Airbnb (NASDAQ:ABNB) Surprises With Q2 Sales But Stock Drops

Online accommodations platform Airbnb (NASDAQ:ABNB) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 12.7% year on year to $3.10 billion. The company expects next quarter’s revenue to be around $4.06 billion, close to analysts’ estimates. Its GAAP profit of $1.03 per share was 9.5% above analysts’ consensus estimates.

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Company Overview

Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ:ABNB) is the world’s largest online marketplace for lodging, primarily homestays.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Airbnb’s sales grew at a solid 16.2% compounded annual growth rate over the last three years. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Airbnb reported year-on-year revenue growth of 12.7%, and its $3.10 billion of revenue exceeded Wall Street’s estimates by 2.1%. Company management is currently guiding for a 8.8% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 8.4% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

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Nights And Experiences Booked

Booking Growth

As an online travel company, Airbnb generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.

Over the last two years, Airbnb’s nights and experiences booked, a key performance metric for the company, increased by 10% annually to 134 million in the latest quarter. This growth rate is solid for a consumer internet business and indicates people are excited about its offerings.

In Q2, Airbnb added 8.9 million nights and experiences booked, leading to 7.1% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating booking growth just yet.

Revenue Per Booking

Average revenue per booking (ARPB) is a critical metric to track because it not only measures how much users book on its platform but also the commission that Airbnb can charge.

Airbnb’s ARPB growth has been subpar over the last two years, averaging 2.7%. This isn’t great, but the increase in nights and experiences booked is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Airbnb tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether bookings can continue growing at the current pace.

This quarter, Airbnb’s ARPB clocked in at $23.10. It grew by 5.2% year on year, slower than its booking growth.

Key Takeaways from Airbnb’s Q2 Results

We enjoyed seeing Airbnb beat analysts’ revenue and EBITDA expectations this quarter. Looking ahead, revenue and EBITDA guidance for next quarter was just in line, which didn't seem good enough. The market seemed to be hoping for more, and the stock traded down 6.8% to $121.90 immediately after reporting.

So should you invest in Airbnb right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.