Airbnb (ABNB Quick QuoteABNB - Free Report) reported adjusted earnings of 86 cents per share for second-quarter 2024, which declined 12.2% year over year. The bottom line missed the Zacks Consensus Estimate by 6.5%.

Revenues of $2.75 billion increased 11% on a reported basis, as well as on an FX-neutral basis, year over year. The top line lagged the Zacks Consensus Estimate by 0.1%.

The year-over-year increase was driven by driven by the growth of nights stayed on the platform. Continuous improvement in the Nights and Experiences Booked metric acted as a tailwind.

A modest increase in Average Daily Rate was a plus.

These factors aided growth in the company’s Gross Booking Value (GBV) in the second quarter.

Also, a solid momentum in Airbnb app downloads contributed well.

Quarterly Details

Nights and Experiences Booked were 125.1 million, up 9% on a year-over-year basis. The metric was driven by strong performances in all regions, especially the Asia Pacific and Latin America.

GBV amounted to $21.28 billion, which rose 11% from the prior-year quarter’s reported figure.

GBV per Nights and Experiences Booked (or Average Daily Rates) were $169.53, which grew 2% on a year-over-year basis.

In the reported quarter, the company witnessed a 25% year-over-year increase in app downloads globally, driven by strong growth in the United States. 

In addition, nights booked on the app during the quarter increased 19% year-over-year and comprised 55% of total nights booked.

Operating Results

Adjusted EBITDA was $894 million, up 9% from the prior-year quarter.

Operations and support costs, product development expenses, and sales and marketing expenses were $338 million, $519 million and $573 billion, increasing 6.6%, 15.1% and 17.9%, respectively, year over year. General and administrative expenses were $315 million, up 14.5% year over year.

For the second quarter, Airbnb reported an operating margin of 18.1%, which contracted 300 basis points (bps) from the prior-year quarter.

Balance Sheet & Cash Flow

As of Jun 30, 2024, cash and cash equivalents and short-term investments amounted to $11.3 billion compared with $11.1 billion as of Mar 31, 2024.

Long-term debt, as of Jun 30, 2024, was $1.993 billion compared with $1.992 billion as of Mar 31, 2024.

Net cash provided by operating activities was $1.1 billion for the second quarter of 2024, down from $1.9 billion in the previous quarter.

Airbnb generated a free cash flow of $1.0 billion in the second quarter.

Guidance

For the third quarter of 2024, the company expects revenues between $3.67 billion and $3.73 billion, implying year-over-year growth of 8-10% on a reported basis. The Zacks Consensus Estimate is pegged at $3.86 billion.

Airbnb anticipates take rate in in the third quarter will be higher on a year-over-year basis, primarily due to the timing of bookings and cross-currency transaction fees.

The adjusted EBITDA margin is expected to decrease year over year.

For 2024, the company expects an adjusted EBITDA margin of at least 35%.

Zacks Rank and Stocks to Consider

Currently, Airbnb has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Badger Meter (BMI Quick QuoteBMI - Free Report) , Arista Networks (ANET Quick QuoteANET - Free Report) , and Apple (AAPL Quick QuoteAAPL - Free Report) . While Badger Meter and Arista Networks sport a Zacks Rank #1 (Strong Buy) each, Apple carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Badger Meter shares have gained 32.7% in the year-to-date period. The long-term earnings growth rate for BMI is currently projected at 17.92%.

Arista Networks shares have gained 41.5% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 17.20%.

Apple shares have gained 16.4% in the year-to-date period. The long-term earnings growth rate for AAPL is currently projected at 12.69%.