10-QPeriod: Q1 FY2017

Booking Holdings Inc. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 9, 2017For Securities:BKNG

Summary

Booking Holdings Inc. (formerly The Priceline Group Inc.) reported solid financial results for the first quarter of 2017, demonstrating continued growth and a strong financial position. Total revenues increased by 12.6% year-over-year to $2.42 billion, driven primarily by a 19.0% rise in agency revenues, largely from Booking.com's accommodation reservation services. Gross profit saw a robust increase of 15.6% to $2.33 billion, with international operations accounting for the majority of this growth. The company maintained healthy profitability, with net income rising to $455.6 million, or $9.11 per diluted share. Despite some revenue pressures in the merchant segment and increased performance advertising expenses, the company's strategic focus on its core Booking.com brand and international expansion continues to yield positive results. Significant cash reserves and a revolving credit facility provide ample liquidity for ongoing operations and potential strategic initiatives.

Financial Highlights

53 data points
Beta

Revenue

$2.42B

96.7% Gross Margin

Net Income

$456.00M

18.8% Net Margin

EPS (Diluted)

$0.36

Total Assets

$21.99B

Cash & Equivalents

$2.43B

Free Cash Flow

$310.06M

Financial Statements
Beta
Revenue$2.42B
Cost of Revenue$80.40M
Gross Profit$2.34B
Operating Expenses$1.78B
Operating Income$556.46M
Interest Expense$55.72M
Net Income$456.00M
EPS (Basic)$0.37
EPS (Diluted)$0.36
Shares Outstanding (Basic)1.23B
Shares Outstanding (Diluted)1.25B

Key Highlights

  • 1Total revenues grew 12.6% to $2.42 billion for the three months ended March 31, 2017.
  • 2Gross profit increased by 15.6% to $2.33 billion, driven by international operations.
  • 3Net income rose to $455.6 million, or $9.11 per diluted share.
  • 4Accommodation room night reservations saw a significant increase of 27.4%.
  • 5Performance advertising expenses increased by 25.8%, reflecting continued investment in customer acquisition.
  • 6The company ended the quarter with a strong liquidity position, holding $15.5 billion in cash, cash equivalents, and investments.
  • 7The acquisition of Momondo Group was announced, signaling continued strategic expansion.

Frequently Asked Questions

The primary driver of revenue growth was the significant increase in agency revenues, which rose by 19.0%. This growth was largely attributed to the strong performance of Booking.com's accommodation reservation services, particularly in terms of room night reservations.

International operations continued to be the main contributor to the company's financial results. Gross profit from international operations increased by 17.2% year-over-year on a constant-currency basis, demonstrating the continued strength and growth of brands like Booking.com in global markets.

The company continues to invest heavily in advertising. Performance advertising expenses increased by 25.8% year-over-year, reflecting a strategy to drive gross bookings and gross profit. While this increases near-term expenses, the company views it as essential for growth. Brand advertising also saw a slight increase.

The company maintains a strong financial position with $15.5 billion in cash, cash equivalents, and investments as of March 31, 2017. This robust liquidity, combined with a $2.0 billion revolving credit facility, provides ample resources for operations, strategic investments, and potential acquisitions.