Asia-Pacific and Latin America growth contributions, the pioneer of shared accommodation Airbnb's Q3 revenue increased by 10%, Q4 guidance slightly disappointing, surged after hours then turned down | Earnings report insights

Thanks to the continued strong growth in overseas markets, the pioneer of shared accommodation, Airbnb, reported third-quarter revenue slightly above market expectations, barely maintaining double-digit growth. It is expected that demand will be strong in the fourth quarter, coinciding with the major holiday at the end of the year, but the revenue guidance for the quarter fell short of expectations, causing the stock price to surge and then retreat after hours.

On November 7th, Eastern Time, Airbnb announced its financial data for the third quarter of 2024, as well as its performance guidance for the fourth quarter.

1) Key Financial Data:

Revenue: Third-quarter operating revenue was $3.73 billion, a year-on-year increase of 10%, with analysts expecting $3.72 billion, compared to an 11% year-on-year increase in the second quarter.

EPS: Third-quarter earnings per share (EPS) were $2.13, a year-on-year decrease of 68%, with analysts expecting $2.14, compared to a 12.2% year-on-year decrease to $0.86 in the second quarter.

EBITDA: Adjusted EBITDA for the third quarter was $1.96 billion, a year-on-year increase of 7%, with analysts expecting $1.86 billion, compared to a 9% year-on-year increase in the second quarter; the adjusted EBITDA margin for the third quarter was 52%, with analysts expecting 50%.

Accommodation and Experience Bookings: The number of accommodation and experience bookings in the third quarter was 122.8 million, a year-on-year increase of 8%, with analysts expecting 121.27 million, compared to a 9% year-on-year increase to 125.1 million in the second quarter.

GBV: The total gross booking value (GBV) for the third quarter was $20.1 billion, a year-on-year increase of 10%, with analysts expecting $19.8 billion, compared to an 11% year-on-year increase in the second quarter.

2) Performance Guidance:

Revenue: Fourth-quarter revenue is expected to be between $2.39 billion and $2.44 billion, with analysts expecting $2.42 billion.

Accommodation and Experience Bookings: Fourth-quarter accommodation and experience bookings are expected to grow by more than 8.5%, with analysts expecting a growth of 7.7%.

EBITDA: The adjusted EBITDA margin for the full year is expected to be 35.5%, while the company originally expected at least 35%.

After the earnings report was released, Airbnb (ABNB), which had risen nearly 4.6%, initially surged after hours, with the after-hours increase reaching 15%, but quickly retreated and turned negative, at one point dropping over 4%.

Third Quarter EPS Slightly Below Expectations, Accommodation and Experience Bookings Reach Record Highs for the Same Period

The financial report shows that Airbnb's revenue growth in the third quarter slowed slightly to 10% compared to the second quarter, but still exceeded analyst expectations. However, the EPS for the third quarter was slightly below expectations, as last year's EPS surged due to one-time income tax-related gains, resulting in a significant year-over-year decline in this year's third quarter EPS.

Airbnb stated that the revenue growth in the third quarter was driven by a steady increase in the number of nights booked on the platform, while the average daily rate (ADR) for nights booked increased slightly by 1% year-over-year to $164.

In the third quarter, Airbnb's accommodation and experience bookings reached a record high for the same period in the company's history. Airbnb noted that bookings increased by 8% year-over-year in the third quarter, although growth slowed at the beginning of the quarter, it accelerated each month thereafter, and by the end of the quarter, it had rebounded to double-digit growth.

The financial report shows that the number of bookings through the Airbnb app continued to surge in double digits. In the third quarter, 58% of total nights booked were completed through the mobile app, with app bookings increasing by 18% year-over-year, slightly lower than the 19% growth in the second quarter, but the proportion exceeded the 55% in the second quarter.

Third Quarter Bookings in Asia-Pacific Increased by 19%, Latin America Increased by 15%

By region, Airbnb reported that accommodation and experience bookings increased year-over-year across all regions in the third quarter, with growth in the Asia-Pacific and Latin America regions continuing to lead.

In the third quarter, bookings in the Asia-Pacific region increased by 19% year-over-year, maintaining the same growth rate as the second quarter, primarily driven by cross-border travel, which saw a 23% year-over-year increase in bookings. Airbnb stated that the recovery of its business in the Asia-Pacific region has been gradual, and the company is encouraged by the recovery of outbound travel from China.

In the third quarter, bookings in Latin America increased by 15%, a slowdown from the 17% growth in the second quarter. In Latin America, Airbnb found that travel within the region continued to maintain strong momentum, with domestic night bookings increasing by 21% year-over-year in the third quarter.

Airbnb noted that in North America, the growth of bookings at the beginning of the third quarter was slow but improved thereafter. In the Europe, Middle East, and Africa (EMEA) region, bookings in the third quarter saw a slight increase compared to the second quarter, as events like the Paris Olympics significantly boosted bookings.

Strong Demand Expected in the Fourth Quarter, but Revenue Guidance Average Slightly Below Wall Street Expectations

In terms of guidance, Airbnb stated that based on strong momentum in September, the company had a good start to the fourth quarter and expects strong trends in both long-term and short-term booking lead times in core and expanding markets. However, the revenue guidance provided by Airbnb is still slightly below Wall Street expectations.

Based on the guidance range, Airbnb expects fourth-quarter revenue to grow by 8.6% to 10.9% year-over-year. Calculating the midpoint, revenue is expected to grow by 9.8% year-over-year, while analysts expect revenue to be close to the high end of the guidance range, anticipating a growth of 10%.

Airbnb mentioned that if last year's fourth-quarter one-time gains related to gift cards are excluded, the revenue growth for this year's fourth quarter could be about 2 percentage points higher. Additionally, Airbnb noted that the core profit margin in the fourth quarter will decline due to increased marketing and product development expenses