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. Is now the time to buy ABNB? Find out in our full research report (it’s free for active Edge members). Airbnb (ABNB) Q3 CY2025 Highlights: Revenue: $4.10 billi ...

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $4.1 billion, representing a 10% year-over-year increase [18] - Adjusted EBITDA reached $2.1 billion, with a 50% EBITDA margin, marking the highest quarterly EBITDA ever [17][18] - Gross booking value (GBV) grew 14% year-over-year to $22.9 billion, driven by strong growth in both bookings and pricing [17][18] - Net income was $1.4 billion, with earnings per share (EPS) of $2.21, reflecting a 4% year-over-year growth [18] Business Line Data and Key Metrics Changes - Nights and seats booked increased by 9% year-over-year, showing a two-point sequential acceleration from Q2 [17] - The introduction of the Reserve Now, Pay Later payment option significantly contributed to the growth in the U.S. market [17][25] - Service and experiences launched in May received an average rating of 4.3 out of 5 stars, indicating strong customer satisfaction [9] Market Data and Key Metrics Changes - Average nights booked in expansion markets grew at double the rate of core markets over the past 12 months [8] - First-time bookers increased by over 20% in Japan and nearly 50% in India year-over-year [8] - Nights growth across major regions remained steady or accelerated, with Latin America growing in the low 20s and Asia-Pacific in the mid-teens [17] Company Strategy and Development Direction - The company is focusing on four key growth areas: improving service quality, expanding globally, diversifying offerings, and integrating AI into the app [4][8] - The launch of hotels on the platform aims to fill gaps in supply-constrained markets, with a focus on boutique and independent hotels [11][44] - The integration of AI is expected to enhance personalization and user experience, with plans for AI-powered search and customer support [12][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued momentum in bookings, particularly due to the Reserve Now, Pay Later offering [20] - The company anticipates revenue growth of 7%-10% in Q4 2025, despite tougher year-over-year comparisons [20] - Management highlighted the importance of maintaining strong margins while investing in growth initiatives for 2026 [21] Other Important Information - The company repurchased $857 million of common stock during the quarter, with a total of over $3.5 billion repurchased in the trailing 12 months [19] - A one-time $213 million valuation allowance impacted net income due to changes in tax legislation [18] Q&A Session Summary Question: What percentage of the acceleration in the U.S. has come from the Reserve Now, Pay Later offering? - Approximately 70% of users offered the Reserve Now, Pay Later option have utilized it, contributing to increased bookings despite some rise in cancellations [25][26] Question: How should investors think about the duration of execution and investment needed for international market expansion? - The company has been selective in market expansion, with different timelines for each market, and is seeing success in targeted regions like Latin America and Japan [28][30] Question: What is the contribution of experiences and services, and are they helping with overall platform velocity? - Experiences are attracting new users, with about half of those booking experiences not having an associated home stay, indicating potential for future growth [33][34] Question: How does the company view the long-term scope of hotel offerings? - Hotels are seen as a promising opportunity, with the potential to complement the existing home rental business without significant cannibalization [39][43] Question: What are the incremental investment plans for 2026? - The company plans to continue investing in new business initiatives, including hotels and AI integration, while maintaining a focus on profitability [52][56]

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].

Group 1: Berkshire Hathaway Investments - Berkshire Hathaway acquired a new stake in UnitedHealth (UNH) during Q2 2025, purchasing 5.04 million shares valued at $1.57 billion [3] - The company also took new stakes in Nucor (NUE) and D.R. Horton (DHI), while reducing its holdings in Apple (AAPL) and Bank of America (BAC) [3] Group 2: Other Investment Moves - Eminence Capital exited its positions in Bank of America (BAC), Uber (UBER), GE Healthcare (GEHC), Capital One (COF), and Primo Brands (PRMB), while acquiring 0.57 million shares of UnitedHealth (UNH) [4] - Renaissance Technologies also invested in UnitedHealth Group (UNH), taking a new stake of 1.35 million shares [5] Group 3: Intel Developments - Intel (INTC) shares rose 7.38% following reports that the U.S. government is considering taking a financial stake in the company to support the development of a factory hub in Ohio [6] - The plan for Intel could potentially make the site the largest chip foundry globally, although details on the investment amount and legality remain unclear [7] Group 4: Airbnb Payment Options - Airbnb (ABNB) introduced a "Reserve Now, Pay Later" option for U.S. guests, allowing reservations without upfront payment for listings with moderate or flexible cancellation policies [8][10] - A survey indicated that 60% of respondents find flexible payment options important, and 55% utilize them when available [10]

Core Insights - Airbnb Inc. has launched a "Reserve Now, Pay Later" feature for U.S. customers, allowing travelers to book certain domestic stays without upfront payment [1][2] - The feature is designed for listings with moderate or flexible cancellation policies, enabling guests to delay full payment until just before the property's free cancellation window closes [2][3] - This new option aims to provide more flexibility for travelers, particularly for groups coordinating payments, and complements existing payment options like "Pay Part Now, Part Later" and "Pay Over Time" [3][4] Industry Trends - The introduction of the "Reserve Now, Pay Later" feature aligns with a growing consumer preference for installment and deferred payment products, as evidenced by an estimated $175 billion in BNPL transactions in the U.S. in 2024 [6] - The demand for flexible payment options is increasing, with consumers seeking greater financial management and convenience in uncertain economic conditions [6] - Airbnb's expansion of payment flexibility tools is expected to lower the barrier to commitment for cost-conscious travelers, potentially driving more bookings [4][5]