Image Source: TradingView
By Brian Nelson, CFA
Booking Holdings (BKNG) recently reported second quarter results that came in better than expectations. Total revenue grew 16% in the quarter, while adjusted EBITDA advanced 28% and adjusted earnings per share increased 32%. Gross bookings were up 13%, while room nights advanced 8% year-over-year. Net cash provided by operating activities increased 27%, to $3.2 billion, while free cash flow increased 32%, to $3.1 billion. Booking Holdings ended the quarter with $18.2 billion in cash and long-term investments and $18.5 billion in short- and long-term debt. It repurchased $1.3 billion of stock in the quarter, with total remaining authorization of $24.6 billion.
Management had the following to say about the results:
We are pleased to report a strong second quarter with 8% room night growth and a double-digit increase in gross bookings and revenue, reflecting disciplined execution against our strategic initiatives. We reached a milestone with Connected Trip transactions, where customers choose to book more than one travel vertical with us, representing a low double-digit share of Booking.com’s total transactions and up over 30% year-over-year. This was driven by healthy growth across our other verticals, including flight tickets up 44%. We’re encouraged by this progress and remain focused on these and other long-term growth drivers that create meaningful value for our travelers and partners.
Looking to the third quarter, Booking Holdings expects room nights growth in the range of 3.5%-5.5%, constant currency gross bookings growth of 4%-6%, constant currency revenue growth of 3%-5%, and adjusted EBITDA growth of 6%-9%. Looking to 2025, Booking Holdings expects constant currency gross bookings growth in the high-single-digits and constant currency revenue growth in the high-single-digits. Adjusted EBITDA growth for the year is targeted to expand at a mid-teens percentage pace. We continue to like Booking Holdings’ free cash flow profile, and the company remains an idea in the newsletter portfolios.
—–
Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.