Booking Holdings Inc.
04/28/2026 | Press release | Distributed by Public on 04/28/2026 15:13
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, including Part I, Item 1A "Risk Factors," as well as our Unaudited Consolidated Financial Statements and accompanying notes and the Sections entitled "Risk Factors" and "Special Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q. We use the Investor Relations page of our website (ir.bookingholdings.com) to disclose material information for purposes of the SEC's Regulation Fair Disclosure. We encourage our investors to monitor this website in addition to our other public announcements and SEC filings as information posted on that page could be deemed to be material information. The information on our websites is not a part of this Quarterly Report and is not incorporated herein by reference.
We evaluate certain operating and financial measures on both an as-reported and constant currency basis. We calculate constant currency based on the predominant transactional currency in each country, converting our current-year period results in currencies other than U.S. Dollars using the corresponding prior-year period monthly average exchange rates.
Overview
Our mission is to make it easier for everyone to experience the world. We aim to provide consumers with a best-in-class experience with tailored planning, payment, language, and other options, seamlessly connecting them with our travel service provider partners. We offer these services through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable.
We derive substantially all of our revenues from enabling consumers to make travel service reservations. We also earn revenues from payment facilitation, advertising, restaurant reservation and management services, travel-related insurance offerings, and other services.
Trends
Our global room nights in 2025 increased 8% year-over-year driven primarily by healthy travel demand in Europe and Asia. We saw the booking window expand in 2025 compared to 2024, which benefited year-over-year room night growth.
Global room nights increased 6% year-over-year in the first quarter of 2026 and increased by 1% in March. We saw a negative impact on room night growth in the first quarter of 2026 starting with the onset of the conflict in the Middle East, which led to increased cancellations and slower growth in new bookings in March and impacted travel trends both in the Middle East and in other travel corridors such as those between Europe and Asia. Excluding the impact of the conflict in the Middle East, we estimate that our overall room nights were up approximately 8% year-over-year in the first quarter of 2026. The ongoing conflict in the Middle East may adversely affect our results of operations by softening consumer demand for travel. Beyond the direct impact on regional travel patterns, prolonged instability could lead to sustained increases in global oil prices. Such increases would likely result in higher operating costs for travel service providers and elevated prices for consumers, which may further suppress overall travel demand.
While the geopolitical and macroeconomic environment can impact global travel demand, we believe our diversified global portfolio of leading travel brands, flexible platforms, and strong financial position helps us to navigate a range of scenarios. We continue to take a long-term view, staying focused on delivering value to our travelers and partners, maintaining disciplined cost management, and making strategic investments as appropriate.
Quarterly Room Nights and Change versus the prior year
Change vs. PY (1)
(1) Room night growth rates are rounded for presentation purposes.
The cancellation rate in the first quarter of 2026 was lower than the first quarter of 2025, although we experienced a year-over-year increase in cancellation rates during the month of March due to the conflict in the Middle East. Because we recognize revenues from bookings when the traveler checks in, our reported revenues are not at risk of being reversed due to cancellations. Late in the first quarter of 2026, the increase in cancellation rates negatively impacted our marketing efficiency since we incur performance marketing expenses at the time a booking is made even if that booking is canceled in the future.
In the first quarter of 2026, our global average daily rates ("ADRs") on a constant currency basis were approximately 1% higher than the prior year primarily driven by higher ADRs in Europe. Our global ADRs were not materially impacted by changes in regional mix in the first quarter of 2026.
We focus on relentless innovation to grow our business by providing a best-in-class user experience with intuitive, easy-to-use platforms that aim to exceed the expectations of consumers. We are executing against our long-term strategy to create an ideal AI-powered traveler experience, offering our customers relevant options and suggestions at the times and in the language they want them, making trips booked with us seamless, easy, and valuable. We refer to this as the "Connected Trip." The goal of our Connected Trip vision is to offer a differentiated and personalized travel planning, booking, payment, and in-trip experience for each trip, enhanced by a robust loyalty program that provides value to travelers and partners across all trips. While we believe these efforts will help improve traveler loyalty, frequency, and mix of direct bookings over time, which will benefit revenue growth and marketing efficiency in the future, the expansion of our Connected Trip vision involves a higher proportion of non-accommodation services which have lower margins than our accommodation services. To the extent these non-accommodation services increase as a percentage of our total business, our overall operating margins may be negatively affected.
Our mobile apps are an important platform for experiencing the Connected Trip since the app travels with the traveler. The mix of our room nights booked on our mobile apps over the trailing twelve months ended March 31, 2026, was a high-fifties percentage, up from a mid-fifties percentage over the trailing twelve months ended March 31, 2025. The significant majority of room nights booked on our mobile apps are direct, and we continue to see favorable repeat direct booking behavior from consumers in our mobile apps, which allow us more opportunities to engage directly with them. The revenues earned on a transaction on a mobile app may be less than a typical desktop transaction as we see different consumer purchasing patterns across devices. For example, accommodation reservations made on a mobile app typically are for shorter lengths of stay and have lower accommodation ADRs.
We continue to expand our merchant service offerings as part of a broader strategy to provide more payment options to travelers and travel service providers, increase the variety of our accommodations, and enable our long-term Connected Trip strategy. These merchant services allow us to facilitate payments from travelers and offer secure, flexible transaction terms, such as varied payment forms, currencies, and timing. The mix of our total gross bookings generated on a merchant basis across the Company was 72% in the first quarter of 2026, an increase from 67% in the first quarter of 2025 due to the ongoing shift from agency to merchant bookings at Booking.com. We believe that expanding these types of service offerings will benefit consumers and travel service providers, as well as our gross bookings, room night, and earnings growth rates. However, this results in additional expenses for personnel, payment processing, chargebacks (including those related to fraud), and other expenses related to these transactions, which are recorded in "Personnel" expenses and "Sales and other expenses" in our Unaudited Consolidated Statements of Operations, as well as associated incremental revenues (e.g., payment card rebates), which are recorded in "Merchant revenues." To the extent more of our business is generated on a merchant basis, we incur a greater level of these merchant-related expenses, which negatively impacts our operating margins despite increases in associated incremental revenues. Over the trailing twelve months ended March 31, 2026, the incremental revenues from facilitating payments were greater than the associated incremental variable expenses.
We have established widely-used and recognized brands through marketing and promotional campaigns. Our total performance and brand marketing expenses, which are substantially variable in nature, were $2.1 billion in the first quarter of 2026, up 16% versus the first quarter of 2025 as a result of the year-over-year growth in travel demand and due to changes in foreign currency exchange rates. Our performance marketing expenses, which represent a substantial majority of our marketing expenses, are primarily related to the use of online search engines (primarily Google), affiliate marketing, meta search, and social media channels to generate bookings through our platforms. Our brand marketing expenses are primarily related to costs associated with producing and airing digital branding and television advertising.
Marketing efficiency, expressed as marketing expenses as a percentage of gross bookings, and performance marketing returns on investment ("ROIs") are impacted by a number of factors that are in some cases outside of our control. Such factors include ADRs, costs per click, cancellation rates, foreign currency exchange rates, search engine bidding algorithms, channel mix, our ability to convert paid traffic to booking customers, and the timing and effectiveness of our brand marketing and social media marketing campaigns. When evaluating performance marketing spend, we typically consider several factors for each channel, such as the customer experience on the advertising platform, the incremental bookings we receive, and anticipated repeat rates. The impact of cancellation rates on ROIs was evident in the first quarter of 2026, as a notable portion of our spend occurred prior to the onset of the conflict in the Middle East, which resulted in diminished returns on performance marketing expenses as many bookings sourced through paid channels were subsequently canceled due to the conflict.
Marketing efficiency is also impacted by the extent to which consumers book directly with us. The mix of total room nights booked by consumers coming directly to our platforms was a mid-fifties percentage over the trailing twelve months ended March 31, 2026 and March 31, 2025, respectively. The mix was higher if we exclude the room nights booked through affiliate programs (i.e., business-to-business). This was achieved despite declines in traffic through organic or unpaid search results, which is what we call Search Engine Optimization ("SEO"), as well as regional volatility, as impacted regions, such as the Middle East, historically have a higher direct mix compared to our global average. Room nights booked through the SEO channel remain a small component of our overall room nights. While we seek to adapt to evolving search engine dynamics, we expect SEO traffic to decline in the short to medium term, which may lead to increased spend in paid marketing channels.
Booking.com had approximately 4.5 million total properties on its website at March 31, 2026, representing an increase from approximately 4.1 million total properties at March 31, 2025. At March 31, 2026, Booking.com's website had approximately 4.0 million alternative accommodation properties (including homes, apartments, and other unique places to stay) and 500,000 hotels, motels, and resorts.
The mix of Booking.com's room nights booked for alternative accommodation properties in the first quarter of 2026 was approximately 38%, up versus approximately 37% in the first quarter of 2025. We have observed a longer-term trend of an increasing mix of room nights booked for alternative accommodation properties as consumer demand for these types of properties has grown, and as we have increased the number and variety of these properties on Booking.com. We may experience lower profit margins due to additional costs from offering alternative accommodations, such as increased customer service or certain partner related costs. As our alternative accommodation business grows, these different characteristics may negatively impact our profit margins. A larger proportion of Booking.com's alternative accommodation room nights are located in Europe compared to our total company room night mix; consequently, our alternative accommodations business is more exposed to the regional impacts of the conflict in the Middle East than our total business.
Although we believe that providing an extensive collection of properties, excellent customer service, and an intuitive, easy-to-use platform are important factors influencing a consumer's decision to make a reservation, for many consumers the price of the travel service is the primary factor determining whether to book. Discounting and couponing (i.e., merchandising) occurs across the major regions in which we operate, particularly in Asia. In some cases, our competitors are willing to make little or no profit on a transaction or offer travel services at a loss in order to gain market share. As a result, it is important to offer travel services at a competitive price, whether through discounts, coupons, closed-user group rates or loyalty programs, increased flexibility in cancellation policies, or otherwise. Some of these initiatives, such as discounts, may result in lower ADRs and lower revenues as a percentage of gross bookings as they can reduce the daily room rate and are recognized as contra-revenue.
Over the long term, we intend to continue to invest in marketing and promotion, technology, and personnel, as well as exploring strategic alternatives such as acquisitions, within parameters consistent with efforts to improve long-term operating results. To create room for these investments, we intend to continue to look for ways to optimize our expenses.
In the fourth quarter of 2024, we began the implementation of organizational changes to improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to travelers and partners, and better position our business for the long term (the "Transformation Program"). The Transformation Program resulted in approximately $250 million in savings in 2025 and, as of the end of 2025, enabled approximately $550 million in annual run-rate savings. We expect to realize these run-rate savings by the end of 2026. We expect that the restructuring costs and accelerated investments related to the Transformation Program will largely be incurred by the end of 2026 and are estimated to be, in the aggregate, less than one times the expected annual run-rate savings.
Many taxing authorities seek to increase tax revenues and have targeted large multinational technology companies. Many jurisdictions, particularly in the EU, have implemented or are considering the adoption of a digital services tax or similar tax that imposes a tax on revenues earned from digital advertisements or the use of online platforms, even when there is no physical presence in the jurisdiction. Rates for these taxes range from 1.5% to 10% of revenues deemed generated in the jurisdiction. We record the applicable digital services taxes in "Sales and other expenses" in the Unaudited Consolidated Statements of Operations. The recent One Big Beautiful Bill Act (the "BBB Act") changes certain international, foreign tax credit, and domestic tax provisions in the U.S. effective in 2025 and 2026. Certain provisions of the BBB Act that are effective in 2026 and impact our effective tax rate include U.S. interest expense limitation rules and utilization of additional foreign tax credits in calculating U.S. federal tax related to our international earnings. The impact of the BBB Act could have a negative impact on our results of operations and cash flows. See Part I, Item 1A, Risk Factors - "We may have exposure to additional tax liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2025.
Increased regulatory focus on large technology companies could result in increased compliance costs or otherwise adversely affect our business. For example, we are subject to rules and regulations that may not apply to our competitors because the European Commission designated the Company as a "gatekeeper" and Booking.com as a "Very Large Online Platform" under the Digital Markets Act and the Digital Services Act, respectively. See Part I, Item 1A, Risk Factors - "Our business is subject to various competition, consumer protection, and online commerce laws and regulations around the world, and as the size of our business grows, scrutiny of our business in these areas may intensify" in our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 13 to our Unaudited Consolidated Financial Statements.
Our businesses outside of the U.S. represent a substantial majority of our financial results, but because we report our results in U.S. Dollars, we face exposure to movements in foreign currency exchange rates (principally related to Euros and British Pounds Sterling). As a result of these movements, the absolute amounts of and percentage changes in our foreign-currency-denominated net assets, gross bookings, revenues, operating expenses, and net income as expressed in U.S. Dollars are affected. Our total revenues increased by approximately 16% in the first quarter of 2026 as compared to the first quarter of 2025, including a benefit of about 6% from changes in foreign currency exchange rates. Since our expenses are generally denominated in foreign currencies on a basis similar to our revenues, our operating margins have not been significantly impacted by currency fluctuations.
We generally enter into derivative instruments to minimize the impact of foreign currency exchange rate fluctuations. In addition, we may designate certain portions of the aggregate principal value of our Euro-denominated debt as a hedge of the foreign currency exposure of the net investment in certain Euro functional currency subsidiaries. See Notes 6, 9, 12, and 15 to our Unaudited Consolidated Financial Statements and Part I, Item 1A, Risk Factors - "We are exposed to fluctuations in foreign currency exchange rates" in our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical Accounting Estimates
Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Unaudited Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Certain of our accounting estimates are important to our financial position and results of operations and require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We use our judgment to determine the appropriate assumptions to be used in the determination of certain estimates and we evaluate our estimates on an ongoing basis. Estimates are based on historical experience, terms of existing contracts, our observance of trends in the travel industry, and on other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions. For a discussion of our critical accounting estimates for the valuation of goodwill and other long-lived assets, income taxes, and contingencies, see the "Critical Accounting Estimates" section of Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025.
Recent Accounting Pronouncements
See Note 1 to our Unaudited Consolidated Financial Statements, which is incorporated by reference into this Item 2, for details regarding recent accounting pronouncements.
Results of Operations
Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025
Operating and Statistical Metrics
Our financial results are driven by certain operating metrics that encompass the booking and other business activity generated by our travel and travel-related services. See "Results of Operations" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on our Operating and Statistical Metrics, including room nights, rental car days, airline tickets, and merchant and agency gross bookings.
Room nights, rental car days, and airline tickets reserved through our services were as follows:
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Room nights | 338 | 319 | 5.9 | % | ||||||||||||||||
| Rental car days | 21 | 22 | (4.9) | % | ||||||||||||||||
| Airline tickets | 21 | 16 | 28.5 | % | ||||||||||||||||
For the three months ended March 31, 2026, room nights reserved through our services increased year-over-year, driven primarily by increased travel demand in Europe, Asia, and the U.S., partially offset by negative growth in Rest of World, which includes the Middle East. We estimate room night growth was negatively impacted by approximately 2 percentage points due to the conflict in the Middle East. Rental car days reserved through our services decreased year-over-year for the period due to higher average daily car rental prices and a negative impact from the conflict in the Middle East. Airline tickets reserved through our services increased year-over-year for the period driven by the expansion of flight offerings at Booking.com and Agoda, partially offset by a negative impact from the conflict in the Middle East.
Gross bookings resulting from reservations of room nights, rental car days, and airline tickets made through our merchant and agency categories were as follows (numbers may not total due to rounding):
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Merchant gross bookings | $ | 38,736 | $ | 31,170 | 24.3 | % | ||||||||||||||
| Agency gross bookings | 15,022 | 15,500 | (3.1) | % | ||||||||||||||||
| Total gross bookings | $ | 53,758 | $ | 46,669 | 15.2 | % | ||||||||||||||
For the three months ended March 31, 2026, the year-over-year increase in merchant gross bookings was due primarily to growth in accommodation reservation services and flight reservation services at Booking.com and Agoda. Merchant gross bookings also increased year-over-year and agency gross bookings decreased year-over-year for the period due to the ongoing shift from agency to merchant bookings at Booking.com.
The year-over-year increase in total gross bookings for the three months ended March 31, 2026 was due to a 7% positive impact from changes in foreign currency exchange rates, 6% increase in room nights, 1% higher constant currency ADRs, and a positive impact from the growth in flight gross bookings. We estimate that the conflict in the Middle East impacted gross bookings growth in line with the impact observed in room night growth.
Flight gross bookings increased 25% year-over-year for the three months ended March 31, 2026 due to airline tickets growth, partially offset by lower average airline ticket prices. Rental car gross bookings increased 7% year-over-year for the period due to higher average daily car rental prices, partially offset by a decrease in rental car days growth.
Revenues
See Note 2 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on our revenues, including merchant, agency, and advertising and other revenues. Substantially all of our revenues are generated by providing online travel reservation services, which facilitate online travel purchases by travelers from travel service providers.
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Merchant revenues | $ | 3,698 | $ | 2,918 | 26.7 | % | ||||||||||||||
| Agency revenues | 1,528 | 1,564 | (2.3) | % | ||||||||||||||||
| Advertising and other revenues | 306 | 280 | 9.6 | % | ||||||||||||||||
| Total revenues | $ | 5,532 | $ | 4,762 | 16.2 | % | ||||||||||||||
| % of Total gross bookings | 10.3 | % | 10.2 | % | ||||||||||||||||
For the three months ended March 31, 2026, the year-over-year increase in merchant revenues was due primarily to growth in revenues from accommodation reservation services at Booking.com. Merchant revenues also increased year-over-year for the period, while agency revenues decreased, due to the ongoing shift from agency to merchant revenues at Booking.com. Advertising and other revenues increased year-over-year for the period due to growth at OpenTable and growth in advertising revenues at Booking.com. The year-over-year increase in total revenues for the period included a 6% benefit from changes in foreign currency exchange rates.
Total revenues as a percentage of gross bookings increased year-over-year for the three months ended March 31, 2026 due to an increase in revenues related to facilitating payments, as well as a positive impact from the timing of booking versus travel. This was partly offset by an increase in the mix of flight gross bookings, which have lower revenues as a percentage of gross bookings. While the conflict in the Middle East negatively impacted our revenues during the first quarter, it had a more pronounced downward impact on our gross bookings. Because we recognize revenues at the time of travel, the associated impact on revenues from the reduction in new booking activity and the increase in cancellations will not be fully realized until future quarters. We estimate that the conflict in the Middle East impacted revenue growth slightly lower than the impact observed in room night growth.
Operating Expenses
See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information about the components of our operating expenses and the related accounting policies. The year-over-year growth in our total operating expenses for the three months ended March 31, 2026 was increased in part by changes in foreign currency exchange rates.
Marketing Expenses
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Marketing expenses | $ | 2,068 | $ | 1,777 | 16.4 | % | ||||||||||||||
| % of Total gross bookings | 3.8 | % | 3.8 | % | ||||||||||||||||
| % of Total revenues | 37.4 | % | 37.3 | % | ||||||||||||||||
Our marketing expenses, which are substantially variable in nature, increased year-over-year for the three months ended March 31, 2026, to help drive additional gross bookings and revenues, and were increased by changes in foreign currency exchange rates. Marketing expenses as a percentage of total gross bookings in the three months ended March 31, 2026 were slightly higher than the three months ended March 31, 2025, driven primarily by the impact of the conflict in the Middle East. Due to the conflict, certain performance marketing expenses yielded diminished or negligible returns as bookings sourced through paid channels were subsequently canceled resulting in lower average ROIs. Excluding the impact of the Middle East conflict, we achieved modest marketing leverage in the quarter, supported by the growth in our direct channel, which was partially offset by declines in SEO, which remains a small component of our overall distribution mix.
Sales and Other Expenses
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Sales and other expenses | $ | 804 | $ | 702 | 14.6 | % | ||||||||||||||
| % of Total gross bookings | 1.5 | % | 1.5 | % | ||||||||||||||||
| % of Total revenues | 14.5 | % | 14.7 | % | ||||||||||||||||
Sales and other expenses, which are substantially variable in nature, increased year-over-year for the three months ended March 31, 2026 due primarily to an increase in merchant transaction costs of $112 million related to the ongoing shift from agency to merchant transactions at Booking.com, as well as due to changes in foreign currency exchange rates. Sales and other expenses as a percentage of total revenues decreased year-over-year for the period primarily due to a benefit of $31 million resulting from the repeal in March 2026 of Canadian digital services taxes related to prior years, as well as efficiencies in third-party customer service costs, partially offset by the impact of increased merchant transactions costs, which grew faster than total revenue.
Personnel
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Personnel | $ | 893 | $ | 693 | 28.8 | % | ||||||||||||||
| % of Total revenues | 16.1 | % | 14.6 | % | ||||||||||||||||
Personnel expenses increased year-over-year for the three months ended March 31, 2026 primarily due to the impact of a $170 million reduction during the three months ended March 31, 2025 in the accrual related to the Netherlands pension fund matter. Salary expenses increased year-over-year for the three months ended March 31, 2026 due to changes in foreign currency exchange rates. Employee headcount increased 2% year-over-year to approximately 24,900 as of March 31, 2026.
General and Administrative
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| General and administrative | $ | 100 | $ | 142 | (29.3) | % | ||||||||||||||
| % of Total revenues | 1.8 | % | 3.0 | % | ||||||||||||||||
General and administrative expenses decreased year-over-year for the three months ended March 31, 2026 primarily due to the benefit of $89 million on the settlement of certain litigation matters (see Note 13 to the Unaudited Consolidated Financial Statements), partially offset by an increase in certain travel transaction taxes, fees for certain outside professionals, and changes in foreign currency exchange rates.
Information Technology
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Information technology | $ | 240 | $ | 200 | 19.7 | % | ||||||||||||||
| % of Total revenues | 4.3 | % | 4.2 | % | ||||||||||||||||
Information technology expenses increased year-over-year for the three months ended March 31, 2026 due primarily to an increase in cloud computing costs and software license and system maintenance fees, as well as changes in foreign currency exchange rates.
Depreciation and Amortization
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Depreciation and amortization | $ | 131 | $ | 154 | (15.4) | % | ||||||||||||||
| % of Total revenues | 2.4 | % | 3.2 | % | ||||||||||||||||
Depreciation and amortization expenses decreased year-over-year for the three months ended March 31, 2026 due primarily to decreased amortization expense related to intangible assets, partially offset by changes in foreign currency exchange rates.
Transformation Costs
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Transformation costs | $ | 25 | $ | 32 | (21.8)% | |||||||||||||||
See "Trends" above and Note 17 to our Unaudited Consolidated Financial Statements for additional information on the Transformation Program. Transformation costs decreased year-over-year for the three months ended March 31, 2026 due primarily to lower professional fees.
Interest Expense and Interest and Dividend Income
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Interest expense | $ | (253) | $ | (649) | (61.0) | % | ||||||||||||||
| Interest and dividend income | 187 | 241 | (22.4) | % | ||||||||||||||||
Interest expense decreased year-over-year for the three months ended March 31, 2026 primarily due to the amortization in 2025 of debt discount related to the convertible senior notes that matured in May 2025 (see Note 9 to our Unaudited Consolidated Financial Statements). Interest and dividend income decreased year-over-year for the three months ended March 31, 2026 primarily due to lower interest rates.
Other Income (Expense), Net
|
Three Months Ended March 31, |
||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Other income (expense), net | $ | 194 | $ | (258) | ||||||||||
See Note 15 to our Unaudited Consolidated Financial Statements for additional information.
Income Taxes
|
Three Months Ended March 31, |
Increase (Decrease) | |||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Income tax expense | $ | 316 | $ | 63 | 406.6 | % | ||||||||||||||
|
% of Income before income taxes
|
22.6 | % | 15.8 | % | ||||||||||||||||
See Note 11 to our Unaudited Consolidated Financial Statements for additional information.
Liquidity and Capital Resources
Our primary source of funds for operations is the cash flow that we generate from operations. We use our cash for a variety of needs, including ongoing investments in our business, share repurchases, dividends, repayment of debt, and capital expenditures. Our continued access to sources of liquidity depends on multiple factors. See Part I, Item 1A, Risk Factors - "Our liquidity, credit ratings, and ongoing access to capital could be materially and negatively affected by global financial conditions and events" in our Annual Report on Form 10-K for the year ended December 31, 2025. Our financial results and prospects are almost entirely dependent on facilitating the sale of travel-related services. Marketing expenses, personnel expenses, and sales and other expenses are our most significant operating expenses. See our Unaudited Consolidated Statements of Operations and "Trends" and "Results of Operations" above for additional information. We believe that our existing cash balances, liquid resources, and access to capital markets will be sufficient to fund our operating activities and other obligations in the short term and into the foreseeable future.
Cash, cash equivalents, and investments
At March 31, 2026, we had $16.5 billion in cash, cash equivalents, and investments, of which approximately $12.1 billion is held by our international subsidiaries. Cash, cash equivalents, and long-term investments held by our international subsidiaries are denominated primarily in Euros, U.S. Dollars, and British Pounds Sterling. Our investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. See Notes 5 and 6 to our Unaudited Consolidated Financial Statements.
Deferred merchant bookings
Deferred merchant bookings of $8.2 billion at March 31, 2026 includes cash payments received from travelers in advance of us completing our performance obligations and are comprised principally of amounts estimated to be payable to travel service providers as well as our estimated future revenue for our commission or margin and fees. The amounts are mostly subject to refunds for cancellations.
Debt
Our revolving credit facility extends a revolving line of credit up to $2 billion to us. As of March 31, 2026, we are in compliance with the maximum leverage ratio covenant under the facility, which is a condition to our ability to borrow.
Our outstanding senior notes at March 31, 2026 had cumulative interest to maturity (based on coupon interest rates) of $5.4 billion, with $650 million payable within the next twelve months.
See Note 9 to our Unaudited Consolidated Financial Statements for additional information.
Share repurchases and dividends
At March 31, 2026, we had a total remaining authorization of $18.2 billion related to the share repurchase program authorized by our Board of Directors (the "Board"). In April 2026, the Board declared a cash dividend of $0.42 per share of common stock, payable on June 30, 2026 to stockholders of record as of the close of business on June 5, 2026.
See Note 10 to our Unaudited Consolidated Financial Statements for additional information.
Commitments, contingencies, and other
At March 31, 2026, we had, in the aggregate, $1.1 billion of non-cancellable purchase obligations individually greater than $10 million, of which $343 million is payable within the next twelve months. Such purchase obligations relate to agreements to purchase goods and services that are enforceable and legally binding and that specify significant terms, including the quantities to be purchased, price provisions, and the approximate timing of the transaction. At March 31, 2026, we had lease obligations of $763 million, of which $134 million is payable within the next twelve months.
See Note 13 to our Unaudited Consolidated Financial Statements for information related to the standby letters of credit and bank guarantees issued on our behalf.
See Note 13 to our Unaudited Consolidated Financial Statements and Part I, Item IA, Risk Factors - "Our business is subject to various competition, consumer protection, and online commerce laws and regulations around the world, and as the size of our business grows, scrutiny of our business in these areas may intensify" in our Annual Report on Form 10-K for the year ended December 31, 2025 for information related to certain regulatory matters and our other contingent liabilities.
See Note 13 to our Unaudited Consolidated Financial Statements and Part I, Item IA, Risk Factors - "We may have exposure to additional tax liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2025 for information related to certain tax assessments and other tax matters.
At March 31, 2026, we had a remaining transition tax liability of $257 million as a result of the U.S. Tax Cuts and Jobs Act, which was paid in April 2026.
See "Trends" above for information on the Transformation Program, including the estimated annual run-rate savings and restructuring costs and accelerated investments required for the program.
Cash Flow Analysis
See our Unaudited Consolidated Statements of Cash Flows for additional information related to our cash flows.
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Three Months Ended March 31, |
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| (In millions) | 2026 | 2025 | ||||||||||||
| Net cash provided by operating activities | $ | 3,215 | $ | 3,283 | ||||||||||
| Net cash used in investing activities | (107) | (118) | ||||||||||||
| Net cash used in financing activities | (4,026) | (3,967) | ||||||||||||
Net cash provided by operating activities for the three months ended March 31, 2026 resulted from net income of $1.1 billion, a favorable net impact from adjustments for non-cash and other items of $250 million, and a favorable net change in working capital and other assets and liabilities of $1.9 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction gains related to Euro-denominated debt, stock-based compensation expense, depreciation and amortization, provision for expected credit losses and chargebacks, and net losses on equity securities. Deferred merchant bookings and other current liabilities increased by $1.8 billion during the period, primarily due to higher business volumes. Merchant revenues increased while agency revenues decreased year-over year for the period due to the ongoing shift from agency revenues to merchant revenues at Booking.com.
Net cash provided by operating activities for the three months ended March 31, 2025 resulted from net income of $333 million, a favorable net impact from adjustments for non-cash and other items of $899 million, and a favorable net change in working capital and other assets and liabilities of $2.1 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction losses related to Euro-denominated debt, adjustments related to the convertible senior notes, depreciation and amortization, deferred income taxes, and stock-based compensation expense. Deferred merchant bookings and other current liabilities increased by $1.9 billion during the period, primarily due to higher business volumes.
Net cash used in investing activities for the three months ended March 31, 2026 and 2025 resulted principally from payments for property and equipment.
Net cash used in financing activities for the three months ended March 31, 2026 resulted principally from the repurchase of common stock of $3.8 billion and dividend payments of $343 million. Net cash used in financing activities for the three months ended March 31, 2025 resulted principally from the repurchase of common stock of $2.2 billion, payments on the maturity of debt of $1.5 billion, and dividend payments of $319 million.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, and the documents incorporated by reference contain forward-looking statements. These statements reflect our views regarding current expectations and projections about future events and conditions and are based on currently available information. They are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict including the Risk Factors identified in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II, Item 1A of this Form 10-Q; therefore, our actual results could differ materially from those expressed or described in the forward-looking statements.
Expressions of future goals and expectations and similar expressions, including "may," "will," "should," "could," "aims," "seeks," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," and "continue," reflecting something other than historical fact are intended to identify forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the reports and documents we file or furnish from time to time with the Securities and Exchange Commission, particularly our Annual Report on Form 10-K for the year ended December 31, 2025, our subsequent Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K.
Booking Holdings Inc. published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 28, 2026 at 21:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]