Booking (NASDAQ:BKNG) Misses Q2 Revenue Estimates

Kayode Omotosho /
2022/08/03 4:18 pm EDT

Online travel agency Booking Holdings (NASDAQ:BKNG) missed analyst expectations in Q2 FY2022 quarter, with revenue up 98.7% year on year to $4.29 billion. Booking made a GAAP profit of $857 million, improving on its loss of $167 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) Q2 FY2022 Highlights:

  • Revenue: $4.29 billion vs analyst estimates of $4.34 billion (1.28% miss)
  • EPS (non-GAAP): $19.08 vs analyst estimates of $17.67 (7.98% beat)
  • Free cash flow of $2.59 billion, up 63.8% from previous quarter
  • Room Nights Booked: 246 million, up 89 million year on year

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

Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission paying sellers, generating flywheel scale effects which feed back into further customer acquisition. 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. 

Sales Growth

Booking's revenue growth over the last three years has been very strong, averaging 36.6% annually.

Booking Total Revenue

This quarter, Booking reported a very impressive 98.7% year on year revenue growth, but this result fell short of what analysts were expecting.

Ahead of the earnings results the analysts covering the company were estimating sales to grow 28.6% over the next twelve months.

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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 97.1% annually to 246 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 Q2 the company added 89 million nights booked, translating to a 56.6% growth year on year.

Key Takeaways from Booking's Q2 Results

With a market capitalization of $79.4 billion, more than $11.8 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 impressed by the exceptional revenue growth Booking delivered this quarter. And we were also glad to see the user growth and strong free cash flow. On the other hand, it was unfortunate to see that Booking missed analysts' revenue expectations. Overall, this quarter's results seemed pretty positive and shareholders can feel optimistic. The company is up 3.85% on the results and currently trades at $2,044.39 per share.

Should you invest in Booking 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.