A month has gone by since the last earnings report for Booking Holdings (BKNG). Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Booking Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Booking Holdings Q1 Earnings & Revenues Beat Estimates, Rise Y/Y
Booking Holdings reported first-quarter 2026 adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate by 3.64%. The figure increased 14% year over year.
Revenues of $5.53 billion edged past the Zacks Consensus Estimate by 0.61% and increased 16% year over year and about 10% on a constant currency (cc) basis.
Revenues as a percentage of gross bookings were 10.3% in the first quarter of 2026, up about 10 basis points year over year, driven by the estimated impact of the situation in the Middle East.
BKNG’s Q1 Top Line in Detail
Merchant revenues were $3.70 billion (66.8% of total revenues), up 26.7% year over year. Agency revenues were $1.53 billion (27.6% of total revenues), down 2.3% year over year. Advertising & Other revenues were $306 million (5.5% of total revenues), up 9.3% year over year. The mix underscores the company’s continued scale in its payments-enabled model, which management highlighted as a contributor to revenue growth in the quarter.
First-quarter room nights of 338 million grew 6% year over year, even as the company cited headwinds tied to the Middle East conflict.
Alternative accommodation room nights at Booking.com grew 5.5% year over year, with total listings reaching 8.8 million, up 9% year over year.
Merchant gross bookings grew 24.3% year over year to $38.7 billion, representing 72% of total gross bookings.
Total gross bookings rose 15% year over year to $53.8 billion, with management noting a meaningful foreign-exchange benefit and modest constant-currency accommodation ADR gains.
Approximately 21 million airline tickets were booked across Booking Holdings' platforms in the first quarter, witnessing a 28.5% year-over-year increase.
BKNG’s Q1 Operating Results
Marketing expense, a highly variable expense line, increased 16.4% year over year. Marketing expense as a percentage of gross bookings was 3.8% in the first quarter of 2026, which was four basis points higher year over year, driven primarily by the situation in the Middle East, as certain bookings sourced through paid channels were subsequently canceled.
Sales and other expenses were $804 million, up 14.6% year over year. As a percentage of total gross bookings, sales and other expenses were 1.5%, similar to the first quarter of 2025. General and administrative expenses declined 29.3% year over year to $100 million, while information technology expenses rose 19.7% to $240 million. Personnel expenses increased to $893 million in the first quarter, up approximately 28.8% year over year.
Adjusted fixed operating expenses increased 14% year over year due to adverse FX changes and $53 million in one-time benefits in the first quarter of 2025.
Profitability reflected operating discipline. Operating income was $1.27 billion, an increase of 19.7% year over year. Net income margin improved to 19.6% compared to 7.0% a year-ago quarter.
Adjusted EBITDA rose 19% year over year to approximately $1.29 billion. Adjusted EBITDA margin was 23.3%, expanded 50 basis points year over year, with the company pointing to leverage in adjusted fixed operating expenses as a key driver of the adjusted profit expansion.
BKNG’s Q1 Balance Sheet & Cash Flow
As of March 31, 2026, the company's cash and investments totaled $16.8 billion, down from $17.8 billion as of Dec. 31, 2025.
Booking Holdings had $15.4 billion of total long-term debt, down from $16.9 billion as of Dec. 31, 2025.
Free cash flow was $3.1 billion, up compared with $1.4 billion reported in the previous quarter.
Shareholder payouts also included a quarterly cash dividend of $0.42 per share. Separately, the company noted that it effected a 25-for-1 stock split on April 2, 2026, and that per-share figures have been retroactively adjusted to reflect the split.
Booking Holdings’ Q2 & 2026 Guidance
For the second quarter of 2026, room night growth is expected between 2% and 4%. Gross bookings, revenues and adjusted EBITDA are each projected to grow 4% to 6%. Constant-currency gross bookings growth expected at 2% to 4%.
For full-year 2026, BKNG expects gross bookings growth in the high-single-digit to low-double-digit range, constant-currency gross bookings growth in the high-single-digit range, and constant-currency revenue growth in the mid-to-high-single-digit range. Adjusted EBITDA growth is expected to be slightly faster than revenue growth, while adjusted earnings growth is projected in the low-to-mid-teens.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -7.97% due to these changes.
VGM Scores
Currently, Booking Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Booking Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Booking Holdings Inc. (BKNG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).