Airbnb beats earnings estimates for the third quarter, helped by continued strong international growth. But ABNB stock fell Thursday, after the company also warned about volatility slowing travel for the rest of the year.
In earnings published late Wednesday, the San Francisco-based company said it earned $6.63 per share on sales of $3.4 billion for the quarter ending Sept. 30. Analysts expected the home-sharing company to report earnings of $2.11 per share on sales of $3.37 billion, according to FactSet.
The per-share number may not be comparable, as Airbnb's Q3 net income of $4.4 billion included a one-time income tax benefit of $2.8 billion, the company said.
On the stock market today, ABNB stock fell 3.3% to 115.50.
ABNB Stock: 'Volatility In Q4'
Airbnb's results represent an 18% year-over-year increase in sales.
For the current fourth quarter, Airbnb projected sales of $2.15 billion. Analysts were expecting $2.18 billion, according to FactSet.
"Q3 was a record-breaking summer travel season for our business," the company's third-quarter shareholder letter said. "We are seeing greater volatility early in Q4, and are closely monitoring macroeconomic trends and geopolitical conflicts that may impact travel demand."
On the company's earnings call, Chief Financial Officer David Stephenson added that the company has not narrowed down a single root cause for the volatility.
"Just broadly, what we're seeing is a little bit of softness in our overall kind of demand relative to Q3," he said.
Airbnb Gross Booking Top Estimates
Active listings on Airbnb grew 19% in the third quarter from the same period last year, with "double-digit supply growth across all regions and market types," the company said.
Further, the company noted international markets were gaining momentum for booking. Cross-border nights booked grew by 17% in the third quarter compared to a year ago, the company said.
Gross booking value climbed 17% year over year to $18.3 billion, topping estimates of $17.9 billion.
The average daily rate customers pay for a stay — a closely watched metric for investors — climbed 3% year over year to $161, ahead of estimates of $158.
William Blair analyst Ralph Schackart maintained an overweight rating for ABNB stock following the report.
"While there could be potential cyclicality in the stock's performance should consumers pull back travel discretionary spend in the wake of a potential recession, we believe that Airbnb is the best positioned as a leading platform for short-term rentals and home sharing through the long term," Schackart wrote in a client note.
AI Agent
But other analysts are more bearish. Morgan Stanley analyst Brian Nowak maintained an underweight rating on ABNB stock following the earnings report, with a 105 price target that is about 10% below its current price.
"Room night growth is slowing, which, in our view, could limit the multiple investors are willing to pay," Nowak wrote in a client note.
Chief Executive Brian Chesky has said in recent media appearances that he believes the company needs to improve its systems to keep pace with its growth. On the earnings call, he highlighted some of those efforts. Further, he envisioned how generative AI could boost usage of the app.
"Generative AI could be really, really powerful," Chesky said. "It can match you in a way that you've never seen before. So, imagine Airbnb being almost like the ultimate travel agent as an app. We think this can unlock opportunities that we've never seen."
ABNB stock has gained just under 40% this year and was added to the S&P 500 in September.
