Booking Q3 Earnings Call Highlights

Key Points

• Third-quarter results beat the high end of guidance: Room nights grew 7%, gross bookings rose 10%, adjusted EBITDA increased 9% to about $4.6 billion, and adjusted EPS climbed 17% to $4.66.
• Booking expects slower growth in Q4 amid moderating travel demand, a tough comparison and Middle East-related disruptions. It forecasts room-night growth of 1%–3% and roughly flat adjusted EBITDA, while maintaining its full-year outlook.
• AI investments are showing early promise: AI-assistant users at Priceline and Agoda converted at about twice the rate of non-users, while Booking returned $2.4 billion to shareholders during the quarter, including $2.1 billion in buybacks.

Booking NASDAQ: BKNG reported third-quarter results that exceeded the high end of its guidance for room nights, gross bookings, adjusted revenue and adjusted EBITDA, while outlining a more cautious outlook for the fourth quarter amid moderating international travel demand and disruptions tied to the Middle East conflict.

CEO Glenn Fogel said the company’s operating performance reflected resilient travel demand and ongoing efforts to improve its products, services and marketplace capabilities. CFO Ewout Steenbergen said third-quarter room nights increased 7% year over year, up from 5% growth in the second quarter, while gross bookings rose 10%, or approximately 11% on a constant-currency basis.

Third-Quarter Growth and Profitability

Booking reported adjusted revenue growth of 9%, or about 10% on a constant-currency basis. Adjusted EBITDA increased 9% to approximately $4.6 billion, and the company’s adjusted EBITDA margin expanded slightly to 47.0%, including stock-based compensation as an expense. Adjusted earnings per share rose 17% year over year to $4.66, helped by a 7.5% reduction in average share count.

Steenbergen said average daily rates, measured on a constant-currency basis, rose approximately 3% year over year. The increase was primarily driven by Europe, with contributions from the U.S. and Asia. Room-night growth was supported by improved international travel from European and Asian bookers, while domestic growth remained stable at a higher level.

• European room nights grew high single digits, with domestic room nights also up high single digits.
• Asia room nights rose high single digits, while domestic room nights increased low double digits.
• U.S. room nights grew mid-single digits, driven by domestic travel and another quarter of direct-channel growth.
• Alternative accommodations represented about 37% of Booking.com room nights, up roughly 1 percentage point from a year earlier.
• Flight tickets increased 19%, while attraction tickets rose 24%.

Connected Trip transactions, in which travelers book more than one travel vertical for the same trip, grew nearly 20% and represented a low-double-digit share of Booking.com’s total transactions. Fogel said such transactions grew three times faster than Booking.com’s overall transactions from a relatively small base.

AI Investments and Early Results

Fogel characterized artificial intelligence as a major transformation for travel distribution and said the company is testing tools across the traveler journey. Booking.com is expanding AI features for destination exploration and customer-service tasks, while Agoda has introduced an AI Assistant across 21 markets and Priceline is integrating more capabilities from its Penny travel assistant into its main product experience.

The company also launched two new AI-native offerings. Lola offers conversational access to travel, dining and event inventory through a membership model, while Vayo is designed as a personal travel agent that can bring reservations from a traveler’s email history into one place, recommend itinerary additions and monitor prices after booking.

Steenbergen cited several early performance indicators from AI tools. He said Priceline’s Penny and Agoda’s AI Assistant users have converted at approximately twice the rate of non-users, while Agoda AI Assistant users have average booking values about 20% higher than non-users. OpenTable’s integration with OpenAI generated 190,000 seated covers in September and has become one of the brand’s fastest-growing channels from a small base, he said.

Booking.com’s daily AI search visitors using trip search increased tenfold in the third quarter compared with the second quarter, according to Steenbergen. Still, large-language-model referrals account for significantly less than 1% of Booking.com room nights, despite accelerating in recent weeks.

The company also highlighted operating efficiencies from AI. Steenbergen said third-party customer-service efficiencies more than offset higher payment expenses associated with the growing merchant business. At Agoda, blended cost per million AI tokens declined more than 25% between June and September, while companywide developer productivity improved and cost per merge request fell by double digits.

Direct Engagement, Loyalty and Supplier Relationships

Booking’s direct B2C mix remained in the mid-60% range over the past four quarters. Its mobile-app mix of total room nights was in the high-50% range, up from the mid-50% range a year earlier. Higher-tier Genius loyalty members accounted for a high-50% share of Booking.com room nights, and level two and level three members represented more than 30% of Booking.com’s active customer base over the prior 12 months.

Fogel said the company plans to further develop Genius while maintaining its focus on value for both travelers and suppliers. He noted that partners fund much of the existing program and receive returns on those discounts, while travelers receive lower-priced accommodations. Future enhancements could include benefits that have low marginal costs for partners, he said, without providing specific details.

The company emphasized its role serving independent hotels and alternative-accommodation providers. Fogel said the 10 largest global hotel chains account for only a low-double-digit percentage of Booking.com room nights. Booking processes more than 100 payment methods in over 50 currencies and provides customer service in more than 40 languages, he said.

Fourth-Quarter Outlook Reflects Travel Uncertainty

For the fourth quarter, Booking expects room nights to increase between 1% and 3%, citing its toughest comparison of 2026 and uncertainty surrounding recent travel disruptions. The outlook assumes that the direct and indirect effects of the Middle East conflict, including elevated airfares and reduced capacity on certain routes, persist through year-end.

Gross bookings are expected to rise 2% to 4%, or 4% to 6% on a constant-currency basis. Adjusted revenue is projected to be flat to up 2%, or up 2% to 4% on a constant-currency basis. Adjusted EBITDA is expected to be approximately flat year over year, or up about 2% on a constant-currency basis, as the company increases investment in AI, non-accommodation verticals and technology infrastructure.

For the full year, Booking maintained its outlook for high-single-digit growth in gross bookings, adjusted revenue and adjusted EBITDA on a reported basis, along with low- to mid-teens adjusted EPS growth. The company remains on track to achieve $650 million in annual run-rate savings from its Transformation Program in 2027.

During the third quarter, Booking generated $1.1 billion in free cash flow and returned $2.4 billion to shareholders, including $2.1 billion in share repurchases. Through the first nine months of 2026, it returned $10.5 billion to shareholders, including $9.5 billion in buybacks.

About Booking (NASDAQ:BKNG)

Booking Holdings Inc is a global online travel and restaurant-reservation company that connects consumers with travel providers through digital platforms and mobile applications. Its services include accommodations, flights, rental cars, cruises, vacation packages, restaurant reservations and other travel-related offerings.

The company operates a portfolio of well-known brands, including Booking.com, Priceline, Agoda, KAYAK, OpenTable, Rentalcars.com and Kayak-associated travel services.

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