Analysis
Airbnb Rose 12% After Hours as Revenue Grew 19%
Airbnb shares rose about 12% after hours on Thursday after third-quarter revenue grew 19% to $4.87 billion, above the $4.75 billion expected, and it added a $12 billion buyback.
On the worst day for US stocks in 19 months, Airbnb found a way up. After the close on Thursday, November 5, the company reported third-quarter revenue of $4.87 billion, up 19% from a year earlier and its fastest growth in more than three years, against a consensus of $4.75 billion. Earnings were $3.16 a share, against $2.85 expected. The shares rose about 12% to $188.78 in extended trading, according to Yahoo Finance, recovering in minutes what the market had taken from most of the technology sector during the day.
The rest of the report pointed in the same direction. Gross booking value rose 21% to $27.7 billion, nights and seats booked rose 16% to 155 million, and adjusted EBITDA grew 22% to $2.5 billion, a margin of about 52%. First-time bookers grew 13%, the most since early 2022. Net income was $1.9 billion. The company summed up the quarter in five words: "Airbnb is back in growth mode."
The outlook supported the claim. Airbnb guided fourth-quarter revenue to $3.22 billion to $3.28 billion, growth of 16% to 18% that includes about two points from currency, against a $3.16 billion estimate cited by Benzinga. It now expects full-year revenue growth in the high teens and an adjusted EBITDA margin of about 36%. And it authorised a further $12 billion of share repurchases on top of the $2.7 billion left at the end of September, after buying back $0.7 billion during the quarter.
The buyback says something about cash; the new businesses say something about where growth is meant to come from. Hotels are now a single-digit share of nights booked, and about 35% of guests whose first booking is a hotel come back to book a home. Services such as grocery delivery, car rental and ski gear are expanding, and an exclusive deal with American Express adds more than a million listings to Amex Travel. The company also said its AI assistant resolved about 40% of support issues without a human in the quarter, which helped cut support cost per booking by more than 17%.
Two cautions sit in the same release. The fourth-quarter EBITDA margin is expected to dip slightly from a year earlier, partly because of marketing timing, and free cash flow fell to 29.3% of revenue from 34.7% in the second quarter. An after-hours jump on a day like Thursday also rests on thin trading: Friday's regular session, which opens with the October jobs report, will set the price that counts.