Booking (NASDAQ:BKNG) Exceeds Q4 Expectations

Max Juang /
2024/02/22 4:10 pm EST

Online travel agency Booking Holdings (NASDAQ:BKNG) beat analysts' expectations in Q4 FY2023, with revenue up 18.2% year on year to $4.78 billion. It made a non-GAAP profit of $32 per share, improving from its profit of $24.72 per share in the same quarter last year.

Is now the time to buy Booking? Find out by accessing our full research report, it's free.

Booking (BKNG) Q4 FY2023 Highlights:

  • Revenue: $4.78 billion vs analyst estimates of $4.71 billion (1.6% beat)
  • EPS (non-GAAP): $32 vs analyst estimates of $30.05 (6.5% beat)
  • Free Cash Flow of $1.25 billion, similar to the previous quarter
  • Room Nights Booked: 231 million, up 20 million year on year
  • Market Capitalization: $130.5 billion

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

Online Travel

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 incredible, averaging 68.1% annually. This quarter, Booking beat analysts' estimates and reported 18.2% year-on-year revenue growth.

Booking Total Revenue

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Usage Growth

As an online travel company, Booking generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.

Over the last two years, Booking's nights booked, a key performance metric for the company, grew 37.4% annually to 231 million. This is among the fastest growth rates of any consumer internet company, indicating that users are excited about its offerings.

Booking Room Nights Booked

In Q4, Booking added 20 million nights booked, translating into 9.5% year-on-year growth.

Revenue Per Booking

Average revenue per booking (ARPB) is a critical metric to track for consumer internet businesses like Booking because it not only measures how much users book on its platform but also the commission that Booking can charge. Booking ARPB

Booking's ARPB growth has been strong over the last two years, averaging 9%. The company's ability to increase prices while rapidly growing its nights booked reflects the strength of its platform, as its bookings continue to book more each year. This quarter, ARPB grew 7.9% year on year to $20.71 per booking.

Key Takeaways from Booking's Q4 Results

It was good to see Booking narrowly top analysts' revenue expectations this quarter on better-than-expected gross bookings. We were also glad it expanded its user base. Zooming out, we think this was a decent quarter, showing that the company is staying on target. The market was likely expecting more, and the stock is down 3.9% after reporting, trading at $3,749.99 per share.

So should you invest in Booking right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.