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Airbnb (ABNB) Q3 Earnings Beat Estimates, Revenues Up Y/Y
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Airbnb (ABNB - Free Report) reported third-quarter 2023 earnings of $2.39 per share, which beat the Zacks Consensus Estimate by 14.9% and jumped 33.5% year over year.
Revenues of $3.4 billion increased 18% on a reported basis and 14% on a forex-neutral basis, respectively, year over year. The top line also surpassed the consensus mark by 0.98%.
The year-over-year increase was driven by a continuous improvement in Nights and Experiences Booked. Also, growing Gross Booking Value (GBV) remained a tailwind.
Growing gross nights booked, owing to solid momentum across high-density urban areas and first-time bookers, remained positive. Increasing guest demand and a continuous recovery in cross-border travel aided the quarterly performance.
Strong momentum in active listings acted as a tailwind.
Nights and Experiences Booked were 113.2 million, up 14% on a year-over-year basis. The metric was driven by strong performances in all regions.
GBV amounted to $18.3 billion, which rose 17% from the prior-year quarter’s reported figure. GBV per Night and Experience Booked (or Average Daily Rates) was $161, which increased 3% on a year-over-year basis.
In the reported quarter, active listings increased 19% year over year. Airbnb’s total active listings are now more than 7 million. The company witnessed double-digit supply growth across all regions, with the most growth in Asia Pacific and Latin America.
In terms of trip length, the category of long-term stays of 28 days or more, which accounted for 18% of overall gross nights booked, remained positive. In the reported quarter, gross nights booked in high-density urban areas increased 2.2% year over year and accounted for 49% of gross nights.
Guests traveling more than 3,000 miles increased 18% year over year. Cross-border represented 45% of total gross nights booked, up from 43% in the year-ago quarter.
Operating Results
Adjusted EBITDA was $1.8 billion, up 26% year over year.
Operations and support costs increased 9.9% year over year to $299 million. Product development expenses increased 5.6% year over year to $244 million.
Sales and marketing expenses rose 3.4% from the year-ago quarter’s figure to $367 million. General and administrative expenses were $243 million, up 29.9% year over year.
For the third quarter, Airbnb reported an operating income of $1.5 billion, up 24.4% year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents and short-term investments amounted to $10.96 billion compared with $10.4 billion as of Jun 30, 2023.
Long-term debt, as of Sep 30, 2023, was $1.990 billion compared with $1.989 billion as of Jun 30, 2023.
Net cash provided by operating activities was $1.3 billion for the third quarter of 2023, significantly down from $909 million in the previous quarter.
Airbnb generated a free cash flow of $1.3 billion compared with $900 million in the previous quarter.
Guidance
For fourth-quarter 2023, the company expects revenues between $2.13 billion and $2.17 billion, implying year-over-year growth in the band of 12-14% on a reported basis. The Zacks Consensus Estimate is pegged at $2.17 billion.
Airbnb expects greater volatility in travel demand, subjected to macroeconomic trends and geopolitical conflicts in the fourth quarter.
Adjusted EBITDA margin is expected to increase on year-over-year growth.
Zacks Rank and Stocks to Consider
Currently, Airbnb has a Zacks Rank #3 (Hold).
Here are some better-ranked stocks worth considering in the broader sector.
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Airbnb (ABNB) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Airbnb (ABNB - Free Report) reported third-quarter 2023 earnings of $2.39 per share, which beat the Zacks Consensus Estimate by 14.9% and jumped 33.5% year over year.
Revenues of $3.4 billion increased 18% on a reported basis and 14% on a forex-neutral basis, respectively, year over year. The top line also surpassed the consensus mark by 0.98%.
The year-over-year increase was driven by a continuous improvement in Nights and Experiences Booked. Also, growing Gross Booking Value (GBV) remained a tailwind.
Growing gross nights booked, owing to solid momentum across high-density urban areas and first-time bookers, remained positive. Increasing guest demand and a continuous recovery in cross-border travel aided the quarterly performance.
Strong momentum in active listings acted as a tailwind.
Airbnb, Inc. Price, Consensus and EPS Surprise
Airbnb, Inc. price-consensus-eps-surprise-chart | Airbnb, Inc. Quote
Quarterly Details
Nights and Experiences Booked were 113.2 million, up 14% on a year-over-year basis. The metric was driven by strong performances in all regions.
GBV amounted to $18.3 billion, which rose 17% from the prior-year quarter’s reported figure. GBV per Night and Experience Booked (or Average Daily Rates) was $161, which increased 3% on a year-over-year basis.
In the reported quarter, active listings increased 19% year over year. Airbnb’s total active listings are now more than 7 million. The company witnessed double-digit supply growth across all regions, with the most growth in Asia Pacific and Latin America.
In terms of trip length, the category of long-term stays of 28 days or more, which accounted for 18% of overall gross nights booked, remained positive. In the reported quarter, gross nights booked in high-density urban areas increased 2.2% year over year and accounted for 49% of gross nights.
Guests traveling more than 3,000 miles increased 18% year over year. Cross-border represented 45% of total gross nights booked, up from 43% in the year-ago quarter.
Operating Results
Adjusted EBITDA was $1.8 billion, up 26% year over year.
Operations and support costs increased 9.9% year over year to $299 million. Product development expenses increased 5.6% year over year to $244 million.
Sales and marketing expenses rose 3.4% from the year-ago quarter’s figure to $367 million. General and administrative expenses were $243 million, up 29.9% year over year.
For the third quarter, Airbnb reported an operating income of $1.5 billion, up 24.4% year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash and cash equivalents and short-term investments amounted to $10.96 billion compared with $10.4 billion as of Jun 30, 2023.
Long-term debt, as of Sep 30, 2023, was $1.990 billion compared with $1.989 billion as of Jun 30, 2023.
Net cash provided by operating activities was $1.3 billion for the third quarter of 2023, significantly down from $909 million in the previous quarter.
Airbnb generated a free cash flow of $1.3 billion compared with $900 million in the previous quarter.
Guidance
For fourth-quarter 2023, the company expects revenues between $2.13 billion and $2.17 billion, implying year-over-year growth in the band of 12-14% on a reported basis. The Zacks Consensus Estimate is pegged at $2.17 billion.
Airbnb expects greater volatility in travel demand, subjected to macroeconomic trends and geopolitical conflicts in the fourth quarter.
Adjusted EBITDA margin is expected to increase on year-over-year growth.
Zacks Rank and Stocks to Consider
Currently, Airbnb has a Zacks Rank #3 (Hold).
Here are some better-ranked stocks worth considering in the broader sector.
Ballard Power System (BLDP - Free Report) , NetEase (NTES - Free Report) and Upstart (UPST - Free Report) are some better-ranked stocks that investors can consider in the broader sector. While BLDP and NTES carry a Zacks Rank #1 (Strong Buy) each, UPST carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ballard Power System shares have declined 31.1% year to date. BLDP is set to report its third-quarter 2023 results on Nov 7.
NetEase shares have gained 49.2% year to date. NTES is set to report its third-quarter 2023 results on Nov 16.
Upstart shares have returned 86% year to date. UPST is set to report its third-quarter 2023 results on Nov 7.