Company DCF analysis file
Booking Holdings DCF Analysis
A Booking Holdings DCF needs recognized travel revenue, acquisition cost and merchant-settlement timing on the same basis. FY2025 operating income increased, while net income fell. Advance customer collections explain part of the difference between profit and cash but remain associated with travel obligations.
Revenue, expenses and profit on one annual basis
Historical Booking Holdings consolidated comparison, $ millions: FY2024 ended 2024-12-31 and FY2025 ended 2025-12-31. These annual periods are separate from the later interim observation below.
| Measure | FY2024 | FY2025 |
|---|---|---|
| Revenue | 23,739 | 26,917 |
| Marketing | 7,278 | 8,186 |
| Sales and other expenses | 3,120 | 3,453 |
| Personnel including stock compensation | 3,354 | 3,403 |
| General and administrative | 1,036 | 857 |
| Information technology | 771 | 908 |
| Depreciation and amortization | 591 | 623 |
| Impairment | 0 | 457 |
| Transformation costs | 34 | 205 |
| Operating income | 7,555 | 8,825 |
| Net income | 5,882 | 5,404 |
Source: Annual financial statements. Annual values are reported unless a row is marked derived.
Marketing is a major operating deduction, not a reduction in the reservation-value headline. The complete expense rows reconcile revenue to operating income. Interest, other nonoperating items and tax then affect net income, so its decline alone does not describe the travel operating trend. Transformation and impairment adjustments need their own recurrence and cash explanation.
Merchant and agency revenue are different payment models
| Reported group revenue, $ millions | FY2024 | FY2025 |
|---|---|---|
| Merchant | 14,142 | 17,755 |
| Agency | 8,524 | 7,968 |
| Advertising and other | 1,073 | 1,194 |
Source: Annual business disclosures and financial notes. Annual values are reported unless a row is marked derived.
Merchant activity facilitates traveler payments; agency activity generally does not. A shift between them changes the cash schedule as well as reported revenue composition. Gross booking value is the reservation value, not revenue to add to these rows. Reconcile cancellations and expected check-in dates before extrapolating cash conversion.
Reconcile reported cash before forecasting investor cash
| Measure | FY2024 | FY2025 |
|---|---|---|
| Consolidated operating cash | 8,323 | 9,409 |
| Cash property additions: positive deduction | 429 | 322 |
| Operating cash less property additions: derived | 7,894 | 9,087 |
Source: Annual cash-flow statement and related notes. Annual values are reported unless a row is marked derived.
The 2025 subtraction is 9,409 minus 322 = $9,087 million. These are consolidated cash-statement payments, not accrued additions or the parent-only cash statement. Pulling a merchant receipt forward can improve one half-year and reverse in the next without creating extra annual revenue or profit.
The later interim period stays separate
| Observation | Period-specific evidence |
|---|---|
| Reported interim basis | Q2 2026 covers 2026-04-01 through 2026-06-30 and was released 2026-08-04. Revenue was $7,352 million in this quarter. |
| Interpretation boundary | Room nights, gross bookings, revenue recognition and merchant collections have different dates. A net-income comparison with a different adjustment base does not directly measure growth in core travel cash. |
Source: official interim reporting. The dated quarter is not annualized here and is not added to either full-year column. Later reporting must be checked before refreshing the valuation date.
Turn the statements into a DCF operating case
Forecast completed travel, recognized fees and marketing cost by matched seasonal cohorts. Reconcile operating profit to cash using operating taxes, noncash expense, commission receivables and deferred merchant bookings separately. A slower new-booking case must still pay suppliers and refunds for prior cohorts. Separate genuine nonoperating assets and financing from those operating balances before the equity bridge.
| Driver | Evidence to carry into the forecast | Downside condition to test |
|---|---|---|
| Travel demand | Room nights, cancellations and recognized fees | Earlier reservations do not become completed stays |
| Acquisition efficiency | Marketing cost per retained economic booking | Paid traffic grows without enough retained contribution |
| Merchant settlement | Customer receipts, refunds and supplier payments | New collections slow while prior travel obligations settle |
Compare the same travel demand with earlier receipts against lower demand with unchanged refund and supplier calendars. The first changes timing; the second can unwind the funding benefit. Select a sustainable full-cycle cash base before setting terminal assumptions, rather than capitalizing a strong seasonal cash quarter.
Use the Booking Holdings financial analysis for the broader operating context, the company forecast to state the operating assumptions, and the DCF calculator only after defining the investor cash stream. Keep the statement definitions, reporting dates and your own assumptions visible when comparing valuation cases.
Company analysis