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Airbnb Inc.
ABNB 2.00%
posted its most profitable quarter to date, with record revenues bolstering the case that travel demand remains strong despite the continued challenges of rampant inflation.
The home-sharing company said its results were driven by higher bookings in cities, stronger cross-border travel and longer stays. Airbnb said nights and experiences booked in the third quarter, or activities booked through the platform, were the highest ever, up 25%.
The San Francisco-based company posted revenue of $2.88 billion for the quarter ended Sept. 30. Analysts had expected $2.85 billion in revenue.
July to September is typically Airbnb’s busiest period, due to the summer holidays.
Airbnb said it expects revenue growth to continue in the current quarter, citing a backlog of future bookings and upcoming bookings being canceled less frequently, among other factors, four weeks into the period. The company expects revenue for the fourth quarter between $1.8 billion and $1.88 billion. Analysts polled by FactSet had expected $1.87 billion before the forecast was issued.
“As the impact of the pandemic recedes but macro conditions persist, we expect a continued, albeit choppy, recovery in cross-border travel to be a further tailwind for future results,” the company said in a letter to shareholders.
Shares of Airbnb fell more than 4% in after-hours trading on Tuesday. Shares closed at $109.05, up 2%, during the regular trading session.
Airbnb posted its first profit of $1 billion or more since going public in 2020. The company posted a profit of $1.21 billion, beating analysts’ estimates of $1.03 billion and beating the previous period’s profit of 834 millions of dollars.
Airbnb’s number of nights and experiences booked, as well as gross bookings (the value of bookings made on its platform) were up 25% and 31%, respectively, in the quarter. The number of nights and experiences fell slightly below analysts’ expectations, while gross bookings beat analysts’ estimates.
After the Covid-19 pandemic initially crushed Airbnb’s home rental business, the company has rebounded strongly as more customers work remotely and travel restrictions are lifted. Local travel remains strong, and long-haul and cross-border travel improved in the third quarter, Airbnb said. Stays of 28 days or more accounted for 20% of bookings in the quarter, flat from the same period last year.
“We believe new use cases, including extended stays and non-urban travel, are here to stay as millions of people have new flexibility in where they live and work,” Airbnb said in its letter to shareholders.
Write to Denny Jacob at [email protected]
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