Airbnb Crushes Q4 Estimates As 'Classic Hotel Users' Flock To Short-Term Rentals—Here's What's Driving The Surge In 'Nights And Experiences'

Zinger Key Points

Airbnb's fourth quarter revenue of $2.5 billion, up 12% year-over-year, beat analyst estimates of $2.42 billion.
Q1 revenue will be heavily impacted by both the FX headwinds, said CFO.
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Airbnb Inc. ABNB exceeded earnings expectations in the fourth quarter of 2024, driven by accelerated growth in “nights and experiences” bookings and market share gains from traditional hotels. This marked the company’s strongest year-over-year growth quarter of the year 2024.

What Happened: According to the company’s CFO, Ellie Mertz, the company has predominantly witnessed “market share gains coming from hotels ” recently.

“The increases we’ve seen in terms of brand consideration have really been attracting more, frankly, classic hotel users to try our product and has allowed us to continue to gain market share,” Mertz said during the earnings call.

The company witnessed a growth in Airbnb ‘nights,’ which refers to a single overnight stay at a listed property, along with Airbnb ‘experiences,’ which are activities led by locals that allow travelers to experience a destination through the eyes of a local.

“Nights and experiences booked accelerated in Q4 to 12%, making it the highest year-over-year growth quarter of 2024,” added Mertz.

The management further said that this year, Airbnb plans to invest $200 million to $250 million toward launching and scaling new businesses, which will be introduced in May.

Why It Matters: Airbnb’s fourth quarter revenue of $2.5 billion, up 12% year-over-year, beat analyst estimates of $2.42 billion. Gross booking value reached $17.6 billion, with 111 million nights and experiences booked. Free cash flow was $458 million and adjusted EBITDA rose to $765 million from $738 million last year.

However, highlighting the future outlook Airbnb expects a margin impact from the new business investments to be concentrated in the first three quarters of the year. Revenue gains from the new businesses won’t materialize until after their launch at the end of the second quarter.

“Q1 revenue will be heavily impacted by both the FX headwinds as well as the calendar changes vis-a-vis or relative to 2024. That will impact not just revenue but also Q1 EBITDA. Q1 EBITDA margins would actually be relatively flat,” added CFO Mertz.

Price Action: ABNB shares gained 0.37% on Thursday, reaching $141.04 per share, but jumped 14.22% in after-hours trading after its results.

The exchange-traded fund tracking the Nasdaq 100 index, Invesco QQQ Trust, Series 1 QQQ rose 1.44% on Thursday. ABNB has risen 7.27% year-to-date, whereas it fell 4.83% over the last year.

The average price target among 35 analysts tracked by Benzinga is $137 with a ‘hold’ rating. The estimates range from $90 to $195 apiece. Recent ratings from Wells Fargo, Morgan Stanley, and B of A Securities suggest a $126.67 target, implying a potential downside of 21.37%.