Online travel agency Booking Holdings (NASDAQ:BKNG) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 16% year on year to $6.80 billion. Its non-GAAP profit of $55.40 per share was 10.1% above analysts’ consensus estimates.
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Booking (BKNG) Q2 CY2025 Highlights:
- Revenue: $6.80 billion vs analyst estimates of $6.56 billion (16% year-on-year growth, 3.7% beat)
- Adjusted EPS: $55.40 vs analyst estimates of $50.32 (10.1% beat)
- Adjusted EBITDA: $2.44 billion vs analyst estimates of $2.20 billion (35.8% margin, 10.6% beat)
- Operating Margin: 33.1%, up from 31.7% in the same quarter last year
- Free Cash Flow Margin: 46.2%, down from 66.4% in the previous quarter
- Room Nights Booked: 309 million, up 22 million year on year
- Market Capitalization: $181.9 billion
Company Overview
Formerly known as The Priceline Group, Booking Holdings (NASDAQ:BKNG) is the world’s largest online travel agency.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Booking grew its sales at an impressive 19.6% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, Booking reported year-on-year revenue growth of 16%, and its $6.80 billion of revenue exceeded Wall Street’s estimates by 3.7%.
Looking ahead, sell-side analysts expect revenue to grow 7.9% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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Room Nights Booked
Booking 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 room nights booked, a key performance metric for the company, increased by 9.5% annually to 309 million in the latest quarter. This growth rate is solid for a consumer internet business and indicates people are excited about its offerings. 
In Q2, Booking added 22 million room nights booked, leading to 7.7% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating booking growth just yet.
Revenue Per Booking
Average revenue per booking (ARPB) is a critical metric to track because it not only measures how much users book on its platform but also the commission that Booking can charge.
Booking’s ARPB growth has been mediocre over the last two years, averaging 3.9%. This isn’t great, but the increase in room nights booked is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Booking tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether bookings can continue growing at the current pace. 
This quarter, Booking’s ARPB clocked in at $22. It grew by 7.8% year on year, mirroring the performance of its room nights booked.
Key Takeaways from Booking’s Q2 Results
We were impressed by how significantly Booking blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $5,552 immediately after reporting.
So should you invest in Booking right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.