Airbnb's ($ABNB) financial performance for the second quarter has revealed a concerning downward trend, with earnings falling more than anticipated as costs surged. Despite the vacation rental giant's revenue surpassing Wall Street's expectations, the overall financial picture appears mixed, prompting a deeper analysis of the company's metrics.
In the three months leading up to June 30, Airbnb reported earnings per share of $0.86, a decline from $0.98 during the same period last year. This figure fell short of the consensus estimate by Capital IQ, which had predicted earnings of $0.91. Meanwhile, revenue displayed a year-over-year increase of 11%, amounting to $2.75 billion and narrowly exceeding the Street's estimation of $2.74 billion.
The company's bookings also reported growth; nights and experiences booked reached 125.1 million—up 9% from the previous year—though this figure did not meet the expectations set by Visible Alpha, which anticipated 126.4 million bookings. Expenses, however, surged significantly during this quarter, climbing to $2.25 billion from $1.96 billion.
This increase has been attributed to rises in both marketing and administrative costs, raising concerns among investors who reacted by sending shares down 14% in after-hours trading. A key indicator of the company's performance, gross booking value, which encompasses host earnings, service fees, cleaning fees, and taxes, saw an impressive jump of 11% on an annual basis, totaling $21.2 billion, as highlighted in a shareholder letter.
Looking forward, Airbnb has provided guidance for the third quarter, projecting revenue growth of 8% to 10% year-over-year, forecasting revenue figures between $3.67 billion and $3.73 billion. In contrast, analysts polled by Capital IQ are targeting a higher consensus at approximately $3.84 billion.
Airbnb cautioned that the annual growth rate of nights and experiences booked is expected to slow during the current three-month period. They noted a growing trend of shorter booking lead times globally, alongside indications of reduced demand from US guests. Additionally, the company anticipates that their adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin will decline year-over-year in the third quarter, largely due to the expected increase in marketing expenses anticipated to outpace revenue growth.
Nevertheless, for the fiscal year 2024, Airbnb has reaffirmed its guidance for an adjusted EBITDA margin of at least 35%. Stock information shows a current price of $112.00, reflecting a change of -18.47, which corresponds to a percentage change of -14.16..