Common-Size Income Statement
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Booking Holdings Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Booking Holdings Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the provided financial data reveals several notable trends and insights regarding revenue composition, expense management, and profitability over the five-year period from 2020 to 2024.
- Revenue Composition
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Merchant revenues have shown a consistent and substantial increase, rising from 31.15% of total revenues in 2020 to 59.57% in 2024. Conversely, agency revenues have declined markedly from 63.48% to 35.91% over the same period. Advertising and other revenues have remained relatively stable, fluctuating slightly around the 4.5% to 5.5% range. These changes indicate a strategic shift in revenue streams away from agency-based models toward merchant-based revenues.
- Operating Expenses
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The trend in operating expenses as a percentage of revenues shows a significant improvement. Total operating expenses decreased from -109.28% in 2020 to -68.17% in 2024, indicating enhanced cost efficiency. Marketing expenses, while still substantial, declined from -32.06% to -30.66%, suggesting tighter control over marketing spend relative to revenue generation.
Sales and other expenses remained somewhat volatile, with a low of -8.04% in 2021 and increasing to -13.14% in 2024, which could highlight areas requiring closer expense management. Personnel costs decreased notably from -28.61% in 2020 to -14.13% in 2024, reflecting possible workforce optimization or changes in compensation structure.
General and administrative expenses showed variability, with an improvement to -4.36% in 2024 from -8.55% in 2020, though a slight spike occurred in 2023. Expenses related to information technology and depreciation and amortization progressively decreased, contributing to overall expense reduction. New categories such as transformation costs emerged with a minor expense of -0.14% in 2024, potentially indicating strategic investments in change initiatives.
Other operating expenses exhibited inconsistency, ranging from negative to positive contributions, while impairments such as goodwill impacted 2020 heavily at -15.63% with no impact in later years, signaling the resolution of previous write-downs.
- Profitability
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Operating income improved substantially, moving from a negative margin of -9.28% in 2020 to a strong positive of 31.83% in 2024. This improvement aligns with the reduced operating expense burden and the shift in revenue structure towards higher-margin merchant revenues.
Interest expense initially decreased from -5.24% to -2.29% by 2022 but began to rise again in subsequent years, reaching -5.46% in 2024, possibly reflecting changes in debt levels or interest rates. Interest and dividend income increased notably from 0.79% in 2020 to approximately 4.7% in 2023 and 2024, indicating enhanced returns on investments or improved cash management.
Foreign currency transaction gains and losses fluctuated, with gains recorded in 2021 and 2024 and losses in other years, suggesting exposure to foreign exchange volatility. Net gains on equity securities were significant in 2020 (26.68%) but turned negative in 2021 and 2022, then stabilized near zero, indicating volatility in investment performance.
One-time losses such as those related to conversion options on convertible notes appeared in 2024 and impairments were noted only in 2020, signaling episodic impacts rather than ongoing issues. Other income (expense) moved from a positive 22.07% in 2020 to progressively smaller negative values, reflecting a normalization of non-operating results.
Earnings before income taxes increased consistently from 8.34% in 2020 to 30.72% in 2024, driven by improved operating income and supplemental income trends. Income tax expense as a percentage of revenues remained modest and stable between approximately -2.7% and -7.5%, without clear directional change.
Net income showed dramatic growth, rising from a minimal 0.87% margin in 2020 to 24.78% in 2024. This reflects improved core profitability, effective cost management, and positive contributions from non-operating activities, notwithstanding some volatility in investment-related items.