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Airbnb (ABNB -8%) is traveling lower today after reporting its Q2 results last night. Despite reporting EPS and revenue upside, the alternative accommodations company is seeing some selling pressure from investors. We think investors are responding to ABNB's Q3 and FY25 outlook, which points out tougher yr/yr comps later in Q3 and into Q4, putting pressure on growth rates in 2H25.

• ABNB had 134 mln Nights and Seats Booked, up 7% yr/yr. A positive was that ABNB saw an acceleration in yr/yr Nights and Seats Booked with growth rates for May and June both outpacing Q1. Gross booking value is another key business metric for ABNB. GBV increased 11% yr/yr to $23.5 bln, compared to 7.5% yr/yr growth to $24.5 bln in Q1.
• A quick note, Nights and Seats Booked is a new metric and alternative to its prior Nights and Experiences Booked. The metric now includes the number of nights booked for stays as well as the total number of seats booked for both services and experiences. Airbnb Services (chef, photographer, catering etc.) and its reimagined Experiences launched in May. ABNB noted that while it's early, over 60,000 people have submitted applications to host a service or experience.
• For regional performance, Nights and Seats Booked increased in the high teens in Latin America, mid-teens in Asia Pacific, and mid-single digits in EMEA. North America continues to lag its other regions, growing only low-single digits. Management called out specific strength in Brazil and Japan, with Japan having an acceleration in booked nights, driven by more domestic travel and a 15% yr/yr increase in first-time bookers.
• Moving on to what we think is causing a negative reaction in the stock. ABNB noted it saw encouraging demand trends, specifically the acceleration of nights booked from April through July, with particularly strong momentum in the US. That said, yr/yr comps get tougher in Q3, putting pressure on growth rates, which is expected to continue into Q4. As a result, Q3 Nights and Seats Booked is expected to be flat sequentially, while Q3 adjusted EBITDA margin is expected to be lower yr/yr.

Overall, while ABNB had several positives and upside Q2 results, the cautious Q3 outlook is weighing more heavily on shares. Its new services and experiences offer further growth opportunities, but it's still too small and early for those benefits to resonate with investors who are focused on the near-term outlook. We saw something similar with Booking Holdings (BKNG) when it reported its Q2 results last week. Despite the upside results, shares traded lower as the company was a bit cautious on US inbound travel. On a final note, peer Expedia (EXPE) will report its Q2 results today after the close. This report from ABNB makes us a little more cautious on EXPE's report tonight.