Booking Holdings Inc. (BKNG) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

Source: Annual Report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001075531-26-000009.

Booking Holdings runs online travel and restaurant reservation platforms that connect consumers with hotels, home and apartment owners, airlines, rental car companies, attraction operators and restaurants. Substantially all of its revenue comes from facilitating online travel reservations, through commissions, margins and fees on each booking. It also earns money from payment facilitation, advertising, restaurant reservation and management services, and travel insurance. Accommodation is the core: about 90% of revenue in Q2 2026 (89% in the first half) came from online accommodation reservation services, and no other service line reached 10%. Revenue for 2025 was $26.9 billion.

Five consumer-facing brands:

• Booking.com (headquartered in the Netherlands) is the largest brand and, by the company's description, the world's leading brand for booking online accommodation, measured by room nights. At year-end 2025 it listed about 4.4 million properties in more than 220 countries and territories: roughly 500,000 hotels, motels and resorts and about 3.9 million homes, apartments and other alternative accommodations. By June 30, 2026 the total had grown to about 4.7 million, including more than 4.1 million alternative accommodations. Booking.com also sells flights (in more than 55 markets in 2025), attractions, rental cars and ground transportation.
• Priceline (Norwalk, Connecticut) sells discount travel, mainly in North America: hotels, flights, rental cars, packages and cruises.
• Agoda (Singapore) sells accommodation, mainly in Asia-Pacific, plus flights, ground transportation and attractions.
• KAYAK (Norwalk) is a meta-search site that compares prices across hundreds of travel platforms in more than 60 countries and territories.
• OpenTable (San Francisco) handles restaurant reservations for diners and sells reservation-management software to restaurants, mainly in the U.S.

How the money is classified. Merchant revenue comes from bookings where Booking Holdings takes the traveler's payment. It includes commissions, the spread between what the traveler pays and what is owed to the supplier, payment-processing rebates and fees, and insurance. Most of it comes from Booking.com accommodation. Agency revenue is commission on bookings where the company does not process the payment, almost all of it Booking.com accommodation. Advertising and other revenue comes mainly from KAYAK referrals and ads, OpenTable reservations and subscriptions, and ad placements on the other brands. Booking.com has been moving bookings from agency to merchant terms for several years. Merchant revenue was $17.8 billion of the $26.9 billion total in 2025, against $14.1 billion of $23.7 billion in 2024.

Geography and structure. The business is overwhelmingly non-U.S. by reporting entity. In 2025, $24.3 billion of revenue came from businesses outside the U.S., and $21.7 billion of that was attributed to an entity domiciled in the Netherlands. U.S. businesses contributed $2.6 billion. The company counts all of Booking.com and Agoda as non-U.S. even when the traveler or hotel is in the U.S. Its five brands are five operating segments, combined into one reportable segment. Management measures them on revenue and "Adjusted EBITDA less Capex", which was $9.85 billion in 2025, up from $8.18 billion in 2024.

Strategy. Management's stated long-term goal is the "Connected Trip": an AI-powered, personalized way to plan, book, pay for and take a trip, tied together by loyalty programs such as Booking.com's Genius and built on its own payments platform. The 2025 priorities included Gen AI features for travelers and partners, more flights and attractions (flight tickets grew 37% in 2025 and attraction tickets about 80% from a small base), more alternative accommodations, brand-building in Asia and the U.S., and the Transformation Program, a cost-efficiency effort begun in Q4 2024.

Seasonality. Gross bookings are fairly even across quarters. Revenue is recognized at check-in, though, which peaks in the third quarter, while marketing costs are expensed at the time of booking. As a result, profitability is typically highest in Q3 and lowest in Q1. The length of the booking window and the timing of holidays such as Easter and Ramadan can move quarterly growth rates.

People. About 24,300 employees at December 31, 2025, of whom about 2,900 were in the U.S. Headcount was about 25,550 at June 30, 2026.

Risk factors

Source: 2025 Form 10-K, accession 0001075531-26-000009, Item 1A. The Q2 2026 Form 10-Q (accession 0001075531-26-000037) carries these forward, supplemented by one risk factor added in the Q1 2026 Form 10-Q.

• Travel demand shocks. Results depend on discretionary travel. Economic downturns, wars and regional conflicts, pandemics, sanctions, natural disasters and overtourism rules can cut demand, raise cancellations and lower average daily rates (ADRs). Lower ADRs reduce revenue.
• Competition, especially from AI and big tech. Barriers to entry are low. The 10-K names Google, which links travel search to its search engine, Google Maps and its Gemini AI offering. It also warns that AI assistants and agents from large platforms and AI-native companies could search, compare and book travel directly, reducing visits to dedicated travel sites and possibly evolving into full booking platforms that bypass online travel companies. Hotels, airlines and rental car firms selling direct, and competitors willing to run at minimal or negative margins, add pricing pressure.
• Dependence on Google and other traffic sources. Much of the company's traffic comes from search engines, app stores and other platforms. These increasingly answer queries with AI-generated content that may not send users on to Booking's sites. Changes to their algorithms, terms or placement of AI answers could raise customer acquisition costs and cut bookings. The Q2 2026 MD&A says unpaid search (SEO) traffic is declining and management expects that to continue in the short to medium term, which may lead to more paid marketing.
• Marketing efficiency. Performance marketing costs depend on what others bid in the same channels. Bidding competition around AI-generated results could raise costs per click. In 2025, average marketing return on investment fell slightly because of changes in paid traffic mix and more social media spending.
• Alternative accommodations. This is a fast-growing but lower-margin business with more exposure to liability (Booking.com arranges partner liability insurance up to $1 million per occurrence), short-term-rental regulation (including EU Digital Services Act registration and verification duties) and fines from local regulators.
• Competition and platform regulation. The European Commission has designated the company a "gatekeeper" under the Digital Markets Act (DMA) and Booking.com a "Very Large Online Platform" under the Digital Services Act. That brings parity-clause prohibitions in the European Economic Area, data-use limits, supervisory fees, audits and large potential penalties, none of which apply to many competitors. Competition authorities have investigated parity clauses, pricing tools and ranking practices. Follow-on private claims include a Dutch consumer-group claim against Booking.com and Agoda.
• Tax. A majority of income is reported in the Netherlands. Part of Booking.com's earnings is taxed under the Dutch Innovation Box at 9% instead of the 25.8% statutory rate, and losing or reducing that benefit could substantially raise the effective tax rate. Other tax risks include digital services taxes (1.5% to 10% of in-country revenue), OECD minimum-tax rules, the U.S. One Big Beautiful Bill Act (whose interest-limitation and foreign-tax-credit provisions effective in 2026 affect the effective tax rate), lawsuits over travel transaction (hotel occupancy) taxes, and VAT changes.
• Payments. Most transactions are now merchant transactions, so the company bears fraud losses, chargebacks and processing costs. It also faces payment-licensing and money-transmission rules, EU Payment Services Directive and Regulation changes, card-network rules, and losses on prepayments if a supplier fails.
• Cybersecurity and data privacy. The company has experienced phishing, account-takeover and fictitious-listing attacks. GDPR fines can reach 4% of global revenue. The 10-Q discloses that in April 2026 Booking.com notified data protection authorities after unauthorized third parties accessed certain guests' booking information. The company says it fixed the problem and expects possible follow-on investigations, litigation or fines.
• Execution. Risks include delivering the Transformation Program's savings, the cost and payoff of Connected Trip and Gen AI investments, keeping technical talent (including after cuts to the Dutch tax exemption for foreign workers), and impairments. KAYAK's goodwill and intangibles were written down in 2025.
• Financial. The risks named are exposure to the euro and pound against the dollar, substantial and growing debt, reliance on capital markets to fund buybacks and dividends, a volatile stock price, and swings in the value of equity investments.

Management's discussion, fiscal 2025

Source: 2025 Form 10-K, accession 0001075531-26-000009, Item 7.

Volume and top line. Room nights rose 8.0% to 1,235 million, on healthy demand in Europe and Asia and a longer booking window. Q4 2025 room nights grew 9%. Gross bookings rose 12.4% to $186.1 billion, about 10% in constant currency. Merchant gross bookings grew 24.8% to $130.0 billion while agency fell 8.7% to $56.1 billion, and merchant reached 70% of gross bookings, up from 63%. Airline tickets jumped 36.6% to 68 million and flight gross bookings grew 29%. Revenue rose 13.4% to $26.9 billion, including about 3 points from currency. Revenue as a share of gross bookings rose to 14.5% from 14.3%, helped by payment-facilitation revenue and partly offset by the growing share of lower-take flights. Constant-currency ADRs were about flat; excluding the shift toward lower-ADR Asia, they were up about 1%.

Costs and margins. Marketing grew 12.5% to $8.19 billion and held steady at 4.4% of gross bookings. More direct bookings offset lower performance-marketing returns. Sales and other expenses grew 10.6% to $3.45 billion, including $381 million more in merchant transaction costs. Personnel rose only 1.5% to $3.40 billion, helped by a $176 million reduction in the Netherlands pension accrual after the Dutch Supreme Court's March 2025 final ruling. G&A fell 17.2% to $857 million, against a 2024 base that included a $337 million accrual for Italian indirect tax matters. IT spending rose 17.8% on cloud costs. Two charges weighed on 2025: a $457 million impairment for KAYAK ($180 million of goodwill and $277 million of intangibles, reflecting higher expected customer acquisition costs in meta-search) and Transformation costs, which rose to $205 million from $34 million. Operating income was $8.83 billion, up from $7.56 billion.

Below the line. Net income fell to $5.40 billion from $5.88 billion even though operating income grew. Three non-operating items explain it. Foreign currency losses on euro-denominated debt not designated as hedges were about $1.4 billion, after a $526 million gain in 2024. Interest expense rose 24.9% to $1.62 billion, mainly from debt-discount amortization on convertible notes that matured in May 2025. Interest income fell 17.3% on lower rates. The effective tax rate was 20.9%, against 19.3% in 2024, when a Tax Court decision (Varian) had reduced the 2018 repatriation tax liability. Diluted EPS as reported was $165.57, against $172.69; both figures predate the April 2026 25-for-1 stock split.

Transformation Program. The program produced about $250 million of savings in 2025, and by year-end it had enabled about $550 million of annual run-rate savings against the 2024 cost base. The 10-K expected those savings to be realized by the end of 2026 at a total cost below one year's run-rate savings. That outlook was raised in the Q2 2026 10-Q (see below).

Cash and capital return. Operating cash flow was $9.41 billion in 2025. Net cash used in investing activities was $313 million, mainly for property and equipment. The company spent $6.4 billion on share repurchases (including shares withheld for taxes) and paid $1.2 billion in dividends ($9.60 per share each quarter before the split). It repaid or redeemed $5.0 billion of debt and issued $3.7 billion of new senior notes. Cash, cash equivalents and investments were $17.8 billion at year-end. Repurchase authorization remaining was $21.8 billion, after the Board authorized a new $20 billion program in Q1 2025.

Current quarter, Q2 2026 (three months ended June 30, 2026)

Source: Form 10-Q for the quarter ended June 30, 2026, accession 0001075531-26-000037. Guidance is from the earnings release furnished on Form 8-K, accession 0001075531-26-000036.

Demand and the Middle East conflict. Room nights grew 5.3% to 325 million, slower than about 6% in Q1. Management attributes the slowdown mainly to the Middle East conflict, which began during Q1 and mostly affected March, then weighed on all of Q2. Travel within the region largely normalized during June. The indirect effects continued: higher airfares, reduced capacity on some international routes and weaker long-haul international demand. Domestic and short-haul regional travel, including within Europe, stayed relatively healthy. The Rest of World region, which includes the Middle East, returned to growth after declining in Q1. Cancellation rates normalized after the spike in March. Constant-currency ADRs rose about 2%, led by Europe and the U.S. Rental car days fell 6.5% to 23 million because of lower partner volume and higher rental prices. Flight tickets rose 3.7% to 17 million, and flight gross bookings grew 12% on higher average fares (driven partly by fuel costs) and ticket growth.

Top line. Gross bookings rose 9.0% to $50.96 billion, about 8% in constant currency. Merchant gross bookings rose 14.5% to $37.0 billion and agency fell 3.3% to $14.0 billion, putting merchant at 73% of gross bookings against 69% a year earlier. Revenue rose 8.1% to $7.35 billion, including about 1 point from currency. Merchant revenue was $5.13 billion (up 15.0%), agency $1.90 billion (down 6.9%), and advertising and other $322 million (up 8.1%, from OpenTable and Booking.com advertising). Revenue as a share of gross bookings slipped to 14.4% from 14.5%. Management attributes this to the timing of bookings versus travel, partly offset by higher payment revenue.

Costs. Marketing rose 10.8% to $2.37 billion and edged up to 4.7% of gross bookings from 4.6%. Management cites declining SEO traffic, a shift in paid traffic mix, and continued spending in paid channels where returns were attractive. Sales and other expenses rose 4.8% to $942 million, including $37 million more in merchant transaction costs, but fell as a share of revenue because of customer-service efficiencies. Personnel rose 0.5% to $900 million as higher salaries (partly from currency) were partly offset by lower stock-based compensation. IT rose 20.1% to $263 million on cloud and software license costs. Depreciation and amortization fell 18.3% to $129 million. Transformation costs were $30 million. Operating income was $2.50 billion, up from $2.25 billion.

Earnings. Net income was $1.95 billion against $895 million, and diluted EPS was $2.53 against $1.10 (both split-adjusted). Most of the jump came below operating income. Other income was a $159 million gain, against a $962 million expense a year earlier, as remeasuring euro-denominated debt produced a $195 million gain instead of a $961 million loss. Interest expense fell to $300 million from $418 million because 2025 had included convertible-note discount amortization. Partly offsetting this, the effective tax rate rose to 23.8% from 18.9%. The company cites higher unrecognized tax benefits, a valuation allowance on the carryforward of U.S. federal interest expense, and higher discrete tax expenses, partly offset by lower U.S. tax on international earnings. Unrecognized tax benefits rose to $313 million from $250 million, mainly for 2018 U.S. taxes that may be affected by an April 2026 Tax Court decision in the Varian case. Earlier in the year, first-half results included an $89 million litigation-settlement gain booked in G&A and a $31 million benefit from Canada's March 2026 repeal of its digital services tax.

First half. Revenue was $12.88 billion (up 11.5%), gross bookings $104.7 billion (up 12.1%), room nights 662 million (up 5.6%) and net income $3.03 billion against $1.23 billion. Operating cash flow was $6.93 billion against $6.48 billion, helped by a $4.2 billion increase in deferred merchant bookings and other current liabilities on higher business volumes. Capital expenditures were $183 million.

Structural trends. Over the trailing twelve months, a high-fifties percentage of room nights were booked on the company's mobile apps, up from mid-fifties a year earlier. Direct bookings held at a mid-fifties percentage of room nights. In Q2 2026, alternative accommodations were about 37% of Booking.com room nights, in line with Q2 2025, held back partly by weaker alternative-accommodation growth in the Middle East. Payment-facilitation revenue continued to exceed its incremental variable costs over the trailing twelve months.

Transformation Program update. Management raised the expected annual run-rate savings to about $650 million from about $550 million. It expects most of the additional savings to arrive in 2027, and now expects restructuring costs to be largely incurred by the end of 2027, where the 10-K had said 2026.

Capital structure and shareholder returns.

• Stock split. A 25-for-1 forward split took effect April 2, 2026. All share and per-share figures above are split-adjusted unless marked otherwise.
• Buybacks. In Q2 the company repurchased 22 million shares for $3.79 billion under its authorized program, at average monthly prices between about $163 and $178. That brought first-half repurchases to $7.45 billion (42 million shares). $14.5 billion of the $20 billion 2025 authorization remained at June 30. Shares outstanding were 751.4 million at July 27, 2026.
• Dividends. The quarterly dividend was $0.42 a share in 2026, against $0.38 split-adjusted in 2025. First-half cash dividends totaled $664 million.
• Debt. In May 2026 the company issued €600 million of 3.5% notes due 2030, €700 million of 4.0% notes due 2034, €600 million of 4.5% notes due 2039 and $750 million of 5.375% notes due 2036. Proceeds are for general corporate purposes, including buybacks and debt repayment. In June it repaid $1 billion of 3.6% notes at maturity. Senior notes outstanding totaled $20.3 billion in principal at June 30, 2026, up from $18.9 billion at year-end. Of that, $19.1 billion was euro-denominated and $2.0 billion was due within twelve months. The $2 billion revolving credit facility was undrawn.
• Balance sheet. Cash, cash equivalents and investments were $17.7 billion, of which about $14.7 billion was held by international subsidiaries. Deferred merchant bookings were $10.1 billion. Stockholders' deficit widened to $10.8 billion from $5.6 billion at year-end, as $7.8 billion of total first-half share repurchases, including shares withheld for employee taxes, and $0.7 billion of dividends exceeded first-half net income of $3.0 billion.

Regulatory and legal matters (as of the 10-Q). The company carries a $472 million liability for the 2024 fine from Spain's CNMC, which is suspended pending Booking.com's appeal. Switzerland's price regulator ordered Booking.com to cut its average hotel commissions, and that order is suspended on appeal. France's DGCCRF has ordered Agoda to change certain practices by October 2026. Greece's and Hungary's competition authorities have open investigations of Booking.com. German hotels are pursuing parity-clause litigation, and two Dutch foundations have filed claims on behalf of European hotels and consumers. During 2026 an audit began of the company's refund claim on its 2018 one-time repatriation tax liability, which stems from the 2024 Varian decision. Standby letters of credit and bank guarantees rose to $1.3 billion from $874 million.

Insider trading plans. CFO Ewout Steenbergen adopted a Rule 10b5-1 plan on May 13, 2026 to sell up to 20,000 shares between August 12, 2026 and March 31, 2027. Chief Human Resources Officer Paulo Pisano adopted one on June 1, 2026.

Outlook (from the August 4, 2026 earnings release; adjusted measures are non-GAAP). Management said global travel demand had stayed resilient early in Q3, supported by domestic travel. Guidance assumes the conflict's indirect effects continue through Q3 and that inbound travel to the Middle East stays under some pressure.

Currency is expected to reduce revenue growth by about 1 point in Q3 and add about 1 point for the full year.

Subsequent events

Source: Form 10-Q for the quarter ended June 30, 2026, accession 0001075531-26-000037 (Notes 10 and 13), filed August 4, 2026.

The 10-Q has no separately captioned subsequent-events note. It discloses the following developments after June 30, 2026:

• Dividend (August 2026). The Board declared a cash dividend of $0.42 per share, payable September 30, 2026 to stockholders of record at the close of business on September 11, 2026.
• FTC matter at Priceline (July 2026). FTC staff told Priceline they intend to recommend that the FTC file a complaint against Priceline and one of its business-to-business affiliate partners. The complaint would allege unfair or deceptive practices involving disclosures, fees, customer support and billing. Priceline disagrees and is in discussions to resolve the matter. The company says possible outcomes include commitments to change business practices, damages or penalties.

The 10-Q discloses no acquisitions, divestitures, new borrowings or debt repayments after quarter-end. The Q2 notes offerings and the June 2026 note repayment both fell within the quarter and are described above.