TLDR
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Booking Holdings reported Q1 revenue of $4.8B, up 8%, and EPS of $24.81, beating estimates by 44%.
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Room nights grew 7%, while alternative accommodations bookings jumped 12%.
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Airline tickets and attraction tickets booked soared 45% and 92%, respectively.
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Free cash flow hit $3.2B, and cash reserves totaled $16.1B.
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Management warned of U.S. travel softness, rising marketing costs, and geopolitical risks.
Booking Holdings Inc. (NASDAQ: BKNG) kicked off 2025 with an upbeat quarter, as Q1 earnings surged past Wall Street expectations. The company reported adjusted EPS of $24.81, up 22% year over year and well ahead of the $17.25 consensus estimate. Revenue rose 8% to $4.8 billion, topping forecasts and reflecting solid travel demand early in the year.
Despite the earnings beat, shares dipped slightly to $4,880.12 on Tuesday morning. Investors are weighing strong current performance against management’s cautious outlook amid growing macro and geopolitical headwinds.
Room Nights, Flights, and Attractions See Healthy Gains
Booking logged over 319 million room nights in the first quarter, marking a 7% year-over-year increase and surpassing 300 million in a quarter for the first time. Alternative accommodations bookings were particularly strong, growing 12%, with listings now totaling 8.1 million.
Beyond lodging, Booking’s airline ticket sales soared 45%, while attraction tickets spiked 92%—though these segments are still small contributors to overall revenue. Gross bookings climbed 7%, or about 10% in constant currency, reflecting stable global demand for travel services.
Cash Generation Remains Strong
Free cash flow hit an impressive $3.2 billion in Q1, boosting cash and investments to $16.1 billion. Adjusted EBITDA grew 21% to approximately $1.1 billion, outpacing revenue growth and indicating improved operating leverage.
The company continues to scale its Genius loyalty program, with over 30% of active travelers now in higher tiers. This is helping drive more direct bookings and improve customer retention.
Cautious Outlook Due to U.S. Weakness and Rising Costs
Despite its strong start to 2025, Booking widened its full-year guidance range, citing rising geopolitical risks and macroeconomic uncertainty. The U.S. market showed signs of strain, with shorter stays and shifting travel patterns hinting at more cautious consumer spending.
Marketing expenses also rose 10% year over year, and the company acknowledged that returns on performance marketing are softening in some channels. As a result, management flagged the potential for volatility in future quarters.
Stock Performance and Valuation
BKNG stock has slipped about 1.6% year to date, lagging the broader S&P 500, which is down roughly 6% over the same period. The company’s 1-year price target stands at $5,411.81, implying around 10% upside from current levels.
While Booking has beaten EPS estimates four straight quarters, the outlook for future quarters remains mixed, with analysts adjusting forecasts in both directions amid the uncertain macro backdrop.
Conclusion
Booking Holdings delivered a strong Q1, with double-digit EPS growth and healthy gains across its core and emerging travel segments. However, softer U.S. demand, rising costs, and global uncertainties could weigh on momentum in the coming months. Investors will likely watch upcoming quarters closely to gauge whether Booking can sustain its current growth pace in a more challenging environment.
