Why Airbnb fell 9% in US afterhours trading overnight despite blockbuster numbers

Shares of vacation rental app Airbnb slid 9% in US afterhours trading overnight after the company posted poor guidance even as its profit doubled in the last quarter.

The company projected revenue for the quarter ending June to be between $2.68 billion and $2.74 billion, below Wall Street’s estimates.

The company added it expects its earnings to slow down before an increase in travel during summer.

In a letter to shareholders, the company explained that Easter is an important travel holiday and since it came early, its revenue reflected in the first quarter of the calendar year. Additionally, the quarter had an extra working day of February 29, which led to a higher revenue in the previous quarter.

Airbnb’s revenue increased 18% YoY to $2.14 billion in the first quarter while net income rose to $264 million in comparison to $117 million last year.

The earnings per share (EPS) was recorded at 41 cents while analysts expected it to be at 23 cents.

Although the travel industry has been steadily recovering since the pandemic, it is evident that the effect of the post-pandemic boom in travel is simmering down.

However, Airbnb management said that it expects demand to rise in the third quarter due to various events like the Paris Olympics and the Euro Cup in Germany.

Brian Chesky, CEO of Airbnb said that the company is also looking to explore various non-core products and making efforts to increase listings and make them more affordable.

He added that there has been a 15% YoY increase in the number of active listings in the first quarter.

Chief Business Officer Dave Stephenson said that Airbnb is planning on tapping into different marketplaces, services and limited edition experiences to boost revenue.