Here's our initial take on Airbnb's (ABNB 1.82%) fiscal 2025 first-quarter financial report.
Key Metrics
| Metric | Q1 2024 | Q1 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Total revenue | $2.14 billion | $2.27 billion | +6% | Beat |
| Adjusted earnings per share (EPS) | $0.41 | $0.24 | -41% | Met |
| Nights/experiences booked | 132.6 million | 143.1 million | +8% | n/a |
| Gross booking value | $22.9 billion | $24.5 billion | +7% | n/a |
Travel Anxiety?
Airbnb was quite happy with the way it started its 2025 year. Despite the challenges the travel industry faced early in the year, Airbnb's business didn't seem to suffer, as guests spent $24.5 billion on the platform. High-single-digit percentage gains in key metrics like revenue and nights and experiences booked were in line with what analysts anticipated. Even though earnings were sharply lower from year-earlier levels primarily due to stock-based compensation expenses, adjusted EBITDA eased lower by just 2%.
In describing travel trends, Airbnb management said that traveler behavior was largely consistent with the previous year's first quarter. Demand in North America remained robust despite macroeconomic uncertainty, and the company said that most U.S. nights booked were by domestic travelers. Airbnb almost pointed out that although fewer Canadians traveled to the U.S. during the quarter, they still booked Airbnb listings in alternative destinations like Mexico. Meanwhile, growth was stronger in Latin America and the Asia-Pacific region.
Yet Airbnb's second-quarter outlook still included some potential impacts from global economic volatility. Revenue projections of $2.99 billion to $3.05 billion were a bit below expectations, and Airbnb believes that nights booked are likely to grow more slowly, with flat average daily rates for accommodations. Adjusted EBITDA should produce some growth, but likely with weaker margins as marketing expenses pick up.
NASDAQ: ABNB
Key Data Points
Immediate Market Reaction
Airbnb shareholders weren't entirely comfortable with the sluggish guidance for the current quarter. Shares were down between 3% and 4% in after-hours trading 30 minutes after the financial report came out. Some investors might also have hoped for less of a hit to earnings than the company suffered.
The reaction to this quarter's report is in stark contrast to the positive response Airbnb generated last quarter. From those mid-February highs, though, the stock had fallen as much as 40% before regaining some lost ground.
What to Watch
At this point, Airbnb is now trying to prepare shareholders for its annual summer release. This year's version should be jam-packed with new features as the company celebrates going beyond simply providing places to stay. Investments in technology have paid off with a better customer experience, but the company played it close to the vest in choosing not to reveal too many secrets before the official May 13 release date.
In the meantime, though, investors will also be watching to see how economic and geopolitical trends affect the travel industry more broadly. Airbnb has been resilient so far, but any further damage to international relations could start to have a bigger impact as the key summer travel season in the Northern Hemisphere approaches.
