Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Airbnb’s profits more than doubled in the first quarter, boosted by an early Easter holiday, but the home rental platform forecast lower than expected sales and earnings for the second.
Net income reached $264mn in the three months to March compared with $117mn in the same period a year before and substantially higher than the $152mn analysts had expected, Airbnb said on Wednesday. Revenue of $2.14bn beat analyst forecasts for $2.06bn.
Earnings were fuelled by sales growth helped by the timing of Easter, which occurred on March 31, as well as “cost discipline”, it said.
However, revenue growth in the second quarter is likely to slow markedly to between 8 per cent and 10 per cent year on year, a deceleration from recent rates in the high teens and more. Airbnb’s quarterly revenue guidance of between $2.68bn-$2.74bn compared with analyst estimates of $2.74bn. It attributed the slowdown largely to the early timing of Easter, the leap year and currency headwinds.
Airbnb said it expected growth to pick up again in the middle of the year, with a “strong backlog” of nights booked, including for summer events such as the Paris Olympics.
Shares, which have risen by almost a fifth this year, fell 7 per cent in after-market trading.
The San Francisco-based company has spent years working to improve and grow its core rentals business, including by rolling out features designed to improve the experiences of users and hosts. During the first quarter Airbnb said it had removed what it called “thousands of low-quality listings”.
In recent quarters, it has outlined ambitions to expand beyond its core segment in order to drive longer-term growth. In May, Airbnb launched its new “icons” category, offering customers a selection of experiences tied to well-known names and brands, such as a night in the Ferrari Museum in Italy and an intimate concert by pop star Doja Cat.
It said on Wednesday that there was ample scope for growth, with most countries not widely served by Airbnb. Expanding into those markets would “take time and investment”, it said.
Airbnb ended the first quarter with its highest number of active listings and said it continued to see “double-digit supply increases across all regions”.
Although Airbnb’s gross bookings rose 12 per cent to $22.9bn in the first three months of the year, that marked a slowdown from the 15 per cent recorded last quarter and higher historical growth rates.
For the second quarter, adjusted earnings before interest, tax, depreciation and amortisation would be roughly unchanged from a year ago, or about $819mn, lower than analyst forecasts for roughly $917mn.
Airbnb said it had repurchased $750mn of stock in the period and had $6bn left in its buyback programme.