All right, great. Well, good afternoon, everyone. Welcome to our next conversation here at the Morgan Stanley 2025 TMT Conference. We are very thrilled to have Ewout Steenbergen with us, the CFO of Booking Holdings. Good to see you, Ewout. Thanks, Brian. We have a lot to talk about around macro, micro, agentic, disruption, core trends, but first, the disclosures, the most exciting part. All important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at www.morganstanley.com/researchdisclosures. They are also available at the registration desk. Some of the statements made today by Booking Holdings may be considered forward-looking. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. Any forward-looking statements made today by the company are based on assumptions as of today, and Booking Holdings undertakes no obligation to update them. Please refer to Booking Holdings Form 10-K for discussion of the risk factors that may impact actual results. Okay, so happy anniversary. It's been about a year in the role. Next week, yeah. Yeah, yeah. Time flies when you have fun. That's right, that's right. It's been eventful. You've done a lot. So maybe let's talk about that. So over the course of the last year, you've spent time sort of going through the OpEx base, the areas of investment. There have been some adjustments there. What are the main things from a prioritization perspective you're spending your time on now as you sort of think about 2025 and delivering on your growth targets? Yeah. And by the way, you is plural what we have done. I mean, it's the whole team that has, of course, done a lot, and I'm super proud of the performance of the company and how we have operated. I think where we are focused on is in terms of priority areas, not so much different than we have been talking about. It is growing the U.S., growing alternative accommodations, growing Connected Trip and other verticals, making sure that we're on the forefront of GenAI, making sure that we are diversifying in terms of channels, how we acquire customers, growing the direct mix, finding alternatives in the performance marketing channel. So all of that is the same. And just to do a bit of a commercial, obviously, the fourth quarter was phenomenal in that respect. If you think about growing the U.S. 10%, growing faster than anyone in the market, large players in the market by 10%, growing flights 52% in terms of airline tickets. I mean, there's no airline that grew that fast. And in terms of the scale, we're already now a really large player in terms of airline tickets. In terms of alternative accommodations, growing 19%, faster than the large incumbent in that space, growing Connected Trip 45%, being in the Direct Mix in the mid 60% rates on B2C. So I think it's really working. I think all of these elements that go in the product, in the platform, how they are reinforcing each other. So we're really happy with the performance, but obviously, this is the typical type of business. You can't be too happy with yourself. Next day, you will have to wake up and work very hard and further improve because it's highly competitive and to make sure that we continue to really improve our position. Yeah, no, it was very impressive fourth quarter and overall 2024 results, given your scale and just your growth relative to peers in an absolute and then on the go-forward, I like the 8815. It's easy to remember. 8% forward constant currency bookings growth, 8% constant currency revenue growth, 15% EPS growth. We like that, so you talked about sort of every day you have to get out, execute, compete. When we think about that 8815, what are sort of one or two of the most important micro-level areas of execution you have to continue to improve on to make sure you at least hit the 8815 framework? Yeah. I was waking up this morning and I saw what Elon Musk said here early on stage, and I thought about maybe we have to rethink how we talk about it because we usually say we grow GDP plus and then a few things, but he said in the GenAI world, GDP growth infinite level. So we can grow over infinite. How that will work? So I think it's probably something we need to frame in a different way going forward. It's getting bigger. But in all seriousness, I think we are really optimistic about the outlook because we're a challenger in the U.S. market. That's, of course, the largest travel market in the world. So we still can grow our position, gain more share over time. That will be a growth driver. I think we have an opportunity to grow in Asia, which is, I think, really an opportunity for us. We're the largest travel platform outside of mainland China. This is going to be a region with very high growth over the next few decades. That's going to be a massive opportunity. The other verticals where if we really put a lot of effort and resources behind it, we can really grow those in a very large way, as we have seen with flights, for example. So that's why we're investing in some of those other verticals. We can maybe dive later on deeper on that if you want, so there's many of those where we think we are able to grow faster than the market in general, and therefore with additional efficiencies that we can accomplish, drive the bottom line even with a faster level up than the top line of the 88, do the active return of capital and the buybacks and the dividends, and therefore end up in the mid-teen kind of level in terms of EPS growth, and it's a very repeatable model for the company, so I think it's definitely a model and a formula and targets that we continue to be very much committed to. Got it. Maybe let's talk about that EPS, the EPS growth kicker a little bit, because one of the questions I get is sort of around the $400-$450 million cost reduction or reallocation, however you want to think about it, last year. How should we think about that $400-$450 flowing through the bottom line as opposed to sort of being reinvested in growth for further long-term growth in the Excel sheet? Yeah. We think about that from a management philosophy perspective as two different frameworks. I call it more or less the double discipline framework. One is we are going after opportunities to find savings and find efficiencies. And there are many opportunities that we have within the company, so therefore we said we're going after that transformation program that, by the way, is not only about cost. It's really setting our organization up to be more nimble, faster-moving, quicker decision processes, and that will help ultimately also the outcome for the company. But the areas where you find those efficiencies are not necessarily the same areas where you can reinvest. So you need to go through that process in a very different way. So where can we find those opportunities? It should be all around driving faster top-line growth. And we have said there's many of these areas that in a business-as-usual environment, we can fund it and it will grow, but at a certain level. But if you put more resources behind it, actually, we can grow this much faster, and we think that's very attractive. But you have to be very disciplined about those reinvestments in the strategic capital allocation, track those independently, have the transparency around it. So we also have a lot of discipline in how we do that, how we track it, how we monitor it. And we should be able to our shareholders to explain where are we taking those efficiencies from, where are we reinvesting. But our focus is growing this company as fast as we can. With the margins, we are having mid-30% margins, EBITDA margins on a post-stock-based compensation basis. Can I please repeat that? On a stock post-based compensation basis. So it's really apples to apples. If we can just grow the company as fast as we can on that basis, that's the most attractive. And ultimately, top-line growth leads to also more margin expansion. So we have so many of these opportunities. For me, that's the fascinating part of Booking Holdings. We have done so well. We have grown so rapidly. We have an incredible skill, but we can do so much more. So that is the opportunity. So ultimately, the $450, we will $400-$450 in savings, we'll realize, we'll reinvest a part of it, but ultimately, the value creation will come growing a faster company and over time also continue to do margin expansion as well. Got it. Okay. Grow, grow, grow. Makes sense. Let's talk about a couple of the areas where you're investing. Let's start with the U.S.. The U.S. in the fourth quarter was particularly strong. It accelerated to 10% year-on-year growth versus 3% in the prior quarter, even accelerated on a two-year stack. So maybe just from a micro-level perspective, are there any areas you'd call out where you really saw more return or better signal that really drove that acceleration in the U.S.? A couple of things happened in the fourth quarter in the U.S. One was the comps were a little bit easier. Why? Because the fourth quarter of 2023, there was definitely now, with hindsight, we can say some impact on consumer behavior as a consequence of the start of the war in the Middle East between Israel and Hamas. It was hard to substantiate it at that time. We could, of course, see the direct impact on business in the Middle East, but now a year later, we could clearly see there was probably some benefit from that. So that is one particular dynamic. The other was what we could see is consumers hesitant to spend and delaying spend until after the U.S. presidential election. So there was definitely a pickup from the mid of November onwards. So that was another element. And the third was there was a bit of an expansion of the booking window or pull forward of bookings that otherwise would have happened in the first quarter into the fourth quarter. So those were specific, I think, macro factors. But then you're absolutely right. On top of that, there were some idiosyncratic factors that the company did really well, why we were able to grow faster than the market in general. I think this is investments in brand. So we still have to work on overall brand recognition in the U.S. and familiarity with us in the market. It's around product. It's around supply. It's around alternative accommodations, focus on specific performance marketing actions for the U.S. So it's multiple factors that we're working on at the same time. I think therefore, overall, we have been able to do better than the market in general. So very pleased with the results. But obviously, yeah, we need to make sure that we continue with that trajectory. We can't impact the overall market in the U.S. It is what it is. But our objective is every period to grow faster than the market, gain some share, and gradually over time really work ourselves up from a challenger to really a well-established player. I want to get to alternatives in more detail in a little bit, but just going back to your point on alternatives in the U.S., is that business at a point where it can actually contribute some of those incremental basis points of growth, or is it still earlier in its overall lifecycle? It contributes already to incremental growth. We see alternative accommodations growing faster than traditional accommodations in all regions of the world, including the U.S. But in fairness, our position in alternative accommodations in Europe, in Asia, in South America, in the Middle East is much larger on a relative basis than in the U.S. So you could say that's a great opportunity for us. If we speak about upside and growth potential, we work very hard to start to close that gap. And the more we do that, that will add in terms of overall growth to the company. How do you think about that upside potential from alternatives? How do you think about the investments you need to make to really keep that growth going or even just further take share within alternatives in the U.S. from here on the host side or on the guest side? It's a bit of a, I call it a self-stimulating kind of effect. The more familiarity there is in the market with Booking as a brand, the more that consumers know they can come to our platform for alternative accommodations, the more we can drive traffic to the host, the more that host like to be on our platform because they don't want to miss out on that traffic and the occupancy that we can bring to them, the more that it will help familiarity because people can find more properties on our platform. I think we have been doing very well, quickly really helping the supply grow, starting with the professional managers, working our way now to the semi-professional managers. The most important next thing is, of course, getting to those individual hosts, those unique properties, and that will take more time. So the absolute level of growth of supply will come down, but the quality of the overall supply will go up. So that's just the next phase for our investments. Do you ever think through the individual host point? Do you ever think through potentially adjusting the take rate structure, not even reducing your take rates, just adjusting the take rates, the amount that the host pays and the guest pays? There is quite a big difference if you're a Superhost, like my wife is. The amount that you pay, your competitor is three to four points. If you're a host on Booking, you're paying 14 points. How do you think about sort of the take rate structure to compete with supply? Yeah. Economically, we're more or less neutral, as you know, because we charge no fees to the traveler on top of the base fee. But then there is an offset in terms of the commission level. So I think overall economically, it's very much the same, but it comes in different forms and different ways. I mean, we're always looking for optimization. So we need to see if there's another way we can structure that in the future. But so far, it hasn't been really a negative in terms of the growth of supply for us as a company. Okay. The other area you talked about investing in when you went through sort of the menu was Asia. For years, Asia has been a pretty competitive market, perceived to be a very competitive market. Maybe talk to us about the changes or what are sort of the important areas of investment in Asia, if we think two buckets, China and then Asia ex-China? Brian, in general, every market is highly competitive. Traditional players, new players, banks, credit card companies, technology companies, local players. So I think that's in every market in the world. So I wouldn't call Asia more competitive than other places. I think we are very well positioned. We're the largest travel tech platform outside of mainland China. We have a very strong position in all of these countries outside of mainland China and Hong Kong, both through Booking.com and Agoda. Agoda has a very particular strategy that is focused on localization. So they make themselves look and feel like a Korean company in Korea in terms of the interface, the UX, the payment options, the marketing, the brand campaigns, and so on. And in some markets, they focus more on merchandising. In other markets, they focus more on performance marketing spend. So even there, there's differences in effectiveness. So Agoda is doing that in a very smart way. I think we're investing there. Part of our $170 million investment strategic investment program in 2025 is going to expand our presence in Asia. So we do that deliberately because we think it's a huge opportunity. But I think we're very well positioned to deal with competition and to continue to do well on a relative basis. Great. Well, we've been on stage for quite a few minutes, and we still haven't talked about GenAI. I mean, who would have thought? I doubt you get through many meetings and get this long without questions on GenAI. So let's get started. There is a lot of discussion about the future of the online travel funnel and the way in which consumers will search for travel, plan itineraries, book travel. Maybe just let me start with your perspective. What is Booking.com's vision for the three to five years from now, how consumers will book travel? A couple of thoughts on this topic. First of all, we are preparing for all scenarios. We very much are on the forefront. We are collaborating very closely with all the developers, hyperscalers, large language model developers, and so on to learn from that, understand what's going on, to really have a front row seat in terms of where's the world moving. So we're not so much thinking it's only one scenario, and we put everything on that scenario. We're trying to prepare for whatever direction this may go. The first point I actually want to make is, I think what sometimes is misunderstood. Travel sounds very attractive at the surface, but it's actually complex and messy below the surface. The fulfillment, the payment, the customer service, the partner management, the regulatory environment, dealing with the data in the right way. Then something goes wrong. How do you solve for that? So far, if you look at that, you need to really be a specialist in that whole operational segment of travel. Even Google never stepped into it. You could say they had a very good possibility if they wanted to, but they never said, you know what, I want to be in that part of the value chain. So that's one. The second is, I think there is an interesting question about consumer behavior, consumer acceptance. Will consumers say, you know what, I have this horizontal agent, generic agent, and I will say that agent, please book this family trip for the summer for me? Or would the consumer say, you know what, this is a pretty consequential decision. I want to know where my money, my savings for the whole year are going to be spent? I want to know it's not a shady provider that if something goes wrong, I don't know where to go and get it resolved. So in other words, the question is, is that part only going to be for doing the research and getting inspired? But ultimately, the booking is going to happen on a specialized platform that has a vertical agent that is really focused on getting this booking done of a provider that you know, you trust, has a brand name, has good customer service, you can trust them with your money, and so on. So that's a big question. How will that go? It's interesting if you think about it, some of the meta search companies today are often used only for research, but haven't done so well on the transactional side. So are these generic horizontal agents only becoming big in transaction? I think that is to be seen. I think my third thought on this is, I have four, by the way, so sorry. Hang in with me, please. No, please. I have five questions on this. My third thought here is, I think this technology, I find it fascinating because it's probably the newest technology where the largest CapEx amount ever has been spent in history, but it's probably also the newest technology that has gotten commoditized the fastest in history. So would those providers that have spent all this CapEx and where the investors are becoming anxious about when do we see the returns on all of this say, you know what, and now I'm going to even spend more money on building a travel company? Or are they saying, you know what, I have a monetization option here where I quickly have a win, I have a revenue model, I can show this to my investors, and they become effectively a performance marketing channel for us providing leads, and we can work with them and we have our optimization models to do that in the best way. So that is the third thought. And the fourth thought is, obviously, this is for ourselves a huge opportunity. Inefficiency in getting our core product better with an AI trip planner or a Penny or smart filters, but also thinking about how this could change our overall business model and how we can apply a travel vertical-specific agent and develop that. That will be better than anyone else because we have the specific knowledge, we have the data, we can make this very much personalized for this traveler. So those are a couple of thoughts I have around it. Sorry to be so lengthy. No, that was very helpful. Let me ask you about point three on the idea of using some of the next generation agents as a paid marketing channel or as a funnel. How do you think through the risk that if some of these big companies that are building these next generation agents, they're public and private companies that are trying to do this, they could build up better next generation travel planning tools that leverage even more of their data and your leading supply to cause even more people to use them and you become more reliant on them as a paid channel going forward and it potentially impacts your high margin direct mix. Are you worried at all that you could actually be enabling these companies to get into the game and just all of a sudden you're more reliant on them going forward? That could be hypothetically a scenario. By the way, I think if that scenario will happen, I think actually our customer acquisition costs will come down rapidly because in traditional search, we have been so much dependent on one party. If we suddenly get multiple large language models, multiple agents that can be lead generators, I think that will economically for us be a good development. But I think the more likely scenario that I see is we have a much better vertical agent. So will I ask my generic agent that helps me with the recipe for my dinner tonight and makes the appointment at the dealership for my car maintenance next week? Will I trust that that is the best agent to also do my travel booking? Or will I go to my platform within Booking Holdings, it could be Priceline, Agoda, Booking.com, and so on, and say, you know what, I know them, they have my data, they can make it personalized, I have my loyalty there, I know I get a fair deal, and so on? And is that more where they ultimately would like to go to do the same thing? So that is, of course, what we're very much focused on to develop that and being the most attractive. That could potentially mean even more direct business coming to us. Correct. You could be the agent. Okay. That's helpful. And then the last one on this is there are some private companies that are sort of talking about disintermediating the OTAs from a supply perspective and leveraging wholesale supply, Bed Banks, I think as they're known. What's your response to that? What is the difference in your supply as opposed to what you can get access to on the wholesale side? Very fragmented market. I think there will be potentially a lot of legal restrictions. So forward distribution is often, in those B2B partnerships, not permitted. And there's still someone that has to do all the messy stuff, the customer service, the payment, the partner management. All of that is you need a huge infrastructure to do that. So you need ultimately a large established player that has that whole infrastructure in order to do that. Got it. Okay. Now, I remember the wholesale debate being a debate 10 years ago as well. Other companies could leverage the wholesale inventory and there are restrictions around that. So that's a very good point. You mentioned that the partnerships and the hotel partners, what are you investing in internally with new generative AI capabilities to sort of even further increase the value that you provide for all of your fragmented hoteliers and mom-and-pop businesses? I like the last thing you said, mom-and-pop businesses, because that's sometimes misunderstood. The hotel market in the U.S. is heavily dominated by the chains, but that's not the same in the rest of the world, and you have far more, I think, independent hotels, family-owned hotels all over the world compared to the U.S., and they usually don't have the newest technology. Actually, they want partners like us to help them to develop the newest technology, and that is what we are also always investing in and will continue to do it, and we have already some tools today where we're helping them, so as an example, we have GenAI tools where we help those hotels write responses to a question from a traveler, if they say, "Can I bring my dog to your hotel? By the way, the dog is 50 lbs and can I bring it to the restaurant? Then this writes the answer. The hotel owner can maybe change it a little bit and put a few emojis to it and whatever they want to do, but it helps them already to write it. So these kinds of tools are already trying to make their life easier and really use the newest technology. So I think this will ultimately, as we always think, we have two sets of customers as a two-sided marketplace, and we will be focused on investing on both sides. Yep. And then on GenAI, I know you had mentioned before how you're investing in other internal productivity tools. So are there some examples where you're already seeing incremental efficiency internally from using either GPU and AI machine learning or other tools? What are those and how can you quantify the help at all? Yeah. I like always not to speak about these kinds of things theoretically. So we say, oh yeah, we have bars in the organization where we have 30% savings in coding or something like that. Yes, we have that as well. But just to point to something that where is it showing up in our financials? So if you look at our fourth quarter results, you see Sales and Other line was actually for the first time not a source of deleverage. We had multiple quarters before that deleverage from Sales and Other. Why was that the case? Because we're growing our emergent business, the payment costs that are showing up there. Yeah, we have also payment revenues, but that's showing up in another line. This was for the first time where it was basically stable. The reason is that we were able to take efficiencies in customer service going in the opposite direction and therefore being net neutral. That is a clear place where this is showing up. We expect in customer service to continue to see that benefit showing up this year. A meaningful part of the $150 million in-year savings as part of the transformation program that we expect in 2025 is related to customer service efficiency. You will see more of that benefit showing up in the S&O line in 2025. Great. Okay. We'll probably have time for one question from the audience for Ava, if you have one. So maybe raise your hand or mic runners in the back. Do you have one question here? I'll get you to two. Oh, two. Oh, two. Yeah. Sorry. Related to GenAI questions, did you guys ever do internally use your data from your users that is part of your whatever loyalty programs? Did you ever test how good your internal predictive models in predicting what type of hotels or things that they would like to do? Yeah. I would say maybe with the exception of Google, I dare to say we probably have the best data in terms of customer preferences, where they have traveled, what kind of accommodations they like to stay, what kind of activities they want to do. We can link it at some point with the OpenTable data. We haven't done that yet and say what kind of restaurants they would like to dine. We have made a lot of investments over the last 12 to 18 months in modernizing our data environment. So that has been a very important foundational investment. And now for this year, also part of our $170 million strategic investment program, we're further investing in data and tokenizing the data so that we can use it more in a large language model environment in the future. So when I was speaking about our advantage in terms of data and personalizing ultimately our proposition, that's coming from the data sets that we are having. And I think that's something that's really important because today, why do people need to search seven different sites in order to find their way? Is that because there's so many options? So the more we can tailor the options and narrow the options, I think the search process will be much more satisfactory, will be much more efficient. And I think that's going to be a big advantage for travelers in the future. The point of sort of the next generation agent, I know building out these, getting your data in one place and getting it ready to be using these models and then shipping products takes time. It's a big lift for any company. Is that a 2025 product? Is that a 2026 product? How do we think about timelines of sort of seeing this fully integrated agent that could be rolled out to everybody? Yeah, it's something that we haven't put the data out, so I can't give that here. What I can say is I think we're really focused on this. This market goes fast. These players are going fast. We need to go fast. The good thing is we have the resources to invest in it. So we're very focused on going as fast as we can. I really think that this is going to be a catalyst even to go faster with that big Connected Trip vision that you really can say, I'm not booking just a flight in a hotel, but there is a logic between those elements and how it hangs together. For example, if I take a rental car, the hotels that are being proposed are the ones with a parking spot. And if my flight is delayed, we update the restaurant reservation and just making it convenient for the traveler and also a travel platform. If I walk in Paris close to the Louvre, the app gives you a notification, hey, do you want to have tickets? We know there's four tickets available for you and your family in an hour. Click here to get that done. So that, of course, I think, yeah, that will take a little bit more time, but that's ultimately where we're working towards. Sounds great. I love Paris. Question. Just wondering if you could unpack the 15% EPS growth, in particular, the growth in direct or leveraging payments, and then how much of that comes from share buybacks. Just trying to understand kind of the drivers there a little more. Yeah. So think about it in the following way. So if we say 8% gross bookings growth, leading to about 8% revenue growth, we're aiming for achieving leverage in marketing. Why? Because we will continue to move more business to direct as well as increasing the ROIs on the performance marketing channels. I think we have really a competitive differentiator in terms of the expertise and the algorithms that we run in the performance marketing to optimize this all the time. There's still a lot of opportunity to do that more. So then we get marketing leverage. We already spoke about sales and other, which was deleverage. If we get that to neutral, then it will become less of a drag. Hopefully, sometime we can get it even to leverage, particularly if the growth of payments at some point needs to start to flatten off because at some point it will become so high it will not start to grow much longer. Fixed OpEx is an area where we're laser focused on, so that will be an opportunity to create leverage, so that would mean that we should be able to increase earnings to a kind of low double digit level, and then with a buyback program, the shares we take out to get to mid-teens kind of an EPS formula, so that's the kind of algorithm that you need to think about. Great. Thank you. Thank you. All right. Ewout, thank you very much for all the discussion. It will be a fascinating year to watch. We can't wait to see you next year. Absolutely. Thanks so much.