Airbnb (NASDAQ: ABNB) delivered a strong second-quarter performance that exceeded analyst expectations across key metrics, prompting management to raise its full-year outlook. The company's shares responded positively, climbing 8.5% to $164.48 in initial after-hours trading on Tuesday, following a regular session close at $151.64.
The home-sharing platform reported revenue of $3.61 billion for the quarter, a 17% increase year-over-year and slightly above the consensus estimate of $3.58 billion. Adjusted EBITDA rose 21% to $1.26 billion, with the margin expanding by one percentage point to 35%. Earnings per share came in at $1.37, beating the $1.26 consensus by 8.7%.
Gross booking value reached $27.20 billion, up 16% from the prior year and ahead of the $26.45 billion expected by analysts. The growth was driven by a 10% increase in nights and experiences booked, along with a 5% rise in average daily rates. The take rate remained stable at 13.2%, indicating that the company did not rely on higher fees to drive results.
Management highlighted broad-based strength across geographies, describing it as "one of the most encouraging trends in Q2." The United States, France, Britain, and Australia were standout performers. Night bookings in North America accelerated at their fastest pace in nearly three years, while Latin America grew approximately 20% and Asia-Pacific saw high-teens growth.
A key highlight was the efficiency gains from the company's AI initiatives. Customer-support spending per booking dropped roughly 16%, which management attributed partly to its AI assistant. This helped offset a 27% increase in sales and marketing expenses to $875 million, which now represent 24.3% of revenue, up from 22.3% a year ago. The combination of AI-driven cost savings and revenue growth allowed the company to invest more aggressively in customer acquisition while still expanding margins.
App adoption continued to rise, with app-based nights growing 23% and now accounting for 64% of total nights, up from 59%. First-time bookers increased 11%, the fastest growth rate in four years, reinforcing the company's product-led growth strategy.
Looking ahead, Airbnb raised its full-year revenue growth guidance from low-to-mid teens to at least mid-teens, and lifted its minimum adjusted EBITDA margin forecast from 35% to 35.5%. For the third quarter, the company guided revenue in the range of $4.69 billion to $4.77 billion, representing growth of 15% to 17%, with the midpoint coming in 2.6% above consensus. Management noted that currency effects are expected to contribute about three percentage points to growth. The third-quarter adjusted EBITDA margin is projected to decline slightly year-over-year due to the timing of investments.
The company also continued its share repurchase program, buying back $1.1 billion in shares during the quarter, which reduced the diluted share count by 4.6% to 597 million. This contributed to a 33% increase in earnings per share, outpacing the 27% growth in net income.
Despite the positive results, valuation remains a concern. The consensus price target from 39 analysts prior to the earnings release was $160.65, and the after-hours price of $164.48 was already 2.4% above that level. Recent analyst actions have shown a wide range of opinions, from an Underweight rating with a $125 target from Morgan Stanley to a Buy rating with a $175 target from Jefferies.
Investors are likely to focus on whether the company can sustain its AI-driven efficiency gains to support continued growth, especially as marketing costs rise and third-quarter margins are expected to dip. The market's reaction suggests optimism, but the proof will come in future quarters.
