Airbnb: It's hard to know where to stand

Four years after its IPO, the flatness of the share price was a cause for concern, especially when compared with the soaring performance of rival Booking.

Such a wait-and-see attitude on the part of investors was unusual, especially as Airbnb's sales doubled and its operating profit quintupled between 2021 and 2024. Not only has the unicorn put its accounts solidly in the green, but its domination of the vacation rental segment between private individuals - via the famous "network effect" - now seems enshrined for good.

In addition to this operating profit, Airbnb has also benefited from a providential windfall: the financial income generated by the interest earned on the cash held in escrow by the platform's users. By 2024, an additional $818 million will have flowed into the coffers of the group headed by Brian Chesky.

Airbnb's pre-tax profit will reach $3.3 billion in 2024, compared with $2.1 billion in 2023 and 2022, and a slight deficit in 2021. Last year, we pointed out that the group's communication was surprisingly timid on the half-mast profitability despite clear sales growth. Over the past twelve months, however, there has been a clear improvement, which has been welcomed by the market.

It will undoubtedly take more to convince the pessimists. Airbnb, like Uber, is still operating in a risky regulatory niche, with some major cities already taking steps to limit its expansion on their territory.

What's more, while growth continues, its pace is slowing. In 2024, reservations were up 12% in value and 10% in volume. Last year, they were up 16% in value and 14% in volume. Is Airbnb gradually approaching its glass ceiling?

In addition to this possibility - and as is customary for American technology companies - stock option remuneration continues to rise: another $1.4 billion in 2024, compared with $1.1 billion in 2023, or 12% of sales.

Since its IPO, Airbnb has spent nearly $10 billion on share buybacks. However, these operations do not represent a return of capital to shareholders; in fact, they have served to absorb the dilution caused by stock option issues.

Despite the amounts involved, on a diluted basis, the number of shares in circulation will increase significantly between 2021 and 2024, from 616 to 645 million.