• 1Q24 revenue/PATMI was within expectations at 19%/9% of our FY24e forecasts because of seasonality weakness. Revenue growth of 18% YoY was led by a 10% YoY surge in booking volumes. We expect profitability in 2H24e to rebound strongly, driven by summer travel demand around the Olympics and higher operating leverage.
• For 2Q24e, Airbnb expects revenue to rise 9% YoY to US$2.7bn. The significant drop in growth rate is likely due to the timing of the Easter holiday this year and the unfavorable foreign exchange rates. Management reiterated its prior guidance to deliver an adj. EBITDA margin of at least 35% in FY24e (FY23: 37%).
• We maintain our NEUTRAL recommendation with an unchanged DCF target price of US$150 (WACC 7%, g 4%). Our FY24e revenue estimates remain unchanged while we nudge higher our PATMI by 2% to account for higher interest income. We expect moderating travel demand as booking patterns normalise from its post-pandemic peak.

The Positives

+ Revenue for 1Q24 showed strong growth. 1Q24 revenue grew 18% YoY to US$2.1bn, which was 4% above the top end of the company guidance. This outperformance was primarily driven by a 10% YoY increase in booking volumes to 133mn, a 3% YoY improvement in the average daily rates to US$173, and a shift in the Easter holiday this year. Airbnb reported a 21% YoY growth in bookings in the Asia-Pacific region and a 19% YoY growth in Latin America. Meanwhile, the number of cross-border nights booked grew by 10% YoY, representing 46% of total booking volumes in the quarter.

+ Net margin improved on lower costs and higher interest income. Airbnb expanded its net profit margin by 6% points YoY to 12%, while PATMI more than doubled to US$264mn. The margin improvement was mainly due to top-line upside, higher operating leverage, and 38% YoY increase in interest income to US$202mn. The sales and marketing expenses grew by 14% YoY to US$514mn (1Q23: 30% YoY).

The Negative

– Soft 2Q24e revenue guidance. For 2Q24e, Airbnb expects total revenue to grow 9% YoY to US$2.7bn (2Q23: 18% YoY). The significant slowdown is mainly because of unfavourable foreign exchange rates and holiday-related stays being pulled forward to 1Q24, as the Easter holiday fell in March instead of April this year.