Airbnb Inc. on Tuesday reported record fourth-quarter revenue and earnings to match its first profitable year, and executives issued a first-quarter guidance that beat Wall Street estimates despite plans to cut prices.
Airbnb ABNB’s shares rose more than 10% in after-hours trading immediately after the earnings release, after rising 3.8% in the regular session to close at $120.87.
The alternative accommodation booking company reported record fourth-quarter revenue and profits, although it fell short of analysts’ expectations for gross bookings and nights booked and experiences booked. Executives pointed to strong demand throughout the year and strong supply.
“All regions saw significant growth in 2022 as guests increasingly crossed borders and returned to cities via Airbnb,” executives wrote in a letter to shareholders on Tuesday.
Read: Airbnb shares rise after analysts say demand for online travel is still strong
Airbnb reported gross bookings of $13.5 billion for the fourth quarter, compared to analysts’ expectation of $13.6 billion. Booked nights and experiences totaled 88.2 million, the highest fourth-quarter total ever, led by a rebound in Asia-Pacific, although analysts had expected 89.7 million. The average daily price was $152.81, beating analysts’ expectations of $151.40.
Net income for the quarter was $319 million, or 48 cents a share, compared to $55 million, or 8 cents a share, for the same period last year. Revenue increased to $1.9 billion from $1.53 billion in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) were $506 million, a record high for the fourth quarter.
Analysts polled by FactSet had forecast earnings of 26 cents a share on sales of $1.86 billion and EBITDA of $434 million.
Latest quarterly results: Airbnb stock falls despite ‘biggest, most profitable quarter ever’
For the full year, Airbnb reported net income of $1.89 billion, or $2.79 per share, on revenue of $8.4 billion. Analysts were expecting net income of $1.74 billion, or $2.59 per share, on sales of $8.36 billion.
Adjusted Ebitda for the year was $2.9 billion, beating analysts’ expectations of $2.83 billion. Free cash flow was $3.4 billion, up 49% year over year. The company ended the year with 6.6 million active listings, which it says is its highest to date.
Airbnb expects revenue of $1.75 billion to $1.82 billion in the first quarter, while analysts had forecast revenue of $1.68 billion. The optimistic sales forecast is based in part on European guests booking summer trips earlier this year, the company said.
It’s also despite the company’s expectation that average daily rates will fall in the first quarter and the rest of the year, which executives attributed to a number of factors: the mix of rental supply in different regions and efforts to improve affordability.
Read more: Airbnb hosts say bookings “have fallen off a cliff” amid the influx of new vacation rentals and soaring prices.
Airbnb said in its shareholder letter that it expects to introduce “new and improved pricing and discount tools” this year to “drive greater affordability and value for guests, support booking growth, and in turn, benefit hosts.”
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Airbnb’s stock is up 36% year to date but has fallen about 35% over the past year. The S&P 500 index SPX is up about 8% year-to-date and down 7.5% over the trailing 12 months.