Airbnb results beat expectations amid continued travel rebound, but stock falls after running higher this year

Date:

By Bill Peters

Company also said it plans to expand beyond its core product offering

Vacation-home rental platform Airbnb Inc. on Thursday reported second-quarter results and a third-quarter sales forecast that topped Wall Street’s estimates, as people sought longer stays and bigger properties in higher-priced areas amid an extended rebound in travel.

Still, shares fell 4.2% in after-hours trading, after a big advance higher so far this year.

The company — whose platform allows owners of properties of all kinds to rent them out to travelers — said it expected third-quarter sales of $3.3 billion to $3.4 billion. That was above FactSet estimates for $3.23 billion. It also said it expected a “modest” increase from the second quarter in nights booked.

For the second quarter, Airbnb (ABNB) reported net income of $650 million, or 98 cents a share, compared with $379 million, or 56 cents a share, in the same quarter last year.

Revenue climbed 18% to $2.48 billion, compared with $2.1 billion in the prior-year quarter. The sales figure, executives said in the company’s second-quarter shareholder letter, reflected “continued strong travel demand.”

Gross bookings came in at $19.1 billion. Customers booked 115.1 million nights and experiences with Airbnb during the quarter.

Analysts polled by FactSet expected Airbnb to report earnings per share of 80 cents, on revenue of $2.42 billion and gross bookings of $18.9 billion.

Executives issued the results and forecast as the travel industry’s rebound from pandemic lockdowns continues despite concerns about the impact of price increases on basic necessities over the past year. But with more people still working remotely, longer-term stays during the second quarter held steady when compared with the prior quarter, at 18% of the total nights booked during the period, according to Airbnb’s letter to shareholders.

Management also said more travelers were coming back to cities. They were also traveling longer distances. Cross-border nights booked rose 16% year over year during the quarter. The company has tried to expand internationally, in countries like Germany and Brazil, but executives said “the mix of international travel hasn’t yet returned to pre-pandemic levels.”

Airbnb on Thursday also said it planned to “expand beyond” its core product offering. The company already helps owners connect with so-called “co-hosts,” who can help with preparing, cleaning and maintaining the guest quarters.

The company, meanwhile, has redesigned its pricing tools to help hosts add discounts and compare their prices with those of nearby listings. For guests, it has also added features to make planning trips easier.

“Since offering these tools, we’ve seen Hosts begin to lower their prices, with more of them offering weekly and monthly discounts,” executives said in the shareholder letter. “We believe these changes will continue to drive greater affordability and value for guests, ultimately supporting bookings growth.”

Executives said that the discounts had a “moderating effect” on the company’s average daily rates overall. But they said foreign exchange and a shift to higher-priced listings would act as a counterweight to those discounts.

Shares of Airbnb are up 65.1% so far this year. By comparison, the S&P 500 SPX has risen 17.9% over that period.

-Bill Peters

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

 

(END) Dow Jones Newswires

08-03-23 1635ET

Copyright (c) 2023 Dow Jones & Company, Inc.

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