Executive Summary

Q3 delivered high-end revenue and cash flow: Revenue grew 10% YoY to $4.10B (at high end of guide), Adjusted EBITDA reached a record $2.05B (50% margin), and FCF was $1.35B (33% margin) .
Mixed vs consensus: Revenue slightly beat S&P Global consensus ($4.095B vs $4.080B), but EPS of $2.21 missed ($2.21 vs $2.32) as a one-time $213M CAMT valuation allowance pressured net income margin to 34% from 37% YoY; EPS still rose 4% YoY . Q3 consensus figures from S&P Global estimates are marked with an asterisk below.
Demand drivers and product catalysts: Nights & Seats Booked rose 9% YoY to 133.6M, GBV +14% YoY to $22.9B, ADR +5% YoY (FX tailwind); U.S. re-accelerated partly due to Reserve Now, Pay Later (RNPL) .
Guidance/Catalyst: Q4 revenue guided to $2.66–$2.72B (7–10% YoY), nights growth mid-single digits, GBV low-double digits, ADR modestly up; FY25 Adjusted EBITDA margin raised to ~35% (from ≥34.5%)—key support for medium-term profitability narrative .

What Went Well and What Went Wrong

What Went Well

Demand and monetization resilience: GBV +14% YoY, Nights & Seats +9% YoY; ADR +5% YoY (2% ex-FX); growth accelerated vs Q2, driven by U.S. strength and pricing tailwinds .
Product/feature momentum: RNPL helped drive U.S. acceleration; 70% of eligible U.S. guests adopt RNPL, with management expecting a net lift to bookings despite higher cancellations (tested ex-ante) .
Strategic expansion: Services/Experiences traction (half of experiences not attached to a stay; 110k host applications); hotels pilot in LA/NYC/Madrid to backfill supply in constrained urban markets .
- Quote: “Adjusted EBITDA was over $2 billion, and this is our highest in any quarter ever.” — CEO Brian Chesky .
- Quote: “We initially launched [AI support] in the U.S., where it’s already reduced people’s need to contact a human agent by 15%.” — CEO Brian Chesky .

What Went Wrong

EPS miss vs consensus: EPS $2.21 vs $2.32*, as a $213M CAMT valuation allowance weighed on GAAP margins (NI margin 34% vs 37% YoY) despite revenue beat .
Take rate compression: Implied take rate fell to 17.9% (vs 18.6% YoY) on FX and booking/stay timing; management also migrated hosts to single 15.5% service fee in October to aid pricing competitiveness .
Data discrepancy on Experiences ratings: Shareholder letter cites 4.93/5 average for services/experiences, while the call referenced ~4.3/5; investors should monitor clarity in KPI disclosures .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($B)	$3.732	$3.096	$4.095
Net Income ($B)	$1.368	$0.642	$1.374
Diluted EPS ($)	$2.13	$1.03	$2.21
Adjusted EBITDA ($B)	$1.958	$1.043	$2.051
Adjusted EBITDA Margin %	52%	34%	50%
Net Income Margin %	37%	21%	34%
Gross Booking Value ($B)	$20.1	$23.5	$22.9
Nights & Seats Booked (M)	122.8	134.4	133.6
ADR ($)	$163.64	$174.48	$171.29
Implied Take Rate (%)	18.6%	13.2%	17.9%

KPIs and Cash

Metric	Q3 2024	Q2 2025	Q3 2025
Net Cash from Ops ($B)	$1.078	$0.975	$1.356
Free Cash Flow ($B)	$1.074	$0.962	$1.349
Cash & Other Liquid Assets ($B)	$11.280 (Sep-24)	$11.400 (Jun-25)	$11.719 (Sep-25)
Share Repurchases ($B)	—	$1.000	$0.857

Consensus vs Actual (S&P Global)

Metric	Q3 2025 Consensus	Q3 2025 Actual
Revenue ($B)	$4.080*	$4.095
Diluted EPS ($)	$2.32*	$2.21

Values marked with * retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 2025	—	$2.66–$2.72B	New
Nights & Seats Booked (YoY)	Q4 2025	—	Mid-single-digit growth	New
GBV (YoY)	Q4 2025	—	Low-double-digit growth	New
ADR (YoY)	Q4 2025	—	Modest increase (price + FX)	New
Implied Take Rate	Q4 2025	—	Relatively flat YoY	Maintain
Adjusted EBITDA Margin	FY 2025	≥34.5%	~35%	Raised
Adjusted EBITDA	Q4 2025	—	Flat to down slightly YoY; margin decline YoY	New
Effective Tax Rate	FY 2025	—	~21% (one-time $213M CAMT valuation allowance, partial offset)	New
Long-term Effective Tax Rate	2026+	—	Mid-to-high teens (OBBBA)	New

Earnings Call Themes & Trends

Topic	Q1 2025 (Q-2)	Q2 2025 (Q-1)	Q3 2025 (Current)	Trend
AI/customer support & search	Rebuilt tech stack; preparing for new offerings	AI support to 100% of U.S.; 15% fewer contacts	AI support expands; 15% fewer contacts in U.S.; AI search testing with conversational roadmap in 2026	Accelerating rollout
Payments & RNPL	Local payment method Pix in Brazil (boosted bookings)	More flexible payment options lifted revenue	RNPL U.S. launch; 70% uptake among eligible; net lift despite higher cancels	Positive adoption
International expansion	Expansion markets >2x core nights growth	6 quarters of expansion >2x core; Japan first-time bookers +15%	Japan first-time bookers >20%; India nearly +50%	Sustained outperformance
Services & Experiences	Announced May 13 launch	Early traction; >60k host apps since launch	~50% of experiences not attached to stays; 110k host apps; rating disclosure inconsistency (4.93 vs ~4.3)	Building but early
Hotels pilot	—	—	Pilots in LA/NYC/Madrid to backfill constrained markets; boutique/independent focus	New vector
Pricing/fees	Total price display emphasized	Take rate tailwinds from cross-currency fees	Migrated PMS and non‑PMS hosts to single 15.5% service fee; aim: competitiveness	Simplification
Regional trends	LATAM strong; APAC mid-teens; NA low-single-digit	LATAM high-teens; APAC mid-teens; NA improved late-Q2	LATAM low-20s; APAC mid-teens; NA mid-single-digit with sequential acceleration; EMEA mid-single-digit with Olympics comp	Broad-based growth
Capital returns	$807M buyback	$1.0B buyback; new $6B authorization	$857M buyback; $6.6B remaining authorization	Ongoing

Management Commentary

“Revenue increased 10% year-over-year, landing at the high end of our guidance. Adjusted EBITDA was over $2 billion, our highest in any quarter. GBV increased 14% YoY, while nights and seats booked rose 9%.” — CEO Brian Chesky .
“We’re piloting hotels in Los Angeles, New York City, and Madrid…a best-in-class commission and custom-built product page…a huge supplement for our supply, especially in supply-constrained markets.” — CEO Brian Chesky .
“EPS was $2.21, growing 4% YoY. Net income was impacted by a one-time $213 million valuation allowance related to CAMT…starting in 2026, the One Big Beautiful Bill will materially reduce our effective tax rate.” — CFO Ellie (Elinor) Mertz .
“In Q4, we expect revenue of $2.66–$2.72 billion…we now expect our full-year adjusted EBITDA margin to be approximately 35%.” — CFO Ellie Mertz .

Q&A Highlights

RNPL adoption and cancellations: ~70% adoption among eligible U.S. guests; tested to ensure net positive bookings after higher cancellations; early impact drove U.S. acceleration .
International expansion cadence: Brazil as a template (multi-year share gains); Japan in earlier innings with encouraging domestic growth and first-time bookers; market-by-market localized approach .
Services/Experiences path to materiality: 3–5 years to become material; focus on achieving product-market fit in “pilot cities” (Paris, LA) before broader rollout; notable local demand via “Originals” .
Hotels strategy: Boutique/independent focus to fill urban gaps; minimal cannibalization vs homes; leverages Airbnb’s existing demand without incremental marketing .
AI roadmap: Deep integration across support, search, and messaging into a single travel concierge; specialization and custom UI expected to differentiate vs generalized AI .

Estimates Context

Q3 2025: Revenue slightly beat ($4.095B vs $4.080B*), while EPS missed ($2.21 vs $2.32*). The EPS shortfall was primarily tax-related (one-time $213M CAMT allowance), despite solid operating performance and record Adjusted EBITDA .
Q4 2025: Revenue guide midpoint ($2.69B) is slightly below S&P Global consensus ($2.71B*), with management citing tougher comps, mid-single-digit nights growth, and modest ADR increases .
Values marked with * retrieved from S&P Global.

Implications: Street EPS models should reflect the FY25 ETR of ~21% and Q4 EBITDA margin headwinds from growth/policy investments; FY25 Adjusted EBITDA margin lift to ~35% supports stable-to-better full-year profitability assumptions into year-end .

Key Takeaways for Investors

Narrative: Strong top-line and cash generation with U.S. re-acceleration; product catalysts (RNPL, AI, hotels) extend growth levers beyond core homes .
Profitability: FY25 Adjusted EBITDA margin raised to ~35%; Q4 margins guided flat-to-down YoY as the company funds new initiatives—consistent with long-term reinvestment strategy .
Taxes: One-time CAMT allowance depressed Q3 EPS; 2026+ ETR expected to decline to mid-to-high teens under OBBBA—supportive for out-year EPS power .
Monetization: Q3 take rate compression due to FX and timing; October fee simplification (15.5% single service fee) should help hosts price more competitively, potentially aiding conversion .
New vectors: Services/Experiences (multi-year horizon) and hotels pilot (near-term backfill) broaden the platform; watch for city-by-city execution and KPIs to scale .
Regional setup: Robust LATAM/APAC growth and improved North America momentum; EMEA comped by Paris Olympics in Q3—normalization expected into Q4 .
Trading setup: The combination of revenue beat, EPS miss (tax-driven), slightly cautious Q4 revenue guide vs consensus, and higher FY25 margin target creates a balanced near-term setup; focus on demand momentum (U.S., payments), take rate trajectory, and AI/product adoption into 2026 .

Airbnb, Inc. (ABNB)·Q3 2025 Earnings Summary