Airbnb’s Warning 🏡

Airbnb’s Warning

Homestay rental titan Airbnb has just released its first-quarter earnings report, that although much greater than its previous performances, still isn’t enough to please Wall Street. As the pandemic unfolded, Airbnb defied all odds to successfully IPO the company into public markets. This was, however, not a complete success, as quarantining and travel restrictions at the height of the pandemic let revenues slide roughly 72% and quarterly losses reach several hundreds of millions of dollars. Now, with the World Health Organization forgoing Covid-19 as a public health emergency, Airbnb has shown some progress in its first quarter earnings report.

For the first time since its IPO, Airbnb was able to make a profitable quarter that even beat on both the top and bottom lines. They delivered $117 million in net profit, far greater than its net loss of $19 million from one year ago. They beat their earnings per share expectation by two times over, with 18 cents per share versus the expected 9 cents per share. Furthermore, their sales exceeded their expected revenues by $30 million, rising by over 20% year over year. Despite the gains in operations, Airbnb’s stock plummeted over 11% in extended trading due to their weak guidance for this current quarter’s revenue. Regardless, new discussions to integrate AI features into the platform may bode well for sales, however, the chances of a recession can inflict losses like that of the pandemic.

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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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