01—Abstract
Summary
Summary of the 10-Q filed November 2, 2022. Cited figures are marked; the original filing is the authoritative source.
Booking Holdings Inc. reported strong financial performance for the third quarter and the first nine months of 2022, demonstrating a significant recovery from the pandemic's impact.
Total revenues surged by 29.4% and 63.5% year-over-year for the respective periods, reaching $6.05 billiona and $13.04 billion. This growth was primarily driven by a rebound in travel demand, leading to substantial increases in room nights, rental car days, and airline tickets booked. Merchant revenues, in particular, saw impressive growth of 61.2% and 103.8%, reflecting the expansion of Booking.com's merchant accommodation reservation services.
The company's liquidity remains robust, with $11.8 billionb in cash, cash equivalents, and investments at the end of September 2022. Despite increased marketing expenses and a notable increase in interest expense, Booking Holdings maintained healthy profitability.
The company also continued its share repurchase program, underscoring its confidence in its financial position and future prospects. Management remains focused on long-term growth initiatives, including marketing, technology investments, and strategic acquisitions, while navigating ongoing regulatory scrutiny and market uncertainties.
02—Key points
Key Highlights
- Total revenues increased significantly year-over-year, up 29.4% for Q3 2022 and 63.5% for the nine months ended September 30, 2022.
- Merchant revenues showed exceptional growth, increasing by 61.2% in Q3 and 103.8% in the first nine months of 2022, driven by the expansion of merchant accommodation reservation services.
- Operating income grew substantially, up 28.2% for Q3 2022 and 128.6% for the first nine months of 2022, indicating strong operational leverage as the business recovers.
- Net income attributable to common stockholders also saw a substantial increase, rising 116.4% for Q3 and 232.5% for the first nine months of 2022.
- The company generated strong operating cash flow of $4.4 billion for the first nine months of 2022, underscoring its robust business model.
- Booking Holdings repurchased $4.3 billion of its common stock during the first nine months of 2022, reflecting a commitment to returning capital to shareholders.
- The company continues to hold a strong liquidity position with $11.8 billion in cash, cash equivalents, and investments as of September 30, 2022.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2022filed November 2, 2022Financial Statements
Q3 FY2022 against Q3 FY2021
| Line item | Q3 FY2022Q3 FY2021 | Change |
|---|---|---|
| Revenue | $6.05B$4.68B | +29.4% |
| Operating Expenses | $3.47B$2.66B | +30.4% |
| Operating Income | $2.58B$2.02B | +28.2% |
| Interest Expense | $102.00M$80.00M | +27.5% |
| Net Income | $1.67B$769.00M | +116.6% |
| EPS (Basic) | $1.68$0.75 | +124.8% |
| EPS (Diluted) | $1.68$0.74 | +125.7% |
| Shares Outstanding (Basic) | 989.10M1.03B | −3.7% |
| Shares Outstanding (Diluted) | 991.77M1.03B | −4.0% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in Q3 2022?
The primary driver of revenue growth in Q3 2022 was the continued improvement in travel demand as the impact of the COVID-19 pandemic lessened. This led to significant increases in booked room nights, rental car days, and airline tickets. Additionally, the expansion of Booking.com's merchant accommodation reservation services contributed significantly to the growth, particularly in merchant revenues.
How did foreign currency fluctuations impact the company's financial results?
Foreign exchange rate fluctuations negatively impacted the year-over-year growth in gross bookings, revenues, and operating expenses for the three and nine months ended September 30, 2022. For example, the U.S. Dollar strengthened against the Euro and British Pound Sterling. However, since expenses are generally denominated in foreign currencies similar to revenues, operating margins were not significantly impacted by these currency fluctuations. The company uses derivative instruments to mitigate foreign currency risk.
What is the company's outlook for the remainder of 2022?
For the fourth quarter of 2022, Booking Holdings expects gross bookings to be approximately 15 percentage points better than room night growth compared to Q4 2019, primarily due to higher constant currency ADRs. Revenues as a percentage of gross bookings are expected to be lower than Q4 2019, and operating profit is projected to be lower than Q4 2019, partly due to unfavorable foreign exchange rates.
What significant investments does Booking Holdings have, and how are they valued?
Booking Holdings has significant investments in equity securities, including those in Meituan, Grab, and DiDi, as well as private companies like Yanolja. Publicly traded equity securities are measured at fair value using Level 1 inputs (quoted prices). Investments in private companies, often measured using Level 3 inputs (unobservable inputs), are valued using market and income approaches. The company recognized an impairment charge of $184 million on its investment in Yanolja during Q2 2022 due to adverse market changes.
06—Continue