In the second quarter, the US platform conscientiously beat Wall Street forecasts. With $23.5bn in gross bookings, the group generated $3.1bn in revenue, with an EBITDA margin of 34%, in line with annual targets. Net income also exceeded estimates at $642m, representing a net margin of 21%.
All of the above figures show double-digit growth. The group is also taking the opportunity to announce the largest share buyback in its stockmarket history: $6bn. This explains the more than 5% rise in the share price in the minutes following the announcement.
But on closer inspection, a few weaknesses emerge.
A warning that changes the game
Behind these solid results, the message is more nuanced. Airbnb remains confident for the summer season and expects the third quarter to be in line with expectations. However, management is more cautious about the end of the year.
"We anticipate a more challenging comparison base at the end of the quarter, a trend that is expected to continue into the fourth quarter, weighing on growth rates," the CFO warned.
Quarterly growth in bookings (Source: Bloomberg)
Admittedly, the platform has seen growth of more than 20% in expanding markets such as Asia Pacific and Latin America, which supported the end of the 2024 financial year. But investors are starting to hear this song before, and many see it as an excuse.
The rebound in growth to over 10% last year is very real, but the cautious tone of management suggests a sense of resignation in the face of this symbolic 10% quarterly growth threshold.
Growth is plateauing in mature markets
The trend in bookings remains positive, but momentum is slowing in traditional markets. In the United States, which accounts for 30% of revenue, revenue per booking is currently plateauing.
Growth in revenue per booking, in blue for North America and red for Europe (Source: Bloomberg)
In both North America and Europe, Bloomberg data shows a decline in average prices, which limits growth prospects. Faced with increasingly aggressive competition and significant exposure to local regulatory decisions, Airbnb must seek new growth drivers.
The massive share buyback suggests that external growth is not a priority. Instead, the group is focusing on developing its platform by expanding it to include services and experiences.
The "Experiences" gamble
Launched in May, the new "Experiences" section has been well received, according to the group. However, Airbnb has not yet released any figures.
The new "Experiences" section of the Airbnb website (Source: Airbnb)
Management sees this as a strategic lever: according to CEO Brian Chesky, this offering could generate more than $1bn in annual revenue over time, or nearly 10% of 2024 revenue.
But this investment—$200m planned for this year, notably to develop AI agents—will squeeze margins in the second half of the year.
If the market had full confidence in this growth driver, it would not have batted an eyelid at management's warning of a decline in margins ahead. The fall in the share price after the good news was digested reflects investors' skepticism about future growth.
