Welcome to Booking Holdings' second quarter 2026 conference call. Booking Holdings would like to remind everyone that this call may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guaranteed of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed, implied, or forecasted in any such forward-looking statements. Expressions of future goals or expectations and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements. For a list of factors that could cause Booking Holdings' actual results to differ materially from those described in the forward-looking statements, please refer to the safe harbor statements in the Booking Holdings earnings press release, as well as Booking Holdings' most recent filings with the Securities and Exchange Commission. Unless required by law, Booking Holdings undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. A copy of Booking Holdings earnings press release is available in the For Investors section of the Booking Holdings website, www.bookingholdings.com. Booking Holdings intends to use the investor relations page of its website, ir.bookingholdings.com, to disclose material information for purposes of the SEC's Regulation Fair Disclosure. Booking Holdings encourages investors to monitor this website in addition to other public announcements and SEC filings as information posted on this page could be deemed to be material information. We ask that you please limit yourself to one question so that we may give as many analysts as possible an opportunity to participate. Now I'd like to introduce Booking Holdings' speakers for this afternoon, Glenn Fogel and Ewout Steenbergen. Go ahead, gentlemen. Good afternoon, thank you for joining us today. I am pleased to report that our teams delivered another quarter of strong execution. We exceeded the high end of our guidance across all of our key financial metrics while continuing to invest in the strategic priorities that we believe will drive long-term value. These results reflect the strength of our diversified global platform, disciplined execution across our businesses, and our ability to deliver strong returns to our shareholders while also investing for future growth. As you know, the world remains an uncertain place. With the Middle East conflict and related macroeconomic developments continuing to affect travel demand, both directly and indirectly through the impact on major Middle East transit corridors and higher travel costs. These dynamics create near-term volatility, yet we know from decades of experience that the underlying desire to explore, connect, and experience the world is remarkably resilient, and travel demand recovers once the underlying disruption subsides. This resiliency was clearly evident during the second quarter. While long-haul international travel remained pressured by elevated airline prices and reduced capacity due to the conflict in the Middle East, domestic and intraregional travel remained relatively healthy across many parts of the world. As I have stated many times, we remain focused on creating long-term value and look beyond near-term uncertainty. During the quarter, we further increased our capacity to invest for future growth as the expected annual run rate savings enabled by our transformation program continued to increase. These savings provide us with additional flexibility to accelerate innovation, enhance our products, and strengthen our business over the long run. Our focus is on what we can control, delivering strong value, reliability, and great service through differentiated solutions for travelers and partners. This focus is reflected in the strategic investments we are making across our business, starting with our Connected Trip vision. Travel remains a fragmented experience, often requiring multiple providers, transactions, and customer service interactions. Our Connected Trip vision is about fundamentally improving that experience, making travel easier while creating greater value for travelers and partners. We're encouraged by the progress we are making. During the quarter, Connected Trip transactions where travelers booked more than one travel vertical with us for the same trip grew in the low double-digit range and represented a low double-digit percentage of Booking.com's total transactions. Importantly, these transactions continue to grow meaningfully faster than our overall transaction growth. As travelers increasingly choose to book accommodations, flights, rental cars, attractions, and other travel services with us, we are creating a more seamless end-to-end journey which strengthens our offerings for both travelers and partners. Our Genius loyalty program is a key enabler of this strategy. We continue to see strong engagement from our higher-tier Genius members, who plan their trips further in advance return more consistently, and have a higher direct booking rate than non-Genius travelers. During the second quarter, level 2 and level 3 Genius members represented more than 30% of our active customer base and accounted for a high 50% share of room nights, both up from the prior year. Given the importance of loyalty and the success of Genius so far, we see additional opportunities to further strengthen the Genius offering going forward. Another important strategic priority is strengthening our presence in the U.S. and Asia. The U.S. remains one of our largest long-term growth opportunities. Over the past several years, we've made disciplined investments across product, supply, brand, marketing, and technology, and we're encouraged by the progress we are seeing. These investments continued to deliver encouraging results during the second quarter. U.S. room nights grew in the high single digits, supported by healthy domestic demand. We also saw continued growth in our direct channel and increasing engagement across multiple travel verticals. While we still see significant room for growth, some of which will come from further product improvement, we remain encouraged by our consistent progress and remain confident in our ability to continue strengthening our offering in this important market. We are also continuing to invest in building our presence in Asia, which we believe represents one of the most attractive long-term opportunities in global travel. Despite a dynamic competitive environment and indirect impact from the conflict in the Middle East, underlying domestic demand remained healthy during the quarter. By combining Booking.com's global reach with Agoda's deep local expertise, we are continuing to invest in localized products, payments, and distribution capabilities that position us well for long-term growth across the region. The final strategic priority I'd like to discuss is AI. AI's rapid and continuous development is having a profound impact on all areas of society. Our approach remains focused on deploying this technology in measurable ways and scaling when we see clear benefits. The combination of trusted brands, proprietary travel data, broad supplier relationships, and global reach creates a differentiated foundation as AI reshapes how travelers discover, plan, and book travel. As travelers increasingly begin their journeys through AI-powered experiences, trusted brands will play an even more important role in where they ultimately choose to book. That's why we continue to work closely with leading AI organizations to ensure travelers can engage with our brands wherever their journey begins. We're also encouraged by the early progress we're seeing in AI-powered discovery. While AI-driven referrals remains a relatively small contributor to our overall business today, we are seeing encouraging momentum that reinforces our belief that the strengths we've built over many years, helping travelers find the right travel options with confidence, positions us well as travelers further gravitate towards AI-powered discovery. At the same time, we're embedding AI across our own platforms to make every stage of the travel journey more personalized, seamless, and intuitive. During the quarter, we continued advancing AI capabilities across our portfolio, including beginning to roll out testing of Booking.com's new AI-powered discovery experience, which helps travelers in the early inspiration phase of planning a trip. For destination searches, the experience combines flight prices, real traveler reviews, and AI-generated insights, including the best time to visit, travel tips, and itinerary suggestions to make it easier to move from inspiration to booking. We're also deploying the next generation of Priceline's agentic AI travel assistant called Penny, and we're launching Agoda's new gallery view, which gives travelers a more visual way to browse search results by pairing hotel images with relevant guest reviews. We're already seeing how AI can transform the customer experience. For example, initial testing of Penny's integrated hotel checkout experience has shown that beginning more of the booking journey into a single seamless experience has the potential to improve traveler engagement while delivering stronger business outcomes. These innovations are just a few examples of how we're using AI to reduce friction throughout the travel journey while advancing our broader Connected Trip vision. AI is also strengthening our partner value proposition. We are investing in tools that help partners better engage with guests, improve their property content, and operate more efficiently. For example, our AI-powered messaging capabilities enable accommodation partners to respond to guest inquiries more quickly and consistently, reducing operational friction and improving the traveler experience. These partner innovations were a central focus of our recent Booking.com Click conference, where hospitality partners from around the world explored how AI, personalization, and data-driven insights can improve both guest experiences and business performance. This conference also reinforced our collaborative approach to innovation, including co-developing new AI capabilities using direct partner feedback. Finally, we're increasingly applying AI across our own business to accelerate software development, enhance customer service, and streamline internal workflows. One area where we continue to see meaningful benefits is in customer service. Our AI initiatives are reducing customer friction, lowering contact rates, and improving operational efficiency. We have now scaled voice AI support across the majority of eligible inbound traveler calls while continuing to expand digital automation. At the same time, AI-powered analytics and real-time agent assistants are helping our teams resolve issues faster and more effectively. As a result of these combined AI and human capabilities, customer service cost per booking continues to decrease at a double-digit rate while overall customer satisfaction remains high. We're also seeing promising early results in our technology organization, where AI is accelerating software development and improving developer productivity. These signals give us confidence that AI will continue to be an increasingly important driver of innovation, operational efficiency, and better experiences for both travelers and partners. Looking ahead, we recognize that the external environment may remain dynamic. We believe consumer preferences will continue to evolve, technology will continue to advance, and competition will remain, as it always has been, competitive. These changes create challenges, but they also create opportunities. What gives us confidence is not the expectation that the world will become more predictable. Rather, it is our confidence in our ability to execute our strategy to address our customers' long-term needs. Whether it's advancing the Connected Trip, strengthening our offering in the U.S. and Asia, deepening our partnerships, or harnessing AI across our business, we are making the investments that we believe will create better experiences for travelers, greater value for our partners, and a stronger company for the long term. With that, let me turn the call over to Ewout to walk through our financial results and outlook in more detail. Thank you, Glenn, good afternoon, everyone. I will now review our results for the second quarter and provide our current thoughts for the third quarter and full year. All growth rates are on a year-over-year basis, and the reconciliation of non-GAAP to GAAP financials can be found in our earnings release. Room nights, gross bookings, revenue, and adjusted EBITDA all exceeded the high end of our guidance for the second quarter. These results reflect the resilience of our global business in an uncertain travel environment and the disciplined execution of our teams. Glenn covered many of the underlying travel trends, so I'll focus on what they meant for our financial results and our outlook. Overall, consumer demand remained resilient in the quarter, although we observed some modest shifts in travel behavior. Constant currency ADRs increased approximately 2% year-over-year, demonstrating continued pricing strength, primarily driven by Europe and the U.S. Globally, we saw a modest contraction in booking window and length of stay during the quarter, although both began to normalize in June. Importantly, in Europe, our largest region, both metrics were approximately flat for the quarter. Let's turn to our second quarter results. Room nights grew 5%, exceeding the high end of our guidance by about one percentage point. Globally, domestic room nights, representing travel within the same country, grew high single digits. In contrast, international room nights increased slightly, reflecting continued pressure on long-haul travel, due primarily to the indirect impacts of the situation in the Middle East. Looking at room night growth by booker region, Europe grew mid-single digits, with domestic room nights up high single digits. Asia grew mid-single digits, with domestic room nights up low double digits. The U.S. grew high single digits, driven by domestic demand. We're also pleased to see another quarter of direct channel growth in the U.S. Rest of World grew mid-single digits, improving from a low single-digit decline in the first quarter due to stronger bookings from Middle East bookers. Over the past four quarters, our B2C direct mix remained stable in the mid-60% range, while direct room nights continued to grow. This performance came despite the continued pressure on SEO, which we are seeing across much of consumer internet. SEO remains a small component of our overall room nights. The mobile app mix of total room nights over the past four quarters remained in the high 50% range, while the mix of Booking.com room nights booked by travelers in Genius levels 2 and 3 was also in the high 50% range. Both metrics increased year-over-year. Alternative accommodation room nights at Booking.com were also affected in part by the Middle East conflict, growing 4%. This growth was slightly lower than our overall 5% room night growth due to brands and regional mix, as we saw higher growth from Agoda and Priceline, and also in the U.S., where our alternative accommodation offering is relatively smaller. Alternative accommodations represented approximately 37% of Booking.com's room nights, similar to the second quarter of 2025. In our other travel verticals, attraction tickets grew double digits, while flight tickets increased 4% year-over-year, despite pressure from the Middle East conflict, including reduced capacity on certain international routes and higher flight ticket prices. We believe this growth continued to outpace the broader market. Connected Trip transactions grew low double digits, more than twice the rate of Booking.com's total transaction growth. This matters because our data shows that travelers who book with us across multiple travel verticals return more frequently. Our total merchant growth bookings represented approximately 73% of total gross bookings, up about four percentage points year-over-year. Our merchant payments platform is foundational to our Connected Trip vision, enabling a more seamless customer experience while generating incremental value and contribution margin dollars. Total gross bookings increased 9% year-over-year or approximately 8% on a constant currency basis, exceeding the high end of our guidance by about three percentage points. Constant currency growth bookings growth was approximately three percentage points higher than room night growth, primarily reflecting the approximately 2% increase in constant currency ADRs and the contribution from flights and other verticals. Revenue increased 8% year-over-year, or approximately 7% on a constant currency basis. Revenue growth was lower than gross bookings growth, primarily due to elevated cancellations in March that affected second quarter revenue. Marketing expense increased 11% year-over-year, modestly faster than gross bookings, driven by changes in traffic mix, incremental investments in paid marketing at attractive ROIs, and a shift of merchandising spend to performance marketing. As always, we aim to grow our top-line metrics faster than marketing investments, but are willing to lean in when we see positive long-term value for the business through both attractive ROIs and repeat rates. Adjusted sales and other expenses were 1.9% of gross bookings and provided a leverage despite the higher merchant mix, as higher payment expenses were more than offset by customer service efficiencies. Additionally, payment expenses grew less than merchant gross bookings due to a one-time benefit from processing fee reversals. Adjusted fixed operating expenses increased 6% year-over-year, including 1% higher adjusted personnel expenses, and were a source of leverage as a percentage of revenue, reflecting the targeted cost management actions we implemented last quarter and our continued focus on managing our fixed expense base while investing in key strategic priorities to drive long-term growth. Adjusted EBITDA of approximately $2.6 billion grew 9% year-over-year, exceeding the high end of our guidance. Adjusted EBITDA margin expanded nearly 40 basis points, reflecting disciplined execution and cost management. Adjusted EPS of $2.54 per share increased 15% year-over-year, faster than adjusted EBITDA growth, helped by a 6% reduction in average share count. Beyond the quarter's financial performance, we also continued to make meaningful progress improving the efficiency of our business. As we continue to execute on the transformation program, we identified additional opportunities, increasing our expected annual run rate savings from approximately $550 million to approximately $650 million. We expect the approximately $100 million of incremental annual run rate savings to be realized primarily in 2027. We incurred approximately $30 million of transformation cost in the second quarter, the majority of which were excluded from our adjusted results. Now on to our cash and liquidity position. Our second quarter ending cash and investments balance increased sequentially by $1.2 billion to $17.7 billion. During the quarter, we generated strong free cash flow of $3.6 billion, raised $3 billion of debt, paid down $1 billion of debt, and returned $4.1 billion to shareholders, including $3.7 billion of share repurchases, marking another record quarter of capital returns. During the first half of 2026, we repurchased $7.4 billion of our common stock at an average price of approximately $173 per share. We remain committed to a disciplined capital allocation framework, first investing behind the highest return growth opportunities across our business, while also returning meaningful capital to shareholders and maintaining a strong balance sheet. Moving to our thoughts for the third quarter. Global travel demand has remained resilient so far in the third quarter, supported by healthy domestic travel trends. As we look ahead, we remain mindful of the situation in the Middle East and continue to monitor the direct and indirect impacts on travel demand. Our guidance assumes stability in the broader travel environment in line with recent trends. It also assumes that the indirect impacts of the conflict, including elevated flight ticket prices, reduced flight capacity on certain routes, and softer long-haul international travel demand persist through the third quarter. In terms of the direct impact of the conflict, we continue to assume some pressure on inbound travel to the Middle East while travel demand from Middle East bookers remains largely normalized. Our guidance also assumes recent FX rates for the remainder of the quarter and year, including the Euro-U.S. dollar exchange rate at 1.15. We estimate changes in FX will weigh on our third quarter reported U.S. dollar growth rates by about one percentage point for gross bookings and revenue. For the full year, we estimate changes in FX will positively impact full-year reported growth rates by about one and a half percentage points for gross bookings and about one percentage point for revenue. We currently expect third quarter room nights to increase between 3% and 5% and for gross bookings, revenue, and adjusted EBITDA to each increase between 4% and 6%. On a reported basis, our full year expectation is for gross bookings, revenue, and adjusted EBITDA to each be up high single digits and for adjusted EPS to be up low to mid-teens. Our expectation for gross bookings is lower than our prior expectation, primarily due to lower flight ticket growth, while our accommodation outlook remains largely unchanged. In conclusion, our second quarter results demonstrate both the resilience of our global platform and the disciplined execution of our teams. Despite the external environment, we delivered robust results and exceeded the high end of our guidance across our key financial metrics while continuing to invest in the strategic initiatives that we believe will drive long-term growth. Our strategy remains unchanged. We are continuing to invest in the Connected Trip, expanding our presence in key markets, advancing our AI capabilities, and strengthening the value we create for both travelers and partners. At the same time, we remain disciplined in how we allocate capital, balancing these investments with strong operational execution, solid free cash flow generation, and meaningful capital returns to shareholders. Together, these strengths give us confidence in our ability to continue creating long-term value. Finally, I would like to thank my colleagues across the world for their continued dedication, passion, and execution throughout the quarter. Their commitment to serving our travelers and partners in such a dynamic environment is what continues to strengthen our business and positions us well for the future. With that, we'll now take your questions. Operator, will you please open the lines? Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again. As a reminder, we ask that you please limit yourself to one question. Your first question today comes from the line of Mark Mahaney from Evercore. Your line is open. Okay, thanks. Glenn Fogel, I want to try to draw you out a little bit more on the AI impact, particularly on the top line on customer satisfaction. Maybe it's still too early, but I would think at some level, AI can potentially materially improve personalization, which should show up in things like book-to-look ratios, match rates. Is it too early, or have you seen any quantitative evidence that in this year and a half you've had with Penny, that it's somehow improved conversion rates or increased booking per customer? Thank you very much. Hi, Mark Mahaney. I think that's a great question, and we've talked about this a little bit. Penny, especially, we've mentioned how people using it do come back with more satisfaction, and we talk about how we want to increase conversion. It makes sense, common sense. If you provide somebody with a better way to do the business, they'll be happier doing it. The whole idea of giving personalization, well, I certainly as a customer, I prefer something that actually matches up with what I need versus a large smorgasbord, most of which I want to ignore. All these things are good, but, and this is important, it's still very small, and we're not at a stage we're going to start giving away percentages, numbers, increases in CSAT, or anything of that nature. However, I am very pleased with it, and I will say what makes it so exciting now with this technology is the ability to do things we never would've been able to do before. If you recall, when I first started talking about, for example, the Connected Trip, bringing it together, and we were talking about AI in terms of machine learning models, so ending up with different types of mathematical predictions of what we thought they want. Now using Gen AI, we'll be able to do it so much better. I envision in the future we're going to get even more personalized than I ever thought we could, which will lead to what you're asking about in terms of a much better way to actually complete a transaction. Then, God forbid something goes wrong, a much better way to solve the problem. Anything to add? Yeah, Mark Mahaney, let me add one other dimension to your question. If we look at the traffic we're currently receiving from large language models, so this is not what we are receiving directly in terms of traffic, but from large language models, both on a paid and an unpaid basis, that is still significantly below 1% of our room nights. That hasn't moved so much recently, so no material change over the last few months or quarters. I'm not saying that will never change in the future. This, of course, at some point, might go in a different trajectory. At this moment, it's still very minimal and is not really moving so much. Going a little deeper, the organic traffic, what we are receiving from the LLMs, we believe the vast majority is coming to us according to third-party data sources. If I look at the paid traffic, we are part of the test group of OpenAI for CPC. We like that from a diversification perspective in terms of our paid channels, and it's very much playing to our strength, the optimization models that we are running in order to convert, at an optimal way, traffic into bookings. As Glenn said, strategically, we are, of course, very much focused on learning ourselves, diversifying our channels, then in the end, focused on keeping the direct traffic to us by investing the AI tools, the customer-facing AI tools in our own environment. Thank you, Ewout. Thank you, Glenn. Your next question comes from a line of Alex Brignall from Rothschild & Co Redburn. Your line is open. Thank you for taking the question. I'll carry on with the AI theme, which I suspect many will. We've seen some evidence in our surveys of the LLMs, raising kind of a broader mix of independent content, and they rely more on inspirational content as well as just standardized booking style content. Could you talk about, obviously, it's very low volumes, but could you talk about what you have seen on that side, how you're presenting the data within the LLMs? Also, just if I could, on the e-commerce side of things, obviously lots of conversation on Google, and OpenAI's different e-commerce expeditions. Could you just talk about how they have evolved? Thank you. Hey, Alex. On the first one, everybody would like to know what's the secret sauce so they'll show up in any sort of prompt regarding travel, that the results will be their property or their OTA or their service. Well, how do you do it? What's the right way to do it? One of the things that we believe is very helpful is to have tremendous amount of content that is very reliable and has been around for a very long time. Now, we don't actually have any sort of handbook saying exactly how we can show up more often than others. However, I think Ewout may have just mentioned it, I think, about the fact that third-party people are saying, "Hey, we're showing up an awful lot," which is great. On the other hand, he also mentioned we're showing up a lot, but the referrals aren't showing much. That's an interesting difference between the two. That being said, we hope it actually reminds people when they do get ready to book, they are still thinking of us, having seen us show up in the results of their prompt. We believe that in the long run, it's very important to continue to work very closely with all of the frontier players, which we are doing. We've talked about this a lot in the past. In fact, the most recent thing is, I believe maybe today even, I think Google may have come out today, a small percentage of their traffic, seeing their agentic booking, which we are one of the first with them. We've been working very hard with them, as we have for many years, but working hard on this one. I think it's out. I didn't see it myself yet, but I think it's out there, and we'll see how that one does. Point of this, summing it all up in that area is that we are working hard with the third-party frontier players to make sure we're properly placed when somebody wants to book if they want to start there. Even more important to me is making sure that we're offering our own opportunities for people to come to us direct. That's why we talked a little bit about in the prepared remarks about Booking.com just come out with their way to do discovery. We've got Priceline Penny. We got the new thing we mentioned about Agoda and their gallery thing. We're going to keep on working with that so that people, when they think of travel, they think, "I can go to one of our brands," and they will get everything they could get from any of the large language models, but get even more because we're able to personalize it from what they've done with us in the past, either give them value that they could not get because we're going to work with our partners to provide incredible opportunities, help them get incremental business. We see this as a win-win-win, as it's always been. We always work with third parties to bring in customers, but we also like them to come to direct. Regarding your second question on e-commerce, I don't know if I really answered that or not. If you want to restate it, please do. Well, just in terms of, obviously Google and OpenAI have talked about different either agent offerings that they will give the consumer or the Google UCP that you mentioned. Have they been broadly as you expected sort of a few months ago? Have they gone in a direction that you were kind of working with them, or have you seen anything that has surprised you there? Well, I'll say we continue to work with them. When they change, we change too. There have been many changes over the last couple of years in the way they were going to go and things would come up. Personally, I like to take a little pride in the fact that I thought that one of them would start going for a performance marketing advertising platform, which is right in our wheelhouse, that we're very, very good at, and they have, and we're working very hard on that, so I'm pleased about that. Again, the important things are make sure we work with them closely, one. Two, being the big player that we are, we have the expertise, the knowledge, the people who can work with them. We can spread it across all of them to make sure we're not letting anybody out. The last thing is, if they want a chance to do something else, we'll work with them. Thank you so much. Your next question comes from a line of Justin Post from Bank of America. Your line is open. Great. Hey, Glenn. Connected Trip is obviously a big focus, and you had some positive comments there. It looks like air really decelerated and rental cars were down a little bit. Any thoughts on why those are going in a little different direction than room nights and what that means for Connected Trip? Thank you. All right. They're different issues, clearly. Why don't I take the first one, talk about Connected Trip in general. Ewout had some really good thoughts on why those numbers have diversion and really why you should understand that's not a big deal, very much exogenous factors. In terms of Connected Trip, all these elements are important over the long run, and that means having all of the verticals being able to work together. That's the whole idea, is to bring something that is actually better than the way people was buying individual verticals that aren't connected at all. One of the critical things, of course, is our payments platform, which I was very pleased that we were able to announce how the percentage going through is even higher, up four percentage points. 73% is a great number, is a huge goal, because that is critical. That's the glue that brings it all together. By the way, then as we bring in Genius too, it's a flywheel that keep on increasing. You would say, "Wait, your flywheel, you had two little parts here seem to have had a little bit of a hiccup here. What's up with that?" Ewout, you have some good thoughts on that. Why? Yes. Specifically, Justin Post, with respect to flights, our flights business continues to outperform the market, even in a challenging overall airline environment. If you look at global demand, that was clearly impacted by airline capacity and also higher flight ticket prices during the second quarter. Therefore, our 4% growth of tickets is actually higher than the global airline industry. If you then add 8% of ticket growth on top of it, we had actually 12% bookings growth for tickets. We saw in Europe, a couple of carriers actually have a contrarian strategy to the rest of the airline world. They were more focused on lowering prices to increase demand, but the airlines in the rest of the world were actually doing exactly the opposite. Asia was particularly hit hard because of their dependency on the Strait of Hormuz. We expect the capacity of the airline industry gradually to come back over the next few months. Most importantly, if we think about travelers, what have they done in the quarter? They have found alternative options. They have been looking for travel domestically, for intra-regional travel. We saw some healthy pickup of still people that want to get their summer bookings in. That is happening. Therefore, the shorter booking window, but the higher ADRs that we are seeing. Please keep in mind that the biggest part of our economics is actually coming from accommodation bookings, and that wasn't so much impacted by those dynamics with respect to the airline industry. Even with that, we're still very pleased with the growth of our Connected Trip, that low double-digit number, the percentage of our total transactions in the low double digits. These are still very good numbers, even with this incredible exogenous impact of the Middle East war. Great. Thank you. Your next question comes from a line of Kevin Kopelman from TD Cowen. Your line is open. Great. Thanks a lot. Could you talk more about the testing you're doing on the AI-powered discovery experience on Booking.com? What's the extent of the testing today? What are you learning, and how do you see it potentially being deployed more broadly in the future? Thanks. Kevin, it's out very early. I don't have any data to come back to you. Not that I'm sure I would right now, but we don't have enough to say anything except certainly looking at it as it was being put together, I was very pleased with what I saw. I find it adding convenience, making it easier for people to go through their ideas, their inspiration, working from that all the way through to be doing their booking. It looks sweet to me. We'll see when, in the end, my opinion is not the important thing. The important thing is seeing how the customers use it, and if we need to make modifications or not. Certainly, I think last quarter I mentioned to people how I stressed how if you want to see what we're building, what's going on, just keep using our products and services and see it. This is testing, so you may not see some of it because obviously we're not rolling out to everybody at once. I am pleased with what I'm seeing. I recognize that that's not the important thing. The important thing is the data. Got it. If I could ask one, just separate follow-up on Iran. Last quarter, you did quantify, I know it's difficult to quantify, but you said you were assuming a 300 basis points headwind for the second quarter. Could you just tell us where that ended up and what you're assuming for the third quarter there? Thanks. Yeah, Kevin, if we look at the impact from the Middle East, we said that it was about a two-point impact on the first quarter, but keep in mind, that was actually only from the month of March and the elevated cancellations we had in March. If you look at the second quarter, the impact was actually a bit higher than in the first quarter because we saw the impact continuing in April and in May. As we said, then in June, actually, the situation started to normalize more, and that continued in the month of July. If we look now forward to the third quarter, we expect that there will be a little bit less of an impact than we have seen in the second quarter because I think of the normalization. As we said, we still expect that the indirect impact, particularly on airline capacity and flight ticket prices, will continue until the end of the third quarter in our assumptions and guidance. Overall, we are encouraged by the resiliency in demand, including in July, the healthy pickup of the summer bookings. Overall, if I also may point you to our full-year guidance, actually, if you look at our full-year guidance, we are at a high single-digit level for growth bookings and revenues and at mid-teens level for EPS at the high end. That is still in line with our long-term algorithm and is also in line at a constant currency basis with our original guidance for the year, despite the fact that in our assumptions we have seven out of 12-month impact of the Middle East. Overall, I would say great resilience of the market and demand and very strong execution by our team. Thank you very much. Your next question comes from the line of Ron Josey from Citi. Your line is open. Great. Thanks for taking the question. Glenn, I wanted to follow up on your comments around progress in the U.S. market, specifically, I think you said room for growth and continued investments on inventory. I would love to hear more thoughts on just the roadmap here. Is it adding inventory? Is it a greater focus on alternative accommodations or maybe just a consistent rollout of Penny? Any insights there would be helpful. Ewout, you talked about an additional $100 million of incremental savings identified or efficiencies. Just would love to hear more about where that's coming from. Thank you. Thanks, Ron. I am very pleased with the overall progress we have made in the U.S. over the years. I talked about this last quarter also, but I'll repeat it because I think it's important. We talked some years ago, I said the U.S. is an important strategic goal for us, and we're going to put time, energy, effort, money to work. If you look over the last quarters, go back a bunch of them, and you'll see us doing very well. We come down to a high single digit, and that's less than some of the other ones last quarter, but it's still really good numbers compared to how the market overall was doing. We're doing something right, and I'm really pleased. A shout-out to the team for what they've been accomplishing. How we've been doing it, we've been doing it the way we do everything, is grind it out. Improve the product, improve the service, get more inventory, make the marketing better. Do all the things that are necessary so that people, when they're thinking about where they're going to book, they think of us, they use us, they like us, they come back to us. If they got a problem, we solve it fast. That's business. That's what we've been doing forever. We had to make a little bit of a concentration of it to make sure that we've fixed some things that perhaps weren't the best. When you're a global player like us, sometimes things that are localized are not being addressed and need to be addressed, and we've been doing that. What are we going to do going forward? It's exactly the same stuff. Continue to improve it, get more product, get more inventory, make sure we're doing a better job of marking it out. I still say, you know it, look at 4% growth in alternative accommodations. I'd like that to be a lot higher, specifically I want to be a lot higher in the U.S. Boy, this sounds like a broken record, I know, about how much we need to make sure we have the right inventory, and we need to make sure the U.S. customer is aware of it. We got to make sure the partners like what we're doing. We are working on that, and I see different things we are going to be improving, and I think that will enable us to continue this very good path we've been on. Ron, with respect to your second question on the additional $100 million savings from the transformation program. First of all, philosophically, I think you know how we run the company. We are focused to optimize for long-term shareholder value. Very happy that the team has done so well. We found additional savings opportunities within existing categories, no new categories. This is all existing categories to go deeper in some of those areas, and the additional $100 million mostly came from the procurement work stream. We are happy because now we raised the overall target to $650 million from $550 million, but you probably remember originally when we launched this program, we were at $450 million. What we are doing in the end is creating capacity to self-fund and invest ultimately in our strategic initiatives that then will help to drive long-term growth for the company. Thank you. Your next question comes from the line of Lloyd Walmsley from Mizuho. Your line is open. Thanks, guys. Two questions that are sort of related. I guess first, correct me if I'm wrong, but I don't think you all have called out SEO pressure before. So the question there is sort of do you think this is a shift to AI search or more just a function of pressure on sort of organic visibility in favor of SEM? The follow-up would just be, it sounds like AI search traffic is still minuscule. Related to the first one, do you think that there are a higher share going directly to hotels coming out of AI? Could that be part of what's going on? I know that's a big question investors have. Maybe you guys could talk to it. Thanks. Hi, Lloyd. I do believe that some of the changes that were made in the display at Google definitely put some pressure on SEO Putting in that AI overview probably has done it. Here's the important thing to keep in mind. Our direct, mid-60s%. Hasn't gone down at all. In fact, total number, absolute number, obviously, had to go up to maintain the same percentage share in the direct, because obviously we grew. That's good. That says that we are doing a good job of making sure that people come to us, think of us, and yes, losing SEO, don't like it. It was never a big part of the business, small part of the business, but obviously I don't like that and I wonder, somebody, they didn't come to us from SEO, which would have been in that direct category. Where did they go? Did they come to us direct, or what happened? Our direct number didn't go down. I don't know. I do know, however, that I am pleased, I am very pleased that we continue to develop what we need to make sure people understand the better service we are offering to them to get them to come back direct. Look at what we're doing with our app and that high 50s%. When you look back a year ago, that was mid-50s%. You go back two years ago, that was low 50s%. People going to the app, and they're coming direct. Like that. Your second question, are some of the people coming off of the AI, whichever model you want, are they going direct to the hotels more or not? I don't know. They don't tell me. I will say, though, again, I doubt that anybody is getting a huge amount of business directly from what they're doing with their travel prompts, their discovery. I think what we are seeing, and I think this shows how we are still performing very well, is people are doing what they used to do always. They do a lot of search, they do a lot of looking, a lot of thinking, a lot of discovery, it's called. When they are actually ready to buy for real, that's when they get serious, and that's why we are seeing still nice growth rates. Lloyd, if I just may clarify one additional thing, because you also made a comment about that you didn't believe we talked about SEO before. Yes, we did. Last quarter, we also talked about it. Again, just to emphasize, it's a very small component of our overall direct mix, and we see some slight headwinds, but the overall direct channel is growing in absolute numbers. Although that the ratio of direct mix is stable, that is because that's a ratio of two positives. We are growing the absolute channel and the paid channel. In absolute terms, both are going up, but the ratio therefore is staying stable. Yep. Thanks. Seems remarkably stable out there, despite all the noise. Thank you. Your next question comes from the line of Stephen Ju from UBS. Your line is open. All right. Thank you so much. Hi, Glenn, Ewout. I'll ask the AI question in a slightly different way. We talk to a lot of companies. They're talking about how greater usage of AI, whether it's coding or product development, seems to have accelerated the pace of innovation, for folks that have jumped into the pool. I'm just wondering, at Booking, what you're seeing in terms of your pace of product development, whether the experimentation with new products, that sort of thing, has picked up, over the last year or so. Thank you. Yeah. It is an incredible great part of the story of AI, is how it really is improving all aspects of our business. We mentioned a few times about the internal improvements that we're seeing using AI. Certainly, everybody talks about the improvements in coding, but of course, you got to talk about the whole software development life cycle. Actually, it's improving all areas of it, and we're working very hard, and we are seeing real results. Some people have talked about, "Well, we're not seeing much ROI on it." Well, I don't know what they're doing, but we absolutely are seeing benefit from it. It's great, and I believe we will continue to improve. As we know, the models are going to continue to improve, and I believe when they improve, we will improve along with it. That's great. Look to something else that's internal, but it's also external. Look at how we've improved our customer service. We've been talking about how our cost per interaction with a customer are going down. That's because of AI. That's using it, and we're getting better CSAT numbers. The customer likes it, and it costs us less. This is a win-win. It's great. It's not just those easy that everybody knows about. It's throughout the entire business it's being used. It's being used in finance. It's being used in PR. It's being used by our public affairs. They came back with stuff that they're doing. It's great throughout if it's done the right way. Here's the careful thing, though. As I made this very clear to everyone, and Ewout's been echoing it fully. What we do not want is any surprise because people went bonkers with spending money on tokens or somehow doing something that costs a lot more than we thought it would. Ewout, I don't know if you want to talk about it or not, has actually come up with some things to talk about to make sure that we are making sure when we are spending money on AI, we're going to get a good return on it or stop it. Ewout, why don't you talk a little bit about that? Absolutely. Stephen, I think it's really important to emphasize what Glenn just said. We are already seeing an ROI that is positive on our AI investments today as a company. If I'm looking specifically about our AI costs, yes, they're going up. It could be token cost or license fees. It's still at a low single-digit level of our overall technology spend. It's not really a driver of the growth of that line item, but it is going up. We have introduced very specific metrics to measure the benefit of this. Think about, for example, in the engineering world, metrics around adoption, metrics around productivity. The most important one from my perspective is that we are having a cost-aware model routing so that we make sure that for simple tasks, we are using cheaper models, and that for more complex tasks, we're using more expensive models. We're measuring that, for example, by looking at our AI costs over merge requests and our technology cost over merge requests. Actually, those are coming down in a meaningful way. Again, very positive internal usage of AI. Thank you. Your next question comes from the line of Ken Gawrelski from Wells Fargo. Your line is open. Thanks. Just one from me, please. Could you talk about, as you consolidate your B2B operations, what opportunities to invest might emerge in B2B, and how do you view the opportunity, whether it be share gain or just absolute growth? Thank you. Just to make sure everybody's on the same page on this. We have three brands, Agoda, Priceline, Booking, that all had separate B2B operations units. Last year, looking at how we could improve things, it was, "Let's put it together as one unit." All of them were very good. All of them were making good progress, lots of business. Some of them had better aspects than others, different tools, different things that a customer wanted. We said, "Why don't we put it together and get the best of all of them?" That when we go to a potential customer, we can offer them the very best-in-class platform. That's what we're in the progress of doing. It's being headed up by Omri Morgenshtern, who is the CEO of Agoda, incredibly talented individual, and he's leading this, putting it together. It's obvious the part of why it's better to put it together. Your question is, what do we think is going to happen? Well, it's a big business now, but I want to make it even bigger, and I want to make sure that no customer says, "Well, gee, I would have used you, except you have these two things that I wanted, but you only have them in the different units. You don't have it as one platform." By improving the platform, making it best in class, we will be more competitive than we already are, which we are because we have a whole bunch of great big customers, small customers throughout the world. I am really looking forward to the future when you'll be saying, "Gee, wow, that B2B business is really going great." I expect that to happen. Then, Ken, one other additional thought on that. It's very important to be focused in a B2B business on incrementality because it's easy to some extent to grow a B2B business very fast, but cannibalizing your existing B2C business, where the unit economics are much higher. This is a business where you have to be very disciplined from that perspective in terms of being able to measure incrementality. That is something that we are having real expertise in, are always doing, and will continue to do that, of course, also when we put three B2B businesses together in the future. Thank you. Your final question comes from a line of Jed Kelly from Oppenheimer. Your line is open. Hey, great. Thanks for taking my question. Just following up on the B2B, and then those comments you just made. Should we imply that your B2B sort of focusing more on, call it corporate travel clients that might be using you for supply? Are you still going to power some leader-focused brands, too? Thank you. Jed, it does it for everyone and anyone who needs inventory and supply. Of course, though, we want to go with the bigger players. You're able to achieve a lot more with the big players, like, for example, a U.S. bank. We have some of those. Maybe an airline. We got a lot of those. All these bigger players are really the ones that are going to really move the dial, and that includes things like TMCs, which are the corporate travel players who are looking for inventory that we can supply to them. All of them. That doesn't mean we're going to neglect the small players, too. It's good. If it's easy to do it, if it doesn't take time, if it's easy self-service and be able to put it up, that's fine, too. We want to make sure that we are always looking for what's going to be the most efficient use of our resources, bring back the best return to us. In the end, we'll make sure that we're absolutely looking to do the best thing we can in all areas, so long as it does provide that positive return. Thank you. Okay. That is our final question, I think. Is that correct, operator? That is our final question. Great. Well, let me wrap up here. Listen, first a thank you. One thing I got to always put out is the thanks to our dedicated employees. Very important, obviously. It's not a business without the employees. Of course, I have to thank our stockholders, too. Most important, the travelers and the partners whose trust and support has been instrumental to our strong execution and solid performance this quarter. Look, we remain mindful of the current macroeconomic and geopolitical environment. We've successfully navigated periods of uncertainty before, of course, and we remain confident in the enduring resilience of travel demand. As always, we will stay focused on what we can control, and we will continue executing against our long-term strategy. Thank you very much, and good night. This concludes today's conference call. Thank you for your participation, and you may now disconnect.