Airbnb Stock Sinks on Warning About Slowing US Demand

Airbnb (ABNB) shares sank Wednesday, a day after the vacation rental firm missed second-quarter profit forecasts and warned about slowing demand in the U.S.

The company posted earnings per share (EPS) of $0.86, $0.06 below the average estimate of analysts surveyed by Visible Alpha. Revenue rose 10.6% to $2.75 billion, slightly above expectations.

Airbnb sees current-quarter revenue in the range of $3.67 billion to $3.73 billion, while the Visible Alpha average is $3.72 billion. It wrote in a letter to shareholders that it expects “a sequential moderation in the year-over-year growth of Nights and Experiences Booked relative to Q2 2024.” It added that while Latin America and Asia Pacific continue to be its fastest-growing regions, it is “seeing shorter booking lead times globally and some signs of slowing demand from U.S. guests.”

Record Q2 Nights and Experiences Bookings

The company noted that the gains in the second quarter came primarily from “solid growth in Nights and Experiences Booked and a modest increase in Average Daily Rate (“ADR”).” It reported bookings for Nights and Experiences grew 9% to 125.1 million, the most of any second quarter ever. 

In addition, Chief Executive Officer (CEO) Brian Chesky said Airbnb removed more than 200,000 listings “that failed to meet our guests’ expectations” following the launch of the company’s updated host quality system in April of last year.

Shares of Airbnb slumped more than 14% as of 10 a.m. ET Wednesday to $111.59, their lowest level in more than a year.