Airbnb's Strong Q1 Performance... Why Did the Stock Plunge?

Airbnb, a lodging sharing platform company, reported first-quarter earnings that exceeded market expectations, but its stock price plunged sharply in after-hours trading. This was due to expectations of a slowdown in second-quarter revenue.

On the 8th (local time), Airbnb announced in its first-quarter earnings report that revenue reached $2.14 billion, an 18% increase compared to the same period last year. This amount surpassed analysts' forecast of $2.06 billion. Net income for the same period was $264 million, a 126% increase year-over-year, significantly exceeding analysts' estimate of $152 million. Airbnb explained that revenue and net income were boosted by an earlier-than-usual Easter in March this year.

However, despite Airbnb's strong performance, its stock price fell about 8.5% in after-hours trading. This was due to observations of a slowdown in second-quarter revenue. Airbnb projected second-quarter revenue to be between $2.68 billion and $2.74 billion, which is a lower guidance than experts' estimate of $2.74 billion. This was interpreted as the industry not having fully recovered since the COVID-19 pandemic. Competitors Booking Holdings and Expedia Group also issued similar guidance in their recently announced first-quarter earnings.

Nonetheless, Airbnb expects revenue growth to accelerate again in the third quarter. Major international events such as the Paris Olympics and the UEFA European Football Championship are scheduled during the summer peak season. The company also stated that there is still room for business growth. An Airbnb representative said, "There is still ample room for growth in countries where we have not yet provided services," adding, "However, time and investment are needed."