Booking (BKNG.US) Q3 total bookings of $54.5 billion beat expectations; adjusted EPS jumps 17%; Q4 guidance turns cautious due to Middle East situation

Booking (BKNG.US) Q3 total bookings of $54.5 billion beat expectations; adjusted EPS jumps 17%; Q4 guidance turns cautious due to Middle East situation Beijing time in the early hours of November 4, the world's largest online travel company Booking Holdings (BKNG.US) released its Q3 2026 results after the U.S. market close on Tuesday. Total bookings, room nights and adjusted profit metrics for the quarter all exceeded market expectations, with adjusted EPS surging 17%; however, due to an accrual related to a U.S. Federal Trade Commission (FTC) matter, GAAP revenue and net income declined slightly year over year. The company also cautioned that disruption to the travel industry from the Middle East conflict is affecting Q4 demand, and its Q4 guidance is correspondingly cautious. Core results: strong bookings, profit beat The report shows Booking's Q3 total bookings reached $54.5 billion, up 10% year over year (about 11% in constant currency), above the market expectation of $52.69 billion; room nights sold were 345 million, up 7% year over year, better than the expected 339 million, with alternative accommodations (homestay/apartment-type) room nights on the Booking.com platform growing 7%. Profitability was strong: adjusted EBITDA was $4.6 billion, up 9% year over year, beating the expected $4.49 billion; adjusted net income was $3.5 billion, up 8%; adjusted EPS was $4.66, surging 17% year over year; GAAP EPS was $3.61, up 7%. The adjusted EBITDA margin held at a high level of 47.0%, with a net margin of 30.6%. Cost control was also notable: total operating expenses fell 1% year over year, adjusted fixed operating expense growth was held to 6%, with personnel costs even declining slightly; marketing expenses as a percentage of total bookings were 4.8% (4.7% in the year-ago period). Why did GAAP revenue "decline"? $900 million FTC accrual On the surface, Q3 GAAP revenue was $8.89 billion, down 1% year over year and below the market expectation of $9.54 billion; net income was $2.7 billion, down 1% year over year. But this "decline" mainly stems from one-time items: the company reduced revenue by $900 million and recorded a $100 million loss related to an FTC matter, both of which have been excluded from adjusted metrics. Excluding that impact, the company's preferred "Adjusted Revenue" was $9.8 billion, up 9% year over year (about 10% in constant currency). It should also be noted that Booking implemented a 25-for-1 stock split on April 2, 2026, and all per-share metrics have been retroactively adjusted this is also why some market data software shows "EPS plunging year over year," which is actually a difference in basis caused by the stock split. CEO Glenn Fogel said: "We are pleased with our third-quarter operating performance resilient travel demand and disciplined execution by our team drove double-digit total bookings growth, margin expansion and 17% adjusted EPS growth. As AI transforms how people discover, plan and book travel, we will continue to integrate AI across our brands, develop AI-native experiences, and partner with industry-leading AI platforms." Capital returns and Q4 guidance: real money unchanged, but growth clearly shifting gears Capital returns remain strong: the company repurchased $2.1 billion of stock in the quarter nearly twice its quarterly free cash flow ($1.1 billion) with $12.4 billion remaining under its repurchase authorization; the board declared a quarterly cash dividend of $0.42 per share (post-split basis), payable December 31, which at Tuesday's closing price of $155.67 implies an annualized dividend yield of about 1.1%. At the current repurchase pace, the $12.4 billion authorization could support buybacks for roughly the next two quarters, and management's willingness to "spend" has not shrunk. But the Q4 guidance clearly signals deceleration: compared with Q3's actual performance, the company's Q4 expectations are broadly "downshifted." For total bookings, Q3 still maintained 10% year-over-year growth (about 11% in constant currency), but Q4 guidance drops sharply to 2% to 4% (4% to 6% in constant currency), a deceleration of about 6 percentage points; room night growth will slow from 7% in Q3 to 1% to 3%; the pullback in adjusted revenue growth is even more pronounced, plunging from 9% in Q3 (about 10% in constant currency) to 0% to 2% (2% to 4% in constant currency); profit faces the most pressure, with adjusted EBITDA up 9% year over year in Q3 but Q4 guidance at only "roughly flat." The company explained that global travel demand had already cooled somewhat by the end of Q3 international travel trends weakened while domestic travel remained resilient; since October, travel disruptions to and from the Middle East caused by the conflict, indirectly higher airfares, and localized unrest in some European cities have all been affecting demand, and the Q4 guidance incorporates the assumption that these direct and indirect effects persist through year-end. The full-year view remains relatively optimistic: over the full-year horizon, the company maintains its 2026 guidance of high-single-digit growth in total bookings and adjusted EBITDA, with adjusted EPS expected to grow low-double-digit to mid-double-digit the latter still close to the company's long-term target of "at least 15% adjusted EPS growth," while the 47% adjusted EBITDA margin and continued buybacks form the base for earnings growth. In other words, management's message is: short-term headwinds are real, but they have not shaken the full-year foundation.