Stocks Of Airbnb Fall Sharply Following A Cautious Forecast And Disappointing Bookings

Airbnb Inc. announced on Tuesday that the first quarter of the year saw a record high in nights booked on their platform due to an increase in international travel and the return of guests to cities. 

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As a result, the company recorded its first profitable start to a year on record. However, despite forecasting strong revenue growth for the second quarter and a busy summer travel season, executives cautioned that the growth in nights and experiences booked would be "unfavorable" compared to the same period last year when there was a surge in travel demand following subsiding fears about the COVID-19 omicron variant.

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Despite the cautionary note, the alternative-accommodations booking company still achieved its highest quarterly number ever, with 121.1 million nights and experiences booked. 

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Gross bookings value (GBV) totaled $20.4 billion, beating analysts' expectations, while average daily rates were $168.43, higher than the anticipated $164.80. However, shares fell 12% after hours, after rising 1% in the regular session to close at $127.07, as the numbers fell slightly short of analysts' predictions.

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In a letter to shareholders, the company's executives said that Airbnb had doubled in size since before the pandemic, on both a GBV and revenue basis, with considerably higher profitability and cash flow. 

Free cash flow increased by 32% year-over-year to $1.6 billion. Although long-term stays accounted for 18% of total gross nights booked, down from 21% in the previous quarter, Chief Executive Brian Chesky remained "extremely bullish" about long-term stays as he believes the pandemic has opened the door to permanent flexibility.

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Airbnb also reported a first-quarter net income of $117 million, or 18 cents per share, compared to a loss of $19 million, or 3 cents per share, in the same period last year. Adjusted EBITDA was $262 million, beating analysts' expectations. Revenue rose to $1.82 billion from $1.51 billion in the year-ago quarter, exceeding analysts' expectations.

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For the second quarter, Airbnb expects revenue of $2.35 billion to $2.45 billion, slightly below analysts' forecast of $2.42 billion. 

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Adjusted EBITDA is expected to be in line with the same quarter last year, although the adjusted EBITDA margin is expected to be lower due to the timing of marketing spending. The board has also approved a new stock buyback of up to $2.5 billion. 

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Airbnb's shares have risen by 50% year-to-date, outperforming the S&P 500 index, which has increased by approximately 7% so far this year.

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