Booking (NASDAQ:BKNG) Delivers Impressive Q4, Shows User Growth

Petr Huřťák /
2023/02/23 4:05 pm EST
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Online travel agency Booking Holdings (NASDAQ:BKNG) announced better-than-expected results in the Q4 FY2022 quarter, with revenue up 35.8% year on year to $4.05 billion. Booking made a GAAP profit of $1.24 billion, improving on its profit of $618 million, in the same quarter last year.

Is now the time to buy Booking? Access our full analysis of the earnings results here, it's free.

Booking (BKNG) Q4 FY2022 Highlights:

  • Revenue: $4.05 billion vs analyst estimates of $3.9 billion (3.83% beat)
  • EPS (non-GAAP): $24.74 vs analyst estimates of $22.08 (12% beat)
  • Free cash flow of $2.1 billion, up from negative free cash flow of $95 million in previous quarter
  • Room Nights Booked: 211 million, up 60 million year on year

Formerly known as The Priceline Group, Booking Holdings (NASDAQ: BKNG) is the world’s largest online travel agency.

Because of the enormous number of flights, hotels, and accommodations available, travel is a natural fit for marketplaces that aggregate suppliers, simplifying the shopping process for consumers. Online travel platforms today make up over 50% of the industry’s bookings, a percentage that has been rising for 20 years, and will likely continue in the years ahead.

Sales Growth

Booking's revenue growth over the last three years has been impressive, averaging 41.4% annually. The initial impact of the pandemic was negative for Booking's revenue, but growth rates subsequently normalized.

Booking Total Revenue

This quarter, Booking beat analyst estimates and reported an excellent 35.8% year on year revenue growth.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Usage Growth

As an online travel company, Booking generates revenue growth by a combination of increasing the number of stays (or experiences) booked, as well as the level of commission charged on those bookings.

Over the last two years the number of Booking's nights booked, a key usage metric for the company, grew 101% annually to 211 million users. This is among the fastest growth of any consumer internet company, indicating that users are excited about the offering.

Booking Room Nights Booked

In Q4 the company added 60 million nights booked, translating to a 39.7% growth year on year.

Key Takeaways from Booking's Q4 Results

With a market capitalization of $94.1 billion, more than $12.4 billion in cash and with free cash flow over the last twelve months being positive, the company is in a very strong position to invest in growth.

We were very impressed by Booking’s strong user growth this quarter. And we were also excited to see the really strong revenue growth. Zooming out, we think this was a very solid quarter. The company is up 0.93% on the results and currently trades at $2,449.5 per share.

Booking may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.