Airbnb posts mixed results as it arrives at “inflection point”

Airbnb had tempered its expectations for the fourth quarter, then topped them in results reported Tuesday — but investors were not impressed.

The short-term rental company disclosed after the bell that it recorded $2.22 billion in revenue for the three-month period, CNBC reported. That was up 17 percent year-over-year and topped the $2.17 billion forecasted by analysts.

At the same time, Airbnb lost $349 million — a reversal from the fourth quarter a year ago, when it reported a $319 million profit. Income tax obligations in Italy played a significant role in that result, according to Reuters.

Airbnb’s adjusted earnings for the fourth quarter were $738 million, topping analyst expectations by nearly $100 million.

Its share price, which closed Tuesday at $150.82, fell to $143.41 Wednesday morning before stabilizing. It is still up 19 percent in the past year but only 3.45 percent in the past five years, in part because of the pandemic. Airbnb is preparing to buy back up to $6 billion of Class A common stock.

“Clearly, they have no use of the cash right now other than buying back their stock. And that’s good for [investor] sentiment,” Bloomberg Intelligence analyst Mandeep Singh told Yahoo Finance. “But I think at the end of the day, investors want to know what is the addressable market and where else can they move into beyond the vacation rentals that they dominate.”

In a shareholder letter, Airbnb, led by CEO Brian Chesky, referred to the moment as an “inflection point.” It plans to invest more in under-penetrated markets, particularly abroad, and expand its business offerings. It promised to share details about that later this year.

The company raised expectations for the first quarter, forecasting revenue at the high-end of where analysts had it pegged after 6 million guests started the year at a booked Airbnb. 

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In the fourth quarter, 98.8 million stays and experiences were booked through the platform, up 12 percent year-over-year. Volatility from geopolitical issues tempered demand at the start of the quarter before it accelerated for the rest of the period.

Despite the pushback Airbnb is facing in some markets, including New York City, there were 7.7 million active listings at the end of the year, an 18 percent increase year-over-year. The company experienced double-digit growth in active listings for every region, according to its shareholder letter, paced by the Asia-Pacific region and Latin America.

— Holden Walter-Warner