01—Abstract
Summary
Summary of the 10-Q filed November 7, 2017. Cited figures are marked; the original filing is the authoritative source.
Booking Holdings Inc. (formerly The Priceline Group Inc.) reported strong financial performance for the nine months ended September 30, 2017.
Total revenues grew 17.7% year-over-year to $9.9 billiona, driven by a significant 22.4% increase in agency revenues, primarily from accommodation bookings. Gross profit also saw robust growth of 20.2% to $9.7 billion, with international operations accounting for the majority of this increase. The company demonstrated solid profitability, with net income increasing substantially year-over-year to $2.9 billion for the nine-month period.
The company continues to expand its global footprint, notably through the acquisition of Momondo Group for $555.5 millionb. While reporting strong operational growth, Booking Holdings is also navigating various legal and regulatory challenges, including competition reviews in Europe related to price parity clauses and ongoing litigation regarding travel transaction taxes. The company maintains a healthy liquidity position with significant cash and investments, and a substantial portion is held by international subsidiaries.
02—Key points
Key Highlights
- Total revenues increased by 17.7% to $9.9 billion for the nine months ended September 30, 2017.
- Gross profit grew by 20.2% to $9.7 billion for the nine months ended September 30, 2017.
- Net income for the nine months ended September 30, 2017, was $2.9 billion, a significant increase from the prior year's $1.5 billion.
- Accommodation room night reservations saw strong growth of 18.6% and 22.2% for the three and nine months ended September 30, 2017, respectively.
- The company acquired Momondo Group for $555.5 million on July 24, 2017.
- Cash and cash equivalents, short-term and long-term investments totaled $18.4 billion as of September 30, 2017.
- The company is subject to various legal and regulatory investigations and litigation, particularly concerning competition practices and travel transaction taxes.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2017, Booking Holdings Inc. kept $0.39.
- Revenue$4.43B100.0%
- Cost of revenue−$54.0M1.2%
- Gross profit$4.38B98.8%
- Operating costs−$2.28B51.4%
- Operating income$2.10B47.4%
- Interest, other & tax−$381.8M8.6%
- Net income$1.72B38.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2017filed November 7, 2017Financial Statements
Q3 FY2017 against Q3 FY2016
| Line item | Q3 FY2017Q3 FY2016 | Change |
|---|---|---|
| Revenue | $4.43B$3.69B | +20.1% |
| Cost of Revenue | $54.18M$101.49M | −46.6% |
| Gross Profit | $4.38B$3.59B | +22.0% |
| Operating Expenses | $2.28B$2.76B | −17.3% |
| Operating Income | $2.10B$833.23M | +152.2% |
| Interest Expense | $66.34M$55.48M | +19.6% |
| Net Income | $1.72B$506.02M | +239.9% |
| EPS (Basic) | $1.40$0.41 | +243.0% |
| EPS (Diluted) | $1.38$0.41 | +239.9% |
| Shares Outstanding (Basic) | 1.22B1.24B | −0.9% |
| Shares Outstanding (Diluted) | 1.25B1.25B | 0.0% |
05—Questions
Frequently Asked Questions
What was Booking Holdings' revenue and profit performance for the period?
For the nine months ended September 30, 2017, Booking Holdings reported total revenues of $9.9 billion, a 17.7% increase year-over-year. Gross profit increased by 20.2% to $9.7 billion. Net income for the period was $2.9 billion, a significant improvement from $1.5 billion in the prior year's comparable period.
What were the main drivers of revenue growth?
Revenue growth was primarily driven by a 22.4% increase in agency revenues, which was largely attributable to strong performance in accommodation room night reservations. International operations, particularly Booking.com, were the primary contributors to this growth.
How is the company managing its cash and investments?
As of September 30, 2017, Booking Holdings had $18.4 billion in cash, cash equivalents, short-term and long-term investments. A substantial portion ($15.9 billion) is held by international subsidiaries, which the company intends to reinvest internationally. The company also repurchased $1.1 billion of its common stock during the nine-month period.
Are there any significant legal or regulatory matters that investors should be aware of?
Yes, the company is involved in several significant legal and regulatory matters. These include ongoing competition reviews in Europe concerning 'price parity' clauses with accommodation providers and various lawsuits related to the payment of travel transaction taxes in the U.S. The company believes it is in compliance with relevant laws and is contesting these matters, but the outcomes are uncertain and could impact future results.
06—Continue