Booking Holdings beats on adjusted Q3 results as $1 billion FTC-related charge cuts reported revenue

BKNG reported third-quarter results on Tuesday, Nov. 3, with adjusted EPS of $4.66 topping the $4.49 consensus and adjusted revenue of $9.79 billion, up 9%, above the $9.55 billion estimate. GAAP revenue of $8.89 billion, down about 1%, came in below the roughly $9.54 billion estimate once a $900 million FTC-related reduction is included.

The company's release said it recorded the $900 million revenue reduction and accrued a $100 million loss for the FTC matter, so the roughly $1 billion total is the sum of the two, not two separate hits. Both were excluded from adjusted metrics. GAAP diluted EPS was $3.61 versus $3.38 a year earlier, against adjusted EPS of $4.66 versus $3.98; per-share figures reflect the 25-for-1 stock split effective April 2.

Operating metrics were solid. Room nights rose 7% to 345 million, above the 339.24 million estimate, gross bookings of $54.5 billion beat the $52.69 billion estimate, and adjusted EBITDA of $4.61 billion topped the $4.49 billion estimate. Zacks noted merchant revenue grew 14.1% while agency revenue fell 4.1%. Shares slipped 0.94% to $154.20 after hours, Investing.com reported.

Guidance is the softer part: Q4 room nights are guided up 1% to 3%, gross bookings up 2% to 4%, adjusted revenue up 0% to 2% and adjusted EBITDA about flat. On the FTC matter, excerpts of the 10-Q indicate talks are under way, no settlement has been reached, and the FTC may seek penalties above the amounts recorded, which could mean further charges.