To The Moon

$Airbnb, Inc.(ABNB)$ released its Q2 earnings report after close August 2nd. The prosperity of the travel industry in the current quarter made the performance beat estimate. But, the guidance for summer quarter not enought meet investors' expectations, stock price still plunged 10%.

For Q2 performance, both revenue and profit beat.

• Revenue reached 2.104 billion US dollars, a year-on-year increase of 58%, slightly exceeding the expected 2.095 billion US dollars;
• The adjusted EBITDA was US $711 million, a year-on-year increase of 227%, exceeding the expected US $592 million;
• The adjusted diluted EPS was USD 0.56, which was higher than the market expectation of USD 51 million.
• The total scheduled amount was US $16.98 billion, a year-on-year increase of 26.5%, which was higher than the market expectation of US $16.92 billion;

For revenue, 22Q2 is the second highest income single season in history, only below last Q3, which is due to the strong travel demand in Q2 compared to last year; At the same time, the growth rate of cross-border traveling beyond the pre-pandemic level that nearly doubled.

For profit, Q2 is the most profitable quarter in Airbnb's history, which has achieved good results in tightening expenses, streamlining and concentrating operations. At the same time, with the travel demand changing, the company is constantly adjusting its business.

In addition to Q1's announcement of withdrawing from the Russian market, the company announced in May that it would officially close its local business in China, including Airbnb China (Airbnb), which will completely offline nearly 150,000 local housing and experience businesses in China, and only keep its cross-border business. However, Airbnb said earlier that China's local business accounted for nearly 1% of all businesses in the pandemic.

For Airbnb, there are two notable factors-inflation and the forex.

Compared with short rent, long-term accommodation (8 days or more) on Airbnb platform is the fastest growing part, with an increase of 25% over the same period last year. It can be clearly felt that inflation factors have obvious reactions in the tourism and accommodation industry. On the one hand, the rent itself has risen rapidly. Compared with the level before the epidemic in 2019, the average daily house price on Airbnb platform has increased by 40%, reaching $164. On the other hand, the Fed's interest rate hike is very fast, which greatly inhibits the demand for buying a house and increases the demand for renting a house.

At the same time, a strong dollar has also had a certain impact on growth. For example, the total predetermined amount increased by 27% year-on-year in US dollars and 34% in original currencies. Exchange gains and losses had a 600 basis point impact on Q1 profits, although management expects Q3 to ease somewhat.

For Q3 performance expectations, investors seem to be more aggressive than management.The company expects Q3 to be the highest in history, ranging from US $2.78 billion to US $2.88 billion, an up 24% to 29% year-on-year, and up 69% to 75% compared with 2019 before the pandemic.The adjusted EBITDA profit margin is expected to reach or slightly lower than 49%.

As for why investors are so demanding from Airbnb? There may be the following reasons

First, Airbnb's current valuation is still high. According to the market's radical expectation, the price-earnings ratio in 2022 has also reached 51 times, while BKNG and EXPE in the same industry are 20 times and 14 times, so if the growth rate is less than expected, it is easy to undermine investor confidence.

Second, the market may think that the environment of raising interest rates will have an impact on the travel market, so the company lowered its expectations.