Booking Holdings Inc. Q4 FY2025 earnings call

• 2025 was a year of strong execution despite global market volatility; travel demand resilient. - Completed 26th year at the company, optimistic about future opportunities. - AI-powered capabilities deployed to drive value, personalization, etc. - Transformation Program launched in Nov 2024, enabled ~$550 million annual run rate savings by year-end. - Connected Trip transactions grew in high 20% range, represented low double-digit percentage of Booking.com's total transactions. - Genius loyalty program: Level 2 and 3 travelers over 30% of active base, accounted for high 50% share of room nights. - Asia remains high focus area, benefiting from Agoda's local presence and Booking.com's global reach. - Supplier value proposition includes technological capabilities, local expertise, etc. - Generative AI rolled out across brands to enhance traveler journey, focus in 2026 on unifying agentic capabilities.

Fourth quarter room nights reached $285 million, a 9% year-over-year increase. Fourth quarter gross bookings and revenue both up 16%, adjusted EBITDA $2.2 billion, up 19% year-over-year, adjusted earnings per share grew 17% year-over-year. Full year room nights over $1.2 billion, up 8% year-over-year; gross bookings and revenue growth 12% and 13% respectively; adjusted EBITDA over $9.9 billion, up 20% year-over-year; adjusted margins 36.9%, up 193 basis points. Asia saw low double-digit room night growth; U.S. mid-single digits in first half, low double digits in fourth quarter; Europe and Rest of World high single digits. Alternative accommodations at Booking.com full year room night growth about 10%, global mix about 36% for full year. Flights: 68 million airline tickets booked across platforms in 2025, up 37% year-over-year.

• 2026 targeting full year constant currency top line growth ~100 basis points ahead of long-term growth algorithm. - First quarter 2026 currently expects room night growth between 5% and 7%; gross bookings increase between 14% and 16%; revenue growth between 14% and 16%; adjusted EBITDA growth between 10% and 14%. - Transformation Program to deliver in-year savings of $500 million to $550 million in 2026. - Reinvesting about $700 million above baseline in 2026 into areas like GenAI, Connected Trip, etc., expecting ~$400 million incremental revenue, net impact ~$300 million to adjusted EBITDA. - Board approved 9.4% increase to quarterly cash dividend per share to $10.50; 25-for-1 stock split effective April 2, trading post-split April 6.

Q: Mark Mahaney asked about marketing spend deleverage in Dec quarter.

A: Glenn Fogel said they take advantage of opportunities to build franchise value, Ewout Steenbergen added reasons like performance marketing opportunities, social media investments, and higher brand marketing spend.

Q: Lee Horowitz asked about agentic capabilities.

A: Glenn Fogel talked about building personal travel agent digitally, Ewout Steenbergen mentioned more engagement, faster search, better conversion, lower cancellation rates, and lower customer service costs.

Q: Eric Sheridan asked about Genius program.

A: Glenn Fogel said Genius is important and they're working hard to expand it; Ewout Steenbergen noted contribution of Genius Levels 2 and 3 customers to room nights.

Q: Alex Brignall asked about agentic businesses.

A: Glenn Fogel said it's very early with large language model players, not much to show yet, and discussed complexity of being merchant of record.

Q: Lloyd Walmsley asked about paid search and reinvestment.

A: Glenn Fogel said search is good; Ewout Steenbergen talked about investment areas like core OTA, generative AI, fintech.

Q: Trevor Young asked about alternative accommodation business.

A: Glenn Fogel said they're working hard on it; Ewout Steenbergen added healthy growth of alternative accommodation supply and potential.