Airbnb 3Q25 Quick Interpretation: Overall, the company's performance this quarter shows mixed financial indicators, with ongoing issues of profit margin contraction. However, operational metrics such as GBV and the growth rate of room night bookings have both accelerated significantly quarter-on-quarter.
The guidance for GBV growth in the next quarter also exceeds expectations, suggesting that the company's business growth may finally be rebounding. Specifically:
1) The biggest highlight this quarter is that GBV increased by 13.9% year-on-year, significantly accelerating from the previous quarter and surpassing the market expectation of approximately 10.1%. The driving factor, more importantly, is the volume—room night bookings growth rate also improved to 8.8%, exceeding the market expectation of 7.7%.
Although the improvement may seem modest, market expectations for the company were not optimistic before the earnings, making this an important directional turning point.
2) According to the company, the better-than-expected growth rate of room nights this quarter was mainly due to the largest market—the United States, not performing as poorly as anticipated. The company's growth rate this quarter was in the mid-single digits, slightly accelerating from the low-single digits of the previous quarter. Additionally, favorable exchange rates and changes in product mix led to a significant year-on-year increase of 4.7% in average spending per booking, contributing more to the better-than-expected GBV.
3) For the next quarter, the company expects GBV growth to remain above 10%, significantly exceeding the pre-earnings market expectation of 6.8%, indicating that the signs of growth improvement seen this quarter can continue. However, room night growth is expected to slow from nearly 9% this quarter to mid-single digits due to the high base from last year, which is roughly in line with market expectations. Therefore, the main contribution will still come from strong growth in average spending per booking.
4) On financial metrics, although GBV was significantly better than expected this quarter, the monetization rate was slightly lower than expected, contracting by 68 bps year-on-year, resulting in revenue and gross profit not being as good as expected. Fortunately, actual expenses were not as high as anticipated, growing by 10% year-on-year vs. the expected 13%. Therefore, the final profit performance was still in line with expectations.
Adj. EBITDA grew by approximately 4.8% year-on-year this quarter (with the profit margin contracting year-on-year). However, due to expected higher expenses next quarter, the company guides that adj. EBITDA will decline year-on-year, which will be worse than this quarter. But this is also in line with pre-earnings market expectations.$Airbnb(ABNB.US)
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