About 3 points of Airbnb's faster growth in nights came from letting guests pay later

Airbnb grew faster in the September 2026 quarter than it had told shareholders to expect. Nights and seats booked, its count of stays and experiences sold, rose 16% from a year earlier, against guidance in August of low double-digit growth. Revenue rose 18.9% to $4,869 million, above the top of the range management had guided. Part of that acceleration came from changing when guests pay, and the same change explains why the take rate and the cash did not keep pace.

Reserve Now, Pay Later lets a guest book a home without paying in full at the time of booking. The company expanded the option, and its results say it is one reason guests are booking further ahead. Ellie Mertz, the chief financial officer, said the expansion added a net 3 points to nights growth. Taking her figure off the reported rate leaves growth of about 13% without it, still faster than the 10% of the quarter before, although that quarter had a smaller pay-later lift of its own; Mertz put last quarter's effect at a point or more larger.

A stay that has not been paid for is easier to give up. Mertz said cancellation rates overall are "up 200 to 300 basis points from a year ago". Airbnb counts nights net of the cancellations that happen within each period, so a booking made last quarter and cancelled later comes off a later quarter's count. That is the reason Mertz gave for expecting the net lift to nights to shrink in the fourth quarter: the extra bookings arrive before the full cancellations do.

The change also moves money. Booking value is recorded when a guest books and revenue when the guest stays, so with guests booking further ahead the implied take rate, revenue as a share of booking value, fell to 17.6% from a year earlier. Unearned fees, money collected for stays not yet taken, were $1.5 billion at the end of the quarter, lower than a year before because pay-later guests pay closer to their trip. Free cash flow still rose, but it fell to 29.3% of revenue from 32.9%, calculated from the reported figures. The company put that down to working-capital outflows that included pay-later, and to a property purchase in New York.

Profit margins moved the other way. Adjusted EBITDA, the company's profit measure before taxes, interest, depreciation and stock-based pay, among other items, came to 52% of revenue against 50% a year earlier, although in August management had guided the margin slightly down. Mertz credited revenue growth, AI-driven savings in customer support and the shifting of some marketing spending into the fourth quarter. The income statement shows support costs falling as a share of revenue, while the share spent on sales and marketing was a shade higher than a year earlier, by Inve's calculation.

That leaves the fourth quarter carrying two things the third did not: the marketing spending that moved, and a smaller pay-later lift. The company guided fourth-quarter revenue up 16% to 18%, including about two points from currency, and a slightly higher take rate; nights growth of at least low double digits; and an adjusted EBITDA margin slightly below a year earlier, partly because of when marketing is spent. For the full year it now expects revenue growth in the high teens and an adjusted EBITDA margin of about 36%, raised again from its August guidance.

Growth without the pay-later effect was still accelerating, which says the demand underneath is real. The rest is bookings whose payment, and some of whose cancellations, have yet to arrive. The company says pay-later shifts payment and the fees it collects closer to the date of stay, so on its own account the cash missing from last quarter comes in as those trips are taken, less whatever is cancelled before then.