Airbnb (NASDAQ:ABNB) Slightly Misses Q2 Revenue Estimates, Stock Drops 10%

Kayode Omotosho /
2022/08/02 4:11 pm EDT

Online accommodations platform Airbnb (NASDAQ: ABNB) fell slightly short of analyst expectations in Q2 FY2022 quarter, with revenue up 57.5% year on year to $2.1 billion. On the other hand, guidance for the next quarter exceeded analyst expectations with revenues guided to $2.83 billion at the midpoint, or 1.95% above analyst estimates. Airbnb made a GAAP profit of $378.8 million, improving on its loss of $68.2 million, in the same quarter last year.

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Airbnb (ABNB) Q2 FY2022 Highlights:

  • Revenue: $2.104 billion vs analyst estimates of $2.105 billion (small miss)
  • EPS (GAAP): $0.56
  • Revenue guidance for Q3 2022 is $2.83 billion at the midpoint, above analyst estimates of $2.77 billion
  • Free cash flow of $794.7 million, down 33.5% from previous quarter
  • Gross Margin (GAAP): 81.4%, up from 77.9% same quarter last year
  • Nights and Experiences Booked: 103.7 million, up 20.6 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 incredible, averaging 67% annually.

Airbnb Total Revenue

This quarter, Airbnb reported a very impressive 57.5% year on year revenue growth, but this result fell short of what analysts were expecting.

Guidance for the next quarter indicates Airbnb is expecting revenue to grow 26.4% year on year to $2.83 billion, slowing down from the 66.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 17.9% over the next twelve months.

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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 42.7% annually to 103.7 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 Q2 the company added 20.6 million nights booked, translating to a 24.7% growth year on year.

Key Takeaways from Airbnb's Q2 Results

Sporting a market capitalization of $70.7 billion, more than $9.89 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 exceptional revenue growth Airbnb delivered this quarter. And we were also glad to see the user growth. Overall, we think this was a strong quarter, that should leave shareholders feeling positive. But investors might have been expecting more and the company is down 10% on the results and currently trades at $104.78 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.