Booking Holdings Inc.

Booking Holdings (Nasdaq: BKNG) operates Booking.com, Priceline, Agoda, KAYAK and OpenTable. It earns commissions, transaction revenue, payment-related fees, advertising revenue and restaurant reservation or subscription fees.

Merchant transactions are bookings where the group facilitates traveler payments. Its revenue is mainly commissions, the difference between traveler charges and amounts owed to providers, and related fees. Agency transactions generally leave payment collection to the travel provider. The shift toward merchant transactions can lift merchant revenue while agency revenue falls.

The FTC item changes the reported revenue comparison

The September quarter included a $900 million reduction to revenue and a $100 million expense in general and administrative costs over an FTC matter involving Priceline and a business-to-business affiliate partner. The related liability is recorded in current liabilities.

In July, FTC staff told Priceline they intended to recommend a complaint alleging unfair or deceptive practices involving disclosures, fees, customer support and billing. That risk was already disclosed in August. Priceline remains in discussions; a settlement has not been agreed, and the FTC may seek more.

Our comparison finds $785 million of growth across revenue categories before the FTC reduction, leaving GAAP revenue $115 million lower. Gross bookings, which measure the value of travel reserved, were unaffected by the FTC accounting item.

Adjusted revenue excludes the FTC reduction. Adjusted profit removes the combined FTC item and other specified costs or gains, including intangible amortization or impairment, transformation costs, investment and currency movements, and tax adjustments. Adjusted EBITDA also removes interest, taxes, depreciation and amortization. Its margin on adjusted revenue rounded to 47% in both quarters.

Earlier expectations and the next quarter

Q3 room nights grew 6.7%, against August guidance of 3%-5%. Gross bookings grew 9.6%, versus 4%-6%, and adjusted EBITDA rose about 9%, versus 4%-6%. The original revenue forecast used GAAP revenue; the new adjusted measure excludes the FTC item.

For Q4, management expects room-night growth of 1%-3%, adjusted revenue growth of 0%-2% and about flat adjusted EBITDA. It says international travel softened late in Q3. The outlook assumes continuing direct and indirect effects from the Middle East conflict.

The annual revenue outlook now uses adjusted revenue. Its high-single-digit growth description therefore has a different accounting basis from August's GAAP revenue outlook.

Cash, traveler balances and funding

Nine-month operating cash rose to $8.071 billion from $7.919 billion. Free cash flow was $7.820 billion versus $7.670 billion, after capital spending of $251 million and $249 million.

September cash was $15.814 billion, with a separate $230 million of restricted cash primarily related to traveler payments held for service providers. Deferred merchant bookings were $6.450 billion, versus $10.121 billion in June. Those advance payments include amounts owed to providers and future commissions or fees, and are mostly refundable on cancellation.

Short-term debt of $1.987 billion and long-term debt of $18.074 billion total $20.061 billion in carrying amounts, versus $18.736 billion at year-end. The $2 billion revolving facility had no borrowings outstanding at September.

Shareholders and remaining legal exposure

Q3 program repurchases cost $2.116 billion, excluding separately reported employee tax-withholding purchases. Remaining authorization was $12.4 billion. The board also declared a $0.42 quarterly dividend payable December 31. Lower diluted shares, 753 million versus 814 million, helped EPS grow faster than net income. All per-share comparisons reflect the April 2026 25-for-1 split.

Separately, Booking.com recorded a $469 million long-term liability for the Spanish CNMC matter. The decision and payment are suspended pending appeal. The next results can test the slower growth outlook, cash movements as travelers complete trips and developments in the FTC discussions.