📢 Earnings Summary — ABNB

Airbnb delivered a strong Q3 with revenue at the high end of guidance, record quarterly adjusted EBITDA, and accelerating nights growth. Performance was led by U.S. strength and product changes—most notably Reserve Now, Pay Later—which boosted bookings despite higher cancellations. The company is broadening its platform with relaunches in services/experiences, a boutique hotel pilot, and extensive AI integration that is already reducing support contacts and will expand to AI-driven search next year. Cash generation remains robust, supporting sizable buybacks and a strong balance sheet. Guidance calls for Q4 revenue growth of 7%–10% and low double-digit GMV growth, with a higher full-year EBITDA margin outlook. While comps and cancellation dynamics present near-term considerations, management’s tone and execution signal confidence in continued growth and international expansion.

📈 Growth Highlights

• Revenue up 10% YoY to $4.1B, at the high end of guidance
• Gross Booking Value (GBV) up 14% YoY to $22.9B
• Nights and seats booked up 9% YoY; 2-point sequential acceleration vs. Q2, driven by U.S. strength and ADR
• Expansion markets: average nights booked grew at 2x the pace of core markets over the past 12 months
• First-time bookers up 20%+ in Japan and nearly 50% in India YoY
• Experiences are attracting new users: ~50% of experience bookers did not have an Airbnb stay; services saw ~10% first-time Airbnb customers

🔨 Business Development

• Launched Reserve Now, Pay Later in the U.S. for eligible bookings; ~70% take rate among those offered
• Shipped 65 major product improvements since May, including richer maps (landmarks, transit, satellite/street views) to increase conversion
• Updated cancellation options: hosts can opt for free cancel up to 14 days pre-check-in; guests get 24-hour free cancel if booked >7 days before check-in
• Relaunched services/experiences with social features (see who’s going, in-app messaging, profile connections); experiences rated 4.3/5 vs. core stays at 4.8/5
• Received 110,000 applications from prospective experience hosts in Q3, nearly doubling QoQ
• Initiated hotel pilot in Los Angeles, New York City, and Madrid; direct partnerships with boutique/independent hotels; new hotel filters, room-type selection, and redesigned pages

💵 Financial Performance

• Adjusted EBITDA $2.1B (50% margin), highest quarter ever
• Net income $1.4B; EPS $2.21, up 4% YoY
• One-time $213M valuation allowance related to corporate AMT credits from the One Big Beautiful Bill Act
• Free cash flow $1.3B in Q3; $4.5B TTM (38% FCF margin)
• Regional nights growth: Latin America low-20s YoY; APAC mid-teens; North America and EMEA mid-single digits
• Small FX tailwind after hedging in outlook

🏦 Capital & Funding

• Corporate cash and investments of $11.7B; $7.2B funds held on behalf of guests
• Repurchased $857M of stock in Q3; $3.5B repurchased over the last 12 months (~75% of FCF)
• $6.6B remaining under repurchase authorization; fully diluted share count reduced by 8% since 2022
• Anticipate materially lower effective tax rate starting in 2026 due to favorable foreign earnings taxation changes

🧠 Operations & Strategy

• Four growth levers: improve core service, expand internationally, broaden offerings (experiences/services, hotels), integrate AI across the app
• AI customer support assistant reduced human agent contacts by ~15% in the U.S.; expansion to >50 languages planned next year
• Building AI-powered conversational search to help plan trips; testing now, rollout expected next year
• Product changes (maps, cancellations, payments) aimed at conversion lift and lower customer service cases
• Localized go-to-market in expansion markets (e.g., Brazil as a mature success; Japan early but progressing)
• Hotel supply targeted to fill gaps in urban, short-stay use cases where hotels are a better fit

🌍 Market Outlook

• Q4 revenue guidance: $2.66B–$2.72B (+7% to +10% YoY), including a small FX tailwind
• Q4 GMV expected to grow low double digits YoY on modest ADR increases (price and FX) and continued nights growth
• Q4 nights/seats booked growth expected mid-single digits YoY; incorporates tougher comps from last year’s Q4 acceleration
• Sequential acceleration expected on a 2-year basis from Q3 to Q4
• FY25 adjusted EBITDA margin now expected to be ~35% (raised from prior 34.5% floor)
• 2026 focus on maintaining strong margins while investing in growth; more detail in February

⚠ Risks & Headwinds

• Tougher year-over-year comps in Q4 may temper growth rates
• Reserve Now, Pay Later increases cancellations (management expects net positive impact on bookings)
• Recent acceleration concentrated in the U.S.; geographic mix risk if U.S. demand normalizes
• New offerings (experiences/services, hotels) are early-stage and rated below core stays, implying execution risk
• FX remains a variable despite hedging (currently a small tailwind)

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.