Summary
Booking Holdings Inc. (formerly Priceline.com Incorporated) reported strong growth in its second quarter and first half of 2010, driven primarily by its international operations, particularly Booking.com. Total revenues increased significantly, with agency revenues seeing substantial growth due to international bookings. The company also successfully integrated TravelJigsaw, a U.K.-based car rental service acquired in May 2010. Despite robust top-line growth and improving gross margins, the company highlighted increasing online advertising costs and ongoing legal challenges related to hotel occupancy taxes as areas requiring attention. Management expressed optimism about continued growth, especially in international markets, while also acknowledging potential headwinds from currency fluctuations and intense competition.
Financial Highlights
51 data points| Revenue | $767.44M |
| Cost of Revenue | $322.18M |
| Gross Profit | $445.25M |
| Operating Expenses | $272.10M |
| Operating Income | $173.16M |
| Interest Expense | $9.27M |
| Net Income | $114.96M |
| EPS (Basic) | $2.41 |
| EPS (Diluted) | $2.26 |
| Shares Outstanding (Basic) | 47.79M |
| Shares Outstanding (Diluted) | 50.85M |
Key Highlights
- 1Total revenues increased by 27.1% for the three months ended June 30, 2010, and 26.8% for the six months ended June 30, 2010, compared to the prior year periods.
- 2Agency revenues saw significant growth of 55.3% for the three months and 63.5% for the six months ended June 30, 2010, largely driven by international bookings from Booking.com.
- 3Gross profit increased by 45.9% for the three months and 48.8% for the six months ended June 30, 2010, with gross margin improving to 58.0% and 56.5% respectively, indicating better profitability relative to revenue.
- 4The company completed the acquisition of TravelJigsaw Holdings Limited in May 2010, a U.K.-based car hire reservation service, which contributed $43.9 million to merchant gross bookings in the second quarter.
- 5Cash and cash equivalents and short-term investments stood at $1.2 billion as of June 30, 2010, indicating a strong liquidity position.
- 6Online advertising expenses increased by 47.1% for the three months and 55.2% for the six months ended June 30, 2010, reflecting increased investment to support business growth, particularly international operations.
- 7The company continues to face significant legal proceedings related to hotel occupancy and other taxes, with a reserve of $23 million established as of June 30, 2010, highlighting a material contingent liability.