Booking Holdings (BKNG.US) Reports Strong Q3 2025 Adjusted EPS and Raised Savings Outlook

Booking Holdings (BKNG.US) announced robust financial results for the third quarter ended September 30, 2025. The company reported adjusted EPS of $99.50, marking a significant 19% increase year-over-year, and surpassing the analyst estimate of $96.11. Revenue for the quarter reached $9.0 billion, a 13% increase compared to the third quarter of 2024, although it fell short of the analyst estimate of $8.73 billion.

Key Business Drivers

During Q3 2025, room nights experienced an 8% growth year-over-year, with alternative accommodation room nights on Booking.com increasing by approximately 10%. Gross bookings surged by 14%, or 10% on a constant currency basis, underscoring strong demand in the travel sector. These performance indicators highlight the effectiveness of the company's platform and its strategic initiatives, including the Connected Trip and Genius loyalty program.

The company also achieved an adjusted EBITDA margin of 47.0%, an increase from 45.8% in Q3 2024. This improvement in profitability was realized despite a 15% increase in total operating expenses, which grew faster than revenue. Marketing expense as a percentage of gross bookings decreased to 4.7% from 5.0% in Q3 2024, indicating more efficient customer acquisition.

Management Outlook and Strategic Initiatives

Booking Holdings raised its expectation for the ultimate annual run-rate savings from its Transformation Program to a range of $500 million to $550 million, up from the previous guidance of $400 million to $450 million. This increase is attributed to stronger-than-expected early results from the program, which aims to improve operating expense efficiency and organizational agility. Management expressed confidence in continued momentum and steady travel demand trends for the fourth quarter, despite macroeconomic and geopolitical uncertainties.

For Q4 2025, the company projects room night growth of 4% to 6% and gross bookings growth of 11% to 13%, or 6% to 8% on a constant currency basis. Revenue growth is anticipated to be between 10% and 12%, with adjusted EBITDA expected to range from $2.0 billion to $2.1 billion, representing an 8% to 14% growth. For the full year 2025, adjusted EBITDA growth is estimated at 17% to 18%.

Shareholder Returns and Discrete Items

The Board of Directors declared a cash dividend of $9.60 per share, payable on December 31, 2025. The company also actively returned capital to shareholders by repurchasing $0.7 billion of stock during the quarter, with a remaining authorization of $23.9 billion as of September 30, 2025. This reflects a continued commitment to enhancing shareholder value.

A notable discrete item impacting financial results was an impairment charge of $457 million related to KAYAK's goodwill and certain intangible assets. This impairment was primarily driven by a reduction in forecasted cash flows for KAYAK, stemming from expected increases in customer acquisition costs impacting its meta-search business.