BKNG 10-K & 10-Q changes, risk factors and insider trading

The risk factors section should be carefully considered in full, in addition to other information appearing in this Form 10-K, including Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and related notes. The following is only a summary of the principal risks that make an investment in our securities speculative or risky.

Our financial results depend upon sales of travel services, which can fluctuate based on consumer discretionary spending levels. Demand for and sales of travel services often decline during periods of perceived or actual adverse economic conditions and times of political or economic uncertainty. Economic and political uncertainty can negatively impact transaction growth rates, cancellation rates, and accommodation average daily rates ("ADRs"). While lower occupancy rates can increase distribution of accommodation reservations through third-party intermediaries such as us, ifIf there are lower ADRs, it generally has a negative effect on our revenues and results of operations.

Macroeconomic uncertainties and geopolitical tensions have ledcaused, toand in the future may cause, significant volatility in foreign currency exchange rates, stock markets, and oil prices, which can impact consumer travel behavior. The uncertainty of macroeconomicthese factors and their impact on consumer behavior makes it difficult to forecast industry and consumer trends and their potential impact on our business,trends, which could adversely affect our ability to effectively manage our business and adversely affect our results of operations.

Other events beyond our control such as pandemics, terrorist attacks, natural disasters, trade disputes, sanctions, wars and regional hostilities, political unrest, travel-related accidents, or increased focus on the environmental impact of travelovertourism may disrupt or limit the ability or willingness of travelers to visit certain locations, or result in declines in demand for ouror travel offerings.restrictions, Responses to such events by governments or global organizationswhich could restrict travel in ways that couldnegatively impact our ability to conduct our business. Because theseThese events and their impacts are largely unpredictable,unpredictable theyand can dramatically and suddenlyabruptly affect consumer travel behavior by consumers, demand for and provision of our services, and relationships with travel service providers and other partners, any of which cancould adversely affect our business and results of operations.

For many consumers, the price of a travel service is the primary factor determining whether to book a reservation. In some cases, ourSome competitors aremay willingoperate toat make littleminimal or nonegative profit on a transaction or offer travel services at a loss in ordermargins to gain market share. InTravel service providers may offer lower prices through direct or AI-enabled channels, OTC and other competitors may more effectively invest in online marketing channels, and in certain markets,markets we may need to provide discounts or other incentives in order to be competitive, any of which may make it difficult for us to maintain or grow marketour share,competitive maintainposition historicalor profit margins, and may also result in lower ADRs and lower revenues as a percentage of gross bookings. Consolidation among travel service providers or the development ofAI-enabled alternative travel offerings as a result of Gen AI could result in lower OTC commission rates, increased discounting, and greater incentives for consumers to join closed-user groups as such travel service providers expand their offerings.groups. If we are unable to effectively offer competitive prices, our revenues, marketcompetitive share,position, business, and results of operations could be materially adversely affected.

We have significant operations in countries outside the United States and derive a substantial portion of our gross bookings from thesecountries countries.outside Ourthe OTCUnited States. The growth rate of our operations outside of the United States historically had achieved significant year-over-year growth in their gross bookings, though growth rates have generally declined over time as the absolute level of our gross bookings increased and online travel growth rates declined.declined, Otherand factorsthey may also slowbe theimpacted growthby ratesfactors ofsuch our businesses outside of the United States, includingas economic conditions, strengtheningchanges ofin theforeign U.S.currency Dollarexchange versus other currencies,rates, declines in ADRs, increases in cancellations, adverse changes in travel market conditions, and competition. Any decline in the growth rates of our businesses could negatively impact our revenue and earnings growth rates and as a consequence our stock price.rates.

We are also subject to risks related to expanding our business internationally. InternationalMany markets may have strong local competitors with an established brand and travel service provider or restaurant relationships making expansion in that market difficult or costly. Certain markets in which we operate have unique localized preferences or lower operating margins, or from time to time have experienced declining or no growth. ScalingSome of our current and growingpotential competitors may have greater resources or stronger competitive positions in certain regions than we do, or may be domiciled in different countries and subject to political, legal, and regulatory regimes that enable them to compete more effectively than us. Growing our business in such markets could require significant investment, which could have a negative impact on our profit margins. In some markets such as China, local requirements may restrict participation by foreign businesses, making our entry into and expansion in those markets costly, difficult, or impossible. If we are unsuccessful in expanding in new and existing markets and managing that expansion, our business and results of operations could be adversely affected.

We believe that the breadth, variety, and quality of accommodations on our platforms helps drive our growth. The market for accommodations covers a wide range of property types including alternative accommodations and companies like Airbnb and Vrbo (owned by Expedia) compete directly with our accommodations businesses. The growth rate of the number of accommodations on our platforms may vary in part due to removing accommodations from time to time. Many newer accommodations we offer may have fewer rooms or higher credit risk and may appeal to a smaller subset of consumerscustomers (e.g., hostels and bed and breakfasts). If occupancy rates increase, accommodation providers often limit their offerings to OTCs. Also, certain jurisdictions have instituted regulations intended to address the issues of "overtourism" and the impact of tourism on climate,overtourism, including by restricting accommodation offerings near popular tourist destinations.destinations, As a result, wewhich may experienceresult in constraints on the number of listings or available accommodation room nights or decreased demand, which could negatively impact our business growth rate and results of operations.

We rely on providersthird of accommodations, rental cars, and airline tickets, and on restaurants,parties to make their services available to consumers for reservation through us. Our arrangements with travel service providers are generally do not require themrequired to make available any specific quantity of reservations, or to make reservations available in any geographic area, for any particular route, or at any particular price. Similarly, our arrangements withOur restaurants are generally do not require themrequired to provide all of their available tables and reservations to customersconsumers through us. Our arrangements with OTCs and travel service providers to provide pricing, schedules, availability, and other information in connection with Kayak'sKAYAK's meta-search services are non-exclusive and can be terminatedterminable with little notice. A significant reduction on the part of any of our major travel service providers,providers or restaurants,restaurants for a sustained period of time or their complete withdrawal from our services, including due to a provider's bankruptcy or closure, could have an adverse effect on our business, advertising revenue, marketcompetitive share,position, and results of operations. Further, as consolidationindustry consolidation, including among travel service providersproviders, increases, or if Gen AI better enables, or offers alternatives for travel service providers to reach consumers, the potential adverse effect of areduced decisionusage or withdrawal from our services by a significant travel service provider to withdraw from or reduce its participation in our services also increases.

OurAs we continue to grow our alternative accommodations businessbusiness, faceswe face increasing risks relating to claims of liability, regulatory developments, and continued growth and profitability. Because alternativeAlternative accommodations aretypically oftenconsist either aof single unitunits or a small collection of independent units, and may haveresult in additional costs tofor beus, offeredwhich oncan ourresult platforms, these properties generally representin more limited booking opportunities and lower profit margins than hotels, motels, and resorts. Further, alternative accommodations may be subjectunavailable during peak periods due to increased seasonality or mayowner not be available at peak times due to use by property owners.use. To the extent alternative accommodations represent an increasing percentage of the properties we add to our platforms, we expect that our room-night growth rate and property growth rate will continue to diverge over time, and the number of reservations per property will likely continue to decrease. Additionally, if we don't offer features preferred by alternative accommodation property owners or our competitors have better features, our alternative accommodations business could be negatively impacted.

Alternative accommodations are subject to increased risk of claims of liability based on injury, death, discrimination, or criminal activities occurring at these properties.activities. We have no control over the actions of our consumers, property owners, andor other third parties during a stay, and cannot guarantee the safety of such individuals. We havedo not in the past and may not in the future undertake to systematically verify the safety, quality, and legal compliance of all of our alternative accommodationaccommodations listings. Weand rely on property owners to disclose information relating to their listingslistings, and such informationwhich may be inaccurate or incomplete. Moreover, Booking.com facilitates the provision of partner liability insurance thatunderwritten mayby third-party insurance providers to protect certain alternative accommodation partners against liability claims, lawsuits by third parties for bodily injury, or personal property damage that occuroccurs during a staystay. atIf aapplicable, partnerthis property.insurance Thisprovides partner liability insurance, if applicable to the claim, may provide partners withcoverage up to $1.0 million equivalent per occurrence (policy limit) of third party liability coverage relatedsubject to thelimitations underlyingand claim,exclusions). thoughWe theretain Companycertain financial risks and could be required to pay amounts in excess of the policy limit. Any resulting complaints or claims could result in negative publicity and increased costs, which could adversely affect our reputation, business, and results of operations.

Alternative accommodation regulation is newrules and regulations are complex, evolving, can be inconsistent among individual localities, and laws, regulations, or property association rules could impose obligations on property owners and managers that limit or negatively affect theirproperty owners' and managers' ability to rent their properties. For example, in conjunction with the Digital Services Act ("DSA"), the European Commission (the "EC") hasimposes adoptedobligations aaround short-term rental regulation that imposes new obligations around property owner registration, property verification, and enforcement of local registration schemes. Some jurisdictions have adopted or are considering restrictions (e.g., license requirements) on the ability to offer alternative accommodation properties or that require online platforms, owners, or managers to obtain a license to rent or list alternative accommodations. From time to time, weWe have been and are subject to inquiries related to compliance with alternative accommodation legalsuch requirements that have resulted in fines and could result in additional fines, adversely affect our reputation, or require modificationsoperational to our business operations. Legal requirements applicable to alternative accommodations are evolving and can be inconsistent among individual localities, and we are unable to predict what effect they may have on our business.modifications. This dynamic regulatory environment requires us to expend significant time and resources and could negatively impact our alternative accommodation reservationaccommodations business.

We invest considerable resources in the establishment and maintenance of our brands, marketing and other brand building efforts to preserve and enhance consumer awareness of our brands, and to attract and retain customers.consumers. Performance marketing costs to grow traffic to our platforms are variable because they are dependent on others' marketing spend in the same channels. If we are unable to maintain or enhance consumer awareness and acceptance of our brands or if such efforts are not cost-effective, our business, marketcompetitive share,position, and results of operations could be materially adversely affected.

Our marketing efficiency, expressed as marketing expense as a percentage of gross bookings, and performance marketing return on investment ("ROIs") are impacted by a number of factors that are subject to variability and are in some cases outside of our control, including ADRs, costs per click, cancellation rates, foreign currency exchange rates, our ability to convert traffic to booking customers,consumers, and the timing and effectiveness of our brand marketing campaigns. Marketing efficiency can also be impacted by the extent to which consumers come directly to our platforms for bookings.bookings and the economics of distribution channels. If our marketing efforts are less effective at generating new bookings, our marketing efficiency could deterioratedecrease and our margins, revenues, and earnings growth could be adversely affected. For example, competition for desired rankingsplacement in search results and/including among AI-generated or aAI-impacted decline in ad clicks(i.e., by consumersbot or agent activity) results could increase our costs-per-click and negatively impact our marketing efficiency. At times we may pursue a strategy of increasing marketing ROIs, which could negatively affect our gross bookings and revenue growth rates. Pursuing a strategy of improving performance marketing ROIs along with factors such as competitors' actions in the bidding environment, the amount of marketing invested by these channels to generate demand, and overall marketing platform traffic growth trends, may also impact our gross bookings and revenue growth rates. Negative trends in our marketing efficiency, performance marketing ROIs, or consumer shopping activity could negatively impact our business, marketcompetitive share,position, and results of operations.

The following discussion should be read in conjunction with Part I, Item 1A "Risk Factors" and our Consolidated Financial Statements and accompanying notes.

We evaluate certain operating and financial measures on both an as-reported and constant-currencyconstant currency basis. We calculate constant currency based on the predominant transactional currency in each country, converting our current year results in currencies other than U.S. Dollars using the corresponding prior year monthly average exchange rates.

Our mission is to make it easier for everyone to experience the world. We aim to provide consumers with a best-in-class experience offering the travel choices they want, with tailored planning, payment, language, and other options, seamlessly connecting them with our travel service provider partners. We offer these services through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable. See Notes 1 and 17 to our Consolidated Financial Statements for informationsegment on our operating segmentsreporting and revenue by geographic area.information.

We derive substantially all of our revenues from enabling consumers to make travel service reservations. We also earn revenues from advertisingpayment services,facilitation, advertising, restaurant reservation and management services, travel-related insurance offerings, and other services.

Quarterly Room Nights and Change versus the prior year (1)

Full Year Room Nights and Change versus the prior year (1) (1) Room night growth rates are rounded for presentation purposes.

The cancellation rate in 20242025 was inlower line withthan the prior year. Because we recognize revenues from bookings when the traveler checks in, our reported revenues are not at risk of being reversed due to cancellations. Increases in cancellation rates can negatively impact our marketing efficiency as a result of incurring performance marketing expenses at the time a booking is made even though that booking could be canceled in the future if it was booked under a flexible cancellation policy.future.

In 2024,2025, our global average daily rates ("ADRs") on a constant currency basis were about in line with the prior year. Our global ADRs were slightly negatively impacted by a higher mix of room nights fromin Asia, which is a lower ADR region. Excluding the changes in regional mix, our global ADRs on a constant currency basis increasedwere year-over-yearup approximately 1% year-over-year, driven primarily by abouthigher 1%. It is difficult to predict what the trendADRs in industry ADRs will be in the future.Europe.

We focus on relentless innovation to grow our business by providing a best-in-class user experience with intuitive, easy-to-use online platforms that aim to exceed the expectations of consumers. We haveare aexecuting against our long-term strategy to create an ideal AI-powered traveler experience, offering our customers relevant options and connectionssuggestions at the times and in the language they want them, making trips booked with us seamless, easy, and valuable. We refer to this as the "Connected Trip." The goal of our Connected Trip vision is to offer a differentiated and personalized online travel planning, booking, payment, and in-trip experience for each trip, enhanced by a robust loyalty program that provides value to travelers and partners across all trips. We believe these efforts will help improve traveler loyalty, frequency, and mix of direct bookings over time. We believe these improvements will benefit revenue growth and marketing efficiency in the future, however, to the extent our non-accommodation services have lower margins and increase as a percentage of our total business, our operating margins may be negatively affected.

Our mobile appapps isare an important platform for experiencing the Connected Trip since the app travels with the traveler. The mix of our room nights booked on aour mobile appapps in 20242025 was a low-fiftiesmid-fifties percentage, up from a high-fortieslow-fifties percentage in 2023.2024. The significant majority of room nights booked on our mobile apps are direct, and we continue to see favorable repeat direct booking behavior from consumers in our mobile apps, which allow us more opportunities to engage directly with consumers.them. The revenues earned on a transaction on a mobile app may be less than a typical desktop transaction as we see different consumer purchasing patterns across devices. For example, accommodation reservations made on a mobile app typically are for shorter lengths of stay and have lower accommodation ADRs.

AsWe continue to expand our merchant service offerings as part of oura broader strategy to provide more payment options to consumerstravelers and travel service providers, increase the number and variety of our accommodations, and enable our long-term Connected Trip strategy,strategy. Booking.comThese increasinglymerchant processesservices transactionsallow us to facilitate payments from travelers and offer secure, flexible transaction terms, such as varied payment forms, currencies, and timing. The mix of our total gross bookings generated on a merchant basis,basis whereacross itthe facilitatescompany paymentswas 70% in 2025, an increase from travelers63% forin 2024 due to the servicesongoing provided.shift Thisfrom allows Booking.comagency to processmerchant transactionsbookings forat travel service providers and to increase its ability to offer secure and flexible transaction terms to consumers, such as the form and timing of payment.Booking.com. We believe that expanding these types of service offerings will benefit consumers and travel service providers, as well as our gross bookings, room night, and earnings growth rates. However, this results in additional expenses for personnel, payment processing, chargebacks (including those related to fraud), and other expenses related to these transactions, which are recorded in "Personnel" expenses and "Sales and other expenses" in our Consolidated Statements of Operations, as well as associated incremental revenues (e.g., payment card rebates), which are recorded in "Merchant revenues." To the extent more of our business is generated on a merchant basis, we incur a greater level of these merchant-related expenses, which negatively impacts our operating margins despite increases in associated incremental revenues. In 2024,2025, the incremental revenues from facilitating payments were greater than the associated incremental variable expenses. The mix of our total gross bookings generated on a merchant basis was 63% in 2024, an increase from 54% in 2023.

We have established widely-used and recognized brands through marketing and promotional campaigns. Our total marketing expenses, which are comprised of performance and brand marketing expensesexpenses, thatwhich are substantially variable in nature, were $7.3$8.2 billion in 2024,2025, up 7%12.5% versus 20232024 as a result of the year-over-year growth in travel demand and our effortsdue to investchanges in marketing.foreign currency exchange rates. Our performance marketing expenses, which represent a substantial majority of our marketing expenses, are primarily related to the use of online search engines (primarily Google), affiliate marketing, meta-search, and social media channels to generate trafficbookings tothrough our platforms. Our brand marketing expenses are primarily related to costs associated with producing and airing digital branding and television advertising.

Marketing efficiency, expressed as marketing expenses as a percentage of gross bookings, and performance marketing returns on investment ("ROIs") are impacted by a number of factors that are in some cases outside of our control. Such factors include ADRs, costs per click, cancellation rates, foreign currency exchange rates, search engine bidding algorithms, channel mix, our ability to convert paid traffic to booking customers, and the timing and effectiveness of our brand marketing and social media marketing campaigns. In recent2025, years,our weaverage observedROI periodswas ofdown stableslightly oryear-over-year increasingdriven ROIs.by Although it is difficult to predict how ROIs will changechanges in thepaid future,traffic ROIsmix could be negatively impacted byand increased levelssocial ofmedia competition and other factors.spend. When evaluating our performance marketing spend, we typically consider several factors for each channel, such as the customer experience on the advertising platform, the incremental trafficbookings we receive, and anticipated repeat rates. Marketing efficiency canis also be impacted by the extent to which consumers comebook directly towith our platforms for bookings.us. The mix of our total room nights booked by consumers coming directly to our platforms was a mid-fifties percentage in 2024,2025, and was a higher percentage of room nights if we exclude the room nights booked through affiliate programs (i.e., business-to-business). BothThe mix of thesetotal percentagesroom nights booked by consumers coming directly to our platforms increased year-over-year, which benefited our marketing efficiency versusfor 2023.2025. See Part I, Item 1A, Risk Factors - "We face risks relating to our marketing efforts" and "We are dependent on travel service providers, restaurants, search platforms, and other third parties."

The mix of Booking.com's room nights booked for alternative accommodation properties in 20242025 was approximately 35%,36%, up versus approximately 33%35% in 2023.2024. We have observed a longer-term trend of an increasing mix of room nights booked for alternative accommodation properties as consumer demand for these types of properties has grown, and as we have increased the number and variety of these properties on Booking.com. We may experience lower profit margins due to additional costs,costs from offering alternative accommodations, such as increased customer service or certain partner related costs, related to offering alternative accommodations.costs. As our alternative accommodation business has grown,grows, these different characteristics havemay negatively impactedimpact our profit margins and this trend may continue.margins.

Although we believe that providing an extensive collection of properties, excellent customer service, and an intuitive, easy-to-use consumer experienceplatform are important factors influencing a consumer's decision to make a reservation, for many consumers,consumers the price of the travel service is the primary factor determining whether to book. Discounting and couponing (i.e., merchandising) occurs across the major regions in which we operate, particularly in Asia. In some cases, our competitors are willing to make little or no profit on a transaction or offer travel services at a loss in order to gain market share. As a result, it is important to offer travel services at a competitive price, whether through discounts, coupons, closed-user group rates or loyalty programs, increased flexibility in cancellation policies, or otherwise. TheseSome initiativesof havethese resultedinitiatives, and,such inas the future,discounts, may result in lower ADRs and lower revenues as a percentage of gross bookings.bookings as they can reduce the daily room rate and are recognized as contra-revenue.

In Novemberthe fourth quarter of 2024, we announcedbegan the implementation of organizational changes to improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our intentionoffering to implement certain organizational changes, including modernizing processestravelers and systems, initiating an expected workforce reduction, optimizing procurement,partners, and seekingbetter realposition estateour savingsbusiness for the long term (the "Transformation Program"). WeThe believeTransformation itProgram is important to make these organizational changesresulted in orderapproximately to$250 drive further expense efficiency, create room for reinvestmentmillion in projectssavings andin initiatives2025. that will supportGiven the growthstronger-than-expected early results of our business over the long run, and further improve our organizational agility. We expect the Transformation ProgramProgram, in the third quarter of 2025, we raised our expectation for the ultimate annual run-rate savings to ultimatelya deliverrange aboutof $500 to $550 million from our previous guidance of $400 to $450 million in annual run rate savings over the next three yearsmillion, as compared to our 2024 expense base. WeAs areof the end of 2025, we have enabled approximately $550 million in theannual earlyrun-rate stages of this programsavings and we expect to realize these run-rate savings by the majorityend of the run rate savings to be achieved after 2025.2026. We expect that the restructuring costs and accelerated investments related to the Transformation Program will largely be incurred inby the nextend twoof to three years2026 and are estimated to be, in the aggregate, approximatelyless than one times the expected annual run raterun-rate savings.

Many taxing authorities seek to increase tax revenues and have targeted large multinational technology companiescompanies. Many jurisdictions, particularly in thesethe efforts. Many jurisdictionsEU, have implemented or are considering the adoption of a digital services tax or similar tax that imposes a tax on revenues earned from digital advertisements or the use of online platforms, even when there is no physical presence in the jurisdiction. Rates for these taxes range from 1.5% to 10% of revenues deemed generated in the jurisdiction. We record the applicable digital services taxes in "Sales and other expenses" in the Consolidated Statements of Operations. ForThe morerecent information,One seeBig Beautiful Bill Act (the "BBB Act") changes certain international, foreign tax credit, and domestic tax provisions in the United States effective in 2025 and 2026. While the BBB Act did not result in a significant impact to our income tax expense or effective tax rate for 2025, we are evaluating the impact of the BBB Act and it could have a negative impact on our results of operations and cash flows as it relates to provisions that are not yet effective. See Part I, Item 1A, Risk Factors - "We may have exposure to additional tax liabilities."

Increased regulatory focus on large technology companies could result in increased compliance costs or otherwise adversely affect our business. For example, we are subject to rules and regulations that may not apply to our competitors because the European Commission designated the Company as a "gatekeeper under the Digital Markets Act in 2024" and Booking.com as a "Very Large Online Platform" under the Digital ServicesMarkets Act in 2023. As a result of these designations, we are subject to additional rules and regulationsthe thatDigital mayServices notAct, berespectively. applicable to our competitors. For more information, seeSee Part I, Item 1A, Risk Factors - "Our business is subject to various competition, consumer protection, and online commerce laws and regulations around the world, and as the size of our business grows, scrutiny of our business by legislators and regulators in these areas may intensify" and Note 16 to our Consolidated Financial Statements.

Our businesses outside of the U.S. represent a substantial majority of our financial results, but because we report our results in U.S. Dollars, we face exposure to movements in foreign currency exchange rates as the financial results and the financial condition of our businesses outside of the U.S. are translated from local currency (principally related to Euros and British Pounds Sterling) into U.S. Dollars.. See Note 17 to our Consolidated Financial Statements for information related to revenues by geographic area. As a result of movementsthese in foreign currency exchange rates, bothmovements, the absolute amounts of and percentage changes in our foreign-currency-denominated net assets, gross bookings, revenues, operating expenses, and net income as expressed in U.S. Dollars are affected. Our total revenues increased by approximately 11%13% in 20242025 as compared to 2023,2024, butincluding withouta the impactbenefit of about 3% from changes in foreign currency exchange rates our total revenues increased year-over-year on a constant-currency basis by approximately 12%.rates. Since our expenses are generally denominated in foreign currencies on a basis similar to our revenues, our operating margins have not been significantly impacted by currency fluctuations.

We generally enter into derivative instruments to minimize the impact of foreign currency exchange rate fluctuations,fluctuations. suchIn asaddition, foreignwe currency exchange derivative contracts to hedge our exposure to the impact of movements in foreign currency exchange rates on our transactional balances denominated in currencies other than the functional currency. See Note 6 to our Consolidated Financial Statements for additional information. Wemay designate certain portions of the aggregate principal value of our Euro-denominated debt as a hedge of the foreign currency exposure of the net investment in certain Euro functional currency subsidiaries. Foreign currency transaction gains or losses on the Euro-denominated debt that is not designated as a hedging instrument for accounting purposes are recognized in "Other income (expense), net" in the Consolidated Statements of Operations (see Notes 12 and 18 to our Consolidated Financial Statements).Operations. Such foreign currency transaction gains or losses are dependent on the amount of net assets of the Euro functional currency subsidiaries, the amount of the Euro-denominated debt that is designated as a hedge, and fluctuations in foreign currency exchange rates. ForSee moreNotes information,6, see12, and 18 to our Consolidated Financial Statements and Part I, Item 1A, Risk Factors - "We are exposed to fluctuations in foreign currency exchange rates."

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of AmericaAmerica. ("U.S. GAAP"). Our significant accounting policies and estimates are more fully described inSee Note 2 to our Consolidated Financial Statements.Statements for our significant accounting policies. Certain of our accounting estimates are important to our financial position and results of operations and require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We use our judgment to determine the appropriate assumptions to be used in the determination of certain estimates and we evaluate our estimates on an ongoing basis. Estimates are based on historical experience, terms of existing contracts, our observance of trends in the travel industry, and on other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions. Matters that involve significant estimates and judgments of management include the valuation of investmentsgoodwill inand privateother entities,long-lived assets, income taxes, and contingencies.

The determinationestimation of the recoverable values of asset groups and the fair values of investmentsour wherereporting we are a minority shareholder and have access to limited information from the investeeunits reflects numerous assumptions that are subject to various risks and uncertainties, including key assumptions regarding theeach investee'sreporting unit's expected growth rates and operating margin,margin asand wellwith asrespect otherto matters outside of our control, such as discount rates and market comparables. It requires significant judgments and estimates and actualActual results could be materially different than thosethe judgments and estimates utilizedused. Generally, changes in the assumptions used for comparable company multiples would result in directionally similar changes in the fair value estimate.and changes in the assumptions used for discount rates would result in directionally opposite changes in the fair value. Future events and changing market conditions may lead us to re-evaluate the assumptions reflectedused into estimate the valuation,fair whichvalues of our reporting units. Such changes may resultinclude travel service providers reducing or withdrawing from our services, generative AI better enabling or offering alternatives for travel service providers to reach consumers, or competitors affecting our ability to market to and reach consumers in a needcost-efficient to recognize additional impairment charges.way.

We determine our tax expense based on income and statutory tax rates applicable in the jurisdictions in which we operate. Due to the complex and dynamic nature of tax legislation, significant judgment is required in computing our tax expense and determining our tax positions. The U.S. Tax Cuts and Jobs Act (the "Tax Act") enacted in December 2017 made significant changes to U.S. federal tax law, including a one-time deemed repatriation tax imposed on accumulated unremitted international earnings, to be paid over eight years.earnings. We do not intend to indefinitely reinvest our international earnings that were subject to U.S. taxation pursuant to the mandatory deemed repatriation or subject to U.S. taxation as global intangible low-taxed income ("GILTI").

We are subject to ongoing tax examinations and assessments, and face challenges regarding the amount of taxes due from time to time. These challenges include questions regarding the timing and amount of deductions on our tax returns. Although we believe that our tax filing positions are reasonable and comply with applicable law, we regularly review our tax filing positions, especially in light of tax law or business practice changes, and we may change our positions or determine that previous positions should be amended, either of which could result in changes to our tax liabilities. The final determination of tax audits or tax disputes may be different from what is reflected in our historical income tax provisions and accruals.

The determination of whether a loss is probable and whether the amount of the loss can be reasonably estimated requires significant judgment and evaluation of all the underlying facts and circumstances including judgments about the potential actions of third-party claimants, regulatory authorities, and courts. Claims, assessments, and litigations involve significant uncertainties such as the complexity of the facts, the legal theories involved, the nature of the claims, the judgment of the courts, the applicable methodology for determining potential damages, and, in the case of class actions, whether a class action can be certified and the extent to which members of athe class wouldchoose orto wouldparticipate notin filethe a claim.litigation.

On a quarterly basis, we update our analysis and estimates considering available information, including the impact of negotiations, settlements, rulings, and advice of legal counsel. Changes in our assessment of whether a loss is probable, our estimate of the loss, or our determination of whether the amount of loss can be reasonably estimated could have a material impact on our results of operations and financial position. Changes in our assumptions regarding a particular matter or the effectiveness of our strategies related to legal and other proceedings could also have a material impact on our results of operations and financial position. For all loss contingencies, until a matter is finally resolved, there may be an exposure to loss in excess of the liability accrued for the matter and such amounts could be material. In a similar manner, gain contingencies and recoveries of costs and losses are also assessed on a quarterly basis.

Room nights, rental car days, and airline tickets reserved through our services for the years ended December 31, 2024 and 2023 were as follows:

Room nights reserved through our services increased year-over-year in 2024 compared to 2023,2025, driven primarily by increased travel demand in Europe and Asia. Rental car days reserved through our services increased year-over-year in 2024 compared to 2023,2025 driven primarily by year-over-year growth in rental car days reserved on Booking.com. Airline tickets reserved through our services increased year-over-year in 2024 compared to 2023,2025 driven primarily by the expansion of flight offerings at Booking.com and Agoda.

Gross bookings resulting from reservations of room nights, rental car days, and airline tickets made through our merchant and agency categories for the years ended December 31, 2024 and 2023 were as follows (numbers may not total due to rounding):

The year-over-year increase in total gross bookings in 20242025 was due primarily to the increase in room nightsnights, a positive impact of foreign currency exchange rate fluctuations, and thea positive impact from year-over-year growth in flight gross bookings, partially offset by a negative impact of foreign exchange rate fluctuations.bookings.

Our operations and financial results are subject to various risks and uncertainties which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. For a discussion of such risks, please refer to Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K")., Thisas sectionsupplemented supplementsby the Riskrisk Factorsfactor describedset forth in thePart 2025II, Item 1A of our Quarterly Report on Form 10-K10-Q based on recent developments sincefor the 2025quarterly Formperiod 10-Kended filing.March 31, 2026.

The cancellation rate in the firstsecond quarter of 2026 was lower than the firstsecond quarter of 2025,2025. although we experienced a year-over-year increase in cancellation rates during the month of March due toWhile the conflict in the Middle East.East continued to affect travel demand during the second quarter, cancellation rates normalized following the elevated levels in March 2026 immediately after the onset of the conflict. Because we recognize revenues from bookings when the traveler checks in, our reported revenues are not at risk of being reversed due to cancellations. Late in the first quarter of 2026, the increaseIncreases in cancellation rates can negatively impactedimpact our marketing efficiency sinceas wea incurresult of incurring performance marketing expenses at the time a booking is made even ifthough that booking iscould be canceled in the future.

In the firstsecond quarter of 2026, our global average daily rates ("ADRs") on a constant currency basis were approximately 1%2% higher than the prior year primarily driven by higher ADRs in Europe.Europe and the U.S. Our global ADRs were not materially impacted by changes in regional mix in the firstsecond quarter of 2026.

Our mobile apps are an important platform for experiencingdelivering the Connected Trip sinceexperience, theallowing appus travelsto engage directly with thetravelers traveler.throughout their journey. The mix of our room nights booked on our mobile apps over the trailing twelve months ended MarchJune 31,30, 2026, was a high-fifties percentage, up from a mid-fifties percentage over the trailing twelve months ended MarchJune 31,30, 2025. The significant majority of room nights booked on our mobile apps are direct, and we continue to see favorable repeat direct booking behavior from consumers in our mobile apps, which allow us more opportunities to engage directly with them. The revenues earned on a transaction on a mobile app may be less than a typical desktop transaction as we see different consumer purchasing patterns across devices. For example, accommodation reservations made on a mobile app typically are for shorter lengths of stay and have lower accommodation ADRs.

We continue to expand our merchant service offerings as part of a broader strategy to provide more payment options to travelers and travel service providers, increase the variety of our accommodations, and enable our long-term Connected Trip strategy. These merchant services allow us to facilitate payments from travelers and offer secure, flexible transaction terms, such as varied payment forms, currencies, and timing. The mix of our total gross bookings generated on a merchant basis across the Company was 72%73% in the firstsecond quarter of 2026, an increase from 67%69% in the firstsecond quarter of 2025 due to the ongoing shift from agency to merchant bookings at Booking.com. We believe that expanding these types of service offerings will benefit consumers and travel service providers, as well as our gross bookings, room night, and earnings growth rates. However, this results in additional expenses for personnel, payment processing, chargebacks (including those related to fraud), and other expenses related to these transactions, which are recorded in "Personnel" expenses and "Sales and other expenses" in our Unaudited Consolidated Statements of Operations, as well as associated incremental revenues (e.g., payment card rebates), which are recorded in "Merchant revenues." To the extent more of our business is generated on a merchant basis, we incur a greater level of these merchant-related expenses, which negatively impacts our operating margins despite increases in associated incremental revenues. Over the trailing twelve months ended MarchJune 31,30, 2026, the incremental revenues from facilitating payments were greater than the associated incremental variable expenses.

We have established widely-used and recognized brands through marketing and promotional campaigns. Our total performance and brand marketing expenses, which are substantially variable in nature, were $2.1$2.4 billion in the firstsecond quarter of 2026, up 16%11% versus the firstsecond quarter of 20252025, asprimarily a result of thereflecting year-over-year growth in travel demanddemand, continued investment in performance marketing channels where returns remained attractive, and duethe toimpact of changes in foreign currency exchange rates. Our performance marketing expenses, which represent a substantial majority of our marketing expenses, are primarily related to the use of online search engines (primarily Google), affiliate marketing,marketing (i.e., business-to-business or "B2B"), meta search, and social media channels to generate bookings through our platforms. Our brand marketing expenses are primarily related to costs associated with producing and airing digital branding and television advertising.advertising, as well as sponsorships and other brand-building activities.

Marketing efficiency, expressed as marketing expenses as a percentage of gross bookings, and performance marketing returns on investment ("ROIs") are impacted by a number of factors that are in some cases outside of our control. Such factors include ADRs, costs per click, cancellation rates, foreign currency exchange rates, search engine bidding algorithms, channel mix, our ability to convert paid traffic to booking customers, and the timing and effectiveness of our brand marketing and social media marketing campaigns. When evaluating performance marketing spend, we typically consider several factors for each channel, such as the customer experience on the advertising platform, the incremental bookings we receive, and anticipated repeat rates. The impact of cancellation rates on ROIs was evident in the first quarter of 2026, as a notable portion of our spend occurred prior to the onset of the conflict in the Middle East, which resulted in diminished returns on performance marketing expenses as many bookings sourced through paid channels were subsequently canceled due to the conflict.

Marketing efficiency is also impacted by the extent to which consumers book directly with us. The mix of total room nights booked by consumers coming directly to our platforms was a mid-fifties percentage over the trailing twelve months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. TheIn both periods, the mix was higher if we exclude the room nights booked through affiliatethe programsB2B (i.e., business-to-business).channel. This was achieved despite declines in traffic through organic or unpaid search results, which is what we call Search Engine Optimization ("SEO"), as well as regional volatility, as impacted regions, such as the Middle East, historically have a higher direct mix compared to our global average.. Room nights booked through the SEO channel remain a small component of our overall room nights. While we seek to adapt to evolving search engine dynamics, we expect SEO traffic to decline in the short to medium term, which may lead to increased spend in paid marketing channels.

Booking.com had approximately 4.54.7 million total properties on its website at MarchJune 31,30, 2026, representing an increase from approximately 4.14.3 million total properties at MarchJune 31,30, 2025. At MarchJune 31,30, 2026, Booking.com's website had approximatelyover 4.04.1 million alternative accommodation properties (including homes, apartments, and other unique places to stay) and over 500,000 hotels, motels, and resorts.

The mix of Booking.com's room nights booked for alternative accommodation properties in the firstsecond quarter of 2026 was approximately 38%,37%, upin versusline approximatelywith 37%the second quarter of 2025, reflecting, in part, lower alternative accommodation room night growth in the firstMiddle quarterEast. Over the past several years, alternative accommodations were increasing as a percentage of 2025. We have observed a longer-term trend of an increasing mix ofBooking.com's room nightsnights, bookedreflecting forgrowth alternative accommodation properties asin consumer demand for these types of properties has grown, and asan weincrease have increasedin the number and variety of thesealternative accommodation properties available on Booking.com. We may experience lower profit margins due to additional costs from offering alternative accommodations, such as increased customer service or certain partner related costs. As our alternative accommodation business grows, these different characteristics may negatively impact our profit margins. A larger proportion of Booking.com's alternative accommodation room nights are located in Europe compared to our total company room night mix; consequently, our alternative accommodations business is more exposed to the regional impacts of the conflict in the Middle East than our total business.

In the fourth quarter of 2024, we began the implementation of organizational changes to improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to travelers and partners, and better position our business for the long term (the "Transformation Program"). The Transformation Program resulted in approximately $250 million in savings in 2025 and, as of the end of 2025, enabled approximately $550 million in annual run-rate savings. WeAs expectwe continued to realizeexecute theseon the Transformation Program, we identified additional opportunities, increasing our expected annual run-rate savings byto approximately $650 million. We expect the majority of the incremental savings above the approximately $550 million annual run-rate level enabled as of the end of 2026.2025 to be realized in 2027. We expect that the restructuring costs and accelerated investments related to the Transformation Program will largely be incurred by the end of 20262027 and are estimated to be, in the aggregate, less than one times the expected annual run-rate savings.

Many taxing authorities seek to increase tax revenues and have targeted large multinational technology companies. Many jurisdictions, particularly in the EU, have implemented or are considering the adoption of a digital services tax or similar tax that imposes a tax on revenues earned from digital advertisements or the use of online platforms, even when there is no physical presence in the jurisdiction. Rates for these taxes range from 1.5% to 10% of revenues deemed generated in the jurisdiction. We record the applicable digital services taxes in "Sales and other expenses" in the Unaudited Consolidated Statements of Operations. The recent One Big Beautiful Bill Act (the "BBB Act") made changes to certain international, foreign tax credit, and domestic tax provisions in the U.S. effective in 2025 and 2026. Certain provisions of the BBB Act that are effective in 2026 and impact our effective tax rate include U.S. interest expense limitation rules and utilization of additional foreign tax credits in calculating U.S. federal tax relatedassociated towith our international earnings. The impact of the BBB Act could have a negative impact on our results of operations and cash flows. See Part I, Item 1A, Risk Factors - "We may have exposure to additional tax liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Our businesses outside of the U.S. represent a substantial majority of our financial results, but because we report our results in U.S. Dollars, we face exposure to movements in foreign currency exchange rates (principally related to Euros and British Pounds Sterling). As a result of these movements, the absolute amounts of and percentage changes in our foreign-currency-denominated net assets, gross bookings, revenues, operating expenses, and net income as expressed in U.S. Dollars are affected. Our total revenues increased by approximately 16%8% in the firstsecond quarter of 2026 as compared to the firstsecond quarter of 2025, including a benefit of about 6%1% from changes in foreign currency exchange rates. Since our expenses are generally denominated in foreign currencies on a basis similar to our revenues, our operating margins have not been significantly impacted by currency fluctuations.

Three and Six Months Ended MarchJune 31,30, 2026 compared to the Three and Six Months Ended MarchJune 31,30, 2025

Our financial results are driven by certain operating metrics that encompass the booking and other business activity generated by our travel and travel-related services. See "Results of Operations" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on our Operating and Statistical Metrics, including room nights, rental car days, airlineflight tickets, and merchant and agency gross bookings.

Room nights, rental car days, and airlineflight tickets reserved through our services were as follows:

For the three and six months ended MarchJune 31,30, 2026, room nights reserved through our services increased year-over-year, driven primarily by increased travel demandgrowth in Europe,all Asia,key andregions. In the U.S.,second partiallyquarter offsetof by2026, negative growth inthe Rest of World,World region, which includes the Middle East.East, Wereturned estimateto room nightyear-over-year growth wasfollowing negativelya impacteddecline byin approximatelythe 2first percentage pointsquarter due to the onset of the conflict in the Middle East. While direct impacts on travel within the region largely normalized in the second quarter, there were continued indirect impacts including elevated flight ticket prices, reduced flight capacity on certain routes, and a decrease in long-haul international travel demand, which negatively impacted overall room night growth. Rental car days reserved through our services decreased year-over-year for the periodthree dueand tosix months ended June 30, 2026, primarily reflecting lower partner volume, as well as the impact of higher average daily car rental prices and a negative impact from the conflict in the Middle East.East Airlineon travel demand. Flight tickets reserved through our services increased year-over-year for the periodthree and six months ended June 30, 2026 driven by the expansion of our flight offerings at Booking.com and Agoda,offerings, partially offset by a negativethe impact fromof elevated ticket prices, reduced flight capacity on certain routes, and a decrease in long-haul international travel demand, in each case related to impacts of the conflict in the Middle East.

Gross bookings resulting from reservations of room nights, rental car days, and airlineflight tickets made through our merchant and agency categories were as follows (numbers may not total due to rounding):

For the three and six months ended MarchJune 31,30, 2026, the year-over-year increase in merchant gross bookings was due primarily to growth in accommodation reservation services and flight reservation services at Booking.comBooking.com, Agoda, and Agoda.Priceline. Merchant gross bookings also increased year-over-year and agency gross bookings decreased year-over-year for the period due to the ongoing shift from agency to merchant bookings at Booking.com.

The year-over-year increase in total gross bookings for the three months ended MarchJune 31,30, 2026 was due to a 7%5% increase in room nights, approximately 2% higher constant currency ADRs, a positive impact from changes in foreign currency exchange rates,rates 6%of increaseabout in room nights, 1% higher constant currency ADRs,1%, and a positive impact from the growth in flight gross bookings. We estimate that the conflict in the Middle East impacted gross bookings growth in line with the impact observed in room night growth.

Flight gross bookings increased 25%12% and 18% year-over-year for the three and six months ended June 30, 2026, respectively, due to higher average flight ticket prices and flight ticket growth. Higher average flight ticket prices in the second quarter were driven in part by higher fuel costs associated with the conflict in the Middle East. Rental car gross bookings decreased 1% year-over-year for the three months ended MarchJune 31,30, 2026 due to airlinea ticketsdecrease in rental car days growth, partially offset by lowerhigher average airlinedaily ticketcar rental prices. Rental car gross bookings increased 7%3% year-over-year for the periodsix months ended June 30, 2026 due to higher average daily car rental prices, partially offset by a decrease in rental car days growth.

For the three and six months ended MarchJune 31,30, 2026, the year-over-year increase in merchant revenues was duedriven primarily toby growth in revenues from accommodation reservation services at Booking.com.Booking.com Merchantand revenues also increased year-over-year for the period, while agency revenues decreased, due to theits ongoing shift from agency to merchant revenuesrevenues. atThis Booking.com.shift also contributed to the year-over-year decrease in agency revenues. Advertising and other revenues increased year-over-year for the period due to growth at OpenTable and growth in advertising revenues at Booking.com. The year-over-year increase in total revenues for the period included a 6% benefit from changes in foreign currency exchange rates.

See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information about the components of our operating expenses and the related accounting policies. The year-over-year growth in our total operating expenses for the three and six months ended MarchJune 31,30, 2026 was increased in part by changes in foreign currency exchange rates.

Our marketing expenses, which are substantially variable in nature, increased year-over-year for the three and six months ended MarchJune 31,30, 2026, due to helpefforts to drive additional gross bookings and revenues,revenues and were increased by changes in foreign currency exchange rates. Marketing expenses as a percentage of total gross bookings in the three months ended MarchJune 31,30, 2026 were slightly higher than the three months ended MarchJune 31,30, 2025, driven primarily by declines in SEO, which remains a small component of our overall distribution mix, as well as changes in paid traffic mix and investments in paid marketing channels at attractive ROIs. For the impactsix months ended June 30, 2026, marketing expenses as a percentage of gross bookings was negatively impacted by the onset of the conflict in the Middle East.East Due toin the conflict,first quarter of 2026, as certain performance marketing expenses yielded diminished or negligible returns as bookings sourced through paid channels were subsequently canceled resulting in lower average ROIs. Excluding the impact of the Middle East conflict, we achieved modest marketing leverage in the quarter, supported by the growth in our direct channel, which was partially offset by declines in SEO, which remains a small component of our overall distribution mix.

Sales and other expenses, which are substantially variable in nature, increased year-over-year for the three and six months ended MarchJune 31,30, 2026 due primarily to an increase in merchant transaction costs of $112$37 million and $149 million, respectively, related to the ongoing shift from agency to merchant transactions at Booking.com, as well as due to changes in foreign currency exchange rates. Sales and other expenses as a percentage of total revenues decreased year-over-year for the periodthree months ended June 30, 2026 primarily due to efficiencies in third-party customer service costs. Sales and other expenses as a percentage of total revenues decreased year-over-year for the six months ended June 30, 2026 primarily due to efficiencies in third-party customer service costs, and a benefit of $31 million resulting from the repeal in March 2026 repeal of Canadian digital services taxes related to prior years, as well as efficiencies in third-party customer service costs, partially offset by the impact of increased merchant transactions costs, which grew faster than total revenue.

Personnel expenses increased slightly year-over-year for the three months ended MarchJune 31,30, 2026 primarily due to an increase in salary expenses partially driven by changes in foreign currency exchange rates, partially offset by a decrease in stock-based compensation expense. Personnel expenses increased year-over-year for the six months ended June 30, 2026 primarily due to the impact of a $170 million reduction during the three months ended March 31, 2025 in the accrual related to the Netherlands pension fund matter.matter, Salaryas expenseswell increased year-over-year for the three months ended March 31, 2026as due to changes in foreign currency exchange rates. Employee headcount increased 2%3% year-over-year to approximately 24,90025,550 as of MarchJune 31,30, 2026.

General and administrative expenses increased year-over-year for the three months ended June 30, 2026 primarily due to an increase in certain travel transaction taxes and changes in foreign currency exchange rates. General and administrative expenses decreased year-over-year for the threesix months ended MarchJune 31,30, 2026 primarily due to the benefit of $89 million onbenefit from the settlement of certain litigation matters (see Note 13 to the Unaudited Consolidated Financial Statements), partially offset by an increase in certain travel transaction taxes, fees for certain outside professionals,taxes and changes in foreign currency exchange rates.

Information technology expenses increased year-over-year for the three and six months ended MarchJune 31,30, 2026 due primarily to an increase in cloud computing costs and software license and system maintenance fees, as well as changes in foreign currency exchange rates.

Depreciation and amortization expenses decreased year-over-year for the three and six months ended MarchJune 31,30, 2026 due primarily to decreased amortization expense related to intangible assets,assets and internally-developed software, partially offset by changes in foreign currency exchange rates.

See "Trends" above and Note 17 to our Unaudited Consolidated Financial Statements for additional information on the Transformation Program. Transformation costs decreased year-over-year for the three and six months ended MarchJune 31,30, 2026 due primarily to lower professionalcosts fees.related to employee termination benefits.

Interest expense decreased year-over-year for the three and six months ended MarchJune 31,30, 2026 primarily due to the amortization in 2025 of debt discount related to the convertible senior notes that matured in May 2025 (see Note 9 to our Unaudited Consolidated Financial Statements). Interest and dividend income decreased year-over-year for the three and six months ended MarchJune 31,30, 2026 primarily due to lower interest rates. In addition, we have certain cash management activities with related interest expense and interest income.

At MarchJune 31,30, 2026, we had $16.5$17.7 billion in cash, cash equivalents, and investments, of which approximately $12.1$14.7 billion is held by our international subsidiaries. Cash, cash equivalents, and long-term investments held by our international subsidiaries are denominated primarily in Euros, U.S. Dollars, and British Pounds Sterling.Sterling, and U.S. Dollars. Our investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. See Notes 5 and 6 to our Unaudited Consolidated Financial Statements.

Deferred merchant bookings of $8.2$10.1 billion at MarchJune 31,30, 2026 includes cash payments received from travelers in advance of us completing our performance obligations and are comprised principally of amounts estimated to be payable to travel service providers as well as our estimated future revenue for our commission or margin and fees. The amounts are mostly subject to refunds for cancellations.

Our revolving credit facility extends a revolving line of credit up to $2 billion to us. As of MarchJune 31,30, 2026, we are in compliance with the maximum leverage ratio covenant under the facility, which is a condition to our ability to borrow.

Our outstanding senior notes at MarchJune 31,30, 2026 had cumulative interest to maturity (based on coupon interest rates) of $5.4$6.3 billion, with $650$754 million payable within the next twelve months.

At MarchJune 31,30, 2026, we had a total remaining authorization of $18.2$14.5 billion related to the share repurchase program authorized by our Board of Directors (the "Board"). In AprilAugust 2026, the Board declared a cash dividend of $0.42 per share of common stock, payable on JuneSeptember 30, 2026 to stockholders of record as of the close of business on JuneSeptember 5,11, 2026.

At MarchJune 31,30, 2026, we had, in the aggregate, $1.1$1.2 billion of non-cancellable purchase obligations individually greater than $10 million, of which $343$362 million is payable within the next twelve months. Such purchase obligations relate to agreements to purchase goods and services that are enforceable and legally binding and that specify significant terms, including the quantities to be purchased, price provisions, and the approximate timing of the transaction. At MarchJune 31,30, 2026, we had lease obligations of $763$744 million, of which $134$136 million is payable within the next twelve months.

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 resulted from net income of $1.1$3.0 billion, a favorable net impact from adjustments for non-cash and other items of $250$510 million, and a favorable net change in working capital and other assets and liabilities of $1.9$3.4 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction gains related to Euro-denominated debt, stock-based compensation expense, depreciation and amortization, provision for expected credit losses and chargebacks, and net losses on equity securities. Deferred merchant bookings and other current liabilities increased by $1.8$4.2 billion during the period, primarily due to higher business volumes. Merchant revenues increased while agency revenues decreased year-over yearyear-over-year for the period due to the ongoing shift from agency revenues to merchant revenues at Booking.com.

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2025 resulted from net income of $333$1.2 million,billion, a favorable net impact from adjustments for non-cash and other items of $899$2.2 million,billion, and a favorable net change in working capital and other assets and liabilities of $2.1$3.1 billion. Non-cash and other items were principally associated with unrealized foreign currency transaction losses related to Euro-denominated debt, deferred income taxes, adjustments related to the convertible senior notes, depreciation and amortization, deferred income taxes, and stock-based compensation expense.expense, and provision for expected credit losses and chargebacks. Deferred merchant bookings and other current liabilities increased by $1.9$3.8 billion and accounts receivable increased by $1.1 billion during the period, primarily due to higher business volumes.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 resulted principally from payments for property and equipment.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 resulted principally from the repurchase of common stock of $3.8$7.8 billion, payments of $1 billion on the maturity of debt, and dividend payments of $343$664 million.million, partially offset by the proceeds from the issuance of long-term debt of $3.0 billion. Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2025 resulted principally from the repurchase of common stock of $2.2$3.7 billion, payments of $3.5 billion on the maturity of debtdebt, ofincluding $1.5the billion,conversion premium on the convertible senior notes, and dividend payments of $319$631 million.million, partially offset by the proceeds from the issuance of long-term debt of $2.0 billion.