3Q23: Miss on 4Q23 guidance; fasten your seatbelts in anticipation of some turbulence
ABNB: Miss on 4Q23 guidance; fasten your seatbelts in anticipation of some turbulence
- Record summer travel season in 3Q; top line met expectations while bottom line surpassed consensus estimates
- 4Q23 toplines represents a sequential moderation and could see some turbulence
- On the brighter side, ABNB is expecting a record-high fourth quarter EBITDA and adjusted EBITDA margins for 2023 is expected to tread 150 bps higher than in 2022
Record summer travel season in 3Q; top line met expectations while bottom line surpassed consensus estimates. 3Q23 revenue grew 18% yoy (+14% fxn) yoy to $3.4b due to continued strength in travel in addition to forex tailwinds. This was largely comparable to analyst forecasts of $3.37b. Adjusted EBITDA of $1.8b (+26% yoy, +20% fxn) was at record levels owing to growth in top lines, modest growth in average daily rates, and opex discipline. Accordingly, EPS of $2.43 came in above the street’s forecast of $2.10. Key business metrics also displayed strong growth with gross booking values up 17% yoy and nights and experiences booked up 14% yoy.
4Q23 toplines represents a sequential moderation and could see some turbulence. 4Q23 revenue guidance of $2.13-$2.17b was below analyst estimates of $2.18b. Implied growth rate stands at 12-14% yoy which is largely comparable to Q3 ex forex impact. Growth in nights booked, a key business metric could moderate qoq. We are anticipating some turbulence ahead given the macroeconomic uncertainty and heightened geopolitical tensions. ABNB is also “seeing greater volatility early in Q4” which could warrant investors to fasten their seatbelts. On the brighter side, ABNB is expecting a record-high fourth quarter EBITDA owing to higher EBITDA margins. Street projects 4Q23F EBITDA of $641m (+47% yoy, -63% qoq,) with EBITDA margin of 29%. On a full year basis, ABNB projects adjusted EBITDA margins for 2023 to tread 150 bps higher than the 35% in 2022.