Airbnb shares jumped 3% on Friday after the home-rental platform posted stronger-than-expected third-quarter revenue and raised its fourth-quarter guidance, signaling sustained travel demand heading into the year-end holiday season.
While earnings per share missed Wall Street estimates, the company’s solid top-line performance and forward-looking optimism helped reassure investors about its growth trajectory.
Revenue growth defies broader market concerns
Airbnb reported third-quarter revenue of $4.1 billion, a 10% increase from a year earlier and slightly above the $4.08 billion forecast by analysts surveyed by FactSet.
The company attributed the growth to improving traveler confidence and a rebound in forward bookings.
Gross booking value (GBV), a key measure of total transaction volume, climbed to $22.9 billion, beating analyst expectations of $21.9 billion.
Management said travel demand strengthened not only through the third quarter but also in October, as consumers became more comfortable making vacation plans further in advance.
Airbnb highlighted its new “Reserve Now, Pay Later” program as a key factor behind the shift.
The feature allows guests to secure stays without immediate payment, which has helped increase the number of early bookings compared with the start of the year, when travelers were more hesitant due to economic uncertainty.
Earnings pressured by one-time tax impact
Despite solid revenue growth, Airbnb’s quarterly profit came in slightly below expectations.
Net income for the three months ended September 30 totaled $1.37 billion, largely unchanged from the prior year.
Earnings per share rose modestly to $2.21 from $2.13, but missed the $2.31 consensus estimate from FactSet.
The miss was primarily attributed to higher tax expenses tied to the implementation of the One Big Beautiful Bill Act.
The legislation eliminated Airbnb’s use of the corporate alternative minimum tax credit, prompting a $213 million tax asset write-off during the quarter.
Airbnb noted, however, that the new law should lower its tax rate over time.
The company expects its effective tax rate to fall into the mid-to-high teens by 2026, compared with its previous estimate of around 20%.
Optimism builds around fourth-quarter forecast
For the current quarter, Airbnb projected revenue between $2.66 billion and $2.72 billion, slightly above Wall Street’s $2.67 billion forecast.
The company anticipates gross booking value will rise by a low double-digit percentage, supported by continued growth in average daily rates and higher booking volumes.
Analysts generally viewed the report as encouraging.
Jefferies, which maintains a “Buy” rating and a $160 price target, said faster bookings growth and positive hotel industry trends could boost confidence in Airbnb’s long-term potential.
The firm also highlighted AI-powered sponsored listings as a future monetization opportunity.
BTIG, which rates the stock “Neutral,” acknowledged the quarter’s strength but cautioned about limited traction in newer initiatives and potential margin headwinds from higher services spending.
Meanwhile, TD Cowen reiterated its “Buy” rating with a $150 price target, noting that Airbnb has narrowed its growth gap with Booking Holdings (BKNG) and expects stable margins as its product rollout strategy matures.
Overall, Airbnb’s results reinforce its position as one of the travel industry’s strongest post-pandemic performers.
With travelers showing renewed confidence and the company investing in flexible payment options and new monetization tools, Airbnb appears poised to sustain steady growth into 2025.
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