01—Abstract
Summary
Summary of the 10-Q filed November 7, 2013. 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, 2013, driven by significant growth in its international operations, particularly through its Booking.com brand.
Total revenues increased by 29.0% to $5.25 billiona, with agency revenues showing robust growth of 40.5%. This growth was fueled by a substantial increase in hotel room night reservations, up 37.1%, and rental car days, up 38.4%, indicating strong customer demand in key markets. The company also completed a significant acquisition of KAYAK Software Corporation in May 2013 for approximately $2.1 billion, integrating a leading travel meta-search service to enhance its portfolio.
This strategic move, alongside continued investment in marketing and technology, positions Booking Holdings for future growth. Despite considerable legal challenges related to travel transaction taxes, the company maintains a strong liquidity position with $6.6 billionb in cash, cash equivalents, and short-term investments as of September 30, 2013.
02—Key points
Key Highlights
- Total revenues increased 29.0% to $5.25 billion for the nine months ended September 30, 2013, compared to the same period in 2012.
- Agency revenues grew significantly by 40.5% to $3.41 billion for the nine months ended September 30, 2013.
- Hotel room night reservations increased by 37.1% for the nine months ended September 30, 2013, demonstrating strong demand.
- Acquisition of KAYAK Software Corporation completed in May 2013 for approximately $2.1 billion, significantly expanding the company's offerings.
- Cash, cash equivalents, and short-term investments totaled $6.6 billion as of September 30, 2013, providing a strong liquidity position.
- The company continues to actively repurchase its common stock under authorized programs, demonstrating commitment to shareholder returns.
- Legal proceedings related to travel transaction taxes remain ongoing, with approximately $60 million accrued as of September 30, 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2013, Booking Holdings Inc. kept $0.37.
- Revenue$2.27B100.0%
- Cost of revenue−$280.8M12.4%
- Gross profit$1.99B87.6%
- Operating costs−$942.2M41.5%
- Operating income$1.05B46.1%
- Interest, other & tax−$213.9M9.4%
- Net income$833.0M36.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2013filed November 7, 2013Financial Statements
Q3 FY2013 against Q3 FY2012
| Line item | Q3 FY2013Q3 FY2012 | Change |
|---|---|---|
| Revenue | $2.27B$1.71B | +33.0% |
| Cost of Revenue | $280.84M$309.81M | −9.4% |
| Gross Profit | $1.99B$1.40B | +42.4% |
| Operating Expenses | $942.17M$640.91M | +47.0% |
| Operating Income | $1.05B$755.59M | +38.6% |
| Interest Expense | $24.14M$17.07M | +41.4% |
| Net Income | $832.99M$599.97M | +38.8% |
| EPS (Basic) | $0.65$0.48 | +35.5% |
| EPS (Diluted) | $0.63$0.47 | +34.8% |
| Shares Outstanding (Basic) | 1.28B1.25B | +3.0% |
| Shares Outstanding (Diluted) | 1.32B1.28B | +3.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of Booking Holdings' revenue growth in this period?
The primary driver of Booking Holdings' revenue growth was the strong performance of its international operations, particularly the Booking.com brand, which saw significant increases in hotel room night reservations and rental car days. Overall, agency revenues, which are largely driven by international bookings, increased by 40.5%.
What is the significance of the KAYAK acquisition?
The acquisition of KAYAK Software Corporation in May 2013 for approximately $2.1 billion was a significant strategic move. KAYAK is a leading travel meta-search service, and its integration expands Booking Holdings' portfolio and competitive positioning in the online travel market by adding powerful search and comparison capabilities.
What are the main financial risks highlighted in this filing?
The main financial risks highlighted include ongoing legal proceedings related to travel transaction taxes, which have resulted in an accrual of approximately $60 million. Additionally, the company faces currency exchange rate fluctuations due to its substantial international operations and the inherent risks associated with intense competition in the online travel industry.
How has the company managed its liquidity and capital?
Booking Holdings maintained a strong liquidity position with $6.6 billion in cash, cash equivalents, and short-term investments as of September 30, 2013. The company also issued $1.0 billion in convertible senior notes in May 2013 and continued to execute share repurchase programs, indicating a balanced approach to capital management and shareholder returns.
06—Continue