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Airbnb (NASDAQ:ABNB) Beats Q4 Sales Targets, Stock Soars


Anthony Lee /
2023/02/14 4:09 pm EST

Online accommodations platform Airbnb (NASDAQ: ABNB) reported results ahead of analyst expectations in the Q4 FY2022 quarter, with revenue up 24.1% year on year to $1.9 billion. Guidance for next quarter's revenue was $1.79 billion at the midpoint, 5.79% above the average of analyst estimates. Airbnb made a GAAP profit of $319 million, improving on its profit of $54.5 million, in the same quarter last year.

Is now the time to buy Airbnb? Access our full analysis of the earnings results here, it's free.

Airbnb (ABNB) Q4 FY2022 Highlights:

  • Revenue: $1.9 billion vs analyst estimates of $1.86 billion (2.22% beat)
  • EPS: $0.48 vs analyst estimates of $0.27 ($0.21 beat)
  • Revenue guidance for Q1 2023 is $1.79 billion at the midpoint, above analyst estimates of $1.69 billion
  • Free cash flow of $455 million, down 52.6% from previous quarter
  • Gross Margin (GAAP): 81.9%, up from 80.7% same quarter last year
  • Nights and Experiences Booked: 88.2 million, up 14.8 million year on year

Founded by Joe Gebbia and Brian Chesky by renting out a blowup bed on the floor of their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.

Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission paying sellers, generating flywheel scale effects which feed back into further customer acquisition.

Sales Growth

Airbnb's revenue growth over the last three years has been exceptional, averaging 58.9% annually. The initial impact of the pandemic was negative for Airbnb's revenue, but growth rates subsequently normalized.

Airbnb Total Revenue

This quarter, Airbnb beat analyst estimates and reported a decent 24.1% year on year revenue growth.

Guidance for the next quarter indicates Airbnb is expecting revenue to grow 18.3% year on year to $1.79 billion, slowing down from the 70.1% year-over-year increase in revenue the company had recorded in the same quarter last year.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Usage Growth

As a online marketplace, Airbnb generates revenue growth both by growing the number of buyers using the platform and how much each of those buyers spends.

Over the last two years the number of Airbnb's nights booked, a key usage metric for the company, grew 36% annually to 88.2 million users. This is among the fastest growth of any consumer internet company, indicating that users are excited about the offering.

Airbnb Nights and Experiences Booked

In Q4 the company added 14.8 million nights booked, translating to a 20.2% growth year on year.

Key Takeaways from Airbnb's Q4 Results

Sporting a market capitalization of $73.7 billion, more than $9.62 billion in cash and with positive free cash flow over the last twelve months, we're confident that Airbnb has the resources it needs to pursue a high growth business strategy.

We were impressed by the very optimistic revenue guidance Airbnb provided for the next quarter. And we were also glad to see the user growth. Overall, we think this was a really good quarter, that should leave shareholders feeling very positive. The company is up 8.65% on the results and currently trades at $131.33 per share.

Airbnb may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.