To The Moon

$Airbnb, Inc.(ABNB)$ reported earnings for 24Q2, and while the quarterly results were strong, investors were disappointed by the downward revision of its future guidance, and at one point fell 17% after hours.

Q2 Review

In terms of financial metrics

• Revenue came in at $2.75 billion, up 11% year-over-year and slightly ahead of market expectations of $2.74 billion;

• Earnings per share of $0.86, down from $0.98 in the year-ago quarter and the market consensus estimate of $0.91;

• Adjusted EBITDA of $894.0 million, up 9% year-over-year, an all-time high for the second quarter, and above the market consensus estimate of $862.3 million;

• Free cash flow of $1 billion, beating expectations of $788 million.

• Repurchased $749 million of stock, leaving $5.25 billion in repurchases.

In terms of operating metrics.

• Gross bookings value (GBV) increased 11% to $21.2 billion, in line with expectations.

• The number of nights and experiences booked reached 125 million, up 9 percent year-over-year, and average daily rate (ADR) increased modestly by 2 percent.

• The number of active listings exceeded 8 million, with growth across all regions and market types.Active listings managed by superintendents grew by 26%.

• Mobile app bookings grew by 19% and accounted for 55% of total bookings.A record number of young users used the platform for the first time.

• Paris bookings up more than 100% year-over-year and active listings up 37% in preparation for the upcoming Olympics in Paris The July 4th holiday week set a new single-week revenue record for North America

Next Quarter Guidance

1. Q3 revenue guidance was $3.67-$3.7 billion, below market expectations of $3.84 billion, as consumer bookings weakened.The lower revenue guidance is also in line with the airline's earlier statement that "bookings were not as strong as expected", given that Q3 coincides with the summer and the Olympics are forgotten.

2. Booking lead times have shortened globally, with signs of a slowdown in U.S. customer demand.

3. Latin America and Asia Pacific remain the fastest growing regions.

Investment highlights

On the trend of shorter booking lead times and slower U.S. demand

The Company has noted a shortening of booking lead times beginning in July, primarily reflecting a decrease in long-term bookings (e.g., Thanksgiving, Christmas).This is primarily a temporary hesitation on the part of consumers, and at this time cannot be described as a cancellation of travel plans, which primarily reflects consumer confidence.The company has taken this into account in its third quarter guidance and has therefore lowered its guidance as well.

1. Plans to expand beyond the core business.

The company plans to expand its business in a number of ways, including:

• Launching a co-hosted marketplace service in October of this year.

• An improved "experience" service will be relaunched next year.

• New products and services will be introduced annually in the future, including extended stays, customer service and landlord services.

International Expansion

The Company uses localized products and marketing strategies to drive growth in these markets.Currently low penetration but high potential markets include:

• Europe: Germany, Italy, Spain

• Latin America: Brazil, Peru, Chile, Colombia, Argentina

• Asia: China, Japan, Korea, India, Southeast Asia, etc.

Is there any room for upward movement in listing pricing?

Q2 saw a slight increase in average daily rate (ADR) globally, particularly in North America, where customers are choosing larger, more expensive listings, reflecting Airbnb's strength in providing large, cost-effective listings.In addition, the company removed more than 200,000 listings that did not meet customer expectations since April 2023, and launched features such as Guest Favorites and Top Listing Highlights to help customers find high-quality listings, with active listings managed by Superhosts up 26% year-over-year.

$Expedia(EXPE)$ $Booking Holdings(BKNG)$