Booking Holdings Inc. – One of the best-managed businesses you'll find!
Last week, Booking delivered one of the most impressive earnings reports of 2025, nailing it on all fronts amid tremendous execution. Let me walk you through the numbers!
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Introduction
On Thursday, February 20, Booking Holdings released its fourth-quarter earnings report, which might just have been the most impressive report released so far in 2025 (that I looked at in detail, at least). Booking nailed it on all fronts, blowing past consensus estimates and its own guidance by some margin, as the company delivered accelerating growth and expanding margins all across the board amid far better Q4 demand than previously expected.
Notably, Booking's growth was also better than that of close peers Airbnb and Expedia, which tells me that It continues to gain market share. Despite its already significantly larger size, Booking has been outgrowing its close peers for years.
For reference, Airbnb reported 111 nights booked in Q4, compared to 261 million for Booking. Indeed, booking is still more than 2 times the size of Airbnb.
Today, Booking is the absolute industry leader by a mile and is undoubtedly the highest-quality player in the travel industry, thanks to its consistently phenomenal execution, competent management team, and terrific long-term strategy, which is paying off today. I mean, Airbnb is even planning to copy the Booking playbook.
As a result, Booking still has a very promising outlook, with management confident it should be able to keep growing gross bookings and revenue by at least 8% in any given year, which, driven by expanding margins from size benefits, should lead to EPS growth of at least 15% in any given year, in the medium term.
Honestly, that is absolutely brilliant…
Meanwhile, Booking has also become an absolute FCF machine, generating roughly $8 billion in FCF annually at an FCF margin of almost 38%. Notably, almost all of this cash is returned to shareholders, with the company retiring an astonishing 21% of its outstanding shares over the last two years alone and introducing its first-ever dividend last year.
In other words, Booking is a dominant industry leader that consistently outgrows its peers, steadily grows its top line, sees rapid margin expansion and EPS growth, has a solid outlook, and is also incredibly shareholder-friendly.
I mean, what more can we wish for?
It’s for all these reasons that I absolutely adore this business and have been a long-time shareholder.
On that note, I want to examine those blinding Q4 results closely, delving into all the details to show you exactly why I am so impressed. I will then update my medium-term projections and target price to make up the balance.
Without further ado, let’s delve in!
