Booking Holdings(BKNG) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of approximately $4 billion and adjusted EBITDA of $1.2 billion, both exceeding previous expectations [3] - Full year revenue reached over $17 billion, which was 13% higher than 2019 and up about 24% on a constant currency basis [13] - Free cash flow for the full year was nearly $6.2 billion, a 38% increase compared to 2019 [14] - Adjusted EBITDA for the fourth quarter was over $1.2 billion, which was 3% below 2019 but would have been around 16% above 2019 on a constant currency basis [83] Business Line Data and Key Metrics Changes - Room nights for the full year were 6% higher than 2019, with gross bookings 26% higher [13] - Alternative accommodation room nights grew about 56% versus 2021 and represented about 30% of total room nights [7] - The mobile app accounted for about 45% of total room nights booked in 2022, a 13 percentage point increase from 2019 [8] Market Data and Key Metrics Changes - U.S. room night growth was nearly 30% and gross bookings growth was about 60% in 2022 compared to 2019 [100] - Room night growth in the fourth quarter was 10%, up from 8% in the third quarter, with significant contributions from Asia and the U.S. [11] - International mix of total room nights in Q4 was about 48%, higher than Q3 but still below Q4 2019 levels [11] Company Strategy and Development Direction - The company is focused on expanding payments at Booking.com, enhancing connected trip capabilities, and strengthening its position in the U.S. market [5] - The long-term vision includes making travel booking easier and more enjoyable while linking relevant travel components for a seamless experience [76] - The company aims to increase its direct booking mix through initiatives like enhancing the Genius loyalty program and improving the mobile app experience [78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of travel and the company's positioning, despite recognizing potential volatility in top-line trends [19][41] - The company anticipates low-teens gross booking growth for the year, with expectations of continued pressure on constant currency ADRs [21][41] - Management highlighted the importance of adapting to technological changes and leveraging AI to enhance customer service [22][43] Other Important Information - The company repurchased over $6.5 billion of its shares in 2022, reducing the year-end share count by 8% compared to 2021 [14] - The CFO plans to retire in early 2024 but will assist with the transition for up to two more years [9] Q&A Session All Questions and Answers Question: What is the outlook for room night growth and ADRs? - Management expects room night growth to be slightly lower than low teens gross booking growth, with some support from FX and flights [21] Question: How is the company positioned for changes in technology and AI? - Management is confident in adapting to technological changes and believes their capabilities are competitive in utilizing new AI tools [22] Question: What are the expectations regarding the recovery of the Chinese travel market? - Management acknowledges the potential in the Chinese market but cautions that recovery may take time, with outbound travel still limited [24] Question: Is there another region where the company sees potential for market share gains similar to the U.S.? - Management does not identify another specific region but emphasizes ongoing efforts to gain market share globally [25]