Priceline.com (BKNG -0.47%) reported earnings on Nov. 7, and the online travel company is clearly firing on all cylinders. Priceline delivered strong growth in both sales and earnings, and it continues gaining market share versus competitors like Expedia (EXPE 0.58%) and Orbitz Worldwide (NYSE: OWW). This profitable growth company continues delivering.

The numbers
Priceline delivered a 33.5% growth rate in revenue for the third quarter to almost $2.27 billion; a big increase of 37.5% in gross bookings was the main growth driver for the company during the quarter. Non-GAAP net income grew at an even stronger 44.2% to $920 million, or $17.3 per share, comfortably above analysts' forecasts of $16.23 per share.

The company is performing well across the board; worldwide hotel-room reservations were 74.8 million for the quarter, up 36% year over year. Booking.com's online hotel reservations platform now has more than 355,000 hotels and other accommodations, an increase of 45% over last year. Rental car days booked were up by 28% for the quarter, and management believes the company continues gaining market share in the worldwide rental car reservation market.

Gross profit for the quarter was $2 billion with an annual increase of 42% versus the same quarter in the previous year, and adjusted EBITDA amounted to $1.11 billion, up 43% over the year. According to management, Priceline is also benefiting from increased advertising on Kayak.com, which is generating increased booking volumes and higher profit margins for the company.

Management is expecting an increase of between 27% and 34% in gross travel bookings for the fourth quarter, and sales are forecast to grow in the area of 19% to 26% during the last quarter of the year. Earnings guidance for the coming quarter is for non-GAAP net income per diluted share between $7.80 and $8.30.

The numbers show that Priceline is still in the high-growth phase, and the company seems to be far from reaching a maturation point. Revenues continue growing strongly and profit margins are expanding, which provides a double boost to earnings growth. The hotels business is as strong as ever and areas like car rentals and travel meta-search -- Kayak.com -- provide diversification and additional growth venues for the company.

Market leadership
While Expedia competes head-to-head against Priceline in the United States, Priceline is much stronger in Europe, where Booking.com generates a big chunk of the company's profits. Even under harsh economic conditions, Europe is a major destination for visitors from all over the world, and this provides a key competitive advantage for Priceline.

Expedia is more focused on the merchant business model, which means buying blocks of rooms and selling them at a mark-up to travelers. Priceline, on the other hand, gives more weight to the agency model: allowing hotels to list their own rooms and pay Priceline a commission for every transaction. This has proven to be a more effective and profitable strategy over time.

Orbitz Worldwide is a third player in the industry, but it comes way behind both Priceline and Expedia in terms of sales and financial resources. Orbitz generated revenue of $221 million for the last quarter versus $1.4 billion for Expedia and $2.27 billion for Priceline, so it still has a long way to go before it can measure up against its bigger competitors.

Priceline has outgrown both Expedia and Orbitz by a wide margin during recent years, and the trend is only getting stronger as of the last quarter. While Priceline increased sales at 33.5%, Expedia grew the top line at 17% versus the last year and Orbitz did it at a slower 11% for the quarter.

Priceline is the top dog in online travel; the company has a superior business model and a leadership position supported by a strong brand presence and a self-sustaining competitive advantage provided by the network effect. The company is the clear leader in the online travel industry, and continues widening the gap between itself and its competitors judging by recent financial figures.

Bottom line
Priceline delivered a rock-solid earnings report for the last quarter, the company is firing on all cylinders in terms of both sales and profitability. Notably, Priceline continues outgrowing the competition and consolidating its leadership position in the online travel industry.

Fasten your seatbelt, relax, and enjoy the flight: This online travel agency looks well positioned to continue gaining altitude in the coming years.