Booking Holdings(BKNG) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues increased by approximately 8% in Q1 2025 compared to Q1 2024, with a 10% increase on a constant currency basis [118]. - Total revenues rose by 7.9% year-over-year to $4.762 billion for the three months ended March 31, 2025, with total revenues as a percentage of gross bookings increasing to 10.2% [133]. - Total gross bookings increased by 7.2% year-over-year to$ 46.669 billion for the three months ended March 31, 2025, with merchant gross bookings rising by 21.0% to $31.170 billion [129]. - Total gross bookings increased by 7% for the three months ended March 31, 2025, compared to the same period in 2024; on a constant currency basis, the increase was approximately 10% [174]. - For the full year 2025, the company expects room nights growth between 4% and 6%, gross bookings growth between 10% and 12% on a reported basis, and revenue growth between 10% and 12% on a reported basis [121]. Marketing and Expenses - Total marketing expenses in Q1 2025 were$ 1.8 billion, up 10% compared to Q1 2024, reflecting increased investment in marketing due to higher travel demand [108]. - Marketing expenses increased by 10.4% year-over-year to $1.777 billion for the three months ended March 31, 2025, representing 3.8% of total gross bookings [136]. - Personnel expenses decreased by 16.1% year-over-year to$ 693 million for the three months ended March 31, 2025, primarily due to a reduction in pension fund accruals [139]. - General and administrative expenses decreased by 23.4% year-over-year to $142 million for the three months ended March 31, 2025 [140]. - Information technology expenses increased by 7.1% year-over-year to$ 200 million for the three months ended March 31, 2025, due to higher cloud computing and software maintenance costs [141]. - Depreciation and amortization expenses increased by 13.1% year-over-year to $154 million for the three months ended March 31, 2025, primarily due to increased depreciation of computer equipment [142]. - Interest expense increased by 196.8% year-over-year to$ 649 million for the three months ended March 31, 2025, primarily due to the amortization of debt discount related to convertible senior notes [144]. - Foreign currency transaction losses amounted to $420 million for the three months ended March 31, 2025, compared to gains of$ 136 million in the same period of 2024 [145]. - Income tax expense decreased by 61.1% to $63 million for the three months ended March 31, 2025, with an effective tax rate of 15.8% [147]. Operational Metrics - Global room nights increased by 9% year-over-year in 2024, with a 7% increase in the first quarter of 2025, driven by strong travel demand in Europe and Asia [99]. - Room nights reserved increased by 7.2% year-over-year to 319 million for the three months ended March 31, 2025, driven by increased travel demand in Europe and Asia [128]. - The average daily rates (ADRs) on a constant currency basis were approximately 1% higher year-over-year in Q1 2025, with a 2% increase when excluding regional mix effects [104]. - The mix of room nights booked through mobile apps increased to the mid-fifties percentage in Q1 2025, up from low-fifties in Q1 2024, indicating a growing trend in mobile bookings [106]. - The mix of total gross bookings generated on a merchant basis increased to 67% in Q1 2025 from 59% in Q1 2024, indicating a shift towards more flexible payment options [107]. - The cancellation rate in Q1 2025 was slightly higher than in Q1 2024, which could impact marketing efficiency due to incurred performance marketing expenses [103]. Cash Flow and Investments - Cash, cash equivalents, and investments totaled$ 16.1 billion as of March 31, 2025, with approximately $11.3 billion held by international subsidiaries [151]. - Net cash provided by operating activities was$ 3.283 billion for the three months ended March 31, 2025, driven by a net income of $333 million and a favorable change in working capital of$ 2.1 billion [166]. - Net cash used in financing activities was $3.967 billion for the three months ended March 31, 2025, primarily due to common stock repurchases of$ 2.2 billion and debt repayments of $1.5 billion [169]. - The company authorized a share repurchase program of up to$ 20 billion, with a total remaining authorization of $25.9 billion as of March 31, 2025 [157]. - Deferred merchant bookings reached$ 6.9 billion at March 31, 2025, reflecting cash payments received from travelers in advance of performance obligations [152]. - The fair value of the May 2025 Notes was $1.9 billion as of March 31, 2025 [154]. - The company had$ 1.1 billion in non-cancellable purchase obligations greater than $10 million as of March 31, 2025, with$ 227 million payable within the next twelve months [159]. - A hypothetical 10% decrease in the fair values of investments in equity securities would have resulted in a loss of approximately $55 million before tax [175]. Strategic Outlook - The company expects annual run rate savings of$ 400 to $450 million from the Transformation Program over the next three years, with restructuring costs anticipated in the near term [115]. - The company is closely monitoring geopolitical and macroeconomic uncertainties that could impact future travel demand and consumer behavior [100].