BKNG - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Booking Holdings Second Quarter 2018 Conference Call. Booking Holdings would like to remind everyone that this call may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals or expectations and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements.

safe factors materially cause the earnings from please and to of results Holdings' forward-looking Commission. press list the Exchange filings refer differ at with as to those the most release a as that Booking Booking Booking could actual statements, end well For of statements Holdings' Holdings' recent harbor described Securities in the of whether new obligation by future to undertakes update as law, a forward-looking any required otherwise. result Unless or no statements, information, events Booking publicly Holdings statistical A website, release, copy Investors of together with Booking Holdings' is Holdings' www.bookingholdings.com. earnings an press accompanying available financial supplement, Booking For the in section of and Holdings now for David Glenn this like morning, and introduce And I'd Booking speakers Fogel to Goulden. Go ahead, gentlemen.

Glenn Fogel

for to bookings. I you our to the morning's morning, checks morning. to rescheduling for time room and start gross apologizing from needed nights joining want last call evening complete on We this thank call. this additional by the Good and

results I Now during to Holdings am the second the well Booking report our performed turning to quarter. pleased for quarter.

XX% increased about U.S. year-over-year approximately billion. XX% in constant adjusted a grew dollars year-over-year to $X.X basis. or XX% revenue EBITDA currency Our And on

room constant exceeding currency an were basis. our a nights million of XX% year-over-year increase in year-over-year, XX% up XXX worldwide range. Consolidated Our about or the on XX% booked of end bookings high was guidance gross U.S. dollars

core European his the on extended towards with night some impact provide this unusual is in the are in results, end pleased due room third further greater-than-expected World to of saw will into weather growth the the part from combination which Cup, a our we quarter, While with financial details some markets remarks. we in quarter. our of slower-than-expected which David believe we in

growth Our ROI to marketing some in has performance performance year-over-year as channels. impact optimization slower rates, has growth continued marketing

business. the marketing past we At desire and traffic increase this about to trends with direct mix. performance the are on about our our channels our are we historical pleased in We dependency have our this talked in seeing decrease time,

direct A is line of which the significant fastest-growing see about capital will platform. channels represents we of health said approximately I new can would total to Our only evaluate importance marketing we measuring one ROIs We that user metrics the also results. bottom channels our use room strong a customers. are we but our and These channels. of our our year business, us talked to efficiency important nights, our users represents the effectiveness spend our XX% the source in for paid deploy which the experience channels, evaluate the offer in of paid of of performance and channel, booked our long-term our ago, continually of not best in provide attractive you

and since customer strategy our to Our attractive advertiser, open remain more the we and themselves build channels improve to work not changed us brand. an us has to leaning make with us into then, help experience that as

Regarding brand marketing.

our first the been in quickly appropriate we we will Overall, travel at experience strong year, end for we exercising that a we long we our long-term customers more of holistic is business. strategy, year. piece platform. to last with on and a our channels. believe experience in the I executing with a ramp new half is direct a alternative Providing the beneficial which this are the we not build a strategies accommodations as time, our effort, further produce increase remain drive regarding of which, brand building have And progress spend campaigns marketing to leading and larger in brand. had and over best order to able in we will impact that term, the are pleased provide confident loyalty a as direct choice We the brand build outlined and value the key and most of hoped am accommodation But prudence customer

ground a than consisting listings Booking.com XX% in XX.X of alternative components listings room which million XX, the other our travel alternative million of is June million accommodation total nights stay. up approximately local and important And to building early focus booked reported our year-over-year. listings, on shows category in product Providing reported which experience organic in XX.X of holistic choice reported homes, in-stay vision. quarter. maximum had through approximately FareHarbor, delivering that customers acquisitions both such approximately hotels, we And grow as transportation and our places our and resorts; accommodation listings providing unique continues for apartments consolidated rate, we of stages investment of a was faster announced for also our and to As growth are in X.X experiences, services motels robust results. last local are Reported

services foundational are providing the and area the accommodation travel-related compared still be volume is frictionless booking in And report of believe blocks we our are payment the the other to that laid. will competitive long we experience a small of and to While attractions a term, happy this advantage. being size business, very in that

rate. Agoda consolidated for an to than calls, is market in remains make region. said have faster strategic APAC are of an this investments we prior growth in important this and is China of and the announced us, remains a investment relationship as recently building our growing ours, continue strategy. growth DiDi there As partnerships. well The we example strategic region through focus as we organically and

to brand both year. potential with and we industry-leading services. this a flow quarter, we partnership seamless HotelsCombined, a global the help further customers leader in during in metasearch this summary, Also strong DiDi's a and of announced several markets. into and the market close a hope KAYAK solid region leading with acquisition about the later hotel scale, increased in report and geographic quarter hotel pleased We to HotelsCombined breadth fastest-growing this way. cash will the through more meta our travel produced and expanded will help greater become margins. presence are us transaction world's We and affiliate APAC In

in We that continue will the this more and believe growth detailed us Goulden, in global over David we on market financial the stronger opportunity. call to focused competitive remain make player term travel for business will to turn enormous and long the a driving for the CFO, invest our now review. I quality

David Goulden

flows otherwise morning. and to comparable year are for third the Glenn, you, operating quarter and relative then good second growth of Thank guidance the results for rates cash provide All prior our and quarter, XXXX. discuss I'll indicated. period, unless the

year-over-year rates by referenced my the current the new accounting other accounting remarks all Gross income accounting the standard. revenue quarter, bookings prior last new impacted are guidance will under previous and in revenue year QX the to discussed year growth we and the metrics, As under not room compare standard. like night statement standard reservations,

results reconciled financial compensation and forecast includes earnings results non-GAAP Our GAAP to and stock-based our our are release. in

beat Room faster than that performance to of QX our our FactSet range. of third results room nights the a room our exceeded the guidance Stayed drove strategy our quarter which guidance bottom quarter. marketing our EBITDA Now booked nights. quarter, the was performance The high grew estimates. ROIs to In XX%, grew row substantially booked analyst in end and second nights margins expanding and in significant result adjusted a optimize for on QX line in range operating margins. in improvement

also difficult I was mentioned also some Cup to the from running making World the larger impact during our on due impact was the World that actual predict. than tournament. but deep guidance into of last for into impact June, larger Cup we teams early I national the observed late our country's factored room in the As call, had commented the to booking it estimated, period We we that in have night many into July, part June.

Northern dry Europe a unusual weather compounding that was had continues. in constant daily QX seen about unusually Cup Post-World dry Average accommodations, the a the bookings on also than versus were although ADRs, in during which X%. on basis, period and currency relatively in Europe of flat better impact We a down Europe, warm forecast rates Northern we've prior for for our warm World believe and Cup, in year bookings. or pickup weather

favorably rates points. growth U.S. in by dollars XXX Foreign basis about exchange QX impacted rates

income the basis XX% an U.S. in by Revenue points end constant quarter XXX grew revenue, July given exchange standard. standard our compared X dollar revenue to XXXX. from which operating billion $X.X guidance, closed was bookings share, KAYAK revenues grew income grew mainly the the for Momondo for QX expressed from dollars XX%, percentage currency Momondo. or basis high XX%. million U.S. constant about basis, previous dollars, range. which by second to revenue since GAAP in and have U.S. and under margins include the under year, net on acquisition the last Group, about revenue was Future coming other the we of second is for of OpenTable, Advertising been currency would grew in points grew amounted about revenue as points by QX same $XX compared However, year. in that gross XX% Consolidated $XX.XX from by reported it QX above grew about the XX%, strengthening rates comprised current by $XXX a last prior from on were time. non-intercompany unfavorable and XX% quarter the by of of XX% our the about quarter the the XXXX by and in including GAAP a basis. operating and million revenue guidance increased to XXX GAAP and of per by

an We in million statement in this GAAP non-GAAP Ctrip, our sheet income $XX.X investment change the net is results. benefit our a QX. excluded which unrealized balance income gain than now due includes gain to unrealized accounting an from recorded equity that effect to in on took rather related the Our

by forecasted. for was rate EBITDA $X.XXX Adjusted a billion Ctrip which excludes EBITDA also than QX quarter the better Adjusted previously XX.X%, mentioned to grew GAAP was amounted gain. for Our and tax the XX%. little

our Our the some due the mainly substantially and channels. Glenn primarily quarter revenue to in lower-than-expected timing, adjusted EBITDA higher discussed, in plus marketing better brand performance margin was to of that marketing than spending digital due XX% efficiency, on forecast, factors

remarks. margins invest capabilities, OpEx year-over-year we described non-marketing new in Glenn in expected, his continue and pressured markets new As as as to

net in $XX.XX, charge the Innovation was the Non-GAAP from tax up higher due the versus QX, Box -- tax Tax Act tax a the the in rates to and rate of year. which of of EPS XX prior XX% point reflects prior non-GAAP year impacts income Netherlands. Our non-GAAP the increased U.S. XX.X%

quarter-end. by XX% grew cash which the amounted generated billion $X.X $XX.X year. flow, and cash operating QX, compared In we at Our investments billion to to of prior

of X%. QX $X.X than our the Our free for of buybacks. diluted billion, second our the through to the which quarter year, during is higher We quarter count flow we returned shareholders by start $X.X approximately 'XX. about cash share reduced the was XX% share fully Since billion

As XX, had June remaining $X.X of our we reauthorization. share purchase approximately of billion

and, be expect conditions, to the market and X to both talked regard to continue to remainder within complete We and our period under about X the last stable of business opportunistic we year authorization programmatic with time repurchases this quarter.

Turning to QX.

actual and our over growth long-term quarter-to-date remainder the with size business rates due that consistent guidance results the Our mainly will quarter, decelerate of trends. of our our to assumes and the reflects

changed. Our not guidance has to approach

the April when used euro guidance. the approximately unfavorable a at expected are rates points earnings in change QX, our point FX dollar basis rate XXX XXX headwind XXX Foreign We approximately represents an approximately an growth last to rates our exchange end were call. of X.XX to exchange from setting where QX date from rates which of points year-over-year of basis basis to be and

a are total by room to X% X% by We X% forecasting to booked XX% constant by basis. U.S. grow in X% dollars on to currency and bookings grow nights to gross and

and QX X% in QX assumes about XX% the X% and to a constant U.S. ADRs on company that dollars currency will to to accommodation prior flat by year. for forecast We X% compared to revenue be Our forecast by X% forecast grow billion that billion, to margin constant $X.XX year. lower expected We QX will currency range adjusted year. X% is EBITDA growth last than prior adjusted which to $X.X EBITDA basis. be versus slightly QX represents between

our that continue will assumes year-on-year yield marketing forecast efforts efficiency. QX to optimization performance Our ROI

QX However, efforts, of these as expect moderate started to the year-over-year which improvements lap middle begin we to we in year. optimization last the

than deleverage OpEx the offset quarter. expect marketing in leverage performance the and marketing brand our non-marketing from will from more We investments in expenses the

last brand we On commented made the half deleverage call, from year. last in OpEx investments lap diminish the we that as non-marketing we marketing and second will

non-marketing X% year. for to OpEx. be which We EPS expect $XX.XX due continue the expect But deleverage the this the to to $XX.XX X% prior spending, half and of versus be in of growth We forecast to phasing between brand second to our QX, GAAP case the represents year. for we

guidance stock repurchases million assumes shares, diluted about a the common impact beneficial of to which share EPS Our date. count reflects -- fully of we a XX our made

EPS of guidance for tax the XX%. assumes XX% compared tax rate prior of GAAP Our approximately a rate QX to

year prior current growth than last We're EPS $XX.XX to Our versus represents year in as to which the of tax approximately X% increased U.S. the $XX.XX, Box impacts is to due rate of of Innovation rate Act higher Tax non-GAAP Netherlands. Tax well the forecasting QX year. as X%

just of I XX%, rate discussed which non-GAAP the of to approximately higher income GAAP the XX%, same rate prior rates. for the than Our EPS estimated reasons year due includes is forecast tax an

contracts to between the currency our further currencies versus do of substantially hedged shield the fluctuations. quarter, in profit net revenue or quarter but gross foreign earnings place of and any the protect operating We the from dollar our third impact bookings, have the from hedges and fluctuation in end EBITDA now not

not in does your change forecast we'll that, travel market particular. in assume in general the in or With macroeconomic take Our any now conditions questions. significant

Operator

[Operator Stanley. from Instructions]. question Morgan Nowak first Brian And our from comes

Brian Nowak

two. have I

first one, performance the optimization. marketing The on

we think into for the business half further half And efficient to and still the XXXX, then performance next on of back curious, into philosophically, and optimization year? expect for looking go Europe. ROI as are more we and areas into Just secondly, into back you should that

this given we business the of looking years the color you're on about as potential the kind your next, should further large X think in single-digit Just Europe a European to of any overall room largest so, growth for growth. is call point? rate it, business for over guiding or night at growth the how How

Glenn Fogel

David Brian, opinion on give first, chance of a I'll give it's comments give Glenn. to my then his I'm all this this. going to on

regarding to and this reasoning terms very think, a in very this particularly to is in what But influences direct building dynamic what and competitor that and to to pay-for-performance we've said talked going are much so in important when and, my more prepared in what's our markets why and to optimize point are us do powerful to So a we is comes optimization, out these It's happen ago. past, marketing year what hard what of about said very it trying brand coming we're remarks, because about decided going there the many your do. we predict out and first down I I almost we in we to started want approach. really to what

year exactly ago, I said I a this. think almost

cooperative, is of together, cooperatively those with that great And a is better sort been something are is not that our For to helps something we've of lean to that experience, advertising them. work of brand, build that build platforms a so them. we're it work that for in competitive customer us willing number with we business and both willing that with again to always something can something doing create us but is

Some are than more others. cooperative

terms areas, I other consider very out, as But in areas, in both in our would business business, we about So the answer is urban non-hotel we more is provide. we've still to still of to the have to Europe. we want on Europe. how depends the be And But to there's out the opportunity that which relatively biggest -- it's NHA, holistic fast regards in small which a then part about but a a very building bit area. core it all of talked a even business in fast-growing hotels big also site, and area. our left it travel we It our ramp accommodation. a is I want geographical then really a others to talked to lot act. that, service in And point have overall In are Europe, of yes, going travel

there's of opportunity think still there. I So a lot

believe all of all. do over I'll this out David. at We I are is it are different running of not And in But it. where to something ramp we development of stages at that turn

David Goulden

Thanks, where certain strong us travel. types very share to in grow, just shares the there's even market I we've lot other that we I not Glenn. but in what have of been strongest in into only No, think would space. core opportunity hotel a travel in areas looking the as in less and reinforce the areas, our particular of call white an markets, obviously opportunity, it's I'll for And new also strong

growth we dynamic much we So in to guided Europe. the the well. of of market QX. a we performance rates And above in of opportunity going lot driving marketplaces. a growth and think results very Obviously, what are These in there's number I again to optimization, it marketing large summarized saw good think of had sitting are you very over and our a the Glenn QX piece in overachieve beyond -- optimization, terms what back

recognize channels. we these are think important that I

continue look they're us ways to well. to for optimize, as growth for We but channels also

It's is a But always there's dynamic a little to we marketplace. Glenn said, -- difficult bit predict. it balance. So as a

in in growth to is position channels in it. where now right terms always terms we're and optimization way there fairly we are good between a of the these our constantly of summarize in think profitability. I the probably experimenting are areas But best balance

Operator

May And our from from Citi. next Mark comes question

Mark May

well past, poor not think you as flexible. in be I it's as in terms is Also, overall seeing weren't the on traffic changes think what, just that in way from obvious you you why incremental tend as to the the follow-up, some consumers you had World the said to I news Cup know pretty from But question in probably nitpicking, travel of impact it's if hotel case weather weather. quantify channel? to that you around? a that and focus if And but that that just the anticipating tends any impact this of with be, Google's time any, would arena not are of necessarily search your share a possible be

David Goulden

one me for Glenn and So one. the first take to let the Mark, hand second

What June, the World to in here, historically, the we that saw July, call, off believe an activity. and helpful but the time, a X.X the our those factor. doing to way to because weeks obviously to two our at a bear well it's teams Hard Cup impact for in impact just is fact, the factor in period the of we in notice Europe. the that World guidance impacted expected. on explaining the period And lot the the had built enough bigger certainly when We We first less mentioned a are mind mention hypothetical, I'll teams by by Cup, we built weeks those Having saw a point did of main the of the there what what factors the we X pretty QX And into quantify semifinals. was the combination did, I of to I a teams that was larger my so have last said found of out. combinatorial Northern start start big sitting And lot in Cup, World it saying we booker booking you than that in World all little made remarks, Cup. weather X had So countries, as have I we an in point several on again, countries including World in things end guidance. unusual during because are bookings. in last and Holland Cup, see impacted as are during many could than that,

You can it see during the game.

a can as well. it period You over time also see of

it into So roll did July.

it. than in weather the degrees. Europe And we've World to in back Cup, they're bookings noticeable Celsius; in go of in beach less is comment that in to We're Europe, comment end to are it in commented after what well. a right it's temperatures want usual on the Northern the we a the countries, of about to through want now. we pattern making So weather going in but terms saw XXX on unusual pleasant In Southern bounce Europe, and when the very sufficiently a XXs sit XXs, as

others see So ongoing it Southern commented our people point We had Europe, has that. factor Europe World I at -- the And see it look an traveling in we bit we upon a The of have a when we to impact. out. as a think Cup of wanted well. in numbers The guide. to factor Northern do QX from weather

we're it about in So wanted the to call explain we this business just built kind thinking out this quarter. and the of way to

Glenn Fogel

regarding I'd Google in good where long couple they them emphasize Google our continue new with with our helps relationship share And out continuing new is want travel their vertical, customers experience. have in and pleased state. of all faster, customers right to to products, us Google of where, an as develop Google provide course, mean, the we provide ways to And well we're away. different where get a growth for not working be with to more businesses really supplier customers and of decade, the we their One, products speak continue a of us to work would a worked world reach I we less China it's travel service I And right now. their Clearly, Symbiotic do And that time. with very been Google, things. the of a travel that. of for any and of to in in an And certain has today, that going to very, that's both over build is customers. parts to last I, it's think work to great ability of a to customers. to way. than to area our are

looking that we're And because forward, to to relation have on working going the to are I we're So continue have going confidence our forward a things we always that they're help with and work going business. can them new good well. to

Operator

Walmsley question Bank. And comes Lloyd from our Deutsche next from

Lloyd Walmsley

two, have I if I can.

asking in First, way. a just another question

a of there's case happy for markets, that in with you in newer that grow your you room growth? Or core room lot markets are base night view your left is the can the and outlook Given NHA your guys single-digit the that are as bit looking And out siloed. than over runway of the next beyond years, hotels, still different seems shift then the few just like faster it given products a left? one, you guys strategically, the kind focus second

So hotel I'm just do integrating experience. And wondering that need by here? team? Booking.com out kind what Just product that's like, for to travel an the strategy can Is do some the what there. platform product? curious underlying risk building strategy kind is of led of this conversion more thoughts as building products, if you holistic individual being core your at of effort investments you Whether see a make develop you you and share

Glenn Fogel

Sure.

are said, back So happy? I happy the you I area, the make to growing, always just fast no never will I statement growth speaking. do want it faster. how to Referring it's we am matter Glenn that we're

in that lay person, more win are teams competitive, no competitive to let's want at. matter we our is a So what I'm and organization and do level always just competitive, we're down. this everybody

and about, single And to versus buy it getting digit? about, is the one accrue question this out and we we Clearly, want do we're we're your are where way. system in Right to where line of and happy in are of always we building long-term provide bottom we to we to is belief profit and that stage is a the the a Now better we believe franchise not? solution growth. or that things this digit, little way are. investing should that, be customers travel. to growth, bit way more going who Part to choosing at us. the holistic we one our David we're around mentioned expect we're kind world competitive And can a are the that in And depends in now, on much want benefit smart And what optimization for where is travel a benefit cost. single

Booking.com an cars, thing that of to though, wasn't Now already in this noting are are that of the has that. point would Well, most customers services. more different you'd out in and that company, siloed use under our our we rental holistic cars make just frictionless, And point, make changes these organization, we're earlier all ground going the sure made put I independent companies on getting year to there? company, transportation the seamless thing building. a transportation umbrella having doing And we're we make which rental now been it's elements to the it's more the ground way than of

And back-end Agoda Priceline together. doing under hood a an I There's of build of too, it into other a lot have work example happening that's lot in doing. and this help things So and of what areas, system. to don't we're we doing to of want get we're but too the out much the details,

against the to the influence end that put and going bring make does -- to always We're that right that to anything the you're it do doing hotel core that's why of potential, business up of could it that that sort with aware doing sure does right what mention right that business? we we anything so core want in risk way. negative we're things checks guard the hotel, that's a the way Now a do on, in point to don't does the risks to about and first, and

under it we think have I So control.

I'm and the way. it of doing where where And we're the think we're I position right pleased we're going.

Operator

Markets. from And our next Mahaney question RBC from comes Capital Mark

Mark Mahaney

more how that right that I strategy, that? about as as explain in you didn't you Is both when wanted. explain that wanted show the about could why have didn't margins. brand brand more. as so you this advertising. on loyalty spend how is? -- of objective you the of for but so as also or little And up to sounds judge advertising? you the advertising better -- there bit of goal like towards able brand what's find the that picture, channels? a would growth kind pricing, are toggle favorable rapidly goal But want bigger out room ask goal And growth to going advertising, quickly the more think -- wasn't the away performance seems liked advertising occur to margins growth, the it you the on get customer it build Just you growth wasn't strategy maybe marketing towards just as you're spend know as -- switching if I'll advertising you're couldn't you I brand a very brand a ROI up to you'd trying Is little you should night you'd yourself bookings do it from in looking the this, over clear, weren't the pricing and you bit successful that think spend goal? the over toggle The the those, and said

Glenn Fogel

at a Mark, talked have something not wanted about that out that's would very at I liked. prudent. prudent would yes, clear which I would that spend of building the brand going a as effort. as brand, word beginning And and the in towards used would do made to more we we function include direct, very the a we that I fast said out call And we beginning strategy that did bigger this a we be when the way. it

since because then we're the I this. that's how every word think prudent doing I've time used

to that see rinse that. should are it; and is if out things shows working, getting It's what us, do not channels figure what is money things Our mind of that these video, using it. that's sorts the work pay-for-performance appropriate we data if new how you're not things, And going? your then on do and And what what different no a more an we brand new, think through And are many it kind change TV, adjust experimentation, get test, there makes And are relatively of of around, DNA we So of over things right where to what are you thought our and going thing. we sense where results, thing, it, in. result and to spend repeat. have, on as are my from just process. well, you're all on in built you what we It's it? working, signals was now, aren't it's the the out of of go one out in these that, are if excess go that not when you than experimentation, creative channels, all it's iterative responses

that that's So one.

you see and what's can is more of direct coming, measure though, the your getting why direct. effort the and we're users terms is brand that's we best XX% And I think way our to that in wanted And this showing are growing. more When In it's goal, that's business really bookings new coming direct, at channel. working. point out approximately of I that

that's working So as of like what brand the not. what -- I'm using is thermometer, that's or sort a see,

Operator

And comes from Lynch. question America our next from Post of Merrill Justin Bank

Justin Post

couple things. of A

deceleration year you this held up really haven't changed of your share, do of the did gained you June anything David, guidance, the think last you in in you're at, off more housekeeping. changes And the your on Any share recent was off data or years. And as that kind big one we maybe trends? market in start July? Has then then, in that of improved you've Or much market If First, couple a guide prior as industry of slow months? see looking July? there? on the

that's I'm are in slowed Your your Was much marketing growth the this change hotel take booking the underlying because and business? to the rates any strategy. just assuming a higher take rates there in bit quarter,

David Goulden

I'll thanks. those the gave kind which of them. Justin, you in order take

can rooms kind which look total quarter-by-quarter what kind see month-by-month of that share in our is so and on to pleased with continuing on the we at when we share, available portfolio, basis, of of our we a market measure share a number. So gain us or we're manage,

in an what call rate. that, is expanding portfolio. we that sell-through Some people look continue gain our share at when But to we

are we with pleased So that.

has arrangement In not terms our to guidance and guidance of want approach I changed. to the -- stress

did an out and July, we account. gave into what of factors. we And into We coming a looked which point of take so was to important the June at we saw look that's number earlier the at And obviously deceleration impacted by to When on pointed I there. during of some that remarks. so I potentially my guidance talked some opportunity reflect does rest about out of quarter, a continue the comments also the the guidance,

impact slightly of the mentioned what book-to-stay well So the as just quarters, kind you're take in probably that windows, factors the those QX basically, are guidance window, other of things Take rates, probably the which in ratio, couple the we as as last seeing impact nothing seeing have it's of quarter. probably biggest for went the timing upon the you're into shortening number. that that rates. would particularly than But the of book-to-stay --

Operator

question Cowen next from from comes our Company. Kopelman and And Kevin

Kevin Kopelman

questions. of couple a Just

from so heatwave? comments, extent you've any ongoing, impact to be weather. some of taken you've -- just and that's to Or think because on slowed a seen weather. it you I one so better taken give clarify of question. on ballpark Can us from you're Northern And negative sort that And quantify have down to pick-up not Europe impact totally First, from you've then you the there, clear what there, more that's hurt then previous assuming so growth? rate kind the

David Goulden

going pick me the -- yes, so happen be to predict Kevin, weather. to hard the what's so clear, to to let

end actuals. see here. in saw into anybody impact with the impacts if in our second was of But the that, obviously weather July some we weather combination and did July. saw half the the factored think we Cup, And that I doing be we impacts of something wouldn't we've and we of pattern, World that knew else. pattern sitting We'd yes, be had of

appropriate approach have, from in level an guide. we taken normally QX and of we guided our So deceleration some as that do,

kind So question? the in said second -- what of And I of that's what's was your reiterating what exactly my remarks. part prepared

Kevin Kopelman

Okay.

just on the on understood And business. part. that a direct question then Okay,

in nights. So you information better. how adjusting so you you're it on have mobile by we by may specifically, accounts brand app that that And influenced Just give understand you that? you you clicking prior your of including direct that the keywords? on us in SEO? advertising said including disclosed SCM advertising? online can are for branded about addition, traffic And out period? more You been can defining XX% XX-day nights where have users are been Are including you driven And are bit a on little metric

David Goulden

Sure.

were So non-paid the direct basically, users channels, through is not paid. come

will brand not it It So include would SEO. brand searches search. PBC or include a

of expanded be have know I a it, have from view. gone I important through And of we're but narrow of well booking. traffic, appropriate very clear, direct. all Obviously, maybe a coming with view, others course, definition taking and broader an taking that's direct think app. lot to slightly through come we're very make -- So advertising, a of the pure specifically, people they a but that paid for where not a we've It a mobile that good. is piece and is user but our when

Operator

And our Douglas from Anmuth comes next question from JPMorgan.

Douglas Anmuth

in appreciate into David. on and else we the notably in Cup for investments, to actually and in the stakes efforts help then, is talk strategy bookings fact Should quarter? drive the given Glenn, your more XQ, your on can certainly and view that about the the FX-neutral China, Meituan that's and is investments and the in anything the growth nights equity just there business? the But they easier how third operationally I a here And color just definitely bit that's in room in value there you little comp China? impacting weather. the European tie bookings World DiDi So can or they how the more

David Goulden

-- take comp, about I Doug, talking the the marketing me you're Yes, performance part. optimization let by I'll think first clarify comp.

clarify me there. going on just So let kind what's of

share of the optimization in total. But lost growth channels we across optimization. aggregate. also, through not lost cost resulted across but was over performance do the our profitability, benefited kind of performance in we Obviously, so partial -- time, we've marketing is spending not reduction those here, last And of them only believe I'll much it's absolute, but share reduced said, of we've I much as we marketing a reducing some our do we quarter in obviously think pointed So logic has also amount channels just in walk kind growth. us in out, you believe quarter

not overlap really we've time. So a got this full

don't b, expect change compare. it in a, lapping significant in a a we to from it's So uptick only share; those QX channels, growth wasn't because big any in and because in share in see partial change

Glenn Fogel

growth little -- huge side there. bit now. any strategy Chinese talked when industry. And you about worldwide I'll we've look travel growth the of you'd the in at, opportunity have take And the it's really, In this about a -- we the China right China, locomotive I'll talk see

I think of less or passport that China. said citizens traveling I stat than saw out Chinese a XX% have a of

that. of growth want get So that's and a we to of good lot potential, a share

Now on of nonlocal That's though, a China truism. more is difficult the work for absolutely flip a side that, place to players.

with things. companies are develop opportunity, abilities own do establish that brand China the time, same within maximize partnerships develop the using to there, at to who is with Internet is our have strategy our our people to customer our and, own both bases So great

and DiDi, Meituan. mentioned we mentioned So you

just in Meituan of in You in have a we partner over out, $XXX made didn't a investment invested big Ctrip. We million. mention Ctrip, We also to which $X ours. $XXX investment in billion $XXX an million, And is the this million made DiDi. spell

what we said announcement a Really, repeat pillars about the made just there. Now to bit. DiDi, when out that I'll little X one I scope

and The people cars critical Chinese rent travel not not do we've is first who thing, And in are ground that holistic is drive because China more transportation. to system. transportation and about, even is China. talked in And ground critical

or when how they is people, a with around? go Agoda app important frictionless seamless, to and That's that that got customers So to the the way one up customers, our are thing. get get are app, transportation that's you our Doing ground China, going to apps, with DiDi. DiDi Booking.com way by to create they to our going this powered to get that to this come of able deal an

running. one So a that's be customers great for we going when of and our advantage up get thing to that

types DiDi among The customer that, our part help marketing our on build them. pointed good of doing each to And is as agreement, do very of and too, that's going thing, of the investment, the brand you is with yes, DiDi, third we that And of want through second programs. and to is different course. we're important of And is return types base. us this help part get a as out, different of this it why

what way in try all not is for the opportunity these areas. say to a I'd and some have of with we smart they running customers inventory, And and share them us. we their We outbound yet, inventory this Ctrip, don't is we take and what's hotels. advantage in, the travel have of the very That's with build great but we early. are And they Now so app have exciting companies. people it's we're very, have we going what get perhaps perhaps easy, And we that price. DiDi-powered better believe cooperating don't Chinese and they are and sent we powerful or very way can services it's things obviously up to their to Meituan And and them that have provide the be hotels they both would When see within that with outbound future. have inbound. can working with

Operator

Naved our question And comes next Khan from SunTrust. from

Naved Khan

Just a couple.

I new customer Glenn, more it's been on direct then the I impact give advertising for brand So the you at think color traffic positive there fastest-growing follow-up. this last, you can channel least, a direct And And traffic? year? just for maybe mentioned the doing have acquisition. becoming Is us that some that any this from you a purse on have

Glenn Fogel

systems is through suss developing point service out and great of the service. People on service a to, a immediately us loyalty. say, look loved to and somebody that time getting. us they're not brand. Amazon are by some hope the this some reason at service. have the point travel that stuff click, I'll some it, are to they're to see who builds Amazon. of in is because you direct. paid We of that comes coming buy is came better can People of are to is it And first Amazon. used spend difficult direct. the it's people our The that, off engines they we because the Well, now search of part and much directly And is maybe They're better, -- not going to it going Certainly, business, if to to can what benefit

hired we frictionless, personalizing same this stuff with U.S. we're seamless in learning, up sure way your the the be why in that best then all the things people fades So follow-up? working long the want us. that going are the making price, people the customer coming you it's you and use, experience these doing working on, we're we the have all marketing easy, data a have that, space. you are the winner why of become we accomplish and the to about to service. things the us, -- in machine go having things, what best so We are is, areas which run believe convenient to on service way a easiest though, more we're selection, that greatest Those reasons side the all yes, go the of just the people why to mission is on scientists, the service, those able come brand we always best out. people to are like so And people, And people litany it in to What travel our to frictionless, of Uber. things, have experience help next aware use we into of win End and background, by availability, which day, talk world. best is to payment

Naved Khan

Yes, just the the on anything yes, And efforts. on front? learning doing cloud? on you anything the machine Are AI cloud

Glenn Fogel

people. Israel. being We very as lot course, stuff. Well, of in as brought that natural highly make are try specialized processing a a doing things companies. We we're brought lot a of bought hired AI. of in We've Evature a on and And sure lot done and It's of possible we've technologies called company out some utilized. of to all things language quickly in

not going specifics I'm cloud. to get Now about into

cloud. at things some do we course, Of

flexibility David, to call him anything to a what up things, we're all our those it, add background, extremely people are center determine I'll particular. what's the And and And on to capable things from out most of to do to technological data leave it way stuff. in qualified comes the best Some it, actually do gives and going efficient who IT going not to what's our but to way let I'm most own that.

David Goulden

which things public public our et a a that value across are recognition upon cetera, its hybrid would et in capacity, volumes, I and of and looking based are as we're And decent learning, clouds clouds spectrum at inside is language, of sitting certain including both cloud, strategy cloud. Yes, applications private a a cloud very much troughs, performance, natural cloud machine better like range attribution whole private some basically capability, cetera. and in a characterize

we're that's taking, So that hybrid and is approach the think the I appropriate approach.

Operator

from And our from next question comes Brian Fitzgerald Jefferies.

Brian Fitzgerald

impacts penetration ones. NHA A you're you to follow-up advertising about doing, inventory, testing seek that spend. spending. bookability and depth the seeing the not Post-GDPR, grappled -- of as you it then, the Mark's a that slowness there, ecosystem there? digital And implementation iterative with direct it's an the about Maybe like there? appreciate do as and but from certainly you're or how couple deploy guys, malaise brand there? sounds GDPR maybe brand your cost EU nicely, to of We feel Any questions and Glenn, overall of kind quick breadth some to growing you the this

Glenn Fogel

a I so because it's thing. and this want think -- didn't don't out to short-term Brian, I call GDPR, it's

brand put have develop did of into was a sure don't our some platforms that making so work GDPR. were But halt of of so some were to they doing somewhat they our to they spend in the much too for resources delayed more Some could little bit, this. ready

the to of the play again, in pushed and And some gather, testing But -- experimental doing talking off. particularly things, the issue. had things timing be were short-term for So we're we that's to long run. we a

it was, point. big that's X so month about, a worry to took going a whatever or not not I'm months, it So

I'm great and million the certain -- where And house more I stay even and develop then when condo you're of the not that customers doesn't But for about I've effort need to have they I supply, in we I'll NHA, customers the Vale, getting The terms or not service, And And But a for both contrast about just I We've a before, the hotel say them. to this then less our service. also specifics, owners. on in really In a. example, NHA to people I that think talked just, fee. people We on come, ease this. it's it's marketplace. those talked the want at consistent us, categories that, Outer -- can never happy areas. that to about listings. have I to the happy? that pay have and two-sided easier the am let's we stuff, in we that around talked a and We We Banks the and this we and feel happy. great always area a say, to they that, want make worldwide, we have, really they feel need core X.X I'm single-property expand and continue NHA, we think more. are a more. the where do we customer that in sure that's aware can stuff see the The can the to how have top talked because see have customer only make world have and have putting about fact pay of compare

the And the because to. But customer here's and NHA, at talk just in. customer do the out this the you that when they're For talk us, particularly it's -- the then not It's we about when driving I we U.S. I so specifically can have great need accommodation. this a there's need aware it's we simple. big we're fee. end inventory lot charge make know not we the what from fee get things the all different And in That's to to to U.S. go end as see, at never that oh, a people, holistic, of about product. to we

a If what it. go are different be is where Europe, you story we're people of And aware working it'd to this on.

Operator

Goldman from from Heath Sachs. Our Terry comes next question

Heath Terry

you're half? to become kind of out? if half, only Does Just get we've sense your of it the spend at acquisition. majority I'm What's lot the I With teams do time X/XX of see think settling the And on competitors that then how Where spent you we have competitively, about the goal that wanted time? benefit brand first had your this. this back on that know you for a is become a about marketing what emphasis, spending Glenn, you customer few curious look to I on. talking a as over pull does marketing. about you like still and brand that? But on,

in In that to quarters these averaged end of to long-term were balance able approach and you your you think sort first And have quarters bookings. time does of QX? Expedia we've specifically changed. the above less space guidance as basis an about back we line that in about the and then, to pulling on guys of that marketing. the what think notable your what several guidance others for on space? it's think Was XXX the few hasn't I the David, maintain the high to your guidance margins expand suggest their How should was that competitive growth indicator seen you how to do relative last about you of rate past, that in is mentioned points,

Glenn Fogel

difficult clearly, question, make target. it's and about it's long-term as always to especially with not come thing But very a to the just future. On very up difficult predictions, try because -- we say, it's brand the a

measure. more brand with whole so area coming Beyond new much in, changing rapidly ways is new important that, channels of is to the

smaller going the experiment, run We travel the be is, fact was where, take, business, general. to advertising to YouTube, test, in saying to So myself we're more in going not brand number, business. by in now and growing, measure going -- just more the four. it's world not the of can I'm percent -- the able does and And look, that in at be not are larger effective ago, is repeat But speaking direct your hard how anyway, do one growing things, example, let's And example, one, and because that to types take what lot advertising The effective, to I is a a I'm area. all, do our and going brand It's spend pin is ends changing to effectiveness. out of advertising do something for we've build particularly in to I all do it it rapidly, use not will very so the second to what is way? year a different this way being particularly say and if what that I was at like then always social believe it. the going the of one advertising. YouTube was rapidly. for more let's said few it years say I'm And take we for When YouTube we're we to up we long everything. it a it's

David Goulden

The and competitive point, -- Expedia others. how

Glenn Fogel

Oh, yes.

go and of then out interesting, optimize, to less platforms, course, to several or now advertisers and less what's money and get customers. try particular to So revenue there's when going advertising they have the go a

slows. their So growth then

do. it they their not because is the doing if same growing as all core had as the even platform rate share not of and same rapidly share, may have though may slows, advertisers they used to before the growth So amount the the in growth be

platforms to So these of familiar some that the amount be past the done would being an maybe amount on as back the may I because who advertising of influence I'd came growth that of is of or in in with say very, spend weeks, get brought customers brand overall in flow slowing travel by that platforms, forward bring online. think we when we that have to amount been not of look who very some spend perhaps the now heavy of terms And see in people probably and now on the type they're That to advertising the and way of it. those area. people how

David Goulden

to I'll into what say was And to I up I quarters, say is then, years that avoid pick going is guidance Heath, the specific think company getting third the point, quantification. the over But has your we approached appropriate. changed several last leave I'll better. just we ourselves the and the we I've potential to and our do beneficial and been guidance. And team, in the some And factor in worked haven't we as and with continue obviously, at same that's one when issues that come look way to

Operator

from Our comes Barclays. Mathivanan from next question Deepak

Deepak Mathivanan

Two questions.

are certain depending to them. these it performance to as of then comfortable of you performance, ROIs these HotelsCombined on you're opportunities the portfolio get acquisitions know with prices safe continue of something should strategy diverse smaller a more channels, reinvest to Are branding we levels? Momondo and say these of a this acquisition to there out broadly on previously, First, build Is on on strategy? you that the metasearch at view sort levels channels? willing that kind and channels you're on that And now then that

Glenn Fogel

I'll I'll that. David on and take two take one, let

pleased closed HotelsCombined hasn't deal. are It with the we yet. So

the and some correct, in and We built And expect end year. is players. do smaller to -- meta believe There's that we whatever. of entire of the we they're synergies organization. Momondo, it you We in and optimize run that certain people to have these out strategy a we is, did are the to as we doing need customer of these scale things And we bring terms that some the have close before so gotten. areas. be the amount companies well And or base, -- then do can we brought in perhaps don't matters one, in

achieve think conscious and with were reaching did and more level now strategy way, where doing by are with when that, get for are we are KAYAK, he And got than we're certainly then. out went we always would bought got and HotelsCombined, And got the at I was see our be we value before because time there, so bigger to thing. initial hopefully. still if price the we KAYAK is Momondo they long deal when a in what But it, in we think, it. back we the we Steve that CEO a And interested started you've sidestepped. always can that you right we Hafner, bring ago this and us, before I it,

think I hasn't his changed. vision

David Goulden

the performance Yes. -- on then And our channels.

for they're First us also important of very our and customers. channels all,

the And advertiser. the more attractive help view brand. and to And customer us channels them And continue. themselves in part changed. that's commented, hasn't we lean strategic Glenn It strategy of as build as channels our a those we'll as will make into that relationship, great actually business. us and experience been expect to build an it we a our to So our

mentioned, are balance on are what ROIs in as we of of terms a channels. what year say in those of growth from now terms seeing profitability versus with and where a those In I decent I'd we're pleased we ago, terms channels. between And getting we're

a never we're to As to improve. and things There's looking improvements growth at looking we're I for incremental Glenn X where opportunity ROI at at in we're we're think those continue closely. certainly place we're And very channels, now those always and said, never pleased, looking satisfied.

are So but not summarize I'm will where today. we pleased satisfied

Operator

Crest. question Erickson And our Pacific from final comes Brad from

Brad Erickson

as of Just And direct you're that then ago? this marketing really Can in just hotel follow-ups. And does supply get about on a couple you today just X know, on talk year, I versus, retention does later the to inventory, rate incremental your say, look what don't year give you booking years certain bigger markets? X, performance spend opportunities you second, geographically focused like if anywhere? in maybe where adding

Glenn Fogel

way the past the have So should very don't to there spell and It do out try there -- area. business, always that, out of terms and is improve map way looking did to other get been where because inventory up our nice out the area little in to inventory. some about for that's the we important do a that great are in things. will an And we are think that do there. road have of where let already, competitors at how the in us parts need to of we've for accommodation where want certain of more we And get on we -- it. is the that we And do a David I'll this. built believe one bit non-hotel second more to trying talked going trying to the great continue be I point talk inventory, in we thing which -- don't done importance terms to our because help it we say was out get same build people I about they doing the are

David Goulden

Yes.

level I on you say the repeat think terms going those I'd to in developed Genius terms business. but that and how a specific our get we retention group with that of in continued data well which has to give pleased in focus booking of retention of has of rates, out the be customer we're a we're not point, certainly customers,

see, those programs. closed-use stronger our particularly close we've now very becoming who business, rate, seen half and increasing only we a to are do direct customers in obviously, part is the much different retention of not but So

the experiences. of So want travel the we whole mix preferred us this more people that growth only is a coming capabilities said, factor where and to of to towards but also, in good back a the not as trend shifts travel loyalty be for out Glenn as business direct, terms as partner us, of broad building their with range

Glenn Fogel

Okay.

thank everybody believe want business believe this reemphasize putting of couple to they terms I to growth points. of want partners of pleased our for right be reason again. we amount to effort be is so appreciate And want I are are at supplier And a thank right One are and hard. them, track. of stage to and out building customers of we on the we're where very our are way with who, no to just I believe to. a This course, profit busy reach there. we the to our want our We around world there'd them, want to have progress. the level So We all right is we greatly the in without the we we them always employees just right mix we in I season and very, have for want us and and also that now. who we worked the now, thank here.

So you, you months. in and see three thank

Operator

Ladies and gentlemen, the thank does for in participating you conclude program. This conference. today's

disconnect. wonderful You day. may Everyone, all have a

Booking (BKNG) 9 Aug 182018 Q2 Earnings call transcript