Booking Holdings (BKNG): Cash, Buybacks and Margin Momentum

FY2024 surprise: outsized profits, massive buybacks and a tiny net debt load#

Booking Holdings [BKNG] closed FY2024 with $23.74B in revenue and $5.88B in net income, a +37.14% year‑over‑year jump in the bottom line that outpaced the top‑line increase of +11.11%. The company converted those profits into cash: free cash flow of $7.89B and ending cash of $16.19B even after returning $6.51B to shareholders in share repurchases and paying $1.17B in dividends in 2024. Those three facts — accelerating net income, robust free cash flow, and heavy buybacks — are the single most consequential developments for Booking’s financial story in 2024 and into 2025.*

The juxtaposition creates tension. On one hand, Booking’s operating performance shows material margin expansion: operating income rose to $7.59B, an operating margin of 31.97% (a +464 basis‑point improvement from 27.33% in 2023). On the other, the company is trading at a stretched multiple on reported earnings (the intraday quote in the dataset shows a share price around $5,456.77 and a trailing PE near 38.08x), leaving investors to weigh valuation against cash generation and capital returns.*

(Selected figures and filing dates summarized below are drawn from Booking Holdings’ FY2024 financials filed 2025‑02‑20 and subsequent company releases.) Investor Relations — Booking Holdings. SEC filings for Booking Holdings (search).

How the numbers moved: revenue, margins and cash conversion#

Booking’s FY2024 revenue of $23.74B represented an +11.11% increase from $21.36B in 2023. That pace is meaningful because it combined with margin expansion to produce outsized net income growth: operating income increased from $5.84B (2023) to $7.59B (2024), driving operating margin to 31.97% from 27.33% a year earlier. Net income margin expanded to 24.78% in 2024 from 20.07% in 2023.

The quality of that profitability shows up in cash flow. Net cash from operating activities rose to $8.32B and free cash flow to $7.89B in 2024, implying a free cash flow conversion ratio (FCF / net income) of approximately 134% (7.89 / 5.88). That conversion underscores that the earnings improvement was supported by cash generation rather than non‑cash accounting items.*

Two balance sheet items further shape the narrative. First, Booking finished FY2024 with $16.16B in cash and short‑term investments against $17.08B of total debt, producing a small net debt of $0.92B (total debt minus cash). Using FY2024 EBITDA of $9.34B, that implies net debt to EBITDA of roughly 0.10x on a simple FY basis — effectively a net cash position relative to operating earnings. Second, total stockholders’ equity declined into negative territory (‑$4.02B at year‑end 2024), primarily driven by accumulated share repurchases and the accounting treatment of treasury stock — a reminder that heavy capital returns have materially changed the balance sheet structure.

Table 1 — Income statement highlights (FY2021–FY2024)#

Sources: Booking Holdings FY2021–FY2024 income statements (filed as annual financials); calculations by Monexa AI.

Where margin expansion came from — scale, mix and controlled SG&A#

Booking’s gross profitability has long been structurally high — historical gross profit ratios are consistently reported above 94% (FY2024 96.84%). The margin story in 2024 is therefore not gross margin expansion but operating leverage and disciplined SG&A. Selling, general and administrative expenses were reported at $15.4B in 2024, up in absolute terms but delivering better leverage against higher revenue. The result was a +464 bps operating margin expansion year‑over‑year, indicating that incremental revenue flowed to the operating line at a favorable rate.

The company’s EBITDA of $9.34B in 2024 (up from $7.04B in 2023) drives the operating leverage argument further: EBITDA margin increased to 39.34% in 2024 from 32.97% the year before, showing that profitability improvement was broad‑based across the P&L rather than dependent on a single accounting item.

Cash flow and capital allocation: buybacks dominate#

Booking returned substantial capital to shareholders in 2024. The company repurchased $6.51B of common stock and paid $1.17B in dividends, reflecting a combined cash return to shareholders of $7.68B. That represented nearly the entire free cash flow for the year but left cash and investment balances intact at $16.19B due to operating cash generation and proceeds from financing or balance sheet management.

Net cash used in financing activities was ‑$4.20B in 2024 because the FCF financed buybacks and dividends while some debt issuance/repayment dynamics adjusted total financing outflows. Over the prior years Booking has run sustained repurchase programs: common stock repurchased was $10.38B in 2023 and $6.62B in 2022, establishing a multi‑year pattern of outsized buybacks.

Table 2 — Balance sheet & cash flow highlights (FY2021–FY2024)#

Sources: Booking Holdings FY2021–FY2024 balance sheets and cash flow statements; calculations by Monexa AI.

Why negative equity matters (and why it may not be an operational red flag)#

Booking reported total stockholders’ equity of -$4.02B at year‑end 2024. That outcome reflects substantial accumulated repurchases and the balance sheet accounting for treasury stock, not sustained operating losses. The company remains highly profitable, generating multi‑billion dollar net income and free cash flow, and carries a manageable leverage profile with net debt under $1B. Negative equity in an otherwise cash‑generative business with low net leverage is a capital‑structure feature rather than an immediate solvency concern, but it does limit conventional equity‑based metrics (book value, price‑to‑book) and can complicate certain covenant or regulatory ratios for counterparties.

Earnings momentum in 2025 quarters — beat pattern and credibility#

Through mid‑2025 Booking posted several notable quarterly beats to consensus in aggregate: earnings surprises listed in the dataset include positive surprises on 2025‑02‑20, 2025‑04‑29, and 2025‑07‑29 (actual results exceeding estimates). Those beats reinforce the message that management’s operating execution remains credible and that analysts’ consensus estimates have been conservative relative to actual delivery. The company’s forward EPS estimates embedded in consensus data show continuing EPS growth — analysts model EPS to climb toward the $222.21 range in 2025 and higher in later years — supporting forward multiples that compress out over time (company data shows forward PE estimates moving from 24.87x in 2025 to 13.32x in 2029 on consensus EPS growth assumptions). Booking press releases and quarterly results.

Competitive and strategic context: pricing power, platform scale and risk#

Booking’s economics are underpinned by high gross margins and a technology‑enabled marketplace that benefits from global distribution scale. The company’s operating margin expansion and strong cash conversion indicate continued pricing power and distribution efficiency. Against peers in online travel and digital marketplaces, Booking’s returns on capital (reported ROIC ~51.76% TTM) and EBITDA margins place it among the higher‑quality internet platforms with low capital intensity and high cash conversion. Those characteristics help explain why management has been comfortable deploying capital in buybacks rather than materially expanding capital spending; capex remained modest (FY2024 investments in property, plant and equipment were $429MM).

Risks however remain. The travel industry is cyclical and sensitive to macro shocks (geopolitical events, pandemics, recessions). High valuation multiples — trailing PE near 38x on reported EPS — leave little room for a growth miss. Additionally, competition from other online travel agencies, metasearch platforms and direct booking initiatives by hotels put pressure on commission rates and customer acquisition costs over the long run. Finally, the negative equity posture introduces governance and structural considerations should markets turn and liquidity be needed.

Historical pattern and management track record#

Historically, Booking has shown a pattern of revenue recovery and margin expansion following downturns, with FY2021–2024 revenue compound growth and improving margins as travel demand rebounded. Management, led by CEO Glenn D. Fogel, has consistently prioritized shareholder returns in recent years, as evidenced by multi‑year repurchase programs that accelerated in 2022–2024. The current financial profile — strong margins, large FCF and minimal net debt — is the cumulative result of that execution and capital allocation stance.

Forward expectations embedded in consensus and what they imply#

Analyst consensus embedded in the provided dataset shows revenue and EPS progression through 2029. Consensus revenue for 2025 is around $26.34B with estimated EPS of $222.21; by 2029 analysts model revenue of roughly $36.34B and EPS of $391.73. Those assumptions imply a multi‑year revenue CAGR in the high single digits and an EPS CAGR materially higher due to operating leverage and continued buybacks compressing share count.

A few arithmetic implications are worth calling out. Using the FY2024 EBITDA of $9.34B and consensus 2025 EBITDA estimates (reported in formatted consensus data as roughly $7.69B for 2025 — note differing bases across sources), investors should watch whether EBITDA growth keeps pace with revenue and whether buyback cadence remains consistent. If buybacks remain large, per‑share metrics will rise faster than aggregate net income, increasing EPS growth even under moderate revenue growth scenarios.

What this means for investors#

Booking’s FY2024 financials establish three durable structural facts: the business is highly cash‑generative, management is aggressively returning capital via buybacks and dividends, and operating margins are at multi‑year highs. These attributes explain why the market prices the company at premium multiples despite a modest revenue growth rate relative to high‑growth tech peers.

For investors focused on cash flow and capital returns, Booking’s profile is attractive: $7.89B of free cash flow in 2024, low net debt (~$0.92B) and an established buyback program demonstrate strong shareholder orientation. For valuation‑sensitive investors, the current trailing multiple near 38x reported EPS requires confidence that margin expansion and per‑share earnings growth will persist.

From a risk perspective, Booking is exposed to travel cyclicality and competitive dynamics that could compress commissions or increase marketing costs. The company’s negative book equity should be monitored as a structural outcome of buybacks, not a standalone failure of operations, but it can alter balance sheet perceptions and limit certain financing or accounting flexibilities.

Key takeaways#

Booking delivered robust earnings and cash flow in FY2024 with net income of $5.88B and FCF of $7.89B, funded a $6.51B buyback program, and ended the year with ~$0.92B net debt. Operating margin expansion (+464 bps YoY) drove much of the earnings acceleration while SG&A leverage and sustained high gross margins underpinned profitability. Analyst consensus projects continued EPS growth through 2029, which — if realized — would compress forward valuations.

Closing synthesis — the valuation versus quality trade‑off#

Booking is simultaneously a high‑quality cash machine and a richly priced growth/cash‑return story. The company’s operating execution in FY2024 and the early 2025 earnings beat cadence lend credibility to management’s ability to convert revenue into sustained profitability and cash. At the same time, the premium multiple and the structural balance sheet outcome from aggressive repurchases create a tightrope: small operational setbacks could have outsized valuation implications. Investors and stakeholders should therefore monitor three quantifiable items closely: sequential EBITDA trends, quarterly free cash flow generation relative to buybacks, and any shifts in gross take rates or customer acquisition economics reported in quarterly disclosures.

All fiscal figures and filing dates cited here are drawn from Booking Holdings’ FY2024 annual financial statements (filed 2025‑02‑20) and subsequent quarterly earnings releases through mid‑2025. For primary documents, see Booking’s investor relations and SEC filing pages: Investor Relations — Booking Holdings and SEC filings for Booking Holdings (search).