Airbnb’s third-quarter earnings fell slightly short of Wall Street expectations, although the company managed to surpass revenue estimates.
The vacation rental platform reported $3.73 billion in revenue for the quarter, an increase of 10% from the same period last year, beating analysts’ forecast of $3.72 billion. However, the company posted earnings of $2.13 per share, which was just below the expected $2.14.
Despite the earnings miss, Airbnb’s stock saw a small decline of about 3% in after-hours trading, as the company faces a mixed financial picture. Its net income of $1.37 billion, or $2.13 per share, represents a significant drop compared to the $4.37 billion, or $6.63 per share, reported for the same quarter in 2022, which included a one-time $2.8 billion tax benefit.
In a letter to shareholders, Airbnb highlighted its focus on expanding beyond its traditional core markets. The company has been working to increase its presence in under-penetrated regions globally, noting that the growth rate of nights booked in these expansion markets was double that of its core markets during Q3.
“While we remain focused on accelerating growth, we are also preparing for Airbnb’s next chapter, which will take us beyond accommodations,” the company stated.
The company’s adjusted EBITDA for the quarter came in at $2 billion, marking a 7% year-over-year increase, and exceeding analyst expectations of $1.86 billion. Gross booking value, which tracks host earnings, service fees, and taxes, reached $20.1 billion, surpassing the $19.9 billion estimate. Airbnb reported an 8% increase in nights and experiences booked, totaling 123 million, slightly above the expected 121.4 million.
Airbnb’s average daily rate (ADR) rose by 1% to $164, while its international markets, particularly Asia Pacific and Latin America, showed strong booking growth, with increases of 19% and 15%, respectively. The company also noted growth in North America, though bookings started slower at the beginning of the quarter.
For the fourth quarter, Airbnb provided guidance of revenue between $2.39 billion and $2.44 billion, in line with analysts’ expectations of $2.42 billion. The company expressed optimism about demand trends in both core and expansion markets, expecting year-over-year growth in nights and experiences booked to exceed Q3’s performance.
Airbnb’s stock, which saw substantial growth during the post-pandemic “revenge travel” period, has been more modest in 2023, with a 7% year-to-date increase, underperforming the broader S&P 500.
CNBC, the Wall Street Journal, and Investor’s Business Daily contributed to this report.
