By Callum Keown

Airbnb stock surged after its earnings beat expectations. It has largely missed out on the travel boom but that may be about to change as the short-term rental company positions its app to become the Amazon of the travel industry.

The shares have fallen 5% over the past year heading into Friday's trading -- in contrast to hotel companies Hilton and Marriott, which are up 40% and 23%, respectively, over the same period.

But Airbnb jumped 14% to $161.40 ahead of the open after reporting fourth-quarter earnings late Thursday that beat expectations. The short-term stay company's sales growth accelerated but its guidance disappointed.

However, Airbnb revealed something a bit more exciting for investors -- plans to invest up to $250 million in launching and scaling new businesses set to be introduced in May.

"We want the Airbnb app kind of similar to Amazon -- to be one place to go for all of your traveling and living needs," CEO Brian Chesky said on the company's earnings call. He said Airbnb will start "with things very closely adjacent to travel," and that investors could expect one or two businesses to launch every year for the next five years.

"I think that each business could take three to five years to scale. A great business could get to $1 billion of revenue. It doesn't mean all of them will," he added.

Chesky noted that while the Airbnb app was used on some 1.6 billion devices each year, it's "not very frequently used" -- maybe once or twice a year by the typical user. "I would love Airbnb one day for people to use us once or twice a week. And so that's kind of one of the goals over the long term," he said.

Wall Street appears to be a bit more cautious. Seaport analyst Aaron Kessler said the new businesses will weigh on margins in 2025 but "could help accelerate long-term growth." He has a positive fundamental view on the stock but maintained a Neutral rating as he sees shares as being fairly valued at current levels.

"From here, it is about execution, and we will await...what new businesses entail," KeyBanc analyst Justin Patterson said, maintaining a Sector Weight rating on the stock.

Revenue rose 12% to $2.5 billion in the fourth quarter and the number of nights and experiences booked through its platform jumped 12% to 111 million. Gross booking value -- the total amount of payments processed on the platform -- climbed 13% to $17.6 billion.

The company said it saw a "notable acceleration in the number of first-time bookers on our platform."

First-quarter guidance for revenue between $2.23 billion and $2.27 billion fell slightly below the Street's estimate of $2.28 billion.

Write to Callum Keown at callum.keown@dowjones.com

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February 14, 2025 08:23 ET (13:23 GMT)

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