Companies
Airbnb rallies after hours on earnings and revenue beat
Airbnb shares rallied after hours on Thursday after third-quarter earnings and revenue beat analysts' estimates. The company's fourth-quarter revenue outlook also topped forecasts. The gain reversed a weak regular session.
Quick Read
- Airbnb's third-quarter earnings per share and revenue both beat analysts' estimates, and gross bookings grew from a year earlier.
- The company's fourth-quarter revenue range sits entirely above the analyst estimate.
- The after-hours rally reversed a regular-session drop that came on a broad down day for stocks.
- Airbnb makes up a small share of the largest U.S. companies' combined value, so its swings barely move a broad index fund.
What did Airbnb report?
Airbnb (Nasdaq: ABNB) shares rose 11.3% after hours on Thursday to $188.87. The move followed third-quarter results that beat analysts' estimates. After-hours trading happens after the regular session closes, when far fewer buyers and sellers take part.
Why it matters: Earnings came in at $3.16 per share, against the $2.84 analysts expected. Revenue reached $4.87 billion, above the $4.75 billion Street estimate.
By the numbers: Gross bookings, the total value of stays and services guests booked, rose 21% from a year earlier. Nights and seats booked also grew.
Why did the shares rally?
The beat came with a stronger outlook. Airbnb said it expects fourth-quarter revenue of $3.22 billion to $3.28 billion. Even the low end of that range sits above the $3.16 billion analysts had estimated.
The company described the quarter as a turn. "Airbnb is back in growth mode," it wrote in its letter to shareholders. The letter said growth sped up across its business, including its most established markets.
How does Thursday's drop fit in?
The rally followed a weak regular session. Airbnb stock fell 3.5% to close at $170.13, on a day the S&P 500 tumbled 4.4%.
Airbnb lost $2.6 billion in market value during the session. Its closing price sat 10.7% below the stock's 52-week high of $190.50. The after-hours price put the stock back just under that high.
What comes next?
What’s next: After-hours moves can shrink or reverse once the full market opens, because thin trading lets a few large orders move the price. Friday's regular session may show whether the gain holds. Friday also brings the October jobs report and the University of Michigan's preliminary November consumer survey, which could move the broad market.
For a broad index fund, the effect is small. Airbnb accounts for 0.08% of the combined value of the 500 largest U.S. companies. Its regular-session drop took $3 from $100,000 spread across them by size.
For readers
What it could mean for you: This story reaches people who own Airbnb shares directly, since a single stock carries the company's results in full with nothing else to offset them. Shareholders went from a sharp regular-session loss to an after-hours gain on the same day. The open question is whether that gain holds in Friday's regular session, when far more traders take part. Airbnb's fourth-quarter revenue range may also become the yardstick for its next results.
Questions and answers
Did Airbnb beat earnings estimates?
Yes. Airbnb's third-quarter earnings per share and revenue both came in above the estimates analysts had set.
What is Airbnb's fourth-quarter revenue guidance?
Airbnb gave a fourth-quarter revenue range whose low end is above the analyst estimate. That outlook came alongside the quarterly beat.
Why did Airbnb stock fall before its earnings?
The stock dropped in Thursday's regular session, on a day the S&P 500 also fell sharply.
The numbers
| Airbnb (ABNB) price | $170.13 |
|---|---|
| Airbnb (ABNB) change | −3.54% |
| Airbnb (ABNB) market value | $71 billion |
| Airbnb (ABNB) 52-week high | $190.50 |
| S&P 500 change | −4.36% |
| 10-year Treasury yield | 4.84% |
Thursday’s close
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