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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Airbnb (ABNB) Q3 CY2025 Highlights:
- 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
- Nights and Experiences Booked: 133.6 million, up 10.8 million year on year
- Market Capitalization: $73.08 billion
StockStory’s Take
Airbnb’s third quarter results were well received by the market, highlighted by management’s focus on product improvements and expansion into new service categories. CEO Brian Chesky attributed growth to the launch of flexible payment options, a surge in international bookings, and ongoing enhancements to the guest experience. Management emphasized that the introduction of 'Reserve Now, Pay Later' in the U.S. led to a notable increase in bookings, while over 65 product updates—including improved mapping and cancellation policies—helped reduce friction for both guests and hosts. Chesky noted, “The better our product is, the more people use it.”
Looking ahead, Airbnb’s guidance reflects confidence in sustained momentum driven by continued investment in artificial intelligence, international market expansion, and new business lines such as experiences and hotel listings. CFO Ellie Mertz highlighted that the company expects to maintain strong margins while scaling these new initiatives, explaining, “We will be investing in experiences, hotels, and AI next year to drive growth.” Management sees significant runway for further growth, particularly as AI-powered features are rolled out globally and new offerings attract both travelers and hosts to the platform.
Key Insights from Management’s Remarks
Management pointed to a combination of payment innovation, global expansion, and new business launches as the main contributors to revenue growth and platform engagement in the latest quarter.
- Flexible payments drive bookings: The introduction of 'Reserve Now, Pay Later' significantly boosted U.S. bookings, with about 70% of eligible guests opting for this payment method. Management said the incremental lift in bookings outweighed a modest increase in cancellations, enabling broader access to the platform and supporting higher conversion rates.
- International growth accelerates: Expansion efforts in markets like Japan and India resulted in first-time bookers growing over 20% and nearly 50% year-over-year, respectively. Localized marketing and product adaptation were cited as critical to the platform’s success outside its core markets, and Latin America continued to deliver double-digit nights booked growth.
- New experiences and services attract new users: The launch of Airbnb experiences and services brought in a new audience, with nearly half of experience bookers not having an Airbnb stay. Management shared that service experiences, particularly Airbnb Originals, are seeing strong local adoption, especially in Paris where 70% of Originals are booked by residents.
- Hotels pilot fills supply gaps: Airbnb’s pilot program for boutique and independent hotel listings in supply-constrained cities like New York and Madrid is showing encouraging momentum. Management believes that hotels serve as a supplement, not a replacement, for home listings, especially for short urban stays.
- AI integration enhances user experience: Over a dozen AI initiatives are underway, including an AI-powered customer support assistant and a conversational search function. The U.S. rollout of AI customer support reduced the need for human intervention by 15%, and management sees AI as a differentiator in delivering more personalized experiences across the platform.
Drivers of Future Performance
Airbnb’s outlook for the coming quarters is rooted in product expansion, ongoing international market development, and the rollout of advanced AI features to drive engagement and efficiency.
- AI-powered platform enhancements: Management plans to expand AI-driven features such as conversational search and smart customer support globally, aiming to improve trip planning and issue resolution while reducing support costs. These initiatives are expected to boost guest satisfaction and operational scalability.
- Scaling new business lines: Airbnb will continue investing in experiences, services, and hotels, with management projecting these segments to become material revenue drivers over a three- to five-year horizon. The company’s city-by-city approach to market entry allows for focused piloting and efficient scaling of new offerings.
- International and payment innovation: Further localization and flexible payment methods, such as installment plans in Brazil and expanded 'Reserve Now, Pay Later' options, are central to capturing new users in underpenetrated regions. Management expects these efforts to accelerate growth in both bookings and nights stayed, particularly outside North America.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the rollout and adoption of AI-powered search and support features across more markets and languages, (2) the pace and impact of hotel and experiences expansion in new pilot cities, and (3) the effect of additional payment flexibility offerings on user acquisition and retention. The evolution of international market share and the success of localized product launches will also be key indicators of long-term growth.
Airbnb currently trades at $126.45, up from $120.62 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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