Airbnb Shares Plunge 15% After Q2 Earnings Miss and Disappointing Q3 Forecast

Airbnb (NASDAQ:ABNB) experienced a significant drop in share price, plunging 15% intra-day today, following the release of its mixed second-quarter results and a disappointing revenue forecast for the third quarter.

In the second quarter, the company reported revenue of $2.75 billion, which slightly exceeded the Street estimate of $2.74 billion and reflected an 11% increase year-over-year. However, the adjusted EPS of $0.86 fell short of analyst expectations of $0.91.

The outlook for the third quarter contributed to investor concerns. Airbnb projected revenue to range between $3.67 billion and $3.73 billion, below the anticipated $3.84 billion. The company attributed this to "some signs of slowing demand from U.S. guests" and globally shorter booking lead times.

CEO Brian Chesky highlighted that while there were indications of reduced demand from U.S. guests, regions like Latin America and Asia Pacific continued to show robust growth.

For the second quarter, Airbnb reported a net income of $555 million, achieving a 20% margin. Adjusted EBITDA saw a 9% increase year-over-year, reaching $894 million, and free cash flow rose 16% to $1.0 billion.

Despite expecting modest year-over-year growth in average daily rates (ADR) for Q3, Airbnb anticipates that Adjusted EBITDA will remain flat compared to the previous year, with margins likely to decline due to marketing expenses outpacing revenue growth.