Summary
Booking Holdings Inc. (formerly Priceline.com Incorporated) is a leading online travel company with a strong international presence, primarily driven by its Booking.com brand. In 2012, international operations accounted for approximately 82% of gross bookings and 92% of operating income, highlighting the company's global reach and success, particularly in hotel reservations. The company's strategy focuses on maintaining its leadership in worldwide online hotel and accommodation reservations, expanding its service offerings and markets, and continuing to be a top online travel service in North America. A significant development mentioned is the pending acquisition of KAYAK Software Corporation, valued at $1.8 billion, which is expected to close in the first half of 2013, signaling a strategic move to enhance its meta-search capabilities. Investors should note the company's substantial investment in online advertising, which has grown faster than gross profit due to factors like brand mix and lower advertising returns on investment. While the company demonstrates robust growth, it also faces increasing competition from large technology companies and faces potential risks related to economic downturns, currency fluctuations, and ongoing legal proceedings, particularly concerning hotel occupancy taxes.
Financial Highlights
52 data points| Revenue | $5.26B |
| Cost of Revenue | $1.18B |
| Gross Profit | $4.08B |
| Operating Expenses | $2.25B |
| Operating Income | $1.83B |
| Interest Expense | $62.06M |
| Net Income | $1.42B |
| EPS (Basic) | $28.48 |
| EPS (Diluted) | $27.66 |
| Shares Outstanding (Basic) | 49.84M |
| Shares Outstanding (Diluted) | 51.33M |
Key Highlights
- 1International operations are the primary revenue and profit driver, with Booking.com being the dominant brand.
- 2The company is actively expanding its global presence, with a focus on continued growth in international online travel markets.
- 3A significant strategic initiative is the pending acquisition of KAYAK Software Corporation for $1.8 billion, expected to close in early 2013.
- 4Online advertising expenses have increased significantly, outpacing gross profit growth, due to brand mix, channel mix, and recent lower ROI.
- 5The company faces intense competition from established online travel agencies, search engines (like Google), and emerging platforms.
- 6Legal proceedings related to hotel occupancy and other taxes represent a material risk, with significant accruals made for potential liabilities.
- 7The company is exposed to foreign currency exchange rate fluctuations due to its substantial international operations.