Airbnb (ABNB) earnings in the second quarter of 2022

Brian Chesky, CEO and co-founder of Airbnb

Mike Segar | Reuters

Airbnb beat Wall Street estimates for profit and recorded revenue this was in line with second quarter estimates. The company also announced a $2 billion share repurchase program.

Shares fell about 9% after hours, despite the report looking strong, suggesting Wall Street is expecting faster growth and higher earnings. The company also said that it was affected flight cancellations at the end of the block.

Here are the key numbers:

  • Earnings per share: $0.56 vs. According to Refinitiv, analysts expect $0.43.
  • Income: $2.10 billion vs. Analysts expect $2.11 billion, according to Refinitiv.

airbnb, like an uberbenefited from increased consumer spending on activities rather than goods. Revenue jumped 58% year-over-year to $2.1 billion, helping the company post its most profitable second quarter to date. However, this growth was slower than last quarter, with revenue up 70% from the first quarter of 2020.

Airbnb posted a net profit of $379 million compared to a loss of $68 million in the year-ago quarter.

The company said it cut costs in the midst of the pandemic, which helped it become leaner and more focused, and that it has adapted its business as travel continues to change. But he wasn’t entirely immune to the surge in canceled flights.

“At the end of the quarter, we did see some increased cancellations compared to our forecast,” Airbnb CFO Dave Stephenson said during a call with investors. “We believe some of the increased cancellations were related to flight cancellations around the world, but mostly in North America towards the end of the second quarter of 2022.”

Airbnb expects record revenue in the third quarter, despite headwinds from currency fluctuations, in particular the weakening of the euro against the dollar. Third-quarter revenue was between $2.78 billion and $2.88 billion, beating StreetAccount’s estimate of $2.77 billion. The company said it broke a single-day revenue record on July 4, which it says signals a strong summer season ahead.

Airbnb’s free cash flow has been declining on a quarterly basis, which could be one reason for the stock’s drop.

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CEO Brian Chesky took this issue to CNBC’s Jim Cramer in “crazy money.”

“Free cash flow was $795 million and we adjusted EBITDA of $711 million… excluding currency, that’s $764 million. So we are actually seeing some metronomic improvement in our free cash flow compared to last year and I expect the upcoming quarter to be extremely strong for us.”

In the second quarter, Airbnb reported over 103 million booked nights and experiences. This is the company’s biggest quarterly figure ever, but fell short of StreetAccount’s estimate of 106.4 million booked nights and experiences.

The total value of bookings that Airbnb uses to track host income, service fees, cleaning fees, and taxes was $17 billion in the second quarter, up 27% from last year. This was slower than the 67% growth recorded in the first quarter.

And while many companies call employees back to the office, long-term stays, where guests stay in a home for 28 days or more, remain Airbnb’s fastest growing segment, up 25% year-over-year.

The company said the total number of nights booked for cross-border travel exceeded pre-pandemic levels during the quarter and doubled from the same quarter last year.

Average daily rates are up 40% from pre-pandemic levels in 2019 to $164. This is 7% more than the same quarter a year ago, excluding currency fluctuations. The company expects ADR to remain unchanged in the third quarter from last year.