Airbnb Shares Plunge Despite Earnings Rise, Plan $2B Share Buyback

Airbnb Inc. said Tuesday that it had its first profitable second quarter as a public company and that it is so confident in its business that it is buying back $2 billion of its stock.

“Our second quarter results show that Airbnb has achieved growth and profitability at scale,” CEO Brian Chesky said during prepared remarks on the company’s earnings call.


shares fell as much as 9.5% after hours after rising nearly 5% in the regular session to close at $116.34. They are up 14% in the last five days.

The lodging reservation company reported second-quarter net income of $379 million, or 56 cents per share, compared with a loss of $68 million, or 11 cents per share, in the same period last year. Revenue rose to $2.19 billion from $1.34 billion in the year-ago quarter.

Analysts polled by FactSet had forecast earnings of 45 cents per share on revenue of $2.1 billion.

Airbnb said travel demand is strong almost everywhere. The company’s gross bookings were $17 billion, up 27% year over year and up 73% from the pre-pandemic quarter of 2019. Customers booked 103.7 million nights and experiences, the highest ever and a 24% increase compared to the 2019 quarter. Gross overnight stays booked for cross-border travel continued to exceed pre-pandemic levels and doubled compared to the year-ago quarter, the company said.

However, those numbers missed analysts’ expectations of 106.2 million nights and experiences booked and $17.13 billion in gross bookings.

The company also reported that its free cash flow for the second quarter was $795 million, the highest for a second quarter. That brings his total cash on hand to nearly $10 billion. On the conference call, Chief Financial Officer Dave Stevenson said the company doesn’t need that much cash on hand, which is why it’s buying back shares. He and Chesky said they remain committed to growing the business and will continue to invest in growing headcount at a high single-digit rate this year.

Airbnb expects third-quarter revenue of $2.78 billion to $2.88 billion, which is expected to be its highest ever. It also expects adjusted Ebitda to be its highest ever, though it did not provide a number. Analysts on average had forecast earnings of $1.29 per share on revenue of $2.77 billion and adjusted Ebitda of $1.26 billion, according to FactSet.

In response to analysts on the call who wanted to know about the possible macroeconomic effects on the business, Stevenson said that “we don’t know what the economy is going to bring, but we know that Airbnb is resilient.” He noted that the company has different types of property listings; that “he has already made a difficult choice” c redundancies at the start of the coronavirus pandemic; and that it’s a “leaner, tighter machine.”

The company said the Asia-Pacific region “remains depressed” compared to the same period before the pandemic, and Stevenson expressed optimism about the upturn as it catches up with the recovery of other regions.

YipitData, which tracks Airbnb’s active listings, said it saw year-over-year growth in June in all regions except China — where the company pulled all of its listings due to difficulties doing business there, it announced in May. June listings in North America rose 19% year over year. Two regions, Latin America and the Middle East and Africa, saw 14% growth in listings in June, according to YipitData.

Shares of Airbnb are down about 30% so far this year. By comparison, the S&P 500 index

is down 13% year to date.

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