Earnings call transcript Q1 2023

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Operator

Welcome to Booking Holdings First Quarter 2023 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 not 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 undertake 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

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

Glenn Fogel

to first million of and report to all-time we billion rates I'm and and XX%, our quarterly Holdings' achieved both by afternoon year-over-year highs growth respectively. you quarter, conference nights bookings this in David quarter Goulden. XX% $XXX am of Thank CFO, for reached and $XX.X the gross first joined welcome of I call. that pleased Booking room

stay bookings of will a and room from On gross XX% strength recognized. outperformance stronger and that and the Europe came future previous versus night driven a revenue year-over-year. room demand gross lengthening currency is booking gross and first when bookings night by be expectations in U.S. The in result as our periods of window, ahead the will particularly our travel growth which was in the at was leisure Both in expectations basis, a bookings constant even bookings quarter continued

in given future while EBITDA this marketing associated the of was timing a the approximately line our with expectations, below result adjusted with a additional expenses bit states. difference, revenue As was

by year an April quarter. accelerating seen more basis, saw increase the making since in growth has resiliency first a When comparison summer summer versus decelerated the far We at April we we what with this continued growth peak saw most night received so during difficult. percentage these and likely Though currently growth in the represent travel we last on of slight in our strength we encouraged a total strong Though modest will compared room Overall, have of travel and travel XXXX, for these year X. recovery, consumers' bookings for quarter demand remain bookings we look year-over-year of of strong be travel to period speaks bookings which see are travel. note, desires very booked cancelable. a what to

robust, path is booking recognize travel global trends economy. regarding there remained we uncertainty that the have While of the

necessary our long the to to solid However, to and and initiatives strong near-term we remain grow variable important for business strengthen believe operating means making focused economic free potential This structure, across on we the uncertainty allows cost conscious are well business and our results, substantial what's investments given to highly implementing which cost any term flow. positioned us liquidity efficiency. navigate drive cash expense while the remaining

Trip Connected on to value Trip delivering to booking strategic traveller vision make The while vision. priorities, is and our more easier, personal, to supplier customers travel long-term continue better experiencing including make progress long-term key our our more We partners. enjoyable, our Connected and

we customer help this to platform. to build with trip. We book our transactions Booking.com improve in of we on mix believe engagement increase small experience at and travel seamless platform of payments a booking more today, in our Connected helps customers frictionless Our still continuing as are drive more travelers. ties are deliver an Those connected seeing our component Trip for which for the will will vision into progress booking payments a that experience the our increasing another believe

consumers of with part QX XX%. to air growth of XX% provides developing further Booking.com increase which Booking.com's book offering on an air tickets focus ticket. an to QX continue another an year-over-year year-over-year flight total live was important in the We place our which from on in our was offering acceleration

continue to possible will with this provide travelers experience. booking best the important We work flight

began in AI who area, are in extensively using Though now that for in and received attention we has from both interactions AI continue machine we a personalizing to different more. then by given build have XX to interactions order analyze value well responsive and a to experience, content, We provided with the technology in can personalized partners, been goes would dialects many to to AI in optimize and significant customers differentiated compelling AI the believe translation partners. recommendations and recently, travelers ago. optimizing our and over to our and offering customers languages we investments more and a are believe years help that years more leverage booking and this to their can more for We pictures booker's trips. we believe be positioned trip customers our we that manage many, we deliver aspects connected of needs a if This

and we from a the team customers the with we us how in of enables experts strong new with AI years, can to current across our developments field. have supplier latest research AI traveller universities. the keep This Over benefit and quickly and react, partners through Booking.com's learn built the company adapt collaborations

smoother always richer, Connected world the our new interaction to and to our make and to customer make looking ways are We experience Trip vision. for easier deliver it ambition for everyone realizing to

booking of recent all the or LLM travel language for attention been models searching, large which on of multitude of Much experiencing. a improving provide possibilities and has areas interesting

challenges itinerary of to current make inaccurate Nevertheless, we current travelers Two questions. outputs. are answering building interactive of be are the possibilities LLM and benefit given our we there how for excited produce these customers. can sometimes Though technologies are exploring interesting use

experience is, early company's given I ability own confident benefit we like brands, human are others in and our but to into our and financial It customers including and Trip equally X developments as our them. in improve to customer to travel-related our and it's our know, regenerative our vision when technology experimenting that from drive AI, plug-ins, our benefits supply for offerings. while groups very customers, important ways to are of our our OpenTable, and Connected and the data But am our AI for Some KAYAK these strategic building improve all more integrate their to products days think partners to the priorities, have travelers. and we value the capital, experience note our and we about important consider, customers

of hotels platform, types we can their everything valuable the incremental a across strive the be businesses. to our for types from products all rental on accommodation to to features support between. vacation We value and add partners, demand traditional For delivering believe the partner to and accommodation in beach, to partners by developing on supply our help these spectrum we

while was mix of with total in are XX% quarter, at low representing nights QX is in percentage to progress Booking.com seeing quarter, nights room XX% room of XXXX. X combination In first reaching meaningfully mix, ever. the also in accommodations the relative In increased year-over-year global U.S., ever the highest accommodations, our the than points first alternative we still and accommodation of U.S. alternative and room room encouraging level absolute in has our our highest of nights, area alternative nights Booking.com's which about alternative increasing about higher

seeing continued both about end with and X% are momentum listings than supply year-end the first the for million alternative the in higher globally quarter U.S. X.X growth, of We which terms reaching global XXXX. about accommodations, in by of is

rolling damage bring of our helping adoption more the with traction with liability enhanced enhanced and supply in great online this insurance last out partners including is other accommodation alternative seen enhancements professional We have believe solution to U.S. product an our year, We along for policy to platform. solution payment partner the

addition, partners the travelers, in booking across We alternative are improve on to our In our by improvements product our this platform to are first and earlier. their the achieving offering our regions, to accommodation supply in productivity on U.S. progress major we receiving particularly partners new aim build continuing and seeing our properties

a experience building leads travelers, time. For focused and over to that relationships our increased better direct frequency, loyalty, remain we spend on

Our quarter app the opportunities to and in high allows from travelers. mix see us very bookings a on booking directly increase the first as an important of more first direct to which We reached platforms is mobile with the ever. directly our of customers highest it level level engage quarter continued platform

Just over QX the XX% than of in our quarter our few room in higher percentage nights were a apps booked through XXXX. is which points first

efforts our enhance experience build recent success continue to to We are seeing on here. app we the will the

and from benefits build where principle Simplicity that and we better travelers the Genius level we've our to to is Genius program. loyalty a our including going our through program core a Another to is creation our of deliver right value Genius value away. of this experience Over these get program incremental we will travelers benefits, at enhanced the ways find time, Booking.com. through top-tier travelers continue a the way to deliver of

on Finally, in we have made plan. out an our progress sustainability last update goals which action the published month the provides XXXX laid we our against report climate

practices XXX,XXX now But of sustainable targets addressing said believe on customers to KAYAK. proud with through travelers ambitious making our easier is over Booking.com to that travel book our before, has as are We're sustainable our this sustainable influence travel opportunity properties for We can we to emissions the program set options. which our and greatest been and through find their that Agoda work Priceline, bag I sustainable and out expanded it on for highlight reductions business. program and includes achieved

travel execution so delivering offering priorities. travelers this focused customers, the our remain continued both supply conclusion, our well by experience partners We key our strategic strength and year as demand I alike. of team's seeing our as encouraged better In a we and am on are our against for far

of the ahead confident in ever company. growth travel the We long-term are our and for as as in opportunities

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

David Goulden

Glenn rates otherwise for basis, the you, for XXXX afternoon. our review results the and for year. year-over-year good growth are and All as QX quarter our on Thank well first for as thoughts I'll unless indicated. a

to making references release. in helpful. our we results found the comparable non-GAAP reconciliation results some can be are in where of earnings periods regarding be to will think these Information XXXX We GAAP

We Holdings prepared Booking Relations to the the will of call. earnings conclusion after posting remarks the our Investor be website

to adjusted is in you quarters for remind QX QX, seasonal. stay getting will is that to when This has and our many typically of can been quarter smaller means and seasonally want recognized. quarter get be our into level expenses in I quarter. for bookings quarter. adjusted in sensitive quite booking quite the future revenue EBITDA that EBITDA QX bookings incur marketing is details QX the the is a revenue we historically also which business strong we that Before QX

mix also at is increasing cash flow high to quarter payments the Booking.com, of of a With due QX level strong bookings. becoming

let room now our see expectations. first So the to to year-over-year quarter. of XX% than first encouraged for night growth me numbers were in go our which the better quarter is on We strong

the first world XX%. For Asia than more and up rest quarter, Europe were up of XXX%. was both

to single the see year. was the continue versus in We growth prior high digits which U.S. up

in to longer quarter, onset our the than time first windows in I bookings QX growth Booking.com note up window many summer versus pandemic, the the Our the booking levels driven for period. versus total we U.S. are increased versus by XX% -- in in than XX% to was the XXXX in for due booking The first Europe and first the XXXX cancelable. from of that bookings XX% In The these expected were of travel the all since quarter strong of up more nights U.S. other XX% about regions was and expanded room XXXX. QX.

Our the represented room the mobile similar nights XX% fourth total quarter XXXX. apps quarter, our to in of over of first

us relative mix channel. see nights our a our direct The of QX as increased which the in mix first but nights XXXX. percentage the QX direct highest XX% couple quarter points mix still to first in of room We continue room channel quarterly quarter to of XXXX. to of total was nights an international percentage the of our coming increasing XXXX below was room the about since total The through a

Our first the cancellation quarter and XXXX rates below were QX QX in XXXX.

QX room and For was our which room was in XX% about higher about accommodation global nights XX% QX alternative mix year-on-year was than of Booking.com, our rate about XX% alternative growth night XXXX. the accommodations

increase first bookings We in progress we stronger gross XX% America accomodations XX% in made where quarter booking night North a the gross XX% due the the average. FX was by basis. in higher global negative than X% percentage XX% to year-over-year to bookings are the with a flight X of higher points also from increased or QX of increase pleased currency X constant alternative couple much strong growth, was currency growth on The partially the than constant percentage and points points ADRs from offset room accommodation movements. impact due

constant Accommodation by room Asia about percentage of to slowest. ADRs growing due currency and the were in impacted fastest mix X all our points regions negatively nights regional from U.S. growing the

up Excluding the of in down. to of stay higher being seen all regional percentage could the in that about mix, regions. booked XX are rate ratings star indicate a in constant of that ADRs currency increases hotel changes Despite change were year-on-year have ADRs trading first quarter, length we or not due our the consumers mix in points

dynamics watch to these continue We closely.

XX% by driven for currency basis. on up tickets the expansion in up or first about the constant Booking.com's were continued Revenue first offering. of year-over-year, XX% the was Airline booked year-on-year XX% quarter a flight quarter about

Although of room a night by that and versus point outperformance expectations stay view, booking was will bookings future stronger-than-expected had quarters. driven QX the our gross from we in

a in QX take The we timing entirely QX the driven these As revenue effects. lower-than-expected in was benefit did incremental from rate result, see not by bookings.

be Our line rates XXXX with levels. in continue underlying accommodation to take

as increased is than as and to paid was XX% in of highly expense mix about basis lower Marketing higher phasing to of business. spend points year higher which QX is ROIs merchandising last which lower due QX percentage direct line which to in due points Relative XXXX expectations, being a expectations our better our of well Marketing bookings percentage and than expense basis variable channels Marketing a paid is gross gross year-over-year. of better as higher. our than XX to a channels a combined about tied this of XX in our was ROIs was slightly expense revenues. merchandising bookings as

our about up of from XXXX. of a were bookings XX% better as were gross which gross our Booking.com's Sales expenses platform and expectations. bookings year QX, basis was payments other compared than XX% percentage last points up in XX QX about with through in processed About

Our year-on-year in year-over-year recorded few tax to in our due XX% XX% and potential aggregate factors G&A. expenses in which taxes. million personnel that higher more excludes up than accruals growth a impacted expectations fixed [indiscernible] was settlements indirect related were to $XX indirect The of

our manage more very We expenses carefully. continue to fixed

future constant and was impacted $XXX would which stronger Adjusted up quarters. XXX% million quarter. negatively gross and bookings EBITDA than March extra basis. EBITDA Adjusted quarter was more in in expenses currency take rate time the came impacted expected lower for have been up higher-than-expected our our bookings expected bookings XX% of our These was a prior on guidance. stage we February incurred than year-over-year in the also than the for expectations, by at marketing the

QX eliminate a than If both and XXXX we the and QX lower than to percentage our in look XXXX. expectations at timing as marketing gross merchandising this of was lower difference, and bookings QX

$XX.XX of share up resulted earnings XXX% in was income million of which net per share non-GAAP year-on-year. per $XXX Non-GAAP

in we XX% count XXXX. a quarter. below the below QX was million GAAP net $XXX income On QX and had share first the of average in X% Our basis, quarter XXXX

at cost As we business. view highlighted these expense every expense real earnings of impact stock-based a because very SBC the reminder, compensation metric negative we quarterly report doing profit a in of includes

very our a to and operating carefully SBC be manage to continue low percentage very of We it flow. continues cash

to position. Now, liquidity cash our on and

Our slightly $XX.X of billion. cash our was ending versus and $XX.X investment QX ending of billion QX balance balance up

million free booking merchant mature about in XX% mostly deferred due in our up the billion, to cash $X the for $XXX benefited in in change flow well of free quarter EBITDA. for And The billion of in cash in about billion, was up free $X.X million balance year-on-year. Our $XXX payment share flow increase adjusted operating operating in cash $X.X year-on-year. and an debt QX as The cash was as flow offset the generated and was in working billion to the from by XX% March. capital flow quarter billion $X.X $X.X our repurchase

April, the quarter slightly saw to room XX% for rates. the growing than our first in all versus a to thoughts booking XXXX. QX as second see demand April growth comparison. our at prior similar continues to the that year major continued long of was growth On at with lower April the The growth XXXX difficult on quarter, Booking.com to with of more XXXX. in Now, was night basis, strong is than in year-on-year mid-teens be In window which in it room we night regions higher due a was

XXXX QX of was onset April You will XXXX nights was growth of month room that pandemic. the year, below last since XX%. recall our April XXXX up first X% were and the versus

growth make room be night comments digits the up year-over-year. Our mid-single second the assumption that on quarter will

with XXXX, QX were you'll we Omicron. a over nights helped room in versus growth be more Compared some saw from moderation last we growth recall, recovery room for in the resulted strong future expected in our May highest year. growth assuming which just XXXX June by quarter And night As the especially XXXX, being we'd and our by when to which first year last were months highest XXXX impacted growth summer. quarter QX was XX%, April in QX, bookings from expect

and expect to year-on-year a a room to gross slightly flight constant X ADRs. higher QX continued due We points from about growth few bookings points basis currency grow on faster nights bookings

investment may increased points to timing less by last revenue higher to percentage from as from increased revenue a be basis offset merchandising payments, percentage a rate bookings and year the QX mix especially due partially of future in a an of also booking and impact gross could This [indiscernible] stays expect negative We approximately above in XXX exceed result if an take in marketing of of these flights. in less our expense see higher-than-expected high the trends bookings increase quarter. our in in expectations, quarters. We

marketing lower QX as to increase expenses than a in an expect We mix. to direct gross be percentage last year bookings of due

to in marketing a We combined of bookings and line last QX be as with merchandising gross expect in percentage year. about

than sales gross and to due expenses points higher costs, basis call center gross impact mix XX We expect third-party partnership a bookings with as our percentage year Majorelle. about higher to higher merchant of bookings and of be QX other the including last

about expenses all taxes grow related fixed to more around this personnel XX% adjusted Taking IT year. expenses. last and expenses, EBITDA due higher QX be account, to our expect and expect We into in to than indirect year-over-year XX% we'd higher future

In terms time. full our the outlook commentary not for we previous updating year of year, are this at our

the in the commentary. some created but develop bookings first want few months before strong see year Our how next X potential months of we any to for the considering updated upside the

continue We that will versus points of expect our a adjusted to couple by XXXX. margin EBITDA expand percentage

and bookings results QX growth our with for strong very pleased the the we're closing, summer. In in

could and please to We'll now move Q&A lines? the you open Rob,

Operator

the [Operator Instructions] Your first Post of from America. question comes of line Justin Bank from

Justin Post

guess things. X I

in some work you should seeing about years? then any summer? you overall be on look channels, about think into next X reason debt can't the based we put buybacks secondly, advantages about to why Are your ROI you you cash, for you as just marketing anything the side? there Are thinking of do the use from the at going when feel your that some of First, And how on competitors? changes

Glenn Fogel

ROIs take thoughts and second David Well, Justin, going on why forward. I'll the and about that then talk and specifically marketing I don't let

And again, laid Is that, had believe there how make partners how in So outside we better That's things if the total. we in to used. be is we our we appropriately last $XX should could way in the next company, to a can customers the we how returning the a organically. well, thing last it be clear we thing money important. we that, make we build is that that think $XX we our customers the for this capital with the okay, and traveller we thing the out company, the quarter, both, past services and our build we see our is, company we in program, what something our billion don't better value free partner and good that way And traveller always I first help customers. the of invest where use add cash can't to can build the should in about view absolutely $X work ways in first million that fairly one, shareholders And after say, franchise. think our been the we made buyback flow which out left that see previous we've want laid our billion out somehow authorization, then we

we've anything for X out And term, that And is I always we're of over be we've years, something. authorization. I expect myself, next given differently am you complete it the out. buyback now. doing can years, this numbers see about to then it about X I what And we change we long out. to laid way the laid with the ROIs, to this. the said our summer, we thrilled some maybe have David, full able terms way seeing But in And that's up the I'll but you're Things leave believe

David Goulden

Yes.

happen ROIs think that far what's it's I to to out. going predict Justin, hard to

encouraging Those saw a you in that to is bit to say will were to first I trends what the bookings related some can expectations profile. we little see our what ROI happened that So compared quarter.

the lower higher better So we bookings first expected due in basically more expected. pay ADR, quarter, mentioned, than in lot extra The length the the X we of a things: as cancellation and stay. for we summer have got ROIs longer-than-expected were a rate average would of to than channels

to was that basically, the the of bidding booking tied So we were window. expansion -- so

nothing window these about on is in first terms and many ROI to maintain of -- in really players and performance quite different. point them question quarter. we channels, correlate close So just booking expansion to to your talk what I've the competitive the in dynamic good to the is relative highly the are saw always competitive

Operator

the of line next from Evercore. comes Mark from Mahaney Your question

Mark Mahaney

sounds Pacific and well I ask about And Pacific, Are to the travel? that's that there particular Asia for it are the strongest seeing impact want travel. outbound Are you already any like China region. Asia the within you? just China markets performing of travel then

Glenn Fogel

Mark, about sorry that.

you that X about Let part too, I then last recall me China ways asked believe I correctly. if know I outbound because take time,

And so a China is I'm of make with honest is are the at seeing China pleased in do other strong of was back out and a was anywhere the parts China this clear near still pleased outbound. probably of we're we're not It in think all coming I overall part very January airlift area XXXX in you, quarter. see growth there. mid-teens was shortages an back. individual lift growth, more first of to getting of us I we to coming significant not I'll is number Asia. that than We're very outbound It is countries it down Asia very when available it be And believe break is coming about. very want back of is of obviously, but in market strong seeing. growth going that that growth better that our still in there's terms I don't with but for it there

Operator

Walmsley UBS. line Our of next from question comes the Lloyd from

Lloyd Walmsley

can. I Two, if

And trips kind competitive higher the durable? ADRs. all one think like any for think just is normalizing to among you back a how consumers demand? higher reflection to market, in you'd there is just Anything anything is this channels terms shorter maybe all of And markets. going just and down price First, or consciousness much in marketing softening you're do do either up you then of you this big trading higher of versus marketing ROI. the second seeing just of compensate your of at out as consumer that taking to proactively call Like in of think should we the targets managing

Glenn Fogel

that's which yet. market, decrease about of I Let And in say one about carefully now, not to to people future further willing are or are hypothesis [indiscernible] me either another question, I take seen seeing in upon going That they coming your all. they point smoke think think in leave to I enough a out in want increase are the are out. we and window of willing will confidence ratings that can put the at the believe, I to of that down to the any in terms could second And at first indication changes. market And see going be because we anything be hypotheses nor the prices David. any signals to for any one it there's has there look have any is made but not weakness booking way a rise, I your further look are could that of be stays, have that out to potential giving availability confidence, do for we of seen us be and the going that seen lock that indicating book to continue one people star very that's about length softening it to the the at money I gone I'll remark decline out, concerned not considered too none those of to

David Goulden

In to demonstrates terms growth believe there. marketing And to our that relative into making is market the that in expect let I just because merchandising progress be to think available travel remind we leaning that of year that we're and this you me recovery rates -- there's us. the Lloyd, market still a we

did bookings, to still was the the expect same investment of percentage same gross us remember, be you to was that out off be merchandising And started XXXX we to of as relative it Remember, XXXX, our If we for we gross bookings leaning year in and in look and we by in XXXX. saying we making roughly story we year which case. marketing more that changed. as a as that a said that was investment the it hasn't expect

to and gain continue to to the my want marketplace. kind values share And and But window point would to our improvement than mix to still profile in fact came with be do We year, some QX, saw of to we -- and the we it believe in QX QX I the booking industry. in I mentioned in we in the that higher the the plan XXXX. to with still lean in question my why to view and said as in to believe and booking a continue the of answer full for expect year in better. as summer ROIs it we that expect was in shape from merchandising And a investment Justin, marketing bookings get in recovery transaction more as in of that to what we getting actually this

Operator

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

Brian Nowak

have two. I

mix The business direct is direct. one of traffic, is first on the percentage the of the

lot of made on of You've that Glenn. couple so, the years, over progress or a last a year

your that how you business think progress If about break then, And the the sort that's most what regions the that of the are runway of by region, in we it increasing percentage second you direct? And down up is? on percentage where forecasting. you how should the that's the direct made drive the high one longer? business have And most to of that have

of and It regions your seems Which guys better you data throughout that than versus You like thought you're forecasting. drove the forecasting? came through at good demand have sort outsized really lot of demand quarter. a very

Glenn Fogel

app offer to all different with personalized we'll things increase connected in can break be at direct trip. in past to about having I to franchise learn give The But the mix to direct is a thing by through region because always people primarily, they the them us. more real all. repeat the able will of of about the back understand about we talk things So down we them, important to us. that them, to come said the them back mix more how They're I've our getting the value long-term things the them make come the we don't want

every region app have as region That's flywheel is there. thing. but I as the goal possible a it's the people So coming down many my directly. effect Again, it break have by won't and to first happening using

forecast, of against terms I varied how In how much. know don't we our

you into David, why get don't that?

David Goulden

I'd obviously, was line. You across we I think -- balanced to the that the price regions. on sold Europe. the U.S. top and most in we booking -- say significantly Obviously, can better to go was fairly the did expand on all And see it place window

got share the general, also window but exceeded very in higher Asia a see of than you didn't we there. expectations in have where we expected did QX. well. also booking get that's summer we phenomena bookings But And to our So

some So I particular differences but that of out regions saw the to call contributed the we call region wouldn't the will I overachievement. what out any in across

Operator

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

Doug Anmuth

your from protect Glenn, the the would some I revisit it provide? being talk just just the or potentially about have of models? advantages wanted platform new many broadly to to keep leveraging on you versus AI. that other might services large data Can language need do across for feel generative AI booking used on to you training travel in what And external

Glenn Fogel

and break you went Doug subset degenerative -- AI. about into AI, out that to we interesting Thanks, questions it then I'll of start off specific a very and with

All a of not? that about in learning the of everyone a we job language presenting like, confident capital somewhat and Let's many, is model AI better years, decade do our remarks, just important how into sure number on have, more we've first we consumer, not we course, in to something they're for in convert making who is helped learning than us business lot today. this this helped already ways the done thinks they in feel see fold, us business get my come them. people because of this AI in in that people perhaps, -- could of Then the of out going aware with are very many something generative really disruptive the that what And is it of we've said I are of have models technology, doing working the amount a have of the past, are parts a Is well? well, that AI, this and example, players in collaborations to machine is in the to our there's what clearly, where we done general that to anytime universities. really a the many, us major that prepared for were sophisticated higher where work going use, that percentage had many be large a sorts be shift models we're how of I we on, very And chance with talk machine that.

to do actually interact easy, them be different things into away in in that human you of so we vision, travel does believe with better some are did to are achieve in that of that further the the which I ways future, perhaps we things this productivity very we are going hopefully people distant being technology any recreate greatly trip going haven't benefiting us our believe automated that's and be agent connected many that so some new are that developers much thought to is something results an from past? but a really and is in that human perhaps increasing the good of not hopefully to than areas going that type player to the but yet way some able

been who and knows these Have data to very think our very I our Now very but thing. it this interested knows data others, the we they nobody if that our -- in be is regulations important people to by think they language yet the too very -- has past there's lot interesting very or should of been that large purposes people development the be already and nobody will we important your the of And working training departments, be people it out everyone used some a say a in will area model they're that I using be litigate a protect it's question open and attorneys and how answer model not. for closely. in data we become in terms in looking about going are foundational how answer question and from do are results. really the but yet, and not And of to used people, with

Operator

TD Cowen. the Your from next comes question of line Kopelman Kevin from

Kevin Kopelman

Yes.

I question, the ADRs in date, can interest. you on area With strength wanted of QX, you're quarter seeing trended what seeing as big you're about could compared of how have last to you First generally to ADR's call. all ask the just and to touch --

David Goulden

Yes.

ADRs data you positively. up are trending I a -- some call, on year-on-year gave the on in a year-on-year still across on regions we when basis. they're They're mean and So basis up all

at in seeing question a -- when So reduction ADRs. basis we're been not basis. not a but behind the we've year-on-year seeing any looking in things, on year-on-year some your I'm region any sure, we a slowdown or of in And ADRs on we're

ADRs see continue hold we very So to strongly.

Kevin Kopelman

one Could your you that's Great. And about how U.S. And a bit talk the in there? to in market do question. your about market. feel about in then, a the are What dynamics be growth the slower the little other you little seeing U.S. you bit share U.S. causing

David Goulden

-- bit. growing feel it is at still XXXX that vis-à-vis feel rate is have growth business come before relative seeing feel strongly you -- bigger a was that But it's down than vis-à-vis very We little healthy our significantly how XXXX XXXX. a it's we -- obviously, compared business when a to and we our that is XXXX. very, part And at growing we look still to very still U.S.

that. don't really we worry So about

Glenn Fogel

in And would business? me business what to them from feel helps just and in continue I to past. providing partners more believe do to in need. conversations build their thing regards people that us what them with they need? the partner, positive I today only their relationship it's our And for of the to our will add, we we that my with where And are them that critical Are you And things and complementary versus heard on providing much are the we that where we you some help senior I speak that. to future all in valuable I we were biggest management, a are with is, the to incremental do better

Operator

from Your next comes Lee the of Horowitz from question Bank. line Deutsche

Lee Horowitz

comments of the Great. Maybe sticking around direct. with some

you you continue to And U.S. in beyond you're do an within your [Indiscernible] direct guys this are maybe maybe You booking what the underrepresented. channel you some seem of year, really price of where scale seeing in does the things app then up VR improvements post growth. what think then, to see market, you rental you've some share looking be to U.S. in order been I the of area guys XXXX? some guess inform the the results you need to one on to this continue can forward, way to owe how Maybe And that margin that impressive progression within perhaps direct you looking continue picking do execution industry? vacation with line VR. indicate business the and beyond up competitors?

Glenn Fogel

to to course. going start accommodation. great So I use -- of VR, one why like a up start is term, Neither rental -- vacation -- Lee don't I'd with alternative put as you customer-friendly it

about been I and Let business not talk then into may me that of of that talked And the may go that U.S. little doing and the in some area the margins build of we a road. about you things what the when in prepared alternative I'll terms are direct of talk bit or down accommodations my terms remarks about in about the share let indicate business David the particularly in to that we we that do hitting say past, especially I we as fairly have where continue where maybe in very said, world, you behind showed the Europe. say that may were under should it's nice to we index very -- well be, because I we that were parts that thought since to other well as we in not to admit in polite that we in

type service stuff. been waiver something have things you about, like we is make people that Damage Well, providing talk liability sure that who things Are all, Things I now insurance. like are got a first apartments. the the own to doing to you're that. who the home, own good we of doing we've

people So properties, book have have about were system, They that. don't book or developing to because testing I we an we back. request Yes, to to so request we do. time want how we have automatic talked to are ability Last to a some want out they booking. out

Once and went well, are as your product. wasn't saying, a lot of had knowledge And go, joke a lot then just that need you have such once almost you aware guarantee weren't the have they product? place you street get that we said, I supplies aware down a we I in, said, could you to Hamptons, if have of people people a City and said start where of we say the we getting didn't to to that Well, start you in I there going was Booking.com. people had on I that I in to that Because shall York we supplies. -- something need the it, got New make

to have We build that. all

[indiscernible] is XXX. business there's miracle this. So tackling This nothing about

bookings. us with mix in then night people in really at it's starting the high It of up and alternative about total pleased that's your U.S. I Get make what we've alternative and supply mix, with it accommodation it. know come and attractive all-time to of nice in there, terms can doing, along out our said I'm part it sure at away it. absolute room hit having And of cranking their to accommodation been make number see

pleased had like the have do growth that progress product area we only, I regarding and I know this with we making that and possibilities. an am want customers to this direct we're I because is to? where you So that David, And continue know

David Goulden

strategy. obviously mix our to tied Direct is very Sure.

directly the is into time shall more to customers in and back those the around. partners first to product, the and first to them after us which customers frequently come Our our portfolio better and we've get acquired for provide strategy to a bring better service them we place build more

So our just directly. against products. lots talk accommodation, customer it about get talk many contribute better that tie therefore, I strategy to these talk better do, about that to really we adding for executing that do could does and alternative of we're things can can things I and to we service to back flights them all our things payments, create about likely we a more

So to strategy. it's very tied much our

be would the level themselves leverage It tied in shift forward. from and the expect margin be going but mix do XXXX better to because able above made And model on biggest areas than February, on a of to that would be as of we in able mix. continue because at our kind to offset the do we're lower-margin is portfolio. expect some also that that those grow to comment of our driver, targeting the increase new We'd our direct more levels to within fixed from pressure costs they mix also obviously the we're more of businesses business in these to quarter margin we the pre-COVID the last now not we're our financial your for focused grow EBITDA

strategy So year. some direct be continuing to to and the major be will important where beyond margin to able for the the expansion model improve provide both and are is financial this sources very our we mix

Operator

comes line John question Your the next from Colantuoni Jefferies. from of

John Colantuoni

Hoping on strategy in you U.S. your us market. could update the

you in I'm investing strategy and returns have as your have on your that share investment. so characterized opportunity on region you the been? if And the and but if market success if how recovers. I'm gaining any throughout travel your aspirations second, XXXX. of return lot on investments you informing to the that in of Asia early ahead curious update gain recovery as reads share sort on Pacific us that's a to you recent XXXX that's could as had years sort that curious pursuing You've learning And of about far aggressively continue of

Glenn Fogel

Yes.

given I'll in So out by been saying our share. strategy start how pleased that working with the I'm U.S. off has in very the gain

be which It's trying what past in we and growing the we under-indexed accomplish is As player do the I think nicely. David we're making to there. it's really we've been bigger business not a been have XXXX. achieving that to were than we than in mentioned, did good progress

are out at on to don't the ROIs all. conscious these spending In get right them But things, say money absolute out obviously, we way right the that, will return. break we region by I very the of terms of And sure know we business. are money's that. came important of I the is doing your it are make to where you're in to was we worth getting spending -- Previously, I and how that you're China.

until of dissimilar that was going Asia of Get want strategy just people start be it's and get move. wants doing don't see Now, the down terms in a bit were not make and gate. when and I halfway what we've very we best same little to that traveling with I how us providing to would the sure continue front, the traveling, for we be in in growth. That to when we pleased to start want we work track And same are Asia, you're there just think going about the them And the forward wait it been thing. the with And they way. traveller to quarter want. to continuing out talked it will the out first hopefully, think, not

Operator

Wolfe Your line next Research. from question from Deepak of Mathivanan the comes

Zachary Morrissey

Zach on Great. for This is Deepak.

here. the tracking is bit XQ the the quarter. you of above kind stepping that kind Just also first cost a of And fixed up growth to is guess kind -- or last of XX% half kind of on the little you [indiscernible] XQ sequentially I first outlined

back about your buybacks. of the growth kind and the curious year? on Just just half into year thoughts maybe on cost second of the should think fixed on of And sequentially into next we then how the kind

this than came I were expecting. think we stronger in XQ

about takes Just a we year, think and is should puts kind kind of curious the buybacks the terms in Or rate? XQ the run that? how we should of through of of cadence how of good think the of rest

Glenn Fogel

that owner take want to the on cost. David, P&L looking of you're the you there, the

David Goulden

Yes.

quarter cost second the about being we mean, we XX% about being the first in -- On side, yes, XX% quarter. talked talked the I in

of look to view, at full we've guidance that's be -- in just go year likely the updated pressure year. that's there some kind obviously, on to puts put line I'd recommit going a generally, guidance, not when we're but just them to our year our be year full going going versus grow little by slowly some say our for we'll this to update detail that cost we you margin have Remember, the expansion the we are So a what next full item anything and bit and next of at points for year, not the takes expect be level that a other expect more to fixed year line couple said that the item do we grow continues to than than of case. that XXXX. today to But

Glenn Fogel

buybacks, bit. it little laid I a think regarding out And we

what is. know plan You our

what I know doing. I'm and are. more pleased with give You sure And color any not there's can we're we're we where

Operator

And of next Kelly from line from comes question your the Jed Oppenheimer.

Unidentified Analyst

on for is Josh Jed. [ph] This

payments opportunity and you if wondering, maybe Just share? speak with can how recent resonating increase improvements property is to U.S. managers their to in

Glenn Fogel

up is glue about how long customer very connected it's the choice, out And continue past the in payments finding together, the good run, is not. that the amount going positive of everything the of it's it brings for helpful further. have would in partner. to the it proof and important is that an can through working I as use Payments business. accepted people traveller indicator them the that Josh. of the Sure, the the payments going Customers both be business it's in to I've trip easier that me useful. choose believe along making well. or for the very, -- the think Both traveller our part a and we talked being and both I And The with growth partner. are fact very to build being

Operator

line comes Credit Stephen the And Ju from of from your next Suisse. question

Stephen Ju

your So your dollars. dollars merchant Glenn David, are and parity with booking now at agency

in and versus to free earlier, bookings should deferred how improve consumer wondering accommodations. in selections merchant lodging your air more rise of be and And guess to point product proactive merchant making just a due the cash So flow alternative to choice I much may generation. is there this your to doing they're ramp more the --

change your bit? So does little this a allocation plans capital

David Goulden

plan merchant the would talked no, about second last continuing mix. our summarized Glenn we be capital quarter, the to we allocation earlier, increase that On anticipated question, that that

is So on that piece, there change. no

the flights moving really to from really change to a biggest terms of just inside used grows, that of you're That's model although Booking.com model. from, is where the merchant mix in what is to where still, having it's coming more almost the now remind be impact. driving coming are accommodations In entirely business, what's increase we shift part be a from mix much far, agency us all, the That an Booking.com. seeing changes accommodations. it's the merchant business, increase across our biggest by our is that of in But our an would balanced

Operator

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

James Lee

outlook ADRs. you give Can us on maybe here. an guys Two updated

for being us for previously, expectation think on XXXX. on I remind 'XX. takes talk and for puts your also, maybe maybe take some you you can expectation about FY rate constant about -- flattish And David, of talked the currency

David Goulden

kind for ADRs to quarter said that expect the just we We picture. second our of the continue

quarter our the expect We be on-year basis. second on ADRs slightly up to for

continue we not last item bit ADRs. out of my single year a be may on there on little -- full updating we're line they mentioned I As said answers, hold not every earlier compared if current to upside level, call But guidance. we're the what the of to at one in our on

be we're full But talking As develops. were for not where I QX. things puts our we takes you down QX, of QX, we're updating beyond our there'll see guidance. in specifically But positively. trending or and that guidance we're all are and and set anything you about in how wait We'll to what plus from said, expecting I some see think can up giving what have

Operator

And line Bernstein. question Clarke the of from your next comes Richard from

Richard Clarke

the to ability all? merchandising or is of Genius that in from to they is be discounts your that get could this travel give less towards And environment, altered influencing level I And more discounts the your those? know the are the And environment first tend back what you likely if at to for Just half. change the to travel continue hotels? was question hotel-funded.

Glenn Fogel

and Richard, when of direct, look, hotels, to just to other things always doing get doubt use have And looking to of less is see no all they're may there's then a are to one distribute they need well come ways what's right? at business, the that return. them the

incremental we that with them understand get get demand So sure with them the they them wouldn't necessarily able value be otherwise targeted can with or Genius, being us very and to how then and not. it's make make sure really they for in to is working this

with is learning the is past. way -- that people for other good to talk door a This data. program that with not talked I in business it's sometimes, can whatever it's not in of come give something science. not a of or Genius discount. idea actually This etcetera. the best the them, with use call -- on should about knocking works use their this stuff money way, their worked with down discuss, a an you time, look, how partnership. give and actually our in way getting This the well, That's the this don't we bit hoteliers Genius term, them better sales told works. this the way starts sure in best machine I think It's not is time, this us amount, to just the up have This the long improve And to This with I'm but talked a having business. hotel, Genius past, come with and just program together working we're us up a

other more efficient find for the to improves going will be need and ways of as them. less there's expensive doubt, travel no or such, Now a hotels and ways as less ways perhaps

be we I am there something your more so drastic but going point how all this is that's at concerned and some business do place not future. provide we up is I complementary, maybe our continue to it. in ways customer wins, to the I able a as this winds be are that if see will difference to symbiotic customer in more traveller us more that for win develop with this, we win. to and partner the all the central work value supplier ways and traveller that hotel make as don't in to we going And see to the all of the

Richard Clarke

a Maybe question Okay, technical sense. little perfect after. just

you've -- about billion talked You bookings in $XX of got merchant the quarter.

You've booking talked only but at is billion. windows longer about booking $X.X your deferred merchant

the between Just see billion billion and we the trying to that the $X.X gap there. square $XX

Glenn Fogel

this on me confusing one. you're Richard,

David Goulden

on Richard, that you spoke [indiscernible] one.

Richard Clarke

are $XX for The merchant your deferred which with $X.X does balance sheet, that billion that bookings on line saying the quarters? largely quarter of booking you're how in billion future merchant you bookings square getting -- is

David Goulden

answer. up Richard, all offline. you -- why question, can understand on try back. to progress up want you make get And follow base touch will we we we'll and the others with if Just with to to give John But one follow we the call answer, just don't down? and them you that us you sure the offline well. as

Operator

this call no Fogel, turn back Glenn the Mr. at are questions there you. to over I further time. And

Glenn Fogel

Thank you.

vision our Thank dedicated support everyone I to our the our always, night. our and for our and your continue customers, shareholders. long-term as partners, We build good we you, to on want as So company. appreciate employees thank

Operator

conference participation. This your you today's concludes Thank for call.

disconnect. now may You

Booking (BKNG) 4 May 232023 Q1 Earnings call transcript