ABNB Q3 Earnings Miss Estimates, Revenues Rise Y/Y, Shares Down

Airbnb ABNB reported third-quarter 2025 adjusted earnings of $2.21 per share, which lagged the Zacks Consensus Estimate by 3.49%.

Revenues of $4.095 billion increased 10% year over year, both on a reported and forex-neutral basis, driven by solid growth in nights stayed, a slight increase in Average Daily Rate (ADR), and the timing of Easter. The top line beat the Zacks Consensus Estimate by 0.25%.

Following the results, ABNB shares were down roughly 2.2% at the time of writing this article. Year to date (YTD), Airbnb has dropped 8.3%, underperforming the broader Zacks Consumer Discretionary sector as well as its closest peers, including TripAdvisor TRIP, Booking Holdings BKNG and Expedia Group EXPE. The broader sector has returned 1.2% year to date. 

In the third quarter of 2025, TripAdvisor reported revenues of $553 million, up 4% year over year. Earnings increased 30% year over year to 65 cents. Booking Holdings reported earnings of $99.5 per share, which increased 18.6% year over year. Revenues of $9.01 billion increased 12.7% year over year. Expedia reported revenues of $4.41 billion, up 8.7% year over year, while earnings came in at $7.57 per share, up 23.5% year over year. YTD, shares of TripAdvisor and Expedia have appreciated 4.4% and 17.9%, respectively, while Booking Holdings fell 1.4%.

ABNB’s Q3 Revenue Details

The third-quarter 2025 Gross Booking Value (GBV) was $23 billion, up 14% year-over-year on a reported basis or 12% excluding the impact of forex. Take rate (defined as revenue divided by GBV) of 17.9% was down year over year as compared with 18.6% in the year-ago quarter. Revenues from guest travel insurance, which is available in 12 of ABNB’s largest countries, increased more than 25% year over year.

Nights and Seats Booked were 133.6 million, up 8.8% year over year. Excluding North America, which contributes roughly 30% of total Nights and Seats Booked, the metric grew double-digits year over year.

ADR (Gross Booking Value per Night and Experience Booked) was $171.3, up 4.7% on a year-over-year basis. Excluding forex, ADR grew 2% and was up across all regions due to price appreciation.

Nights booked on the app in the third quarter increased 17% year over year and comprised 62% of total nights booked (up from 58% in the year-ago quarter).

Airbnb’s Q3 Operating Details

In the third quarter of 2025, total costs and expenses as a percentage of revenues increased 120 basis points (bps) year over year to 59.1% in the reported quarter. Cost of revenues increased 90 basis points (bps) year over year. Product development and sales and marketing expenses increased 30 bps and 180 bps, respectively. However, operations and support, and general and administrative, as a percentage of revenues, declined 100 bps and 90 bps, respectively. 

Adjusted EBITDA was $1.96 billion, up 4.7% year over year on a reported basis. The adjusted EBITDA margin was 52.5%, down 240 bps year over year.

The third-quarter 2025 operating margin contracted 120 bps year over year to 40.9%.

ABNB’s Balance Sheet & Cash Flow

As of Sept. 30, 2025, cash and cash equivalents, short-term investments, and restricted cash amounted to $11.68 billion compared with $11.4 billion as of June 30. ABNB had $7.21 billion of funds held on behalf of guests.

Net cash provided by operating activities was $1.36 billion for the third quarter of 2025, up from $1 billion reported in the second quarter of 2025 and from $1.08 billion in the year-ago quarter.

Airbnb generated a free cash flow of $1.35 billion in the third quarter of 2025 and $4.55 billion over the trailing 12 months.

ABNB repurchased shares worth $857 million in the third quarter of 2025. As of Sept. 30, 2025, the company still has $6.6 billion remaining under repurchase authorization.

ABNB Offers Positive Guidance

For the fourth quarter of 2025, Airbnb expects revenues between $2.66 billion and $2.72 billion, reflecting a year-over-year increase of 7-10%. GBV is expected to grow low-double-digits year over year.

Airbnb anticipates ADR to increase modestly on a year-over-year basis, due to favorable forex and price appreciation. The company expects mid-single-digit year-over-year growth in Nights and Seats Booked for the fourth quarter of 2025.

For the fourth quarter of 2025, Airbnb expects adjusted EBITDA to be flat to down slightly on a year-over-year basis. For the fourth quarter of 2025, Airbnb expects adjusted EBITDA margin to decline year over year due to higher investments and tough comparisons.

For 2025, this Zacks Rank #3 (Hold) company expects an adjusted EBITDA margin of roughly 35% despite investing roughly $200 million toward services and experiences. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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