Booking’s third quarter results were met with a positive market response, as revenue surpassed Wall Street expectations despite a shortfall in GAAP earnings per share. Management attributed the strong top-line performance to robust demand across both domestic and international markets, with notable acceleration in the U.S. driven by outbound travel and growth in the B2B business. CEO Glenn Fogel pointed to the success of the Connected Trip initiative and ongoing enhancements in the Genius loyalty program, emphasizing that these efforts led to a higher share of direct bookings and deeper customer engagement across multiple travel verticals.
Is now the time to buy BKNG? Find out in our full research report (it’s free for active Edge members).
Booking (BKNG) Q3 CY2025 Highlights:
- Revenue: $9.01 billion vs analyst estimates of $8.74 billion (12.7% year-on-year growth, 3.1% beat)
- Adjusted EPS: $99.50 vs analyst estimates of $95.92 (3.7% beat)
- Adjusted EBITDA: $4.23 billion vs analyst estimates of $4.01 billion (47% margin, 5.4% beat)
- Operating Margin: 38.7%, down from 39.8% in the same quarter last year
- Room Nights Booked: 323 million, up 24 million year on year
- Market Capitalization: $162.2 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 From Booking’s Q3 Earnings Call
- Kevin Kopelman (Cowen): asked about U.S. acceleration and B2B initiatives. CEO Glenn Fogel highlighted consistent contract wins and efforts to unify B2B operations, while CFO Ewout Steenbergen emphasized the payoff from brand and product investments driving direct channel growth.
- Douglas Anmuth (JPMorgan): inquired about the early impact and economic implications of OpenAI integration. Fogel acknowledged it is early but stressed Booking’s ability to provide value beyond discovery, and Steenbergen noted growing but still small traffic from large language model referrals.
- Lee Horowitz (Deutsche Bank): raised concerns about hotels bypassing Booking via AI search partners. Fogel argued that Booking’s value proposition, including Genius loyalty and trust, mitigates this risk, and he believes the threat is currently overestimated.
- Mark Mahaney (Evercore ISI): asked about social media marketing effectiveness and Asia’s growth. Steenbergen discussed disciplined ROI-driven social media investments and differentiated strategies via Agoda and Booking.com, with strong performance across Asian markets.
- Ronald Josey (Citi): questioned strategy for increasing direct traffic and AI’s impact on product metrics. Fogel cited ongoing brand-building efforts, while Steenbergen reported improved conversion, lower cancellation rates, and reduced customer service costs due to new AI tools.
Catalysts in Upcoming Quarters
In future quarters, our analysts will focus on (1) the rate of adoption and monetization of Booking’s AI-powered travel and partner tools, (2) continued expansion of direct and mobile app bookings as a share of total transactions, and (3) progress in key international markets, especially Asia and alternative accommodations. The ability to manage margin pressures amid a changing channel mix and competitive landscape will also be closely monitored.
Booking currently trades at $5,020, down from $5,142 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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