Airbnb Shares Slide Despite 300% Surge in Revenue

Airbnb Shares Slide Despite 300% Surge in Revenue

Airbnb (NASDAQ: ABNB) reported positive second quarter earnings on Thursday, nevertheless shares fell 4% after it warned shareholders about possible volatility amid the Covid delta variant. The company is cautious regarding the new variant and its potential interference in future travel plans.

The online marketplace reported an earnings loss of USD0.11 per share. Revenue shot up nearly 300% year over year to USD1.34 Billion, higher than analysts anticipated USD1.26 Billion.

Amid the ease in restrictions, and the increase in travel demand during the spring and summer, the company greatly benefited. However, Airbnb says that the upcoming months could be rough. Shares fell almost 2% during later morning trading on Friday following the warning.

In its earnings letter, Airbnb said that “In the near term,” Covid as well as any new variants “will continue to affect overall travel behavior, including how often and when guests book and cancel.” Ultimately meaning that the company’s future bookings “will continue to be more volatile and non-linear.”

“As we exit Q2 and come into Q3, we have a combination of fewer bookings for the fall, just given the nature of some of the seasonality, and any kind of impact potentially on Covid concerns,” Airbnb CFO Dave Stephenson said on a call with analysts.

Nevertheless, Airbnb revealed that it believed the consequences would be temporary and assured it’s shareholder that it anticipates third-quarter earnings to be the strongest to date. Analysts forecast that Airbnb will report revenue of about USD1.9 Billion within the third quarter.

The company has said it is reliant on vaccination progress and containment of the new variants for its fourth quarter performance.

“We do not yet know how willing people will be to travel in the fall as compared to summer,” the company said in its shareholder letter.

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