10-KPeriod: FY2015

Booking Holdings Inc. Annual Report, Year Ended Dec 31, 2015

Filed February 17, 2016For Securities:BKNG

Summary

Booking Holdings Inc. (then The Priceline Group Inc.) reported robust performance in its 2015 10-K filing, highlighting strong international growth, particularly from Booking.com, which drove a significant portion of the company's gross bookings and operating income. The company demonstrated resilience amidst a dynamic global economic environment, leveraging its diversified brand portfolio including priceline.com, agoda.com, KAYAK, rentalcars.com, and OpenTable. Key financial metrics showed continued expansion, with gross bookings increasing by 10.4% year-over-year, supported by a 24.9% rise in accommodation room nights booked. Strategic investments in technology and brand awareness, coupled with a focus on providing an excellent consumer experience and strong partnerships with service providers, underscore the company's commitment to sustained growth. Despite challenges such as foreign currency fluctuations and increasing competition from large tech companies and new market entrants like Airbnb and ride-sharing services, Booking Holdings maintained a strong financial position, driven by its international segment. The company also detailed ongoing investments in its brands and potential strategic acquisitions as part of its growth strategy.

Financial Highlights

53 data points
Beta

Revenue

$9.22B

93.1% Gross Margin

Net Income

$2.55B

27.7% Net Margin

EPS (Diluted)

$1.98

Total Assets

$17.42B

Cash & Equivalents

$1.48B

Free Cash Flow

$3.03B

Financial Statements
Beta
Revenue$9.22B
Cost of Revenue$632.18M
Gross Profit$8.59B
Operating Expenses$5.33B
Operating Income$3.26B
Interest Expense$160.23M
Net Income$2.55B
EPS (Basic)$2.00
EPS (Diluted)$1.98
Shares Outstanding (Basic)1.27B
Shares Outstanding (Diluted)1.29B

Key Highlights

  • 1International operations, primarily driven by Booking.com, accounted for approximately 88% of gross bookings and 94% of operating income in 2015, underscoring the company's global reach.
  • 2Gross bookings saw a 10.4% increase year-over-year, reaching $55.5 billion, with accommodation room nights booked growing by a significant 24.9%.
  • 3The company incurred substantial online advertising expenses of $2.8 billion, reflecting a continued aggressive strategy to build brand awareness and drive traffic to its platforms.
  • 4Acquisitions, such as OpenTable (in 2014) and KAYAK (in 2013), continue to be integrated, contributing to revenue growth and service diversification.
  • 5The company faced challenges including a strengthening U.S. Dollar impacting reported international results and intense competition from established players and emerging platforms like Airbnb and ride-sharing services.
  • 6Booking Holdings maintained a strong balance sheet with $10.6 billion in cash, cash equivalents, short-term and long-term investments as of December 31, 2015.
  • 7The company is actively engaged in share repurchases, with $3.1 billion repurchased in 2015, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

The primary growth driver for Booking Holdings in 2015 was its international business, particularly the Booking.com brand, which accounted for the substantial majority of gross bookings and operating income. This highlights the company's strong global presence and reliance on its European and Asian operations.

The significant strengthening of the U.S. Dollar against major currencies like the Euro in 2015 negatively impacted the reported financial results of Booking Holdings. While gross profit from international operations grew approximately 28% on a constant currency basis, the reported growth in U.S. Dollars was only 11.6% due to unfavorable exchange rate movements.

Booking Holdings identified intense competition from various sources, including large online travel agencies (like Expedia), meta-search engines (like Google, TripAdvisor), direct booking websites of travel providers, alternative accommodation providers (like Airbnb), and ride-sharing services (like Uber). Large technology companies with significant resources, such as Google and Apple, were also noted as potential competitive threats due to their ability to leverage existing platforms.

The company's strategy focused on achieving global leadership through relentless innovation, providing the best consumer experience, partnering with service providers, operating independent brands that share best practices, and investing in profitable and sustainable growth. They also indicated a willingness to pursue strategic transactions, such as acquisitions, to expand their offerings and markets.