Airbnb’s bookings are surging. A pay-later option helped—and cancellations rose too

A faster booking engine

Airbnb raised its full-year revenue forecast on November 5 after a surge in bookings helped produce its fastest quarterly revenue growth in more than three years. Shares rose about 11% in extended trading after the results.airbnb +1

The company recorded 155 million nights and seats booked in the third quarter, up 16% from a year earlier and accelerating from 10% growth in the preceding quarter. The total includes stays and experiences. Gross booking value rose 21% to $27.7 billion, while revenue increased 19% to $4.87 billion.airbnb +1

The booking total also surpassed the average estimate of 148.91 million from seven analysts surveyed by Zacks. Airbnb generated $31.41 in revenue per booking, up 2.8% from a year earlier, according to StockStory.stockstory +1

The pay-later effect

The company says its Reserve Now, Pay Later option, which lets eligible guests book without paying upfront, contributed roughly three percentage points to the quarter’s booking growth. Excluding that effect, growth was still about 13%, chief financial officer Ellie Mertz said on the earnings call.marketbeat

Mertz said customers using the option were booking earlier and choosing more expensive listings. She also said Airbnb’s overall cancellation rate had climbed to about 19% from approximately 16% a year earlier; she did not attribute the entire increase to the payment option. The company expects the option’s net contribution to booking growth to ease in the fourth quarter, as cancellations catch up with earlier bookings.marketbeat

More profit, with a tax caveat

Net income reached $1.9 billion and diluted earnings were $3.16 per share. The year-on-year profit comparison benefited from a $135 million reduction in the income tax provision, partly reflecting a charge in the prior-year quarter, 24/7 Wall St. reported.airbnb +1

Airbnb also authorized up to $12 billion in additional share repurchases. That authorization permits purchases but does not require the company to buy the full amount.airbnb

What investors are watching next

Airbnb now expects revenue growth in the high teens for 2026, up from its earlier forecast of at least the mid-teens. It forecasts fourth-quarter revenue of $3.22 billion to $3.28 billion, a 16%–18% increase, with roughly two percentage points of help from currency movements after hedging.airbnb +1

The company expects its fourth-quarter adjusted EBITDA margin to decline slightly from a year earlier, partly because some marketing spending shifted into the period. Its full-year adjusted EBITDA margin target is approximately 36%.airbnb