Airbnb Reports $4.4 Billion Earnings in 3Q, Crediting Tax Benefit and Strong Revenue


On Wednesday, Airbnb (NASDAQ:ABNB) announced robust financial results for the third quarter, with earnings of $4.37 billion. This exceptional performance was driven by a significant tax benefit and higher-than-expected revenue during the peak summer travel season.

However, the company’s forecast for fourth-quarter revenue failed to meet Wall Street’s expectations, causing a drop of over 2% in its shares during after-hours trading. Excluding the tax benefit, Airbnb reported a net income of $1.6 billion, a notable increase from the previous year’s $1.2 billion.

Revenue for the quarter climbed by 18% to reach $3.4 billion, with a 14% surge in bookings and slightly elevated average prices for short-term rentals. Analysts had anticipated revenue of $3.37 billion, according to a FactSet survey.

Airbnb’s prediction for fourth-quarter revenue falls between $2.13 billion and $2.17 billion, falling short of Wall Street’s projection of $2.18 billion. The company cited growing volatility early in the fourth quarter and expressed vigilance regarding macroeconomic trends and geopolitical conflicts that could impact travel demand.

In the third quarter, Airbnb reported booking 113.2 million nights and experiences, marking a 14% increase from the prior year, slightly surpassing analysts’ expectations. Nonetheless, the company anticipates that the growth in nights booked will “moderate” in the fourth quarter compared to the third.

The average daily rental rate experienced a 3% rise, reaching $161. Notably, one-bedroom listing prices, a recent focus for Airbnb, saw a more modest 1% increase, which the company asserted was lower than the increase in hotel rates.

Airbnb’s CEO, Brian Chesky, emphasized the potential for even more competitive pricing. He noted that hosts who lower their prices often tend to see increased earnings. Additionally, Airbnb’s strategy of adding more listings, which grew by 19% compared to the previous year in the third quarter, particularly in Asia and Latin America, is expected to help stabilize prices.

Airbnb has recently made adjustments to provide consumers with a clearer understanding of the total booking cost earlier in the search process. The company has also empowered hosts with more information about the prices charged by nearby listings, enabling them to adjust their prices more effectively to match demand.

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