What happened

Shares of Booking Holdings (BKNG -1.31%) were moving higher today after the world's largest online travel agency posted better-than-expected results in its third-quarter earnings report.

As a result, the stock was up 4.9% as of 12:34 p.m. ET.

So what

Booking, which owns Priceline, Booking.com, and Kayak, among other travel booking sites, said that gross travel bookings increased 36%, or 52% in constant currency, to $32.1 billion, showing the company continues to make a robust recovery from the pandemic. Room nights booked increased 31%.

Revenue was up 29%, or 47% in constant currency, to $6.1 billion, which beat estimates at $5.92 billion. Adjusted earnings per share, meanwhile, rose 41% to $53.03, ahead of analyst expectations at $49.85.

The third quarter is the seasonally strongest for the company, and it tends to make an outsize portion of its annual profits during the peak summer months.

CEO Glenn Fogel said:

I am encouraged by the strong results we are reporting today, including the highest amount of quarterly revenue and adjusted EBITDA ever for our company. We saw an improvement in room night trends as we moved through the quarter, and accommodation ADR growth continued to be strong. Despite the rising concern around the macroeconomic environment, we are encouraged by the slight improvement in room night growth we have seen in October and by the level of bookings for travel in early 2023.

Now what

Management did not give formal guidance for the fourth quarter but shared some data indicating that travel trends remain favorable. The company said on the earnings call it expected 10% room night growth in the fourth quarter compared to Q4 2019, which is steady with its growth rate in Q3. It also called for adjusted EBITDA of $1.1 billion in the fourth quarter, noting that it would be a record adjusting for currency headwinds.

The results show Booking has recovered effectively the pandemic and continues to benefit from strong travel demand. Though a global recession could derail its recovery, the travel stock looks well priced at a price-to-earnings ratio of roughly 20 based on its current momentum.