Jamie Spencer
Airbnb Reports Mixed First-Quarter Earnings
Airbnb’s first-quarter earnings were mostly in line with expectations, but the company issued a disappointing revenue forecast for the upcoming period, causing shares to decline more than 5%. The company reported earnings of 24 cents per share, exactly matching analysts’ expectations. Revenue for the quarter reached $2.27 billion, slightly exceeding estimates of $2.26 billion, marking a 6% increase from the same period last year. However, net income fell to $154 million, or 24 cents per share, down from $264 million, or 41 cents per share, in the first quarter of 2024.
Disappointing Revenue Outlook for Q2
Looking ahead, Airbnb provided a revenue forecast for the second quarter that was below Wall Street’s expectations. The company expects revenue between $2.99 billion and $3.05 billion, with a midpoint of $3.02 billion, while analysts had projected $3.04 billion in revenue for the period. Airbnb attributed the slight miss to softer results in the U.S. market, which it believes were driven by broader economic uncertainties. Despite strong year-over-year growth in North America, the company experienced “softness” in travel from Canada to the U.S. toward the end of the quarter.
Impact of Economic Uncertainty on U.S. Market
Airbnb acknowledged the challenges posed by economic uncertainty, particularly in the U.S. market. The company noted that while it saw strong growth in North America, domestic travel in the U.S. accounted for most of the bookings. It also highlighted that travel from Canada to the U.S. had slowed, contributing to the weaker-than-expected results. This softness in cross-border travel is attributed to ongoing macroeconomic factors, including concerns surrounding President Donald Trump’s tariffs on imports, which are impacting costs and consumer spending.
Global Performance and Strong Growth in Latin America
Outside of North America, Airbnb experienced solid growth, particularly in Latin America, which remains its fastest-growing region. The company reported an 11% increase in nights and experiences booked outside of North America, with notable growth from Canadian travelers visiting Mexico, where bookings jumped 27% year-over-year in March. While Airbnb expects some moderation in bookings for the current period, the company noted strong demand for Easter travel, especially in Latin America, which helped drive growth in April.
Platform Updates and Host Quality Improvements
Airbnb teased upcoming updates to its platform, which will go beyond accommodations and offer new features for users. The company also highlighted its efforts to improve host quality, announcing that it had removed 450,000 listings as part of its updated host quality system implemented in 2023. These changes are part of Airbnb’s ongoing efforts to enhance user experience and maintain the quality of listings on its platform.
Looking Ahead: Earnings Call and Platform Evolution
As Airbnb prepares for the rest of the year, executives will host an earnings call with analysts at 4:30 p.m. ET to discuss the quarter’s results and provide further insights into the company’s strategy moving forward. The company’s focus on global growth, platform updates, and addressing market challenges will likely play a key role in shaping its performance in the coming quarters.
