Booking Q1 - Buying Back Stock

On Thursday evening Booking Holdings or more commonly known as Booking.com released their Q2 numbers. Even though the numbers were on the low side when compared to what analysts were expecting, the stock still jumped 5%. Makes for a nice change, the last few quarters their numbers were on the high side but the stock dropped anyway. Who knows what will happen to share prices in the short run.

Their gross bookings were up 2% to $25.4 billion but would have been up 8% in constant currencies. A strong dollar takes a big bite out of their numbers. Of that $25 billion, Booking's revenue was $2.8 billion, a drop of 3% or an increase of 3% in constant currencies.

Management took advantage of the lower share price coming into this year by buying back 5% of their shares in 2019 alone. It is good to see management buying during these dips!



With a lot of the low hanging fruit in the industry already captured, top-line growth has slowed for the business to the high single figures. As the company becomes more established though, their margins should be able to improve. In Q1 alone, they paid Google over $1 billion to direct people to their site. Once you are part of the Booking.com ecosystem though, they will no longer need the help of Google to drive traffic, much like Amazon. In the past quarter, they have seen an increasing number of clients coming directly to the site.

The share price has been flat for two years, but in that time the company has been growing their profits and buying back shares. Patient shareholders will be rewarded in time.