Airbnb ABNB reported fourth-quarter 2024 adjusted earnings of 73 cents per share, comfortably beating the Zacks Consensus Estimate by 25.86%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

ABNB’s earnings beat the Zacks Consensus Estimate twice and missed in the remaining two of the trailing four quarters, the earnings surprise being 23.94%, on average.

Revenues of $2.48 billion increased 11.8% year over year, both on a reported and FX-neutral basis. The top line beat the Zacks Consensus Estimate by 2.47%. The year-over-year increase was driven by growth in the number of nights stayed on the platform.

ABNB Shares Rise Post Q4 Earnings

Airbnb shares rose 14.22% in the after-hours trading following the results, driven by strong revenue growth, improved operating margins and a sharp rise in first-time bookers. Solid performances across all regions, especially in the Asia Pacific and Latin America, boosted investor confidence despite FX headwinds.

Airbnb shares have gained 20.1% year to date, outperforming the broader Zacks Consumer Discretionary sector’s growth of 5.7% and the Zacks Leisure and Recreation Services industry’s return of 5%.

ABNB Gains From Strong Business Metrics

Airbnb's fourth-quarter results underscore its plan to transform into a comprehensive travel platform beyond accommodations. To support this vision, the company aims to invest $200-$250 million in expanding its services and driving growth.

The fourth-quarter 2024 Gross Booking Value (GBV) was $17.6 billion, up 13% year over year. This was driven by strong Nights and Experiences Booked and a modest increase in Average Daily Rates (ADR).

Nights and Experiences Booked were 111 million, up 12% year over year. The metric was driven by strong performances in all regions, especially North America and EMEA.

ADR (Gross Booking Value per Night and Experience Booked) was $158, up 1% on a year-over-year basis. Excluding FX, ADR grew 2% and was up across all regions due to price appreciation.

In addition, nights booked on the app in the fourth quarter increased 22% year over year and comprised 60% of total nights booked (up from 55% in the year-ago quarter). Airbnb experienced strong growth in first-time bookers, with all regions seeing increased momentum, led by the Asia Pacific and Latin America.

Airbnb’s Operating Results

Adjusted EBITDA was $765 million, up 3.7% on a reported basis and 3% on an FX-neutral basis year over year. The adjusted EBITDA margin was 30.8%, down 240 basis points year over year.

Operations and support expenses, product development expenses, and sales and marketing expenses were $290 million, $538 million and $547 million, respectively, increasing 7%, 24.5% and 29% year over year. General and administrative expenses were $248 million, down 79.4% year over year.

Airbnb reported a fourth-quarter 2024 operating income of $430 million. The operating margin increased 39.7% year over year to 17.3%.

ABNB’s Balance Sheet & Cash Flow

As of Dec. 31, 2024, cash and cash equivalents, and short-term investments amounted to $10.6 billion compared with $4.96 billion as of Sept. 30, 2024. ABNB had $5.9 billion of funds held on behalf of guests.

Long-term debt, as of Dec. 31, 2024, was $1.995 billion compared with $1.994 billion as of Sept. 30, 2024.

Net cash provided by operating activities was $466 million for the fourth quarter of 2024, down sequentially but significantly higher than the year-ago quarter’s $63 million.

Airbnb generated a free cash flow of $458 billion in the fourth quarter of 2024 and $4.5 billion over the trailing 12 months.

ABNB repurchased shares worth $838 million shares in the fourth quarter of 2024. As of Dec 31, it still has $3.3 billion remaining under repurchase authorization.

FX Pressures Lead ABNB to Lower Q1 Forecast

For the first quarter of 2025, Airbnb expects revenues between $2.23 billion and $2.27 billion, reflecting a year-over-year increase of 4-6%, or 7-9% when excluding the impacts of foreign exchange fluctuations.

The Zacks Consensus Estimate for revenues is pegged at $2.29 billion, indicating 6.94% growth from the figure reported in the year-ago quarter. The consensus mark for earnings is pegged at 24 cents, down 7.7% over the past 30 days, suggesting a sharp 41.46% year-over-year decline.

Airbnb anticipates ADR to dip on a year-over-year basis due to foreign exchange headwinds. Excluding the impacts of FX, a modest year-over-year increase in ADR is anticipated.

The company expects year-over-year growth in Nights and Experiences Booked for the first quarter of 2025 to remain relatively stable compared with that reported in the first quarter of 2024.

In the first quarter of 2025, Airbnb expects adjusted EBITDA and its margin to decline due to one-time calendar factors and currency headwinds. Without these impacts, the margin would remain flat year over year.

For 2025, ABNB expects an adjusted EBITDA margin of 34.5%, sustaining strong profitability while continuing growth efforts.

Zacks Rank & Stocks to Consider

Airbnb currently has a Zacks Rank #3 (Hold).

Amer Sports, Inc. AS, Trip.com Group Limited TCOM and Manchester United MANU are some better-ranked stocks in the broader Consumer Discretionary sector, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amer Sports shares have gained 10.5% year to date. AS is set to report its fourth-quarter 2024 results on Feb. 25.

Trip.com shares have returned 1.6% year to date. TCOM is set to report fourth-quarter fiscal 2024 results on Feb. 24.

Manchester United shares have declined 5.9% year to date. MANU is set to post second-quarter fiscal 2025 results on Feb. 19.

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