Booking Holdings Inc. Q1 FY2025 earnings call

• Strong Q1 results: Room nights exceeded 300 million for the first time, revenue and adjusted EBITDA exceeded guidance ranges. - Strategic initiatives: Continued progress on advancing strategic priorities, incorporating AI across platforms. AI-powered features like Smart Filters, Property Q&A, and AI Review Summaries are being tested. - Supplier focus: Committed to being a trusted partner, leveraging AI to help suppliers, with accommodation listings on Booking.com reaching about 31 million by end of Q1. - Traveler focus: Growth in new and repeat travelers, direct booking channel grew faster than paid marketing, Genius loyalty program with over 30% of active travelers in Levels 2 and 3. - Other verticals: Connected Trip transaction growth 35% YOY, flight platform up 45% YOY, attractions tickets up 92% YOY.

First quarter room nights were 319 million, slightly exceeding prior expectations and growing over 7% year-over-year. Revenue was $4.8 billion, growing 8% year-over-year. Adjusted EBITDA was about $1.1 billion, increasing 21% year-over-year. For alternative accommodations at Booking.com, listings at the end of the first quarter were about 8.1 million, up 9% year-over-year, and room night growth was 12%. Alternative accommodations contributed to solid growth, with their room nights making up 37% of the global mix, up 1 percentage point from Q1 2024.

• Second quarter: Expected room night growth between 4% and 6%, gross bookings increase between 10% and 12%, revenue growth between 10% and 12%, adjusted EBITDA between $2.15 billion and $2.2 billion. FX expected to positively impact second quarter growth rates by about 4 percentage points. - Full-year 2025: Widened range for constant currency growth, expecting mid to high single digits for gross bookings and revenue, low to mid-teens for adjusted EPS. Expect constant currency adjusted EBITDA growth of high single digits to low double digits, and adjusted EBITDA margins to expand 50-100 basis points YOY.

• Geopolitical and macroeconomic uncertainty: Concerns about impact on consumer demand, travel patterns, and supplier partners. - Potential changes in near-term environment: Uncertainty could affect travel trends and consumer spending, though the company's global diversification and financial strength are seen as mitigating factors.

Q: On AI, talk about confidence in travel vertical specific agents and shift in travel patterns.

A: Glenn discussed that AI can be both broad and specific, with partnerships with hyperscalers and in-house development. Ewout noted stable travel demand globally, geographical diversification helping navigate shifts, and no major impact from current environment.

Q: On attractions strategy and agentic tools.

A: Glenn talked about attractions as part of the connected trip vision, growing 92% YOY, and agentic tools in beta with ongoing development.

Q: On competitive intensity and marketing experiments.

A: Ewout said no major shift in investments, continuing transformation and reinvestments, and performance marketing experiments showing positive but mixed ROI due to traffic mix.

Q: On widening guidance and marketing ROIs.

A: Ewout explained widening guidance due to uncertainty, and marketing ROIs being affected by traffic mix but still positive.

Q: On market share and direct mix.

A: Glenn said the company will lean in on opportunities, and direct mix continues to creep up with AI potentially impacting it.

Q: On alternative accommodations and supplier engagement.

A: Ewout noted no major economic difference between alternative and traditional accommodations, and supplier engagement with Genius increasing in softer times.