Airbnb Tumbles on Weak Outlook, Commentary

Airbnb (ABNB:US) shares fell nearly 11% on Wednesday after the company issued a softer-than-expected outlook for the current quarter. 

The vacation home-rental company continues to lose market share to Booking.com (BKNG:US) and is now forced to lower prices to spur demand. Airbnb said it expects Q2 revenue to come in between $2.35 billion to $2.45 billion, worse than the expected $2.42 billion.

For the first quarter, sales rose 20% to $1.82 billion, ahead of the $1.79 billion consensus. Similarly, the company reported a profit per share of $0.18 to top the expected $0.09. Another positive element was that the gross booking value per nights and experiences booked topped analyst expectations of $168.43 vs $164.50 expected.

On a negative note, the number of Nights and Experiences Booked, a closely-watched financial metric for Airbnb’s business model, came in at 121.1 million. Analysts were looking for 122.3 million. 

More concerningly, the company said it expects year-over-year growth in Nights and Experiences Booked to be lower than revenue growth during the quarter.

“Nights and Experiences Booked will have unfavorable year-over-year comparisons in Q2 2023 as we overlap pent-up 2022 demand following the COVID Omicron variant,” Airbnb said in a shareholder letter.

The Q2 adjusted Ebitda is seen at similar levels on a nominal basis YoY, but lower on a margin basis. The full-year adjusted Ebitda is expected to be “broadly in-line with 2022.”

Congress members Daniel Goldman, Ro Khanna, Jim Langevin and Bill Keating all reported trades involving Airbnb shares. Most recently, Rep. Goldman bought $15,000 - $50,000 worth of Airbnb shares on January 31 when the stock closed at $111.11.