Booking Q4 Earnings Call Highlights

Key Points

• Booking beat Q4 guidance with 285 million room nights (+9% YoY), gross bookings and revenue up 16% YoY, and adjusted EBITDA rising 19% to about $2.2 billion; full-year 2025 adjusted EBITDA grew 20% to >$9.9 billion and adjusted EBITDA margin expanded to 36.9%, helped by the transformation program delivering roughly $550 million of annual run‑rate savings.
• The company returned $8.2 billion to shareholders in 2025 (including $5.9 billion of repurchases), has cut share count ~22% since 2022, and the board approved a 9.4% dividend increase to $10.50 plus a 25‑for‑1 stock split effective April 2.
• Management will reinvest about $700 million in 2026 into GenAI, Connected Trip, Asia/U.S. growth and fintech/loyalty initiatives—expected to drive roughly $400 million of incremental revenue and a ~$300 million net adjusted EBITDA benefit—while guiding 2026 top‑line growth modestly above its long‑term framework and Q1 revenue growth of 14–16% (adj. EBITDA +10–14%).

Booking NASDAQ: BKNG executives highlighted accelerating room night growth, expanding margins, and increased investment in artificial intelligence and strategic growth initiatives during the company’s fourth-quarter and full-year 2025 earnings call. CEO Glenn Fogel and CFO Ewout Steenbergen said travel demand remained resilient across regions, while the company benefited from foreign exchange tailwinds and cost savings from its transformation program.

Fourth-quarter results beat guidance as room nights accelerated

For the fourth quarter, Booking reported 285 million room nights, up 9% year-over-year and above the high end of its expectations. The company said demand was healthy across major regions, with Asia and the U.S. delivering low double-digit room night growth and Europe and the rest of world up high single digits.

Gross bookings and revenue both rose 16% year-over-year, while adjusted EBITDA increased 19% to about $2.2 billion. Adjusted earnings per share grew 17% to $48.80. Management noted foreign exchange benefited fourth-quarter growth rates by roughly 500 basis points.

Steenbergen said fourth-quarter room night growth exceeded guidance partly due to continued investments in Asia and the U.S. and an “expanded” booking window. In the U.S., he said Booking saw slightly lower average daily rates and slightly shorter lengths of stay versus the prior year, which he suggested may indicate some consumers remain thoughtful about discretionary spending.

Marketing spend rose as Booking leaned into “attractive” opportunities

On marketing, executives addressed higher marketing expense as a percentage of gross bookings in the quarter. Steenbergen said marketing deleveraged year-over-year due to several factors, including opportunities to drive incremental demand at attractive returns in traditional performance marketing channels, higher brand marketing spending versus a lower level a year ago, and increased social media investment.

Fogel emphasized the company’s tactical approach, saying Booking will “strike while the iron is hot” when it sees opportunities to invest for long-term value, especially when savings elsewhere fund those investments. Steenbergen added that despite the marketing deleverage, Booking delivered 19% adjusted EBITDA growth and expanded adjusted EBITDA margins by 80 basis points in the quarter. He said the company aims to achieve marketing leverage in 2026, unless similarly attractive opportunities emerge.

Full-year 2025: margin expansion, transformation savings, and Connected Trip progress

For full-year 2025, Booking reported more than 1.2 billion room nights, up 8% year-over-year. Gross bookings rose 12% and revenue increased 13% (about 10% each on a constant currency basis, according to management). Adjusted EBITDA grew 20% to more than $9.9 billion, and adjusted EBITDA margin reached 36.9%, up 193 basis points versus the prior year. Adjusted EPS rose 22% year-over-year, helped by a 4% reduction in average share count.

Fogel and Steenbergen both pointed to the company’s transformation program, launched in November 2024, as a contributor to margin expansion. Fogel said the program had enabled approximately $550 million in annual run-rate savings as of year-end, at the high end of prior guidance. Steenbergen said Booking achieved about $250 million of in-year savings in 2025, well ahead of an initial $150 million commitment, and realized about $130 million of in-quarter savings in the fourth quarter while incurring $30 million of transformation costs excluded from adjusted results.

On strategy, Fogel said the company continued to advance its “Connected Trip” vision. He noted Connected Trip transactions grew in the high 20% range for the full year and represented a low double-digit percentage of Booking.com’s total transactions. Flights remained a key component: travelers booked 68 million airline tickets across Booking’s platforms in 2025, up 37% year-over-year, representing gross bookings of $16.8 billion. Steenbergen added that attraction tickets booked on the platforms grew nearly 80% year-over-year from a smaller base.

The company also discussed merchant mix and payments. Steenbergen said merchant gross bookings were $130 billion in 2025, up 25% year-over-year, and represented about 70% of total gross bookings, up from about 63% in 2024. He described the merchant payments platform as a “core enabler” of Connected Trip and a source of incremental revenue and contribution margin.

• Alternative accommodations: Booking.com alternative accommodation room night growth was about 10% for the year, with global mix around 36% (up one point from 2024). Steenbergen said supply grew about 8% year-over-year to 8.6 million listings, with faster growth in the U.S.
• Genius loyalty: Fogel and Steenbergen said higher-tier Genius members continue to account for a growing share of room nights. Fogel said level 2 and 3 Genius travelers represented over 30% of the active base and a “high 50%” share of room nights in 2025. Steenbergen said the mix of Booking.com room nights from Genius levels 2 and 3 was in the high-50% range, up from the mid-50% range in 2024, and that these travelers have a meaningfully higher direct booking rate.
• Asia: Fogel said Asia remains a major growth opportunity, supported by rising incomes and cross-border travel. He said the company delivered low double-digit room night growth in Asia in 2025, balancing growth with profitability through disciplined execution and investments in product, payments, and servicing.

AI: agentic capabilities, customer service efficiency, and partnerships

Fogel described generative AI as a major opportunity and said Booking has deployed AI at scale for more than a decade. He said 2025 focused on rolling out “agentic” capabilities across brands, including natural-language search, smart filters and summaries, interactive AI agents for support, and extensions into other verticals with voice functionality. In 2026, he said the company will focus on better connecting those capabilities to offer a more unified and personalized experience.

Steenbergen cited early encouraging signals from agentic tools, including more engagement, faster search, better conversion, lower cancellation rates, and positive customer satisfaction, while noting the numbers are still relatively small. He also pointed to measurable customer service cost benefits, saying Booking’s absolute customer service costs declined even as bookings grew about 10%, equating to roughly a 10% decline in customer service cost per booking.

On relationships with major AI companies, Fogel said Booking continues to collaborate with firms including OpenAI, Google, Microsoft, and Amazon. Addressing concerns about whether large language model platforms could disintermediate online travel agencies, he emphasized the complexity of supplier connectivity, payments, and regulatory requirements involved in being “merchant of record,” and argued these operational demands create meaningful barriers.

Capital returns, dividend increase, stock split, and 2026 outlook

Steenbergen said Booking ended the fourth quarter with $17.8 billion in cash and investments, up from $17.2 billion at the end of the third quarter, reflecting debt raised in November and free cash flow generation, partially offset by capital returns. Fourth-quarter capital return totaled about $2.4 billion, which he said was the highest quarterly amount since 2023.

For full-year 2025, Booking generated about $9.1 billion in free cash flow, up 15% versus 2024, and returned $8.2 billion to shareholders, including $5.9 billion of share repurchases and $1.2 billion in dividends. The company also used $1.1 billion to settle the conversion premium on convertible notes at maturity to avoid dilution from stock settlement. Steenbergen said that since restarting repurchases in early 2022, Booking has returned over 100% of free cash flow to shareholders, repurchasing $29 billion in stock and reducing share count by 22% net of stock-based compensation dilution.

Management announced the board approved a 9.4% increase in the quarterly cash dividend to $10.50 per share, and a 25-for-1 stock split set to take effect April 2, with post-split trading beginning April 6.

Looking to 2026, Fogel said Booking is targeting full-year constant currency top-line growth about 100 basis points ahead of its long-term framework, while keeping bottom-line performance in line. Steenbergen detailed plans to reinvest about $700 million above baseline investments in 2026 into areas including GenAI, Connected Trip, growth in Asia and the U.S., advertising, OpenTable’s international expansion, and expanded fintech and loyalty offerings. He said these initiatives are expected to contribute approximately $400 million in incremental revenue in 2026, with a net adjusted EBITDA impact of about $300 million, while the transformation program is expected to deliver $500 million to $550 million of in-year savings in 2026.

For first-quarter 2026, Booking guided to room night growth of 5% to 7%, gross bookings growth of 14% to 16%, revenue growth of 14% to 16%, and adjusted EBITDA growth of 10% to 14%. Steenbergen noted that, at the high end, first-quarter adjusted EBITDA growth would be about 20% after normalizing for $53 million in one-time benefits in the prior-year quarter.

About Booking NASDAQ: BKNG

Booking Holdings Inc is a global online travel company that operates a portfolio of consumer brands and technology platforms that facilitate the search for and booking of travel services. The company's businesses focus on accommodations, transportation and related travel services through consumer-facing websites and apps as well as partner distribution channels. Booking Holdings was originally founded as Priceline in the late 1990s and adopted the Booking Holdings name in 2018; it is headquartered in Norwalk, Connecticut.

Its core offerings include online reservations for hotels, vacation rentals and other lodging; flight and car rental search and booking; and ancillary services that support travel planning and on-property experiences.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.