Booking’s first quarter results were met with a positive response from the market, as management attributed outperformance to strong global room night growth, increased direct bookings, and disciplined expense management. CEO Glenn Fogel highlighted the company’s broad geographical reach and growing alternative accommodation listings as key to weathering shifting travel patterns. Furthermore, the focus on leveraging artificial intelligence (AI) and expanding the Genius loyalty program bolstered traveler engagement and supplier relationships. Management underscored the role of a diversified platform in capturing demand, particularly as travel preferences shifted across regions and as U.S. consumer behavior showed some signs of caution.
Is now the time to buy BKNG? Find out in our full research report (it’s free).
Booking (BKNG) Q1 CY2025 Highlights:
- Revenue: $4.76 billion vs analyst estimates of $4.59 billion (7.9% year-on-year growth, 3.6% beat)
- Adjusted EPS: $24.81 vs analyst estimates of $17.57 (41.2% beat)
- Adjusted EBITDA: $1.09 billion vs analyst estimates of $851.3 million (22.8% margin, 27.8% beat)
- Operating Margin: 22.3%, up from 17.9% in the same quarter last year
- Room Nights Booked: 319 million, up 22 million year on year
- Market Capitalization: $173.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Booking’s Q1 Earnings Call
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Douglas Anmuth (JPMorgan) asked about the potential for AI-driven travel agents to create value compared to broader platforms. CEO Glenn Fogel explained the advantages of both narrow, travel-specific solutions and partnerships with large-scale AI providers, emphasizing execution and ongoing development.
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Mark Mahaney (Evercore ISI) inquired about growth strategy in the attractions segment and the timeline for wider rollout of proprietary AI-powered travel planning tools. Fogel described the foundational role attractions play in the Connected Trip vision and acknowledged that new AI features remain in early stages but are being improved incrementally.
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Eric Sheridan (Goldman Sachs) questioned whether recent shifts in travel behavior warranted changes in Booking’s investment priorities or marketing approach. CFO Ewout Steenbergen said investments remain focused on long-term initiatives, though the company is prepared to reallocate spending if macro conditions deteriorate.
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Brian Nowak (Morgan Stanley) requested details on the rationale for widening annual guidance. Steenbergen cited stable current trends but emphasized heightened uncertainty for the second half of the year, prompting a more cautious outlook.
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Lee Horowitz (Deutsche Bank) asked about the potential for further gains in direct bookings and how generative AI might influence acquisition channels. Fogel responded that while direct mix is increasing, there are practical limits, and new AI-driven sources could reduce acquisition costs or shift the channel landscape.
Catalysts in Upcoming Quarters
In the coming quarters, our team will monitor (1) continued growth in direct bookings and app usage as a sign of deepening customer loyalty, (2) the scaling of AI-powered features and their impact on traveler engagement and operational efficiency, and (3) progress toward integrating more travel verticals under the Connected Trip vision. The evolution of traveler preferences and the pace of expansion in alternative accommodations will also be important indicators of Booking’s ability to maintain momentum.
Booking currently trades at $5,497, up from $4,916 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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