Does $ABNB buyback make sense? Is this a mature business?
post media
I’m generally anti-buybacks for growth companies but this is the equivalent of the FCF from just their past 2 quarters and their balance sheet is immaculate. This is fine. I just don’t want to see it become a regular thing. Keep reinvesting in the business.
View 2 more comments
StockOpine's avatar
$42.6m follower assets
Highlights from Booking Holdings $BKNG Q2'2022
Q2’2022 FINANCIAL RESULTS

Source: Booking Holdings 10-Q reports, Booking Holdings Q2’22 Earnings release, StockOpine analysis

ALTERNATIVE ACCOMODATION

Alternative accommodation room nights grew by 25% compared to Q2 2019. The global mix of alternative accommodation room nights was about 32% which is in line with Q2 2021 and higher than Q2 2019.

David Goulden, CFO “Within Europe, our mixed alternative accommodations continues to be meaningfully higher than the global average. In North America, our mix of alternative accommodations remains low relative to global average. However, we did see an encouraging increase in mix versus Q2 2021 in that region.”

Glenn Fogel, CEO, “In the second quarter, we saw the largest sequential net increase in alternative accommodation properties since 2019 and we now have 6.6 million alternative accommodation listings on Booking .com.”

It should be also noted that $ABNB reported over 6 million of active listings in Q2 2022.

MOBILE AND APP BOOKINGS

40% of the room nights were booked through the Company’s apps in Q2 2022 which is consistent with Q2 2021 and about 10 percentage points higher than in 2019.

Glenn Fogel, CEO “Booking. com's app continued to set new records in terms of monthly active users in Q2 and remains the number-one downloaded OTA app globally according to a third-party research firm.”

PAYMENTS AND CONNECTED TRIP

Connected trip refers to the Company’s long-term strategy to build a more integrated offering of multiple elements of travel connected by a payment platform.

Glenn Fogel, CEO on payments, “38% of Booking. com's gross bookings were processed through our payment platform in the second quarter, which is our highest quarterly level ever”.

Increasing payments through the platform improves working capital cycle of the business, however it drives operating margins lower (merchant revenues have lower margins than agency revenue). In addition, non-accommodation services (i.e. flights) which are part of the Company’s Connected Trip vision have lower margins and can also negatively affect future operating margins.

However increased payments through the platform are a net benefit to the business as they add incremental EBITDA dollars.

SUPPLY OF PROPERTIES

As of 30 June 2022, Booking .com had over 2.5 million properties on its website (400,000 hotels, motels, and resorts and over 2.1 million alternative accommodation properties), representing an increase from approximately 2.4 million properties as at 30 June 2021.

The year-over-year increase in total properties was driven by an increase in alternative accommodation properties.

You can read the full earnings preview for Q2 2022 in our substack.
post media
Crazy that $BKNG has already a similar amount of alternative accomodation like $ABNB. Here in Europe i also can find a lot of accomodations on both platforms
View 1 more comment
StockOpine's avatar
$42.6m follower assets
Brian Chesky highlights from $ABNB Q2 2022
1.Share repurchase program

“In fact, we're so confident in our long-term growth and profitability that today, we're announcing a $2 billion share repurchase program. And this is coming only 1.5 years after our IPO.”

As per the Shareholder Letter, the program will enable the company to offset dilution from employee stock programs.

2.Long-term stays

“We saw long-term stays of 28 days or more remain our fastest-growing category by trip nights compared to 2019. The long-term stays has increased nearly 25% from a year ago. And actually, long-term stays have increased almost 90% since Q2 2019.”

3.Product enhancements – Airbnb Categories, AirCover for guests, I’m Flexible etc.

  • Airbnb Categories => “Since launch, listings in the Airbnb Categories have been viewed more than 180 million times.” Since the release of Airbnb Categories, Airbnb has also seen the highest daily number of visitors.

  • AirCover for guests => “Since launch, the Net Promoter Score for guests that had an issue with their stay has already improved.”

  • I’m Flexible => “I think this is a really big thing that we're going to be focusing on, and we're going to continue to be investing in this product because I think this is a bit of a paradigm shift for how people will travel.”

  • Hosts related => “So you're going to see some exciting new product features to recruit the next generation of host later this year.” & “We have 4 million hosts on Airbnb, and I think that millions more can turn to hosting, especially during these economic times. So that, I think, is really priority #1.”

4.Cities and non-urban stays

“But we're also seeing guests returning to cities [47% of gross bookings in Q2 2022] and crossing borders above pre-pandemic levels.”

“We continue to see the strongest supply increases in areas of greatest demand, with nonurban active listings up 50% compared to Q2 2019. But as demand is returning to cities, we're also seeing an increase in total urban supply.”

5.Joe Gebbia

“Last month, Joe announced that he'll be stepping back from this full-time operating role. Joe will continue to serve on the Board of Directors of both Airbnb and Airbnb.org. Airbnb is a founder-led company. So he's going to continue to take a role at Airbnb, and this will be as an adviser to me on future concepts and creative culture.”

You can read the full earnings preview for Q2 2022 in our substack.
Just added to kids’ portfolios yesterday. It’s a company they love. The valuation is too high for me personally as a value investor, but I am starting to let the kids make their own investment decisions. Their portfolio has outperformed me and the S&P 500 since 5th grade, so, why not🤷‍♂️

Airbnb looks to be executing pretty well and will be the way I travel without a doubt when I do travel in the future. Why the hell would anyone want to stay in a hotel with options like AirBnB offers is beyond me.
View 5 more comments
Conor's avatar
$21.5m follower assets
$ABNB Host or Guest? Win Win
I am doing a semi-deep dive on Airbnb and it's taking up quite a bit of my time. It seems like a newer business model (established in 2008), however, they already have very strong competitors.

I'm going to be researching Airbnb, $BKNG Booking, and $EXPE Expedia Group as somewhat similar comparisons.

Quick question to my CS followers, who is Airbnb better for in the long run? Is Airbnb a win for the hosts who are either doing a "house hack" or receiving passive income? Is Airbnb a win for the guests who are going on vacation or working remotely?

What if you live in a neighborhood with a ton of Airbnb rentals? Would you even know? Would it be annoying?

What about first-time home purchasers who are priced out of the market due to the shortage of housing supply? Is that a symptom of Airbnb or an entirely separate issue?

Finally, the most optimistic point of view is, could Airbnb be a win-win for everyone? A win for the host making passive income, a win for the guest needing somewhere to stay, and a win for a first-time house purchaser who could rent out a bedroom in order to afford their new home?

I would love to hear everyone's opinions on this. I should have a more detailed analysis soon.

P.S. if you are wondering why I didn't mention one financial metric in this post, it's because investing isn't about P/E, Free Cash Flow, Current Ratio, Debt to Equity Ratio, or whatever financial metric you want to use. It's not about doing a discounted cash flow analysis to pretend you can predict a company's cash flow in the next 5 years.

Investing is about finding outstanding companies, buying shares through good times and bad, and holding for the long-term. Simple as that. Don't overcomplicate it.
It’s quite easy to see your competition in your local area, simply writing in your suburb and looking around on the map. You can see what’s around, what you get for your money or anything you could improve.

I don’t think we have the same housing issues in cities here in Australia because of Airbnb, as compared to the US from what I’ve read / heard.
View 7 more comments
StockOpine's avatar
$42.6m follower assets
Quote - $ABNB supply
“We have nearly every type of space in nearly every location so however travel changes, we can adapt.”
Brian Chesky, Co-founder and CEO, Airbnb, $ABNB
Samuel Meciar's avatar
$24.9m follower assets
Either I'm an idiot or the general consensus is going to be proven wrong on $ABNB over time as it becomes clear where their differences are vs "peers".

Please hold me accountable.

/p.s. @nathanworden knows, and if you don't, check out my writeup: https://commonstock.com/post/17efcbdc-1a8b-48db-bc7f-1f2eac599cc9/
Samuel Meciar's avatar
$24.9m follower assets
Trimmed about 20% of my $NET position here. I feel like that's what I should do after this spike. Things can turn around very quickly and so given the current circumstances I think it's wise to raise some money. In case we go lower I'll start adding to my positions again :) I'm eyeing $ABNB $MSFT $GOOGL $DDOG perhaps $TSLA, and then my SaaS faves that ran away before I managed to build up my position $NOW $SNOW $MDB.

I continue to re-evaluate my $SQ position as for some time I had the dilemma of simply consolidating into $SHOP but I still hadn't looked too closely into their earnings and transcript so this will take a little bit. Will be comparing the performance of the two and make up my mind.

Additionally, I continue to observe what the companies on my watchlist do and will react responsibly there, the goal is to stay disciplined and take a position when I'm fully convinced it's a great fit for my portfolio and I love the company, management and all that good stuff.
StockOpine's avatar
$42.6m follower assets
$BKNG and $ABNB Q2’22
ROOM NIGHTS

  • $ABNB up 24% Vs Q2’2019
  • $BKNG up 16% Vs Q2’2019

GROSS BOOKING VOLUME

  • $ABNB up 73% Vs Q2’2019
  • $BKNG up 38% Vs Q2’2019

A**D**R

  • $ABNB up 40% Vs Q2’2019
  • $BKNG up 19% Vs Q2’2019
post mediapost media
Is there any metric that allows for comparisons between the two whilst removing the variable of size? For instance, Booking may have more rooms booked but I am unaware of how many total rooms they have (capacity) vs Airbnb.
View 7 more comments
StockOpine's avatar
$42.6m follower assets
$META Q2’22 Earnings preview
FINANCIAL HIGHLIGHTS

  • Revenue $28.82B, ⬇️ 1% compared to Q2’21

  • GAAP EPS $2.46, ⬇️ 32% compared to Q2’21

  • Operating income $8.36B, ⬇️ 32% compared to Q2’21

USER ENGAGEMENT

$META managed to retain engagement despite competition from TikTok and other apps striving for people’s time.

User engagement in both Family of Apps and Facebook has grown y/y but was flat q/q.

Facebook engagement was better than expected. Mark Zuckerberg, “Engagement trends on Facebook have generally been stronger than we anticipated, and strong real growth is continuing to drive engagement across Facebook and Instagram.”

REVENUE HEADWINDS

  • Foreign exchange (revenue growth on a constant currency basis was 3% y/y).

  • Reduced advertiser spending due to economic uncertainty.

  • Shift in ad impressions towards lower-monetizing surfaces (from feed and stories towards reels).


REELS

Reels is growing quickly (30% increase in time spent q/q) gaining engagement across both Instagram and Facebook.

Reels reached $1B revenue run rate. According to Zuckerberg, Reels reached $1B run rate at a faster rate than when Stories were initially launched.

REALITY LABS

Operating losses for the segment were $2.8B compared to $2.4B last year. As operating losses continue to grow, they put downward pressure on $META ’s operating margin.

OPERATING INCOME

Operating margin for Q2’22 was 29% Vs 43% last year.

Total expenses were $20.5B, up 22% Vs last year driven to a large extent by headcount which rose by 32%.

Going forward management plans to push back on some of its investments and reduce headcount growth.

CASH FLOW

Free cash flow was $4.5B (15.6% of revenue) Vs $8.5B last year (29.2% of revenue).

Substantial increase in CAPEX to $7.7B, up by 64% y/y and 40% q/q. The substantial increase in CAPEX relates to server spend, including Meta’s AI Infrastructure.

SHARE BUYBACKS

$META repurchased $5.1B worth of shares, a significant deceleration compared to previous quarters.

Buying less at lower prices does not demonstrate the best capital allocation policy.

OUTLOOK

-Q3 revenue of $26-28.5B, implying y/y decrease of 6%. FX headwind on revenue growth expected to be 6% implying flat revenue on a constant currency basis.

-Total expenses for 2022 expected in the range of $85-88B, lower than the prior outlook of $87-92B.

You can read the full earnings preview in our substack. Subscribe for free to receive similar write-ups. We will be covering $PYPL and $ABNB in the following days.
post mediapost media
Next