10-QPeriod: Q3 FY2020

Booking Holdings Inc. Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 5, 2020For Securities:BKNG

Summary

Booking Holdings Inc. reported its third quarter 2020 financial results, which were significantly impacted by the ongoing COVID-19 pandemic. Total revenues for the quarter decreased by 47.6% to $2.64 billion compared to the same period in 2019. The company experienced a substantial decline in gross bookings, down 47.1% year-over-year, primarily driven by a 43.1% drop in accommodation room nights booked. This downturn reflects the unprecedented reduction in consumer spending and travel activities due to global travel restrictions and health concerns. Despite the significant revenue contraction, the company demonstrated resilience by managing expenses effectively. Marketing expenses were reduced by 48.3%, and personnel expenses decreased by 8.6%, partly due to workforce reductions and government aid programs. However, the company recorded substantial goodwill impairment charges totaling $1.06 billion for the nine months ended September 30, 2020, primarily related to its OpenTable and KAYAK reporting units, reflecting the prolonged impact of the pandemic on their outlook. While cash and cash equivalents increased significantly year-over-year, largely due to debt issuance, the company faces ongoing uncertainty regarding the duration and severity of the pandemic's impact on future performance.

Financial Highlights

48 data points
Beta

Revenue

$2.64B

Net Income

$801.00M

30.3% Net Margin

EPS (Diluted)

$0.78

Total Assets

$22.14B

Cash & Equivalents

$11.22B

Free Cash Flow

$848.00M

Financial Statements
Beta
Revenue$2.64B
Operating Expenses$2.33B
Operating Income$315.00M
Interest Expense$98.00M
Net Income$801.00M
EPS (Basic)$0.78
EPS (Diluted)$0.78
Shares Outstanding (Basic)1.02B
Shares Outstanding (Diluted)1.03B

Key Highlights

  • 1Total revenues for Q3 2020 were $2.64 billion, a decrease of 47.6% year-over-year, reflecting the severe impact of COVID-19 on the travel industry.
  • 2Gross bookings declined by 47.1% to $13.38 billion compared to Q3 2019, primarily due to a 43.1% decrease in accommodation room nights booked.
  • 3The company recorded significant goodwill impairment charges of $1.06 billion during the first nine months of 2020, predominantly impacting the OpenTable and KAYAK segments.
  • 4Cash and cash equivalents increased to $11.197 billion as of September 30, 2020, up from $6.312 billion at December 31, 2019, bolstered by debt issuance.
  • 5Personnel expenses decreased by 8.6% year-over-year for the quarter, aided by workforce reductions, lower bonus accruals, and government assistance programs.
  • 6Marketing expenses saw a significant reduction of 48.3% in the quarter compared to Q3 2019, in response to reduced travel demand and strategic cost management.
  • 7The company issued $4.1 billion in new debt in April 2020 to enhance financial flexibility amidst the pandemic.

Frequently Asked Questions

The COVID-19 pandemic had a severe negative impact on Booking Holdings' financial performance. Total revenues decreased by 47.6% to $2.64 billion, and gross bookings fell by 47.1% to $13.38 billion compared to the prior year's third quarter. This was primarily driven by a significant decline in accommodation room nights booked due to travel restrictions and reduced consumer demand.

Booking Holdings recorded substantial goodwill impairment charges totaling $1.06 billion during the first nine months of 2020. These impairments were primarily related to the OpenTable and KAYAK reporting units, reflecting the prolonged negative impact of the COVID-19 pandemic on their business outlook and fair value.

Booking Holdings significantly increased its cash and cash equivalents to $11.197 billion by the end of Q3 2020, up from $6.312 billion at the end of 2019. This was partly achieved through the issuance of $4.1 billion in new debt in April 2020. The company also amended its revolving credit facility to include a minimum liquidity covenant, replacing a leverage ratio covenant temporarily, to ensure financial flexibility.

Booking Holdings has implemented several cost-saving measures, including a significant reduction in marketing expenses (down 48.3% year-over-year in Q3), workforce reductions leading to a decrease in personnel expenses (down 8.6% year-over-year in Q3), and a general hiring freeze. The company also participated in government aid programs and suspended share repurchases.