Airbnb Inc Upgraded to Accumulate as New US Initiatives Drive Booking Growth February 25, 2026
Company Overview
Airbnb Inc operates as a global online marketplace for short-term accommodation rentals, connecting hosts with guests seeking alternative lodging options across diverse markets worldwide.
Financial Performance and Outlook
Airbnb delivered mixed results for FY25, with revenue meeting expectations at 102% of forecast whilst profit after tax and minority interests (PATMI) fell slightly short at 96%. Fourth quarter revenue expanded 12% year-on-year to US$2.8 billion, primarily driven by a robust 10% increase in booking volumes. However, PATMI declined 26% year-on-year due to increased investment in new growth and policy initiatives.
Looking ahead, management expects first quarter FY26 revenue to grow 14-16% year-on-year to US$2.59-2.63 billion, supported by modest average daily rate growth, high single-digit booking volume gains, and favourable foreign exchange tailwinds. The company anticipates higher booking volumes in FY26 driven by major sporting events, including the Winter Olympics this quarter and the 2026 FIFA World Cup across 16 North American cities from June to July.
Key Positives Driving Growth
The company demonstrated strong momentum in booking activity, with nights and seats booked reaching 121.9 million, representing a 10% year-on-year increase. This growth was particularly robust in the US market, supported by stronger adoption of new customer-friendly initiatives including Reserve Now, Pay Later (eliminating upfront payments), simplified fee structures for enhanced price transparency, and updated cancellation policies. These initiatives are set to expand to global guests and cross-border states within the US in coming months.
Average daily rates strengthened considerably, expanding 6% year-on-year to US$167.5 in the fourth quarter, a three-point improvement. This increase was attributed to longer booking lead times, faster growth in higher-priced short-term stays compared to extended 28-plus day stays, and increased bookings for larger homes with four or more bedrooms.
Global expansion continues to show promise, with nights booked in new markets increasing at twice the rate of core markets. Latin America and Asia Pacific regions experienced mid-to-high teen growth in nights booked, with average daily rates boosted by price appreciation and currency effects. Brazil, Japan, and India emerged as the fastest-growing countries, recording nights booked growth of 50% year-on-year.
Research Recommendation
Phillip Securities Research has upgraded Airbnb to Accumulate from Neutral, citing recent share price performance. The target price has been raised to US$138 from the previous US$127 using a discounted cash flow model rolled forward to FY26, whilst maintaining unchanged assumptions with a weighted average cost of capital of 7% and terminal growth rate of 3.5%.
Frequently Asked Questions
Q: What was Airbnb’s revenue performance in the fourth quarter?
A: Airbnb’s fourth quarter revenue grew 12% year-on-year to US$2.8 billion, driven by a 10% increase in booking volumes to 121.9 million.
Q: Why did PATMI decline despite revenue growth?
A: PATMI declined 26% year-on-year due to higher investment in new growth and policy initiatives, despite the revenue increase.
Q: What new initiatives is Airbnb implementing in the US?
A: Airbnb is implementing Reserve Now, Pay Later (zero upfront payment), simplified fee structures for greater price transparency, and updated cancellation policies, with plans to expand these globally.
Q: What is driving the increase in average daily rates?
A: The 6% year-on-year increase in ADR to US$167.5 is driven by longer booking lead times, faster growth in higher-priced short-term stays versus extended stays, and more bookings for larger homes with four or more bedrooms.
Q: Which regions and countries are showing the strongest growth?
A: Latin America and Asia Pacific regions are experiencing mid-to-high teen growth, with Brazil, Japan, and India being the fastest-growing countries with nights booked up 50% year-on-year.
Q: What is Phillip Securities’ new recommendation and target price?
A: Phillip Securities upgraded Airbnb to Accumulate from Neutral with a raised target price of US$138, up from the previous US$127.
Q: What major events may drive FY26 booking volumes?
A: Higher booking volumes in FY26 may be driven by the Winter Olympics this quarter and the 2026 FIFA World Cup across 16 North American cities from June to July.
Q: What is the expected revenue guidance for first quarter FY26?
A: Management expects first quarter FY26 revenue to grow 14-16% year-on-year to US$2.59-2.63 billion, supported by modest ADR growth, high single-digit booking volume gains, and FX tailwinds.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
Disclaimer
These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance.
Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries.
The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.
Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Thomson Medical Group Ltd: Mixed Performance Amid Strategic Transformation 
AppLovin Corp Maintains Strong Growth Trajectory Despite Market Challenges 
BRC Asia Ltd Delivers Strong Growth with Record Order Book Surge 
CapitaLand Investment Faces China Valuation Challenges Despite Resilient Fee Growth 
