01—Abstract
Summary
Summary of the 10-K filed February 17, 2016. Cited figures are marked; the original filing is the authoritative source.
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%a 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.
02—Key points
Key Highlights
- International 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.
- Gross bookings saw a 10.4% increase year-over-year, reaching $55.5 billion, with accommodation room nights booked growing by a significant 24.9%.
- The 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.
- Acquisitions, such as OpenTable (in 2014) and KAYAK (in 2013), continue to be integrated, contributing to revenue growth and service diversification.
- The 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.
- Booking 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.
- The company is actively engaged in share repurchases, with $3.1 billion repurchased in 2015, demonstrating a commitment to returning capital to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Booking Holdings Inc. kept $0.28.
- Revenue$9.22B100.0%
- Cost of revenue−$632.2M6.9%
- Gross profit$8.59B93.1%
- Operating costs−$5.33B57.8%
- Operating income$3.26B35.3%
- Interest, other & tax−$707.5M7.7%
- Net income$2.55B27.7%
Where FY2015 revenue went
$9.22B- Operating costs: $5.33B, 58% of revenue
- Net income: $2.55B, 28% of revenue
- Cost of revenue: $632.2M, 6.9% of revenue
- Interest, other & tax: $707.5M, 7.7% of revenue
Kept 28% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 17, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $9.22B$8.44B | +9.3% |
| Cost of Revenue | $632.18M$857.84M | −26.3% |
| Gross Profit | $8.59B$7.58B | +13.3% |
| Operating Expenses | $5.33B$4.51B | +18.2% |
| Operating Income | $3.26B$3.07B | +6.0% |
| Interest Expense | $160.23M$88.35M | +81.4% |
| Net Income | $2.55B$2.42B | +5.4% |
| EPS (Basic) | $2.00$1.85 | +8.2% |
| EPS (Diluted) | $1.98$1.83 | +8.3% |
| Shares Outstanding (Basic) | 1.27B1.31B | −2.6% |
| Shares Outstanding (Diluted) | 1.29B1.33B | −2.7% |
05—Questions
Frequently Asked Questions
What was Booking Holdings' primary growth driver in 2015?
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.
How did foreign currency fluctuations affect Booking Holdings' reported results?
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.
What are the main competitive threats facing Booking Holdings, according to the filing?
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.
What was the company's strategy for growth and market position?
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.
06—Continue