficit:

Common stock, $0.008 par value,

—

—

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Total stockholders' deficit

Total liabilities and stockholders' deficit

$

$

5

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

Three Months Ended

Nine Months Ended

Merchant revenues

$

$

$

$

Agency revenues

Advertising and other revenues

Total revenues

Operating expenses:

Marketing expenses

Sales and other expenses

Personnel, including stock-based compensation of $148, $128, $432, and $369, respectively

General and administrative

Information technology

Depreciation and amortization

Total operating expenses

Operating income

Interest expense

Interest and dividend income

Other income (expense), net

Income before income taxes

Income tax expense

Net income

$

$

$

$

Net income applicable to common stockholders per basic common share

$

$

$

$

Weighted-average number of basic common shares outstanding (in 000's)

Net income applicable to common stockholders per diluted common share

$

$

$

$

Weighted-average number of diluted common shares outstanding (in 000's)

6

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Nine Months Ended

OPERATING ACTIVITIES:

Net income

$

$

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Provision for expected credit losses and chargebacks

Deferred income tax benefit

Net (gains) losses on equity securities

Stock-based compensation expense

Operating lease amortization

Unrealized foreign currency transaction losses (gains) related to Euro-denominated debt

(2)

Other

—

3

Changes in assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Deferred merchant bookings and other current liabilities

Other

Net cash provided by operating activities

INVESTING ACTIVITIES:

Proceeds from sale and maturity of investments

Additions to property and equipment

Other investing activities

(9)

Net cash provided by investing activities

FINANCING ACTIVITIES:

Proceeds from the issuance of long-term debt

Payment on maturity of debt

Payments for repurchase of common stock

Dividends paid

—

Proceeds from exercise of stock options

Other financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents

Net increase in cash and cash equivalents and restricted cash and cash equivalents

Total cash and cash equivalents and restricted cash and cash equivalents, beginning of period

Total cash and cash equivalents and restricted cash and cash equivalents, end of period

$

$

7

Booking Holdings Inc.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(In millions, except share and per share data) (1)

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED EPS

Three Months Ended

Nine Months Ended

Net income

$

$

$

$

(a)

Adjustment to accruals related to the fine imposed by the Spanish competition authority

—

—

—

(b)

Accruals related to settlements of indirect tax matters

—

(c)

Termination fee related to an acquisition agreement

—

—

(d)

Amortization of intangible assets

(e)

Net (gains) losses on equity securities

(f)

Foreign currency transaction losses (gains) on the remeasurement of certain Euro-denominated debt and accrued interest and debt-related foreign currency derivative instruments

(2)

(g)

Adjustment to one-time deemed repatriation income tax liability resulting from the Tax Act and related net unrecognized tax benefit

—

—

(h)

Other

—

—

(i)

Tax impact of Non-GAAP adjustments

(4)

Adjusted Net income

$

$

$

$

GAAP and Non-GAAP weighted-average number of diluted common shares outstanding (in 000's)

Net income applicable to common stockholders per diluted common share (EPS)

$

$

$

$

Adjusted Net income applicable to common stockholders per diluted common share (Adjusted EPS)

$

$

$

$

8

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

Three Months Ended

Nine Months Ended

Net income

$

$

$

$

(a)

Adjustment to accruals related to the fine imposed by the Spanish competition authority

—

—

—

(b)

Accruals related to settlements of indirect tax matters

—

(c)

Termination fee related to an acquisition agreement

—

—

(j)

Depreciation and amortization

(j)

Interest and dividend income

(j)

Interest expense

(e)

Net (gains) losses on equity securities

(f)

Foreign currency transaction losses (gains) on the remeasurement of certain Euro-denominated debt and accrued interest and debt-related foreign currency derivative instruments

(2)

(h)

Other

—

—

—

(j)

Income tax expense

Adjusted EBITDA

$

$

$

$

Net income as a % of Total Revenues

%

%

%

%

Adjusted EBITDA as a % of Total Revenues

%

%

%

%

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

Nine Months Ended

Net cash provided by operating activities

$

$

(k)

Additions to property and equipment

Free cash flow

$

$

Net cash provided by operating activities as a % of Total Revenues

%

%

Free cash flow as a % of Total Revenues

%

%

(1) Amounts may not total due to rounding.

9

Notes:

(a)

Adjustment to accruals related to the fine imposed by the Spanish competition authority are recorded in General and administrative expenses and excluded from Net income to calculate Adjusted Net income and Adjusted EBITDA.

(b)

Accruals related to settlements of certain indirect tax matters are recorded in General and administrative expenses and excluded from Net income to calculate Adjusted Net income and Adjusted EBITDA. During the quarter, the Company recorded a $365 million accrual related to the proposed settlement of certain Italian indirect tax matters.

(c)

Termination fee related to the acquisition agreement for the Etraveli Group is recorded in General and administrative expenses and excluded from Net income to calculate Adjusted Net income and Adjusted EBITDA.

(d)

Amortization of intangible assets is recorded in Depreciation and amortization expenses and excluded from Net income to calculate Adjusted Net income.

(e)

Net (gains) losses on equity securities with readily determinable fair values and impairments of investments in equity securities are recorded in Other income (expense), net and excluded from Net income to calculate Adjusted Net income and Adjusted EBITDA.

(f)

Foreign currency transaction losses (gains) on the remeasurement of Euro-denominated debt and accrued interest that are not designated as hedging instruments for accounting purposes and debt-related foreign currency derivative instruments used as economic hedges are recorded in Other income (expense), net and excluded from Net income to calculate Adjusted Net income and Adjusted EBITDA.

(g)

Adjustment to one-time deemed repatriation income tax liability resulting from the Tax Act and related net unrecognized tax benefit are recorded in Income tax expense and excluded from Net income to calculate Adjusted Net income. During the quarter, the Company recorded a reduction of $250 million to income tax expense based upon a recent U.S. Tax Court decision.

(h)

For the nine months ended September 30, 2024, includes an accrual related to the Canadian digital services taxes for the years ended December 31, 2022 and 2023 enacted in June 2024 with retrospective effect, which is recorded in Sales and other expenses. For the nine months ended September 30, 2023, includes interest received on tax payments refunded pursuant to a settlement with authorities, which is recorded in Interest and dividend income and Income tax expense, as applicable.

(i)

Reflects the tax impact of Non-GAAP adjustments above and changes in tax estimates which are excluded from Net income to calculate Adjusted Net income.

(j)

Amounts are excluded from Net income to calculate Adjusted EBITDA.

(k)

Cash used for additions to property and equipment is included in the calculation of Free cash flow.

For a more detailed discussion of the adjustments described above, please see the section in this press release under the heading "Non-GAAP Financial Measures" which provides definitions and information about the use of non-GAAP financial measures. Additional information on the impact of the adjustments above on Sales and other expenses, General and administrative expenses, Depreciation and amortization expenses, Interest and dividend income, Other income (expense), net, and Income tax expense, as applicable, are presented in the following pages. The reconciliation of Total operating expenses to Adjusted fixed operating expenses is also provided.

ADDITIONAL INFORMATION ON THE IMPACT OF NON-GAAP ADJUSTMENTS

(In millions)

Sales and other expenses:

Three Months Ended

Nine Months Ended

Sales and other expenses

$

$

$

$

Accruals related to prior-period Canadian digital services taxes

—

—

—

Adjusted Sales and other expenses

$

$

$

$

General and administrative expenses:

Three Months Ended

Nine Months Ended

General and administrative expenses

$

$

$

$

Adjustment to accruals related to the fine imposed by the Spanish competition authority

—

—

—

Accruals related to settlements of indirect tax matters

—

Termination fee related to an acquisition agreement

—

—

Adjusted General and administrative expenses

$

$

$

$

Depreciation and amortization expenses:

Three Months Ended

Nine Months Ended

Depreciation and amortization expenses

$

$

$

$

Amortization of intangible assets

Depreciation expenses

$

$

$

$

Interest and dividend income:

Three Months Ended

Nine Months Ended

Interest and dividend income

$

$

$

$

Interest received on refunded tax payments

—

—

—

Adjusted Interest and dividend income

$

$

$

$

Other income (expense), net:

Three Months Ended

Nine Months Ended

Other income (expense), net

$

$

$

$

Net (gains) losses on equity securities

Foreign currency transaction losses (gains) on the remeasurement of certain Euro-denominated debt and accrued interest and debt-related foreign currency derivative instruments

(2)

Adjusted Other income (expense), net

$

$

$

$

ADDITIONAL INFORMATION ON THE IMPACT OF NON-GAAP ADJUSTMENTS

(In millions)

Income tax expense:

Three Months Ended

Nine Months Ended

Income tax expense

$

$

$

$

Adjustment to one-time deemed repatriation income tax liability resulting from the Tax Act and related net unrecognized tax benefit

—

—

Interest received on refunded tax payments

—

—

—

7

Tax impact of Non-GAAP adjustments

4

Adjusted Income tax expense

$

$

$

$

RECONCILIATION OF TOTAL OPERATING EXPENSES TO ADJUSTED FIXED OPERATING EXPENSES

Three Months Ended

Nine Months Ended

Total operating expenses

$

$

$

$

Marketing expenses

Sales and other expenses

Depreciation and amortization

Adjustment to accruals related to the fine imposed by the Spanish competition authority

—

—

—

Accruals related to settlements of indirect tax matters

—

Termination fee related to an acquisition agreement

—

—

Other

—

(2)

—

(4)

Adjusted fixed operating expenses

$

$

$

$

Booking Holdings Inc.

Statistical Data

Units Sold in millions and Gross Bookings and Total Revenues in billions(1)

(Unaudited)

Units Sold

Room Nights

Year/Year Growth

%

%

%

%

%

%

%

%

%

Rental Car Days

Year/Year Growth

%

%

%

%

%

%

%

%

%

Airline Tickets

6

6

8

9

9

9

Year/Year Growth

%

%

%

%

%

%

%

%

%

Gross Bookings(2)

Merchant

$

$

$

$

$

$

$

$

$

Agency

Total

$

$

$

$

$

$

$

$

$

Gross Bookings Year/Year Growth (Decline)

Merchant

%

%

%

%

%

%

%

%

%

Agency

%

%

%

%

%

%

%

%

%

Total

%

%

%

%

%

%

%

%

%

Constant-currency Basis

%

%

%

%

%

%

%

6

%

9

%

Total Revenues

$

$

$

$

$

$

$

$

$

Year/Year Growth

%

%

%

%

%

%

%

%

%

Constant-currency Basis

%

%

%

%

%

%

%

9

%

9

%

(1)Amounts may not total due to rounding.

(2) Gross bookings is an operating and statistical metric that captures the total dollar value, generally inclusive of taxes and fees, of all travel services booked by our customers, net of cancellations.