Booking Holdings reported a strong first quarter for 2026, beating Wall Street estimates across all key metrics. The company delivered 338 million room nights, achieved gross bookings of $53.8 billion (a 15% year-over-year increase), generated $5.5 billion in revenue (up 16%), and recorded an adjusted EBITDA of approximately $1.3 billion (a 19% increase). Adjusted EPS reached $1.14, growing 14%. Despite these robust results, Booking Holdings lowered the midpoint of its full-year 2026 outlook and provided conservative second-quarter guidance, leading to a significant drop in its shares in pre-market trading.
The primary concern for investors and the reason for the cautious outlook is the ongoing conflict in the Middle East, particularly the Strait of Hormuz blockade. CEO Glenn Fogel stated that the conflict impacted room night and gross bookings growth by approximately 2 percentage points in Q1. CFO Ewout Steenbergen noted that March room night growth collapsed to 1% due to this impact, with an estimated six-percentage-point hit from reduced bookings and elevated cancellations. The company expects the impact to be even higher in Q2 before a projected recovery in the second half of the year.
For Q2 2026, Booking now anticipates room night growth of only 2% to 4%, with gross bookings, revenue, and adjusted EBITDA all guided to grow 4% to 6%. Full-year adjusted EBITDA margin expansion is expected to be between zero and 25 basis points, half of what the market had previously modeled. Goldman Sachs analysts, while reiterating a Neutral rating, highlighted the Middle East situation and the durability of global consumer demand as key risks. They trimmed their 12-month price target from $226 to $223.
