Airbnb stock sinks on Q3 earnings amid slashed guidance

Yahoo Finance's Jared Blikre breaks down Airbnb's third-quarter earnings results.

Video Transcript

DAVE BRIGGS: All right, an earnings alert. You can see the shares of Airbnb moving down about 8% in after-hours trading after reporting earnings. Jared Blikre here with the numbers. Presumably, the investors don't like what, sir?

JARED BLIKRE: The guidance. Guidance a little bit light. We'll get to that in a second. And let's go over the numbers. So for the third quarter, revenue coming in ahead of Wall Street estimates, $2.88 billion. That's up 29% year over year. That beats the estimate of $2.83 billion. Now gross bookings, that value comes in at $15.6 billion. That is higher than the estimate of 15.25 billion, up 31% year over year.

Adjusted EBITDA of 1.46 billion versus estimates of 1.39 billion. And then EPS coming in at $1.79 on a fully diluted basis versus the estimate of $1.53, so nice beat there, also beating last year's number of $1.22. Nights and experience booked, 99.7 million versus estimates of 99.9 million, so slight miss there.

And that's also going to factor into a statement that I'm going to read in a second. Gross booking value per nights and experiences booked, 156-- 156.44. Yeah, $156.44. Estimate was $152.39. And then they ended the quarter with free cash flow of $960 million, basically doubling the estimate of $464.1 million.

Now, I want to talk about their guidance here because as I said, that was a little bit light. The fourth quarter, they are seeing revenue of $1.8 to $1.88 billion. Estimate was for $1.86 billion, so just a little bit less than that. But also saying on a year over year basis, we expect nights and experiences booked growth. That growth will moderate slightly relative to Q3 2022, while ADR will face some pressure from effects headwinds and business mix. So in other words, nights and experience going to flag a little bit and also experiencing some of those strong dollar problems that everybody else is talking about.

Also with respect to share repurchases, as of the end of the quarter, they repurchased $1 billion of class A common stock. The share repurchase program is going to enable them to offset dilution from their employee stock programs. And one last note, they said Q3 was their biggest and most profitable quarter ever, despite the geopolitical and macroeconomic headwinds.