Booking Holdings Inc.

Previous wording

While the geopolitical and macroeconomic environment can impact global travel demand, we believe our diversified global portfolio of leading travel brands, flexible platforms, and strong financial position helps us to navigate a range of scenarios. We continue to take a long-term view, staying focused on delivering value to our travelers and partners, maintaining disciplined cost management, and making strategic investments as appropriate.

Current wording

While the geopolitical and macroeconomic environment can impact global travel demand, we believe our diversified global portfolio of leading travel brands, flexible platforms, and strong financial position help us to navigate a range of scenarios. We continue to take a long-term view, staying focused on delivering value to our travelers and partners, maintaining disciplined cost management, and making strategic investments as appropriate.

Previous 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.

Current wording

The cancellation rate in the third quarter of 2026 was lower than in the third quarter of 2025. 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 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.

Current wording

In the third quarter of 2026, our global average daily rates ("ADRs") on a constant currency basis were approximately 3% higher than the prior year, driven primarily by higher ADRs in Europe. Our global ADRs were not materially impacted by changes in regional mix in the third quarter of 2026.

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 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.

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 75% in the third quarter of 2026, an increase from 72% in the third 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 September 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 $2.4 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.

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 $2.6 billion in the third quarter of 2026, up 11% versus the third quarter of 2025, primarily reflecting year-over-year growth in travel demand, increased affiliate marketing expenses, and continued investment in other performance marketing channels where returns remained attractive. 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, 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.

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 and partner 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 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.

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 September 30, 2026 and September 30, 2025. In both periods, the direct booking mix was higher in our business-to-consumer ("B2C") business (i.e., if we exclude the room nights booked through the business-to-business ("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 4.7 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.

Current wording

Booking.com had approximately 4.7 million total properties on its website at September 30, 2026, representing an increase from approximately 4.4 million total properties at September 30, 2025. At September 30, 2026, Booking.com's website had approximately 4.2 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 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.

Current wording

The mix of Booking.com's room nights booked for alternative accommodation properties in the third quarter of 2026 was approximately 37%, up versus approximately 36% in the third quarter of 2025. Over the past several years, alternative accommodations have mostly increased 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. 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.

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. In the second quarter of 2026, as we continued to execute on the Transformation Program, we identified additional opportunities, and increased 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

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.

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 gross bookings increased by approximately 10% in the third quarter of 2026 as compared to the third quarter of 2025, including a negative impact of about 1% from changes in foreign currency exchange rates. Our merchant revenues, agency revenues, and advertising and other revenues, in the aggregate, were also negatively impacted by 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 and Six Months Ended June 30, 2026 compared to the Three and Six Months Ended June 30, 2025

Current wording

Three and Nine Months Ended September 30, 2026 compared to the Three and Nine Months Ended September 30, 2025

Previous wording

For the three and six months ended June 30, 2026, room nights reserved through our services increased year-over-year, driven primarily by growth in all key regions. In the second quarter of 2026, the Rest of World region, which includes the Middle East, returned to year-over-year growth following a decline in the first quarter due to the onset of the conflict in the Middle East. While direct impacts on travel within the region largely normalized in the second quarter, there were continued indirect impacts including elevated flight ticket prices, reduced flight capacity on certain routes, and a decrease in long-haul international travel demand, which negatively impacted overall room night growth. Rental car days reserved through our services decreased year-over-year for the three and six months ended June 30, 2026, primarily reflecting lower partner volume, as well as the impact of higher average daily car rental prices and the conflict in the Middle East on travel demand. Flight tickets reserved through our services increased year-over-year for the three and six months ended June 30, 2026 driven by the expansion of our flight offerings, partially offset by the impact of elevated ticket prices, reduced flight capacity on certain routes, and a decrease in long-haul international travel demand, in each case related to impacts of the conflict in the Middle East.

Current wording

For the three and nine months ended September 30, 2026, room nights reserved through our services increased year-over-year, driven primarily by growth in all key regions. In the third quarter of 2026, there were continued indirect impacts from the conflict in the Middle East, which negatively impacted long-haul international travel demand and our overall room night growth. Rental car days reserved through our services decreased year-over-year for the three and nine months ended September 30, 2026, primarily reflecting lower partner volume, as well as the impact of higher average daily car rental prices and the conflict in the Middle East on travel demand. Flight tickets reserved through our services increased year-over-year for the three and nine months ended September 30, 2026 driven by the expansion of our flight offerings, partially offset by the impact of elevated ticket prices, reduced flight capacity on certain routes, and softer long-haul international travel demand, in each case related to impacts of the conflict in the Middle East.

Previous 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.

Current wording

For the three and nine months ended September 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 and Agoda. Merchant gross bookings also increased year-over-year and agency gross bookings decreased year-over-year for these periods 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 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.

Current wording

The year-over-year increase in total gross bookings for the three months ended September 30, 2026 was due to a 7% increase in room nights, approximately 3% higher constant currency ADRs, and a positive impact from the growth in flight gross bookings, partially offset by a 1% negative impact of foreign exchange rate fluctuations.

Previous wording

The year-over-year increase in total gross bookings for the six months ended June 30, 2026 was due to a 6% increase in room nights, about 4% positive impact from changes in foreign currency exchange rates, approximately 2% higher constant currency ADRs, and a positive impact from the growth in flight gross bookings.

Current wording

The year-over-year increase in total gross bookings for the nine months ended September 30, 2026 was due to a 6% increase in room nights, about 2% positive impact from changes in foreign currency exchange rates, approximately 2% higher constant currency ADRs, and a positive impact from the growth in flight gross bookings.

Previous 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.

Current wording

Flight gross bookings increased 21% and 19% year-over-year for the three and nine months ended September 30, 2026, respectively, due to flight ticket growth and higher average flight ticket prices. Higher average flight ticket prices in these periods were driven in part by higher fuel costs associated with the conflict in the Middle East. Rental car gross bookings increased 1% and 2% year-over-year for the three and nine months ended September 30, 2026, respectively, due to higher average daily car rental prices, partially offset by a decrease in rental car days.

Previous 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.

Current wording

For the three and nine months ended September 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, as well as by growth in accommodation reservation services at Agoda and Priceline. The shift at Booking.com also contributed to the year-over-year decrease in agency revenues. Advertising and other revenues increased year-over-year for these periods due to growth at OpenTable and growth in advertising revenues at Booking.com. Total revenues decreased year-over-year for the three months ended September 30, 2026, primarily due to the impact of the FTC matter.

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 and six months ended June 30, 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. Changes in foreign currency exchange rates reduced year-over-year operating expense growth for the three months ended September 30, 2026 and increased it for the nine months ended September 30, 2026.

Previous 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.

Current wording

Our marketing expenses, which are substantially variable in nature, increased year-over-year for the three and nine months ended September 30, 2026, due to efforts to drive additional gross bookings and revenues. Marketing expenses as a percentage of total gross bookings in the three months ended September 30, 2026 were slightly higher than the three months ended September 30, 2025, driven primarily by faster growth in affiliate marketing expenses and declines in SEO, which remains a small component of our overall distribution mix, partially offset by a higher proportion of bookings through direct channels excluding SEO. Within our B2C business, marketing expenses as a percentage of gross bookings decreased year-over-year for the three and nine months ended September 30, 2026.

Previous 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.

Current wording

Sales and other expenses, which are substantially variable in nature, increased year-over-year for the three and nine months ended September 30, 2026 due primarily to an increase in merchant transaction costs of $72 million and $221 million, respectively, related to the ongoing shift from agency to merchant transactions at Booking.com. Sales and other expenses as a percentage of total revenues increased year-over-year for the three and nine months ended September 30, 2026 primarily due to the negative impact of the FTC matter on total revenues (see Note 13 to our Unaudited Consolidated Financial Statements), as well as the impact of increased merchant transaction costs, partially offset by efficiencies in third-party customer service costs.

Previous 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.

Current wording

Personnel expenses decreased slightly year-over-year for the three months ended September 30, 2026 primarily due to a decrease in bonus expense accruals, partially offset by an increase in salary expenses driven by a 4% year-over-year increase in employee headcount to approximately 25,850 as of September 30, 2026. Personnel expenses increased year-over-year for the nine months ended September 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 an increase in salary expenses due to an increase in employee headcount and changes in foreign currency exchange rates.

Previous 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.

Current wording

General and administrative expenses increased year-over-year for the three months ended September 30, 2026 primarily due to the impact of the FTC matter (see Note 13 to our Unaudited Consolidated Financial Statements) and a year-over-year increase in fees for certain outside professionals, partially offset by the impact of the $45 million expense in the third quarter of 2025 related to the resolution of an indirect tax matter. General and administrative expenses increased year-over-year for the nine months ended September 30, 2026 primarily due to the impact of the FTC matter and year-over-year increases in certain travel transaction taxes and fees for certain outside professionals, partially offset by the $89 million benefit from the settlement of certain litigation matters in the first quarter of 2026 (see Note 13 to our Unaudited Consolidated Financial Statements), as well as the impact of the $45 million expense in the third quarter of 2025 related to the resolution of an indirect tax matter.

Previous 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.

Current wording

Information technology expenses increased year-over-year for the three and nine months ended September 30, 2026 due primarily to an increase in cloud computing costs, software license fees, and costs related to generative artificial intelligence.

Previous 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.

Current wording

Depreciation and amortization expenses increased year-over-year for the three months ended September 30, 2026 due primarily to the change in the estimated useful life of an intangible asset. Depreciation and amortization expenses decreased for the nine months ended September 30, 2026 due primarily to decreased amortization expense related to internally-developed software, partially offset by the change in the estimated useful life of an intangible asset.

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 and six months ended June 30, 2026 due primarily to lower costs related to employee termination benefits.

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 nine months ended September 30, 2026 due primarily to lower costs related to employee termination benefits.

Previous 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.

Current wording

Interest expense increased year-over-year for the three months ended September 30, 2026 primarily due to the higher outstanding long-term debt balance during the period. Interest expense decreased year-over-year for the nine months ended September 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 nine months ended September 30, 2026 primarily due to lower interest rates and a decrease in money market fund investment balances. In addition, we have certain cash management activities with related interest expense and interest income.

Previous wording

Our primary source of funds for operations is the cash flow that we generate from operations. We use our cash for a variety of needs, including ongoing investments in our business, share repurchases, dividends, repayment of debt, and capital expenditures. Our continued access to sources of liquidity depends on multiple factors. See Part I, Item 1A, Risk Factors - "Our liquidity, credit ratings, and ongoing access to capital could be materially and negatively affected by global financial conditions and events" in our Annual Report on Form 10-K for the year ended December 31, 2025. Our financial results and prospects are almost entirely dependent on facilitating the sale of travel-related services. Marketing expenses, personnel expenses, and sales and other expenses are our most significant operating expenses. See our Unaudited Consolidated Statements of Operations and "Trends" and "Results of Operations" above for additional information. We believe that our existing cash balances, liquid resources, and access to capital markets will be sufficient to fund our operating activities and other obligations in the short term and into the foreseeable future.

Current wording

Our primary source of funds for operations is the cash flow that we generate from operations. We use our cash for a variety of needs, including ongoing investments in our business, share repurchases, dividends, repayment of debt, and capital expenditures. Our continued access to sources of liquidity depends on multiple factors. See Part I, Item 1A, Risk Factors - "Our liquidity, credit ratings, and ongoing access to capital could be materially and negatively affected by global financial conditions and events" in our Annual Report on Form 10-K for the year ended December 31, 2025. Our financial results and prospects are almost entirely dependent on facilitating the sale of travel-related services. Marketing expenses, sales and other expenses, and personnel expenses are our most significant operating expenses. See our Unaudited Consolidated Statements of Operations and "Trends" and "Results of Operations" above for additional information. We believe that our existing cash balances, liquid resources, and access to capital markets will be sufficient to fund our operating activities and other obligations in the short term and into the foreseeable future.

Previous 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.

Current wording

At September 30, 2026, we had $16.2 billion in cash, cash equivalents, and investments, of which approximately $14.4 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.

Previous 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.

Current wording

Deferred merchant bookings of $6.5 billion at September 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 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.

Current wording

Our outstanding senior notes at September 30, 2026 had cumulative interest to maturity (based on coupon interest rates) of $6.3 billion, with $750 million payable within the next twelve months.

Previous 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.

Current wording

At September 30, 2026, we had a total remaining authorization of $12.4 billion related to the share repurchase program authorized by our Board of Directors (the "Board"). In November 2026, the Board declared a cash dividend of $0.42 per share of common stock, payable on December 31, 2026 to stockholders of record as of the close of business on December 11, 2026.

Previous 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.

Current wording

At September 30, 2026, we had, in the aggregate, $1.2 billion of non-cancellable purchase obligations individually greater than $10 million, of which $359 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 September 30, 2026, we had lease obligations of $743 million, of which $138 million is payable within the next twelve months.

Previous wording

See Note 13 to our Unaudited Consolidated Financial Statements and Part I, Item IA, Risk Factors - "Our business is subject to various competition, consumer protection, and online commerce laws and regulations around the world, and as the size of our business grows, scrutiny of our business in these areas may intensify"in our Annual Report on Form 10-K for the year ended December 31, 2025 for information related to certain regulatory matters and our other contingent liabilities.

Current wording

See Note 13 to our Unaudited Consolidated Financial Statements and Part I, Item 1A, Risk Factors - "Our business is subject to various competition, consumer protection, and online commerce laws and regulations around the world, and as the size of our business grows, scrutiny of our business in these areas may intensify"in our Annual Report on Form 10-K for the year ended December 31, 2025 for information related to certain regulatory matters and our other contingent liabilities.

Previous wording

See Note 13 to our Unaudited Consolidated Financial Statements and Part I, Item IA, 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 for information related to certain tax assessments and other tax matters.

Current wording

See Note 13 to our Unaudited Consolidated Financial Statements and 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 for information related to certain tax assessments and other tax matters.

Previous 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.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2026 resulted from net income of $5.8 billion, a favorable net impact from adjustments for non-cash and other items of $670 million, and a favorable net change in working capital and other assets and liabilities of $1.7 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction gains related to Euro-denominated debt, depreciation and amortization, stock-based compensation expense, provision for expected credit losses and chargebacks, deferred income taxes, and net losses on equity securities. Deferred merchant bookings and other current liabilities increased by $2.6 billion and accounts receivable increased by $907 million during the period, primarily due to higher business volumes. The increase in other current liabilities was also due to the impact of the FTC matter (see Note 13 to our Unaudited Consolidated Financial Statements). 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 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.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025 resulted from net income of $4.0 billion, a favorable net impact from adjustments for non-cash and other items of $3.0 billion, and a favorable net change in working capital and other assets and liabilities of $984 million. Non-cash and other items were principally associated with unrealized foreign currency transaction losses related to Euro-denominated debt, deferred income taxes, depreciation and amortization, impairment, stock-based compensation expense, adjustments related to the convertible senior notes, and provision for expected credit losses and chargebacks. Deferred merchant bookings and other current liabilities increased by $1.4 billion and accounts receivable increased by $828 million during the period, primarily due to higher business volumes.

Previous 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.

Current wording

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

Previous 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.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2026 resulted principally from the repurchase of common stock of $9.9 billion, payments of $1 billion on the maturity of debt, and dividend payments of $978 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 nine months ended September 30, 2025 resulted principally from payments of $5.0 billion on the maturity and redemption of debt, including the conversion premium on the convertible senior notes, the repurchase of common stock of $4.3 billion, and dividend payments of $941 million, partially offset by the proceeds from the issuance of long-term debt of $2.0 billion.