Online accommodations platform Airbnb (NASDAQ:ABNB) met Wall Streets revenue expectations in Q3 CY2025, with sales up 9.7% year on year to $4.10 billion. The company expects next quarter’s revenue to be around $2.69 billion, coming in 0.7% above analysts’ estimates. Its GAAP profit of $2.21 per share was 4.8% below analysts’ consensus estimates.
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Revenue: $4.10 billion vs analyst estimates of $4.08 billion (9.7% year-on-year growth, in line)
EPS (GAAP): $2.21 vs analyst expectations of $2.32 (4.8% miss)
Adjusted EBITDA: $2.05 billion vs analyst estimates of $2.04 billion (50.1% margin, 0.7% beat)
Revenue Guidance for Q4 CY2025 is $2.69 billion at the midpoint, roughly in line with what analysts were expecting
Operating Margin: 39.7%, down from 40.9% in the same quarter last year
Free Cash Flow Margin: 32.9%, up from 31.1% in the previous quarter
Nights and Experiences Booked: 134 million, up 11.2 million year on year
Market Capitalization: $75 billion
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ:ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Airbnb’s sales grew at a solid 14.2% compounded annual growth rate over the last three years. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, Airbnb grew its revenue by 9.7% year on year, and its $4.10 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 8.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 8.5% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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As an online travel company, Airbnb generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.
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