Airbnb (NASDAQ:ABNB) has disclosed its third-quarter 2023 earnings, reporting earnings of $2.39 per share, surpassing the Zacks Consensus Estimate by a remarkable 14.9%. This impressive performance represents a notable 33.5% increase compared to the same quarter in the previous year.
The company’s revenues also exhibited growth, reaching $3.4 billion, marking an 18% increase on a reported basis and a 14% increase on a forex-neutral basis, year over year. This revenue growth exceeded the consensus estimate by 0.98%.
Key Drivers of Year-Over-Year Growth
The year-over-year revenue increase was primarily driven by the continuous improvement in Nights and Experiences Booked. Airbnb also experienced a growing Gross Booking Value (GBV), which contributed positively to the quarterly performance.
Notably, the growth in gross nights booked can be attributed to solid momentum in high-density urban areas and first-time bookers. Additionally, increasing guest demand and the ongoing recovery in cross-border travel played pivotal roles in this strong quarterly performance.
Airbnb also reported robust momentum in active listings, further bolstering its position in the market.
Detailed Performance Metrics
Nights and Experiences Booked reached a total of 113.2 million, marking a 14% increase on a year-over-year basis. This growth was observed across all regions.
GBV amounted to $18.3 billion, representing a 17% increase compared to the prior-year quarter’s reported figure. GBV per Night and Experience Booked (or Average Daily Rates) reached $161, reflecting a 3% year-over-year increase.
In the third quarter, Airbnb reported a 19% year-over-year increase in active listings, surpassing a total of 7 million active listings. This growth was notable across all regions, with Asia Pacific and Latin America experiencing the most significant expansion.
Long-term stays of 28 days or more, accounting for 18% of overall gross nights booked, remained a positive category. Gross nights booked in high-density urban areas increased by 2.2% year over year, representing 49% of gross nights.
Airbnb reported an 18% year-over-year increase in guests traveling more than 3,000 miles. Cross-border travel represented 45% of total gross nights booked, up from 43% in the year-ago quarter.
Operational Highlights
Adjusted EBITDA reached $1.8 billion, marking a 26% increase compared to the previous year. Operational and support costs, product development expenses, sales and marketing expenses, and general and administrative expenses exhibited year-over-year increases, reflecting the company’s investments in various areas.
For the third quarter, Airbnb reported an operating income of $1.5 billion, representing a substantial 24.4% increase compared to the same quarter in the previous year.
Financial Snapshot
As of September 30, 2023, Airbnb held cash and cash equivalents and short-term investments totaling $10.96 billion, compared to $10.4 billion as of June 30, 2023. The company’s long-term debt remained relatively steady at $1.990 billion.
The net cash provided by operating activities for the third quarter of 2023 reached $1.3 billion, signifying a significant increase from the previous quarter. Airbnb generated a free cash flow of $1.3 billion, compared to $900 million in the previous quarter.
Guidance for Q4 2023
Airbnb expects revenues between $2.13 billion and $2.17 billion for the fourth quarter of 2023, implying year-over-year growth in the range of 12-14% on a reported basis. The Zacks Consensus Estimate is projected at $2.17 billion.
The company anticipates greater volatility in travel demand in the fourth quarter, subject to macroeconomic trends and geopolitical conflicts. Additionally, Airbnb expects an increase in the Adjusted EBITDA margin on a year-over-year basis.
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