Airbnb Beats Q3 2023 Earnings Estimates Due To One-Time Tax Benefit But Projected Revenue Falls Short

Airbnb (NASDAQ: ABNB) experienced a dip of approximately 3% in after-hours trading on Wednesday following the release of its quarterly financial report. While the company reported robust revenue figures, supported by favorable currency exchange rates, its guidance for the upcoming fiscal quarter fell short of market expectations.

Airbnb’s revenue for the quarter reached $3.40 billion, an increase from last year’s $2.88 billion and exceeding the expected figure of $3.37 billion.

The company also posted a net income of $4.37 billion for the quarter, including a one-time income tax benefit driven by the release of a valuation allowance on certain of our deferred tax assets. Excluding this benefit, Airbnb’s quarterly net income stood at $1.61 billion, in contrast to the $1.21 billion recorded in the same quarter of the previous year.

The company achieved earnings of $6.63 per share, a significant deviation from the anticipated $2.10 per share forecasted by analysts, as reported by LSEG, formerly known as Refinitiv.

Airbnb also disclosed a notable 18% year-over-year revenue growth, highlighting that it recorded a total of 113.2 million nights and experiences bookings for the quarter. This surpassed the 99.7 million reported in the corresponding quarter of the previous year, outperforming the StreetAccount consensus estimate of 112.9 million.

However, the company’s guidance for the fourth quarter was slightly below analysts’ expectations. Airbnb projected revenue in the range of $2.13 billion to $2.17 billion for the upcoming quarter, indicating year-over-year growth between 12% and 14%. This figure fell short of the anticipated $2.18 billion expected by analysts polled by LSEG.

Airbnb’s assessment of the situation included a mention of increased volatility at the start of the fourth quarter. The company expressed a close watch on macroeconomic trends and geopolitical conflicts that could impact travel demand, although they clarified this unpredictability wasn’t specific to any particular region but rather “broad-based” across the board. CFO Dave Stephenson, speaking during a conference call with analysts, emphasized that it was too early to gauge the extent of this volatility.

CEO and co-founder Brian Chesky affirmed that, despite a widely reported disagreement with New York City, Airbnb maintains positive relationships with cities across the globe. Chesky pointed out, “For every headline you read, there are cities that have very workable solutions.”

Airbnb’s financial report also included data on adjusted EBITDA, which amounted to $1.83 billion, marking a 26% year-over-year increase, and free cash flow, which reached $1.31 billion—37% higher than the $958 million reported in the corresponding period of the previous year.

The company also disclosed its ongoing efforts to make Airbnb stays more affordable for consumers. Airbnb noted that while prices in the industry were on the rise, the average nightly price for a one-bedroom listing on their platform in September was $120, only 1% higher than the previous year’s figure, as stated in the company’s letter to shareholders.

Additionally, Airbnb revealed its plans to enhance listing verifications later in the year in the U.S. and four other countries.

Currently, Airbnb is trying to fight legislation in British Columbia that aims to restrict short-term rentals, a move that would require municipal business license numbers to be displayed on rental listings hosted on platforms like Airbnb.

Information for this briefing was found via Airbnb, CNBC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply