Booking Holdings, owner of several travel and event planning and booking platforms, sees resilient travel demand even if it failed to live up to third quarter revenue expectations.
The company, whose platforms include Booking.com, Priceline, Agoda, KAYAK, and OpenTable, said gross bookings for the quarter rose 10% to $54.5 billion, while hotel room nights increased 7% from a year ago, to 345 million.
But third-quarter revenue dipped 1%, to $8.89 billion and below the $9.55 billion Wall Street expected.
Adjusted earnings of $4.66 a share rose 17%, beating the $4.49 analysts anticipated.
Booking stock initially wobbled but then fell 2% in after-hours trading after closing up 1.3% at $155.67 in regular trading. The stock is down 27% this year and down 22% over the past 12 months.
Booking said it also recorded a $900 million reduction in revenue and accrued a loss of $100 million related to a Federal Trade Commission matter, which was excluded from its adjusted revenue and adjusted net income results. FTC staff told Priceline that it potentially faces a lawsuit related to accusations of unfair or deceptive business practices, and that the matter could involve monetary penalties or restitution. Priceline is in discussions with the FTC to seek to resolve this matter, the company said in a regulatory filing.
Booking.com could not immediately be reached for comment. The FTC did not immediately respond to Barron's request for more information.
CEO Glenn Fogel said the company was pleased with its third-quarter operating performance, adding that "resilient travel demand and disciplined execution by our teams drove double-digit gross bookings growth, margin expansion," and 17% adjusted EPS growth.
Booking said it is integrating artificial intelligence across its brands, developing AI-native experiences, and collaborating with industry-leading AI platforms.
The company also noted that "geopolitical and macroeconomic uncertainty may affect near-term travel trends," but maintained its full-year guidance for gross bookings growth in the high single-digits and adjusted earnings-per-share growth to be in the low to mid-teens.
Booking said global travel demand has moderated somewhat toward the end of the third quarter, "reflecting softer international travel trends, while domestic travel has remained resilient."
Travel demand in October was affected by disruptions in the Middle East region, indirect effects from the conflict such as higher airfares, and "localized unrest in certain European cities." It said its guidance reflects those near-term disruptions and assumes that both direct and indirect impacts of the Middle East conflict on travel will persist through the end of 2026.
For the current fourth quarter, Booking expects room nights growth of 1% to 3%, gross bookings growth of 2% to 4%, and adjusted earnings before interest, taxes, and depreciation growth to be about flat.
Rival travel companies Expedia Group will report third-quarter financial results on Wednesday, and Airbnb will report results on Thursday. Expedia shares closed down 4.4%, at $285.77 on Tuesday, while Airbnb closed down 2.4%, at $166.96.
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