Airbnb 2025 Q3 Earnings Slight Earnings Growth Amid Flat Net Income

Airbnb (ABNB) reported mixed Q3 2025 results, with revenue exceeding expectations but net income showing minimal growth. The company provided in-line guidance for Q4, signaling cautious optimism despite challenges in quality control and new initiatives.

Revenue

Airbnb’s total revenue rose 9.7% year-over-year to $4.09 billion, surpassing estimates. This growth was driven by robust performance in the U.S. and international markets, with gross booking value climbing 14%.

Earnings/Net Income

Earnings per share (EPS) increased 3.7% to $2.25, reflecting improved profitability. However, net income remained flat at $1.37 billion year-over-year, impacted by a one-time $213 million valuation allowance related to tax credits. Despite a modest EPS gain, the lack of net income growth highlights ongoing operational challenges.

Post-Earnings Price Action Review

The strategy of buying Airbnb shares upon revenue raises and holding for 30 days generated moderate returns but underperformed the S&P 500. The 36-month annualized return of 14.5% trailed the benchmark’s 16.4%, underscoring the strategy’s moderate volatility (beta of 1.2) and short-holding period limitations. Cumulative gains of 12.8% were offset by average short-term losses of 3.2%, emphasizing the need for broader market context in risk-adjusted return analysis.

CEO Commentary

CEO Brian Chesky emphasized progress in product innovation, international expansion, and AI integration. Record adjusted EBITDA of $2.1 billion and a 10% revenue increase underscored the company’s strategic focus on enhancing user experience and leveraging technology for personalized offerings.

Guidance

CFO Ellie Mertz outlined Q4 2025 revenue guidance of $2.66–$2.72 billion (7–10% YoY growth) and a full-year adjusted EBITDA margin of ~35%. For 2026, margin stability is expected amid investments in AI, hotels, and services.

Additional News

1. Stock Repurchase: Airbnb repurchased $857 million in shares during Q3, with $3.5 billion spent over the trailing 12 months, reflecting strong free cash flow generation.

2. Product Innovation: The "Reserve Now Pay Later" feature, adopted by 70% of eligible U.S. users, boosted bookings but faced cancellation challenges.

3. International Growth: Expansion in markets like Japan and India drove double-digit GMV growth, with the CFO highlighting opportunities in "expansion markets."