AP – Airbnb says its profit fell 15 per cent in the second quarter from a year earlier, as higher income taxes cut into the short-term rental giant’s bottom line even as bookings and revenue rose.
The profits fell short of Wall Street’s expectations and Airbnb’s stock tumbled 16 per cent in after-market trading.
The San Francisco-based company reported on Tuesday net income of USD555 million, or USD0.86 per share, for the three months ended June 30. That compares with net income of USD650 million, or USD0.98 per share, in the same quarter last year.
Analysts’ consensus estimates called for earnings of USD0.91 per share, according to FactSet.
Revenue rose 11 per cent from a year earlier to USD2.75 billion, slightly higher than what analysts forecast.
The vacation-rental platform said it booked 125.1 million nights and experiences in the second quarter, a nine per cent increase from a year earlier. The average daily rate rose two per cent to USD170. The company said it expects that to increase modestly on an annual basis in the third quarter.
While booking growth was strong, management said that in July it noticed that many customers were opting to reserve an Airbnb property within a couple of weeks of when they need to stay, rather than doing so months in advance.
“We are seeing shorter booking lead times globally and some signs of slowing demand from United States guests,” Chief Executive Officer Brian Chesky said during a conference call with analysts. “We’re watching these trends closely, along with the impact any macroeconomic pressures might be causing.”
The company factored the trend into its third-quarter outlook. Airbnb predicts third-quarter revenue between USD3.67 billion and USD3.73 billion, which would be below Wall Street’s forecast of USD3.84 billion, according to FactSet.
The company said that its seeing more customers are sign up for Airbnb rentals to mark holidays and other special events, noting that the week of July 4 was Airbnb’s single highest week of revenue ever in North America.
Nights booked at Airbnb rentals in the Paris region around the Olympics through the end of the second quarter were more than double the same period last year, with a 37 per cent increase in active listings, the company said.
Airbnb is working to draw more people to sign up with the company to host guests in order to beef up its supply of short-term rentals. Its active listings exceeded eight million in the second quarter.
The company, which in May rolled out Airbnb Icons, a promotion that gives its customers a chance at overnight stays in exotic settings, is also culling less appealing listings from its site. Since April 2023, it has removed more than 200,000 listings “that failed to meet our guests’ expectations”, Chesky said.
