Online travel agency Booking Holdings (NASDAQ:BKNG) beat analysts' expectations in Q2 FY2023, with revenue up 27.2% year on year to $5.46 billion. Booking made a GAAP profit of $1.29 billion, improving from its profit of $857 million in the same quarter last year.

Is now the time to buy Booking? Find out by accessing our full research report free of charge.

Formerly known as The Priceline Group, Booking Holdings (NASDAQ: BKNG) is the world’s largest online travel agency.

Because of the enormous number of flights, hotels, and accommodations available, travel is a natural fit for marketplaces that aggregate suppliers, simplifying the shopping process for consumers. Online travel platforms today make up over 50% of the industry’s bookings, a percentage that has been rising for 20 years, and will likely continue in the years ahead.

Sales Growth

Booking's revenue growth over the last three years has been exceptional, averaging 55.6% annually. This quarter, Booking beat analysts' estimates and reported decent 27.2% year-on-year revenue growth.

Ahead of the earnings results, analysts covering the company were projecting sales to grow 12.9% over the next 12 months.

The pandemic fundamentally changed several consumer habits. There is a founder-led company that is massively benefiting from this shift. The business has grown astonishingly fast, with 40%+ free cash flow margins. Its fundamentals are undoubtedly best-in-class. Still, the total addressable market is so big that the company has room to grow many times in size. You can find it on our platform for free.

Usage Growth

As an online travel company, Booking generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.

Over the last two years, Booking's nights booked, a key performance metric for the company, grew 52.2% annually to 268 million. This is among the fastest growth rates of any consumer internet company, indicating that users are excited about its offerings.

In Q2, Booking added 22 million nights booked, translating into 8.94% year-on-year growth.

Key Takeaways from Booking's Q2 Results

Sporting a market capitalization of $107 billion, more than $15.2 billion in cash on hand, and positive free cash flow over the last 12 months, we believe that Booking is attractively positioned to invest in growth.

We enjoyed seeing Booking's revenue and earnings exceed analysts' revenue expectations this quarter. Unit economics are also moving in the right direction. Overall, we think this was a really good quarter that should please shareholders. The stock is up 3.87% after reporting and currently trades at $2,949 per share.

So should you invest in Booking right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

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The author has no position in any of the stocks mentioned in this report.