Revenue rose 17% with about four points of currency help, nights and seats grew 10%, and the shares reached a 52-week high on the second guidance raise of the year.
Airbnb raised its full-year revenue and margin outlook for the second time this year. The shares gapped to a fresh 52-week high of $176.40. They traded at $173.65, up 14.5%, in the session after the release. Nights and seats booked grew 10%, which Brian Chesky described as an acceleration from 9% in the first quarter. On the first-quarter call, Chief Financial Officer Ellie Mertz had said that without the effect of the Middle East conflict, that number would have been about 10%. Put on the same basis, the volume growth rate is roughly unchanged. The question the raise poses is what is actually accelerating.
Revenue outgrew volume by seven points
Revenue reached $3,608 million, up 17%, or 13% excluding currency. Gross booking value rose 16% to $27.2 billion, or 15% excluding currency. Nights and seats booked reached 148.3 million, up 10%. The gap between the revenue figure and the volume figure is average daily rate, up 5%, and about four points of currency.
Below the headline metrics, several demand signals look better than the volume line. First-time bookers rose 11%, which Airbnb says is the highest in four years. App nights grew 23% and now make up 64% of nights, from 59%. Bedroom nights grew 12%, faster than total nights.
Geography is where the acceleration case is strongest. North America nights grew at a high single-digit rate, which the company calls its best in almost three years, with regional rates up 7%. Latin America grew about 20%, with Brazil origin nights up 30%. Asia Pacific grew in the high teens, with India origin nights up 60%. Europe, the Middle East and Africa also grew high single digits, recovering from the previous quarter. Mertz said the conflict's impact on the business came in below what the company had assumed. More than 150,000 listings were added across World Cup host cities, up from 100,000 across 16 cities reported in May.
A $77 million tax benefit sits inside net income
Net income was $816 million, a 23% margin, against $642 million and 21%. The shareholder letter attributes the increase to higher operating income and to a $77 million benefit recorded in the period relating to published guidance affecting prior-year taxes.
The tax line shows the size of it. The provision was $81 million on $897 million of pre-tax income, an effective rate of 9.0% against 17.6% a year earlier. Airbnb guides the full-year rate to the high teens, so the quarterly rate is not representative. Excluding the benefit, net income would sit near $739 million, a margin around 20.5% and growth near 15% on this publication's calculation.
Operating income is the cleaner line and it improved on its own. It rose 23.9% to $758 million, lifting operating margin to 21.0% from 19.8%. Adjusted EBITDA rose 20.9% to $1,261 million, a 35.0% margin against 33.7%.
Two items sit between those margins. Stock-based pay was $897 million, equal to 24.9% of revenue and larger than net income. It accounts for most of the distance between the 21% operating margin and the 35% adjusted EBITDA margin. Diluted shares still rose about 5% to 629 million, despite $1.1 billion of buybacks in the quarter. Award dilution is running ahead of the repurchase. Sales and marketing spending rose 26.6% to $875 million, well ahead of revenue growth of 16.5%.
The guidance raise carries a currency assumption
Third-quarter revenue is guided to $4.69 billion to $4.77 billion, growth of 15% to 17%. The company states that the range includes a currency tailwind of approximately three percentage points after hedging, which puts underlying growth nearer 12% to 14%. Third-quarter adjusted EBITDA margin is guided down slightly year over year on the timing of investments, so the quarter pairs faster revenue with a softer margin comparison.
The full-year change is a genuine two-part raise. Revenue growth guidance moved to at least the mid-teens from low-to-mid teens. The adjusted EBITDA margin target moved to at least 35.5% from 35%. That second figure is an adjusted EBITDA margin and not an operating or net margin.
Mertz said the new guidance assumes a large rise in spending on artificial intelligence. Margins still expand while carrying that cost. She named three offsets. Customer support cost per booking fell 16%. An assistant now settles roughly 45% of issues with no human agent. Headcount growth is slower because output per employee is higher. Chesky said the company has rebuilt itself around the technology. He said it cut concept-to-launch time by as much as 60% and shipped nearly 80% more features than a year earlier. Those productivity figures are the company's own characterisations rather than independently measured results.
The fee change is designed to lower prices
Take rate, measured as revenue divided by gross booking value, was 13.2% against 13.17% a year earlier. It was flat, and describing it as expanding or compressing would misstate it.
The structure underneath it is changing. Airbnb is moving most hosts to a single 15.5% service fee. The old split charged hosts about 3% and guests separately. The switch completes this year. Mertz described the change as putting downward pressure on pricing, framed as delivering value to guests and keeping the platform competitive. Chesky said property managers connected through software had been setting rates for other platforms. Guest fees work differently there. The same net amount to the host produced a higher total on Airbnb. Guest travel insurance revenue grew 60%, from a small base.
Cash timing works against the second quarter in a way that repeats every year. Free cash flow was $1.3 billion, a 35% margin, against 64% in the first quarter. Airbnb collects service fees when a booking is made. The first quarter captures the cash from summer bookings. The second quarter does not. The comparable figures are the 31% margin in the same quarter last year and the 37% margin over the trailing twelve months. Reserve Now, Pay Later pushes more fee cash toward the stay date, which is also why unearned fees of $2.8 billion were roughly flat.
What the second half has to show
The burden of proof has shifted from whether Airbnb can grow to whether the growth rate is rising. The company has raised guidance twice, expanded operating margin by 1.2 points, and shown broad first-time booker gains across both new and core markets. The pieces still to be demonstrated are specific. Volume growth has to move above 10% against a comparison that no longer carries a conflict effect. Margin has to expand with artificial-intelligence spending rising and marketing growing at 27%. The tax rate has to normalise toward the high teens without net income growth stalling. The single fee has to lift take rate rather than simply lower guest-facing prices. Third-quarter results will strip out the currency help by comparison, which is when the underlying rate becomes visible. The share price is at the top of its range, roughly 23% above its 50-day average, which leaves little room for the answer to disappoint.