In the second quarter, Airbnb reported revenue that was in line with expectations while beating Wall Street predictions for profitability. The business also disclosed a $2 billion share repurchase plan.
Despite what seemed to be a great quarter, shares were down around 9 percent after hours, indicating Wall Street was expecting higher growth and a revenue beat. At the conclusion of the quarter, the corporation said that flight disruptions had an impact.
Airbnb Jumps to $2.1b Revenue with Record Breaking Bookings
Earnings per share were $0.56 as opposed to the $0.43 experts had predicted. Refinitiv estimates that revenue was $2.10 billion as opposed to analysts’ expectations of $2.11 billion.
Similar to Uber, Airbnb profited from a rise in consumer spending on services rather than products. The company’s most profitable second quarter to date was aided by revenue growth of 58 percent year over year to $2.1 billion. Even yet, the rise was less rapid than it was the previous quarter when the revenue increased by 70% compared to the first quarter of 2020.
From a $68 million loss during the same quarter last year, Airbnb’s net income jumped to $379 million this time around.
The business said that it has adjusted its operations as travel continues to shift because it restricted expenditure during the pandemic’s peak, which helped make it leaner and more focused. However, it wasn’t completely protected from a spike in canceled flights.
Airbnb CFO Dave Stephenson said on a call with investors,
“We did see some elevated cancellations in the back of the quarter relative to our forecast, we believe that some of the elevated cancellations were related to flight cancellations around the world, but it was mostly in North America towards the end of Q2 2022″
Despite challenges from foreign exchange swings, particularly the decreasing euro relative to the dollar, Airbnb predicts record revenue during the third quarter. In contrast to StreetAccount’s projection of $2.77 billion, it projected third-quarter revenue to be in between $2.78 billion and $2.88 billion. The business claims that on July 4, it smashed its single-day revenue record, which portends a successful summer.
CEO Brian Chesky addressed that concern,
“Free cash flow was $795 million, and we had adjusted EBITDA of $711 million.. if you exclude FX, that’s $764 million. So what we’re actually seeing is some metronomic improvements in our free cash flow year over year and I expect that the coming quarter is going to be extremely strong for us.”
Airbnb’s free cash flow fell quarter over quarter, which might explain why the stock is down. Airbnb claimed more than 103 million nights and experiences booked in the second quarter. It’s the company’s highest quarterly total ever, but it falls short of StreetAccount’s prediction of 106.4 million nights and experiences booked.
In the second quarter, gross booking value, which Airbnb uses to measure host revenues, service fees, cleaning fees, and taxes, totaled $17 billion, a 27 percent increase year over year. This was a slower rate of increase than the 67 percent recorded in the first quarter.
While many businesses are calling staff back to work, long-term stays, in which visitors stay in a house for 28 days or more, remained Airbnb’s fastest-growing sector, with a 25% increase over the previous quarter.
According to the firm, gross nights booked for cross-border travel exceeded pre-pandemic levels throughout the quarter and more than quadrupled when compared to the same quarter last year.
In 2019, average daily costs increased by 40% compared to pre-pandemic levels, hitting $164. This is a 7% increase over the same quarter last year, disregarding the impact of currency movements. The business expects ADR to be flat year on year in the third quarter.