Key Notes
- Airbnb’s third-quarter revenue rose 19% to $4.87 billion, with diluted earnings of $3.16 a share and a 16% increase in its booking-volume measure.
- The company raised its full-year revenue-growth outlook to the high teens and expects fourth-quarter revenue of $3.22 billion to $3.28 billion.
- A new $12 billion buyback authorization follows $700 million of quarterly repurchases, with trailing annual free cash flow reaching $4.90 billion.
Airbnb Inc. (Nasdaq: ABNB) raised its annual growth forecast and announced an additional $12 billion share-buyback authorization after third-quarter revenue climbed 19%, its fastest growth in more than three years. Stronger bookings across major travel markets helped the company beat profit and revenue expectations.
Shares rose about 11.3% to $189.40 in extended trading at 4:48 p.m. Eastern time, according to market data. The gain followed a 3.5% regular-session decline to $170.13 during Thursday’s market selloff.
The company now expects full-year revenue growth in the high teens and an adjusted EBITDA margin of approximately 36%. The stronger outlook comes with a sizeable new commitment to returning capital, although management is also increasing investment in products, services and AI-powered travel tools.
Airbnb Q3 Earnings Top Forecasts
For the quarter ended September 30, Airbnb’s shareholder letter reported:
- Revenue: $4.87 billion, up 19% from a year earlier.
- Diluted earnings per share: $3.16, compared with $2.21 a year earlier.
- Net income: $1.89 billion, up approximately 38%.
- Adjusted EBITDA: $2.51 billion, up 22%, with a 52% margin.
- Gross Booking Value: $27.7 billion, up 21%.
- Nights and Seats Booked: 155 million, up 16%.
The results exceeded the $2.85 earnings-per-share and $4.75 billion revenue forecasts cited by StreetInsider. Revenue growth was 16% excluding currency movements, showing that foreign-exchange effects also helped the reported increase.
Total costs and expenses rose about 15% to $2.85 billion, slower than revenue, lifting operating income to $2.02 billion from $1.63 billion. Net profit also benefited from a lower tax provision: $283 million versus $418 million a year earlier, when Airbnb recorded a valuation allowance against certain deferred tax assets.
The 52% adjusted EBITDA margin compares with 50% a year earlier. That non-GAAP measure excludes items including stock-based compensation and taxes; Airbnb’s reported net-income margin was 39%.
A Higher Outlook Includes a Marketing Headwind
Airbnb expects fourth-quarter revenue of $3.22 billion to $3.28 billion, above the $3.16 billion average estimate shown by Yahoo Finance. The company’s range implies growth of 16% to 18%, including approximately two percentage points of currency support after hedging.
Management expects booking value to rise by a mid-teens percentage, supported by at least low-double-digit growth in Nights and Seats Booked and a modest increase in average daily rates. Adjusted EBITDA should increase, although its fourth-quarter margin is expected to slip slightly because of the timing of marketing spending.
The demand improvement was broad. Every region delivered double-digit growth in booked nights, and North America recorded its fastest growth in four years. First-time bookers increased 13%, the strongest growth since early 2022, while average daily rates rose about 4% globally.
Airbnb is still monitoring developments in Europe, the Middle East and Africa. Its confidence in the full year therefore sits alongside continued regional uncertainty, rather than an assumption that every travel market faces the same conditions.
Cash Flow Backs a New $12 Billion Buyback
The new authorization allows Airbnb to repurchase up to an additional $12 billion of Class A shares. The company bought back $700 million during the third quarter and had $2.7 billion remaining under its earlier authorization at September 30.
Operating cash flow reached $1.51 billion, while free cash flow was $1.43 billion, compared with $1.35 billion a year earlier. Free cash flow over the trailing 12 months totaled $4.90 billion. The company ended September with $12.6 billion in cash, short-term investments and restricted cash.
Repurchases have already helped reduce the share count. Average diluted shares fell to 597 million from 621 million a year earlier, helping per-share earnings grow faster than net income. The new authorization expands the scope for further purchases while Airbnb continues to fund its product roadmap.
AI and New Products Extend the Travel Push
Airbnb says approximately 40% of all customer-support issues were resolved without a human agent during the quarter, up from about a third in the second quarter. Customer-support cost per booking fell more than 17% from a year earlier, with the company crediting improvements to its AI assistant for much of the reduction.
The next step is a travel-planning and booking agent, which Airbnb plans to begin rolling out in the first half of 2027. It is also adding boutique hotels, expanding services such as car rentals and building a partnership that will bring more than one million Airbnb listings to American Express Travel.
The report adds to an uneven set of travel earnings. Booking Holdings (Nasdaq: BKNG) reported higher bookings but a slower fourth-quarter outlook; its reported revenue was also reduced by an FTC-related item. Airbnb’s update points to stronger momentum in its own marketplace.
The raised forecast sets a higher bar for the holiday quarter: Airbnb is promising another period of double-digit booking growth while absorbing a heavier marketing bill.
