BKNG: FY25 Deep Dive
FY25 revenue $26.9B (+13.4%) — Merchant model now 66% of revenue (vs 60% FY24). Room nights 1.24B (+8%); air tickets 68M (+37%). FCF $9.09B (+15%). Capital return $7.6B; new $20B buyback authorization. Stock split 4-for-1 effective March 28, 2026.
Key Takeaways
Booking Holdings closed fiscal 2025 (calendar year ended December 31, 2025) at $26.92 billion of total revenue, up 13.4% YoY (+10% ex-FX) — an acceleration on the FY24 +11% pace. The business mix continued to shift toward the merchant model: merchant revenue grew +25.5% to $17.76 billion (now 66% of revenue, vs 60% FY24), while agency revenue declined -6.5% to $7.97 billion as legacy hotel agency commission flow continued to migrate to merchant economics. Advertising and other revenue (KAYAK, OpenTable, partnership programs) grew +11% to $1.19 billion. Underlying volumes confirmed the acceleration: room nights of 1.24 billion (+8%), rental car days 88M (+6%), and airline tickets 68M (+37%) — the air tickets line is the cleanest acceleration in the disclosure, reflecting Booking's expanding flights vertical via Etraveli partnership / Priceline. Total gross travel bookings reached $186.1 billion (+12.4%). Net income was approximately $5.4 billion (-8% YoY) — revenue up while net income down reflects merchant-model gross margin compression (paying out gross bookings to suppliers, recognizing net spread) plus tax dynamics. Free cash flow stepped to $9.09 billion (+15%). Capital allocation: $6.4 billion in buybacks (incl. $532M tax-withholding) plus $1.2 billion in dividends — total $7.6 billion. The Board authorized a new $20 billion buyback program in Q1 2025. A 4-for-1 stock split was effective March 28, 2026 — pre-split share price ~$5,000; post-split ~$1,250 range. February 2026 special dividend of $10.50 per share also declared.
Main business structure
Booking Holdings reports a single travel marketplace operating segment with revenue disaggregated by business model:
| Revenue line | FY25 ($M) | FY24 ($M) | YoY |
|---|---|---|---|
| Merchant Revenue | 17,755 | 14,142 | +25.5% |
| Agency Revenue | 7,968 | 8,524 | -6.5% |
| Advertising & Other Revenue | 1,194 | 1,073 | +11.3% |
| Total Revenue | 26,917 | 23,739 | +13.4% |
Merchant model (~66% of revenue) is the structural mix-shift line. Under merchant economics, Booking acts as merchant of record — collects payment from the traveler, pays the supplier, recognizes the gross transaction value as gross bookings and the net spread as merchant revenue. This approach was historically Priceline-only; in recent years Booking.com has shifted hotel inventory toward merchant model on a fast-rising portion of European/Asian inventory. The +25.5% FY25 print reflects continued migration plus volume growth. Merchant revenue also captures Vrbo / vacation rental + flight bookings.
Agency model (~30% of revenue) is the legacy hotel agency model where Booking facilitates the transaction without holding payment risk; supplier pays a commission on completed stays. Agency revenue declined -6.5% — the structural unwind continues.
Advertising and Other (~4%): KAYAK metasearch revenue, OpenTable restaurant booking, advertising partner programs.
Operating metrics — volume disaggregation
| Metric | FY25 | FY24 | YoY |
|---|---|---|---|
| Room nights (M) | 1,235 | 1,144 | +8% |
| Rental car days (M) | 88 | 83 | +6% |
| Airline tickets (M) | 68 | 49 | +37% |
| Merchant gross bookings ($B) | 130.0 | 104.2 | +25% |
| Agency gross bookings ($B) | 56.1 | 61.4 | -9% |
| Total gross bookings ($B) | 186.1 | 165.6 | +12.4% |
The airline tickets +37% is the standout — Booking's flights vertical (Etraveli + Priceline) is gaining material share and reaching scale where it begins to materially contribute to economics. Airfare gross bookings carry low gross margin but high "connect-rate" potential — bundled bookings with hotels.
Brand portfolio: Booking.com (largest, hotel-focused), Priceline (US-focused, opaque pricing), Agoda (Asia-Pacific), KAYAK (metasearch), OpenTable (restaurants), Rentalcars.com.
Geographic mix. International dominates — Europe historically the largest geography (Booking.com origin), Asia-Pacific accelerating via Agoda, US ~20% via Priceline. Specific 10%+ market disclosure not provided.
Customer / supplier concentration. Highly fragmented hotel supply on customer side; airline supply concentrated to ~6 large GDS (Sabre, Amadeus, Travelport).
Scale anchors. ~30,000 employees globally. ~3 million properties on the platform (hotels + alternative accommodations). Operations in 220+ countries / territories.
Key core metrics (3-year trend)
1. Revenue and gross bookings
| FY23 | FY24 | FY25 | |
|---|---|---|---|
| Revenue ($B) | 21.4 | 23.7 | 26.9 |
| YoY | — | +11% | +13.4% |
| Gross bookings ($B) | 150.6 | 165.6 | 186.1 |
| Gross bookings YoY | — | +10% | +12.4% |
| Take rate (rev / gross bookings) | 14.2% | 14.3% | 14.5% |
Take rate ticked up to 14.5% — reflecting merchant model mix benefit (merchant has higher reported revenue / bookings ratio than agency due to gross-up accounting).
2. Volume metrics — air the standout
| FY23 | FY24 | FY25 | |
|---|---|---|---|
| Room nights (M) | 1,058 | 1,144 | 1,235 |
| YoY | — | +8% | +8% |
| Air tickets (M) | 35 | 49 | 68 |
| Air YoY | — | +40% | +37% |
Air ticket volumes nearly doubled over two years (35M → 68M, +94%) — confirming flights as the durable second-vertical growth lever.
3. Free cash flow
| FY23 | FY24 | FY25 | |
|---|---|---|---|
| OCF ($B) | 7.4 | 8.3 | 9.4 |
| FCF ($B) | 7.0 | 7.9 | 9.09 |
| FCF YoY | — | +13% | +15% |
FCF growth roughly tracks revenue + working capital benefits.
4. Capital allocation
| FY23 | FY24 | FY25 | |
|---|---|---|---|
| Buybacks ($B) | 9.7 | 6.5 | 6.4 |
| Dividends ($B) | — | 1.2 | 1.2 |
| Special div (declared Feb 2026) | — | — | $10.50/sh |
| Total return ($B) | 9.7 | 7.7 | 7.6 |
| Buyback authorization | — | — | $20B (Q1 2025) |
Booking's capital return profile shifted in FY24 with the introduction of an ordinary dividend; the Q1 2025 $20B new buyback authorization signals continued multi-year buyback program. The February 2026 $10.50/share special dividend on top of regular suggests continued opportunistic returns.
5. Stock split
A 4-for-1 stock split was effective March 28, 2026. All FY25 historical data discussed above is on pre-split share count basis; post-split equivalents would divide per-share metrics by 4.
Market evaluation
Sell-side coverage (Feb-April 2026 window). The data set has dual-format PTs (pre-split vs post-split) given the March 28 split. Tracked actions show consensus Buy/Outperform across major firms. Approximate post-split PT range: $210-$260.
Recent post-split actions (April 2026, post-split $):
- Tigress Financial: $260 (post-split equivalent ~$1,040 pre-split) — Strong Buy
- BTIG: $250 — Buy
- DA Davidson: $240 — Buy
- Wells Fargo: $214 — OW
- Deutsche Bank: $210 — Buy
The PT direction has been uniformly positive. Pre-split February PTs ranged $4,500-$6,806 — implying broad consensus around continued double-digit revenue growth + buyback share-count benefit + special dividend optionality.
Buy-side positioning. BKNG is a core large-cap consumer/internet holding. Trades at premium multiple to TripAdvisor / Expedia on durable share gain + flight vertical optionality. Short interest below 1.5% of float.
FY25 corporate structure: merchant-mix shift + air-vertical scale + capital return
FY25 is the year Booking's "merchant-mix shift + air-vertical scale + capital return" template fired on all three levers. Merchant revenue +25.5% to $17.8B (now 66% of revenue, vs 60% FY24). Airline tickets +37% to 68M (vs 35M FY23, nearly doubled in two years). Capital return $7.6B with a fresh $20B authorization. The Q1 2025 $20B buyback authorization + Feb 2026 $10.50 special dividend + 4-for-1 split together signal management's confidence in sustained FCF generation through FY26-FY28. The two FY26 watch items: (1) does merchant-mix continue toward 70%+ of revenue (gross-up accounting + merchant-model economics produce the headline revenue acceleration even without volume growth); (2) does the air vertical maintain +25-30% growth on the bigger base, and what does the operating margin contribution look like as it scales (air is structurally lower-margin than hotel). The Q1 FY26 earnings print this week is the proximate event for measuring continued room night + air ticket trajectory and any updated commentary on AI/agent commerce strategy (a topic that has come up in management commentary as a distribution-channel question for travel commerce).