10-QPeriod: Q1 FY2007

Booking Holdings Inc. Quarterly Report for Q1 Ended Mar 31, 2007

Filed May 10, 2007For Securities:BKNG

Summary

Priceline.com Incorporated (now Booking Holdings Inc.) reported its first-quarter 2007 financial results, demonstrating significant growth in revenues, driven primarily by its European operations. Total revenues increased by 24.6% year-over-year to $301.4 million, fueled by a substantial 79.4% surge in agency revenues, largely attributable to the continued expansion of its European Booking.com segment. Merchant revenues also saw a healthy 16.9% increase, boosted by a $15.9 million excise tax refund related to airline tickets. The company's gross profit nearly doubled, increasing by 65.7% to $119.7 million, with a significant improvement in gross margin to 39.7% from 29.9% in the prior year. This margin expansion was due to a favorable shift in revenue mix towards net revenue-based agency transactions and the impact of the excise tax refund. However, the company reported a net loss of $14.7 million for the quarter, a widening from a net loss of $0.1 million in the same period last year, primarily due to a significant $54.9 million charge related to the settlement of a securities class-action lawsuit. Despite the net loss, operating cash flow remained positive at $18.8 million, and the company ended the quarter with a strong cash position of $455 million.

Key Highlights

  • 1Total revenues increased by 24.6% to $301.4 million, driven by strong performance in European operations.
  • 2Agency revenues surged by 79.4% to $54.5 million, primarily due to the growth of Booking.com in Europe.
  • 3Gross profit increased by 65.7% to $119.7 million, with gross margin improving significantly to 39.7% from 29.9%.
  • 4A one-time $15.9 million excise tax refund on airline tickets positively impacted merchant revenues and gross profit.
  • 5The company recorded a net loss of $14.7 million, widened from $0.1 million in Q1 2006, largely due to a $54.9 million settlement charge for a securities class-action lawsuit.
  • 6Cash and cash equivalents stood strong at $455 million as of March 31, 2007.
  • 7Gross bookings increased by 33.7%, with agency bookings up 47.9% and merchant bookings up 8.1%.

Frequently Asked Questions

The primary driver of revenue growth was the strong performance of the company's European operations, particularly through its Booking.com segment. Agency revenues, which are largely generated by these international operations, saw a significant increase of 79.4%.

The company reported a net loss of $14.7 million primarily due to a substantial charge of $54.9 million related to the settlement of a securities class-action lawsuit. This one-time expense significantly impacted the overall profitability for the quarter.

The company received and recognized a $15.9 million excise tax refund on airline tickets in the first quarter of 2007. This refund positively impacted merchant revenues and gross profit. An additional $3 million refund was expected in the second quarter.

The company maintained a strong liquidity position, with cash and cash equivalents totaling $455 million as of March 31, 2007. This provides ample resources for operations and potential strategic initiatives.