Booking Q1 2023 Earnings Report

Booking EPS Results

• Actual EPS: $0.46
• Consensus EPS: $0.39
• Beat/Miss: Beat by +$0.08
• One Year Ago EPS: $0.16

Booking Revenue Results

• Actual Revenue: $3.78 billion
• Expected Revenue: $3.75 billion
• Beat/Miss: Beat by +$27.30 million
• YoY Revenue Growth: +40.20%

Booking Announcement Details

• Quarter: Q1 2023
• Date: 5/4/2023
• Time: After Market Closes
• Conference Call Date: Thursday, May 4, 2023
• Conference Call Time: 4:30PM ET

Booking (NASDAQ:BKNG) is a global provider of online travel and related services. The company connects consumers with accommodations, flights, rental cars, restaurants and travel experiences through a portfolio of digital brands and websites.

Its principal brands include Booking.com, which offers lodging, transportation and travel experiences; Priceline, which provides online booking services for hotels, flights, rental cars and vacation packages; Agoda, which focuses primarily on travel bookings in Asia and other international markets; KAYAK, a travel metasearch engine; OpenTable, a restaurant reservation and management platform; and Rentalcars.com, a global car rental service.

Booking Holdings serves customers, travel providers and restaurants across numerous countries and regions, with a particularly extensive international presence. The company was founded in 1997 as Priceline.com and later adopted the Booking Holdings name as its portfolio expanded. Its principal executive offices are in Norwalk, Connecticut.

Glenn Fogel has served as Booking Holdings’ chief executive officer since 2016 and also serves as the company’s president. Through its collection of consumer-facing brands, Booking Holdings operates a broad online marketplace designed to simplify the planning, booking and management of travel.

Booking Q1 2023 Earnings Call Transcript

Key Takeaways

• Booking achieved all-time quarterly highs in Q1 room nights (274 M, +38% YoY) and gross bookings ($39.4 B, +44% YoY; +52% CC), outpacing prior guidance thanks to robust leisure demand and a lengthening booking window.
• Alternative accommodations at Booking.com saw a 45% YoY increase in room nights, now representing 33% of total nights globally, with U.S. supply and bookings each hitting their highest levels ever in Q1.
• 45% of Q1 gross bookings were processed through Booking’s payments platform (up from ~34% in Q1 2022), boosting deferred merchant booking balances and supporting stronger cash flow visibility.
• Free cash flow surged 77% YoY to $2.8 B in Q1, underpinned by a $15.3 B cash and investment balance, enabling strategic investments and $2 B in share repurchases.
• Q1 adjusted EBITDA of $586 M, while up 89% YoY, fell slightly below expectations due to higher marketing spend tied to future-stay bookings, even though revenue met forecasts.

Presentation

[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 guaranteed of future performance and are not subject to certain risks, uncertainties, and assumptions that are difficult to predict.

[Operator]

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.

[Operator]

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

[Operator]

A copy of Booking Holdings earnings press release, together with an accompanying financial and statistical supplement, is available in the For Investors section of Booking Holdings website, www.bookingholdings.com. Now I'd like to introduce Booking Holdings speakers for this afternoon, Glenn Fogel and David Goulden. Go ahead, gentlemen.

[Glenn Fogel, CEO at Booking Holdings]

Thank you, and welcome to Booking Holdings first quarter conference call. I'm joined this afternoon by our CFO, David Goulden. I am pleased to report that in the first quarter, we reached all-time quarterly highs for both room nights of 274 million and gross bookings of $39.4 billion and achieved year-over-year growth rates of 38% and 44% respectively. On a constant currency basis, first quarter gross bookings growth was even stronger at 52% year-over-year. Both room night and gross bookings came in ahead of our previous expectations as a result of the continued strength in leisure travel demand and from a lengthening booking window, particularly in Europe and the U.S. The room night and gross bookings outperformance versus our expectations was driven by bookings that will stay in future periods, which is when the revenue will be recognized.

[Glenn Fogel, CEO at Booking Holdings]

As a result of this timing difference, revenue was approximately in line with our expectations, while Adjusted EBITDA was a bit below, given the additional marketing expenses associated with the future stays. When we look at room night growth versus 2019, we have seen a slight increase in April compared with what we saw in the 1st quarter. Though on a year-over-year basis, growth has decelerated since April last year saw an accelerating travel recovery, making the comparison more difficult. Overall, we remain encouraged by the continued strength and resiliency of travel demand so far this year, which speaks to consumers' strong desires to travel.

[Glenn Fogel, CEO at Booking Holdings]

We currently see very strong growth of bookings received for travel during our peak summer period in quarter three, though we note these bookings represent a modest % of what will likely be booked for total summer travel, and most of these bookings are cancelable. While travel booking trends have remained robust, we recognize that there is uncertainty regarding the path of the global economy. We believe we are well-positioned to navigate any potential near-term economic uncertainty given our highly variable expense structure, solid operating results, substantial liquidity, and strong free cash flow. This allows us to remain focused on what is important for the long term, which means making the necessary investments to strengthen and grow our business while remaining cost-conscious and implementing initiatives across the business to drive cost efficiency. We continue to make progress on our key strategic priorities, including our long-term Connected Trip vision.

[Glenn Fogel, CEO at Booking Holdings]

The Connected Trip is our long-term vision to make booking and experiencing travel easier, more personal, more enjoyable, while delivering better value to our traveler customers and supplier partners. Our payments platform at Booking.com ties into our Connected Trip vision as payments helps deliver a more seamless and frictionless booking experience for our travelers. Though still small today, we are seeing an increase in the mix of transactions that are connected to another book travel component in a trip. We believe continuing to build on this progress will improve the booking experience for more of our customers, which we believe will help drive increasing customer engagement with our platform. We continue to focus on further developing our flight offering on Booking.com, which provides consumers with another place to book an air ticket.

[Glenn Fogel, CEO at Booking Holdings]

Booking.com's flight offering was an important part of our total Q1 73% year-over-year increase in air tickets, which was an acceleration from the year-over-year growth in Q4 of 61%. We will continue this important work to provide travelers with the best possible flight booking experience. Though AI has received significant attention recently, we began our investments in AI years ago. We believed then, and we continue to believe now that we can build a more compelling and differentiated offering if we can leverage AI technology to deliver a more personalized booking experience, a Connected Trip that would be more responsive to a booker's needs and help manage different aspects of their trips.

[Glenn Fogel, CEO at Booking Holdings]

We believe we are well-positioned in this area, given that we have been using AI extensively for years in order to optimize interactions with our customers, who are both travelers and partners. This goes from personalizing interactions and recommendations to machine translation in over 40 languages and dialects to analyzing the content of pictures provided by customers and partners to optimizing value for our customers and many, many more. Over the years, we have built a strong team of AI experts across the company, and we keep current with the latest AI research through Booking.com's collaborations with universities. This enables us to quickly react, adapt, and learn how our traveler customers and supplier partners can benefit from new developments in the field.

[Glenn Fogel, CEO at Booking Holdings]

We are always looking for new ways to make customer interactions smoother and richer, realizing our ambition to make it easier for everyone to experience the world and to deliver our Connected Trip vision. Much of the recent attention has been on Large Language Models or LLMs, which provide a multitude of interesting possibilities for improving all areas of travel searching, booking, and experiencing. Two interesting possibilities are interactive itinerary building and answering travelers' questions. There are current challenges given current LLMs sometimes produce inaccurate outputs. Nevertheless, we are excited to be exploring how we can make use of these technologies for the benefit of our customers. Some of our brands, like KAYAK and OpenTable, are experimenting with generative AI plugins while others are building ways to integrate the technology into their own offerings.

[Glenn Fogel, CEO at Booking Holdings]

It is, as we all know, very early days, but I am confident in our company's ability to benefit from these developments and improve our products for our customers, given our experience in AI, our travel-related data, and our human and financial capital. Our strategic priorities, including the Connected Trip vision, aim to improve the experience for our customers and drive more value and benefits to them. It's important to note that when we think about customers, we have two equally important customer groups to consider: our supply partners and our travelers. For our supply partners, we strive to be a valuable partner for all accommodation types on our platform, from traditional hotels to the vacation rental on the beach to everything in between.

[Glenn Fogel, CEO at Booking Holdings]

We believe we can add value to these partners across the spectrum of accommodation types by delivering incremental demand and developing products and features to help support their businesses. In the area of alternative accommodations, we are seeing encouraging progress at Booking.com, with alternative accommodation room nights in the first quarter increasing about 45% year-over-year and representing about 33% of Booking.com's total room nights, which is 2 percentage points higher than in Q1 2022. In the US, our mix of alternative accommodation room nights, while still low relative to our global mix, has increased meaningfully in the first quarter, reaching its highest level ever and was also our absolute highest room nights in US alternative accommodations ever.

[Glenn Fogel, CEO at Booking Holdings]

We are seeing continued momentum in terms of supply growth both globally and in the U.S. for alternative accommodations, with global listings reaching about 6.7 million by the end of the first quarter, which is about 2% higher than year-end 2022. We have seen great traction with the adoption of our enhanced payment solution for alternative accommodation partners in the U.S. We believe rolling out this solution, along with other product enhancements last year, including partner liability insurance and an enhanced damage policy, is helping to bring more professional supply online to our platform. In addition, we are seeing our alternative accommodation properties across our major regions achieving improvements in productivity, and our new partners are receiving their first booking on our platform earlier.

[Glenn Fogel, CEO at Booking Holdings]

We aim to build on this progress by continuing to improve the product offering to our supply partners and travelers, particularly in the US. For our travelers, we remain focused on building a better experience that leads to increased loyalty, frequency, spend, and direct relationships over time. Our mix of customers booking directly on our platforms in the first quarter continued to increase and reached the highest first quarter level ever. We see a very high level of direct bookings from the mobile app, which is an important platform as it allows us more opportunities to engage directly with travelers. Just over 45% of our room nights were booked through our apps in the first quarter, which is a few percentage points higher than in Q1 2022. We will continue our efforts to enhance the app experience to build on the recent success we have seen here.

[Glenn Fogel, CEO at Booking Holdings]

Another way that we build a better experience and deliver value to our travelers is going through our Genius loyalty program at Booking.com. Simplicity is a core principle of Genius, where our travelers get the benefits from the program right away. Over time, we've enhanced these benefits, including the creation of a top-tier level of Genius, and we will continue to find ways to deliver incremental value to our travelers through this program. Finally, we published our 2022 sustainability report last month, which provides an update on the progress we have made against the goals laid out in our Climate Action Plan. We are proud of the emissions reductions achieved and ambitious targets set out for our business. As I have said before, we believe our greatest influence on sustainable travel is through making it easier for travelers to find and book sustainable options.

[Glenn Fogel, CEO at Booking Holdings]

We're addressing this opportunity through our work with our Travel Sustainable badge and program, which now includes over 400,000 properties that can highlight their sustainable practices to customers on Booking.com. The program has been expanded to Priceline, Agoda, and KAYAK. In conclusion, I am encouraged by the continued strength of travel demand we are seeing so far this year, as well as our team's execution against our key strategic priorities. We remain focused on delivering a better offering and experience for our customers, both our supply partners and our travelers alike. We are as confident as ever in the long-term growth of travel and in the opportunities ahead for our company. I will now turn the call over to our CFO, David Goulden.

[David Goulden, CFO at Booking Holdings]

Thank you, Glenn. Good afternoon. I'll review our results for the first quarter as well as our thoughts for Q2 and for the year. All growth rates for 2023 are on a year-over-year basis, unless otherwise indicated. We will be making some references to the comparable periods in 2019 where we think these are helpful. Information regarding reconciliation of non-GAAP results to GAAP results can be found in our earnings release. We will be posting our prepared remarks to the Booking Holdings Investor Relations website after the conclusion of the earnings call. Before getting into details for Q1, I want to remind you that our business is quite seasonal. Q1 is typically a strong booking quarter, and we incur marketing expenses in Q1 for many bookings that will stay in future quarters, which is when the revenue is recognized.

[David Goulden, CFO at Booking Holdings]

Q1 has also historically been our seasonally smallest revenue quarter and Adjusted EBITDA quarter. This means that Q1 Adjusted EBITDA can be quite sensitive to the level of bookings we get in the quarter. With the increasing mix of payments at Booking.com, Q1 is also becoming a strong cash flow quarter due to high level of bookings. Now let me go on to our numbers for the first quarter. We were encouraged to see strong year-over-year room night growth of 38% in the first quarter, which is better than our expectations. For the first quarter, Asia was up 100%. Europe and Rest of World were both up more than 30%. We continue to see growth in the U.S., which was up high single digits versus the prior year.

[David Goulden, CFO at Booking Holdings]

Our growth in total room nights versus 2019 increased from 10% in Q4 to 26% in Q1. In the first quarter, the U.S. was up more than 30% and all other regions were up about 25% versus 2019. The booking window at Booking.com expanded versus 2019 for the first time since the onset of the pandemic, driven by Europe and the U.S. The booking window in the first quarter was longer than we expected due to strong levels of bookings for travel in the summer period. I note that many of these bookings are cancelable. Our mobile apps represented over 45% of our total room nights in the first quarter, similar to the fourth quarter of 2022.

[David Goulden, CFO at Booking Holdings]

We continue to see an increasing mix of our total room nights coming to us through the direct channel. The direct channel increased as percentage of our room nights in the first quarter relative to the first quarter of 2022. The international mix of our total room nights in Q1 was about 53%, which was the highest quarterly mix since 2019, but still a couple of percentage points below Q1 2019. Our cancellation rates in the first quarter were below Q1 2022 and Q1 2019. For our alternative accommodations at Booking.com, our Q1 room night growth rate was about 45% year-on-year, and the global mix alternative accommodation room nights was about 33%, which was higher than about 31% in Q1 2022.

[David Goulden, CFO at Booking Holdings]

We are pleased with the progress we made in North America alternative accommodations, where growth in the first quarter was much stronger than the global average. Q1 gross bookings increased 44% year-over-year or 52% on a constant currency basis. The 44% increase in gross bookings was 6 percentage points higher than the 38% room night increase due to 9% higher accommodation constant currency ADRs and also due to a couple of points from strong flight booking growth, partially offset by the 8 percentage points of negative impact from FX movements. Our accommodation constant currency ADRs were negatively impacted by about 5 percentage points from regional mix due to Asia room nights growing the fastest of all our regions and U.S. growing the slowest.

[David Goulden, CFO at Booking Holdings]

Excluding regional mix, constant currency ADRs were up about 14 percentage points year-on-year due to rate increases in all of our regions. Despite the higher ADRs in the first quarter, we have not seen a change in the mix of hotel star ratings being booked or changes in length of stay that could indicate that consumers are trading down. We continue to watch these dynamics closely. Airline tickets booked in the first quarter were up about 73% year-over-year, driven by the continued expansion of Booking.com's flight offering. Revenue for the first quarter was up 40% year-on-year or about 47% on a constant currency basis. Although we had stronger than expected Q1 from a room night and gross booking point of view, the outperformance versus our expectations was driven by bookings that will stay in future quarters.

[David Goulden, CFO at Booking Holdings]

As a result, we did not see revenue benefit in Q1 from these incremental bookings. The lower than expected take rate in Q1 was entirely driven by this timing effect. Our underlying accommodation take rates continue to be in line with 2019 levels. Marketing expense, which is a highly variable expense line, increased 32% year-over-year. Marketing expense as a percentage of gross bookings was about 30 basis points lower than Q1 2022 due to higher ROIs in our paid channels and a higher mix of direct business. Marketing and merchandising combined as a percentage of gross bookings in Q1 was about 20 basis points lower than last year, which is better than our expectations of being slightly higher.

[David Goulden, CFO at Booking Holdings]

Relative to our expectations, this was due to better ROIs in our paid channels, as well as phasing of merchandising spend, which is tied to revenues. Sales and other expenses as a percentage of gross bookings were up about 15 basis points compared with last year, which is better than our expectations. About 45% of Booking.com's gross bookings were processed through our payments platform in Q1, up from about 34% in Q1, 2022. Our more fixed expenses in aggregate were up 25% year-on-year, which was higher than our expectations due to a few factors that impacted personnel and indirect taxes. The 25% year-over-year growth excludes $39 million in accruals related to potential settlements of indirect tax matters recorded in G&A. We continue to manage our more fixed expenses very carefully.

[David Goulden, CFO at Booking Holdings]

Adjusted EBITDA was $586 million in the quarter, which was up 89% year-over-year, and would have been up 111% on a constant currency basis. Adjusted EBITDA was lower than our expectations, impacted by marketing expenses incurred for the higher-than-expected gross bookings to stage in future quarters. February and March gross bookings came in stronger than we expected at the time of our prior guidance. These extra bookings also negatively impacted our take rate more than we expected for the quarter. If we look at marketing and merchandising as a percentage of gross bookings in Q1 to eliminate the timing difference, this was lower than our expectations and lower than both Q1 2022 and Q1 2019.

[David Goulden, CFO at Booking Holdings]

Non-GAAP net income of $440 million results in non-GAAP earnings per share of $11.60 per share, which was up 197% year-on-year. Our average share count in the first quarter was 8% below Q1 2022, and 16% below Q1 2019. On a GAAP basis, we had net income of $266 million in the quarter. As a reminder, every profit metric we highlight in these quarterly earnings reports includes the negative impact of stock-based compensation expense because we view SBC expense as a very real cost of doing business. We continue to manage SBC very carefully, and it continues to be a very low percentage of our operating cash flow. On to our cash and liquidity position.

[David Goulden, CFO at Booking Holdings]

Our Q1 ending cash and investment balance of $15.3 billion was up slightly versus our Q4 ending balance of $15.2 billion. Our operating cash flow for the quarter was $2.9 billion, up 70% year-on-year. Our free cash flow was $2.8 billion, up 77% year-on-year. The operating and free cash flow generated in the quarter benefited from $2.3 billion from changes in working capital due to an increase in our deferred merchant booking balance as well as the $586 million in Adjusted EBITDA. The $2.8 billion of free cash flow was mostly offset by about $2 billion in share repurchase in Q1 and the payment of about $500 million for debts that matured in March.

[David Goulden, CFO at Booking Holdings]

On to our thoughts for the second quarter of 2023. In April, we continued to see strong demand with room night growth versus 2019 that was slightly higher than the 26% growth we saw in the first quarter, with all our major regions growing at similar rates. The booking window in April at Booking.com continued to be longer than it was in 2019. On a year-on-year basis, April room night growth was in the mid-teens, which is lower than Q1 due to a more difficult prior comparison. You will recall that last year, Q1 room nights were 9% below 2019 and April was up 10%. April 2022 was our first month of growth versus 2019 since the onset of the pandemic.

[David Goulden, CFO at Booking Holdings]

Our comments for the second quarter make the assumption that room night growth will be up mid-single digits year-over-year. As you'll recall, Q1 of last year was impacted by Omicron. In Q2, we saw a strong recovery, which resulted in Q2 2022 being our highest growth quarter versus 2019, especially May and June, which were our highest growth months last year. Compared with 2019, we'd expect future room night growth in 2023 to be just over 20%, assuming some moderation from growth from the first quarter in April, when room nights were helped by more bookings we expected for the summer. We expect Q2 growth bookings to grow about four points faster than room nights on a year-on-year basis due to a few points from continued flight bookings growth and slightly higher constant currency ADRs.

[David Goulden, CFO at Booking Holdings]

We expect Q2 revenue as a percentage of gross bookings to be approximately 120 basis points above last year due to a less negative impact from timing and increased revenue from payments, partially offset by an increase in investment in merchandising and a higher mix of flights. We may see less of an increase in our take rate if booking trends exceed our expectations, especially if a high percentage of these bookings are for stays in future quarters. This could also result in higher-than-expected marketing expense in the quarter. We expect Q2 marketing expenses as a percentage of gross bookings to be lower than last year due to the increase in direct mix. We expect marketing and merchandising combined as a percentage of gross bookings in Q2 to be about in line with last year.

[David Goulden, CFO at Booking Holdings]

We expect Q2 sales and other expenses as a percentage of gross bookings to be about 40 basis points higher than last year due to higher merchant gross bookings mix. Higher third-party call center costs, including the impact of our partnership with Majorel. We expect our more fixed expenses in Q2 to grow about 25% year-over-year due to higher personnel and related expenses, indirect taxes, and IT expenses.

[David Goulden, CFO at Booking Holdings]

Taking all this into account, we'd expect Q2 Adjusted EBITDA to be around 35% higher than last year. In terms of our outlook for the year, we are not updating our previous full year commentary at this time. Our strong bookings in the first four months of the year create the potential for some upside. We want to see how the next few months develop before considering any updated commentary.

[David Goulden, CFO at Booking Holdings]

We continue to expect that our Adjusted EBITDA margins will expand by a couple of percentage points versus 2022. In closing, we're pleased with our Q1 results and the very strong growth in bookings for the summer. We'll now move to Q&A, and Rob, could you please open the lines?

[Operator]

At this time, I would like to remind everyone, in order to ask a question, press star then 1 on your telephone keypad. Your first question comes from the line of Justin Post from Bank of America. Your line is open.

[Justin Post, Managing Director at Bank of America]

Great. Thanks for taking my question. I guess two things. First, when you look at ROI in the marketing channels, how do you feel about that going into the summer? Are you seeing some advantages based on changes from some of your competitors? Secondly, as you think about your overall use of cash, any reason why you can't just put buybacks, you know, to work for the next five years? Are there anything we should be thinking about on the debt side? Thank you.

[Glenn Fogel, CEO at Booking Holdings]

Well, Justin, why don't I take the second, and then I'll let David talk specifically about ROI and marketing and thoughts there going forward. I think we've been fairly clear in the past about how we view the company and how we believe our free cash flow should be used. The first thing we always wanna see is how can we invest that money appropriately in the company, build out services in ways that we can make the way we work with our partners and our traveler customers in a better way to help build this franchise. That's the first thing, absolutely important. After that, we say, "Well, we can't build it inorganically.

[Glenn Fogel, CEO at Booking Holdings]

Is there something outside the company we think that could add value, make things better for both, again, our traveler customers and our partner customers? The last thing is, okay, if we don't see good use of that, then we should be somehow returning that capital to our shareholders, which is what we laid out. In the last quarter, we laid out our buyback program where we had $4 million left in the previous authorization, $20 billion in the next one, that made $24 billion total. We said that over the next 4 years, we expected to be able to complete the full authorization. I believe we've given out some numbers about our buyback now, and I am thrilled with the way we're doing this. As for long term, 5 years, this is what we laid out.

[Glenn Fogel, CEO at Booking Holdings]

Things can always change, that's the way we've laid it out. I'll leave it up to David in terms of ROIs, anything you're seeing differently about the summer. I haven't myself. Maybe you've seen something.

[David Goulden, CFO at Booking Holdings]

Yeah, Justin, I think it's hard to predict what's gonna happen to ROIs that far out. I mean, what I will say is that you can see that we saw some encouraging ROI trends compared to our expectations in the first quarter. Those were a little bit related to what happened to our bookings profile. As we mentioned, we got a lot of extra bookings for the summer in the first quarter, more than we would've expected. The ROIs in the paid channels were better than we expected due to basically three things: a higher ADR, a lower cancellation rate, and a longer than expected average length of stay. Basically that was tied to the expansion of the booking window.

[David Goulden, CFO at Booking Holdings]

The expansion of the booking window is quite closely correlates to what we saw in terms of good ROI performance in the first quarter. I've just always maintained the point, these are highly competitive channels, many players in them. Relative to your question on competitive dynamics, nothing really to talk about that's different.

[Justin Post, Managing Director at Bank of America]

Great. Thank you. Appreciate it.

[Operator]

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

[Mark Mahaney, Senior Managing Director at Evercore ISI]

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

[Glenn Fogel, CEO at Booking Holdings]

Hey, Mark. Sorry about that. Let me take that apart two ways, 'cause I know last time, I believe you asked about China outbound then too, if I recall correctly. China is not a significant part at all of our very strong Asia growth in the first quarter. I wanna make it clear that China is still not anywhere near it was in 2019 in outbound. It is coming back in terms of the overall market coming back, but there's still shortages of lift there. It is getting better than it was in January when there was I think mid-teens number of available airlift out of China outbound. It is coming back. I'll be perfectly honest with you, we are seeing more growth, obviously, in other parts of Asia.

[Glenn Fogel, CEO at Booking Holdings]

We're very pleased with the very strong growth we're seeing. I don't believe that we're gonna break down individual countries, but I do see that this is an area of growth for us that I'm very pleased about. Anything else, Mark?

[Mark Mahaney, Senior Managing Director at Evercore ISI]

No, that's it, Glenn. Thank you.

[Glenn Fogel, CEO at Booking Holdings]

Thank you.

[Operator]

Your next question comes from the line of Lloyd Walmsley from UBS. Your line is open.

[Lloyd Walmsley, Managing Director at UBS]

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

[Glenn Fogel, CEO at Booking Holdings]

Let me take the second one because I do look at that very carefully to see are there any smoke signals coming out of the market giving us any indication of any changes. I have not seen any decline in the star ratings that people are going for, nor have we seen a decrease in the length of stays, either one of which could increase that potential softening in the market, and we have not seen that yet. I think we made the remark about the booking window has gone out further, indicating confidence. I believe that's one hypothesis one could house. A confidence about the future, willing to put your money down and be willing to book for further out. That could be seen as a positive.

[Glenn Fogel, CEO at Booking Holdings]

Another thing you could see too is that people are concerned about there's not gonna be enough availability, or they could be concerned that prices are gonna continue to rise and wanna lock it in now. That's another way to look at it too. None of those hypotheses though say anything about a weakness at all. In terms of, I think, your first question, I'll leave it to David.

[David Goulden, CFO at Booking Holdings]

Yeah, in terms of Lloyd, let me just remind you that this is a year that we still expect to be leaning into marketing and merchandising because we believe this recovery in the travel market available to us, and I think our, you know, our growth rate relative to the market demonstrates that we're making progress there. If you remember, we started off the year by saying we expect our marketing and merchandising investment to be roughly the same as it was as a percentage of gross bookings, roughly the same as it was in 2022. We still expect that to be the case. Remember we said that 2022 was a year which we were kind of leaning in and making more investment relative to gross bookings than we did in 2019.

[David Goulden, CFO at Booking Holdings]

That story for us hasn't changed. We believe that we wanna continue to lean in, this year to continue to gain share in a recovery marketplace. The fact that we saw some improvement in Q1, as I mentioned in the answer to my question to Justin, was more to do with the kind of shape of our booking profile and the booking window and getting more summer bookings with higher transaction values than we would expected to get, from a mix point of view in Q1. That's really why the ROIs came in better. We still plan to be leaning in this year.

[David Goulden, CFO at Booking Holdings]

As I said, in Q2 and for the full year, we still expect that investment in marketing and merchandising to be as it was in 2022.

[Lloyd Walmsley, Managing Director at UBS]

Okay. All right. Thanks, guys.

[Operator]

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

[Brian Nowak, Managing Director and Senior Equity Analyst at Morgan Stanley]

Great. Thanks for taking my questions. I have two. The first one is on the direct mix of traffic, the percentage of business that's direct. You've made a lot of progress on that over the last year or so, a couple years, Glenn. If you break it down by region, where have you made the most progress in increasing the percentage of the business that's direct?

[Brian Nowak, Managing Director and Senior Equity Analyst at Morgan Stanley]

You know, how should we think about how high that is? Which of the regions do you have the most runway to sort of drive that percentage of the business that's direct up longer? The second one on your forecasting. You guys have a lot of data, and you're very good at forecasting. It seems like, you know, demand really came through better than you thought throughout the quarter.

[Brian Nowak, Managing Director and Senior Equity Analyst at Morgan Stanley]

Which regions sort of drove that outsized demand versus your forecasting? Thanks.

[Glenn Fogel, CEO at Booking Holdings]

All right. We don't break down the direct mix by region at all. I can repeat things I've said in the past about how important direct mix is for the long term, increase the value of the franchise. Because of things we talk about with our Connected Trip, that getting people in through the app primarily, having them understand all the different things we'll be able to offer to them, give them a real personalized thing that will make them want to always come back to us.

[Glenn Fogel, CEO at Booking Holdings]

The more we learn about them, the more they come back to us. It's a flywheel effect happening there. Again, I'm not gonna break it down by region, but, you know, my goal is to have every region have as many people as possible using the app and coming directly. That's the first thing. In terms of how we varied against our forecast, I don't know how much David really wants to get into that.

[David Goulden, CFO at Booking Holdings]

You can see that we're obviously we did significantly better on the top line. I think per place to go to I'd say it was fairly balanced across all regions. Obviously, the place we saw the booking window expand the most was in U.S. and Europe. That's where we got a higher share of summer bookings than we expected to get in Q1. You can see that also Asia did very well, and in general, also exceeded our expectations, but we didn't have the booking window phenomena there. I wouldn't call out any particular region, but I will call out some of the differences in what we saw across the regions that contributed to the overachievement.

[Brian Nowak, Managing Director and Senior Equity Analyst at Morgan Stanley]

Great. Thank you both.

[David Goulden, CFO at Booking Holdings]

Thank you both.

[Operator]

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

[Doug Anmuth, Managing Director and Head of U.S. Internet Equity Research at JPMorgan]

Thanks so much for taking the question. Glenn, I just wanted to revisit on AI. Can you just talk about some of the advantages that Booking would have in leveraging generative AI versus what other external or potentially new travel services might provide? Do you feel the need to protect the data on your platform to keep it from being used for training broadly across many Large Language Models? Thanks.

[Glenn Fogel, CEO at Booking Holdings]

Thanks, Doug. Those are very interesting questions about that, and I'll break it out into... You start off with AI. We went to a specific subset of the generative AI. Let's just talk in general about AI first and how important this has been to our business. For many years, more than a decade perhaps, machine learning models have really helped us do a better job making sure that what we're presenting to a consumer, for example, is really something that they have a higher percentage chance they're gonna convert on that. All sorts of ways that we use, very sophisticated machine learning models in many parts of the business that have helped us get to where we are today.

[Glenn Fogel, CEO at Booking Holdings]

Of course, we come out in the fall, something that is somewhat a lot of people weren't that aware of, this generative AI, Large Language Models and gee, what could be done with them? Clearly anytime there's a major shift in technology, everyone thinks like, "Well, is this gonna be disruptive to the players who are already doing well? Is it not?" I said in my prepared remarks how I feel very confident of where we are in this because of the work we've done in AI in the past, the number of people we've had working on it, the amount of capital we have, our collaborations with universities.

[Glenn Fogel, CEO at Booking Holdings]

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

[Glenn Fogel, CEO at Booking Holdings]

Now, in terms of your very important question about the data and how do we protect it and not let it get out and be used by others, that is a very important thing. Everyone from our attorneys to people in our development departments, people who are really working with some of these Large Language Model, foundational model people, we are looking very closely. Have they already been using our data, and should they be? I think there's gonna be a lot of interesting regulations in this area that nobody knows the answer yet to, but how will people be compensated if their data has been used in the past for training purposes or not? I think it's a very open question that nobody knows the answer to yet, but we will be very interested in the results.

[David Goulden, CFO at Booking Holdings]

Thank you, Glenn.

[Operator]

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

[Kevin Kopelman, Managing Director and Senior Equity Research Analyst at TD Cowen]

Thank you so much. Yeah, first question I wanted to ask about ADRs big area of interest. With all the strength you're seeing in Q1, could you just in quarter to date, can you touch on how ADRs have trended generally compared to what you're seeing as of the last call?

[David Goulden, CFO at Booking Holdings]

Yeah. Well, we gave you some data on the call. ADRs are still trending positively. They're up on a year-on-year basis, and they're up in across all regions on a year-on-year basis. We're not seeing any slowdown in ADRs. You know, we've been looking at some of the things I'm sure go behind your question, but we're not seeing a reduction in ADRs in any region on a year-on-year basis or on a year-on-four-year basis. We see ADRs continuing to hold very strongly.

[Kevin Kopelman, Managing Director and Senior Equity Research Analyst at TD Cowen]

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

[David Goulden, CFO at Booking Holdings]

We feel that obviously our U.S. business is still growing very, very strongly compared to 2019. We have, you know, seen that growth relative to 2019, come down a little bit. We feel that part of it in, you know, we still feel it's when you look at how our business is vis-a-vis 2019, it's significantly bigger than it was before. It's still growing at a very healthy rate vis-a-vis 2019. We don't really worry about that.

[Glenn Fogel, CEO at Booking Holdings]

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

[Kevin Kopelman, Managing Director and Senior Equity Research Analyst at TD Cowen]

Great. Thanks, Glenn. Thanks, David.

[Operator]

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

[Lee Horowitz, Co-Head of Internet Equity Research at Deutsche Bank]

Great. Maybe sticking with some of the comments around direct. You guys continue to post impressive direct booking results and app growth. Maybe looking beyond this year, how does this impressive execution within the direct channel inform the way you see margin progression say beyond 2023? Maybe one on VR. Our checks continue to indicate that you guys seem to be picking up some share in the US vacation rental market, an area where you've been perhaps underrepresented. I guess to what do you owe maybe some of the improvements you're seeing within the US VR industry? You know, looking forward, what are the things you think you need to continue to do in order to, you know, really scale up that business in line with some of your competitors?

[Glenn Fogel, CEO at Booking Holdings]

Why don't I start, Lee, if I can start with, as you put it, VR vacation rental, I like to use the alternative accommodations. Neither one's a great customer, friendly term of course. Let me talk about that, and then I'll let David talk about the direct business and what that may or may not indicate when he goes into the share in terms of margins down the road. I talked a little bit about, in my prepared remarks, about some of the things we are doing in terms of the alternative accommodations area in the U.S. to build that business, and you were very polite to say that maybe, you know, that we may have been under index where we said.

[Glenn Fogel, CEO at Booking Holdings]

It's very nice to say because I've continually admitted that in the past, we have not been hitting that as well as we showed, and that we were far behind where I thought we should be, especially since we do fairly well at that in other parts of the world, particularly in Europe. The things that we've been doing are things that I talk about. First of all is you gotta make sure you're providing a good service to the people who own the homes, who own the apartments. Are we doing things like liability insurance? Well, now we have something like that. Damage, waiver type stuff. Do we have that? Yes, we do.

[Glenn Fogel, CEO at Booking Holdings]

Last time I talked about how we were testing out an ability to request to book because some people have properties, they don't wanna have automatic, booking, they wanna have a request to book system, so we're developing out that. Once you start getting that in, you have to start saying, "Well, are people aware of your product?" Because as I said, there wasn't a lot of knowledge that we had such a product. I always used to joke that if you went down New York City and you said someone on the street and said, "I need a place in the Hamptons. Where should I go?" I could almost guarantee you they weren't gonna say Booking.com. Well, we need to get that supplies once we have it, then we gotta make people aware that we have the supplies.

[Glenn Fogel, CEO at Booking Holdings]

We have to build all that out. There's nothing miracle about this. This is blocking and tackling business one-on-one. Get your supply out there, make it attractive, and then, make sure people know about it, and that's what we've been doing, cranking away at it. I'm pleased, and I said it's really nice to see us starting to hit it. It could come up with our mix in the U.S. at an all-time high in terms of alternative accommodation in part of our total mix, along with having the absolute number of alternative accommodation room night bookings. I am pleased with the progress that we're making, and I know that we have to continue that because I know customers like this product, and this is an area where we have growth possibilities.

[Glenn Fogel, CEO at Booking Holdings]

David, regarding direct, I'll leave it up to you on.

[David Goulden, CFO at Booking Holdings]

Sure. Lee, direct mix obviously is very tied to our strategy. Our strategy is to build a better product, provide better service for our customers and partners, and get those customers to come back to us more frequently and more directly after we've acquired them in the first place, through which I shall we bring them into the portfolio first time around. It really does tie to us executing against our strategy and lots of things that we do, many things that we do contribute to that better product. I could talk about alternative accommodation. I could talk about payments. We could talk adding flights. All these things just create a better service for our customer, and therefore we're more likely to get them back directly. It's very much tied to our strategy.

[David Goulden, CFO at Booking Holdings]

It is also tied to our financial model because we made a comment last quarter on February that we're obviously not targeting pre-COVID margin levels because of the mix shift in the business for some of these new areas that we're now focused in. We do expect to be able to grow our EBITDA margin above the levels that we're at in 2023. The biggest driver of that would be continuing to increase our direct mix. We'd also expect some to be able to do, you know, better from a leverage on our more fixed costs going forward, and those themselves would more than offset the pressure from the mix of low margin businesses as they grow within our portfolio.

[David Goulden, CFO at Booking Holdings]

Continuing to improve our direct mix is very important for both the strategy and the financial model and will be the major source of, for us to be able to provide some margin expansion beyond where we are this year.

[Lee Horowitz, Co-Head of Internet Equity Research at Deutsche Bank]

Helpful. Thank you both.

[Operator]

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

[John Colantuoni, VP and Senior Equity Research Analyst at Jefferies]

Great. Thanks for taking my questions. Hoping you could update us on your strategy in the U.S. market. You've had a lot of success gaining share in recent years, but I'm curious if you could update us on your learning so far about sort of the return on investments and how that's informing your aspirations to continue pursuing that opportunity as aggressively as you have been. Second, you know, you sort of characterized investing ahead of the travel recovery to gain share throughout 2021 and 2022. I'm curious if that's your strategy in the Asia Pacific region as that market recovers, and if you have any early reads on returns on that investment. Thanks.

[Glenn Fogel, CEO at Booking Holdings]

I'll start off by saying that I'm very pleased with how the strategy's been working out in the U.S., given our gain in share. As David mentioned, we have a bigger business than we did in 2019. It's been growing nicely. I really do think that it's achieving what we've been trying to accomplish, which is to not be the under indexed player that we were in the past, and we're making good progress there. In terms of the absolute ROIs on these things, We don't break them out by region at all. I will say that obviously we are very conscious of spending money the right way to get the right return, and we are... You know, I came out of a business, you know, previously, I was in finance.

[Glenn Fogel, CEO at Booking Holdings]

I know how important it is to make sure that you're getting your money's worth where you're spending it. We are doing that. I think in terms of going forward, our strategy's working, so I see us continuing in the same vein. In terms of Asia, it was not dissimilar that we wanna make sure when people are gonna start traveling, we don't wanna wait until, you know, you're halfway, you know, down the, down the track to get out of the gate. That would not be the best move. Get out in front. Be there when the traveler wants to start traveling and providing them with what they want.

[Glenn Fogel, CEO at Booking Holdings]

That we've been doing, and we just talked a little bit about how we were very pleased with the first quarter for Asia growth, and I think, hopefully it will continue the same way.

[John Colantuoni, VP and Senior Equity Research Analyst at Jefferies]

Great. Thanks so much.

[Operator]

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

[Analyst at Wolfe Research]

Great. Thank you. This is Zach on for Deepak. Just first on the fixed cost side, you know, I guess the first half is kind of tricking above the kind of 20% growth that you kind of outlined last quarter. One, two to two Qs also kind of sequentially stepping up a little bit here. Just curious on your thoughts of how we should think about the fixed cost growth kind of maybe sequentially kind of into the back half of the year and into next year. Second on just the buyback. I think once you came in, you know, a bit stronger than we were expecting. Just curious how we should think about kind of the puts and takes in terms of the cadence of buybacks through the rest of the year.

[Analyst at Wolfe Research]

Is one Q kind of a good run rate, or, how should we think of that? Thanks.

[Glenn Fogel, CEO at Booking Holdings]

David, yeah, you're the owner of the P&L there. Looking that you wanna take yourself down on the costs.

[David Goulden, CFO at Booking Holdings]

Yeah. On the cost side, yes. I mean, we talked about, you know, being 25% in the 1st quarter. We talked about being 25% in the 2nd quarter, obviously that's going to put a little bit of pressure on our guidance for the full year. What I'd say just generally, whether you look at anything that's in the kind of full year view, we've not updated our guidance. There are going to be some, you know, likely going to be some puts and takes for the full year at the line item level, we're not going to update that line item detail today, you know, other than just recommit that we'll have our margin expansion by a couple of points versus 2022.

[David Goulden, CFO at Booking Holdings]

Remember next year we said that we do expect our fixed costs to grow more slowly next year than we expect them to grow this year. That continues to be the case.

[Glenn Fogel, CEO at Booking Holdings]

Regarding buybacks, I think we laid it out a little bit. You know what our plan is, you know what we're doing, and I'm not sure there's any more color I could give. We're pleased with where we are.

[Analyst at Wolfe Research]

Great. Thank you.

[Operator]

Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.

[Analyst at Oppenheimer]

Hi. Great. This is Josh on for Jed. Thanks for taking our question. Just wondering if you can maybe speak to how recent improvements in payments is resonating with U.S. property managers and their opportunity to increase share?

[David Goulden, CFO at Booking Holdings]

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

[Operator]

Your next question comes from a line of Stephen Ju from Credit Suisse. Your line is open.

[Stephen Ju, Analyst at Credit Suisse Securities]

All right. Thank you. Glenn and David, your merchant booking dollars are now at parity with your agency dollars. Just wondering, you know, how much of this is due to ramp in air versus a more proactive choice the consumer may be making in their lodging product selections, you know, to your point earlier, to alternative accommodations. I guess, you know, doing more merchant and the rise in deferred merchant bookings there should improve your free cash flow generation. Does this change your capital allocation plans a little bit? Thank you.

[David Goulden, CFO at Booking Holdings]

On the second question, no. The capital allocation plan that we talked about last quarter that Glenn Fogel summarized earlier, you know, anticipated that we would be continuing to increase our merchant mix. On that piece, there is no change. In terms of where that merchant increase coming from, just to remind us all, it's really coming from a mix shift inside of Booking.com, where, you know, we are moving from what used to be almost entirely an agency model now to a much more balanced model. That is the biggest change would be in accommodations. That's still by far the biggest part of the business, although as flights grows, it's having an impact.

[David Goulden, CFO at Booking Holdings]

What's really driving the change that you're seeing is the increase in merchant mix across our accommodations business at Booking.com.

[Stephen Ju, Analyst at Credit Suisse Securities]

Thank you.

[David Goulden, CFO at Booking Holdings]

Okay.

[Operator]

Your next question comes from a line of James Lee from Mizuho. Your line is open.

[Analyst at Wolfe Research]

Great. Thanks for taking my questions. 2 here. Can you guys maybe give us an updated outlook on ADRs? I think previously you talked about expectation being maybe flattish on constant currency for FY 2023. Also David, maybe can remind us, you know, talk about some of the puts and take on takeaway for your expectation for 2023. Thanks.

[David Goulden, CFO at Booking Holdings]

We've said that we expect our ADRs for the second quarter just to kind of continue the picture. We expect our ADRs for the second quarter to be up slightly year-on-year basis. As I mentioned in one of my early answers, we're not updating every single line item on our full year guidance. You know, if they continue to hold at the current levels, there may be a little bit of upside compared to what we said on the last call on ADRs. As I said, there'll be some puts and takes up and down our full set of guidance. We're not specifically, you know, updating our guidance or giving you anything beyond what we're talking about for Q2.

[David Goulden, CFO at Booking Holdings]

We'll have to wait and see how that all develops. I think you can see from where we were in Q1 plus what we're expecting in Q2, things are trending positively.

[Operator]

Your next question comes from the line of Richard J. Clarke from Bernstein. Your line is open.

[Richard Clarke, Managing Director at Bernstein Autonomous LLP]

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

[Glenn Fogel, CEO at Booking Holdings]

Hi, Richard. look, there's no doubt that hotels, when they are doing well, may see less of a need to use all other ways to distribute and get business than just having to come to them direct, right? One of the things they are always looking is what's the return. So with us and Genius, it's really being very targeted with them to make sure they understand how we can get them incremental demand that they wouldn't necessarily be able to get otherwise, and then working with them, make sure is this value to them or not. You know, there's something I actually have talked a bit in the past. I know I'm not sure.

[Glenn Fogel, CEO at Booking Holdings]

I remember it on a call, but our sales people have worked with hoteliers and talked to them sometimes where we're working with the Genius program, and noticed that it's not actually the best use of their money and the best way for them to do the business. Told them, "Look, don't think you should use Genius this way, this amount, this time, whatever other times, et cetera." This is an idea of long-term, having a good partnership. It's not just knocking down the door of hotels, saying, "Give us discounts." That's not how this works. This works with science. This works with data. These are the machine learning stuff I talked about in the past. This is getting together to come up with a way that we can come up with a better way to improve their business.

[Glenn Fogel, CEO at Booking Holdings]

No doubt, as travel improves and such, there's gonna be, you know, less of a need as the hotels will find other ways and perhaps less expensive ways or, you know, more efficient ways for them. Maybe there will be some places, but I am not at all concerned. If your point is that this is gonna make a drastic difference to how we do our business in the future, I don't see it. I see this as something that's going more and more central as we continue to develop more ways to provide value to the traveler customer and be able to work with the customer supplier partner in ways that are complementary, symbiotic for all of us, that we all win in this. The traveler wins, the hotel wins, and we win.

[Richard Clarke, Managing Director at Bernstein Autonomous LLP]

Okay. Makes perfect sense. Maybe just a little technical question after this. You talked about, you've got $19 billion of merchant bookings in the quarter. You've talked about longer booking windows, but your deferred merchant bookings only at $4.5 billion. Just trying to square the gap between the $19 billion and the $4.5 billion that we see there.

[Glenn Fogel, CEO at Booking Holdings]

Richard, you're confusing me on this one.

[David Goulden, CFO at Booking Holdings]

Yeah. You got both of us, Richard. You've stumped us both on that one.

[Glenn Fogel, CEO at Booking Holdings]

Michael,

[Richard Clarke, Managing Director at Bernstein Autonomous LLP]

Just the deferred merchant booking line, which is $4.5 billion on your balance sheet, how does that square with you getting $19 billion of bookings, merchant bookings in the quarter that you're saying are largely for future quarters?

[David Goulden, CFO at Booking Holdings]

Richard, why don't we follow up with you offline on that one rather than try and bog us all down. Just to understand the question, make sure we get you the answer. If others want us to give us the answer, we can follow up with them as well. We'll touch base with you offline. John will call you back.

[Richard Clarke, Managing Director at Bernstein Autonomous LLP]

Okay. Thank you.

[Operator]

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

[Glenn Fogel, CEO at Booking Holdings]

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

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• David Goulden, CFO
• Glenn Fogel, CEO

Analysts

• Brian Nowak, Managing Director and Senior Equity Analyst at Morgan Stanley
• Doug Anmuth, Managing Director and Head of U.S. Internet Equity Research at JPMorgan
• John Colantuoni, VP and Senior Equity Research Analyst at Jefferies
• Justin Post, Managing Director at Bank of America
• Kevin Kopelman, Managing Director and Senior Equity Research Analyst at TD Cowen
• Lee Horowitz, Co-Head of Internet Equity Research at Deutsche Bank
• Lloyd Walmsley, Managing Director at UBS
• Mark Mahaney, Senior Managing Director at Evercore ISI
• Richard Clarke, Managing Director at Bernstein Autonomous LLP
• Stephen Ju, Analyst at Credit Suisse Securities
• Analyst at Oppenheimer
• Analyst at Wolfe Research