Booking Holdings Inc. (NASDAQ:BKNG)

Current Income Tax Expense

The current income tax expense shows a consistent upward trend from 2020 to 2023, increasing from US$295 million to US$1,670 million. In 2024, there is a notable decline to US$1,312 million, although the value remains substantially higher than the 2020 figure. This indicates that the company experienced rising taxable income or changes in current tax liabilities until 2023, followed by a reduction in the most recent year.

Deferred Income Tax Expense (Benefit)

The deferred income tax expense (or benefit) exhibits a more volatile pattern across the period. In 2020, a positive deferred tax expense of US$213 million was recorded, transitioning sharply to significant deferred tax benefits in the years 2021 to 2023 (with values of -US$445 million, -US$257 million, and -US$478 million respectively). This signifies reversals of prior deferred tax liabilities or recognition of deferred tax assets during these years. In 2024, the trend reverses back to a small deferred tax expense of US$98 million, indicating a change in deferred tax timing differences or tax positions.

Total Income Tax Expense

The overall income tax expense shows an initial decrease from US$508 million in 2020 to US$300 million in 2021, followed by a substantial increase in the subsequent years to US$865 million in 2022 and US$1,192 million in 2023. The upward trajectory continues into 2024, reaching US$1,410 million. This pattern suggests fluctuating tax benefits and liabilities impacting the total tax expense, but with an underlying trend of rising tax expense over the five-year period.

Summary

The data reveals that the current income tax expense has generally increased over the period, indicating growing taxable income or higher tax rates/payments currently due. The deferred income tax expense pattern is less stable, showing significant deferred tax benefits in the middle years, likely reflecting timing differences or tax planning strategies that temporarily reduced total tax expense. Despite these deferred tax fluctuations, the total income tax expense has followed an overall rising trend, implying increasing tax obligations in recent years. The reduction in current tax expense and the return to a deferred tax expense in 2024 suggest possible changes in the company's tax structure or tax strategy.

The analysis of the tax rates over the five-year period reveals several noteworthy trends and variations.

U.S. Federal Statutory Income Tax Rate

The statutory income tax rate remained constant at 21% throughout the entire observed timeframe from 2020 to 2024. This indicates regulatory stability in the federal tax rate applicable to the company over the years.

Effective Income Tax Rate

There is considerable fluctuation in the effective income tax rate during the period. In 2020, the effective rate was exceptionally high at 89.59%, significantly exceeding the statutory rate, signaling notable anomalies or one-time factors impacting tax expense or profit patterns that year.

From 2021 onward, the effective tax rate aligns more closely with the statutory rate, stabilizing between approximately 19% and 22%. Specifically, rates were 20.48% in 2021, 22.05% in 2022, 21.75% in 2023, and 19.34% in 2024. This pattern suggests a normalization of tax obligations or adjustments in accounting/tax strategies bringing effective rates in line with statutory levels.

The slight year-to-year variations within this range are likely due to changes in income composition, tax credits, deductions, or differences in jurisdictions, but overall, the effective rate has remained relatively stable and consistent with the statutory benchmark after the outlier year of 2020.

In summary, the company experienced an anomalously high effective tax rate in 2020, which normalized in subsequent years, maintaining proximity to the stable statutory tax rate. This trend indicates improved tax efficiency or resolution of prior irregularities impacting income tax expense.

The financial data reveals several notable trends and changes over the observed periods. There is a general increase in net operating loss carryforwards for both U.S. and international segments, with international figures showing a marked rise through 2023, followed by a slight decline in 2024. Accrued expenses exhibit a gradual upward trend, with a minor dip in 2023 but rising again in 2024. Stock-based compensation fluctuates but shows an overall upward movement, reaching its highest value in 2024.

Unrealized losses on investments only appear beginning in 2023 and decline slightly by 2024. The foreign currency translation adjustment is volatile yet follows an upward trajectory, peaking notably in 2024. Tax credits steadily increase throughout the years, suggesting improving credit positions. Euro-denominated debt shows inconsistent reporting, with values present in 2020 and later years but missing intermittently. Operating lease liabilities consistently decrease over the years, although there is a slight uptick in 2024.

Property and equipment demonstrate a robust upward trend, more than doubling from 2020 to 2024, indicating significant investment or acquisition. An embedded derivative liability appears suddenly in 2024, reaching a notable value. Other items are inconsistently reported but generally small in magnitude.

Deferred tax assets, gross, show a steady and impressive increase year over year, growing by nearly two and a half times from 2020 to 2024. The valuation allowance on these assets is relatively stable, although with some fluctuations especially between 2021 and 2022. Consequently, net deferred tax assets increase substantially by 2024 after a negative position in earlier years.

Debt discount on convertible notes fluctuates with no consistent trend but ends with a notable negative value in 2024. Intangible assets and other categories show continuous improvement, with the negative values diminishing over time. Euro-denominated debt displays variability with significant changes in amounts reported each period. Unrealized gains on investments drastically reduce from a large negative figure in 2020 towards zero in later years, reflecting a positive shift or realization of gains.

Operating lease assets improve slightly over time, becoming less negative. The installment sale liability steadily decreases in absolute value, stabilizing after 2022. Other miscellaneous items show a declining negative trend. Deferred tax liabilities exhibit a substantial decrease in magnitude from 2020 through 2023 but increase again in 2024, affecting the overall net deferred tax assets (liabilities) position substantially.

Overall, the data suggests strengthening asset positions through increased investment in property and equipment, growing deferred tax assets, and improving intangible asset values. Liabilities related to leases and installment sales are reducing. However, currency translation adjustments and volatile debt items underline exposure to foreign exchange and market instruments. The progression from a negative net deferred tax asset position to a positive one by 2023 and 2024 marks a significant shift in deferred tax accounts.

Net Operating Loss Carryforwards

Increasing in both U.S. and international segments, with international peaking in 2023 then declining.

Accrued Expenses & Stock-based Compensation

Both exhibit an overall increasing trend with some fluctuations.

Unrealized Investment Valuations

Losses emerging in later years with slight improvement; gains reducing substantially from high negative values.

Foreign Currency Translation and Tax Credits

Translation adjustments are volatile but tend upward; tax credits steadily increase.

Lease Liabilities and Assets

Lease liabilities decrease overall, whereas lease assets show a gradual reduction in negative balance.

Property and Equipment

Strong upward trajectory, reflecting substantial investment growth.

Deferred Tax Accounts

Gross deferred tax assets grow significantly; valuation allowance is relatively stable; net deferred tax assets shift from negative to positive.

Debt & Other Liabilities

Euro-denominated debt and convertible note discounts exhibit variability; embedded derivative liability appears significantly in 2024.

The data exhibits notable trends regarding deferred tax assets and deferred tax liabilities over the five-year period ending December 31, 2024.

Deferred Tax Assets

There is a consistent upward movement in deferred tax assets from 455 million USD in 2020 to a peak of 675 million USD in 2023, followed by a slight decline to 662 million USD in 2024. This pattern indicates a generally increasing recognition of deferred tax assets over the observed timeline, with minor retraction in the final year.

Deferred Tax Liabilities

The deferred tax liabilities show a steady and significant decline, dropping from 1127 million USD in 2020 to 289 million USD by 2024. The most pronounced decreases occur between 2021 and 2023, suggesting possible strategic actions or changes in taxable temporary differences that reduce the company’s future tax obligations.

Overall, the trend indicates an improvement in the net deferred tax position, as increasing deferred tax assets combined with decreasing deferred tax liabilities suggest a potential reduction in net tax burden or an increasingly favorable tax situation over the reviewed period.

The financial data exhibits notable trends in both reported and adjusted figures over the five-year period from December 31, 2020, through December 31, 2024.

Total Assets

Reported total assets demonstrate a general upward trajectory, increasing from $21,874 million in 2020 to $27,708 million in 2024, with a slight dip in 2023. Adjusted total assets similarly rise over the period, from $21,419 million in 2020 to $27,046 million in 2024, following a comparable pattern and remaining consistently below reported totals.

Total Liabilities

Reported total liabilities show a pronounced increase, particularly from 2021 onward, escalating from $17,463 million to $31,728 million in 2024. Adjusted liabilities mirror this trend closely, rising from $16,558 million in 2021 to $31,439 million in 2024. The sizeable growth in liabilities outpaces the growth in assets, especially in the latter years.

Stockholders’ Equity (Deficit)

Reported stockholders’ equity starts positive at $4,893 million in 2020 and peaks at $6,178 million in 2021 but then declines sharply into negative territory by 2023, hitting a deficit of $4,020 million in 2024. Adjusted stockholders’ equity follows an analogous pattern, beginning at $5,565 million, slightly higher than reported, but also turning negative, reaching a deficit of $4,393 million by 2024. This transition highlights increasing financial pressure and diminished net equity on the balance sheet.

Net Income

Reported net income exhibits substantial growth over the period, increasing from $59 million in 2020 to $5,882 million in 2024, with especially strong gains from 2021 onwards. Adjusted net income shows a similar upward progression but starts higher at $272 million in 2020 and aligns more closely with reported income by 2024 at $5,980 million. This suggests adjustments are more significant in earlier years but converge over time.

Overall, the data indicate robust income growth paired with rising assets. However, the accelerated increase in liabilities relative to assets has led to a negative shift in stockholders’ equity in recent years, signaling potential concerns regarding financial stability despite improving profitability. The adjusted figures closely track reported values, particularly in later periods, reinforcing the observed trends.

Net Profit Margin Trends

Both reported and adjusted net profit margins exhibit a clear upward trend from 2020 to 2024. The reported net profit margin increased significantly, starting at 0.87% in 2020 and rising to 24.78% in 2024. The adjusted net profit margin follows a similar pattern, increasing from 4.00% in 2020 to 25.19% in 2024. Notably, the adjusted margins consistently stay above the reported figures except in the later years where the margin difference narrows, indicating improved profitability after adjustments over the period.

Total Asset Turnover

Reported total asset turnover showed steady improvement from 0.31 in 2020 to a peak of 0.88 in 2023 before slightly decreasing to 0.86 in 2024. Adjusted total asset turnover closely mirrors this trend with values marginally higher across all years, increasing from 0.32 in 2020 to 0.90 in 2023 then slightly declining to 0.88 in 2024. This pattern suggests enhanced efficiency in asset utilization up to 2023, with a minor efficiency decline in the last year.

Financial Leverage

Reported financial leverage exhibited considerable volatility, starting from 4.47 in 2020, declining to 3.83 in 2021, and then sharply increasing to 9.12 in 2022. Data for 2023 and 2024 are missing, limiting further analysis. Adjusted financial leverage reflects a similar pattern with values from 3.85 in 2020, 3.54 in 2021, to 8.67 in 2022. The steep rise in 2022 suggests a marked increase in the use of debt or other liabilities relative to equity during that year.

Return on Equity (ROE)

Reported ROE shows a dramatic rise from a low of 1.21% in 2020 to 109.92% in 2022, with no data available from 2023 onwards. Adjusted ROE also increases but at a more moderate pace, from 4.89% in 2020 to 98.14% in 2022. This rapid increase within two years likely reflects both improved profitability and the substantial increase in financial leverage in 2022, as ROE is affected by leverage.

Return on Assets (ROA)

Reported ROA significantly increased over the period, rising from 0.27% in 2020 to 21.23% in 2024. Adjusted ROA follows a similar trend, growing from 1.27% in 2020 to 22.11% in 2024. These trends demonstrate notable improvements in the company's ability to generate profits from its assets both before and after adjustments, with adjusted ROA generally slightly higher in later years.

Overall Insights

The data indicates consistent and robust improvement in profitability measures including net profit margins and returns on assets and equity over the examined years. Asset turnover improvements suggest enhanced operational efficiency until 2023, with a slight decrease thereafter. The significant spike in financial leverage and ROE in 2022 highlights a year of strategic financial structuring, possibly involving increased debt usage to amplify equity returns. Adjusted figures show similar trends but with generally more moderated values, highlighting the impact of reported and deferred income tax adjustments on financial performance metrics.

Reported Net Income

The reported net income displays a consistent upward trend over the five-year period. Starting at 59 million US dollars in 2020, it increased significantly each subsequent year, reaching 5,882 million US dollars by 2024. This reflects an overall strong growth trajectory in the company's profitability on a reported basis.

Adjusted Net Income

The adjusted net income also shows a steady increase over the examined years. Beginning at 272 million US dollars in 2020, it rose sharply to 5,980 million US dollars by 2024. The growth pattern is somewhat more pronounced than that of the reported net income, especially notable between 2021 and 2022, indicating considerable adjustments made in the financial statements related to income tax or other factors enhancing the net income figure.

Reported Net Profit Margin

The reported net profit margin improved significantly from 0.87% in 2020 to 24.78% in 2024. This steady increase suggests enhanced operational efficiency or favorable market conditions that contributed to the company's ability to generate higher profit relative to its revenues over time.

Adjusted Net Profit Margin

The adjusted net profit margin follows a similar upward trend as the reported margin, increasing from 4.00% in 2020 to 25.19% in 2024. The adjusted margins are higher than the reported margins initially but converge closely by 2024, implying that adjustments made for deferred income tax or other items initially had a significant positive impact on profitability, which has become less pronounced over time.

Overall Observations

Both reported and adjusted financial metrics demonstrate strong growth and improving profitability throughout the period. The differences between reported and adjusted figures highlight the impact of tax adjustments and possibly other accounting considerations affecting the net income and profit margins, with adjustments being more influential in the earlier years. The convergence of adjusted and reported margins by the end of the period may indicate stabilization in the adjustment factors or changes in tax reporting.

The analysis of the annual financial data reveals distinct trends in the reported and adjusted figures related to total assets and total asset turnover ratios.

Total Assets

Over the five-year period from 2020 to 2024, both reported and adjusted total assets exhibit a consistent upward trend. The reported total assets increased from approximately 21,874 million US dollars in 2020 to 27,708 million US dollars in 2024, showing an overall growth of about 26.7%. Similarly, adjusted total assets rose steadily from 21,419 million US dollars in 2020 to 27,046 million US dollars in 2024, reflecting a comparable growth trajectory. Despite some fluctuations in individual years, the adjusted figures closely track the reported values with slight downward adjustments each year, suggesting adjustments for deferred income tax effects or other non-operational factors.

Total Asset Turnover

Total asset turnover ratios, both reported and adjusted, demonstrate a significant improvement throughout the observed period. The reported total asset turnover increased from 0.31 in 2020 to a peak of 0.88 in 2023, before a marginal decline to 0.86 in 2024. The adjusted total asset turnover follows a similar pattern, rising from 0.32 in 2020 to 0.90 in 2023, then slightly decreasing to 0.88 in 2024. This upward trend indicates an improving efficiency in utilizing assets to generate revenue, with nearly tripling turnover ratios over the four-year span. The small difference between reported and adjusted turnover suggests minor adjustments that slightly enhance the efficiency metric when accounting for deferred taxes.

Overall, the data reflects a period of robust asset growth accompanied by notable gains in asset utilization efficiency. The steady increase in total assets paired with improving asset turnover ratios implies enhanced operational performance and effective asset management strategies. Minor adjustments due to deferred income taxes slightly moderate asset values but concurrently improve measured efficiency ratios.

The data reveals significant fluctuations in both reported and adjusted financial figures over the five-year period from 2020 to 2024.

Total Assets

Reported total assets showed a consistent upward trend from 21,874 million USD in 2020 to 25,361 million USD in 2022, followed by a slight decline to 24,342 million USD in 2023, and then a strong increase to 27,708 million USD in 2024. Adjusted total assets mirror this pattern closely, increasing from 21,419 million USD in 2020 to 24,748 million USD in 2022, dipping to 23,667 million USD in 2023, and rising again to 27,046 million USD in 2024. Overall, total assets have grown appreciably over the period, despite the mid-term decrease.

Stockholders’ Equity (Deficit)

Both reported and adjusted stockholders' equity exhibit volatility and a notable downward trajectory starting in 2022. Initially, reported equity increased from 4,893 million USD in 2020 to 6,178 million USD in 2021, but then dropped sharply to 2,782 million USD in 2022, moving into negative territory at -2,744 million USD in 2023, and further declining to -4,020 million USD in 2024. Adjusted equity follows the same pattern, rising from 5,565 million USD in 2020 to 6,529 million USD in 2021, then declining to 2,854 million USD in 2022, and transitioning into negative values of -3,161 million USD and -4,393 million USD in subsequent years. This trend indicates a significant erosion of shareholder equity and a transition into deficit position.

Financial Leverage

Financial leverage ratios provide insight into the company’s debt levels relative to equity. Reported financial leverage decreased from 4.47 in 2020 to 3.83 in 2021, showing a reduction in leverage. However, it rose dramatically to 9.12 in 2022. Adjusted financial leverage shows a similar pattern, declining from 3.85 in 2020 to 3.54 in 2021 and then increasing significantly to 8.67 in 2022. Data for 2023 and 2024 are missing, but the sharp increase in 2022 suggests a marked rise in the company’s reliance on debt or liabilities relative to equity, corresponding with the negative equity values reported.

In summary, the company experienced growth in total assets over this timeframe, despite a slight dip in 2023. However, the stockholders’ equity presented a concerning reversal starting from 2022, moving into deficits that persist through the end of the reported period. This erosion of equity significantly impacted financial leverage, which surged, indicating increased financial risk associated with higher debt levels or reduced equity base. The adjusted figures closely reflect the reported results, suggesting that tax adjustments have a limited impact on the overall financial trends observed.

Net Income Trends

The reported net income has shown a significant and consistent increase from 59 million USD in 2020 to 5,882 million USD in 2024. This represents a substantial growth over the five-year period, indicating strong profitability improvements. Adjusted net income follows a similar upward pattern, starting at 272 million USD in 2020 and reaching 5,980 million USD by 2024. The adjustment narrows the gap between reported and adjusted figures over time, reflecting possibly refined accounting treatments or tax adjustments.

Stockholders’ Equity Trends

Reported stockholders’ equity exhibits growth initially, rising from 4,893 million USD in 2020 to 6,178 million USD in 2021, then declining sharply to 2,782 million USD in 2022. Thereafter, it turns negative, reaching -2,744 million USD in 2023 and further declining to -4,020 million USD in 2024. Adjusted stockholders’ equity follows a similar pattern but consistently shows slightly higher values than the reported equity for each year. The negative equity in the later years suggests accumulated losses or significant liabilities outweighing asset values, presenting potential solvency concerns.

Return on Equity (ROE) Analysis

Reported ROE increased markedly from 1.21% in 2020 to 18.86% in 2021, then surged dramatically to 109.92% in 2022, after which no data is reported for subsequent years. Adjusted ROE also shows growth from 4.89% in 2020 to 11.03% in 2021 and then jumps to 98.14% in 2022. The unusually high ROE values in 2022 may reflect the impact of lower equity bases combined with rising net income, possibly distorted by the equity deficits emerging in later periods. The absence of ROE data beyond 2022 could indicate reporting limitations related to negative equity values.

Overall Insights

The company demonstrates strong and growing profitability evident from net income trends; however, the declining and eventual negative stockholders’ equity in later years raises concerns about financial stability. The high ROE figures in 2022 are primarily driven by reduced equity rather than merely increased earnings, suggesting risk that may affect the sustainability of returns. The adjustments to both net income and equity indicate ongoing refinements in accounting treatment, impacting performance metrics and equity valuations.

Net Income Trends

The reported net income demonstrated substantial growth over the five-year period, increasing from 59 million USD in 2020 to 5,882 million USD in 2024. Similarly, adjusted net income exhibited a consistent upward trend, rising from 272 million USD in 2020 to 5,980 million USD in 2024. Both measures indicate significant profitability improvements, with particularly sharp increases noted between 2021 and 2022, and continuing growth through 2024.

Total Assets Trends

Reported total assets increased moderately from 21,874 million USD in 2020 to 27,708 million USD in 2024, with a slight dip in 2023 compared to the previous year. Adjusted total assets followed a similar pattern, rising from 21,419 million USD to 27,046 million USD over the same period. The asset base expanded steadily, supporting the company's growing operations and income generation capabilities.

Return on Assets (ROA) Trends

The reported ROA showed a marked improvement, rising from a very low 0.27% in 2020 to a strong 21.23% in 2024. Adjusted ROA also increased substantially, from 1.27% to 22.11% within the same timeframe. Both reported and adjusted ROA depict enhanced efficiency in utilizing assets to generate earnings, with a notable acceleration in returns starting from 2021 onward.

Comparative Observations Between Reported and Adjusted Figures

Adjusted net income and adjusted ROA figures are generally lower than their reported counterparts in the earlier years but converge and slightly exceed the reported figures by 2024, suggesting that adjustments made for deferred and other income taxes have become less significant over time or that the adjustments increasingly reflect operational performance accurately. Adjusted total assets are consistently marginally lower than reported total assets, indicating conservative valuation adjustments or reclassifications.

Overall Insights

The company has exhibited robust financial growth and improved asset utilization capabilities across the five years analyzed. The consistent upward trends in both net income measures and ROA signify enhanced profitability and operational efficiency. Meanwhile, asset growth remains steady, providing a solid foundation for sustained income expansion. The narrowing gap between reported and adjusted figures suggests greater alignment between accounting measures and underlying economic performance.