Vacation rental company Airbnb reported impressive reports for its second quarter. Although the company had a good quarter, its shares fell 9 percent in after-hours trading on the announcement. Airbnb also announced a $2 billion share buyback program.
For the quarter, earnings per share came in at $0.56, beating analysts’ estimate of $0.43, according to Refinitiv. Revenue stood at $2.10 billion, slightly below analysts’ expectation of $2.11billion, according to Refinitiv.
The company gained from an increase in consumer spending on services. Airbnb’s revenue was up 58 percent year-over-year, the company’s most profitable second quarter ever. The company’s greatest revenue surge, however, remains the 70 percent it recorded over the first quarter of 2020.
Net income for the quarter came in at $379 million and was up from a loss of $68 million recorded in the same quarter of 2021.
The company said that it tightened spending at the height of the pandemic adding that this aided its adaptation to the changes in the business environment. A recent surge in canceled flights, however, affected its business.
In a call with investors, the company’s Chief Financial Officer Dave Stephenson said that “We did see some elevated cancellations in the back of the quarter relative to our forecast. We believe that some of the elevated cancellations were related to flight cancellations around the world, but it was mostly in North America towards the end of Q2 2022.″
The company expects third-quarter revenue to come in between $2.78 billion and $2.88 billion. Analysts forecast revenue of $2.77 billion for the third quarter, according to StreetAccount.
For its shares that declined, experts opine that its free cash flow which declined quarter-over-quarter could be one of the reasons. The company’s CEO commented on this while speaking in an interview. “Free cash flow was $795 million, and we had adjusted EBITDA of $711 million… If you exclude FX, that’s $764 million. So what we’re actually seeing is some metronomic improvements in our free cash flow year over year and I expect that the coming quarter is going to be extremely strong for us.”
The company reported over 103 million nights and experiences booked in the quarter. Although this was its biggest quarterly number ever, it was below analysts’ estimate of 106.4 million nights and experiences.
Gross booking value, used by the company to keep track of host earnings, service fees, cleaning fees, and taxes, summed up to $17 billion in the second quarter. This was up 27 percent year-over-year and was lower than the 67 percent the company reported in the first quarter.
Average daily rates were up 40 percent compared to pre-pandemic levels in 2019. At $164, it was up 7 percent compared to the second quarter of 2021, taking the effects of currency fluctuations out of the picture. The company expects this metric to be flat in the third quarter on a year-on-year basis.