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Airbnb (ABNB) Q2 Earnings Beat Mark, Revenues Increase Y/Y

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Airbnb (ABNB - Free Report) reported earnings of 56 cents per share for second-quarter 2022, which beat the Zacks Consensus Estimate by 36.6%. ABNB incurred a loss of 3 cents and 11 cents per share in the prior quarter and the year-ago quarter, respectively.

Revenues of $2.1 billion increased 57.6% year over year and 39.4%, sequentially.

The year-over-year increase was driven by a continuous improvement in Nights and Experiences Booked. Also, growth in Average Daily Rates and Gross Booking Value remained a tailwind.

Nights and Experiences Booked remained strong in North America, mainly driven by the United States. Also, the same generated higher value in EMEA and Latin America. During the second quarter, ABNB ceased its domestic business operations in China due to complex operating challenges and severe COVID-related lockdowns. This induced a weak performance in the Asia Pacific region.

Growth for gross nights booked remained strong in high-density urban areas. Increasing guest demand for non-urban nights drove active listings for non-urban destinations. Continuous recovery in both longer-distance and cross-border travel owing to a reduction in travel restrictions aided the quarterly performance. 

Airbnb, Inc. Price and EPS Surprise

Airbnb, Inc. Price and EPS Surprise

Airbnb, Inc. price-eps-surprise | Airbnb, Inc. Quote

Quarterly Details

Nights and Experiences Booked were 103.7 million, increasing 25% on a year-over-year basis.

Gross Booking Value amounted to $17 billion, which rose 27% from the prior-year reported figure.

Gross Booking Value per Night and Experience Booked (or Average Daily Rates) was $163.7, up 1% year over year, driven by price appreciation.

In terms of trip length, long-term stays of 28 days or more remained the fastest-growing category in the second quarter. Also, 45% of gross nights booked were from stays of at least seven nights. However, long-term stays constituting 19% of gross nights booked were in line with the same quarter’s level last year.

Operating Results

Adjusted EBITDA for the second quarter was $711 million compared with $217 million reported in the same quarter last year.

Operations and support costs increased 24.1% year over year to $258.3 million. Product development expenses were $375.1 million, up 7.2% year over year. Sales and marketing expenses rose 20.5% from the year-ago quarter’s figure to $379.9 million. General and administrative expenses amounted to $243.3 million, up 11.4% year over year.

For the second quarter, Airbnb reported a net income of $378.8 million. ABNB incurred a net loss of $68.2 million in the second quarter of 2021.

Balance Sheet & Cash Flow

As of Jun 30, 2022, cash and cash equivalents, marketable securities and restricted cash amounted to $9.91 billion, up from $9.34 billion reported on Mar 31, 2022.

Long-term debt as of Jun 30, 2022, was $1.985 billion. ABNB’s long-term debt was $1.984 billion as of Mar 31, 2022.

Unearned fees were $1.98 billion at the second-quarter-end compared with $1.75 billion at the previous-quarter-end.

Net cash provided by operating activities was $800 million for the second quarter of 2022 compared with $1.2 billion in the prior quarter.

Airbnb generated a free cash flow of $795 million in the second quarter.

Guidance

For third-quarter 2022, Airbnb expects revenues between $2.78 billion and $2.88 billion, implying growth between 24% and 29% from the year-ago reported number. The Zacks Consensus Estimate for revenues is pegged at $2.76 billion.

Airbnb anticipates the year-over-year growth rate for the Nights and Experiences Booked to be stable in the third quarter with the growth rate registered in the reported quarter. Management also expects Average Daily Rates to be higher than the year-ago reported figure.

Adjusted EBITDA is expected to be strong, driven by seasonality in the business.

Zacks Rank & Stocks to Consider

Currently, Airbnb has a Zacks Rank #3 (Hold). Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Keysight Technologies (KEYS - Free Report) , ASE Technology (ASX - Free Report) and Asure Software (ASUR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Keysight Technologies has lost 21.1% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.

ASE technology has lost 26.1% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.

Asure Software has lost 33.3% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.