Booking's Travel Business Grew, but a $900 Million FTC Hit Turned Revenue Negative

Booking Holdings took a $900 million revenue hit from a Federal Trade Commission matter in the third quarter, turning reported revenue negative even as travel demand kept growing.

Booking Holdings Inc. (NASDAQ: BKNG) is a Norwalk, Connecticut online travel company. Its brands include Booking.com, Priceline, Agoda, KAYAK and OpenTable. Adjusted figures exclude the FTC item and other listed costs.

Demand grew through the quarter

Room nights rose 7% to three hundred forty-five million. Gross bookings rose 10% to $54.5 billion. On a constant currency basis, gross bookings rose about 11%. Constant currency strips out exchange-rate swings.

Merchant gross bookings were $40.7 billion, up about 14%. Agency gross bookings were $13.7 billion, down about 1%.

The FTC item erased the revenue growth

Reported revenue fell 1% to $8.89 billion, from $9.01 billion a year earlier. The decline came from one discrete item. Booking recorded a $900 million reduction in revenue tied to the FTC matter.

Booking also accrued a $100 million loss tied to the same matter. Together, the two items total $1 billion before tax effects.

Gross bookings do not reflect the FTC matter, the release states. That is why bookings could grow 10% while revenue fell. The charge sits in revenue, not in the volume measure.

Adjusted results show the underlying quarter

Adjusted revenue rose 9% to $9.79 billion. Adjusted net income rose 8% to $3.51 billion. Adjusted EBITDA rose 9% to $4.61 billion. Its margin held at 47.0% of adjusted revenue.

Adjusted earnings were $4.66 a share, up 17%. Official earnings were $3.61 a share on a GAAP basis, up 7%. GAAP means the standard accounting rules. Net income fell 1% to $2.72 billion.

Operating income fell to $3.42 billion, from $3.48 billion. Merchant revenues rose to $7.00 billion. Agency revenues fell to $2.46 billion. Advertising and other revenues were $332 million.

Chief Executive Glenn Fogel said the quarter showed resilient demand and disciplined execution. He cited double-digit gross bookings growth and 17% adjusted earnings growth. One context point matters for the per-share figures.

Booking completed a 25-for-1 stock split on April 2, 2026. All per-share figures are restated for the split. That is why these share numbers look small.

What the FTC matter involves, per reporting

Reuters reported the action involves a subsidiary's connection to deceptive hotel ads. Booking disclosed in August that the FTC was considering suing Priceline and an affiliate. The issues included disclosures, fees, customer support and billing practices.

The inquiry also covered Priceline's relationship with Guest Reservations, a third-party hotel site. Priceline supplies hotel inventory to that site through Priceline Partner Solutions. That link is cited in a San Francisco lawsuit, Reuters reported.

The release itself does not adjudicate the matter. It records the charge and the accrual only. Whether more cost follows is not stated.

Against expectations

Expectations framed a different revenue story. Analysts expected revenue near $9.6 billion, per InvestingLive. Reported revenue missed that mark. By TickerGrove's calculation, the shortfall was 7.4%.

By TickerGrove's calculation, adjusted revenue beat the expectation by 2.0%. Adjusted earnings beat the roughly $4.50 expectation. By TickerGrove's calculation, that beat was 3.6%.

Gross bookings also beat the roughly $52.7 billion estimate. By TickerGrove's calculation, the beat was 3.4%.

Guidance is announced, not reported

For the fourth quarter, Booking announced room-night growth guidance of 1% to 3%. Announced gross bookings growth guidance is 2% to 4%. Announced adjusted revenue growth guidance is 0% to 2%.

Announced adjusted EBITDA is expected to be about flat. Announced adjusted earnings growth is expected in the low to mid-teens. For the full year, Booking announced high-single-digit growth for gross bookings, adjusted revenue and adjusted EBITDA.

The outlook assumes Middle East conflict effects persist through year-end. That covers direct disruption and indirect effects such as higher airfares. Demand moderated late in the quarter, Booking said, while domestic travel stayed resilient.

Shares fell after hours

Shares fell 1.23% in after-hours trading to $153.76 as of 7:31 p.m. ET on Tuesday, according to Nasdaq quote data. The official regular close was $155.67, up 1.25%. That figure is an after-hours snapshot, not a close.

Booking had closed Monday at $153.75, the prior close. The stock rose in the regular session. The after-hours move erased that gain, on this one snapshot.

Cash flow and shareholder returns

Third-quarter operating cash flow was $1.14 billion, down 21%. Free cash flow was $1.07 billion, down 22%. Free cash flow is operating cash flow minus equipment spending. Both measures rose 2% year to date.

Booking repurchased $2.1 billion of its stock in the quarter. It had $12.4 billion of authorization left on September 30. The board declared a $0.42 dividend, payable December 31 to holders of record on December 11.

What remains unknown

What remains unknown includes the full terms behind the FTC charge. The release names the amounts but not the settlement or ruling behind them. Footnote 13 of the Form 10-Q is the next document to check.

Whether the after-hours drop holds on Wednesday is also unknown. After-hours snapshots can fade. The official test is the next regular close. Fourth-quarter demand under the conflict assumption remains unproven.

What to watch next

What to watch is the Form 10-Q disclosure on the FTC matter. Watch for any added cost beyond the $1 billion recorded. Watch fourth-quarter room nights against the announced 1% to 3% range.

Watch gross bookings against the announced 2% to 4% range. Watch adjusted revenue against the announced 0% to 2% range. Watch the next regular close against the after-hours snapshot.