BKNG · Earnings call · 2026Q3T · Full report

Operating Expense Trends

Booking Holdings Inc. · 2026-11-03 · Importance 30 · Surprise 40 · In source text

Third-quarter marketing expense increased 11% year over year, slightly faster than gross bookings, primarily because B2B affiliate marketing commissions rose with B2B revenue; B2C marketing had leverage. Adjusted fixed operating expenses increased 6%, while adjusted sales and other expenses were 2.0% of gross bookings and provided leverage; AI-supported third-party customer-service efficiencies more than offset higher payment expenses from the growing merchant mix. Agoda's blended cost per million AI tokens fell more than 25% from June to September, and companywide cost per merge request declined double digits. Booking Holdings incurred approximately $23 million of Transformation Program costs in Q3 and remains on track to deliver $650 million of annual run-rate savings in 2027.

Key facts

• Booking Holdings remains on track to achieve $650 million in annual run-rate Transformation Program savings in 2027.
• Booking Holdings' cost per merge request declined double digits as developer productivity improved.
• At Agoda, blended cost per million AI tokens declined by more than 25% between June and September.
• Booking Holdings was evaluating marketing leverage in the fourth quarter after achieving B2C marketing leverage in the third quarter through higher paid-channel ROI and increased direct traffic.
• Marketing expenses increased 11% year over year, slightly faster than gross bookings, primarily because B2B affiliate marketing expenses grew faster.
• Adjusted fixed operating expenses increased 6% year over year.
• Booking Holdings said its combined B2B marketing expenses and commissions were increasing as B2B revenues grew because commission structures are usually based on revenue share; management said the economics were healthy for the company.
• Booking Holdings Inc.'s headcount growth has been very minimal over the last 2 years, mostly in lower-cost locations such as its center of excellence in India.

Impact estimates