Investment Rating - The report indicates a positive outlook for the company, with a stock price increase of 3.4% in after-hours trading, corresponding to a 2025 price-to-earnings (PE) ratio of 23x [1][8]. Core Insights - The company reported total revenue of $9.01 billion for Q3 2025, a 12.7% year-over-year increase, surpassing Bloomberg consensus by 3.2% [1][14]. - Gross bookings reached $49.67 billion, up 14.3% year-over-year, exceeding expectations by 3.7% [1][14]. - Adjusted EBITDA grew 15% year-over-year to $4.23 billion, also beating consensus estimates [1][14]. - The adjusted EPS increased by 19% year-over-year to $100, exceeding expectations by 3.8% [1][14]. Financial Performance Summary - Total revenue for Q3 2025 was $9.01 billion, with a year-over-year growth of 12.7% and a constant currency growth of 8% [1][14]. - Gross bookings were $49.67 billion, reflecting a 14.3% year-over-year increase, with a 10% growth excluding foreign exchange effects [1][14]. - Merchant revenues increased by 23.3% year-over-year to $6.13 billion, driven by growth in accommodation booking services [1][14]. - Agency revenues decreased by 6.7% year-over-year to $2.57 billion, primarily due to a shift from agency to merchant models [1][14]. - Advertising and other revenues rose by 14.5% year-over-year to $3.08 billion, supported by OpenTable and advertising growth [1][14]. - Key operating metrics included room nights at 323 million, up 8.2% year-over-year, and airline tickets at 17 million, up 32.3% year-over-year [1][14]. Market Growth and Strategic Insights - Asia is identified as a key growth engine, with management noting that it is the fastest-growing travel market globally [1][21]. - The company aims to leverage the strengths of Agoda and Booking.com to enhance its market position in Asia [1][21]. - The "Connected Trip" vision is expected to deliver long-term value, with significant growth in airline ticket bookings and attraction ticket sales [1][22]. - Alternative accommodations saw a 10% year-over-year increase in room nights, outpacing overall business growth [1][23]. - The company is integrating generative AI features to enhance customer experience and streamline booking processes [1][24].

Financial Data and Key Metrics Changes - Booking Holdings reported a strong third quarter with gross bookings of $50 billion, a 14% year-over-year increase, and revenue of $9 billion, up 13% year-over-year, both exceeding prior guidance [5][27][32] - Adjusted EBITDA reached $4.2 billion, reflecting a 15% increase from the prior year, and adjusted earnings per share grew 19% year-over-year to $99.50 [5][29][30] - Room nights increased to 323 million, an 8% year-over-year growth, surpassing expectations [5][19][20] Business Line Data and Key Metrics Changes - Connected trip transactions grew mid-20% year-over-year, now representing a low double-digit percentage of total transactions [9] - Flight ticket bookings increased by 32% year-over-year, while attractions bookings surged nearly 90% [24][27] - Alternative accommodations room night growth was about 10%, with a global mix of alternative accommodation room nights at 36% [24][17] Market Data and Key Metrics Changes - The U.S. market saw high single-digit growth in room nights, driven by stronger outbound travel and B2B business momentum [5][21] - Asia remains a key growth driver, with the region expected to grow in the high single digits over the next several years [18][63] - Global average daily rates (ADRs) increased by about 1% year-over-year, with U.S. ADRs slightly lower compared to the prior year [22][27] Company Strategy and Development Direction - The company is focused on advancing its connected trip vision, enhancing loyalty programs, and leveraging AI capabilities to create more value for travelers and partners [7][12][19] - Investments are being made to improve product offerings and brand awareness, particularly in the U.S. market [39][72] - The company aims to strengthen its position in alternative accommodations and expand its presence in Asia, leveraging the strengths of both Agoda and Booking.com [17][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the value proposition through the connected trip and Genius loyalty program, despite macroeconomic uncertainties [19][31] - The company anticipates continued momentum in travel demand and expects fourth quarter room night growth between 4% and 6% [32][34] - Full-year guidance has been increased, with expectations for gross bookings to rise by 11% to 12% and revenue to grow by about 12% [35] Other Important Information - The company is investing approximately $170 million above baseline investments in 2025 to support strategic priorities for long-term value creation [30] - Cash and investments at the end of the third quarter totaled $17.2 billion, with $1.4 billion in free cash flow generated [31] Q&A Session Summary Question: U.S. acceleration and B2B initiatives - Management noted that both B2B and B2C initiatives contributed to U.S. acceleration, with ongoing improvements in product and brand awareness driving results [38][41] Question: AI integration and economic impact - Management acknowledged the early stages of AI integration and emphasized the importance of providing value and executing transactions effectively [46][49] Question: Risk of hotel partners bypassing platforms - Management downplayed the risk of hotels partnering directly with generative search players, citing the value and trust that Booking Holdings provides to customers [54][56] Question: Social media marketing and Asia performance - Management confirmed ongoing investments in social media marketing while highlighting strong growth in Asia, driven by localized strategies from Agoda and global reach from Booking.com [61][63]