Hey Thomas, I'm new to your publication. I am wondering if you could share how you calculate incremental margins? Also how come you have single digit actual margins for booking holdings while their financial statements show roughly double digit >20% ebitda margins?
Incremental Margin = $2,432/$24,908 = 9.8% (vs 4.2% on an absolute margin basis)
You can do trailing 4 quarters to calculate through 1Q25 vs 1Q24. You can also look at the individual quarter's Y/Y which for 1Q25 was 9.4% (vs 4.4% on an absolute margin basis)
Hey Thomas, I'm new to your publication. I am wondering if you could share how you calculate incremental margins? Also how come you have single digit actual margins for booking holdings while their financial statements show roughly double digit >20% ebitda margins?
To calculate incremental margins for example, just take YE24 to make it easy:
2024 EBITDA - 2023 EBITDA = Incremental EBITDA $
2024 GBV - 2023 GBV = Incremental GBV $
Incremental Margin = Incremental EBITDA $ / Incremental GBV $
So for UBER:
Incremental EBITDA = $6,484m - $4,052m = $2,432m
Incremental GBV = $162,773m - $137,865m = $24,908m
Incremental Margin = $2,432/$24,908 = 9.8% (vs 4.2% on an absolute margin basis)
You can do trailing 4 quarters to calculate through 1Q25 vs 1Q24. You can also look at the individual quarter's Y/Y which for 1Q25 was 9.4% (vs 4.4% on an absolute margin basis)
Great post!