Booking Holdings Q2 Earnings Beat Estimates, Revenues Grow Y/Y

Booking Holdings BKNG reported second-quarter 2025 earnings of $55.4 per share, beating the Zacks Consensus Estimate by 8.82%. The figure increased 32.2% year over year.Revenues of $6.8 billion beat the Zacks Consensus Estimate by 3.56% and increased 16% year over year and about 12% on a constant-currency (cc) basis. The rally exceeded the high end of company guidance by 4 percentage points, driven by higher revenues from facilitating payments and lower merchandising spend. FX favorably impacted growth rates by roughly four percentage points.Revenues as a percentage of gross bookings of 14.5% were up about 40 basis points year over year, fueled by the timing impacts of the Easter calendar shift and higher revenues from payments.In the second quarter of 2025, BKNG benefited from expanding alternative accommodations, enhancing Genius loyalty, advancing AI and Connected Trip initiatives, and driving superior traveler experiences and incremental demand for partners.Booking Holdings Inc. Price, Consensus and EPS Surprise  Booking Holdings Inc. price-consensus-eps-surprise-chart | Booking Holdings Inc. QuoteBKNG’s Q2 Top Line in DetailMerchant revenues were $4.46 billion (65.6% of the total revenues), up 29.3% on a year-over-year basis. Agency revenues were $2.04 billion (30.1% of the total revenues), down 4.7% year over year.Advertising & Other revenues were $297 million (4.4% of the total revenues), up 10.4% year over year.Second-quarter room nights of 309 million, up 7.7% year over year, exceeded the high end of prior expectations, led by strong growth across Europe and Asia, with Asia posting low double-digit gains and supporting a positive long-term outlook.For travelers, the company expanded its supply of alternative accommodations. At the end of the second quarter, there were approximately 8.4 million such listings on Booking.com, representing an 8% year-over-year increase. This growth enhanced traveler choice and drove a 10% year-over-year increase in alternative accommodation room nights for the second quarter, outpacing growth in the core hotel segment.Booking Holdings saw Connected Trip transaction growth of 30% year over year in the second quarter, and these connected transactions represent a low double-digit percentage of Booking.com’s total transactions.BKNG Q2 Operating ResultsMarketing expense, which is a highly variable expense line, increased 10.3% year over year. Marketing expense as a percentage of gross bookings was 4.6% and was about in line with expectations. Marketing expense as a percentage of gross bookings was slightly lower than the 4.7% reported in the second quarter of 2024.Marketing expense as a percentage of gross bookings provided leverage compared to the second quarter of 2024, driven by lower brand marketing expenses and a higher direct mix, partly offset by increased social media investment delivering strong incremental ROIs.Second-quarter sales and other expenses as a percentage of gross bookings were 1.9%, in line with last year, despite an increasing merchant mix, as higher payment expenses were offset by increased efficiencies in customer service as well as lower transaction taxes and bad debt provisions.Adjusted fixed operating expenses increased 11% year over year, or 7% on a constant currency basis. The year-over-year increase was caused by higher performance-based compensation accruals, increased cloud costs and a legal settlement in the second quarter.Personnel expenses increased year over year by 11% in the second quarter, primarily due to an increase in salary expenses, as well as increases in bonus expense accruals.Adjusted EBITDA rose 28% year over year to approximately $2.4 billion, exceeding the high end of guidance by 12 percentage points, driven largely by stronger revenue growth. Adjusted EBITDA margin expanded 330 basis points (bps) year over year to 35.6% in the reported quarter.BKNG Q2 Balance SheetAs of June 30, 2025, the company’s cash and investments totaled $18.2 billion, up from $16.1 billion as of March 31, 2025. The increase reflected $3.1 billion in quarterly free cash flow and $700 million in FX gains, partly offset by capital return activities, including $1.3 billion in share repurchases and $300 million in dividends.Booking Holdings had $18.47 billion of total debt, down from $16.02 billion as of March 31, 2025.Free cash flow was $3.1 billion compared with $3.2 billion reported in the previous quarter. Free cash flow in the second quarter benefited by over $800 million from changes in working capital, driven primarily by the seasonal increase in deferred merchant bookings balance.Booking Holdings’ Q3 GuidanceFor the third quarter of 2025, Room Night Growth is expected to be between 3.5% and 5.5%. Gross bookings are projected to grow 8-10%, with approximately 2 percentage points of the increase driven by stronger flight ticket demand.Third-quarter revenue growth is expected to be between 7% and 9%.The company expects third-quarter adjusted EBITDA between $3.9 billion and $4 billion, suggesting growth of 9% year over year at the high end.For the full year of 2025, the company anticipates low double-digit growth in gross bookings and revenues.Adjusted EBITDA is expected to increase in the mid-teens, with year-over-year margin expansion of roughly 125 basis points.BKNG’s Zacks Rank & Other Stocks to ConsiderCurrently, Booking Holdings carries a Zacks Rank #2 (Buy).Wayfair W, Yum! Brands YUM and Maplebear Inc. CART are some other top-ranked stocks in the broader Zacks Retail-Wholesale sector. Wayfair currently sports a Zacks Rank #1 (Strong Buy), and Yum! Brands and Maplebear carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.Wayfair shares have jumped 50.4% year to date. W is set to report its second-quarter 2025 results on Aug. 4.Yum! Brands shares have returned 8.2% year to date. YUM is set to report its second-quarter 2025 results on Aug. 5.Maplebear shares have gained 12.7% year to date. CART is slated to report its second-quarter 2025 results on Aug. 7.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Yum! Brands, Inc. (YUM): Free Stock Analysis Report Wayfair Inc. (W): Free Stock Analysis Report Maplebear Inc. (CART): Free Stock Analysis Report Booking Holdings Inc. (BKNG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks