Booking Holdings Inc.

Previous wording

The cancellation rate in the first quarter of 2026 was lower than the first quarter of 2025, although we experienced a year-over-year increase in cancellation rates during the month of March due to the conflict in the Middle East. Because we recognize revenues from bookings when the traveler checks in, our reported revenues are not at risk of being reversed due to cancellations. Late in the first quarter of 2026, the increase in cancellation rates negatively impacted our marketing efficiency since we incur performance marketing expenses at the time a booking is made even if that booking is canceled in the future.

Current wording

The cancellation rate in the second quarter of 2026 was lower than the second quarter of 2025. While the conflict in the Middle East continued to affect travel demand during the second quarter, cancellation rates normalized following the elevated levels in March 2026 immediately after the onset of the conflict. Because we recognize revenues from bookings when the traveler checks in, our reported revenues are not at risk of being reversed due to cancellations. Increases in cancellation rates can negatively impact our marketing efficiency as a result of incurring performance marketing expenses at the time a booking is made even though that booking could be canceled in the future.

Previous wording

In the first quarter of 2026, our global average daily rates ("ADRs") on a constant currency basis were approximately 1% higher than the prior year primarily driven by higher ADRs in Europe. Our global ADRs were not materially impacted by changes in regional mix in the first quarter of 2026.

Current wording

In the second quarter of 2026, our global average daily rates ("ADRs") on a constant currency basis were approximately 2% higher than the prior year primarily driven by higher ADRs in Europe and the U.S. Our global ADRs were not materially impacted by changes in regional mix in the second quarter of 2026.

Previous wording

Our mobile apps are an important platform for experiencing the Connected Trip since the app travels with the traveler. The mix of our room nights booked on our mobile apps over the trailing twelve months ended March 31, 2026, was a high-fifties percentage, up from a mid-fifties percentage over the trailing twelve months ended March 31, 2025. The significant majority of room nights booked on our mobile apps are direct, and we continue to see favorable repeat direct booking behavior from consumers in our mobile apps, which allow us more opportunities to engage directly with them. The revenues earned on a transaction on a mobile app may be less than a typical desktop transaction as we see different consumer purchasing patterns across devices. For example, accommodation reservations made on a mobile app typically are for shorter lengths of stay and have lower accommodation ADRs.

Current wording

Our mobile apps are an important platform for delivering the Connected Trip experience, allowing us to engage directly with travelers throughout their journey. The mix of our room nights booked on our mobile apps over the trailing twelve months ended June 30, 2026, was a high-fifties percentage, up from a mid-fifties percentage over the trailing twelve months ended June 30, 2025. The significant majority of room nights booked on our mobile apps are direct, and we continue to see favorable repeat direct booking behavior from consumers in our mobile apps, which allow us more opportunities to engage directly with them. The revenues earned on a transaction on a mobile app may be less than a typical desktop transaction as we see different consumer purchasing patterns across devices. For example, accommodation reservations made on a mobile app typically are for shorter lengths of stay and have lower accommodation ADRs.

Previous wording

We continue to expand our merchant service offerings as part of a broader strategy to provide more payment options to travelers and travel service providers, increase the variety of our accommodations, and enable our long-term Connected Trip strategy. These merchant services allow us to facilitate payments from travelers and offer secure, flexible transaction terms, such as varied payment forms, currencies, and timing. The mix of our total gross bookings generated on a merchant basis across the Company was 72% in the first quarter of 2026, an increase from 67% in the first quarter of 2025 due to the ongoing shift from agency to merchant bookings at Booking.com. We believe that expanding these types of service offerings will benefit consumers and travel service providers, as well as our gross bookings, room night, and earnings growth rates. However, this results in additional expenses for personnel, payment processing, chargebacks (including those related to fraud), and other expenses related to these transactions, which are recorded in "Personnel" expenses and "Sales and other expenses" in our Unaudited Consolidated Statements of Operations, as well as associated incremental revenues (e.g., payment card rebates), which are recorded in "Merchant revenues." To the extent more of our business is generated on a merchant basis, we incur a greater level of these merchant-related expenses, which negatively impacts our operating margins despite increases in associated incremental revenues. Over the trailing twelve months ended March 31, 2026, the incremental revenues from facilitating payments were greater than the associated incremental variable expenses.

Current wording

We continue to expand our merchant service offerings as part of a broader strategy to provide more payment options to travelers and travel service providers, increase the variety of our accommodations, and enable our long-term Connected Trip strategy. These merchant services allow us to facilitate payments from travelers and offer secure, flexible transaction terms, such as varied payment forms, currencies, and timing. The mix of our total gross bookings generated on a merchant basis across the Company was 73% in the second quarter of 2026, an increase from 69% in the second quarter of 2025 due to the ongoing shift from agency to merchant bookings at Booking.com. We believe that expanding these types of service offerings will benefit consumers and travel service providers, as well as our gross bookings, room night, and earnings growth rates. However, this results in additional expenses for personnel, payment processing, chargebacks (including those related to fraud), and other expenses related to these transactions, which are recorded in "Personnel" expenses and "Sales and other expenses" in our Unaudited Consolidated Statements of Operations, as well as associated incremental revenues (e.g., payment card rebates), which are recorded in "Merchant revenues." To the extent more of our business is generated on a merchant basis, we incur a greater level of these merchant-related expenses, which negatively impacts our operating margins despite increases in associated incremental revenues. Over the trailing twelve months ended June 30, 2026, the incremental revenues from facilitating payments were greater than the associated incremental variable expenses.

Previous wording

We have established widely-used and recognized brands through marketing and promotional campaigns. Our total performance and brand marketing expenses, which are substantially variable in nature, were $2.1 billion in the first quarter of 2026, up 16% versus the first quarter of 2025 as a result of the year-over-year growth in travel demand and due to changes in foreign currency exchange rates. Our performance marketing expenses, which represent a substantial majority of our marketing expenses, are primarily related to the use of online search engines (primarily Google), affiliate marketing, meta search, and social media channels to generate bookings through our platforms. Our brand marketing expenses are primarily related to costs associated with producing and airing digital branding and television advertising.

Current wording

We have established widely-used and recognized brands through marketing and promotional campaigns. Our total performance and brand marketing expenses, which are substantially variable in nature, were $2.4 billion in the second quarter of 2026, up 11% versus the second quarter of 2025, primarily reflecting year-over-year growth in travel demand, continued investment in performance marketing channels where returns remained attractive, and the impact of changes in foreign currency exchange rates. Our performance marketing expenses, which represent a substantial majority of our marketing expenses, are primarily related to the use of online search engines (primarily Google), affiliate marketing (i.e., business-to-business or "B2B"), meta search, and social media channels to generate bookings through our platforms. Our brand marketing expenses are primarily related to costs associated with producing and airing digital branding and television advertising, as well as sponsorships and other brand-building activities.

Previous wording

Marketing efficiency, expressed as marketing expenses as a percentage of gross bookings, and performance marketing returns on investment ("ROIs") are impacted by a number of factors that are in some cases outside of our control. Such factors include ADRs, costs per click, cancellation rates, foreign currency exchange rates, search engine bidding algorithms, channel mix, our ability to convert paid traffic to booking customers, and the timing and effectiveness of our brand marketing and social media marketing campaigns. When evaluating performance marketing spend, we typically consider several factors for each channel, such as the customer experience on the advertising platform, the incremental bookings we receive, and anticipated repeat rates. The impact of cancellation rates on ROIs was evident in the first quarter of 2026, as a notable portion of our spend occurred prior to the onset of the conflict in the Middle East, which resulted in diminished returns on performance marketing expenses as many bookings sourced through paid channels were subsequently canceled due to the conflict.

Current wording

Marketing efficiency, expressed as marketing expenses as a percentage of gross bookings, and performance marketing returns on investment ("ROIs") are impacted by a number of factors that are in some cases outside of our control. Such factors include ADRs, costs per click, cancellation rates, foreign currency exchange rates, search engine bidding algorithms, channel mix, our ability to convert paid traffic to booking customers, and the timing and effectiveness of our brand marketing and social media marketing campaigns. When evaluating performance marketing spend, we typically consider several factors for each channel, such as the customer experience on the advertising platform, the incremental bookings we receive, and anticipated repeat rates.

Previous wording

Marketing efficiency is also impacted by the extent to which consumers book directly with us. The mix of total room nights booked by consumers coming directly to our platforms was a mid-fifties percentage over the trailing twelve months ended March 31, 2026 and March 31, 2025, respectively. The mix was higher if we exclude the room nights booked through affiliate programs (i.e., business-to-business). This was achieved despite declines in traffic through organic or unpaid search results, which is what we call Search Engine Optimization ("SEO"), as well as regional volatility, as impacted regions, such as the Middle East, historically have a higher direct mix compared to our global average. Room nights booked through the SEO channel remain a small component of our overall room nights. While we seek to adapt to evolving search engine dynamics, we expect SEO traffic to decline in the short to medium term, which may lead to increased spend in paid marketing channels.

Current wording

Marketing efficiency is also impacted by the extent to which consumers book directly with us. The mix of total room nights booked by consumers coming directly to our platforms was a mid-fifties percentage over the trailing twelve months ended June 30, 2026 and June 30, 2025, respectively. In both periods, the mix was higher if we exclude the room nights booked through the B2B channel. This was achieved despite declines in traffic through organic or unpaid search results, which is what we call Search Engine Optimization ("SEO"). Room nights booked through the SEO channel remain a small component of our overall room nights. While we seek to adapt to evolving search engine dynamics, we expect SEO traffic to decline in the short to medium term, which may lead to increased spend in paid marketing channels.

Previous wording

Booking.com had approximately 4.5 million total properties on its website at March 31, 2026, representing an increase from approximately 4.1 million total properties at March 31, 2025. At March 31, 2026, Booking.com's website had approximately 4.0 million alternative accommodation properties (including homes, apartments, and other unique places to stay) and 500,000 hotels, motels, and resorts.

Current wording

Booking.com had approximately 4.7 million total properties on its website at June 30, 2026, representing an increase from approximately 4.3 million total properties at June 30, 2025. At June 30, 2026, Booking.com's website had over 4.1 million alternative accommodation properties (including homes, apartments, and other unique places to stay) and over 500,000 hotels, motels, and resorts.

Previous wording

The mix of Booking.com's room nights booked for alternative accommodation properties in the first quarter of 2026 was approximately 38%, up versus approximately 37% in the first quarter of 2025. We have observed a longer-term trend of an increasing mix of room nights booked for alternative accommodation properties as consumer demand for these types of properties has grown, and as we have increased the number and variety of these properties on Booking.com. We may experience lower profit margins due to additional costs from offering alternative accommodations, such as increased customer service or certain partner related costs. As our alternative accommodation business grows, these different characteristics may negatively impact our profit margins. A larger proportion of Booking.com's alternative accommodation room nights are located in Europe compared to our total company room night mix; consequently, our alternative accommodations business is more exposed to the regional impacts of the conflict in the Middle East than our total business.

Current wording

The mix of Booking.com's room nights booked for alternative accommodation properties in the second quarter of 2026 was approximately 37%, in line with the second quarter of 2025, reflecting, in part, lower alternative accommodation room night growth in the Middle East. Over the past several years, alternative accommodations were increasing as a percentage of Booking.com's room nights, reflecting growth in consumer demand for these types of properties and an increase in the number and variety of alternative accommodation properties available on Booking.com. We may experience lower profit margins due to additional costs from offering alternative accommodations, such as increased customer service or certain partner related costs. As our alternative accommodation business grows, these different characteristics may negatively impact our profit margins.

Previous wording

In the fourth quarter of 2024, we began the implementation of organizational changes to improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to travelers and partners, and better position our business for the long term (the "Transformation Program"). The Transformation Program resulted in approximately $250 million in savings in 2025 and, as of the end of 2025, enabled approximately $550 million in annual run-rate savings. We expect to realize these run-rate savings by the end of 2026. We expect that the restructuring costs and accelerated investments related to the Transformation Program will largely be incurred by the end of 2026 and are estimated to be, in the aggregate, less than one times the expected annual run-rate savings.

Current wording

In the fourth quarter of 2024, we began the implementation of organizational changes to improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to travelers and partners, and better position our business for the long term (the "Transformation Program"). The Transformation Program resulted in approximately $250 million in savings in 2025 and, as of the end of 2025, enabled approximately $550 million in annual run-rate savings. As we continued to execute on the Transformation Program, we identified additional opportunities, increasing our expected annual run-rate savings to approximately $650 million. We expect the majority of the incremental savings above the approximately $550 million annual run-rate level enabled as of the end of 2025 to be realized in 2027. We expect that the restructuring costs and accelerated investments related to the Transformation Program will largely be incurred by the end of 2027 and are estimated to be, in the aggregate, less than one times the expected annual run-rate savings.

Previous wording

Many taxing authorities seek to increase tax revenues and have targeted large multinational technology companies. Many jurisdictions, particularly in the EU, have implemented or are considering the adoption of a digital services tax or similar tax that imposes a tax on revenues earned from digital advertisements or the use of online platforms, even when there is no physical presence in the jurisdiction. Rates for these taxes range from 1.5% to 10% of revenues deemed generated in the jurisdiction. We record the applicable digital services taxes in "Sales and other expenses" in the Unaudited Consolidated Statements of Operations. The recent One Big Beautiful Bill Act (the "BBB Act") changes certain international, foreign tax credit, and domestic tax provisions in the U.S. effective in 2025 and 2026. Certain provisions of the BBB Act that are effective in 2026 and impact our effective tax rate include U.S. interest expense limitation rules and utilization of additional foreign tax credits in calculating U.S. federal tax related to our international earnings. The impact of the BBB Act could have a negative impact on our results of operations and cash flows. See Part I, Item 1A, Risk Factors - "We may have exposure to additional tax liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Many taxing authorities seek to increase tax revenues and have targeted large multinational technology companies. Many jurisdictions, particularly in the EU, have implemented or are considering the adoption of a digital services tax or similar tax that imposes a tax on revenues earned from digital advertisements or the use of online platforms, even when there is no physical presence in the jurisdiction. Rates for these taxes range from 1.5% to 10% of revenues deemed generated in the jurisdiction. We record the applicable digital services taxes in "Sales and other expenses" in the Unaudited Consolidated Statements of Operations. The One Big Beautiful Bill Act (the "BBB Act") made changes to certain international, foreign tax credit, and domestic tax provisions in the U.S. effective in 2025 and 2026. Certain provisions of the BBB Act that are effective in 2026 and impact our effective tax rate include U.S. interest expense limitation rules and utilization of additional foreign tax credits in calculating U.S. federal tax associated with our international earnings. The impact of the BBB Act could have a negative impact on our results of operations and cash flows. See Part I, Item 1A, Risk Factors - "We may have exposure to additional tax liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

Our businesses outside of the U.S. represent a substantial majority of our financial results, but because we report our results in U.S. Dollars, we face exposure to movements in foreign currency exchange rates (principally related to Euros and British Pounds Sterling). As a result of these movements, the absolute amounts of and percentage changes in our foreign-currency-denominated net assets, gross bookings, revenues, operating expenses, and net income as expressed in U.S. Dollars are affected. Our total revenues increased by approximately 16% in the first quarter of 2026 as compared to the first quarter of 2025, including a benefit of about 6% from changes in foreign currency exchange rates. Since our expenses are generally denominated in foreign currencies on a basis similar to our revenues, our operating margins have not been significantly impacted by currency fluctuations.

Current wording

Our businesses outside of the U.S. represent a substantial majority of our financial results, but because we report our results in U.S. Dollars, we face exposure to movements in foreign currency exchange rates (principally related to Euros and British Pounds Sterling). As a result of these movements, the absolute amounts of and percentage changes in our foreign-currency-denominated net assets, gross bookings, revenues, operating expenses, and net income as expressed in U.S. Dollars are affected. Our total revenues increased by approximately 8% in the second quarter of 2026 as compared to the second quarter of 2025, including a benefit of about 1% from changes in foreign currency exchange rates. Since our expenses are generally denominated in foreign currencies on a basis similar to our revenues, our operating margins have not been significantly impacted by currency fluctuations.

Previous wording

Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025

Current wording

Three and Six Months Ended June 30, 2026 compared to the Three and Six Months Ended June 30, 2025

Previous wording

Our financial results are driven by certain operating metrics that encompass the booking and other business activity generated by our travel and travel-related services. See "Results of Operations" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on our Operating and Statistical Metrics, including room nights, rental car days, airline tickets, and merchant and agency gross bookings.

Current wording

Our financial results are driven by certain operating metrics that encompass the booking and other business activity generated by our travel and travel-related services. See "Results of Operations" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on our Operating and Statistical Metrics, including room nights, rental car days, flight tickets, and merchant and agency gross bookings.

Previous wording

Room nights, rental car days, and airline tickets reserved through our services were as follows:

Current wording

Room nights, rental car days, and flight tickets reserved through our services were as follows:

Previous wording

Gross bookings resulting from reservations of room nights, rental car days, and airline tickets made through our merchant and agency categories were as follows (numbers may not total due to rounding):

Current wording

Gross bookings resulting from reservations of room nights, rental car days, and flight tickets made through our merchant and agency categories were as follows (numbers may not total due to rounding):

Previous wording

For the three months ended March 31, 2026, the year-over-year increase in merchant gross bookings was due primarily to growth in accommodation reservation services and flight reservation services at Booking.com and Agoda. Merchant gross bookings also increased year-over-year and agency gross bookings decreased year-over-year for the period due to the ongoing shift from agency to merchant bookings at Booking.com.

Current wording

For the three and six months ended June 30, 2026, the year-over-year increase in merchant gross bookings was due primarily to growth in accommodation reservation services and flight reservation services at Booking.com, Agoda, and Priceline. Merchant gross bookings also increased year-over-year and agency gross bookings decreased year-over-year for the period due to the ongoing shift from agency to merchant bookings at Booking.com.

Previous wording

The year-over-year increase in total gross bookings for the three months ended March 31, 2026 was due to a 7% positive impact from changes in foreign currency exchange rates, 6% increase in room nights, 1% higher constant currency ADRs, and a positive impact from the growth in flight gross bookings. We estimate that the conflict in the Middle East impacted gross bookings growth in line with the impact observed in room night growth.

Current wording

The year-over-year increase in total gross bookings for the three months ended June 30, 2026 was due to a 5% increase in room nights, approximately 2% higher constant currency ADRs, a positive impact from changes in foreign currency exchange rates of about 1%, and a positive impact from the growth in flight gross bookings.

Previous wording

Flight gross bookings increased 25% year-over-year for the three months ended March 31, 2026 due to airline tickets growth, partially offset by lower average airline ticket prices. Rental car gross bookings increased 7% year-over-year for the period due to higher average daily car rental prices, partially offset by a decrease in rental car days growth.

Current wording

Flight gross bookings increased 12% and 18% year-over-year for the three and six months ended June 30, 2026, respectively, due to higher average flight ticket prices and flight ticket growth. Higher average flight ticket prices in the second quarter were driven in part by higher fuel costs associated with the conflict in the Middle East. Rental car gross bookings decreased 1% year-over-year for the three months ended June 30, 2026 due to a decrease in rental car days growth, partially offset by higher average daily car rental prices. Rental car gross bookings increased 3% year-over-year for the six months ended June 30, 2026 due to higher average daily car rental prices, partially offset by a decrease in rental car days growth.

Previous wording

For the three months ended March 31, 2026, the year-over-year increase in merchant revenues was due primarily to growth in revenues from accommodation reservation services at Booking.com. Merchant revenues also increased year-over-year for the period, while agency revenues decreased, due to the ongoing shift from agency to merchant revenues at Booking.com. Advertising and other revenues increased year-over-year for the period due to growth at OpenTable and growth in advertising revenues at Booking.com. The year-over-year increase in total revenues for the period included a 6% benefit from changes in foreign currency exchange rates.

Current wording

For the three and six months ended June 30, 2026, the year-over-year increase in merchant revenues was driven primarily by growth in accommodation reservation services at Booking.com and its ongoing shift from agency to merchant revenues. This shift also contributed to the year-over-year decrease in agency revenues. Advertising and other revenues increased year-over-year for the period due to growth at OpenTable and growth in advertising revenues at Booking.com.

Previous wording

Total revenues as a percentage of gross bookings increased year-over-year for the three months ended March 31, 2026 due to an increase in revenues related to facilitating payments, as well as a positive impact from the timing of booking versus travel. This was partly offset by an increase in the mix of flight gross bookings, which have lower revenues as a percentage of gross bookings. While the conflict in the Middle East negatively impacted our revenues during the first quarter, it had a more pronounced downward impact on our gross bookings. Because we recognize revenues at the time of travel, the associated impact on revenues from the reduction in new booking activity and the increase in cancellations will not be fully realized until future quarters. We estimate that the conflict in the Middle East impacted revenue growth slightly lower than the impact observed in room night growth.

Current wording

Total revenues as a percentage of gross bookings decreased year-over-year for the three and six months ended June 30, 2026 due to a negative impact from the timing of booking versus travel, partially offset by an increase in revenues related to facilitating payments.

Previous wording

See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information about the components of our operating expenses and the related accounting policies. The year-over-year growth in our total operating expenses for the three months ended March 31, 2026 was increased in part by changes in foreign currency exchange rates.

Current wording

See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information about the components of our operating expenses and the related accounting policies. The year-over-year growth in our total operating expenses for the three and six months ended June 30, 2026 was increased in part by changes in foreign currency exchange rates.

Previous wording

Our marketing expenses, which are substantially variable in nature, increased year-over-year for the three months ended March 31, 2026, to help drive additional gross bookings and revenues, and were increased by changes in foreign currency exchange rates. Marketing expenses as a percentage of total gross bookings in the three months ended March 31, 2026 were slightly higher than the three months ended March 31, 2025, driven primarily by the impact of the conflict in the Middle East. Due to the conflict, certain performance marketing expenses yielded diminished or negligible returns as bookings sourced through paid channels were subsequently canceled resulting in lower average ROIs. Excluding the impact of the Middle East conflict, we achieved modest marketing leverage in the quarter, supported by the growth in our direct channel, which was partially offset by declines in SEO, which remains a small component of our overall distribution mix.

Current wording

Our marketing expenses, which are substantially variable in nature, increased year-over-year for the three and six months ended June 30, 2026, due to efforts to drive additional gross bookings and revenues and changes in foreign currency exchange rates. Marketing expenses as a percentage of total gross bookings in the three months ended June 30, 2026 were slightly higher than the three months ended June 30, 2025, driven primarily by declines in SEO, which remains a small component of our overall distribution mix, as well as changes in paid traffic mix and investments in paid marketing channels at attractive ROIs. For the six months ended June 30, 2026, marketing expenses as a percentage of gross bookings was negatively impacted by the onset of the conflict in the Middle East in the first quarter of 2026, as certain performance marketing expenses yielded diminished or negligible returns as bookings sourced through paid channels were subsequently canceled resulting in lower average ROIs.

Previous wording

Sales and other expenses, which are substantially variable in nature, increased year-over-year for the three months ended March 31, 2026 due primarily to an increase in merchant transaction costs of $112 million related to the ongoing shift from agency to merchant transactions at Booking.com, as well as due to changes in foreign currency exchange rates. Sales and other expenses as a percentage of total revenues decreased year-over-year for the period primarily due to a benefit of $31 million resulting from the repeal in March 2026 of Canadian digital services taxes related to prior years, as well as efficiencies in third-party customer service costs, partially offset by the impact of increased merchant transactions costs, which grew faster than total revenue.

Current wording

Sales and other expenses, which are substantially variable in nature, increased year-over-year for the three and six months ended June 30, 2026 due primarily to an increase in merchant transaction costs of $37 million and $149 million, respectively, related to the ongoing shift from agency to merchant transactions at Booking.com, as well as due to changes in foreign currency exchange rates. Sales and other expenses as a percentage of total revenues decreased year-over-year for the three months ended June 30, 2026 primarily due to efficiencies in third-party customer service costs. Sales and other expenses as a percentage of total revenues decreased year-over-year for the six months ended June 30, 2026 primarily due to efficiencies in third-party customer service costs, and a benefit of $31 million resulting from the March 2026 repeal of Canadian digital services taxes related to prior years, partially offset by the impact of increased merchant transactions costs, which grew faster than total revenue.

Previous wording

Personnel expenses increased year-over-year for the three months ended March 31, 2026 primarily due to the impact of a $170 million reduction during the three months ended March 31, 2025 in the accrual related to the Netherlands pension fund matter. Salary expenses increased year-over-year for the three months ended March 31, 2026 due to changes in foreign currency exchange rates. Employee headcount increased 2% year-over-year to approximately 24,900 as of March 31, 2026.

Current wording

Personnel expenses increased slightly year-over-year for the three months ended June 30, 2026 primarily due to an increase in salary expenses partially driven by changes in foreign currency exchange rates, partially offset by a decrease in stock-based compensation expense. Personnel expenses increased year-over-year for the six months ended June 30, 2026 primarily due to the impact of a $170 million reduction during the three months ended March 31, 2025 in the accrual related to the Netherlands pension fund matter, as well as due to changes in foreign currency exchange rates. Employee headcount increased 3% year-over-year to approximately 25,550 as of June 30, 2026.

Previous wording

General and administrative expenses decreased year-over-year for the three months ended March 31, 2026 primarily due to the benefit of $89 million on the settlement of certain litigation matters (see Note 13 to the Unaudited Consolidated Financial Statements), partially offset by an increase in certain travel transaction taxes, fees for certain outside professionals, and changes in foreign currency exchange rates.

Current wording

General and administrative expenses increased year-over-year for the three months ended June 30, 2026 primarily due to an increase in certain travel transaction taxes and changes in foreign currency exchange rates. General and administrative expenses decreased year-over-year for the six months ended June 30, 2026 primarily due to the $89 million benefit from the settlement of certain litigation matters (see Note 13 to the Unaudited Consolidated Financial Statements), partially offset by an increase in certain travel transaction taxes and changes in foreign currency exchange rates.

Previous wording

Information technology expenses increased year-over-year for the three months ended March 31, 2026 due primarily to an increase in cloud computing costs and software license and system maintenance fees, as well as changes in foreign currency exchange rates.

Current wording

Information technology expenses increased year-over-year for the three and six months ended June 30, 2026 due primarily to an increase in cloud computing costs and software license fees, as well as changes in foreign currency exchange rates.

Previous wording

Depreciation and amortization expenses decreased year-over-year for the three months ended March 31, 2026 due primarily to decreased amortization expense related to intangible assets, partially offset by changes in foreign currency exchange rates.

Current wording

Depreciation and amortization expenses decreased year-over-year for the three and six months ended June 30, 2026 due primarily to decreased amortization expense related to intangible assets and internally-developed software, partially offset by changes in foreign currency exchange rates.

Previous wording

See "Trends" above and Note 17 to our Unaudited Consolidated Financial Statements for additional information on the Transformation Program. Transformation costs decreased year-over-year for the three months ended March 31, 2026 due primarily to lower professional fees.

Current wording

See "Trends" above and Note 17 to our Unaudited Consolidated Financial Statements for additional information on the Transformation Program. Transformation costs decreased year-over-year for the three and six months ended June 30, 2026 due primarily to lower costs related to employee termination benefits.

Previous wording

Interest expense decreased year-over-year for the three months ended March 31, 2026 primarily due to the amortization in 2025 of debt discount related to the convertible senior notes that matured in May 2025 (see Note 9 to our Unaudited Consolidated Financial Statements). Interest and dividend income decreased year-over-year for the three months ended March 31, 2026 primarily due to lower interest rates.

Current wording

Interest expense decreased year-over-year for the three and six months ended June 30, 2026 primarily due to the amortization in 2025 of debt discount related to the convertible senior notes that matured in May 2025 (see Note 9 to our Unaudited Consolidated Financial Statements). Interest and dividend income decreased year-over-year for the three and six months ended June 30, 2026 primarily due to lower interest rates. In addition, we have certain cash management activities with related interest expense and interest income.

Previous wording

At March 31, 2026, we had $16.5 billion in cash, cash equivalents, and investments, of which approximately $12.1 billion is held by our international subsidiaries. Cash, cash equivalents, and long-term investments held by our international subsidiaries are denominated primarily in Euros, U.S. Dollars, and British Pounds Sterling. Our investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. See Notes 5 and 6 to our Unaudited Consolidated Financial Statements.

Current wording

At June 30, 2026, we had $17.7 billion in cash, cash equivalents, and investments, of which approximately $14.7 billion is held by our international subsidiaries. Cash, cash equivalents, and long-term investments held by our international subsidiaries are denominated primarily in Euros, British Pounds Sterling, and U.S. Dollars. Our investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. See Notes 5 and 6 to our Unaudited Consolidated Financial Statements.

Previous wording

Deferred merchant bookings of $8.2 billion at March 31, 2026 includes cash payments received from travelers in advance of us completing our performance obligations and are comprised principally of amounts estimated to be payable to travel service providers as well as our estimated future revenue for our commission or margin and fees. The amounts are mostly subject to refunds for cancellations.

Current wording

Deferred merchant bookings of $10.1 billion at June 30, 2026 includes cash payments received from travelers in advance of us completing our performance obligations and are comprised principally of amounts estimated to be payable to travel service providers as well as our estimated future revenue for our commission or margin and fees. The amounts are mostly subject to refunds for cancellations.

Previous wording

Our outstanding senior notes at March 31, 2026 had cumulative interest to maturity (based on coupon interest rates) of $5.4 billion, with $650 million payable within the next twelve months.

Current wording

Our outstanding senior notes at June 30, 2026 had cumulative interest to maturity (based on coupon interest rates) of $6.3 billion, with $754 million payable within the next twelve months.

Previous wording

At March 31, 2026, we had a total remaining authorization of $18.2 billion related to the share repurchase program authorized by our Board of Directors (the "Board"). In April 2026, the Board declared a cash dividend of $0.42 per share of common stock, payable on June 30, 2026 to stockholders of record as of the close of business on June 5, 2026.

Current wording

At June 30, 2026, we had a total remaining authorization of $14.5 billion related to the share repurchase program authorized by our Board of Directors (the "Board"). In August 2026, the Board declared a cash dividend of $0.42 per share of common stock, payable on September 30, 2026 to stockholders of record as of the close of business on September 11, 2026.

Previous wording

At March 31, 2026, we had, in the aggregate, $1.1 billion of non-cancellable purchase obligations individually greater than $10 million, of which $343 million is payable within the next twelve months. Such purchase obligations relate to agreements to purchase goods and services that are enforceable and legally binding and that specify significant terms, including the quantities to be purchased, price provisions, and the approximate timing of the transaction. At March 31, 2026, we had lease obligations of $763 million, of which $134 million is payable within the next twelve months.

Current wording

At June 30, 2026, we had, in the aggregate, $1.2 billion of non-cancellable purchase obligations individually greater than $10 million, of which $362 million is payable within the next twelve months. Such purchase obligations relate to agreements to purchase goods and services that are enforceable and legally binding and that specify significant terms, including the quantities to be purchased, price provisions, and the approximate timing of the transaction. At June 30, 2026, we had lease obligations of $744 million, of which $136 million is payable within the next twelve months.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2026 resulted from net income of $1.1 billion, a favorable net impact from adjustments for non-cash and other items of $250 million, and a favorable net change in working capital and other assets and liabilities of $1.9 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction gains related to Euro-denominated debt, stock-based compensation expense, depreciation and amortization, provision for expected credit losses and chargebacks, and net losses on equity securities. Deferred merchant bookings and other current liabilities increased by $1.8 billion during the period, primarily due to higher business volumes. Merchant revenues increased while agency revenues decreased year-over year for the period due to the ongoing shift from agency revenues to merchant revenues at Booking.com.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2026 resulted from net income of $3.0 billion, a favorable net impact from adjustments for non-cash and other items of $510 million, and a favorable net change in working capital and other assets and liabilities of $3.4 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction gains related to Euro-denominated debt, stock-based compensation expense, depreciation and amortization, provision for expected credit losses and chargebacks, and net losses on equity securities. Deferred merchant bookings and other current liabilities increased by $4.2 billion during the period, primarily due to higher business volumes. Merchant revenues increased while agency revenues decreased year-over-year for the period due to the ongoing shift from agency revenues to merchant revenues at Booking.com.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2025 resulted from net income of $333 million, a favorable net impact from adjustments for non-cash and other items of $899 million, and a favorable net change in working capital and other assets and liabilities of $2.1 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction losses related to Euro-denominated debt, adjustments related to the convertible senior notes, depreciation and amortization, deferred income taxes, and stock-based compensation expense. Deferred merchant bookings and other current liabilities increased by $1.9 billion during the period, primarily due to higher business volumes.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2025 resulted from net income of $1.2 billion, a favorable net impact from adjustments for non-cash and other items of $2.2 billion, and a favorable net change in working capital and other assets and liabilities of $3.1 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction losses related to Euro-denominated debt, deferred income taxes, adjustments related to the convertible senior notes, depreciation and amortization, stock-based compensation expense, and provision for expected credit losses and chargebacks. Deferred merchant bookings and other current liabilities increased by $3.8 billion and accounts receivable increased by $1.1 billion during the period, primarily due to higher business volumes.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 and 2025 resulted principally from payments for property and equipment.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 and 2025 resulted principally from payments for property and equipment.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026 resulted principally from the repurchase of common stock of $3.8 billion and dividend payments of $343 million. Net cash used in financing activities for the three months ended March 31, 2025 resulted principally from the repurchase of common stock of $2.2 billion, payments on the maturity of debt of $1.5 billion, and dividend payments of $319 million.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026 resulted principally from the repurchase of common stock of $7.8 billion, payments of $1 billion on the maturity of debt, and dividend payments of $664 million, partially offset by the proceeds from the issuance of long-term debt of $3.0 billion. Net cash used in financing activities for the six months ended June 30, 2025 resulted principally from the repurchase of common stock of $3.7 billion, payments of $3.5 billion on the maturity of debt, including the conversion premium on the convertible senior notes, and dividend payments of $631 million, partially offset by the proceeds from the issuance of long-term debt of $2.0 billion.