Booking Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : That's right. That's right. It's been eventful. You've done a lot. So maybe let's talk about that. So over the course of the last year, you spent time sort of going through the OpEx base, the areas of investments. There have been some adjustments there. What are the main things from a prioritization perspective you're spending your time on now as you sort of think about 2025 and delivering on your growth targets? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, BKNG.OQ - Booking Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Yeah, it's very impressive fourth-quarter and overall 2024 results given your scale and just your growth relative to peers in an absolute. And then on the go forward, I like the 8-8-15. It's easy to remember, 8% forward constant currency bookings growth, 8% constant currency revenue growth, 15% EPS growth. We like that. So you talked about sort of every day, you have to get out, execute, compete. When we think about that 8-8-15, what are sort of one or two of the most important micro-level areas of execution you have to continue to improve on to make sure you at least hit the 8-8-15 framework?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Got it. Maybe let's talk about that EPS growth CAGR a little bit. Because one of the questions I get is sort of around the $400 million to $450 million cost reduction or reallocation, however you want to think about it, last year. How should we think about that $400 million to $450 million flowing through the bottom line as opposed to sort of being reinvested in growth for further long-term growth in the Excel sheet?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Got it. Okay. Grow, grow, grow. Makes sense. Let's talk about a couple of the areas where you're investing. Let's start with the US. The US in the fourth quarter was particularly strong, accelerated to 10% year-on-year growth versus 3% in the prior quarter, even accelerated on a two-year stack. So maybe just from a micro level perspective, are there any areas you call out where you really saw more return or better signal that really drove that acceleration in the US? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, BKNG.OQ - Booking Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : I want to get to alternatives in more detail in a little bit. But just going back to your point on alternatives in the US, is that business at a point where it can actually contribute some of those incremental basis points of growth? Or is it still earlier in its overall level?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : How do you think of that upside potential for alternatives? How do you think about the investments you need to make to really keep that growth going or even just further take share within alternatives in the US from here on the host side or on the guest side?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Do you ever think through the -- on the individual host point, do you ever think through potentially adjusting the take rate structure and not even reducing your take rates, just adjusting the take rates, the amount that the host pays and the guest pays? There is quite a big difference if you're a super host like my wife is. The amount that you pay your competitor is 3 to 4 points. If you're a host on [Booking], you're paying, call it, 14 points. How do you think about sort of the take rate structure to compete in supply?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Okay. The other area you talked about investing in when you went through sort of the menu was Asia. For years, Asia has been a pretty competitive market, perceived to be a very competitive market. Maybe talk to us about the changes. Or what are sort of the important areas of investment in Asia, if we think, two buckets, China and then Asia, ex-China?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Great. Well, we've been on stage for quite a few minutes, and we still haven't talked about gen AI. I mean, who would have thought? I doubt you get through many meetings and get this long without questions on gen AI. So let's get started. There is a lot of discussion about the future of the online travel funnel and the way in which consumers will search for travel, plan itineraries, book travel. Maybe just let me start with your perspective. What is Booking.com's vision for the three to five years from now, how consumers will book trave;?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : I have five questions -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, BKNG.OQ - Booking Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : No, that was very helpful. Let me ask you about point three on the idea of using some of the next-generation agents as a paid marketing channel or as a funnel. How do you think through the risk that if some of these big companies that are building these next-generation agents, they are -- public and private companies are trying to do this. They could build out better next-generation travel planning tools that leverage even more of their data and your leading supply to cause even more people to use them. And you become more reliant on them as a paid channel going forward, and it potentially impacts your high-margin direct mix. Are you worried at all that you could actually be enabling these companies to get into the garden and just all of a sudden, you're more reliant on them going forward?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Correct. You could be the agent, okay. That's helpful. And then the last one on this is there are some private companies that are sort of talking about disintermediating the OTAs from a supply perspective and leveraging wholesale supply, bed banks, I think they're known. What's your response to that? What is the difference in your supply as opposed to what you can get access to on the wholesale side?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Got it. Okay. I remember the wholesale debate being a debate 10 years ago as well. Other companies could leverage the wholesale inventory, and there are restrictions around that. So that's a very good point. You mentioned the partnerships and the hotel partners. How are you -- what are you investing in internally with new generative AI capabilities to sort of even further increase the value that you provide for all of your fragmented hoteliers and mom-and-pop businesses?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Yeah. And then on gen AI, I know you had mentioned before how you're investing in other internal productivity tools. So are there some examples where you're already seeing incremental efficiency internally from using either GPU machine learning or other tools? What are those? And how can you keep quantifying the help at all?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Great. Okay. We'll probably have time for one question from the audience for Ewout. If you have one, you may raise your hand. We have mic runners in the back.

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Yeah. The point of sort of the next-generation agent, I know building out these -- getting your data in one place and getting it ready to be using these models and then shipping product takes time. It's a big lift for any company. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, BKNG.OQ - Booking Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference Is that a 2025 product? Is it a '26 product? How do we think about timelines of sort of seeing this fully integrated agent that could be rolled out to everybody?

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : Sounds great. I love the Paris question. Unidentified Participant Just if you could unpack the 15% EPS growth, like in particular, like the growth in direct or leveraging payments? And then how much of that comes from like share buybacks? Just trying to understand kind of the drivers there a little more.

Question: Brian Nowak - Morgan Stanley & Co. LLC - Analyst : All right. Ewout, thank you very much for all the discussion. It will be a fascinating year to watch and hope we see you next year.