Published - May 04, 2022 @ 12:38 PM (EET)

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Holiday rental firm Airbnb Inc. (NASDAQ:ABNB) projected second-quarter revenue that easily topped Wall Street's estimates as the company sees "substantial demand" for traveling ahead of a busy summer season.

Airbnb expects revenue will be between $2.03 billion and $2.13 billion for the second quarter, compared with the analyst expectation of $1.97 billion.

In the three months through March, the San Francisco company posted $1.5 billion in revenue, helped by customers booking a record number of nights and so-called experiences during the quarter.  

Gross bookings in urban destinations also rose sharply to above pre-pandemic levels, adding to the record growth of $17.2 billion, up 67%. The company reported a net loss of 3 cents per share, much smaller than analysts expected.

Following the results, Airbnb's shares rose more than 5% in after-hours trading.

In a note to shareholders, Chief Executive Officer Brian Chesky wrote, 

‍"As we lap the beginning of the travel rebound that started last year, we are particularly encouraged by the compounding growth we are seeing in North America."

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A CLOSER LOOK

Airbnb's outlook implies it expects nights and experiences to grow about 26% in the second quarter compared with the second quarter of 2019.  

However, while these estimates should put second-quarter nights and experiences at a new quarterly record of 105.7 million, it will still be slightly below Wall Street's forecast of nearly 107 million.

Like many upstarts, Airbnb hasn't posted an annual profit since its founding in 2008.

In the first quarter, the company's losses narrowed from $1.17 billion in the year-earlier period to $19 million.  The company said cutting costs, including keeping marketing expenses below pre-pandemic levels despite higher revenue, helped its margins.

In addition, with an incredible balance sheet with over $6 billion in net cash, Airbnb likely won't have to take out unfavorable loans in the current higher interest rate market conditions.

With travel restrictions lifting and several other favorable developments, the sector should see a boom this spring and summer, making Airbnb a well-positioned travel stock to benefit.