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