- The first-quarter performance of the lodging sharing platform company Airbnb surpassed market expectations, yet its stock price plummeted during after-hours trading.
- The reason for the stock decline is attributed to the company’s failure to fully recover its performance following the COVID-19 pandemic.
- Similar platforms are also expected to report similar performance in the second quarter.
Despite Airbnb‘s better-than-expected first-quarter earnings announcement, the stock price plummeted in after-hours trading due to bleak future outlook.
Airbnb’s strong performance
Airbnb announced in its first-quarter earnings report on May 8, that its revenue totaled $2.14 billion, marking an 18% increase compared to the same period last year. This surpasses analysts’ expectations of $2.06 billion.
Net profit for the same period surged 126% year-on-year to $264 million, significantly exceeding analysts’ forecast of $152 million. Airbnb attributed the boost in revenue and net profit to the earlier Easter in March this year compared to the average year.
Also read: Airbnb adds group bookings, AI integration
Market crisis
However, despite Airbnb’s solid performance, its stock plunged approximately 8.5% in after-hours trading due to concerns about a slowdown in second-quarter revenue. Airbnb had anticipated second-quarter revenue to range between $2.68 billion and $2.74 billion, which is lower than analysts’ expectations of $2.74 billion.
Also read: Why is Tesla stock dropping?
This guidance suggests that the business environment hasn’t fully recovered since the COVID-19 pandemic. Similar guidance has been provided recently by competitors such as Booking Holdings and Expedia Group in their first-quarter earnings announcements.
