Airbnb (NASDAQ:ABNB) Exceeds Q4 Expectations, Stock Jumps 13.8%

February 13, 2025 at 16:20 PM EST

ABNB Cover Image

Online accommodations platform Airbnb (NASDAQ: ABNB) reported Q4 CY2024 results exceeding the market’s revenue expectations, with sales up 11.8% year on year to $2.48 billion. On the other hand, next quarter’s revenue guidance of $2.25 billion was less impressive, coming in 2.2% below analysts’ estimates. Its GAAP profit of $0.73 per share was 25.5% above analysts’ consensus estimates.

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Airbnb (ABNB) Q4 CY2024 Highlights:

Revenue: $2.48 billion vs analyst estimates of $2.42 billion (11.8% year-on-year growth, 2.5% beat)
EPS (GAAP): $0.73 vs analyst estimates of $0.58 (25.5% beat)
Adjusted EBITDA: $765 million vs analyst estimates of $653.6 million (30.8% margin, 17% beat)
Revenue Guidance for Q1 CY2025 is $2.25 billion at the midpoint, below analyst estimates of $2.30 billion
Adjusted EBITDA Margin Guidance for full year 2025 is at least 34.5%, above analyst estimates
Operating Margin: 17.3%, up from -22.4% in the same quarter last year
Free Cash Flow Margin: 18.5%, down from 28.8% in the previous quarter
Nights and Experiences Booked: 111 million, up 12.2 million year on year
Market Capitalization: $87.79 billion

Company Overview

Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.

Online Travel

Because of the enormous number of flights, hotels, and accommodations available, travel is a natural fit for marketplaces that aggregate suppliers, simplifying the shopping process for consumers. Online travel platforms today make up over 50% of the industry’s bookings, a percentage that has been rising for 20 years, and will likely continue in the years ahead.

Sales Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Airbnb grew its sales at an excellent 22.8% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Airbnb reported year-on-year revenue growth of 11.8%, and its $2.48 billion of revenue exceeded Wall Street’s estimates by 2.5%. Company management is currently guiding for a 5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 9.7% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

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Nights And Experiences Booked

Booking Growth

As an online travel company, Airbnb generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.

Over the last two years, Airbnb’s nights and experiences booked, a key performance metric for the company, increased by 11.8% annually to 111 million in the latest quarter. This growth rate is strong for a consumer internet business and indicates people love using its offerings. Airbnb Nights and Experiences Booked

In Q4, Airbnb added 12.2 million nights and experiences booked, leading to 12.3% year-on-year growth. The quarterly print isn’t too different from its two-year result, suggesting its new initiatives aren’t accelerating booking growth just yet.

Revenue Per Booking

Average revenue per booking (ARPB) is a critical metric to track for online travel businesses like Airbnb because it not only measures how much users book on its platform but also the commission that Airbnb can charge.

Airbnb’s ARPB growth has been mediocre over the last two years, averaging 3.2%. This isn’t great, but the increase in nights and experiences booked is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Airbnb tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether bookings can continue growing at the current pace. Airbnb ARPB

This quarter, Airbnb’s ARPB clocked in at $22.34. It was flat year on year, worse than the change in its nights and experiences booked.

Key Takeaways from Airbnb’s Q4 Results

Topline was strong this quarter, with gross booking value, nights & experiences booked, and revenue all accelerating in growth from last quarter. We were also impressed by how significantly Airbnb blew past analysts’ EBITDA expectations this quarter, showing that the growth is profitable as well. While revenue guidance for next quarter missed, adjusted EBITDA margin guidance for the full year came in ahead. Overall, this quarter had some key positives. The stock traded up 13.8% to $160.30 immediately following the results.

Big picture, is Airbnb a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

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