01—Abstract
Summary
Summary of the 10-Q filed November 9, 2010. Cited figures are marked; the original filing is the authoritative source.
Booking Holdings Inc. (formerly priceline.com Incorporated) reported strong performance for the nine months ended September 30, 2010, with total revenues reaching $2.35 billiona, a 31% increase year-over-year.
This growth was largely driven by its international segment, particularly Booking.com, which accounted for 69% of gross bookings and 82% of operating income. The company saw substantial growth in hotel room nights booked, up 52.8% for the nine-month period, with international bookings showing particularly robust growth. Financially, the company ended the period with a strong liquidity position, holding $1.5 billionb in cash, cash equivalents, and short-term investments.
The company also successfully issued $575 millionc in convertible senior notes and continued its share repurchase program, signaling confidence in its financial health and future prospects. However, the company faces ongoing legal challenges, primarily related to hotel occupancy and other taxes, which could result in substantial liabilities, although a reserve of $23 million has been established.
02—Key points
Key Highlights
- Total revenues increased by 31.0% to $2.35 billion for the nine months ended September 30, 2010, compared to the prior year period.
- International operations were a key growth driver, with Booking.com contributing significantly to gross bookings (69%) and operating income (82%).
- Gross bookings surged by 47.3% year-over-year to $10.4 billion for the nine months ended September 30, 2010.
- Hotel room night reservations increased by 52.8% for the nine months ended September 30, 2010, driven by strong performance in international markets.
- The company maintained a strong liquidity position with $1.5 billion in cash, cash equivalents, and short-term investments as of September 30, 2010.
- In March 2010, the company issued $575 million in convertible senior notes and continued its share repurchase program, demonstrating financial flexibility.
- The company has established a $23 million reserve for potential liabilities related to ongoing hotel occupancy tax litigation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2010, Booking Holdings Inc. kept $0.22.
- Revenue$1.00B100.0%
- Cost of revenue−$335.6M33.5%
- Gross profit$666.2M66.5%
- Operating costs−$329.4M32.9%
- Operating income$336.8M33.6%
- Interest, other & tax−$112.2M11.2%
- Net income$224.6M22.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2010filed November 9, 2010Financial Statements
Q3 FY2010 against Q3 FY2009
| Line item | Q3 FY2010Q3 FY2009 | Change |
|---|---|---|
| Revenue | $1.00B$730.66M | +37.1% |
| Cost of Revenue | $335.57M$296.65M | +13.1% |
| Gross Profit | $666.19M$434.01M | +53.5% |
| Operating Expenses | $329.42M$233.25M | +41.2% |
| Operating Income | $336.77M$200.75M | +67.8% |
| Interest Expense | $8.29M$5.91M | +40.3% |
| Net Income | $224.56M$318.98M | −29.6% |
| EPS (Basic) | $0.18$0.30 | −38.7% |
| EPS (Diluted) | $0.18$0.26 | −31.3% |
| Shares Outstanding (Basic) | 1.21B1.06B | +14.1% |
| Shares Outstanding (Diluted) | 1.26B1.24B | +1.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of Booking Holdings' revenue growth in the first nine months of 2010?
The primary driver of Booking Holdings' revenue growth was its international operations, particularly Booking.com, which saw significant increases in gross bookings and hotel room night reservations. International operations accounted for a substantial majority of the company's gross bookings and operating income.
How did the company manage its liquidity and capital resources during this period?
Booking Holdings maintained a strong liquidity position with $1.5 billion in cash, cash equivalents, and short-term investments as of September 30, 2010. The company also issued $575 million in convertible senior notes in March 2010 and continued its share repurchase program, indicating ample financial flexibility.
What are the significant legal challenges the company is facing?
The company is involved in numerous lawsuits and audit proceedings related to the payment of hotel occupancy and other taxes. While the company believes it does not owe these taxes, there is a potential for substantial liabilities, penalties, and legal costs. A reserve of $23 million has been established to address these potential resolutions.
How did the acquisition of TravelJigsaw impact the company's financial results?
The acquisition of TravelJigsaw in May 2010 contributed to the growth in merchant revenues and gross bookings. TravelJigsaw's results were included in the consolidated financial statements from the acquisition date, adding rental car days and associated gross bookings to the company's overall performance.
06—Continue