BKNG - Earnings call transcript Q2 2019

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Operator

Good afternoon, everyone. Welcome to Booking Holdings Second Quarter 2019 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. or facts similar forward-looking are goals other reflecting statements. future historical than intended of expectations expressions and something Expressions to identify

obligation actual most Exchange end Booking statements, please For cause information, to as the Booking from factors Holdings’ of statements result refer recent Holding’s update no Commission. described Holdings required results at earnings as Harbor Holdings’ the release the those a forward-looking a and materially filings forward-looking well Booking to Securities future any the law, that Unless by undertakes in Safe as otherwise. differ of list Booking statements, could to publicly with events whether or new of press

an For and in copy is available section supplement Investors accompanying financial website, A Holdings’ together Booking of www.bookingholdings.com. the statistical Booking earnings of Holdings press with release,

to speakers and And Booking David now, Go this Fogel ahead, Goulden. introduce I’d gentlemen. afternoon, Glenn like Holdings’ for

Glenn Fogel

call. Booking Thank this you, to our welcome afternoon and quarter Holdings' I'm David by joined CFO, Goulden. conference second

produced which end to XXX nights room We are year-over-year worldwide million range. that booked, with quarter, a up guidance our exceeded report the solid of and XX% high is pleased we

for grew above about the Our in high end basis. was by quarter. U.S. non-GAAP our was and in the about range up dollars U.S. revenue year-over-year EBITDA increased but for adjusted XX% which FX, dollars, constant-currency a X% on X% Adjusted by XX% guidance when of

travel connected continued our experiences. global strategic execute to long-term are trip position We against in signs and a leader the business global customers of extended seeing encouraging to for building in become vision leadership we and our and accommodations as our our

our billion scale. half focus and for in largest reach in large the expanding in accommodations gross the over the and $XX we developing online of are first operate and In geographic nights. payments, booked like merchandising a with XXX room against produced global customer investing loyalty, the accommodations, over segments. year, we capabilities million bookings Today, opportunity marketplace global greatest We're the and and market important and

payments for growth, a supply. This facilitate frictionless payment all the relevant by key attract merchandising, market to connected partners objective marketplace. Our provide and will trip, customers is benefit to supporting and enable to us power global options unique

merchant we proposition, to To continues markets. our share, merchandising climb our XX% been We of have now of which of pleased of Booking.com's about to over customers the believe important will Booking.com transaction our result increased XX view in as in Enabled can part steadily rollout payments results customer early by which represents value platform, focus capabilities. our investments its the and pay as we an with merchandising brand. loyalty countries,

frequency loyalty, are these business. Focusing mobile to on remains we on our bring core Genius and increased focus and customer areas, growth a offer program our reach In accommodations incentives our directly. for site expand experience, customers to the opportunity acquisition, our significant to continuing of

to going witness consolidated channels. about good than capabilities become continue important as rate. direct both feel more These with slowing faster bookings and our We here our we mobile progress pay

X segments strengthen the of We built are alternative we will drive specific platforms, the driving largest XX. will on accommodations and has one growth. a of accommodations with believe deeper Booking.com listings greater focus that approximately as June business million

we with where all bookable instantly greater our properties experience best progress building making of are supply consumer in fees. customer believe the we good with have choice We this segment, no being

as accommodation choices, and to business segments We capture growth destination-specific and beach travelers such are such developing other ski also in as new accommodations. capabilities

to to drive where this U.S., promote brand focused such We opportunities geographic we our important select remain continuing on in the awareness as are market.

business new that early is too while but current note we region. or faster brand we this assess it growth, the campaign, like to solid to fully believe still we traffic in progress see direct We would see

Rentalcars.com marketplace, but book capabilities of provide our leading car longer it we a to the cities connected integrate trip, Booking.com. transportation. around distinctive Not Rentalcars.com building entire with by removing the was term, XXX pre-booked service to online is is friction An capabilities meet customer only rental building car approximately travel needs we operating in step Today, journey. will ground early forms also all In along globally. the

of is Another also time. FareHarbor. offering attractions this platform and in providing over And offers to over bookable expect have destinations. date, at even the XXX,XXX bringing was destinations more and with this the step an do attractions just while building out Booking.com, the an online not Booking to starting as can we do someone of now number they over FareHarbor if is ability number globally. small, reservation. begin experience to to have out, was has which markets where someone accelerated the is we're of attraction book these grow accommodation XXX utilizing is activities Booking.com acquisition

are connected that part important Attractions findings, and have data frequency our we like to but product these on customers the attractions we early their increase combination with initial are an see of very what the we're Again, used trip, date. pleased average, of shows, bookings.

company. build in the we tremendous and a play for of achieving will trip, can role this our critical group, the a vision to assets As connected that have brands utilize we all help

recently Priceline a region extensive product APAC and in of brings knowledge learning of packaging Agoda and leveraged data brand developed the our can has companies. has and years machine extensive flight the product on be merchandising. capabilities science across world-class that

be our connected trip to to better and KAYAK's piece knowledge how operating booking better platform multiproduct of our a at an vision. restaurant helps global leading business important will discovery meta serve online customers. OpenTable's us understand

focus on growth As merchandising, and one. driving in job earlier, through accommodations demand continue is to commented initiatives That we inventory. I key in channels payment,

business. trip excited and connected our the also help loyalty across grow to dimensions engagement of will We business, remain and drive many about the which support accommodation

peak experience. to all thank summer of I'd of season. during season, are XX,XXX employees on thank of travel world, an our to over And their and all this busy the now be around our work out hard I the employees our through thank proud associated like exceptional like focused intensely move partners, As our world for world. dedication, would who customers are our you we with. customer especially great throughout a so to are who And send there we millions finally, we supplier the to delivering experiencing

review. over our turn now David Goulden, the will call for financial I to the CFO,

David Goulden

quarter earnings you, All the focus Thank then prior discuss year on to the and review relative reconciliation as well second results operating the be the Information rates period, I'll and are otherwise our found comparable GAAP indicated. afternoon. guidance for in for good Glenn, release. as our third year. growth unless our to full regarding quarter, our can

Now to quarter. the our on for results

Our XX% low of growth was XXXX as by saw Europe. in growth and night quarter night QX range. last booked outperformance we room June for The unfavorable the weather guidance of greater-than-expected exceeded strong the in room lapping year, was which end our Cup the driven World rate growth high in a of June the the results from benefit of

world in in than growth our grow of largely our exceed our Room in remains Europe in environment to region rates macro this night cautious, growth line the the expectations and faster quarter. with expectations were room continued QX. night the continue While Europe for the rest to

constant-currency which down were approximately about better guidance our X%. reduced for versus down accommodation, last in basis, X.X% QX on or foreign rates X% QX ADRs, was daily year. Changes U.S. than exchange about growth by rates Average in in rates a that's dollars

growth rates FX QX in and impacted EPS and change the a point estimate by We X% bookings, gross by more. EBITDA rate about growth similar amounts revenue

by gross our the about range. high QX constant-currency end of XX% U.S. guidance expressed bookings coming a in basis, by X% in dollars grew grew and above on

quarter shift QX than non-GAAP billion in Consolidated second grew a U.S. about had constant-currency dollars timing a in revenue expected. a less Easter basis. the holiday and impact on positive was growth by our rate, on revenue slightly of X% the little The X percentage previously greater for than XX% a point impact and $X.X

about adjusted growth for revenue Easter non-GAAP was QX constant-currency a basis rate on and X%. Our

EBITDA other up and end of non-GAAP on a up reported was year-on-year and XX% range, exceeded revenue, the grew which which basis. and on a in X% billion, mainly is about QX $X.X of QX. and basis our guidance X% KAYAK high for Advertising OpenTable, Adjusted comprised by was constant-currency

a and for Our basis X%. growth adjusted on rate constant-currency timing was about QX adjusted EBITDA Easter

quarter better was increased channels. We which with driven drive from remain in the our an disciplined our quarter. of the performance than faster spending points which than channel, the expected by marketing, room XX to in direct Leverage continues grow paid basis nights in mix about helped on leverage

and customers, performance to see over While we'll we as these working an in effective grow direct rationally to we to keep optimize channel way acquire time, to marketing channels spend growth. channels our continue

more the quarter deleverage. our direct we year, our in traffic drive points our by versus basis QX XXX spend of part last contributed As about XX% of websites, to effort marketing on which to brand increased

grew primarily of the gross grew platform Sales in due other deleverage, due our merchant Booking.com. payment-related points in expense of bookings to QX certain quarter last versus lower to in the XX and and basis of growth other year about contributed slower payment XX% growth expenses. Sales than

slightly small of than a quarter. Finally, our in lower personnel forecast in contributed expense leverage came the and amount

reflects non-GAAP estimated line XX% currency and was quarter. in the in about grew Adjusted and XX% net with up year for prior rate is income non-GAAP the EPS in XX.X% non-GAAP the guidance. a of QX, tax versus Our Non-GAAP $XX.XX, year. timing, prior Easter EPS which our

quarter. in Our XX% benefited count the growth share lower EPS in QX

and to impacted GAAP year. a to income to points expenses. a was adjustment personnel X%, decreased operating On a million revenue million $XX by GAAP QX by operating increased margin basis, basis also -- and by favorable GAAP $XX operating grew income XXX adjustment last unfavorable compared

net per million GAAP to or income XX% $XXX $XX.XX XXXX. share, QX from amounted QX up

gains, losses of income gains well million investments net Our GAAP Meituan, rate prior $XX exclude a which on includes $XX our year. and decreased We results. We quarter, remeasurement and non-GAAP from of million income. in of remeasurement for X tax equity eurobonds as XX.X% had QX adjustments our from as Ctrip unrealized operating unrealized impacting adjustments the and FX the from the losses our pretax slightly these GAAP

flow, to QX of last In of billion X% cash compared increased operating year. we QX, which $X.X generated

We $XX in repurchased and Our the our authorization $XX.X of the authorization cash billion our by was new quarter free in which end outstanding $X.X repurchase at of prior increased $XX reduced to the previous stock under billion to year. quarter. billion $X.X completed repurchase early QX, the XX% for amount billion our which compared million, May flow about

stable market of billion $XX.X outstanding conditions. billion cash authorization We and expect assuming to business in and complete to quarter of We X the with X investments the next $X.X this and years debt. ended

of some facts, QX. discussed on will through Turning to outlook our impact guidance as back come walk the guidance. want the our call I I'll that full to briefly for to the for last we then year, our

XXXX. Starting with our growth in investments

for over customer last quarters, we growth, and X loyalty. As discussed we're the investing acquisition,

Our new new growth trends on we're campaigns, were while our and mixed seeing running launched our the this we're from below of traffic visited brand brand by our encouraged the brand marketing by And the early and shift brand some direct our continued is channel short-term spending towards campaigns return year. campaigns direct expectations. -- earlier new our

result, remain the building second of brand year. brand. our plan levels in spending we As on our We the marketing a refining to on committed half

our to merchandising Turning programs.

results to continue We positive and to these plan see investments. continue

they'll results, take We with to time are but scale. pleased merchandising these

our to we'll seeing programs incentive positive customer the continue results Finally, regard programs, better with spend and ROIs. on with to acquisition some we're

we pull we'll scale investments, and and evaluate not ones at the growth that that the working, in to are year, back we these look told earlier on you ones the we'll As hesitate as are not.

the intelligently we these the refining investments confident our in benefit long move us are we're as investments year and through will term. So that

year. to continue growth similar EBITDA a expect but our versus first by in smaller in our these reduce half the the investments the not be XXXX. be the half, This expect impact points impact will percentage in our in change have which We investments expectations night EBITDA a growth on less in collectively return growth growth the negative we room Overall, on these half. the in second spending half, now to does rate few the a on second material for second results will

the Now impacting outlook. facts mechanical turning to that's our

points This and and our year the million expect French the about year Our guidance G&A tax, reduce $XX impacted respectively. and QX reduce full digital which in EBITDA full respectively. QX basis EBITDA our services expense million, recorded by points, basis by QX line. we by for XX and and XX year is will margins This will full about will $XX be

our approximately percentage quarter. through full our revenue be line gross bookings in non-GAAP current which and points by outlook year, in growth growth guidance, with reduced Using will the EPS to assumed is FX rates for last X

Finally, constant-currency basis any macro the in With our low outlook does a it EPS anticipate in digits in remains environment. on XXXX. the change that double expectation our that will not context, non-GAAP grow

We expect gain to accommodations continue global to this in year. share

QX, our of which Let's is largest the to attention quarter year. now turn our

percentage are our expected EPS or gross when rates QX EBITDA our revenue negatively year-on-year dollar-to-euro percentage use by We of by to guidance. exchange impact points. rate a approximately points, growth rates approximately for bookings X setting Foreign X and non-GAAP exchange and $X.XX

QX. X% other we're Based the forecasting on where nights booked factors, we in are to and grow at looking all room to in X% by quarter,

slightly late summer season, compare QX in which a this As last year. unusually in year bookings a reminder, resulted the from higher benefited QX

grow gross and grow constant-currency in a to X.X% to We dollars, U.S. to by to X% forecast basis. total X% X.X% on bookings

Our X% in X% X% to we constant-currency be increase saw will constant for currency the due revenue by lapping forecast in X% in U.S. QX the We to a QX of forecast basis. experienced QX company over than and ADR of to year. down decline which QX last assumes dollars on up a about be X% in we greater ADRs is to grow that X.X%,

basis. X% to $X.XX X% represents a QX dollars billion on adjusted which EBITDA billion, to range to growth constant X% currency $X.X expected in is U.S. growth between or year-over-year X% and

from channels We leverage paid marketing are acquiring the on continued volumes expense high-quality QX, lower in and reflecting our performance line continued the focus in forecasting traffic.

refine marketing we quarter. last begins a marketing spending brand to a the year, expect QX to brand our in amount from As that spend comp see against of we small higher leverage

grow due payment Finally, is Booking.com. to our the faster expected ramp-up platform primarily to sales at and revenue, other than of expense

EPS QX XX% we expect approximately currency, We non-GAAP QX approximately to to $XX.XX are forecasting to XX%. of non-GAAP EPS for Normalizing $XX.XX. grow

Our which due an last of QX EPS of tax than of XX%, to year. act includes forecast was clarified QX non-GAAP of tax that in estimated approximately last rate lower is a provision the year

be We tax to last XX% year expect full continue XX.X% non-GAAP XX.X% our year. rate to to with compared

EPS last $XX.XX EPS a share We QX million non-GAAP which forecast year. of shares, count $XX.XX QX. diluted below and about Our guidance assumes XX.X fully XX% GAAP QX is between for

tax guidance approximately rate EPS GAAP Our XX%. for QX assumes a of

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

the now open we'll that, questions. can your line take questions, for we With Operator, please?

Operator

Yes.

are lines Your open now question. for

line Cowen the Kopelman from from comes question first of Your and Kevin Company.

Kevin Kopelman

And also much. Hi. trends start and on tough comps through environment and comp seeing us so us growth terms easier on us in give of update heatwave to Thanks. comp Thanks room Can the walk in ROIs? quarter. help the that an then have the you you initially as quarter, what walk in both the the advertising third -- later nights you're help

David Goulden

Kevin, let that. Okay. take me

So a to of understand to the I there's couple things think QX relative guidance. important

You have back QX against strong compare. to talked you still strong about the guide, go relative them. easy some June, Obviously, of result in if we

last making pushed booking that up. a year, happened season what mentioned, I coming bookings into more QX, As delayed compare summer harder

kind point the Obviously, a an a our because QX we positive just look had impacts normalizing to to back and QX on and from has and in obviously, in I and there's World negative the positive QX. negative weather at helps It Cup across QX opposite QX, in then positive QX view, the step guide been what's important few room Easter to going on QX factors. think there's and then as night the of and it's negative impact. to ways and of the us the in said, QX -- and

all way of the of night that's QX, and the kind similar all going If factors, you kind a QX And to those in normalized normalize about room what's projected essentially, think for growth on. band. of are QX,

give kind enter flavor just monthly the and a how that going compare from quarter the harder to and year, we of compares quarter's the we move but QX, gets we little and changed. away in try approach last look as the majority as guidance September, Obviously, we you because within hasn't the of remind saw the of you a stay through growth said, to our

Kevin Kopelman

Okay. Great. helpful. you of countries, other then that across legislation one as how digital play you're tax other see That's expecting just you to give us very and for Can if question. in Europe outlook I And an the ask kind can out?

Glenn Fogel

Sure, Kevin.

tax, up that there passed France into also are that tax a other saw similar you So lining a of are potentially put countries to and the number effect.

course, very disappointed and their of to we but applied share believe We done all to want equitably this. taxes, companies We fairly companies. are, those be of should to taxes fair seen pay have

So what has that. not do been applied does

hard It's very to what's happen. going to guess

You have against remarks focused administration there it believe about have the out against against have been the of that administration a American that that the by American we're U.S. France primarily remarks companies, tariffs the some seen as even may and of French is tax, some come counter. very

believe taxes. going people way is express So and who to of lobby this to we write is forward play right go DST the laws. story the only their fair can knows not can't that is out? are paying to how this the that End We we do ensure

Kevin Kopelman

Thanks, David. Glenn. Thanks,

Operator

Your from from line Capital RBC Mark comes the Mahaney of next question Markets.

Your line open. is

Mark Mahaney

Two years? mute. do when out you'd you're the not of in kind you One, on about year? of advertising, it apologies just the -- things. X the that. And is -- sorry. getting for brand time you talk is like like -- Its of there it a X results am kind which I Is I seems you that. could it

When experimenting the that with optimal advertising marketing doesn't itself brand do the backstop that for well of is brand lend But for point? continues channel. you? been go, You've what's in underperform really just to reach you performance brand advertising, It's display to or a possible case well never industry itself talk year. over that it's maybe just advertising advertising go, about or the point no that

you're talk but about could customers seeing it and little And you're just are of the just you to you briefly, on are it combinations? them just cross-sell then, activities us way? how activities other secondly, bit, is of almost years much next cases an could accommodations help face between where from think Or if I Thank the and synergies you. activities. able Just opportunity a mentioned in you go ask, coming couple the entirely that Glenn, segment. in getting the about for

Glenn Fogel

Sure, Mark.

but that say but really let's things a right if want We saying test, believes out So very terms see clear mixed and to talked be. we've are I what adjust it situation when it's the been company advertising, laid results always we think aren't of in to a always in David do that experiment, in we want brand it. now, better, we them things about

are that. said, going going be. So Though, the to what half as spend the to we're in will be continue of to terms we second year, for refining the going of do David

us is And business. way to it direct. an our do the talked forward. for in I how bring Particularly, us it important direct we've going our important brings one key has this to part strategies is in continue That about of the advertising build brand to customers to that overall us. past believe

believe and the see advertising. some how the has results people positive past space, understanding be. as based, more being think the travel potential will things have that if of some for achieved we more more ROIs much in I become you digitally terms by we advertising brand And effective what other will in who brand that And in the doing look talked certain at you

working. in So say, of you it's terms when not do "Oh,

I don't that's to doing." stop Let's happen. going think ever

the in this to I'm and us to believe it, for continue I important to anybody business. is on we who's need advertising print I think work improve retail looking and always do to going be forward that doing upon that.

In we do about attractions part a city things. a want he of very Nobody that that is question our to attractions business, to your of believe trip. the second goes sit hotel. connected to terms important They

of to believe that easy we how to seamless, these something and going helps are the get attractions. people a they providing giving is information need do provide experience better So frictionless, all that terms things, to they use in

should believe reason, We easy-to-do very seeing said benefit seen very have but from the slightly we've we're whatever I thing, seamless, early, travel. and it are that a very us, and an for book this now, people they bought who frictionless, and right from achieved attraction that, way is believe we

it I so from And continue the my I to slowly buy an they know results having be separate do prepared we're yet, on big far, accommodation. back And ability are mentioned bought don't are that roll but to coming with build out I attractions we going the remarks, more first frequently. beginning how know will in also it. pleased to and to as we're

them, the that can plus in being case be reasons them bring the fix wrong customer the greater I by that's these believe future build and but goes that once, you any to will them it they when need, trip, much travel, need in that cross-sell back we to the to going go they loyalty. the giving they I they terms cascade place wrong, at I don't things one-stop accommodation have things people something make when and of to things everything throughout provides to all believe service the in bringing the customers do shop, how better able and one and that make come of because a for sort to result a come you of data all people all able

Mark Mahaney

you. Thank Okay.

Operator

Your next SunTrust. question Khan comes from line the of from Naved

open. Your line is

Naved Khan

the you spending as the you with that -- not been faster? making Is realized last fact Glenn, it's it how the the efficient out had the you a is do where in expected. traffic about spend direct dig though into -- little into to be? spending that wanted your quarters? referencing as quarters, reconcile have being are growing X your made X just that I brand commentary, you Or not or over bit you So to have you is it that would And and come I that still last few the

Glenn Fogel

I fact about Well, I better. new I to that I'm the February. be know launched just And that I'd speaking to like the end still be doing reconcile like again, how specifically campaign doing say see to we it's we're do to that, am better. And that okay. the not how like saying at saying except of it well, else I that guess don't would us do better. I'd I'd doing not I'm

There look are metrics be you you to look you certain are our would health good, when parts at brand and that at better. them like that some

and that just way to going test we're to always another is this As learn, and it. we we're going do said,

Naved Khan

if follow-up, looming On Understood. for outlook environment quarter, deadlines in, baking the Brexit terms a of sort may. And and another October? are then your you what macro in I in of the third

Glenn Fogel

the can calculations, everything this all negative guidance, on we and and impacts road. I will with. we every down come the we the that some same we're travel things have do what some Well, up when recognize now that all our together we interesting happening that at are say may there right is look We we quarter. and putting take factors everything it put into

parts have what be China it in certain being others. U.S., local And recently environment and seen, of central you've unrest one, terms macro between other a everything or may that the whether certain indicated in certain banks Europe weakening countries. big to then, be certain things those from of

So everything together, that number we've put came is the we this and up with.

Naved Khan

Thank you.

Operator

question from next Lloyd comes Bank. Walmsley from Deutsche the Your of line

line open. Your is

Lloyd Walmsley

questions, can. if Two Thanks. I

assets have, booking, rental, car hotel guys flight search, meta you obviously, Glenn, First, strong restaurants. across

looking where kind about you best of vision, long-term have the vision? assets at with to trying are to just the you to the building the of you product paper to when versus sheet should and make think a what So that extent clean guys kind of of get

see maybe otherwise is get stack And kind rebuild together there? of terms of working new it things all to take And going how in tech like things? what do versus you some or these building a to

the And then, big as changes asset a expect CEO operating should Thanks. just I of guess, you one, the we moving at kind take forward? second as any that Glenn, Booking.com reins

Glenn Fogel

Yes.

always start in all everything do everything things sheet to Lloyd, that. paper a all a tech, and newest love a -- piece ever chance green of So but you has field, would with do to the clean nobody technology, clean with

retro, now built have things You've old already things that you to refactor, bring together.

easier The you're vision we it that already. system lives happen fairly gives be is makes gives together more customers seeing going and holistic easily, with to and and a to everything In our travel seamless clear that that's their want provide does value to and put for them. certain areas,

example, a one, the simple past. it in about OpenTable. talked For I've

that those product, all great We use companies. hotel, that we're leveraging to across you of mentioned the get that simple be going points dining to you Not package a that if can and brand OpenTable, example. and get use do. you our a has hard Now from Priceline new

best I are and to together. a line, I Other of amounts dollar you say more a little the that things sort time possibility, can't this going you give to I of effort, put believe, for we have but I can't require can any investments. give anyone

learning, and key to Two, can of ecosystem to just the investments one. the in money customers. these one you've matters this, the the the who create invested these that travel different all put successful the value the it along and from the all then end, Scale and you in it's with gives of data greater AI get your really things your parts specialist, together, not personalization all things, the machine and the make systems create put to afford it's we technology,

I in an have what end, So I second And advantage believe -- believe your anybody. was we question? almost the we have over

Lloyd Walmsley

as Group was kind that the CEO asset at the in to to things The question addition Booking.com just, reins we should now you're of expect change CEO? second that how of taking

Glenn Fogel

Well, first question, it that of ties actually. kind to

is that One different group. the being the the bringing benefits of part all into had of I've companies

I what companies where they things system. our work to are, together well. and the strengths and the So greater together. different create they the this and how senior And know is know all I I key understanding do helping us management all all know one can of work

So that's biggest the one reasons. of

important The bring second our want rate execution come in I to the believe make customers to new that want is holistic business, I this system happen and want is to bring faster. things urgency I quicker. faster. reason to I this and

Lloyd Walmsley

Thank right. All you.

Operator

Your the Justin from next Merrill comes line America of Lynch. question Post of Bank from

Your line open. is

Justin Post

Great. term term. Thank to David, that one bookings. and us maybe of were XQ one one could exposure think remind was out that the Brexit? pushed you factors you. Maybe that of I your short longer

how Just exposure you a Brexit? and see to the U.K. no-deal

And you. then for is this longer term, maybe, Glenn,

longer-term bookings making this You merchandising -- the basis? billion working, a and room said any you longer-term initiatives at $X is beat but on quarter, nights. I give difference really well, a better as the you. by of maybe Are point not you encouragement know branding Thank

David Goulden

Sure. Okay.

Justin, sure.

U.K. first. go is. much me let disclosed Brexit the We've to how not So

they is an bad and we might a back too simply And recover. our But think about. people couple point think XX% down, these broadly, went XXXX What situations business. was after get than happening kind less I years data around of nervous. in and event we the they slow event, not of of in that's see said ago, it a to

then saw of looked in the happen being early a of a market of there a the into U.K. that we in in saw like that the went. It part off. slowdown, was bit was So year the looked going saw a it early like Brexit nice the we rebound part when We the to year that pushed

So I the changing see think short-term actual we some do sentiment around event itself.

Obviously, does overseas? level British X there's for any Does pound? more in that of and the there's been go today. have nature And There's factors if generally, uncertainty term to impact is that experiences short it the make travelers rebound But then devalue quickly. expensive what they great. our currency, to

QX looked at all something carefully. of as course, QX Right number. said, but quite those than like precise So to thing now, kind a things. it's a rather Glenn watching that of a hard we're that's thing, give it's looking But we

Glenn Fogel

that's still investments we have And the our in we're what for I much spending in really to benefits to that get to and started us. all to us, things the money ahead trying think done our what of at I We what and get so we terms we're terms haven't of create upside result, we're going think on. date believe great of

together. people do. using of is I relatively yet. talked XXX,XXX see the small little we And something about things Yes, And the some believe I people a of a it. I of we've all and more that but Not we road, big they have over are XXX can already. and bit different give but things that attractions so have compared locations, more to that's can a it even that cities, come the you Yes, examples down world, awareness win. lot

out. that pushing be to going we're So

mentioned to then you your more I can increase believe the when ride going much airport, provide to thing that about that's The and to way a transportation, from get to things, things. the seamless hotel, home believe I do efficient, ground help that to I

investments enable talked rolled the things people Grab about DiDi, have not using get out our When at Agoda be to those I Booking.com able we like efficiently apps that and the or around very we've look apps. the yet in will to

and am not down bottom top the lines. there's So things just many the road so And the actually that results future. encouraged yet the to begun I about see have we very in

David Goulden

Thank you.

Operator

Your Brian from the next from of Morgan Stanley. line Nowak comes question

is line open. Your

Brian Nowak

my Glenn, just comments connected two. and about of frequency. trip taking sort back the sort of go I to have for your to questions. Thanks

with a it previous question, bit, little OpenTable the we've seen partner but UberEats. and mentioned in and Caviar You GrubHub

U.S. Just purchase talk advertising? grow potentially faster helping to us about in branded potentially about a delivery to you a potentially business than think high-frequency it grow overall that better the using Is booking how food the way even

quickly. nights? is you room ago, alternative an that Any all on the how Thanks. overall size And gave that on business. We Or second is help quarters pretty growing? at the becoming update how couple the a growing us of in accommodations the large piece think it's one, fast business of

Glenn Fogel

part do that's relatively So let easy. first because second the just me

still faster We haven't disclosure other I any given our growing than they're hotel that. say business. more -- should about our main

you on the can date only color So give to that. that's I about

at OpenTable, reason when thing past. regards customers, say talked they're home. the here. that things The time, all we eat traveling, there of I In think around XXX% X don't it it There's the to our really always always to and OpenTable, are the about and I've we bought joke about

is So to to great service this provide them. a

which investment is and China, a But and mentioned, companies really an actually different, is thing, which an something it that made one Meituan, factor. at And of you in in, important other which that thing awareness is look the the you if the we've delivery the started is of into increase travel with delivery frequency travel develop and a business. then that business, to a using out of high way business, travel, was and help then to pushing your that moved the of base customer the out awareness little food

is that a positive. So

I worse advertising, more when different I more also front you come merchandising plays. in people opportunities we're of ROIs mind all one make to whether travel to business. and out see terms It come or our the to your as but use way to of can now, to of me you have in that than want again, types service, that often. continue helps of Now have rolling help service And value it do awareness better increase do don't than a right just brand because

Brian Nowak

Thanks,

Operator

Deepak Barclays line Your next from Capital. question of comes Mathivanan from the

Your open. line is

Deepak Mathivanan

Great. Thanks questions. for taking my

with reach performing the loyalty of Or think comparable are and these David, transactions? that? they customer are referrals? first wanted we like acquisition Are on ask you noted you've the programs currently can programs in ROIs about when then driving that of So standards? terms performance some other big do one, currently better. the programs how to these I And

David, pointed, a piece last forecast. unique then about your later very XQ, as Clearly, strong reported it, for strong, second you you night that And room Trends the the was right XX% of were like being also is quarter. year. kind of

the we in you seen So extra guide in context the XQ uncertainty that should of back the haven't Thank conservatism this year? end for the of you. think

David Goulden

Okay.

two questions, Deepak. Let take those me

on I commented the acquisition customer programs. So now

talked So points that areas, about this areas growth if the of the EBITDA the us were investments cost with being a of of and We other year. X obviously, brand X few would one they X. the you -- remember, merchandising And were one we investing. there was

we our towards results comparison always some ROI those our the compared to ones but I that but all As not them, to we're programs, expectations. make spend have positive ROIs. moving on see the higher in positive of the here not of between mentioned, brands, position a a We're different

which either here then our also, wouldn't either, for we're are exactly of sit and as you tell to or working to obvious want not and going environments. reasons, And not members either us ones you think

we're driving But ROIs we our pleased them. our ones out some. back. upon upon -- that on a We've growth. the some number obviously pulled about and down are that focused ones now are rolled doubling focused We've think of The we we

the our the not similar early first growth we stages, in second now difference about the half going mentioned, half. are be programs, a I As to and talked night making huge the room fact across more year. to investment I expect returns this they're these totality, the

the color acquisition that's I you give can the on customer now programs. So

our assume our to guidance. we repeat what I the covered on on points first a the terms cannot front vis-à-vis changed. is will we call look and I hasn't is approach at everything how guidance our of think but and guidance of We QX should to in of that us, are consistent first think in expectation on what the -- that, said that to guide, Back what you I I'm night room not question. number answer I've going to

events are when comparing September. And a positive a against these the we I'd year-on-year at have and bit obviously, compare in process know unusual just make strong to us were little pleased up you say, we our June, harder. in we looking compares obviously, coming

all But how terms into -- we the that give of account and of consistent guidance talked plus those us give as about, our be said, view macro in and factor cannot and we we taking try expectations. to into best do you things that our vis-à-vis things Glenn account,

Deepak Mathivanan

Okay.

Operator

Your Anmuth Doug JPMorgan. next from from question of the comes line

Your line is open.

Dae Lee

Hi. This Lee on Dae for is Doug.

a Just reducing on question friction.

going there about other areas there lot. I help ways where assume could are pain across specifically forward? do talked a it points looking the see the could payments accommodations about improve consumer talked are think a trip. But you that on more there, you you that kind of opportunity? And You you you side, but help

talked accommodation. an to Could more us doing update then, unit And the you about supply. past, you turning you're give to onboard single how wanting there? In on

Glenn Fogel

not once to reducing important want of there So mentioned terms payments the very that accept you every or ability to is accommodation in payment has ways, pay a way. and ability area, even in people have friction, the different but that

know, at the hotel, the at customer Booking.com grew the stay. the agency you on the end As paid at platform desk, of where up an

can I friction. That Paytm, different doesn't go M-Pesa If to that an number and methods. We payment use somebody or work removed wants of so well. through large incredibly

the to can we're want, to pay payment accommodation method use easy and they us and way. Somebody come able to an then

that. So the goes that right of away, that's friction much removing a part beyond

with somebody to system. attractions, just hotel in the booked when And the then in us do, else. something attraction, click, I and have my get so, don't at to is in I've example, anything has for goes Booking.com a one method do I'm an to payment and used service, I Booking.com already the looking already

offer prices more we So you a that. Much can to easier. Really friction with the Lots and that that want out more customers to up going, bring push talked ways can demand those lower to and play that demand I'm of when suppliers more I'm suppliers. we then all can of line. I'm us even about, to And our removes merchandising through QR so, do showing place just issue. at code attraction, the

our So down things I think again that's to people throughout one think will that trip. their travel there I are of a all be the service and road reason different using ways, give

world incredible an Regarding to have of a important properties, I'm of have we critical, it's give how given around that. breadth I being on different any data know it's number alternative on know well. don't accommodations, to to continue but we But more with about it that, that. and Look, done We is. single haven't specific pleased types you what's the doing

Dae Lee

you. Thank it. Got

Operator

question line UBS. comes of Eric Sheridan from the from Your next

Your line is open.

Eric Sheridan

trying of Glenn, the Thanks earlier from out and medium more seeing it qualitatively some you're momentum and be in to for think probably the thinking the some the XXXX of early returns. you're what's in might the longer-term look investments and Maybe building rather taking about questions. call. you different questions better sort and you'd while make to multiyear, you the when investments, past about those investments of to than at buckets look if you're expected quantitatively, around my lean of where, on than the yield thinking

much. continue And a be yield investors of multiyear view? for how going and should that comes think balancing to incremental about a the so of on to of you those that are neutral-to-rising those area revenue investments, think sort focus margins areas as investments from Thanks versus

Glenn Fogel

and but on make, as try always and I any is and think careful always comfort. it's that modify go we at balance. As now, is further confidence do we know historical out get what something continue good our appropriately using with spend funds our going throughout? investors it How that always should you trying we very to In to to our to up We more end terms you record give give should spending make return? Yes. it we're or being investment want less something you're to in maintain of a to what's And things, of hard the fast? looking that them

be bring to but are competitors other and talking things of very able the We are classic there for may said, be competitors build at these very very, that race in that very to ours, space, being our together. know connected suppliers a services talk of bit that are considered look being also them, putting similar. to That are We who people trip. too, about travel something people know not trying know with large a is you we this about who big

the the opportunity return these we that things Given if like, we'll getting road. if we but to spend, are accelerate, down we're that, see the see may increase we

Eric Sheridan

Thanks so much Glenn.

Operator

from Heath Sachs. of line the from comes Terry question next Your Goldman

is line Your open.

Heath Terry

Great. Thanks.

seen the at we've basis for between guidance last for widening sort and guidance your And over room the your about XXX there's of gross bookings looking that guidance point a growth. Just few delta night quarters. QX, for

could Is can Just to question sort of sense you a insight a share what's of access Any behind question mix? with hotels? that a you us of curious that? within of driving if that? it types sort give it us inventory of Is specific on of what's

David Goulden

Sure.

So this is David.

you answer me give that. to Let the

increase in main had points in The underlying in up ADRs. QX we the actually down be driver we're ADRs, a of I year-on-year. down QX trends unusual They're which, X% are points this QX. quite rather to year but similar, ago difference which when over additional a XXX got you've basis that compare is actually in QX, we're in So as mentioned and forecasting in basis XXX --

of real driving into of more what's effects. those that QX running the consistently in then that is question QX and of are lapping kind ADRs kind kind excluding So

factors, geo factors of countries are the the than three mix One, some basically world. rate there's ADRs. local those growing some are some countries and pressure, the where pricing lower around And is ADR of that ADR driving higher faster some

the hotel still obviously, sort been hotel but and less travelers moving growing has of some particularly to euro like they those or kind also where that the in on rate of And ratings York then, the the Miami, they're strengthening destinations the vacations where going into seeing of the U.S. we're star been dollar has European coming some euro important because, U.S., into the are in trading New far down pressure, for the size may people of locations, in the be against

factor really the driving Then which facts the that lapping saw gives QX. the are you about. those we of QX in So that are this talked you've kind got we difference, in additional X.X%

Heath Terry

been the mean industry look at increasing. we I generally sorry, have And data, ADRs if

mix the and something of your industry to else what business? that you the different base is European that seeing like given so in between you're is something just customer feel numbers all and this have sort is unique And bookings there third-party heavy exposure? your you of that that's see Or we customers

David Goulden

Yes.

world I -- percentage large geo obviously, very have about, coming or obviously, some we into it's the from have or the are some talked a factors but stronger of we these presence. think because big particularly more European like of base Europe has -- euro by as have parts or done our into global, other themselves. kind that -- the into still Asia, people booking has U.S. that for from we we certainly currency pegged Europe of where U.S. have weakened, affected that a of coming to And mix is traveling we factors

what that's see So we happening.

we things changes could indicative that underlying is to move of that QX pick we're extent more of rate I the way, the in currency think we're start obviously, up. seeing. saw what that that's trend kind And to that those some But seeing. the of the other we see

Heath Terry

you. Great. Thank

Operator

from Your next question comes Oppenheimer. from Jed Kelly

open. line Your is

Jed Kelly

taking for Thanks questions. my Great.

more Just on of on is do grow earlier relationships you penetrate a property trying how strategy? supply U.S. with Just more one issue faster or that comments view region, the to the managers? in the

view particularly offering? to you it's Instagram harder your your it's advertising, some social social then, of in realize strategy, how advertising with on how location you extract do the digital I rental Google, giving growth And do And but strategy? view

Glenn Fogel

All right.

U.S., what the more and things And accommodation, because recognize, that's many opportunity not get the and do that's want supply to fair our in for of than business. just try in I one is look, do. a a great wanted the want. -- that to always It's we better of we're the alternative So part to that's terms is a need want small something and share And U.S. we we us -- we underindexed. to

efficient. areas. the areas, U.S. able in all about. excites the I that are customers payment and U.S. for that It's effective and to provide something me. upside us, It's as for that merchandising being so There It's product a many talk we is see different it's all

because many in about of usual way There parts getting not demand in in world, some is well, effective. is -- no for the of the The China, social interesting is Google parts thing example. our second

So strategy, many are you need that things to and social. have another

Facebook, to And more of see working good way people at meet players to do Twitter, with we social and in And to social, a for Snap, all site? make using we travel. looking. a try bring the way customers way key people And with whether the most different What ROI? parts decisions the more What's and best always our with we're time as even the all is efficient the them. Instagram,

open be ROIs leg an with to continue say to we work are We're work that all different demand. to continue do these it. said, the road bring to we will on believe going because companies channels going other in this and be not being some as of That to use our not will long-term -- effective, are not and easy Google, yet is for the it's as scale like I as example. that down important

Jed Kelly

you. Thank

Operator

the from James Securities. Lee comes of question from next Your line Mizuho

Your line is open.

James Lee

Thanks my for questions. taking

night little guys that the to On strength room seeing be specific a you more bit maybe as are and you outperformance growth XQ, in regions which guys why? can

especially China of China And about given point? outbound also, trends comment the seeing, this this, U.S. you you tension travel, Glenn, are what can Thanks. and kind between at

David Goulden

this is David. James,

Let one. the first take me

It year. think World patterns was in weather unfavorable the in Europe impacts where the QX. we in very most much combination happening relatively saw the versus in we saw we're the Europe, from expectations where I of Cup our unusual of the last clear outperformance

what's -- all that well. impact who had as major mentioned, are both I had the see in other major those outperforming didn't both QX doesn't -- and as did is very vis-à-vis our June strong certain Europe expectations. also because The is say Europe expectations, June. was, was But for I countries football-centric but some now we've was, quarters that compare. a happened we and impact lower impacts And again, Europe, QX in just in well in expectations lower Europe

And we at Europe cetera, headlines the do recognize our results remains both in the the and vis-à-vis out Europe we cautious. we'd But of region. be all pleased and QX read coming in Europe out with QX et of expectation. macro outlooks, our economic same that and But environment

we were where as to relatively I think happening. that was clear

ask first about to the part, answers talk that over and hand China hopefully So Glenn outbound. I'll -- to

Glenn Fogel

not for aware Yes. time to number China an in first you're outbound, an example, actual increase terms coming U.S. Chinese interesting XXXX, the that situation. China U.S. was was that of I to decline, assume travelers total of the

disputes, TV by definitely in such see happening business of as Kong. impacted things then trade Our type Hong and on U.S.-China events, is you these

going You China from read from about Taiwan, and people put happening in Taiwan, there to being things are in place of mainland certain to terms restrictions there.

all outbound the sorts things business. that are of So impacting different

Our of short-term point, long There's, it's is though, lot great of more blip. run. that pull the just China a back outbound, be doesn't opportunity important sort run, a the because is one long going so travelers Chinese any in for to

do providing business We have benefit to great working to our sure to that continue Chinese we're appropriate we'll believe this will Chinese our do And what X,XXX we service because China make the build people be approximately company. in travelers. a to long-term to is

Operator

the Morningstar. last question of line Dan from comes Your from Wasiolek

Your line open. is

Dan Wasiolek

question. the taking for Thanks

Several date, the trip. out, appreciate any to connected few but years? in specific a giving is this not this years? I back Somewhere can going Just between? building

spend earlier then a be there accelerate or might maybe performance the period think spend. I call you might And mentioned that you choose where to in

be So might is a that happens? it where Thank reasonable period there that you.

Glenn Fogel

second we're may, We performance fast seeing terms Well, you how said correct. it it way developed. and part is I cover ROIs entirely just depend think are of where the and on in things the will I'll what being

if I'm and not your answer, is truth, little question, appreciate of is it painting. this sure the bit first the terms that a bridge like In you'll but

You're never done.

done. never You're

to better. completely done. anything do things been actually services. And of type the look always And of with has things technological to You're that come you going it's created, that's new never at all nature

what to always be. will You're and always trying trip that's connected improve, the

doing. what in some do And some we'll to start with said, seeing being we're That believe be will data. that to that from I benefit we'll future, real not-so-distant the you concrete more bring something able be

Dan Wasiolek

Thank you.

Glenn Fogel

execute to our we our we QX to long-term want And excited again, Once plans. we about about going future solid I'm our I how everyone. growth you results. tell thank are as pleased remain Okay.

with So for very thank back the to it much to joining. you that, going turn And I'm operator.

Operator

conference all joining. Thank you for today's concludes call. This

You may now disconnect.

Booking (BKNG) 8 Aug 192019 Q2 Earnings call transcript