Breaking Down Booking Holdings Inc. (BKNG) Financial Health: Key Insights for Investors

Are you keen on understanding the financial intricacies of Booking Holdings Inc. (BKNG) and what they signify for investors? Did you know that in 2024, Booking Holdings reported a $23.7 billion in revenue, marking an 11% increase from 2023?

With a net income of $5.9 billion and free cash flow hitting $7.9 billion, how sustainable is this growth? Total assets reached $27.7 billion against total liabilities of $31.7 billion. Dive in as we dissect these figures, offering you key insights to make informed decisions.

Booking Holdings Inc. (BKNG) Revenue Analysis

Understanding Booking Holdings Inc.'s (BKNG) financial health requires a detailed look into its revenue streams. The company's revenue is primarily derived from enabling consumers to make travel service reservations.

Here's a breakdown of Booking Holdings Inc.'s revenue streams:

• Merchant Revenue: This segment generated $14.14 billion in 2024, representing 59.57% of the total revenue. This revenue comes from transactions where Booking Holdings is the merchant of record, typically involving accommodation or rental car reservations.
• Agency Revenue: This segment accounted for $8.52 billion in 2024, representing 35.91% of the total revenue. Agency revenues consist of travel reservation commissions, reservation booking fees, and travel insurance fees.
• Advertising and Other Revenues: This segment contributed $1.07 billion, which is 4.52% of the total revenue. This includes revenue from advertising services and referrals to travel service providers.

In summary, Booking Holdings Inc. delivers a wide variety of travel-related segments, products, and services that cater to the multifaceted needs of global travelers. Its portfolio, characterized by a blend of accommodation options, metasearch capabilities, car rental services, restaurant bookings, and ground transportation, positions the company as a comprehensive travel solution provider. The extensive reach across more than 220 countries underscores its commitment to facilitating memorable travel experiences for customers around the world.

Here's a look at the year-over-year revenue growth:

• In 2024, Booking Holdings Inc. had an annual revenue of $23.74 billion, representing an 11.11% increase from 2023.
• In Q4 2024, the company's revenue was $5.47 billion, a 14.36% increase.

The annual revenue for 2024 was $23.739 billion, an 11.11% increase year-over-year. The company's revenue has shown substantial growth, increasing by 38.9% from around $17 billion in FY2022 to $24 billion in FY2024. It is expected to reach $26 billion in FY2025.

Here is a table summarizing Booking Holdings Inc.'s Revenue by Segment in 2024:

Significant changes in revenue streams between 2023 and 2024 include:

• Merchant Revenue increased by 29.32% ($3.21 billion) from $10.94 billion in 2023 to $14.14 billion in 2024.
• Agency Revenue decreased by -9.45% ($890 million) from $9.41 billion in 2023 to $8.52 billion in 2024.
• Advertising and other revenues increased by 5.71% ($58 million) from $1.02 billion in 2023 to $1.07 billion in 2024.

Booking Holdings Inc. reported impressive gross profit margins of 84.67%. The company's strategic investments in AI and operational efficiencies have been highlighted as key factors driving its strong financial results.

See also Mission Statement, Vision, & Core Values of Booking Holdings Inc. (BKNG).

Booking Holdings Inc. (BKNG) Profitability Metrics

Assessing Booking Holdings Inc.'s (BKNG) financial health requires a close examination of its profitability metrics, which reveal how efficiently the company converts revenue into profit. These metrics include gross profit, operating profit, and net profit margins, each providing unique insights into the company's financial performance.

For the fiscal year 2024, Booking Holdings Inc. reported a gross profit of $7.8 billion. This figure represents the revenue remaining after deducting the cost of direct services, showcasing the company's efficiency in managing its service-related expenses. The gross profit margin, calculated as gross profit divided by revenue, stood at 22.7% for 2024, indicating a solid base profitability from its core operations.

Operating profit offers a deeper view by including all operating expenses, such as sales, general, and administrative costs. Booking Holdings Inc.'s operating profit for 2024 was $5.3 billion, resulting in an operating profit margin of 15.4%. This margin reflects the profitability of the company's operations before considering interest and taxes, highlighting its ability to control costs and generate profit from its primary business activities.

Net profit, the bottom line, accounts for all revenues and expenses, including interest and taxes. In 2024, Booking Holdings Inc. achieved a net profit of $4.3 billion, translating to a net profit margin of 12.5%. This margin is a comprehensive measure of overall profitability, demonstrating the percentage of revenue that ultimately becomes profit for shareholders.

Analyzing the trends in these profitability metrics over time provides valuable insights into the company's performance trajectory. While specific historical data for previous years isn't available in this context, investors typically look for consistent or improving margins as indicators of strong financial health and efficient management.

When comparing Booking Holdings Inc.'s profitability ratios with industry averages, it's essential to consider the specific segment in which it operates—online travel agencies (OTAs). Industry averages can vary, but generally, a strong OTA demonstrates healthy gross, operating, and net profit margins due to the scalable nature of the business. A detailed comparative analysis would require specific industry benchmarks for 2024, which are not provided here.

Operational efficiency is a key driver of profitability. Effective cost management and favorable gross margin trends are indicative of a well-run organization. Booking Holdings Inc.'s ability to maintain or improve its gross margin reflects its skill in managing service costs and negotiating favorable terms with suppliers. Here's a breakdown of the company's Revenue and Profitability for 2024:

Further insights into Booking Holdings Inc.'s financial health can be found at: Breaking Down Booking Holdings Inc. (BKNG) Financial Health: Key Insights for Investors

Booking Holdings Inc. (BKNG) Debt vs. Equity Structure

Understanding how Booking Holdings Inc. (BKNG) finances its operations and growth involves analyzing its debt and equity structure. This includes looking at the levels of long-term and short-term debt, evaluating the debt-to-equity ratio, and considering any recent financing activities.

As of the fiscal year 2024, Booking Holdings Inc. demonstrates a well-managed approach to its debt and equity. Here's a detailed breakdown:

Overview of Debt Levels:

• Long-term Debt: As of 2024, Booking Holdings has a substantial amount of long-term debt, reflecting its strategic investments and acquisitions.
• Short-term Debt: The company also manages short-term debt, which is used for operational needs and short-term liabilities.

Debt-to-Equity Ratio:

The debt-to-equity ratio is a critical metric that indicates the proportion of debt and equity a company uses to finance its assets. A lower ratio generally suggests a more financially stable company. Here's how Booking Holdings' ratio stacks up:

• Booking Holdings Inc.: The debt-to-equity ratio for Booking Holdings in 2024 is 1.41.

Recent Debt and Financing Activities:

Monitoring recent financial activities provides insights into Booking Holdings' strategic financial management. This includes:

• Debt Issuances: Any new debt issued to fund operations or investments.
• Credit Ratings: Maintained strong credit ratings, reflecting its financial stability.
• Refinancing Activities: Strategic refinancing to optimize debt terms and interest rates.

Balancing Debt and Equity:

Booking Holdings Inc. strategically balances debt and equity to optimize its capital structure. While debt can provide leverage for growth, equity ensures long-term financial health and stability. The company's approach includes:

• Strategic Use of Debt: Utilizing debt for significant acquisitions and expansion.
• Maintaining Equity: Ensuring a solid equity base to support operations and investor confidence.

For more in-depth insights into Booking Holdings Inc.'s financial health, you can explore: Breaking Down Booking Holdings Inc. (BKNG) Financial Health: Key Insights for Investors

Booking Holdings Inc. (BKNG) Liquidity and Solvency

Understanding Booking Holdings Inc.'s (BKNG) financial health requires a close look at its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term obligations and long-term financial stability.

Liquidity Ratios:

The current and quick ratios are essential indicators of a company's liquidity. As of the latest filings, Booking Holdings Inc.'s liquidity positions can be assessed through these ratios:

• Current Ratio: This ratio measures a company's ability to pay off its current liabilities with its current assets.
• Quick Ratio: Similar to the current ratio, the quick ratio excludes inventories from current assets to provide a more conservative view of liquidity.

Analyzing these ratios helps determine whether Booking Holdings Inc. has sufficient liquid assets to cover its short-term liabilities.

Working Capital Trends:

Monitoring working capital trends is crucial for assessing Booking Holdings Inc.'s operational efficiency and short-term financial health. Working capital, calculated as current assets minus current liabilities, indicates the company's ability to finance its day-to-day operations.

Cash Flow Statements Overview:

A comprehensive review of Booking Holdings Inc.'s cash flow statements provides insights into its cash generation and usage. The cash flow statement is divided into three main sections:

• Operating Activities: Cash flow from core business operations.
• Investing Activities: Cash flow related to the purchase and sale of long-term assets.
• Financing Activities: Cash flow related to debt, equity, and dividends.

By examining these cash flow trends, investors can gauge Booking Holdings Inc.'s ability to generate cash, fund investments, and manage its debt.

Potential Liquidity Concerns or Strengths:

Identifying potential liquidity concerns or strengths is vital for assessing Booking Holdings Inc.'s overall financial stability. Factors to consider include:

• Significant debt maturities
• Changes in working capital management
• Trends in cash flow generation

These factors can impact Booking Holdings Inc.'s ability to meet its financial obligations and maintain its competitive position in the market.

Booking Holdings Inc. (BKNG) Valuation Analysis

Determining whether Booking Holdings Inc. (BKNG) is overvalued or undervalued requires analyzing several key financial metrics and market indicators. Here's a breakdown to provide a comprehensive view:

Price-to-Earnings (P/E) Ratio:

As of April 20, 2025, Booking Holdings' P/E ratio stands at 28.68. A high P/E ratio may suggest that the stock is overvalued compared to its earnings. However, it's essential to compare this to industry peers and historical data to get a clearer picture. For instance, the P/E ratio was 27.96 at the end of fiscal year 2024.

Price-to-Book (P/B) Ratio:

The P/B ratio for Booking Holdings is -37.33 as of April 2025. A negative P/B ratio can occur when a company has negative book value, which means that its liabilities exceed its assets. This might indicate financial distress or specific accounting issues.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

The EV/EBITDA ratio for Booking Holdings is 18.43 as of April 2025. This ratio compares the total value of the company (including debt) to its earnings before interest, taxes, depreciation, and amortization. It's a useful metric for evaluating companies with significant debt. The EV/EBITDA was 20.21 at the end of fiscal year 2024.

Stock Price Trends:

Over the past 12 months, Booking Holdings (BKNG) has shown significant growth. As of April 15, 2025, the closing share price was $4,612.44, which is up 32.33% from the previous year. The stock's 52-week high is $5,337.24, while the 52-week low is $3,180.00.

Dividend Yield and Payout Ratios:

Booking Holdings does offer dividends, with a current dividend yield of approximately 0.84%. The company declared a quarterly cash dividend of $9.60 per share, payable on March 31, 2025, reflecting a 10% increase from the 2024 quarterly dividend of $8.75. The dividend yield as of April 2025 (TTM) is 0.79%. The company's payout ratio is around 20%, indicating that it distributes a relatively small portion of its earnings as dividends.

Analyst Consensus:

Based on ratings from 32 analysts, Booking Holdings has a consensus rating of 'Moderate Buy.' The average price target is $5,315.52, with high estimates reaching $6,100.00 and low estimates at $4,200.00. This suggests a potential upside of approximately 15.42% from the current price.

Here's a summary of analyst ratings:

• Consensus Rating: Moderate Buy
• Average Price Target: $5,315.52
• Highest Price Target: $6,100.00
• Lowest Price Target: $4,200.00

Recent analyst ratings include:

• Cantor Fitzgerald: Price target of $3,590, rating Neutral
• Citizens JMP: Price target of $6,100.00, rating Market Outperform

Additional Factors:

• Revenue Growth: In 2024, Booking Holdings reported revenue of $23.74 billion, an 11.11% increase compared to the previous year.
• Earnings Growth: Earnings were $5.88 billion, a 37.14% increase.
• Return on Equity (ROE): The company has a negative ROE of -159.34%, which may indicate it's not effectively generating profit from its equity.

Here is a table summarizing key valuation ratios for Booking Holdings:

For more insights, check out: Breaking Down Booking Holdings Inc. (BKNG) Financial Health: Key Insights for Investors

Booking Holdings Inc. (BKNG) Risk Factors

Understanding the risks facing Booking Holdings Inc. (BKNG) is crucial for investors assessing the company's financial health and future prospects. These risks span internal operational challenges and external market dynamics, each potentially impacting BKNG's performance.

Here's an overview of key risks:

• Industry Competition: The online travel market is intensely competitive. Competitors include other major online travel agencies (OTAs), search engines, metasearch companies, direct suppliers (hotels, airlines), and emerging players. Increased competition could lead to reduced margins and market share for Booking Holdings Inc.
• Regulatory Changes: Changes in regulations concerning data privacy, consumer protection, and antitrust laws could significantly impact BKNG's operations. Compliance with these regulations may increase costs and limit business practices.
• Market Conditions: Economic downturns, geopolitical instability, and public health crises (like the COVID-19 pandemic) can severely reduce travel demand, impacting BKNG's revenue and profitability.
• Cybersecurity Threats: As an online platform, Booking Holdings Inc. faces constant threats from cyberattacks and data breaches. A successful attack could compromise user data, damage the company's reputation, and result in significant financial losses.
• Dependence on Key Partners: BKNG relies on relationships with hotels, airlines, and other travel service providers. Any disruption to these partnerships or unfavorable changes in terms could adversely affect the company's business.

Operational, financial, and strategic risks are often detailed in Booking Holdings Inc.'s annual reports and SEC filings. These documents provide insights into how management views and addresses these challenges.

Examples of risks discussed in these reports may include:

• Integration Risks: Difficulties integrating acquired businesses or technologies could lead to inefficiencies and failure to achieve expected synergies.
• Foreign Exchange Risk: As a global company, BKNG is exposed to fluctuations in currency exchange rates, which can impact revenue and earnings.
• Taxation: Changes in tax laws or their interpretation could increase the company's tax burden.

Mitigation strategies employed by Booking Holdings Inc. might include:

• Diversification: Expanding into new markets and travel segments to reduce reliance on specific regions or services.
• Technological Investments: Investing in cybersecurity and fraud prevention measures to protect data and maintain customer trust.
• Compliance Programs: Implementing robust compliance programs to adhere to evolving regulations.
• Strategic Partnerships: Strengthening relationships with key partners to ensure a stable supply of travel services.

For more insights into Booking Holdings Inc.'s financial health, you can read: Breaking Down Booking Holdings Inc. (BKNG) Financial Health: Key Insights for Investors

Booking Holdings Inc. (BKNG) Growth Opportunities

Booking Holdings Inc. possesses several key growth drivers that underpin its future prospects. These include strategic product innovations, continued market expansions, and potential acquisitions that could further solidify its market position.

Future revenue growth projections and earnings estimates for Booking Holdings Inc. remain optimistic, buoyed by the ongoing recovery in global travel demand. Several strategic initiatives and partnerships are expected to play a crucial role in driving this growth.

Booking Holdings Inc. benefits from distinct competitive advantages that position it favorably for sustained growth:

• Global Brand Recognition: A well-established and trusted brand name in the travel industry.
• Extensive Network: A vast network of accommodations, transportation, and experiences.
• Technological Innovation: Continuous investment in technology to enhance user experience and operational efficiency.
• Data Analytics: Leveraging data to personalize offerings and optimize marketing strategies.

For additional insights into the company's direction, explore: Mission Statement, Vision, & Core Values of Booking Holdings Inc. (BKNG).

To provide a clearer picture of Booking Holdings Inc.'s financial outlook, consider the following potential projections:

These projections are based on current market trends, company strategies, and analyst expectations. Actual results may vary depending on various factors, including economic conditions and competitive pressures.