Booking Holdings (BKNG) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw room nights grow 7% year-over-year to 319 million, with revenue up 8% to $4.76 billion and adjusted EBITDA up 21% to $1.1 billion, all exceeding guidance, driven by global diversification, disciplined expense management, and strong travel demand in Europe and Asia.

• Strategic priorities advanced, including AI integration, alternative accommodations expansion, and the Connected Trip vision, with mobile app and direct bookings mix rising to the mid-50% and mid-60% ranges, respectively.

• Net income declined to $333 million, impacted by non-cash adjustments, higher interest expense, FX losses, and a one-time pension fund adjustment.

• Free cash flow reached $3.2 billion, up 23% year-over-year, benefiting from working capital changes.

• Stable global leisure travel demand observed at the start of Q2, despite ongoing geopolitical and macroeconomic uncertainties.

Financial highlights

• Gross bookings rose 7% year-over-year to $46.7 billion, with merchant bookings up 21% and agency bookings down 12.8%.

• Adjusted EPS increased 22% to $24.81; GAAP EPS was $10.07, down 55% year-over-year.

• Operating income increased to $1.06 billion from $791 million in Q1 2024.

• Adjusted EBITDA margin for the trailing twelve months was 35.3%.

• Ending cash and investments were $16.1 billion after $2.1 billion in capital returns and $1.5 billion debt repayment.

Outlook and guidance

• Q2 2025 guidance: room night growth of 4–6%, gross bookings and revenue up 10–12%, and adjusted EBITDA of $2.15–2.2 billion (up to 16% YoY).

• Full-year 2025: expects mid to high single-digit constant currency growth for gross bookings and revenue, low to mid-teens growth for adjusted EPS, and adjusted EBITDA growth of high single digits to low double digits.

• Transformation Program expected to deliver $400–$450 million in annual run rate savings over three years, with $32 million in Q1 costs and $400–$450 million total expected costs.

• Guidance range widened due to increased uncertainty in the geopolitical and macroeconomic environment.

• FX expected to positively impact reported growth rates by 2–4 percentage points.