Airbnb (NASDAQ:ABNB) Reports Upbeat Q1, Stock Soars

Radek Strnad /
2022/05/03 4:17 pm EDT

Online accommodations platform Airbnb (NASDAQ: ABNB) announced better-than-expected results in the Q1 FY2022 quarter, with revenue up 70.1% year on year to $1.5 billion. On top of that, guidance for next quarter's revenue was surprisingly good, being $2.08 billion at the midpoint, 5.94% above what analysts were expecting. Airbnb made a GAAP loss of $18.7 million, improving on its loss of $1.17 billion, 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) Q1 FY2022 Highlights:

  • Revenue: $1.5 billion vs analyst estimates of $1.45 billion (3.88% beat)
  • EPS (GAAP): -$0.03
  • Revenue guidance for Q2 2022 is $2.08 billion at the midpoint, above analyst estimates of $1.96 billion
  • Free cash flow of $1.19 million, down 99.6% from previous quarter
  • Gross Margin (GAAP): 75.9%, up from 71.3% same quarter last year
  • Nights and Experiences Booked: 102.1 million, up 37.7 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 68.3% annually.

Airbnb Total Revenue

This quarter, Airbnb beat analyst estimates and reported a very impressive 70.1% year on year revenue growth.

Guidance for the next quarter indicates Airbnb is expecting revenue to grow 55.7% year on year to $2.08 billion, slowing down from the 298% 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 25% over the next twelve months.

There are others doing even better than Airbnb. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. 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 48.6% annually to 102.1 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 Q1 the company added 37.7 million nights booked, translating to a 58.5% growth year on year.

Key Takeaways from Airbnb's Q1 Results

With a market capitalization of $97.2 billion, more than $9.32 billion in cash and with free cash flow over the last twelve months being positive, the company is in a very strong position to invest in growth.

We were impressed by the exceptional revenue growth Airbnb delivered this quarter. And we were also glad to see the user growth. Zooming out, we think this was a fantastic quarter that should have shareholders cheering. The company is up 6.54% on the results and currently trades at $154.49 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.