Deferred payment feature boosted Airbnb bookings in the U.S. Shares rise

Airbnb reported a more optimistic outlook for the fourth quarter than analysts expected, attributing it to steady demand, including thanks to its new "book now - pay later" feature. The deferred payment feature is heavily utilized by U.S. travelers when planning trips in advance, the company said, warning that a reduction in U.S. domestic flights due to the shutdown could affect revenue. Shares of the booking service rose 4.8% in after-market trading.

Airbnb expects fourth-quarter revenue to be between $2.66 billion and $2.72 billion, beating the average analyst estimate of $2.67 billion compiled by Bloomberg. At the same time, a key metric - the number of nights and accommodations booked - will grow "within mid-single digits" compared to the same period last year, which is in line with both analysts' expectations and Airbnb's earlier warning about the difficulty of making comparisons to a 2024 base, the agency wrote.

"We continued to see strong demand in October despite more challenging comparisons to last year," Airbnb said in a letter to investors. The company added that the Reserve Now, Pay Later feature, launched in August for U.S. rentals, has spurred early bookings and supports a "positive outlook for the remainder of the year."

On a year-end basis, Airbnb now expects adjusted margin (EBITDA) to be around 35%, up from a forecast of "at least 34.5%" in August.

At the same time, the booking service warned that the "pay later" option could lead to a portion of cancellations closer to the travel date, which could affect quarterly results. Among other things, cancelations could be affected by a reduction in air travel in the U.S. due to the shutdown.

After the report was released on the evening of November 6, Airbnb shares rose 5.7% in extended trading, reaching $127. The securities remain down 8% since the beginning of the year.

In the past quarter, the total number of nights and accommodations of the Airbnb catalog amounted to 133.6 million, which is 8.8% higher than a year earlier and exceeded analysts' expectations, Bloomberg writes. Revenue in the third quarter rose 10% year over year to $4.1 billion, also exceeding forecasts. Adjusted earnings (EBITDA) totaled $2.1 billion, also better than Wall Street expectations. The strong results generally offset losses in net income, which was below analysts' expectations: the company continues to invest heavily in artificial intelligence, international expansion, lobbying initiatives, and the development of Experiences and value-added services. Net income amounted to $1.37 bln with the consensus of $1.46 bln.

In the second half of the year, Airbnb saw an acceleration in bookings growth driven by North America, which accounted for about 30% of all purchases. The growth was driven by domestic travel and an increase in the share of long-haul bookings - including through deferred payment options. These data may reassure investors watching the state of U.S. consumers amid economic uncertainty, Bloomberg notes.

Airbnb's outlook matched the positive expectations of its competitors, with Booking Holdings also seeing solid demand across all regions and Expedia on Thursday raising its full-year outlook for revenue and bookings, reporting a better-than-expected third quarter.

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