Airbnb plummeted after earnings miss and guidance downgrade

Airbnb (NASDAQ:ABNB) shares plummeted, losing 16%, after reporting second-quarter financials below market expectations, and also downgraded its guidance for the third-quarter.

Revenue for the quarter totalled $2.75 billion, which was actually slightly better than Wall Street’s consensus forecast of $2.74 billion.

Earnings, however, disappointed at 86 cents per share versus an estimate of 92 cents.

At $555 million, the vacation-home rental app firm’s profit was also below expectations of $650 million.

Pitching guidance for its third quarter, Airbnb projected revenue between $3.67 billion and $3.73 billion, entirely short of analysts' mid-point consensus estimate of $3.84 billion.

It blamed ‘pressured’ domestic travel in the United States since the start of the year, and said more Americans are cautious about travel spending.

Specifically, it noted that booking windows have shortened – that means more last-minute bookings and in-turn results in more uncertainty and less financial visibility.

Chief executive Brian Chesky, in Airbnb’s ‘shareholder letter’, called it “another strong quarter” whilst pointing to the firm’s 11% year-over-year increase in revenue.

“During Q3 2024, we expect a sequential moderation in the year-over-year growth of nights and experiences booked relative to Q2 2024 … we are seeing shorter booking lead times globally and some signs of slowing demand from US guests,” Chesky said.

In afterhours dealing, Airbnb shares were down $20.75 or 15.9% priced at $109.88 – following on from a 4% gain in regular trade which earlier closed at $130.47.