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Booking Holdings (BKNG) Q2 Earnings Beat, Revenues Rise Y/Y

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Booking Holdings Inc. (BKNG - Free Report) reported non-GAAP earnings of $19.08 per share for second-quarter 2022, beating the Zacks Consensus Estimate by 8.2%. BKNG reported earnings of $3.90 and $2.55 per share in the prior quarter and the year-ago quarter, respectively.

Revenues of $4.29 billion missed the Zacks Consensus Estimate of $4.34. The top line surged 99% year over year on a reported basis and 116% on a constant-currency (cc) basis.

Improving travel demand and booking trends from the year-ago quarter’s readings were tailwinds. In the reported quarter, Booking.com witnessed growth in active customers owing to the increase in repeat customers and customers who made bookings on the platform after a year.

Booking Holdings witnessed growth of 22.4% in rental car on a year-over-year basis. BKNG also experienced 31.4% year-over-year growth in the airline tickets unit in the reported quarter.

Booked room night number, which was 246 million in the second quarter, surged 56.3% from the prior-year quarter’s level.

Booking Holdings witnessed strong growth across its agency, merchant, and advertising and other businesses in the reported quarter.

However, headwinds related to the coronavirus pandemic and macroeconomic uncertainties remain overhangs for BKNG.

Booking Holdings Inc. Price, Consensus and EPS Surprise

Booking Holdings Inc. Price, Consensus and EPS Surprise

Booking Holdings Inc. price-consensus-eps-surprise-chart | Booking Holdings Inc. Quote

Top Line in Detail

Booking Holdings generates the bulk of revenues from international markets, wherein the agency model is more popular. This is reflected in the merchant/agency split of revenues, which was 41/54% in the second quarter (the previous quarter’s split was 39/54%)

Agency revenues were $2.3 billion, up 73.3% year over year. Merchant revenues skyrocketed 164.6% year over year to $1.7 billion.

Advertising & Other revenues of $244 million (accounting for 6% of total revenues) increased 42.7% from the year-ago quarter’s level.

Bookings

Booking Holdings’ overall gross bookings totaled $34.5 billion, which increased 57.3% on a reported and 73% on a cc basis from the respective year-ago quarter’s levels.

Total gross bookings surpassed the Zacks Consensus Estimate of $32.5 billion.

Merchant bookings were $15.1 billion, up 126.5% from the prior-year quarter’s level, while Agency bookings increased 27.2% year over year to $19.4 billion.

Merchant bookings beat the Zacks Consensus Estimate of $12.1 billion, whereas Agency bookings missed the consensus mark of $20.7 billion.

Operating Results

Adjusted EBITDA in the reported quarter was $1.09 billion compared with $48 million in the prior-year quarter. As a % of total revenues, the metric increased from 2.2% to 25.3%.

Per management, operating expenses were $3.3 billion, up 48.6% on a year-over-year basis. As a percentage of revenues, the figure contracted significantly to 76.7% from 102.6% in the year-ago quarter.

Booking Holdings generated an operating income of $1 billion against a loss of $56 million in the same quarter last year.

Balance Sheet

As of Jun 30, 2022, cash and cash equivalents were $11.8 billion, up from $10.5 billion as of Mar 31, 2022.

Account receivable amounted to $2.2 billion in the reported quarter compared with $1.6 billion in the previous quarter.

At the end of the second quarter, Booking Holdings had $8.2 billion of long-term debt compared with $8.4 billion at the end of the first quarter.

Zacks Rank & Stocks to Consider

Currently, Booking Holdings carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the retail-wholesale sector are Dollar General (DG - Free Report) , Costco Wholesale (COST - Free Report) and Dollar Tree (DLTR - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dollar Generalhas gained 6.8% on a year-to-date basis. The long-term earnings growth rate for the DG stock is currently projected at 12.2%.

Costco Wholesale has lost 3.6% on a year-to-date basis. The long-term earnings growth rate for the COST stock is currently projected at 9.2%.

Dollar Treehas returned 17.5% on a year-to-date basis. The long-term earnings growth rate for the DLTR stock is currently projected at 15.5%.


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