Booking Holdings (BKNG) Q2 2025 Earnings: Strong Growth, GAAP Decline
Raised guidance and solid adjusted results, but steep GAAP profit decline and cautious Q3 outlook cap momentum. After-hours dip nears key support.
Financial Highlights (YoY Comparison)
| Metric | Q2 2025 | YoY Change |
|---|---|---|
| Revenue | $6.80B | +16% |
| Gross Bookings | $46.7B | +13% (+9% cc) |
| Adjusted EBITDA | $2.42B | +28% (margin 35.6%) |
| Adjusted EPS | $55.40 | +32% |
| GAAP Net Income | $895M | –41% |
| GAAP EPS | $27.43 | –38% |
| Free Cash Flow | $3.14B | +32% |
| Room Nights Booked | 309M | +8% |
Business Drivers & Challenges
✅ Strengths:
- Flights sold surged 44% YoY.
- Connected Trip bookings rose 30%+ (now low double-digit % of mix).
- Alternative accommodations grew ~10%; now 37% of Booking.com nights.
- Direct & mobile bookings rising (mid-60% of mix); Genius Tier 2/3 users drive >50% of room nights.
- Strong free cash flow and raised full-year guide.
⚠️ Weaknesses:
- GAAP net income fell 41% due to:
- $38M in transformation costs
- Regulatory tax accruals (Canada, Spain, EU)
- Lower-ADR Asia mix
- U.S. room night growth was soft (low single digits); domestic budget travel remains under pressure.
- AI and Connected Trip strategies are promising but not yet financially material or measurable.
🌍 Regional Highlights – Q2 2025 (Qualitative Insights)
- Asia:
- Strongest growth region
- Room night growth: low double digits YoY
- Momentum driven by Agoda and localized Booking.com execution (mobile, language, payments)
- China no longer a major outbound driver, but broader Asia remains a key contributor
- Europe:
- Solid performance
- Continued strength in international inbound and summer travel demand
- Helped offset softness in U.S.
- United States:
- Weakest region
- Room night growth: low single digits YoY
- Trends: shorter stays, lower ADRs, and softer demand among domestic and budget travelers
- Booking believes it gained share, but consumer behavior remains cautious
- Rest of World (e.g., Latin America, Middle East):
- No detailed figures given
- Middle East conflict in June had ~1% negative impact on global growth
Q3 2025 Guidance
| Metric | YoY Growth |
|---|---|
| Room Nights | +3.5%–5.5% |
| Gross Bookings | +8%–10% |
| Revenue | +7%–9% |
| Adjusted EBITDA | $3.9B–$4.0B (+6%–9%) |
Management flagged tough YoY comps (especially in August–September) and macro/geopolitical risks as reasons for the conservative tone.
Capital Return & Liquidity
- Cash & Investments: $18.2B
- Debt Outstanding: $18.5B
- Dividend: $9.60/share (payable Sept. 30)
- Buybacks: $1.3B in Q2; $24.6B remaining
Buybacks helped support adjusted EPS but mainly offset dilution, not a clear value enhancer in the face of shrinking GAAP profit.
Technical Overview (as of July 29, 2025)
| Level | Price |
|---|---|
| Current (AH) | $5,483 |
| Key Support | $5,485 (50% Fib) |
| Next Support Zone | $5,410 (38.2% Fib) |
| Resistance Zone | $5,560–$5,590 |
| RSI (14-day) | 47.2 (neutral) |
| 50-day MA | $5,551.62 |
| 200-day MA | $5,004.66 |
📌 Observation: After-hours trading dipped below $5,485, a key 50% Fibonacci level. If confirmed in regular hours, this could signal short-term downside toward $5,410. However, after-hours moves are not always reliable—investors should wait for confirmation on volume and price action.
Final Takeaway
Booking Holdings continues to deliver on its adjusted metrics with strong international demand, solid execution, and raised guidance. But sharp GAAP profit erosion, ongoing transformation costs, and limited visibility on returns from strategic initiatives pose risks.
Stock’s strong FCF and scale support the long-term story, but short-term sentiment may remain cautious given Q3 guide and after-hours pressure near technical support.
This report was prepared with AI assistance and should not be considered financial or investment advice.