01—Abstract
Summary
Summary of the 10-Q filed May 9, 2017. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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.
02—Key points
Key Highlights
- Total revenues grew 12.6% to $2.42 billion for the three months ended March 31, 2017.
- Gross profit increased by 15.6% to $2.33 billion, driven by international operations.
- Net income rose to $455.6 million, or $9.11 per diluted share.
- Accommodation room night reservations saw a significant increase of 27.4%.
- Performance advertising expenses increased by 25.8%, reflecting continued investment in customer acquisition.
- The company ended the quarter with a strong liquidity position, holding $15.5 billion in cash, cash equivalents, and investments.
- The acquisition of Momondo Group was announced, signaling continued strategic expansion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2017, Booking Holdings Inc. kept $0.19.
- Revenue$2.42B100.0%
- Cost of revenue−$80.4M3.3%
- Gross profit$2.34B96.7%
- Operating costs−$1.78B73.7%
- Operating income$556.5M23.0%
- Interest, other & tax−$100.5M4.2%
- Net income$456.0M18.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2017filed May 9, 2017Financial Statements
Q1 FY2017 against Q1 FY2016
| Line item | Q1 FY2017Q1 FY2016 | Change |
|---|---|---|
| Revenue | $2.42B$2.15B | +12.6% |
| Cost of Revenue | $80.40M$128.67M | −37.5% |
| Gross Profit | $2.34B$2.02B | +15.8% |
| Operating Expenses | $1.78B$1.47B | +21.3% |
| Operating Income | $556.46M$550.32M | +1.1% |
| Interest Expense | $55.72M$46.89M | +18.8% |
| Net Income | $456.00M$374.42M | +21.8% |
| EPS (Basic) | $0.37$0.30 | +22.8% |
| EPS (Diluted) | $0.36$0.30 | +22.0% |
| Shares Outstanding (Basic) | 1.23B1.24B | −0.9% |
| Shares Outstanding (Diluted) | 1.25B1.25B | −0.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in Q1 2017?
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.
How did the company's international operations perform in Q1 2017?
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.
What is the company's outlook regarding advertising expenses?
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.
What is the company's financial position and liquidity?
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.
06—Continue