Airbnb Earnings Overview

Market Reaction

• Earnings reported after market close on Tuesday.
• Shares down 15% as of recording.
• Market cap dropped to $72 billion, despite $10 billion on the balance sheet.

Financial Performance

Key Metrics

• Q2 2024 Results:
  • Revenue: Up 11% YoY
  • Net Income: $55 million (20% net income margin)
  • Free Cash Flow Margin: 33% (up 9% YoY)
  • Gross Booking Value: $21.2 billion
  • Total Nights Booked: Up 9% to 1,251 million

Operating Highlights

• Strong operating leverage gained during the pandemic.
• High margins sustained due to a lean operational model.

Guidance for Q3 2024

• Expected revenue: $3.67 to $3.73 billion (8-10% YoY growth).
• Overall growth rate since the pandemic has been declining, reflecting weaker consumer spending.

Competitive Analysis

Comparisons with Competitors

• Booking Holdings:
  • Q2 2022 revenue growth: 56.3%, now at 7.1%.
• Hilton:
  • Revenue per available room (RevPAR) up 32% YoY, but owned & leased hotel revenue down slightly.

Balance Sheet Insights

• Cash and short-term investments total: $11.25 billion.
• Adjusted Enterprise Value: $61 billion (after cash adjustment).
• Free cash flow for the last 12 months: $4.3 billion (14x free cash flow multiple).

Valuation Metrics

• Price-to-Earnings (P/E) Ratio: 15 (trailing), 25 (forward based on estimates).
• Given growth at nearly double digits, stock considered reasonably priced.

Future Growth Opportunities

• Plans to integrate more hotels into the platform.
• Potential to build customer loyalty through diverse offerings.
• Ongoing innovation with experiences and AI concierge features.

Conclusion

• Overall, the long-term outlook for Airbnb remains positive despite short-term market reactions.
• Opportunity for growth in new markets and services.
• Personal note: Looking to add shares during this weakness.