01—Abstract
Summary
Summary of the 10-Q filed May 9, 2013. Cited figures are marked; the original filing is the authoritative source.
Booking Holdings Inc. (then priceline.com Incorporated) reported a strong first quarter for 2013, with net income applicable to common stockholders increasing by 34.2% to $244.3 milliona, or $4.89 per basic share, up from $182.0 million, or $3.65 per basic share, in the prior year's quarter.
Total revenues grew 25.5% to $1.3 billionb, driven by a significant 43.2% increase in agency revenues, largely from the performance of its international Booking.com segment. The company also saw a 36.4% increase in gross bookings to $9.15 billion, with international gross bookings growing by 42.8% and domestic gross bookings by 8.7%. The company continues to invest heavily in advertising, with online advertising expenses up 45.5% year-over-year, reflecting a strategic shift and investment in international brands.
Despite increasing operating expenses, particularly in advertising and personnel, the company maintained robust gross profit growth of 35.8%, leading to an improved gross margin of 77.5%. The company also announced its definitive agreement to acquire KAYAK Software Corporation for approximately $1.8 billionc, expected to close in May 2013, indicating a strong focus on expanding its meta-search capabilities.
02—Key points
Key Highlights
- Net income applicable to common stockholders increased 34.2% to $244.3 million ($4.89/share) from $182.0 million ($3.65/share) in Q1 2012.
- Total revenues grew 25.5% to $1.3 billion, with agency revenues up 43.2% and merchant revenues up 6.5%.
- Gross bookings increased 36.4% to $9.15 billion, driven by a 42.8% surge in international gross bookings.
- Hotel room night reservations increased by 37.7% to 63.2 million.
- Online advertising expenses rose 45.5% to $403.2 million, reflecting increased investment, particularly in international markets and for the Booking.com brand.
- The company entered into a definitive agreement to acquire KAYAK Software Corporation for approximately $1.8 billion, subject to closing conditions.
- Cash, cash equivalents, and short-term investments totaled $5.2 billion as of March 31, 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2013, Booking Holdings Inc. kept $0.19.
- Revenue$1.30B100.0%
- Cost of revenue−$292.3M22.5%
- Gross profit$1.01B77.5%
- Operating costs−$699.8M53.7%
- Operating income$309.8M23.8%
- Interest, other & tax−$65.6M5.0%
- Net income$244.3M18.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2013filed May 9, 2013Financial Statements
Q1 FY2013 against Q1 FY2012
| Line item | Q1 FY2013Q1 FY2012 | Change |
|---|---|---|
| Revenue | $1.30B$1.04B | +25.5% |
| Cost of Revenue | $292.35M$293.96M | −0.5% |
| Gross Profit | $1.01B$743.29M | +35.8% |
| Operating Expenses | $699.83M$501.76M | +39.5% |
| Operating Income | $309.84M$241.53M | +28.3% |
| Interest Expense | $17.33M$11.26M | +53.9% |
| Net Income | $244.27M$181.82M | +34.4% |
| EPS (Basic) | $0.20$0.15 | +34.0% |
| EPS (Diluted) | $0.19$0.14 | +34.5% |
| Shares Outstanding (Basic) | 1.25B1.25B | +0.2% |
| Shares Outstanding (Diluted) | 1.28B1.28B | 0.0% |
05—Questions
Frequently Asked Questions
What was Booking Holdings' (then priceline.com) financial performance in Q1 2013?
In Q1 2013, Booking Holdings reported a significant increase in net income applicable to common stockholders, which rose by 34.2% to $244.3 million, or $4.89 per basic share, compared to $182.0 million, or $3.65 per basic share, in Q1 2012. Total revenues grew by 25.5% to $1.3 billion. This strong performance was driven by robust growth in gross bookings, which increased by 36.4% to $9.15 billion, largely fueled by its international operations.
What drove the revenue growth for Booking Holdings in Q1 2013?
Revenue growth was primarily driven by a substantial increase in agency revenues, which surged by 43.2% year-over-year. This growth was largely attributable to the performance of the company's international segment, particularly the Booking.com brand. Hotel room night reservations also saw a significant increase of 37.7%.
What is the significance of the pending acquisition of KAYAK?
Booking Holdings entered into a definitive agreement to acquire KAYAK Software Corporation for approximately $1.8 billion. This acquisition, expected to close around May 21, 2013, signals a strategic move to enhance the company's meta-search capabilities and expand its market presence in the online travel sector. If completed, it will integrate KAYAK's operations into Booking Holdings' consolidated financial statements.
How is the company addressing its significant advertising expenditures?
Online advertising expenses increased by 45.5% in Q1 2013 compared to the prior year. This increase reflects the company's strategy to invest heavily in advertising, particularly to support the growth of its international brands and the Booking.com platform, as well as to address lower return on investment (ROI) from certain online advertising channels and a shift in brand and channel mix. Despite the rising costs, the company managed to increase its gross margin to 77.5%.
06—Continue