Booking Holdings Inc. (BKNG) Earnings & Analysis

Latest quarter

Booking Holdings reported Q2 FY2026 revenue of $7.4 billion, up 8.15% from $6.8 billion a year earlier. The company reported adjusted EPS, as the consensus counts it, of $2.54 against consensus of $2.45, a 3.67% difference; reported revenue exceeded the $7.2 billion consensus by 2.26%.

The filing shows diluted EPS of $2.53, compared with $1.10 in Q2 FY2025, while operating margin rose to 34.0% from 33.1%. Booking Holdings reported free cash flow of $3.6 billion, compared with $3.1 billion a year earlier. The filing attributed revenue growth primarily to merchant revenue, which rose as accommodation services grew and Booking.com continued shifting bookings from agency to merchant; agency revenue declined. The company said Q2 revenue growth of 8.15% was above its 4.00%–6.00% guidance range.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Ewout Steenbergen said global travel demand had remained supported by domestic travel in the early part of the third quarter, while the company continued to monitor the Middle East conflict’s direct and indirect effects. He said the outlook assumes elevated flight-ticket prices, reduced capacity on some routes and softer long-haul international travel continue through the quarter.

Steenbergen said constant-currency average daily rates increased during Q2, led primarily by Europe and the U.S., while the company observed shorter booking windows and lengths of stay that began to normalize in June. He said marketing expense increased as Booking Holdings invested in paid channels and faced changes in traffic mix, while customer-service efficiencies and a one-time processing-fee reversal affected sales and other expenses.

Glenn Fogel said the company is investing in its Connected Trip strategy, its U.S. and Asia presence, and AI capabilities. Fogel said AI is being used across customer service, software development and internal functions, and that the company manages spending on AI to seek a return on investment. Steenbergen said traffic from large language models remained minimal, and Booking Holdings is participating in a paid-channel test while seeking to retain direct traffic through its own tools.

Analysts asked about the early rollout of Booking.com’s AI-powered discovery experience. Fogel said the rollout was too early for data and that customer usage data would determine whether modifications were needed. Analysts also asked about the Middle East impact; Steenbergen said conditions had begun to normalize but that airline-capacity and ticket-price effects remained embedded in third-quarter assumptions.

Steenbergen said Booking Holdings increased expected annual run-rate savings from its transformation program to $650.0 million and expects $100.0 million of incremental annual savings primarily in 2027. He said the company returned $4.1 billion to shareholders in Q2, including $3.7 billion of share repurchases.

Guidance

Booking Holdings now expects FY2026 gross bookings, revenue and adjusted EBITDA to be up high single digits; its previous gross-bookings outlook was high single digits to low double digits. The company raised expected Transformation Program annual run-rate savings to $650.0 million from approximately $550.0 million and said $100.0 million of incremental annual savings is expected primarily in 2027.