Airbnb Shares Jump on Strong Q3 Revenue, but Earnings Miss

Core Viewpoint - Airbnb's Q3 results showed a mixed performance with revenue exceeding expectations but earnings per share falling short, indicating challenges in profitability despite strong operational metrics [3][4][5]. Financial Performance - Revenue for Q3 reached $4.10 billion, slightly above the consensus estimate of $4.08 billion, marking a year-over-year increase of 9.86% from $3.73 billion [4][11]. - Adjusted earnings per share (EPS) were $2.21, missing the estimate of $2.32 by $0.11, representing a 4.7% miss [4][11]. - Net income was $1.37 billion, a marginal increase of 0.44% year-over-year [4][11]. Operational Metrics - Gross Booking Value surged 14% year-over-year to $22.9 billion, with nights and seats booked increasing by 9% to 133.6 million [7][11]. - Operating cash flow rose by 25.79% to $1.36 billion, while free cash flow was reported at $1.35 billion, indicating strong operational performance despite profit growth stagnation [7][11]. Strategic Investments - Management is focusing on international expansion, AI integration, and flexible payment options, which are expected to drive long-term growth at the expense of near-term profitability [6][12]. - The "Reserve Now, Pay Later" feature is contributing to increased U.S. bookings, and expansion into markets like Japan and India is gaining traction [12][13]. Forward Guidance - Q4 2025 guidance projects revenue between $2.66 billion and $2.72 billion, reflecting a growth deceleration compared to Q3 [9][10]. - Management anticipates continued margin pressure, with adjusted EBITDA expected to be flat to slightly down year-over-year [9][10].