Airbnb has returned to growth mode. The home-sharing company reported its fastest revenue growth in more than three years, raised its outlook for the year and announced a $12 billion share buyback, as new initiatives in hotels, flexible payments and AI began to pay off.
Revenue for the third quarter rose 19% to $4.9 billion, above the high end of the company's guidance, according to the company's earnings call reported by BigGo Finance on November 5. Gross booking value, the total value of bookings made on the platform, rose 21% to $27.7 billion, an acceleration of five percentage points from the previous quarter. Nights and experiences booked rose 16% to 155 million.
Net income was $1.9 billion, a net margin of 39%, and adjusted earnings before interest, taxes, depreciation and amortisation rose 22% to $2.5 billion, a 52% margin.
Airbnb shares rose 11.02% in after-hours trading on November 5, according to StockTitan, a rare bright spot on a day when the Nasdaq fell 5.5%.
"Airbnb is back in growth mode, and it is here to stay," said co-founder and chief executive Brian Chesky.
India among the fastest-growing markets
Every region posted double-digit growth in nights booked, according to BigGo Finance. North America recorded its fastest growth in four years, Brazil grew more than 30% and India grew more than 60%, making it one of Airbnb's fastest-growing markets.
India's growth reflects rising domestic travel and the growing popularity of holiday homes, villas and homestays among Indian travellers, particularly younger travellers and families. Airbnb has invested in expanding its presence in India, which has a large domestic travel market and is also a growing source of international travellers.
Growth in first-time bookers was 13%, the highest since early 2022, led by Gen Z travellers.
Raising the outlook
Airbnb raised its full-year revenue growth forecast to the high teens, from at least the mid-teens previously, and lifted its adjusted EBITDA margin forecast to about 36%, according to BigGo Finance. For the fourth quarter, it expects revenue of $3.22 billion to $3.28 billion, up 16% to 18%, including a roughly two-point benefit from currency movements.
"We're encouraged by the meaningful acceleration we've delivered, as well as the momentum we're seeing into year-end," said chief financial officer Ellie Mertz.
The $12 billion buyback
The new $12 billion share repurchase programme reflects Airbnb's strong cash generation. The company generated $1.4 billion in free cash flow in the quarter. Buybacks reduce the number of shares outstanding, increasing each remaining shareholder's stake in the company's earnings.
Hotels: a $900 billion opportunity
Airbnb is expanding beyond homes into hotels, a market Chesky described as "a $900 billion market off of a very, very tiny base." The company now offers hotels in more than 60 destinations, and the hotel business is growing faster than its core homes business, according to BigGo Finance. About 35% of guests whose first booking is a hotel return to book a home within a year.
"It is undoubtable that we will do multiple billions of dollars in revenue in hotels in the coming years," Chesky said.
Airbnb has also expanded into services such as car rentals, meal delivery, laundry and gear rentals, and signed an exclusive partnership with American Express that adds more than one million listings to Amex Travel.
