Airbnb outlines $4.02B–$4.1B Q3 revenue target while advancing services and experiences expansion

Earnings Call Insights: Airbnb (ABNB) Q2 2025

Management View

• Brian Chesky, CEO, reported “Airbnb had a strong Q2. We exceeded expectations across key metrics, including bookings, revenue and margin.” He highlighted that nights booked accelerated from April to July, and the company made “meaningful progress across our 3 strategic priorities.” Chesky detailed improvements in checkout, messaging, merchandising, and payment options, and said, “We also expanded our new AI customer service agent in the U.S., reducing the percentage of hosting guests who need to contact a human agent by 15%.”
• Chesky noted expansion in global markets, with nights booked in expansion markets growing “at twice the rate of our core markets for 6 consecutive quarters.” Japan saw a 15% year-over-year increase in first-time bookers. Major partnerships were announced, including a 3-year partnership with FIFA and the World Cup.
• The CEO emphasized the launch of Airbnb services and a reimagined Airbnb experiences business, stating, “The average guest rating for service and experience since launch is 4.93 stars out of 5 stars…this outperforms the already impressive 4.8 average rating for homes during the same period.” Over 60,000 people submitted applications to host a service or experience.
• Elinor B. Mertz, CFO: “Q2 marked another strong quarter for us. We had 134 million nights and seats booked, up 7% year-over-year.” She reported revenue of $3.1 billion, adjusted EBITDA of $1 billion with a 34% margin, net income of $642 million, and EPS of $1.03. Free cash flow was $1 billion. Mertz announced a new share repurchase program with authorization to purchase up to an additional $6 billion of Class A common stock.

Outlook

• Mertz stated, “Specifically for Q3, we expect to generate $4.02 billion to $4.1 billion, representing year-over-year growth of 8% to 10%.” Nights and seats booked are expected to grow at a similar rate to Q2, and ADR is anticipated to increase modestly year-over-year, primarily due to FX. “We expect adjusted EBITDA in Q3 to exceed $2 billion, and we anticipate that adjusted EBITDA margin will be lower than in Q3 2024, primarily due to investments in new growth and policy initiatives.”
• For the full year, Airbnb expects an adjusted EBITDA margin of at least 34.5%, including approximately $200 million of investment toward new businesses in 2025. Management indicated that revenue from new businesses is not expected to be meaningful in the near term, but sees significant long-term opportunity.

Financial Results

• Airbnb reported Q2 revenue of $3.1 billion, adjusted EBITDA of $1 billion, net income of $642 million, and EPS of $1.03. Free cash flow for the quarter was $1 billion, with $4.3 billion generated over the past 12 months. Cash and investments totaled $11.4 billion at quarter end. The company repurchased $1 billion of common stock and announced a new $6 billion repurchase authorization.
• Regional performance showed Latin America growing in the high teens, Asia Pacific in the mid-teens, EMEA in the mid-single digits, and North America in the low single digits.

Q&A

• Mark Mahaney, Evercore ISI: Asked about Airbnb Experiences attach rate and long-term goals. Chesky responded that “attach rate could be significantly higher for the completely reimaginary Airbnb experiences” and that product awareness has materially increased.
• Richard Clarke, Bernstein: Questioned headwinds from events like the Paris Olympics and growth rates in new markets. Mertz explained, “the hard comp that we will face on a year-over-year basis in Q4 could result in a bit of decel from Q3 to Q4,” and highlighted Latin America’s share gain.
• Eric Sheridan, Goldman Sachs: Inquired about marketing investments for new offerings. Chesky said, “We think that probably going forward, the best way to market services and experiences is to actually market the entire offering of Airbnb.” Mertz clarified that the $200 million investment is focused on field operations and supply acquisition, not increased programmatic marketing.
• Colin Sebastian, Baird: Asked about app redesign impact. Chesky said, “We’re seeing a giant uptick in the number of people that are booking a home from the homepage on Airbnb…People are engaged on their app while on trip and they’re engaged with their homepage.”
• Justin Post, BofA: Asked about U.S. growth. Mertz said, “the U.S. has a huge area to grow. How are we going to drive incremental growth in the U.S. is really consistent with the strategies that we’ve laid out, in particular, around perfecting the core.”

Sentiment Analysis

• Analysts’ tone focused on growth drivers, attach rates for new offerings, and international expansion, with questions frequently probing guidance and margin impacts. The tone was neutral to slightly positive, seeking clarity on strategy and execution.
• Management maintained a confident and upbeat tone in both prepared remarks and Q&A, using phrases like “we are very, very impressed and satisfied” and “I feel very confident this company can reaccelerate.” There were occasional notes of caution regarding tough year-over-year comps and the timing of new business contributions.
• Compared to the previous quarter, analyst sentiment was more focused on execution details for new launches, while management’s confidence appeared to increase as the new business lines began contributing.

Quarter-over-Quarter Comparison

• Guidance for Q3 revenue increased to $4.02 billion–$4.1 billion vs. Q2’s $3.1 billion actual, with management reaffirming a full-year adjusted EBITDA margin of at least 34.5%.
• Strategic focus shifted from preparing for new launches (Q1) to scaling new services and experiences and integrating partnerships (Q2).
• Analyst queries evolved from macroeconomic impacts and U.S. softness in Q1 to attach rates, marketing efficiency, and product integration in Q2.
• Management’s tone grew more confident, highlighting traction in international markets and the impact of product redesigns and AI initiatives.

Risks and Concerns

• Management flagged tougher year-over-year comparisons in Q4, which may pressure growth rates.
• Mertz mentioned, “we do expect year-over-year comparisons to get tougher towards the end of the quarter and that this dynamic will continue into Q4, putting pressure on growth rates later in the year.”
• Investments in new businesses are expected to impact EBITDA margins in the second half of the year.
• No specific regulatory or operational risks were highlighted beyond growth investment impacts and market-specific dynamics.

Final Takeaway

Airbnb management emphasized strong Q2 results, accelerating momentum in global expansion, and the promising early reception of new services and experiences. The company projects Q3 revenue between $4.02 billion and $4.1 billion, with continued investment in new business lines and a robust share repurchase program. While near-term growth rates may be pressured by tough year-over-year comparisons, management remains confident in the long-term opportunity and the scalability of its expanded platform.

Read the full Earnings Call Transcript