Booking Holdings Books $1 Billion FTC Charge as Q4 Growth Guidance Slows Sharply

Booking Holdings reported solid third-quarter growth on Tuesday, but a $1 billion accounting hit tied to a possible Federal Trade Commission settlement and a much softer fourth-quarter outlook dominate the picture for anyone who depends on its platforms.

Room nights rose 7% to 345 million, and gross bookings grew 10% to $54.5 billion, or about 11% in constant currency. Revenue fell 1% to $8.9 billion because of the FTC item. Adjusted revenue, which strips it out, grew 9% to $9.8 billion. GAAP net income came in at $2.7 billion, down 1%, while adjusted net income rose 8% to $3.5 billion. GAAP earnings per share grew 7% to $3.61 and adjusted earnings per share grew 17% to $4.66. Adjusted EBITDA rose 9% to $4.6 billion, with the margin flat at 47.0%.

The FTC charge is the story behind the headline. Booking recorded a $900 million reduction in revenue and accrued a $100 million loss related to an FTC matter. Skift reports that the company said Priceline is in discussions with the FTC to resolve a potential complaint, and that no settlement has been reached. The charges have been excluded from the adjusted figures, and the company says gross bookings do not reflect the matter. Booking's quarterly filing indicates the FTC could seek restitution and penalties above $1 billion, plus litigation costs, according to Skift.

For hotels and rental hosts, the more practical numbers sit lower down. Alternative accommodation room nights at Booking.com grew 7%, in line with the group. Accommodation average daily rates rose about 3% in constant currency. Marketing spending was 4.8% of gross bookings, up from 4.7% a year earlier, and the direct channel accounted for a mid-fifties percentage of room nights over the trailing four quarters, similar to last year. A higher marketing ratio alongside a stable direct mix suggests Booking is not yet leaning less on paid channels to fill its funnel.

The outlook is weaker. Booking said global demand moderated toward the end of the quarter, with international travel softer while domestic travel held up. In October, disruption to travel to and from the Middle East, higher airfares linked to the conflict and localized unrest in some European cities also hit demand. Guidance assumes those effects last through year-end. For the fourth quarter, Booking expects room night growth of 1% to 3%, gross bookings growth of 2% to 4% (4% to 6% in constant currency) and adjusted revenue growth of 0% to 2%. Adjusted EBITDA is expected to be about flat. For the full year, it still expects high single digit growth in room nights, gross bookings and adjusted revenue.

CEO Glenn Fogel said the company is "integrating AI across our brands, developing AI-native experiences, and collaborating with industry-leading AI platforms," while noting that "geopolitical and macroeconomic uncertainty may affect near-term travel trends."

Booking returned capital too, repurchasing $2.1 billion of stock in the quarter, with $12.4 billion of authorization remaining, and declaring a $0.42 quarterly dividend payable on December 31.

Operators should plan for slower inbound demand growth through the winter, particularly from international markets, and watch whether the FTC outcome brings changes to how Priceline presents pricing or fees.