01—Abstract
Summary
Summary of the 10-Q filed November 7, 2011. Cited figures are marked; the original filing is the authoritative source.
Booking Holdings Inc. (formerly Priceline.com Incorporated) reported strong financial performance for the nine months ended September 30, 2011, driven by significant growth in its international operations, particularly through the Booking.com brand.
Total revenues grew by 43.0% year-over-year to $3.36 billiona, with agency revenues showing robust growth of 73.7% due to international hotel bookings. Gross profit increased by 64.6% to $2.36 billion, accompanied by an expansion in gross margin from 60.8% to 70.0%, indicating improved profitability on a per-revenue basis. The company also highlighted substantial growth in gross bookings, up 60.9% to $16.7 billion, with international gross bookings surging by 82.6%.
Financially, the company maintained a strong liquidity position, ending the period with $421.2 millionb in cash and cash equivalents and $1.98 billion in short-term investments. Significant investments in online advertising, a 67.6% increase for the nine-month period, were made to fuel this growth.
The company also addressed ongoing litigation regarding hotel occupancy taxes, maintaining a reserve of $31 millionc for potential resolutions. Looking ahead, Booking Holdings has secured a new $1 billion revolving credit facility, demonstrating its continued access to capital.
02—Key points
Key Highlights
- Total revenues increased by 43.0% to $3.36 billion for the nine months ended September 30, 2011, compared to the prior year period.
- Gross profit surged by 64.6% to $2.36 billion, with gross margin expanding significantly from 60.8% to 70.0%.
- International operations remain a key growth driver, with international gross bookings up 82.6% to $12.99 billion.
- Agency revenues grew by 73.7% to $1.79 billion, largely attributed to strong performance from Booking.com.
- The company ended the period with a strong cash position, holding $421.2 million in cash and cash equivalents and $1.98 billion in short-term investments.
- Online advertising spend increased by 67.6% to $701.3 million, reflecting investment in growth.
- A reserve of $31 million has been established for potential resolutions related to hotel occupancy and other tax litigation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2011, Booking Holdings Inc. kept $0.33.
- Revenue$1.45B100.0%
- Cost of revenue−$352.7M24.3%
- Gross profit$1.10B75.7%
- Operating costs−$483.8M33.3%
- Operating income$616.4M42.4%
- Interest, other & tax−$143.5M9.9%
- Net income$472.9M32.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2011filed November 7, 2011Financial Statements
Q3 FY2011 against Q3 FY2010
| Line item | Q3 FY2011Q3 FY2010 | Change |
|---|---|---|
| Revenue | $1.45B$1.00B | +45.0% |
| Cost of Revenue | $352.66M$335.57M | +5.1% |
| Gross Profit | $1.10B$666.19M | +65.1% |
| Operating Expenses | $483.77M$329.42M | +46.9% |
| Operating Income | $616.38M$336.77M | +83.0% |
| Interest Expense | $7.88M$8.29M | −5.0% |
| Net Income | $472.89M$224.56M | +110.6% |
| EPS (Basic) | $0.38$0.18 | +105.4% |
| EPS (Diluted) | $0.37$0.18 | +107.9% |
| Shares Outstanding (Basic) | 1.24B1.21B | +2.5% |
| Shares Outstanding (Diluted) | 1.28B1.26B | +1.2% |
05—Questions
Frequently Asked Questions
What is the primary driver of Booking Holdings' revenue growth in this period?
The primary driver of Booking Holdings' revenue growth in the nine months ended September 30, 2011, was its strong international performance, particularly through the Booking.com brand. This growth was fueled by increased hotel room night reservations and higher average daily rates in international markets.
How did the company's international operations contribute to its financial results?
International operations were a significant contributor, representing approximately 78% of gross bookings and 88% of consolidated operating income for the nine months ended September 30, 2011. International gross bookings grew by a substantial 82.6% year-over-year.
What is the company's current financial position in terms of liquidity?
The company maintained a strong liquidity position, ending the period with $421.2 million in cash and cash equivalents and $1.98 billion in short-term investments. Additionally, a new $1 billion revolving credit facility was secured in October 2011.
What is the company's exposure to litigation, and what provisions have been made?
The company is involved in numerous lawsuits and audit proceedings related to hotel occupancy and other taxes. A reserve of $31 million has been established as of September 30, 2011, to account for potential resolutions of these matters. While the company is vigorously defending itself, an unfavorable outcome could have a material adverse effect.
06—Continue