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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Brian Chesky: Hey, Ken. Just on your question, couple of things. So with regards let's focus on North American urban markets. That are very heavily dominated by hotels. The vast majority of people going to city in North America are staying in a hotel. Which is good for us and so far that there's so much room to grow. So what are the what are the what's the value equation? It's really four things. Why do people book hotels? Well, the first reason they book hotel is because it's pretty frictionless to book. Why we've been working on all those product optimizations, especially usability, to make it easier to book an Airbnb, Inc. The second is they know what they're gonna get. Whether hotels whether you like the hotel or not, you kinda know what to expect. And so that's why we've been focused a lot on reliability. We're gonna do a lot more on reliability and quality. And third, hotels offer a suite of services on premise. But we think there's obviously endless service that could be offered on Airbnb, Inc. And then finally, think affordability is a reason you'd book Airbnb, Inc. In fact, we have a we have a campaign we've been running. Some trips are better than Airbnb, Inc. And it's been incredibly successful. It highlights different between Airbnb, Inc. and hotels, and it basically says, we're not saying we're better in Airbnb, Inc. hotels for every trip. But if you're traveling with other people, it's almost always better and almost always significantly more affordable on Airbnb, Inc. So just tend to, like, back to zoom out. I believe I don't know when this will happen. But I do believe there's probably a tipping point where a whole bunch of guests that don't consider Airbnb, Inc. or use it only for maybe non-urban markets or for really large group family travel, but don't use it for business travel or urban markets. There's a tipping point where if we keep making the service more reliable, we add more service we make it more affordable, even more frictionless, eventually, there's a tipping point I think a lot of
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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we add more service we make it more affordable, even more frictionless, eventually, there's a tipping point I think a lot of hotel travelers will come to Airbnb, Inc. Or use us for more of their share of wallet. So I think I can't possibly predict when this will happen, you know, but I what I can't predict is how much faster our service improve, and that's gonna happen over the coming years pretty quickly.
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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Operator: Our next question comes from the line of Kevin Kopelman with TD Cowen. Please go ahead.
Kevin Kopelman: Thanks. Could you give us an update on how you're thinking about advertising services in your priority list as you're rolling on new businesses? Thanks.
Brian Chesky: Hey, Kevin. I think it it's, like, almost every marketplace that's successful has done this. We've looked at this. We definitely think this is easily a billion-dollar revenue opportunity. It's not a matter of if, it's a matter of when. It's not the most perishable opportunity, so it's not something we'll be doing this year. It's definitely something, you know, on the horizon.
Operator: Our next question comes from the line of Naved Khan at B. Riley Securities. Please go ahead.
Naved Khan: Okay. Thanks. Maybe just on the know, the urban demand, Brian, and you talked about how a lot of people just book hotel? Can you maybe touch on regulation and do you think do you see movement there in terms of how that might become more favorable, especially the other cities like New York might start to open up? Give us some thoughts there. And then if I have to think about regulation, maybe at a at a bigger scale, so I think Europe has been pretty pretty heavy on regulation. Especially on the on the larger platforms. Any anything in terms of either becoming a deemed gatekeeper or I'm not just any faster would be helpful. Thank you.
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203
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ABNB
| 4
| 2,024
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Brian Chesky: Yeah. Sure. I'll take the first part, and I'll let you know it take a second. You know, with regards to regulation, let's just let's just frame it. So our top 200 market take comprise the vast majority of revenue. 80% of those jurisdictions have regulations on the books for Airbnb, Inc., regulations as in they recognize us. And we've now collected and remitted around $13 billion in hotel occupancy tax, and we have a, you know, really a great history of partnering with cities. I think the trajectory for cities is increasingly, I think, they're go when we first started, cities didn't really know what to make of us. This is, like, ten, fifteen years ago. I think some people thought Airbnb, Inc. was a problem. And I think increasingly cities are thinking of us as partners, and they're thinking of us as a solution to their problems. Just give a couple examples. Last summer, you know, parents had a really big problem. I hope many like, millions of people were coming to Paris, and they didn't have hotels to put them in. So Airbnb, Inc., we went from 100,000 to about 150,000 homes. Partnering with the IOC loan debt committee and the city of Paris. The French government, we have great support. And we were able to house 700,000 guests. In Paris during the Olympics. Imagine that. That's, like, more than ten Olympic stadiums where the guests were staying in Airbnb, Inc. I think that Paris Olympics was so successful that the city of Milan and the city of LA now looking at how we can be a solution for their challenges with you know, compression nights during the Olympics. And I think cities all over the world are looking at Airbnb, Inc. as a solution to be able to accommodate guests for large events. Where the money goes into local communities, and it, like, you know, limits hotels' ability to essentially create surge pricing. Another solution we've been is during times of disaster. You know, there was a devastating LA fire that I'm sure you're all aware of, about a month ago. And, you know, a large number of
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2025-02-13 16:30:00
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Airbnb, Inc.
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know, there was a devastating LA fire that I'm sure you're all aware of, about a month ago. And, you know, a large number of people were displaced. Well, Airbnb, Inc. and working with Airbnb.org has housed more than 19,000 residents. Los Angeles that were displaced because of the fire. And so I think generally, the conclusion here is that I think we're developing some really great momentum. I think cities are seeing us as a partner. I think that New York City remains an outlier. They banned the majority of our business. One year later, sorry. One year know, as of, I think, like, last September, the last data I saw, rents, they they they basically banned Airbnb, Inc. with the idea that rents would go down. What we've seen is rents aren't down year over year. In fact, rents are up, I think, 3% year over year. There hasn't been meaningful supply housing stock going back in the market, and guess what happened to hotel prices? They're actually up 7% year over year. So I think New York's a cautionary tale, and I do not think cities are gonna follow it. I think they're gonna, like, see us much more as a solution to a problem.
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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Ellie Mertz: And then just on your second question, related to DMA, no no real change here. From from last quarter. It it doesn't really apply to us.
Operator: Our next question comes from the line of Colin at Baird.
Colin: Thanks, and and good afternoon. I guess two quick ones for me. First off, I guess from a competitive standpoint, Brian and Ellie, the tone of the letter comes across, I think, is quite a bit stronger in terms of leading the industry. So I'm curious if that's more of the result of your performance to date or is that more about what's to come in in terms of putting more distance between Airbnb, Inc. and and competitors? And then secondly, on experience, I know we don't have the formal relaunch yet, although I enjoyed a nice food tour recently, purchased the platform. But just curious on the progress you're seeing in repopulating the marketplace or ingesting more and higher quality experiences before the relaunch. Thank you.
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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
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Ellie Mertz: Great. Thanks, Colin. Just just giving a little bit of update in terms of the competitive competitive environment. What I would say is that, you know, our results in Q4 and 2024 support that. We continue to gain market share on a year-over-year basis, both globally as well as at a regional level. This is true both from a traffic share as well as a night stay perspective. And what we've seen of late is predominantly market share gains coming from hotels. I think all the product improvements that Brian has shared throughout this call as well as the increases we've seen in terms of brand consideration have really been attracting more frankly classic hotel users to try our product. And has allowed us to continue to to gain market share. I think one of the underlying questions I'm sure people have is vis a vis Vrbo and their strong performance in Q4. What I would say there is that, you know, Vrbo obviously had a very soft comp in terms of their business contracting in the US. Or globally in Q4 of 2023. And in the last quarter, what we see is that the markets that we tend to compete against them in, in particular, non-urban US markets. Was actually one of our fastest growing segments in the US. So even in that comparison point, we feel like we're doing quite well. The other point I would make on the competitive is that we continue to see that on the supply side, we're number one, leading in terms of total supply growth. And number two, in terms of the new listings coming online, the majority come to Airbnb, Inc. and the majority are exclusive. So further extending our differentiation with regard to both the breadth but also the differentiation of the supply that is key to to the brand and key to the the guest value proposition for Airbnb, Inc.
Operator: Our next question will come from the line of John Colantuoni with Jefferies. Go ahead.
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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Operator: Our next question will come from the line of John Colantuoni with Jefferies. Go ahead.
John Colantuoni: Thanks so much for my questions. First one on conversion. When when you look at how travelers interact with your booking experience and begin to think about how best to layer in new services over time. Talk about how you're planning to evolve search and discovery to help balance gearing users to your new services while simultaneously maintaining conversion on accommodations. And second, I'd be curious to get your perspective on the opportunity to use new services to create some flywheel effects by which maybe you're acquiring new customers through new products or driving more multiproduct bookings to help increase customer lifetime value. Thanks.
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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Ellie Mertz: Yeah. So let's talk a little bit. You asked about the conversion funnel and how we think about adding in new products. And and I think the question is really, how do you how do you launch and merchandise new products while not creating some risk to your your core offering? And I think this goes to one of our key learnings in terms of the experiences product that we've had historically versus what we want to put into market in coming months. And one of the insights there is that the the kind of classic generalized traveler does not come to our site or any other site to book their entire trip. Instead, they, you know, tend to book their airline. They tend to book their accommodations. Once they get through that, they're very relieved that that is behind them. And they kind of sit on the sidelines for weeks or months in advance of the trip until they start thinking about what do I need to book to fill out my itinerary. And so when we think about how to launch these new offerings, we want to be very mindful of the guest journey and to be very thoughtful with regard to both personalization and timing around what type of products are we merchandising to the customer at what point? So that we can obviously have the the best conversion impact by merchandising the the right thing. In terms of the flywheel, I think as we have been considering what, you know, both near-term and long-term future offerings will be, we're very focused on adding things to the platform that not only will be solid businesses in and of themselves, but also make the core offering better. So so that is part of our our criteria in terms of selecting new offerings is what if added to the platform would actually know, likely cause people to, one, book more frequently in terms of accommodations. But also come back to the app or or or the service on a more frequent basis than they do today because we have a a variety of offerings that may work not just on their trip, but also when they are in their home markets.
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ABNB
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2025-02-13 16:30:00
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Airbnb, Inc.
| 115,705,393
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Operator: And that will conclude our Q&A session. I'll turn the call back over to Brian for any closing remarks.
Brian Chesky: Alright. Well, thanks everyone for joining us today. Just to recap, we ended 2024 with nice growth accelerating in incredible momentum heading out of 2025. Free cash flow was $4.5 billion for the year. Representing a free cash flow margin of 40% and our strong balance sheet enabled us to repurchase $3.4 billion of common stock. I'm really proud of what we accomplished, but this is just the beginning. 2025 marks the start of Airbnb, Inc.'s next chapter. Alright. Thank you all.
Operator: That concludes our call for today. Thank you all for joining. You may now disconnect.
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210
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ABNB
| 3
| 2,024
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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Operator: Good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the Third Quarter of 2024. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb's website following this call. I will now hand it over to Angela Yang, Director of Investor Relations. Please go ahead.
Angela Yang: Good afternoon, and welcome to Airbnb's third quarter of 2024 earnings call. Thank you for joining us today. On the call today, we have Airbnb’s Co-Founder and CEO, Brian Chesky and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our third quarter of 2024. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also, during this call, we will discuss some non-GAAP financial measures. We provide a reconciliation to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. With that, I will pass the call to Brian.
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ABNB
| 3
| 2,024
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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Brian Chesky: All right. Good afternoon, everyone, and thanks for joining. Airbnb had a strong third quarter. Nice and experiences booked accelerated throughout Q3 and into Q4. Despite a slower start to the quarter due to shorter booking lead times compared to last year bookings grew steadily each month returned to double-digit growth by the end of Q3. We had a $123 million nights and experience booked. Revenue grew 10% year-over-year to $3.7 billion. Net income was $1.4 billion, representing net income margin of about 37%. And we generated $1.1 billion of free cash flow. In fact, our total trailing 12 month free cash flow was $4.1 billion, which allowed us to repurchase $1.1 billion of our shares in the quarter. And as of the end of Q3, we have $4.2 billion remaining on our repurchase authorization. Now, during Q3, we continue to make progress across our three strategic initiatives, which are making hosting mainstream, prospecting our core service and expanding beyond the core. Now I am going to share a few highlights about each. First, we're making hosting mainstream. We are focused on making hosting just as popular as traveling on Airbnb. Today, we have over 8 million active listings with growth across all regions and market types. To retain and track new hosts, we prioritize making hosting easier. Last month, as part of our 2024 winter release, we introduced co-host networks, an easy way to find the best local host to manage your Airbnb. Co-hosts are some of our most experienced hosts. They provide personalized support ranges from listing setups, can managing bookings and communicating with guests. Second, we're prospecting our core service. Over the past three years, we've launched more than 535 new features and upgrades to make Airbnb a better service. Our 2024 winner release included over 50 upgrades for guests that make Airbnb a more intuitive and personalized App. This includes features like recommended destinations, suggested search filters and personalized listing highlights. We're also focused on one
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ABNB
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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features like recommended destinations, suggested search filters and personalized listing highlights. We're also focused on one of the top issues for guests, listing quality. Since last year, we removed over 300,000 listings that failed to meet guest expectations. And we will continue to invest in improving the quality of guest stays. Finally, we're expanding beyond our core. Outside of our core markets, there are many countries and regions that remain underpenetrated and we're focused on these expansion markets as part of a global market strategy and we're seeing great results.. In Q3, the growth rate of nights booked in our expansion markets more than doubled that of our core markets. Now, in addition to driving growth in our expansion markets, we're also preparing for an Airbnb’s next chapter, which will take us beyond accommodations. And you'll see more about this next year. We also saw a number of positive business highlights in Q3. First, guest demand accelerated throughout the quarter. As I mentioned earlier, after a slower start in July, bookings accelerated each month in Q3. Global lead times also normalized throughout the quarter. Now part of this growth has been driven by our App strategy. Nights booked on our App increased 18% year-over-year in Q3. App bookings now account for 58% of nights booked. Now this is up from 53% in the same period last year. And we also saw continued growth of first-time bookers, with the highest growth among young travelers. This is quite exciting. And I'm really excited to share that we recently surpassed 2 billion guest arrivals on Airbnb. Second, our global market strategy is working. We continue to drive growth by investing in underpenetrated markets. While our timing and investment level will vary by market, our strategy is consistent, to make Airbnb local and relevant in more places around the world. Now in each market, we focus on finding product market fit, increasing brand awareness, and driving traffic. And I want to just use one country as an example, which is
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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product market fit, increasing brand awareness, and driving traffic. And I want to just use one country as an example, which is Japan. Airbnb is still pretty new in Japan and it's pretty unfamiliar to most Japanese travelers. So to raise awareness, we launched a brand campaign last month is centered on domestic travel. Beyond Japan though, we are all so introducing more local payment options and countries around the world like Vietnam, Denmark and Poland and in fact, by spring of next year, we expect to offer nearly 40 local payment methods around the world. Now finally, supply quality is improving on Airbnb. We are focused on removing low-quality supply, as well as make it easier for guests to find the best places to stay. I shared that we removed over 300,000 listings last year. And we are seeing the - we're already seeing this payoff. Customer service contact rates have decreased, guest MPS has improved, and we're also reducing host cancellations, which are now almost 30% lower than a year ago. And we've made it so much easier for guests to find the best place to stay with Guests Favorites. In fact, since launching Guest Favorites a year ago, last November, over 200 million nights have been booked at Guest Favorite listings. All right, next I want to share briefly some highlights from our 2024, which was last month on October 16th. Starting with the Co-Host network. We know that hosting Airbnb is one of the best ways to make money from our home. But not everyone has the time to host. So that’s why we introduced Co-Host Network, an easy way for people to find the best - to find and hire the best local co-host to manage the Airbnb. Co-host offer personalized support for host needs, everything from setting up your listing, demands your bookings and communicating with guests. These are super experienced hosts with an exceptional track record, 73% are super hosts and 84% manage Guest Favorite. Now, when we announced this on October 16th, we launched the Co-Host Network with 10,000 Co-Hosts across 10 countries. In
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ABNB
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| 2,024
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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Now, when we announced this on October 16th, we launched the Co-Host Network with 10,000 Co-Hosts across 10 countries. In this three weeks since we launched, we've already received interest from over 20,000 potential new co-hosts. This is huge, this is way bigger than we were expecting. And we are making co-hosting easier, we really believe that co-host network will allow us to lock even more high quality supply. And we also introduced safety updates for guests and make Airbnb a more intuitive and personalized App. And some of the features include a personalized welcome tour of the App for first-time guests, suggested destinations, winning guests pass the search bar will recommend locations on their search and booking history. And for our hosting highlights. So when a guest views, a listing, we will highlight the details that are relevant to their search and there are dozens of these features just like these. This is quite literally the beginning of a more personalized Airbnb. Now turning to Q4, last quarter, we talked about shorter booking lead times, but as I shared nights and experiences booked accelerated throughout the quarter, returning to double-digit growth by the end of Q3. While we know the comps from last year will get harder in the back of the quarter, we are anticipating that nights booked will accelerate in Q4 relative to Q3. So with that Ellie and I look forward to answering your questions.
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215
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ABNB
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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Operator: [Operator Instructions] Our first question comes from the line of Richard Clarke with Bernstein. Your line is open.
Richard Clarke: Hi, good afternoon. Thanks for taking my questions. Just a question on supply. It looks like you stopped sort of giving us the year-on-year supply growth I guess because of the removals. I guess,, any color on what’s happening to maybe gross supply growth. And whether the removals you are doing and additions you are doing and seeing any meaningful shift towards professional hosts as you guys do that process or co-listed supply. And then maybe any color on whether this co-hosting is unlocking supply here. You talked about adding co-hosts, but are you getting additional supply due to the co-hosting initiatives?
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ABNB
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| 2,024
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2024-11-07 16:30:00
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Airbnb, Inc.
| 115,705,393
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Ellie Mertz: Yes, thanks, Richard. Let me talk a little bit about what we've seen on supply. As you probably noted, our initiatives around supply have really morphed over the last 12 months. We can continue to focus on growing our overall supply base. But we incrementally are focused on making sure that we are delivering very high quality levels of supply across the world to our guests. And the two important features that we've done to drive quality are obviously introduction of Guest Favorites a year ago, and then ,second the removals that you called out over the last 12 months. And the interesting thing is, we’ve seen what we hope to have seen from these quality initiatives, in particular, what we see is that, based on encouraging our guests to use Guest Favorites and taking down those listings that we believe do not meet our quality expectations or those of our guests. What we see is that the average rating of our stays goes up. The incident rates go down and customer service contacts go down as well. So, we're seeing the intended impact of those quality efforts, which we believe, one, it improves the guest experience, second, allows for improvements of rebooking rates over time; and third, more broadly increases booking confidence around Airbnb. To the specific questions in terms of what has happened to the supply growth? It continues to be strong and in Q3, we continue to see Supply growth exceed demand by a couple of points. So it continues to be the very healthy, but again the focus more recently has been on incrementally raising the quality bar on Airbnb, not just adding more supply to the platform. Brian, do you want to talk about co-hosting or actually take that as well?
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2024-11-07 16:30:00
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Airbnb, Inc.
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Brian Chesky : Yeah, I can take. Yeah, I can take that. Richard, it’s a great question. Airbnb, I think we are just scratching the surface of how big this company can become. And the growth rate of demand is going to fall probably in line with the growth rate of supply. And so, one of the questions we had was, well, how do we get millions more listings in Airbnb? And how do we not just get millions of property managed listing? How do we get millions of regular everyday people to put their homes in Airbnb? Well, we are doing obviously a lot of research and we've asked people and we learned two things. The first thing we learned is that, people are very interested in making extra money in the home Ttey already have and make sense, they pay for this asset. That they can make tens of thousand dollars a year. Why wouldn't you want to put on Airbnb? But the second thing we learned was that the number and reason people don't host is because a lot of people say they don't have the time. And so that’s why we ask ourselves, what if we get match people with homes, that don't have time with people have extra time that don't have homes. The Venn diagram would potentially unlock millions more listings and the best part of all was this would be alternative so some of the third-party property management companies if you want to have one of the best host to Airbnb and the average 5 star rating. for co-host in Airbnb is significantly higher than the average rating of a third-party property manager. So that's what we did with the Co-Host Networks. Now we start with 10,000, co-host. We have 20,000 people that apply in the three week expense. And this is going to be something that we're going to be focusing on in the coming years to come. But, to answer your questions very directly, Richard, not only would this unlock more supply, I think in the coming years, this is going to lock millions of listings. I think that they - the vast majority of them are going to be everyday people that are going to list exclusively on Airbnb.
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Richard Clarke: Thanks. Thanks very much.
Operator: And your next question comes from the line of Mark Mahaney with Evercore ISI. Your line is open.
Mark Mahaney: Hey, thanks. Two questions please. You talked about this acceleration or improvement in. room nights as you kind of went through the quarter. Did that come from any particular geographic areas? We'd heard that Europe was one a market that was recovering maybe faster than others. Was that your experience, as well? And then, just back on the co-hosting experience, you had this out in a series of markets for a while. Is it how long do we see materiality come through it? Like have you seen these in relatively small markets where you’ve rolled it out this will become material to the growth rate in those markets already in the 6 to 12 month, period or is this take a just more of like a 12 to 24 month process? Thank you..
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Airbnb, Inc.
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Ellie Mertz: Thanks, Mark. Let me first answer your first question with regard to the acceleration of the business. What we shared in the letter was that for your line to where we were back at the time of the last earnings call, we called out that there was a bit of softness globally related to lead times is specifically what we shared with that. We were seeing continued strength of last minute bookings, but relative softness in terms of the longer lead times. And what we saw over the course of the quarter, specific to both the regions that you called out, but globally was that lead times over the course of July, August and September normalized and came back almost in line to where we were in ‘23. I think you saw that most notably in EMEA and I think probably some of the, long lead time softness that we were seeing in EMEA was certainly related to some distraction around the Olympics because we certainly saw the bookibgs pick up after the Olympics pass, but more broadly that acceleration was seen across all four major regions. And then, on the co-hosting, Brian gave you, I think a broad answer in terms of the expectations there. One of the reasons that we had confidence in terms of launching the Co-host Network more broadly is, the pilots that we've had over the last several years, in particular, in France, what we've seen is that, the co-host themselves are very incremental in terms of going out and attracting high quality listings themselves. Obviously, it will take time for us to scale co-hosting to a level that is, meaningful relative to the scale of our current business. But what we've seen from those pilots is extremely encouraging and we'll continue to build out the network from here on.
Operator: And your next question is going to come from the line of Brian Nowak with Morgan Stanley. Your line is open
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Operator: And your next question is going to come from the line of Brian Nowak with Morgan Stanley. Your line is open
Brian Nowak: Thanks for taking my questions. I have two. Excuse me. The first one, I think that the 4Q EBITDA guide sort of implies a margin somewhere in the 20s around 27%, 28%. Is there any sort of timing factors you call out that are sort of driving the margin down at that level? And then, how do we sort of think about philosophically the levels of investment and sort of the philosophy around investment and margins into next year to sort of go off this 27 number in the fourth quarter? Thanks.
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Ellie Mertz: Yes. So Brian, talking a little bit about Q4 obviously, the guide does imply a, several points margin compression relative to last Q4. And you should see that most specifically in terms of both the product development line item as well as marketing. In marketing, we continue to invest in our global expansion markets in our comm strategy around icons and then also Performance Marketing where we're seeing really great efficiencies. There's also a little bit of timing difference in terms of spend from Q3 getting into Q4. But in aggregate, the level of incremental marketing spend on a year-over-year basis is relatively modest. So your second question is, how do we think about the level of investment and philosophy around margins in 25? Let me let me give you a little bit of color in terms of our overall approach as we head into to 2025 Obviously, we will give more color in the following earnings call. But let me just talk a little bit about the approach today. So, if you think about how we've been managing our P&L, I think it's important you're certainly well aware of our history. But I think it's important to reflect on how well we've managed the, the overall P&L since we went public. We've been extremely disciplined in terms of delivering over a quarter basis points of EBITDA margin expansion since 2020 going from negative margins in in 2019 and 2020 to over 35% consistent with our outlook this year. And we’ve demonstrated consistently over these last several years that our business model is, extremely strong. It's extremely profitable and obviously has world-class levels of cash flow generation. And over the long term, I think you can expect that there is opportunity for further margin expansion. But when you remind through where we are right now? We've talked a lot about this. We see a huge incredible opportunity to invest in growth, both investing in growth in our core accommodations business, as well as our new offerings. And so, as we head into 2025, we will continue to lean into our growth
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accommodations business, as well as our new offerings. And so, as we head into 2025, we will continue to lean into our growth initiatives around core optimizations, global markets expansions and new products and services, which is then the question is, how exactly will we be managing the P&L? Let's say for the core business, our goal is every year to make the core business better and more efficient, and deliver greater value for our guests and hosts. And the way we do that is to find incremental efficiencies every year across in particular variable costs. And invest some of that into greater service levels on both sides of the marketplace. In addition to that in terms of the growth investments, in ‘25, we will be investing in our existing expansion markets, as well as a handful of incremental expansion markets and we will be launching new products with our upcoming 2025 spring release. The good news about these investments is that, we intend for them to be relatively capitalized, consistent with our core business. but we will be adding members to our teams and spending to our marketing to support these growth levers. We will provide greater detail on the exact level of investment and growth expectations on our next call early next year.
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Operator: And your next question comes from the line of Justin Patterson with KeyBanc. Your line is open.
Justin Patterson: Great. Thanks for taking the question. Brian, recently you’ve passed the two billion guest milestone and you did that next one billion much faster than your first one billion. As you look at the business today, what do you - what investments you need to make to attract that next billion plus guests to Airbnb when you look at just the types of people taking trips today? What demographics do you under-index on? And how do you think some of these service releases can really bring that next wave of customers? And thank you.
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Brian Chesky : Justin, it’s a great question. Maybe I'll just start by stepping back, it's pretty crazy that Airbnb has been used by two billion guests. Because I remember when we started Airbnb, I remember telling investors one day this company be huge, thousands of people will use it. And I think there's been a common like pattern where we keep saying it's going to be big and it’s even bigger than we imagined. And I think the reason why is, the travel industry, as you know, you guys cover it is it's approximate the size of the oil industry. And people love traveling. And one thing I know about the future is more people travel in the past. And, I think that we'll be creative with the new category. And this is the business that is approaching half a billion nights booked a year. And so the question is, well, how do we get to a billion nights a year? Or how do we get a company to even be an order of magnitude bigger one day? Because I'm 43 years old. I started to from my 26. And I feel like I got a couple decades ahead of me. And so, where do we go from here? I think that if you think about the history of this company I think you could maybe break it up into a few chapters. The first chapter was when we had this idea, Tony and I in 2008 - and we went on it really crazy [Indiscernible] And now it’s Phase one. And then I would say the second chapter which are probably in now exiting was the beginning of the pandemic, we lost 80% of our business and then we had the right size the company, become really profitable, go public, listing the customer feedback and really strengthen the foundation for the next chapter of the company. And that’s kind of the stage we are in. And I think the next chapter of Airbnb is starting next May. Because I think the next chapter is really about taking Airbnb and expanding this beyond our core business. And so, I will outline three areas that are going to allow us to grow and let's start with the shortest horizon to a longest horizon. The shortest horizon is actually just our core
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allow us to grow and let's start with the shortest horizon to a longest horizon. The shortest horizon is actually just our core business. Again, we do, - we're approaching 500 million room nights booked a year, I think our core business could certainly get to a billion nights a year. I am not going to put a time horizon on it, but the way we are going to do that, is we are going to continue to increase quality. For everyone who stays in Airbnb, nine people staying on a town. So the question is, what if we could just 1 of those other people to stay in Airbnb? That's how you get to a billion. And so, we think quality, mansion quality is a part of it. I think our work on affordability and usability are also going to be really, really critical. So we're going to continue to focus on the core business. The next horizon, our Global Market. A huge percent of our business is still concentrated in five countries,The US, Canada, Australia, France, UK. So those are all our core markets. But there are massive opportunities in emerging markets. There's nine of them that I'm focused on in the Americas, it’s Mexico and Brzil. In Europe, it’s Germany, Italy and Spain. And in Asia, it’s the big four countries, which are Korea. Japan, India and China. I think this is what I've described as a medium-term horizon. And, by the way, just as for a second, if there was one company in the world, that you can bet on to expand internationally, I think it will be a global travel network. So, I think there's a huge amount of opportunity here. And the biggest opportunity by far is expanding beyond our core business. I'm reminded of Amazon, one of the biggest companies in the world. And they started as an online book seller and can you imagine if Amazon was only selling books to the half way they would become? And yet we for the last 17 years for the most part have only sold one thing, which is basically vacation rentals Airbnb homes by the night. And so, I think that we have a huge opportunity to expand beyond our core business of
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rentals Airbnb homes by the night. And so, I think that we have a huge opportunity to expand beyond our core business of accommodations. Amazon went from books to what they do first after books, they did CDs and DVDs and people used to buy both. And that was a very close adjacency. And eventually, they sold everything and then they even sold things beyond consumers to enterprise. I think Airbnb is going to go on it’s own journey and what I expect is every year now, for the coming years, we will launch 1 to 2 new businesses that will generate $1 billion or more of revenue incrementally a year. I'm not going to be able to share everything we're doing or even most of the things we are doing. We like to reveal them during our release, but one thing that we've previewed to you was we are going to be reimagining Airbnb experiences and those are going to be coming next May, but we have some really core other things that we are working on. And it’s going to basically be starting with the nearest adjacencies around travel and over the next decade, we're going to go far beyond travel.
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Operator: And your next question comes from the line of Justin Post with Bank of America. Your line is open,
Justin Post: Great, thanks for taking my question. I just wanted to ask about the new markets. If you could give us the expansion markets, maybe some of the biggest ones there? I know Japan is one of them and then, how big they are. So we can think about the growth contribution next year. Thank you..
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Ellie Mertz: Yeah, Justin, let me just give you some context in terms of our overall kind of concentration of the business. So, if we think about the core markets and again remember those are US, Canada, Australia, France, and the UK. They currently represent about three quarters of our gross booking value. And then the rest of the world is obviously a quarter. The expansion markets that we're focused on are kind of 15% approximately of the remainder. But in a normalized world should be significantly larger. So if you give, - just to give you a sense in terms of kind of the success that we've had, that encourages us to keep going down this path and adding more expansion markets. I just call out actually Brazil because it was one of our first expansion markets that we began to focus on about two years ago. We introduced localized brand campaigns. We localized the products. We provided incremental payment methods to make it more locally relevant. And if we look at the success of that specific market, would you see - what you would see is that, for Brazil, from a destination nights perspective is actually about three times as large as it was pre-pandemic. And you can see just like paying attention to a particular market deploying, our full funnel marketing strategy, being very thoughtful about product market fit allows us to scale these currently smaller portions of our business to over time a significantly larger proportion. On the other end of the spectrum, I would highlight Japan, which we obviously called out in our shareholder letter, given the recency of our um, of our - the launch of our brand campaign there. That’s obviously a significantly large market. But we are relatively new in the eyes of Japanese travelers. And so if they've opportunity to really introduce ourselves to the local traveler have them under understand the opportunity locally to use Airbnb domestically and begin to scale that business commensurately. And so, when you think about the scale of these markets where we are today, Brian and I
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to scale that business commensurately. And so, when you think about the scale of these markets where we are today, Brian and I characterized this as a medium-term opportunity, because the immediate opportunity is large, but it will take time for us to scale these individual markets such that they have an increasing impact in terms of our consolidated global results given the relative concentration to that.
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Operator: And your next question comes form the line of Lee Horowitz with Deutsche Bank. Your line is open.
Lee Horowitz : Great. Thanks so much. A couple of I could? Maybe you, your online travel peers have given color that's what they think their long-term bookings growth how that looks like. I mean, I guess, given your leverage to alternative accommodations, because the assumption is that you guys should be able to go faster. Can you give any color maybe on sort of what you see is the long-term growth algorithm for your core business? And then, what new verticals may add to that on top of that? And then one follow-up if I could.
Brian Chesky : Yeah, Lee, maybe Ellie before you answer the question, can I just say one quick thing? Lee, o don’t think we do alternative accommodations. I think alternative accommodations is what our competitors OTAs do? I think alternative accommodations is a bit of a catch all that includes property managed homes, service apartments, boutique hotels. But I've never heard a customer say alternative accommodations. I hear them say Airbnb. I am going to book in Airbnb. I am going to get Airbnb. And I think we are really in a category of our own. So, just you know, I just think we don't refer to it and we don't think of it as alternative accommodations. So Ellie, over to you.
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Ellie Mertz: Yes, thanks Lee. So we think about overall growth algorithm and our growth drivers it's exactly as Brian has described earlier in terms of talking about the opportunity. It really starts with focusing on our core offering and optimizing it such that we are effectively limiting the barriers, to trying Airbnb relative to alternatives in particularly hotels. And so that's why we focus so much on things like affordability and reliability, because we know, for many consumers, even though they're aware of Airbnb, there is a gap in terms of their booking confidence around what they are going to get from us. And so, every quarter, we work at reducing that gap of consideration. And when we look at the business from that perspective, there's a huge amount of growth room ahead even in our core markets, because we know so many consumers consider - continue to consider themselves as hotel guests. not necessarily Airbnb guests. And so, a lot of the optimizations and marketing are both raising considerations, as well as helping people frankly get through our platform more easily by making it easier to book, making it more personalized and getting them the right listing. So, we continue to focus on these core optimizations, because we believe it's a considerable future, current I should say and future growth lever that will continue to pay dividends in particular in our core markets but more globally, more generally globally across our platform. The second component is what I just spoke about in terms of responding to Justin. Our business today is over-concentrated in our core markets and is not necessarily reflective of the commensurate business opportunity across the globe. And so, over the couple of years, you should see, assuming that our global market strategy is successful. You should see the contributions to growth of those expansion markets grow every single quarter and I think the results that we've delivered so far this year suggest that that is, that is working. We just need to continue to scale those
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results that we've delivered so far this year suggest that that is, that is working. We just need to continue to scale those businesses such as they contribute to global growth more significantly.
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Lee Horowitz : Great. And then, to the extent that sort of your improving 4Q outlook the acceleration is really nice, it is an output of some of the investments that you guys are putting into place driving the kind of gains that you want. Does this give you confidence to throw fuel on the fire and invest more aggressively behind those initiatives? And maybe how we should think about the way that that interplay should play through in terms of margin over the longer term?
Ellie Mertz: Well, I think where we've seen success. One of the areas is core optimization and so we have built out the product roadmap around that because where we see success in terms of improvements we're making to the booking flow. We continue to keep a stable set of resources against those challenges. So that every single quarter, the price is getting better and we're delivering more gains from those product improvements.
Operator: And your next question comes from the line of James Lee with Mizuho. Your line is open.
James Lee: Great. Thanks for taking my questions. The question of core initiatives here, can you guys talk about the progress you have made and affordability, and quality that’s driving, maybe some of the increased bookings that we’ve seen in the quarter ? And also, can you give us an update on the outcome from a service transformation, maybe what's working, what's not and what's yet to be improved? And when do you expect to complete the process? Thanks.
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Brian Chesky : Yeah, I got this. Hey James, these are great questions. I'm really excited about it. So, I'll take each, affordability and reliability and customer service. Affordability, it's funny, the first tagline Airbnb ever had was an affordable alternative a hotel. And it was the number one reason that people first tried to use Airbnb. Now I think today that's not the main reason people use Airbnb. I think they use it because they want to travel like a local. They want more space. They want homes in real neighborhood, better equipped, but it's really, really important that we don't ever leave our roots of affordability. And I think in the pandemic, I think there was so much demand, there was constrained supply, prices went up, and I think we addressed it from our affordability risk. So, a couple of years ago, we actually got very, very serious about driving more affordable in Airbnb. And we did a few things. The first thing we did is, we heard a lot of complaints about rising cleaning fees and I set the fees in Airbnb. So we introduced total price display, total price slates exactly what it sounds like you can click it on and see the total price upfront. And, since we’ve done that, more than 300,000 listings have removed or lowered their cleaning fees. But this has been huge. Next, we introduced weekly and monthly discounts. And now more than, - we're introducing more entry points in weekly, monthly discounts.Two-thirds of hosts now offer discounts. In fact, more than half of our hosts offer a monthly discount and now 70% of our nights booked are for monthly stays. We introduced a similar listings tool. So what we noticed was a lot of hosts were overestimating what they could make on a nightly basis, especially new hosts. So we built the tool for you to see other listings in your neighbourhood and 2 million hosts have used this tool. And basically, when most of who use this tool they realize that they need to make sure they are competitive and so it brings the prices in line. Now over the this past release
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realize that they need to make sure they are competitive and so it brings the prices in line. Now over the this past release on October 16th, we also added a couple more different features like price tips, hosts can now view suggested prices based on similar listings in that area and search tips. So throughout the guest search, we're going to offer relevant tips to help them find last minute stays. And probably the most important thing you can do to drive affordability is just continue to increase supply. But we know about almost every marketplace is that as supply goes up relative to demand prices come down and so that's a really big effort for us. The results have been the following: In the last two years, while Airbnb prices on a like-for-like basis, if you net out mix shift, has it remains fairly constant hotel prices have gone up considerably. So we believe that we've actually become more competitive from – cancelling relative hotels last year. That’s affordability. Now reliability. Reliability, as I said is probably the most important thing that we can do to drive more growth in our core business. If we do nearly 100 million nights a year in bookings, the question is, how do we get the next 100 million nights booked. And there is no silver bullet, but the closest thing to a silver bullet is quality and reliability. And there is a lot of things we are doing, quite literally dozens. But I can just pick two. The two things I’d pick are at the top, Guest Favorites, piloting the two million best listings in Airbnb. We also highlight the best 1%, 5% and 10% listings. As Ellie mentioned, we’ve got 200 million nights booked just in Guest Favorites. Now, this is amazing. Why it is great? Because number one, customer service contact, these listings are down , our profitability on a per booking basis goes up, NPS is up, because NPS is up that means that rebooking rates are up. That also means the word of mouth is up, but most importantly, a lot of people that wouldn't have considered staying in Airbnb, now would. I
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the word of mouth is up, but most importantly, a lot of people that wouldn't have considered staying in Airbnb, now would. I mean, I'm going to go on a NIM and say that while the average Airbnb is not as reliable as a hotel, I believe the average Guest Favorite is. And we have two million to choose from. Two million listings is more inventory than Hilton or Marriott, nearly combined, by the way. So there's a lot of selection here. At the bottom-end, just like any company you need to make sure you reward the top performers and you also deal with the people that aren't performing. We've removed more than 300,000 listings over the last year, the last two years of hosts that weren't meeting our quality standards. So, these are just some of the things we're doing on reliability. The last is customer service. And we are going through a really exciting transformation on customer service. I don’t want to be one of the CEOs just brings up AI every earnings call, because I think you got a happy measure, but we are seeing some really great progress on AI-powered customer service. The way we think about customer service Powered by AI is in three phases. Phase 1 is the phase we're in right now. If you were to most of - first of all most of our customer contacts, we get over 10 million contacts here, most of the contacts that we anticipate getting in the coming years aren't going to be phone calls. They're going to be chatting through the App. I think really personally don't like calling customer service and having to dial, and I want to be able to chat. And chat AI can intercept. And so, we think in the future the vast majority of our chats are going to be intercepted in the end directly by the AI agent. And so there's really three phasing for this. Phase 1 is just answer basic general questions. We're rolling out a pilot that could answer basic general questions. Phase two, is personalization, personalize the questions. Phase three is to take actions. So I’ll give you an example, let me just give you one example. Let's say,
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the questions. Phase three is to take actions. So I’ll give you an example, let me just give you one example. Let's say, I were to contact customer service and I’d say, how do I cancel a reservation. In Phase one, what we are doing now AI agent will answer – copy even better the average customer service agent how do cancel a reservation. So Phase 2 is how you cancel reservation step-by-step. Phase 2 personalization, they’ll say, hey Brian, I see you have a reservation coming up in Los Angeles next week. Here is how you cancel that reservation. And Phase three is taking actions. It would say hey Brian. I see you have a reservation come to Los Angeles. Would you like me to cancel it for you? Just tell me yes and I’ll do it for you. I can even handle the rebooking. So this is where we think customer service can go enabled by AI, and we've hired some of the best people in the world to work on this and I really excited to tell you more progress about it.
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Operator: And your next question comes from the line of Doug Anmuth with JPMorgan. Your line is open. Doug, if you could check to see if your line is on mute. And moving forward to our next question from Kevin Kopelman with TD Securities. Your line is open.
Kevin Kopelman: Thanks a lot. A question on the new services that are expected to come out next year. Do we think of those new services as driving some revenue growth right off of that for the second half next year? Or areyou anticipating more gradual rollouts in more of 2026 revenue drivers? Thanks.
Brian Chesky : Yeah, I can take that and Ellie feel free to add. Kevin, the answer is a little bit of both, I mean, we are, the way like – let’s just back up? So Uber, let's just take Uber. I admire that company. They've done really well. When they launched Uber Eats, they launched in one market. And they had it city-by-city market and was very, very gradual. We are not going to do that. We're going to be much more aggressive. When we launch the new offerings next year, they are going to be available immediately in more than a 100 cities around the world. So we believe in trying to reach scale a little more quickly just given how big and how mature we are. So, because of that, we do think there will be some incremental revenue next year, that will hit the financials. But I also just want to like step back and just say that what we've learned from Uber Eats, from Amazon category expansion, from Door Dash, from we can go down the list of marketplaces is, when something's built off of small base, you've got to be patient. I think that there's a, multi-billion dollar revenue opportunities, multiple of them that will be introduced next year. But I also would point people to a 5-year Horizon. For a number of these things to really reach scale, not, they won't reach scale in just a year or two. And part of that is it's a network effect business. We want to roll it out carefully. We want to make sure it’s really well done. Ellie, do you want to add anything?
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Ellie Mertz : The one thing I would add is, Kevin, we will obviously give you much more detailed color next year on the next earnings call. But what you should anticipate is that, some of the investment behind those new services will front run the revenue. So you'll begin to see those expenses or those investments I should say, at the beginning of the year, whereas the revenue will start to scale once we've released the new offering.
Operator: And your next question comes from the line of Patrick Scholes with /Truist. Your line is open.
Patrick Scholes: Great. Thank you. Good evening. I want to go back to the first question I was asking and ask it maybe a little more direct. Can you provide us in percentage terms what your year-over-year net unit growth was in the quarter? Thank you.
Ellie Mertz : On Supply?
Patrick Scholes: Yeah. Supply, correct.
Ellie Mertz : Yeah so we had over 10% growth of supply as of the end of Q3, which is down several points based on the removals.
Operator: Your next question comes from the line of John Colantuoni with Jefferies. Your line is open.
John Colantuoni: Great. Thanks for taking my questions. Wanted to ask about the Experiences offering. As you get closer to the relaunch next year, how are you thinking about sort of the pace of expansion and scalability? I know, you'd like to keep experiences unique like your accommodations offering. But I'm curious if that means it will take longer to build supply behind it. And maybe, you could also sort of give us a sense for any investments in Tech or marketing that you plan to make around the relaunch of Experiences? Thanks.
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Brian Chesky: Yeah, John, really good question. I think we are able to reach a sweet spot where I think we can - we're going to offer something that's really, really unique and we will scale. Now, I want to just moderate expectations that again, these Journeys are going to be multi-year journeys that I do not think that there's a choice. I don't think we need to make a choice between you mean unique or being at scale. I think - by the way, I think our core business proof that a business that’s approaching a hundred billion dollars in gross sales a year. And it's pretty unique, it's pretty different than a hotel. So, I'm not going to certainly promise that experience we'll get to that size, but we do think we have something that's very unique, very scalable available around the world. As far as the Tech and marketing, the great thing about our business is, are you not anticipate very many businesses in the next five years are going to need significant investments. We are certainly nothing like many other companies where they have a lot of either capital allocation or major technical investments or even major marketing investments. Here's another way of saying it. We've already made most of the technology investments. When you see the last four years, a huge amount of what we've done is rebuilt the company from the ground up, not just to make it stronger to offer homes, to make it an extensive platform. One of those companies that we learnt from again was Amazon. I know, I talk a lot about Apple. A lot of people reference Apple when they talk about them because of their big launches. But Apple, Amazon is a very good reference point. Initially, as you know, they built a bookstore. They were based on like, IBM. They had to rebuild the platform and I’d extract the platform and you might call compromising to build offer many room verticals. And so, we want to take every new platform that works certification and build it for the next decade for like 50 or 100 different categories, just like Amazon. So now, I think with
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certification and build it for the next decade for like 50 or 100 different categories, just like Amazon. So now, I think with the timeline when we offer them, but we've rebuilt the technology already most of it to be able to do that. Now with marketing, I don’t think we are going to market everything as standalone businesses. We really like the idea of marketing, all of Airbnb. In marketing there's these two choices. Are you a house the brand or a branded house? We're a branded house. We're one App. We are one brand and we want to market everything in one Ad. So that's a little bit more how we're going to approach it. And so I think for those reasons we will, of course, be investing. I want to be clear, we of course be investing, but it's not going to be like many other companies where they have to go deep and sort of right and get the new business off the ground.
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Operator: And your next question comes from the line of Jed Kelly with Oppenheimer. Your line is open.
Jed Kelly: Great, great. Thanks for taking my questions. Just two if I may? Can you talk about in areas such as New York City, where the regulations are becoming increasingly difficult? Can you talk about how we should view those and then potentially leaning more into hotels? And then, as you grow outside some of these non-core markets, is it going to be more brand-driven or will you lean more into Performance Marketing? Thanks.
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Brian Chesky: Hey Jud. I'll take that. Yes, so let’s talk about New York. Actually, I would like to talk about two cities. I want to talk about a tale of two cities. New York City and Paris. Because both cities need some major decisions on Airbnb recently and I want to distinguish differencing the two. New York City has, might be this before the housing crisis and that’s a very real thing. And so the decided one of the ways they try to feel with that was banning Airbnb. And a year ago, Airbnb was banned and the theory was that if you ban Airbnb, a bunch of homes will come back on the rental market and prices will come down. Well, for the first time we've gotten a year-long longitudinal study of what happened in Airbnb into the city. Rent prices in New York City are not down. In fact, they're up 3.5%. And by the way, hotel prices are now up to 7%. So, a year after banning Airbnb, it's more expensive to live there. And it’s even more expensive to travel there. And I think that New York City is now a cautionary tale of how to deal with Airbnb. Now, the other side is Paris. Paris, France. A couple years ago, we knew the Olympics were coming to Paris, we started working with the City of Paris. And I think that Paris tood a different approach and set us thinking that Airbnb as a problem they started that Airbnb is a solution to their problems which were they weren’t going to have enough housing for the Olympics. And so in the last year, we went from a 100,000 homes in Paris to 150,000 homes in Paris And I'm pleased to announce that 700,000 guests stayed in Paris over the course of the Olympics. 700,000 and that's like 8 or 9 Olympics stadiums worth of guests. Our favourability in Paris has not been higher in years. And cities all over the world are now coming to Airbnb and saying we want to be Paris not New York, can you help us, because there are thousands events going around the world. So I think that’s the most important point I would make that New York and Paris are a tale of two cities and we can be a solution to
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think that’s the most important point I would make that New York and Paris are a tale of two cities and we can be a solution to the problem. We are not the problem. But specific to New York, I’d just say two things. Number 1, I remain optimistic that there will be a task to us to re-enter New York and people be able to stay in homes in Airbnb because there is a constrained number of hotels in New York. And by the way most hotels are only in Manhattan. And they're in Midtown, Manhattan. Do you want to stay in any part of the part of the Manhattan, the Brooklyn, The Bronx and Island Queens you are going to be pretty limited. And to answer the other part of your question, yes We absolutely welcome hotels on Airbnb and we are going to be adding more hotels to Airbnb. Because for Airbnb the win hotels don’t have to lose we own hotels a night and we believe that you should be able to find homes and hotels on Airbnb. So yes, we are focused on hotels in New York City on Airbnb. We are focused on Airbnb’s and stay New Jersey, stay Jersey City, which is actually closer Manhattan, other parts of Manhattan. And I am optimistic that New York there will be a workable solution at some opoint in the future, I don’t know when that will be and they can follow the lead of Paris.
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Operator: [Operator Instructions] Our, next question comes from the line of Stephen Ju with UBS. Your line is open.
Stephen Ju : Great. Thanks. So thanks for taking the question. Som Brian, I guess, on the Experiences, again I'm wondering if there's going to be an angle where this could be something that increases the overall engagement or even raises the overall frequency of usage for you, because, maybe I don’t stay in an Airbnb every weekend. But maybe I tried Airbnb Experience every weekend. So I'm just wondering like how the product development path and how utilization will shift as your selection goes? Thanks
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Brian Chesky: 100%, I mean, this is a great point Stephen. Experiences, I absolutely like within, like Airbnb is typically something you book once or twice a year, very, very few people will book Airbnb every month. Unless you are like incredibly prolific traveller and so we struggle from the point, where on the 1 hand, like our average purchase price is over $500, so, like, like the economics are great, on the other hand we have the challenge of low frequency, most people don't travel that frequently. Expansions are going to be, I think, one of many new offerings that you can increase the frequency that can make Airbnb go from an annual App to a monthly usage App or even for some people weekly usage App. And the reason is because Experiences will not be limited just when you travel. Just like they are today. We are designing products, Experiences and new services that will be great when you travel, but you could book them in your own home town like and I think there's a real problem which is what do you what do you want to do on a Saturday? And if you're with your family. Other than the things you already do. If you got a Friday night, what do you do other than going to a restaurant, staying home and watching Netflix I think there is a market for a locals who want to do unique things and I think traveling is how they are going to be expose Experiences, but I do think that some of the people will try them back home. I think the really big opportunity here kind of similar to iPod, when iPod launched you can only use it with a Macintosh. And the really big game for the iPod was once it became Windows compatible. When iTunes be able to Windows all the people that end on the Mac, but iPod end of sales surged. But I do think there is potential place for that down the road experiences. We're gonna position it for most of travelers. But it’’s not going to be exclusive travlers and I do think people are going to come to work frequently.
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Operator: And there are no further questions at this time, I would now like to turn the call back over to Brian Chesky.
Brian Chesky: All right. Well, I just want to thank everyone for joining today. And just to recap, revenue was $3.7 billion, which is 10% higher than a year ago. Adjusted EBITDA was $2 billion and our trailing 12 months cash flow is $1.1 billion. Now this is representing a free cash flow margin of 38%. Our strong enables to repurchase $1.1 billion of our common stock this quarter and we're continuing to innovate and our product just keeps getting better. I am so proud that we accomplish and I am satisfied with that. Thank you all for joining.
Operator: This concludes today's conference call, you may now disconnect
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Operator: Ladies and gentlemen, good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the Second Quarter of 2024. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb's website following this call. I will now hand the call over to Angela Yang, Director of Investor Relations. Please go ahead.
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Angela Yang: Good afternoon, and welcome to Airbnb's first quarter of 2024 earnings call. Thank you for joining us today. On the call today, we have Airbnb’s Co-Founder and CEO, Brian Chesky and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our second quarter of 2024. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also, during this call, we will discuss some non-GAAP financial measures. We provide a reconciliation to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. With that, I will pass the call to Brian.
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Brian Chesky: All right. Good afternoon, everyone, and thanks for joining. Q2 marked another strong quarter for Airbnb. We had 125 million nights and experiences booked. Revenue increased 11% year-over-year to $2.75 billion. Net income was $555 million representing a net income margin of 20% and we generated $1 billion of free cash flow. Our total trailing 12 month free cash flow was $4.3 billion, our highest ever, and our strong cash flow allowed us to repurchase $749 million of our shares in the quarter. And as of the end of Q2, we had $5.25 billion remaining on our share repurchase authorization program. Now during Q2, we continue to make progress on our three strategic priorities, which again are making hosting mainstream, perfecting our core service and expanding beyond the core. So I’ll share a few highlights on each. First, we are making hosting mainstream. Last year, we shared a commitment to make hosting just as popular as travelling in Airbnb. We've been focused on raising awareness around the benefits of hosting and providing better tools for hosts. In Q2, we surpassed 8 million active listings driven by continued growth across all regions and market types. We're not just growing supply and we're also committed to ensuring that it's high quality supply. Since launching our updated host quality system last April, we’ve removed over 200,000 listings that failed to meet our guests expectations. And we'll continue to raise the overall quality of listings on Airbnb so we can consistently deliver high quality stays. Second, we're perfecting our core service. We remain focused on making Airbnb more reliable, affordable and a overall better service for hosting guests. We’ve rolled out hundreds of new features and upgrades over the past two years to do this. This includes launching major reliability initiatives like guest favorites which make it easy for guests to find the best listings in Airbnb. Now since launch, last November, we've seen over a 150 million nights booked at guest favorite listings. We've
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in Airbnb. Now since launch, last November, we've seen over a 150 million nights booked at guest favorite listings. We've also made dozens of smaller changes that have led to improved usability and booking conversion. These include things like simplified set up and login, improved map, clear cancellation policies and so much more. Now we've made tremendous progress and we'll never stop improving Airbnb. We're going to continue this commitment. And finally, perhaps most excitingly, we are expanding beyond our core. We continue to drive growth by investing in underpenetrated markets. In Q2, growth of gross nights booked on an origin basis in our expansion markets significantly outperformed our core markets on average. Our core markets again are US, UK, France, Australia and Canada. This is largely due to the success of our global expansion playbook which includes a more localized product and marketing approach. We're also expanding Airbnb’s brand positioning beyond travel accommodations with the launch and roll out of Airbnb Icons which is a new category of extraordinary experiences that we launched in May. Now since launch, we see nearly 40 million views of Icons on our site. Helping people understand that Airbnb offers more than accommodations will be critical as we expand our offerings in the coming years. Now, looking back to Q2, we saw a number of positive business highlights. First, guests are increasingly booking on the Airbnb app. We've continued to optimized our mobile website’s app downloads and we believe our approach is working. Nights booked in our app during Q2 increased 19% year-over-year. Now these bookings now comprise 55% of total nights booked and this is up from 50% in the prior year period. Now in addition to our success of mobile downloads and bookings, we're continuing to see growth of first-time bookers on our platform with the highest levels of growth seen in the youngest age demographic. Second, Airbnb is uniquely positioned for special events where continuously more guests choose Airbnb
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youngest age demographic. Second, Airbnb is uniquely positioned for special events where continuously more guests choose Airbnb for major holidays and events. The week of July 4th for example represented our single highest week of revenue ever in North America and we saw similar trends in Europe. Now in anticipation of the Olympics which is in Paris, nights booked in Paris through Q2 were more than double what they were this time last year. Additionally, cities hosting matches during the recent Euro Cup in Germany saw an average of more than 20% year-over-year increase in nights booked. And supply has increased to meet the higher demand. So we have 37% increase in active listings in Paris in Q2 compared to the year ago. And these events, what they really do is they highlight Airbnb’s unique ability to disperse travel and spread economic benefits by allowing people stay in local neighborhoods where there are no hotels. Finally, supply growth is improving on Airbnb. We made huge strides for supply growth, we remain just as focus on supply quality. As we improve quality, we believe more people will try Airbnb unlocking even more growth. We have two major initiatives underway to help us do this. First, we're removing low quality supply. As I shared earlier, we've removed over 200,000 listings since April of last year. Second, we're making it easier for guests to find the best stays on Airbnb. We launched guest favorites as well as top listing highlights, which show the top 1%, 5% and 10% of eligible homes on Airbnb. These new features make it easy for guests to find the highest quality homes on Airbnb. In Q2, we also saw active listing managed by Superhosts, some of our highest quality hosts, increase 26% year-over-year. We're proud of our Q2 results. Now, turning to Q3, we're looking forward to another record summer travel season. We're encouraged by the excitement around the Olympics and the Euro Cup and we're also encouraged by the relative strength of Latin America and Asia Pacific which continue to be our
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and the Euro Cup and we're also encouraged by the relative strength of Latin America and Asia Pacific which continue to be our fastest growing regions. However, we are seeing shorter looking lead times globally and some signs of slowing demand from US guests and our Q3 outlook incorporate these recent trends. We are watching these trends closely along with the impact any macroeconomic pressures might be causing. And we're continuing to execute against our growth strategy by improving our service, expanding in less penetrated markets and introducing new offerings. We believe this growth strategy will over the long term offset any transitory macro trends. So with that, Ellie and I look forward to answering your questions.
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Operator: [Operator Instructions] And your first question comes from the line of Ron Josey with Citi. You're line is open.
Ron Josey: Great. Thanks for taking the question. I have two please. Brian, just with your last comments on slowing lead times and what not in North America. Can you tell us a little bit more about that when you saw those trends sort of first hit. And then, how it offsets the strength from the Olympics and UEFA and everything else? And that's question one. And maybe a bigger question when we think about expanding beyond the core and perfecting the core service. Post summer release, posts winter release we've seen a lot of key improvements across Airbnb with Guest Favorites, with Icons and the list goes on and on, , how does - when we think about the coming winter release and throughout ‘25 and everything else, how are these newer services helping to influence call it the Airbnb of tomorrow? Thank you.
Brian Chesky : Yes, why don’t Ellie you take the first one about slowing lead times and when we started seeing these trends and I'll take the second one.
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Ellie Mertz : Yeah. Yeah, absolutely. So let me double click a little bit in terms of the trends for lead times since the beginning of the year. In both Q1 and Q2, what we saw with that lead times were basically equivalent with what we had seen in 2023. So there wasn't really any timing shift behavior in terms of when guests were booking. What we’ve seen more recently and in particular in July is a shrinking of the lead times and in particular what we've seen is that there continues to be very strong growth of the shorter lead times. So anything from same day to next week to a couple of weeks from now. But what we're not seeing the same level of strength is in those longer lead times. So two months from now, what you’re booking for Thanksgiving what you’re booking for Christmas, and so it's that I would say softness in terms of longer lead times as a big factor in terms of the outlook that we've provided. What I would say additionally is that, over the last couple of years as we emerge from covid, there were several periods where we saw some volatility in terms of overall lead times and in particular some hesitancy for consumers to book those longer lead time trips. I suspect that's what we're seeing right now and the - I would say the silver lining with regard to the trends that we see right now, it's not that consumers are not necessarily going to book that trip for Thanksgiving or Christmas. It just appears that they have not booked it yet. So we're closely following all of the trends on lead times, but it is a factor that informs the outlook that we provided for Q3.
Operator: And your next question comes from the line of Doug Anmuth with JPMorgan. Your line is open.
Brian Chesky : Sorry, sorry.
Operator: My apology.
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Brian Chesky : Sorry, there was a second part of the question. So, Ron, to answer your question about expanding beyond the core business. Where we are is we spent 16 years building a business that's approaching $80 billion in gross booking value that's basically one category, which we call Airbnb which is short term accommodation. It's been pretty amazing how far this single product has gone. And we haven't really charged other than like essentially travel insurance, we haven't really ever really expanded beyond our core business and we do have long-term stays which are [17%] (ph) of nights. We haven't done very much. We began before the pandemic preparing to expand Airbnb. And then when the pandemic hit, we cut back a lot of our resources. We got focused, went back to our roots and really focused on rebuilding our platform, becoming lean, becoming a functional organization and we now have essentially the same amount of employees as before the pandemic and double the revenue and that explains why we have 41% free cash flow margin, one of the most profitable companies in tech. We're now beginning to prepare the next chapter of Airbnb. And I want Airbnb to be one of the most important companies of our generation and to do that, we're going to do more than one thing. We're going to do multiple new things. We're going to have to have multiple new products and multiple new services. This fall, this October, we're going to be launching a new host service which is really important. It's essentially a co-hosting marketplace. So, there are people that have homes but they don't have time. There are other people in the world that have time but they don’t have a home. And so, there's a Venn diagram of people today who have both that get host. But what if we can match those two people together? That would unlock a lot more inventory. That's what we're going to be launching later in October. Then next year we're going to begin to expand Airbnb truly beyond our core business. And we're going to be launching - we're going to
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year we're going to begin to expand Airbnb truly beyond our core business. And we're going to be launching - we're going to relaunch Experiences. I've been asked about Experiences probably every earnings call since we’ve been public, rightly so, because it's very exciting. We've learned a lot of lessons from Experiences. They need to be more affordable. They need to be more unique to Airbnb when you think so you can only find on Airbnb. They should be merchandised, videos not photos. They should be discoverable in the app and we should market them. If we think we do these five things, we think we'll have a hit on our hands and we're working on that. We also have new guests services and new host services that we're launching next year that we're working on. And then every year starting next year, we're going to launch new products and services. I look at Apple, I look at Amazon. Apple at one point was selling iMacs, Amazon was only selling books. We've gotten bigger than either of those companies just selling short-term rentals. But we're ready to go beyond short term rentals. So, the new Airbnb, to answer your question Ron, will be about a lot more than short-term rentals. It's going to be about long-term stays. It's going to be our guest services, host services and many new offerings and you'll begin to see that next year.
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Operator: And your next question comes from the line of Doug Anmuth with JPMorgan. Your line is open.
Doug Anmuth : Thanks for taking the questions. Ellie, just to follow up on I know you talked about the shorter booking window. Are you seeing any change in activity around pricing or class of property? And is there anything to call out across cohorts or income levels? And then, Brian just circling back on expanding beyond the core, are there any expansion markets in particular that you would call out where you're seeing particularly strong traction? Thanks.
Brian Chesky : Yes. So, why don't Ellie, you take the first. I’ll take the second.
Ellie Mertz : Yeah. so Let's talk a little bit generally about ADR, so question was like what are people are actually purchasing on the platform. I would say, generally, so far this year what you've seen is a little bit of ADR appreciation globally. In particular, obviously, but more recently in North America. And what we see there is a big driver of the ADR appreciation is big shifts, which you can assume is what it sounds like people choosing more expensive or larger properties. And I think part of the read through from that can be oh, people are choosing more expensive listings. Therefore, you are seeing stronger demand from higher economic demographics. I think that is one read through. I think another read through is that, if you think about the value proposition of Airbnb, it's that we offer these larger properties and on a per guest basis, they can be quite affordable and frankly more affordable than a hotel. So I think part of that ADR mix shift appreciation that you see is frankly people gravitating to where we actually have some great value, which is the larger Airbnb that that do provide value on a guest level.
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Brian Chesky : And to answer your question about expansion markets, maybe a framework I can give to think about how we want accelerate growth, listen, we want to be growing a lot fast than we are. We want to be growing in healthy double-digit growth - double-digit growth and I think we can. And the way we're thinking about accelerating growth is through short-term, medium- term and long-term. Short-term is really optimizing our core business. It's really around affordability, about having high quality stays and just conversion rate increases. Long term is really about new products and services. So, the question you asked about international is interesting because it's kind of like a medium term horizon, like one to three years. And to frame this, Airbnb is in 220 countries and regions. We're one of the most global companies in the world on the Internet, 220 countries and regions. We operate nearly in every country in the world. But there's only really five markets where we're penetrating. And those markers are the US, UK, France, Canada and Australia. And you'd think like, well, if there was one company in the world that would truly be like have a lot of international penetration it’d be a global travel network, right? A website where you want to travel, use one platform to travel around the world. So there's a number of countries. Just to give you a couple of examples of our some big expansion markets, Germany and Brazil we've seen a lot of progress. Those are huge travel markets and the biggest travel markets in the world. And we're continuing to go bigger. In Europe, Italy and Spain, we have low penetration compared to France and UK and these are major destinations. Then in Latin America, we've had a lot of progress in Brazil but there's really Peru, Chile, Colombia, Argentina, these are a huge opportunity markets, and that's Latin America is the fastest growing region alongside Asia. And Asia, you really have like the big four, big five countries. So you have China, Japan, Korea, India and then maybe we
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Asia. And Asia, you really have like the big four, big five countries. So you have China, Japan, Korea, India and then maybe we could kind of call out Southeast Asia as a holistic region. So what we're going to do is we have an international playbook, which is really product and marketing. First, need to localize the product, you need to make sure you have the right regulation in place. You need to make sure you have the right foundation. We've highlighted in our Investor Letter that we’ve retooled our product for Asia. Asia are different character counts. And so it's more laborious in certain languages to type in so like in Korea and Japan they prefer to do browsing than search. So we've had to retool our product and that's yielded some huge conversion rate increases. So some of these are going to pay back sooner, like some of North - like Switzerland, Belgium, Netherlands, they're going to pay back sooner. Japan is going to be a longer game, but that's one of the biggest travel markets in the world. And I literally think there are tens of billions of dollars of gross booking value increase just by getting all the aforementioned countries to the current market penetration of Canada or Australia. If we can get those countries to Canada, Australia there's tens of billions of dollars and it's just something we've had to focus - we're going to focus on. It's something we hadn't focused on in the last four years as much. We really want to solidify our core business, but now we're focused on it.
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Operator: And your next question comes from the line of Richard Clarke with Bernstein. Your line is open.
Richard Clarke: I just want to unpick the Q3 revenue guidance a little bit more. I guess the - if I look from the balance sheet your funds held on behalf of customers, to me it looks like it's up about 13% year-on-year. So it looks like you're carrying more bookings into the quarter and then you're talking about shorter lead times. So does that mean more bookings in the quarter for the quarter. So just trying to square that with why revenue is slowing down in your guidance?
Ellie Mertz: Yeah, thanks Richard. So, obviously, that that energy is balanced on - on the balance sheet gives you some indication of the backlog. I would not take those balance sheet items as a one for one read through in terms of the revenue that will be recognized over the course of the quarter. A couple of deviations in terms of why they might not match. One is obviously a good portion of the bookings that we will recognize in a particular quarter are still to be booked within the quarter? That's one aspect. The second is the balance sheet items will reflect the timing of the payments, the - whether it’s pay less upfront or the entirety of the payment and so they're just not a one for one guide. All they do, they do obviously give a time stamped point in time view of the backlog that we have.
Operator: And your next question comes from the line of Eric Sheridan with Goldman. Your line is open.
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Operator: And your next question comes from the line of Eric Sheridan with Goldman. Your line is open.
Eric Sheridan: Thanks so much for taking the question. Maybe I can ask a two-parter coming back to the booking window. When you've – what you’ve seen over the last couple of years in terms of the booking window evolving from where it was pre-pandemic to where it is post-pandemic how much differ just that booking window look today versus maybe 2019 as opposed to today versus one in two years ago. And when you think about what that shift looks like, how much of that do you think in terms of a shortening booking window are elements of demand-driven Dynamics where the consumer might want to spend less money and be more discerning. Or just elements of normalization that are working in the way back into global travel? Thank you.
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Ellie Mertz: Thanks, Eric. So, let's talk about lead times over time. If we look at where we were say in Q2 of 2019, the average lead time across the platform was within one or two days of what it was in Q2 in ‘24? So from the kind of pre-covid to last quarter, there hasn't been some material shifts. What you did see through the path of covid was initially, we saw a massive reduction in lead time because people had no confidence in terms of their ability to book far out. That, that reversed in say the 20 to 2022 to ‘23 time period where people are so eager to travel that they were booking way in advance of their kind of normalized patterns to make sure that they had the trip on the book. They got the most attractive listing at the best price by booking early. And I think fast forward to ‘24 you're seeing up and up through Q2 a very much return to normal. So hopefully that's helpful in terms of the overall four-year arc. In terms of having some color commentary in terms of what we're seeing today, just to reiterate some of the color I provided at the beginning of the call. The last minute bookings are incredibly strong. So they are, I would say much higher in growth rates than what we are guiding to in terms of the average. There seems to be a lot of desire in terms of making sure you get your summer travel in at very elevated rates. But it's being offset by that portion of bookings which is for us about half of the overall bookings, which are a month or longer. And I think it's a minor - it's a minor softness, but it does have impact in terms of our backlog just given the concentration of bookings that happen more than a month in advance. There's just a modest amount of softness that is bringing the average lead times down. And I think what we’ve seen in the past is from time-to-time whether it be a new COVID variant, whether it be a macro headline, whether it be like last year the outbreak of war in Israel. People from time to time have moments where they are not booking in the same timeframe that they did in
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of war in Israel. People from time to time have moments where they are not booking in the same timeframe that they did in prior periods, and that's what we're tracking closely right now.
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Operator: [Operator Instructions] Your next question comes from the line of Brian Nowak with Morgan Stanley. Your line is open.
Brian Nowak: Thanks for taking my questions. Maybe I'll squeeze in two. Let me ask one on the marketing expense comments for you Ellie. You mentioned in the guide marking expense has been real faster than revenue in the third quarter. I guess, the question is how do we think about performance versus brand expend and I think you sort of learned about your marketing spend over the years sort of gives you confidence this could resonate even faster room than growth this time around. And then one for Brian and sort of Gen AI and philosophical strategy. There's a lot of talks that are about top of funnel Gen AI travel assistance. How do you think about taking your leading supply that you have maybe partnering with hotel partners to create a really differentiated top of funnel alternative and hotel booking assistant using all these large language model capabilities?
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Ellie Mertz : Yeah, so, Brian, let me let me talk a little bit about our marketing spend. Let me just back up before I talk about Q3 and remind you of the full year guide that we provided back in February. What we shared in February is that, for the full year we were looking to deliver an EBITDA margin of a minimum of 35%, which was obviously down slightly from the nearly 37% we delivered in ‘23. And the intent on guiding to margin compression on a year-over-year basis was to allow us the flexibility to invest in growth. And what you've seen so far this year is that for H1, marketing as a percent of revenue was effectively flat with where it was in ‘23. But we do intend to lean into those growth investments in the back half of the year starting in Q3, and that's obviously what informs the EBITDA guide that that you saw in the letter. In terms of where we are leaning in on marketing in particular and the confidence around the various channels, let me just talk about a couple of the components of the increase in marketing. So first, consistent with the conversation Brian Chesky just had on international markets. What you'll see in Q3 is that we will be layering on a handful of incremental markets that we will be targeting and effectively turning on our global playbook. In particular, you'll see us try or intend to extend our success that we've seen in Latin American countries like Brazil and Mexico to other markets in that region. Places like Peru, Colombia, Chile, Argentina so there will be some layering on of those incremental markets. We feel like we have had pretty good success there. Obviously it takes time in terms of investments in a market both from a product perspective as well as a marketing perspective to reaccelerate growth. But as the results have shown in terms of the differential between growth rates in our expansion markets and our core markets we feel like our expansion efforts have been successful and so, rolling them out to incremental markets will be helpful over the medium term. In terms of
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efforts have been successful and so, rolling them out to incremental markets will be helpful over the medium term. In terms of incremental performance marketing, what we've shared with you today that has continued into Q3 is that based on a lot of optimizations that we've made to our performance marketing efforts. We've been able to maintain extremely high efficiencies and so where we see those we do lean in and have quite high confidence in terms of returns.
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Brian Chesky : And why don’t take your second question. So Brian Gen AI ChatGPT launched late November 2022. When it launched, I think we all got like incredibly excited. It was kind of like the moment probably some of us first discovered the Internet or you know maybe when I come with launch. And when it was launched you had a feeling that everything was going to change. But I think that's still true. But I think one of the things we’ve learned over the last say 18 months or nearly two years 22 months since ChatGPT launched is that that’s going to take a lot longer than people think for applications to change. If I were to think of AI, I'd probably think about it in three layers. You have the chips. You have the models. And you have the applications. There has been a lot of innovation on the chips. There has been a lot of innovation on the models. We have a lot of new models and there's a prolific rate of improvement in these models. But if you look at your home screen which of your apps are fundamentally different because of the AI? Like fundamentally different kinds of generative AI, very little especially even less in e-commerce or travel. And the reason why is I think it's just going to take time to develop new AI paradigm. ChatGPT is an AI model – interface if that could have existed before AI. And so, all of our paradigms are pre-AI paradigms. And so what we need to do is we need to actually develop AI applications that are needed to the models, no one's done this yet. There's not been one app that I'm aware of at the top 50 app in the app store in the United States that is a fundamentally new paradigm as fundamentally different FC multi-touch was to the iPhone in 2008 and we need that interface change. So that's one of the things that we're working on. And I do think Airbnb will eventually be much more than a search box where you type a destination, add dates and find a listing. It's going to be much more of a travel concierge is having a conversation, learning adapting to you. It's going to take a
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It's going to be much more of a travel concierge is having a conversation, learning adapting to you. It's going to take a number of years to develop this. And so, it won't be in the next year that this will happen and I think this is probably what most of my tech friends are also saying, it's going to just take a bit more time. But the answer to your question on what’s possible, a new interface paradigm would allow us to attach new businesses. So the question is, what permission do we have to go into a business like hotel? Well today, we have permission because we have a lot of traffic. But if we had a breakthrough interface we have even more permission. Because suddenly we could move top of funnel and not just ask where you're going but we could point to we could inspire where you travel. Imagine if we add an index of the world's communities we told you we had information about every community and we can provide the end-to-end trip for you. So, there's a lot of opportunities as we develop new interfaces to cross-sell new more inventory. And just to remind everyone we own hotels nights. We bought that before the pandemic. It’s one of the most popular hotel booking apps in the world and we are still investing in hotels. So absolutely there are opportunities down the road with this new interface to sell new things including hotels and everything.
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Operator: And your next question comes from the line of Justin Post with Bank of America. Your line is open.
Justin Post: Great thanks for taking my question. Just on the North America and Europe markets presumably growing a little slower than the average for the company. Any signs of kind of cyclical or macro pressure like shorter trips or people trading down that that could end in and any that could maybe drive some acceleration when the period ends. And second, how do you feel about your market share in those two key regions? Thank you.
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Ellie Mertz : Yes, so let me talk. Let me talk a little bit about what we're seeing in both, North America and EMEA. I would say I would go back to my prior comments in terms of just the lead times. That that commentary is true globally so it applies to both northern - North America and EMEA. I would say EMEA has been relatively stable quarter to-date. And so it is not necessarily part of the broader moderation story that we have shared. In terms of North America, there's a handful of components. One is the shorter lead times I would say. A second is North America has a concentration of our long-term stays, nights and what we've seen over the last year is that short term days have grown more quickly than long term stays. And so, the LTS to growth rate is a drag on the average that has an outsized impact on North America and we've just comped with the changes that we made a year ago in terms of our LTS fees which is a bit of a headwind for LTS generally on the platform, but in particular in North America The one other thing I would add in terms of just providing some color on what's happening in the US is couple of regulatory comments. One in particular that we're watching is that in California, the total price display and cancellation grace period, regulations went in went into place on July 1st and we think that's been a little bit of a headwind to our California business. Our California business if you include both guests who reside in California as well as guests who are travelling to California, which is what the new rule is applied to is about 10% of our GVV. So it’s an area that we're watching quite closely just see how quickly consumer behavior normalizes after these regulations have been put into place. And into the comments I made earlier on ADR, I would say we haven't really seen a material move towards trade downs much of the contrary people continue to book our larger more expensive listings. And then in terms of shorter trips, the average from playing has gone down, but that is really a function of
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listings. And then in terms of shorter trips, the average from playing has gone down, but that is really a function of the mix shift between short-term rentals growing more quickly than long-term rentals. Less so people choosing a three day trip versus a four-day trip. So I don't think we've seen that the type of tree down behavior that that you're likely asking about. In terms of the second component of your question, market share. When we look at market share, we look at the market of night stays across accommodations. And so that obviously includes all the hotel nights that are either booked directly through hotel or booked through an intermediary. And when we look at market share on that basis is what we see is that, in Q2, consistent with prior quarters, we continued on a year of your basis to gain market share in terms of total nights stayed over the universe of hotel and other travel accommodations. That is also true on a regional basis. We feel like we're doing quite well. As we across the world continue to gain market share.
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Operator: And your next question comes from the line of James Lee with Mizuho. Your line is open.
James Lee: Great. Thanks for my questions. Two here please. First on experiences. What are some of the frictions and difficult problems you're trying to resolve here. It seems like you have plenty of supply, plenty of listings. So that doesn't seem to be that issue. Can you help us understand something key paint points for both suppliers and customers? And second, I once again noticed in North America and EMEA, you have call out that to see a mix shift to non-urban markets and just want to get some more color on that. Urban markets in general, are you seeing weaker demand or seeing increased competition in the hotels? Thanks.
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Brian Chesky : Hey, James, I'll take the first question. So there's five things that we're looking for to do with experiences. The first thing is we want them to be a better price selection. Right now, we think we can have - we can offer more affordable experiences that younger people especially Gen Z could afford. So that's the first thing. We don't really have enough affordable listings. The second thing is, we need more unique inventory. It's really good. The inventory we have is good. In fact the five star rating average for experiences is higher than the five star rating for homes. But we still think we can have even more unique inventory that you could only find at Airbnb. That's not another platform and we want to recruit some of the most interesting people in the world to be on our platform. And we're getting a lot of excitement. The third is we think we can even merchandise them better. I think experience to see more and more insights like with film, with movie, with video. Imagine deciding on a movie but instead of a film trailer, you had some movie stills. Would you go see the movie, you probably wouldn't. You need a trailer. You need a video experience. You saw video first. The fourth it needs to be discoverable in the apps. Right now experiences are really hard to find because those the last four years we've really focused on prioritizing our core business. I mean a lot of people they come to our homepage they don't ever see experiences. You wouldn't know these sell experiences. So we're going to completely reimagine our search and discovery engines to cross-sell experiences after you book a home and to really target the right homes. We were going to show you other guests on the experience, just provide social proof. We're going to bring some of the magic like the countdown in the icons and some of the magic there. And the final thing is awareness for experiences really low. Most people don't know we offer experiences even though we launched them eight years ago. So we're going to actually market
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Most people don't know we offer experiences even though we launched them eight years ago. So we're going to actually market them and tell the world about them and we can do this without a lot of incremental investment because we can market homes and experiences in the same ad. So if we do those five things, I think we can dramatically change the trajectory of experiences business.
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Ellie Mertz: And James, to your second question, in terms of the mix shift to non-urban market. We call it on the letter because it is a differential in terms of the respective market segments, but there isn't – it’s not a major shift what we are seeing is that growth in non-urban markets continues to be slightly higher than that of urban. I think what that tells you is we have a - I would think differentiated offering in non-urban. And I think the interesting thing about that portion of our business is, it has maintained a - I would say meaningful larger share of our business demand four years post covid than it was previously. And I think over the last four years has been a broadening awareness of the variety of markets that Airbnb is available that hotels simply don't exist and we continue to see great demand for those markets.
Operator: And your next question comes from the line of Justin Patterson with KeyBanc. Your line is open.
Justin Patterson: Great. Thank you very much. Ellie, I appreciate your comments on margins and real flexibility to invest this year. Could you talk about how long we should see this investment cycle persist and when we could start seeing more meaningful returns? Thank you.
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Ellie Mertz: Yes, thank you. So we always have not given a guide for ’25. We will provide you a view on ‘25 as it approaches. What I would say is, if you look at where we have come over the last couple of years, we obviously delivered a substantial amount of margin expansion from where we started. You followed us for some time, but pre - going public we had negative EBITDA margins and four years later, we were able to deliver almost 37% margins last year. So I think we've more than demonstrated the strength of this model both from a profitability basis as well as a free cash flow basis. What we'd like to deliver more of is growth and that's why we have as I said a lower margin target for the current year. And as I said previously, you'll see us start to make those investments in the back half of the year. I anticipate that when you think about both our medium term growth lever of international markets and then what long-term growth lever of expanding the core offerings. Those will require some ongoing investments in order to scale and then deliver the growth. What I think you should also think about though is that all of our expansions to-date have not been very capital intensive. So we will use some of the probability to invest but we don't anticipate any kind of sea change in the foreseeable future around overall profitability levels.
Operator: And you're next question comes from the line of Kevin Kopelman with TD Cowen. Your line is open.
Kevin Kopelman : Great. Thanks a lot. So, if we adjust our Easter impact it looks like you have a little bit of revenue growth slowing kind of each quarter this year expect to see the third quarter. Based on the dynamics you're seeing today do you anticipate some further slowing towards the end of the year, if you look at how space are shaping up for Q4 or do you see anything in your numbers as of now that could lead to stabilization? Thanks.
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Ellie Mertz: Yes. thanks, Kevin. So I would say, first, we're not going to provide outlook right now for Q4, but when I when I give you that color on the lead times, I think it's pretty informative from the perspective of, it's not that people are not definitively booking over the long term, if they may not have booked yet. And so, as I shared previously, we have seen some. some movement in lead times over the last couple of years and in many cases people have come booked. They just come and booked at a later time period and so that's certainly something that we will be on the eyes out for in terms of Q4 and beyond. I think also just thinking about how the comps play out for the balance of the year. As you'll recall where we were last year September and October were quite soft and then November and December had a bit of a rebound. So those are the comps that we'll be lapping as we approach the end of the summer heading into Q4.
Operator: And your next question comes from the line of Nick Jones with Citizens JMP. Your line is open.
Nick Jones : Hey, thanks for taking my question. Maybe just another one on an expenses and philosophically how you're thinking about it. There's plan to relaunch experiences, Brian it sounds like there's not a lot of incremental investment required there, but earlier you kind of talked about launching new products and services every year. So I guess can you speak to how nimble you plan to be with the investment cycle to if demand may be continues to get weaker or versus kind of bouncing back, how should we be thinking about kind of the level of commitment to invest in and what sounds like a lot of new and exciting products and services?
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Brian Chesky : Yeah, I mean we essentially built our forecast to have already have a spread of that between short term, medium term and long term. So in the short term, I mean, the biggest driver of growth in the short term again is conversion increases. Every 1% increase in our business is about $100 million. And we have hundreds of basis points of growth opportunities just in conversion and usability improvements. And then affordability we have quite a few opportunities and then a quality and reliability. Probably one of the biggest variables might be like how we think about expanding internationally like some of the big Asian countries like Japan, we can be very, very nimble. based on the results of Japan. Most of these new services and offering though are going to not cost very much. They're mostly headcount we're talking some teams hundreds of people not thousands of people so you won't really see that. Because this is a network effect business and most of our traffic is going to be taking traffic we already have for accommodations business and cross-selling new offerings. And so, it's really just the cost of acquisition of supply and that's not very expensive because we've found that we can do it fairly efficiently. So most of this it's very nimble. There's not going to be a lot of incremental investment that would materially change. The variability is sometimes it’s probably like marketing especially internationally that's a question.
Operator: And your next question comes from the line of Jed Kelly with Oppenheimer. Your line is open.
Jed Kelly : Hey great. Thanks for taking my question. Just going back to the urban opportunity and potentially putting more hotels on your platform, can you just talk about philosophically how the company balances putting more supply that you might consider more could commoditize and that can be cross-listed. What that might convert at a higher rate? Thank you.
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Brian Chesky : Hi, Jed, so, essentially, I think people come to Airbnb because they want to get something unique. That's what customers think of when they think of Airbnb. That's why we're a noun and a verb. We're one of the only brands in the world like Kleenex or Xerox, that's a noun and verb and it means you can - it's something that didn't really exist before we created this category at a wide scale. That being said, for everyone who books in Airbnb, about 9 people book a hotel. And so, if we can get just one of those guests to book on Airbnb, that's currently booking on a hotel platform we would go from nearly half a billion nights a year to a billion nights a year. And there's two ways to do that. One is the increased reliability of homes in Airbnb, because the number one reason people tell us they book hotels is they are typically more reliable. They know what they're going to get they have a front desk. The other is adding hotels in Airbnb and we're not philosophically misaligned with adding hotels, if we were we would never bought hotels a night before the pandemic. We just haven't prioritized hotels. We think of hotels as a filling in network gap during high occupancy nights. We generally think our if there's an incredible home at a low price, they're always going to choose that but when occupancy goes up they are going to go towards hotels. There are also some use cases where hotels are better and Airbnbs are better. If you need to stay for one night, you're travelling alone, you are business travel and you plug in you plug out a hotel is better. If you're traveling with a group you are travelling for more than three nights and you're travelling in the non-urban area, Airbnb is better. And then, if you're doing something between then you're going to have choices. So, we do think between filling in a network gap and getting more of those one night business travel stays, there is an opportunity to offer hotels in Airbnb and we have a lot of hotels. We have hundreds of thousands of boutique hotels and
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is an opportunity to offer hotels in Airbnb and we have a lot of hotels. We have hundreds of thousands of boutique hotels and non-home inventory on Airbnb and we're going to continue to expand that over its years to come. And so there's no philosophical misalignment to add commodity inventory. The philosophical misalign would be if that becomes the majority of our marketplace and people - consumers stop thinking of Airbnb as unique and local. If they start thinking about us that changes the brand then that would be a philosophical misalignment but I don't see that happening anytime soon.
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Operator: And your next question comes from Mark Mahaney with Evercore ISI, Your line is open.
Mark Mahaney: I just wanted to ask a question about Paris and the learnings you've had from this. I assume this is the biggest event for Airbnb and a massive popular event in your largest city. So just if that’s true and I think that is, just step back and talk about the learnings of being able to make sure you had enough supply working with local regulators and agencies and in terms of getting messages out to opportunities out to guests as well like this big event that you've pulled off. Just talk about the lessons you've been able to draw from that that'll you know help you set you a better for the next FIFA World Cup and the next World Cup, next Olympics et cetera?
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Brian Chesky : It’s a great question, Mark I'm really glad you asked this. I just want to like take us back down memory lane because in 2007, Airbnb provided housing for a design conference. Then in 2008, we provided housing for the Democratic National Convention. Then in 2009 we provided housing for the inauguration. Our first three moments when we started Airbnb was provided housing for events. In fact, our original premise of our business was at housing for events. It wasn't meant to be ever offered for anything other than events in conferences. And the reason why is because conferences and events especially things like the Olympics and World Cup are unbelievable use cases for Airbnb. And the reason why is I think obvious to everyone. Events typically like to host more guests than they have hotel rooms available for. And people, most people they have, most regular people aren't looking to become Airbnb host and make a long-term commitment to host every week. So a lot of people events coming to town is wanting to host one week and make $1,000 or $2,000. And so what we did is we focused a year ago on Paris. And in the last year we increased our supply in Paris by 37%. We now have nearly 150,000 homes in Paris. We had 430,000 guests stay in Paris so far and counting and that number to continue to climb. So that's equivalent of five Olympic stadiums, I want you to imagine five Olympic stadiums where the guest staying in at Airbnb. The fact is that the Olympics as we know it could not ever happen again, without Airbnb because this 400,000 could not have stayed in a hotel room. And so to do that, what we did is we worked at the City of Paris. I was in Paris 10 days ago. I met with President Macron. I met with his economic team. And we talked about how important Airbnb was to the Olympics happening. And we had a lot of cooperation. We were a title sponsor Olympics. And we targeted this event of at Paris, we Did a lot of local campaign. And so it was so successful that we now looking at the top thousand events in the
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of at Paris, we Did a lot of local campaign. And so it was so successful that we now looking at the top thousand events in the world, really large ones like the World Cup and Olympics, but also like you know looking at where Taylor Swift is going on concert or looking at different conferences, different like we provide housing for the Berkshire Hathaway conference in Omaha and we worked with Warren Buffett you got the word out. This is over a decade ago. So conferences, festivals, events, Coachella, you go down the list. I think this is the best strategy we have to recruit supply and the supply recruit for an event is not property managers. They are individuals who host occasionally that come only to Airbnb. And cities actually like when Airbnb provides housing for events because we solve a problem for them. So, I'm glad you ask the question. The answer is it worked widely successful. Better than we ever imagined. We're working on the lawn for 2026. We're looking at La Olympics for 2028. But we're also building a strategy for the top thousand events in the world. But I think this is the strategy the only Airbnb can do. Because we basically increase excess capacity in cities all over the world to allow them to temporary as well. And it's really alignment and incentives. So it's been very successful at least that we continue - we'll be playing to expand the playbook.
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Operator: And your next question comes from the line of Stephen Ju with UBS. Your line is open.
Stephen Ju: Okay. great. Thank you. Brian, I want to ask on Airbnb rooms. I would have thought that given its more nascent statement in the economic backdrop that this is should probably be the product that should be growing the fastest. So is there anything that you can call out in terms of product fit or awareness? I think I heard you call out maybe supply shortages earlier. But any factors that might be weighing on the growth rate here a little bit? Thanks.
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Brian Chesky : Thanks. Yeah, the reality is the biggest issue with Airbnb rooms it’s just a small percent of our business. It's a very small percentage. So even if it - even no matter how fast it grows it's often very small base. It's how Airbnb started by providing a room and a house. It's very affordable. It's very popular for Gen Z, but it is off a very small base and so you're not going to see a major change to the growth rate of the company based on that. I think the thing but maybe just broad zooming out though, two points I’ll make. The first point is Airbnb is one of the most diverse businesses in the world. We have bedrooms and homes up to tens of thousands of dollars a night luxury villas in Airbnb. We allow you to travel by yourself or with the large groups of up to 16 people. We're in every country nearly in the world, every continent in the world including at one point in article and so we're a very - we're in urban areas. Where in the decades arounds this nations we're off to be impact. So our general philosophy is that something for everyone to have the most diverse array of inventory in the world. The other point I'll just make is an area down the road that would really help Airbnb rooms is continuing to invest in our system of trust. The biggest obstacle to people staying in a room is just the discomfort with staying at a house with a stranger they don't know. One of our core inventions with a system of trust and as more we invest in system of trust, I just gave a lot more of these businesses where strangers to live in the others. So I do think it's still a big long term opportunity for us. But it's often but smaller base and it's never going to be as big as entire home and everything.
Operator: And your next question comes from the line of Lee Horowitz with Deutsche Bank. Your line is open.
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Operator: And your next question comes from the line of Lee Horowitz with Deutsche Bank. Your line is open.
Lee Horowitz: Great, thanks. New on one our nights and on pricing. So Ellie you're talking about putting more investments into place in the second half of this year as a means of accelerating growth. Can you help us better understand sort of the payback periods that you tend to expect on these dollars and over what timeframe you may assess the ROI on these investments in terms of accelerating total company growth rates? And then maybe one on ADRs. You guys are highlighting sort of some building demand pressures in North America, all sign the pointing towards people trading up the whole homes and persisting ADR growth for your entire business again despite weaker growth in your highest ADR region, North America. I guess when we think about. the sustainability of ADR growth beyond the 3Q as you mix away from North America and perhaps see the overall travel demand environment continue to soften, how do you think about your ability to continue growing through that kind of a scenario? Thanks so much.
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Ellie Mertz: Yeah, so first let me talk about marketing payback. I would say the way we are looking marketing paybacks is very different based on the channels and investment from a performance marketing standpoint obviously the ROI is very specific and relatively short-term. We think about that in terms of weeks and months not quarters. In terms of Brands we think about that over a longer time horizon. If you think about any particular brand campaign, it needs to be in market for quite some time and it needs to be sustained for you not only to see the benefit, but also sustain the benefit and convert it into actual transaction. So I think about that more from the six months to a year payback period and requires - I would say a consistent level of investment. And then, as a third factor something that I mentioned in terms of an area of investment that is not programmatic. We do need to at the margin build some of our teams that are driving this growth and so that will be in a gradual investment modestly above the headcount growth that we've been targeting over the last couple of years but we think it will help long Payback should I should say high payback in terms of driving acceleration across a variety of initiatives. In terms of pricing, I think there's one question about what is happening at a geo level. I think there's a broader question in terms of the aggregate or global ADRs. To your question in terms of if neighbor is softer than other regions what happens to global ADR obviously mix shift is a huge component in terms of the global ADRs that we report. One Factor in terms of the Q3 guide is the shift a little bit away from North America which as you highlight does have the highest ADRs Over time we would anticipate that as regions like Latin America and APAC become larger portions of our overall business, the global ADR would come down. But those incremental nights are all accretive and the economics behind them still are very strong. So it's a at a global basis, we are we're somewhat agnostic because we
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and the economics behind them still are very strong. So it's a at a global basis, we are we're somewhat agnostic because we can deliver strong economics across a wide range in ADRs.
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Operator: And ladies and gentlemen, that will conclude our question and answer session. I will now turn the conference back over to Brian Chesky for closing remarks.
Brian Chesky: Alright, well, thanks for joining us today. Just to recap, revenue was 2.7 billion 11% higher than a year ago, adjusted EBITDA was a Q2 record And our a trailing 12 months free cash flow was $4.3 billion is our highest yet representing a free cash flow margin of 41%. And we've made significant progress over the past few weeks, but there's more to come. In October we're going to share with set of features and upgrades as part of our 2024 winter release. This includes expanding host of co-hosting, setting the stage for host provided services and much more. I'm proud what we accomplished in Q2 and I look forward to sharing more with you next quarter. Thanks for joining.
Operator: And ladies and gentlemen, that concludes today's call and we thank you for your participation. You may now disconnect.
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Operator: Good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the First Quarter of 2024. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb's website following this call. I will now hand the call over to Angela Yang, Director of Investor Relations. Please go ahead.
Angela Yang: Good afternoon, and welcome to Airbnb's first quarter of 2024 earnings call. Thank you for joining us today. On the call today, we have Airbnb Co-Founder and CEO, Brian Chesky and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our first quarter of 2024. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also, during this call, we will discuss some non-GAAP financial measures. We provide a reconciliation to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. With that, I will pass the call to Brian.
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Brian Chesky: All right. Good afternoon, everyone, and thanks for joining. Airbnb had a strong start to 2024. We had 133 million nights and experiences booked in Q1, marking our highest first quarter ever. Revenue of $2.1 billion grew 18% year-over-year, primarily driven by continued strength in travel demand and the timing of Easter. Net income was $264 million, representing a net income margin of 12%. For Q1, our free cash flow was $1.9 billion, our highest ever. And for the trailing 12 months, our free cash flow was $4.2 billion, representing a free cash flow margin of 41%. Our strong cash flow allowed us to repurchase $750 million of our shares in the quarter. And at the end of Q1, we had $6 billion remaining on our repurchase authorization. Now, during Q1, we made significant progress across our three strategic initiatives, which are making hosting mainstream, perfecting our core service, and expanding beyond the core. First, we're making hosting mainstream. We remain focused on making hosting just as popular as traveling in Airbnb. And to do this, we're raising awareness around the benefits of hosting, providing better tools, and helping hosts deliver high-quality stays. As we grow, we're also taking action to rapidly improve the quality of stays on Airbnb. In Q1, we removed thousands of listings that failed to meet our guest expectations. And excluding these removals, active listings for accommodations grew 17% year-over-year. And we also saw sustained double-digit supply growth across all regions. This year, we'll continue to raise awareness around hosting and improve the overall host experience. Second, we are perfecting our core service. Over the past few years, we've rolled out more than 430 new features and upgrades to improve our service. In November, we took another huge step forward on reliability with the launch of Guest Favorites, a collection of the top homes on Airbnb based on ratings, reviews, and reliability. Now, since launching Guest Favorites, there have been more than 100 million nights
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based on ratings, reviews, and reliability. Now, since launching Guest Favorites, there have been more than 100 million nights booked at these listings. And we will continue to make it easier for guests to find high-quality and affordable stays. Finally, we're expanding beyond our core. During the quarter, we continued investing in less mature markets to unlock more growth. And in Q1, growth nights booked in our expansion markets grew twice as fast as our core markets. And we're also focused on expanding beyond our core business. Now, this will be a multi-year journey, and we've already begun laying the foundation. Last week, we introduced Icons, a new category of extraordinary experiences by the greatest names in music, film, sports, and more. Icons mark an important next step in helping people understand that Airbnb offers more than just travel accommodations. Now, before I share a few business highlights, I just want to provide some context on why we actually introduced Icons, because they deliver on three key objectives. First, Icons keeps Airbnb's brand relevant and top of mind. With new Icons launching throughout the year, we can introduce more people to Airbnb and highlight what makes us unique. Second, while Airbnb's brand is already recognized around the world, there are specific segments where we want to accelerate growth. And with a broad range of Icons spanning various geographies, demographics, and fan bases, we'll be able to reach key segments in a more targeted way. And third, Icons helped change the way people think about Airbnb and what we offer. And this is going to be critical as we expand beyond accommodations in the coming years. Now, it's still early, but we're really excited about the response we've seen to Icons so far. In just one week, the Icons launch has generated over 8,100 pieces of global media coverage and 371 million social media impressions. And the coverage has been overwhelmingly positive. Now, just to put this into perspective, Icons has already generated more for us than our
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has been overwhelmingly positive. Now, just to put this into perspective, Icons has already generated more for us than our IPO. It's clear Icons are resonating with people. Now, looking back to Q1, we saw a number of positive business highlights. First, mobile downloads are accelerating. So, to quickly zoom out, nights and experiences booked in Q1 increased 9.5% year-over-year, despite a hard conference this time last year. And we were particularly encouraged by the growth of app downloads. In the U.S., app downloads increased 60% in Q1 compared to a year ago. And global nights booked in our app increased 21% year-over-year. And they now represent 54% of nights booked during the quarter. And this time last year, mobile bookings represented only 49%. So, it went from 49% to 54%. So, we're seeing some really, really good traction. Second, Airbnb is uniquely positioned for special events. Special events is really how we started Airbnb. We really started it to provide housing for conferences and events. And in April, we had over 500,000 guests stay on Airbnb during the solar eclipse in North America. And interestingly, we saw more than twice as many nights stayed on Airbnb along the direct path of the eclipse compared to the year prior, with many of these locations in areas that don't even have hotels. Nights booked in Paris during the summer's Olympics are five times higher than this time a year ago. And Germany is also seeing a similar trend for the Euro Cup this summer, with nights booked nearly double compared to a year ago. Now, supplies also increased to meet the higher demand, including nearly 40% more active listings in Paris in Q1 compared to a year ago. These events highlight that Airbnb's unique ability to disperse travel and spread economic benefits by allowing people to stay in local neighborhoods where there are no hotels. And finally, supply growth remains strong. Now, as mentioned earlier, in Q1, we removed thousands of listings that failed to meet our guest expectations. And excluding these
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as mentioned earlier, in Q1, we removed thousands of listings that failed to meet our guest expectations. And excluding these removals, active listings for accommodations grew 17% year-over-year. We continue to see double-digit supply growth across all regions, with the highest growth in regions with the highest demand. Urban and non-urban supply increased at about the same rate, and we saw relatively similar supply growth among individual and professional hosts, with the majority of new listings exclusive to Airbnb. We're really proud of our strong Q1 results, and we're looking forward to another record summer travel season. So with that, Ellie and I look forward to answering your questions.
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Operator: [Operator Instructions] Our first question will come from the line of Mark Mahaney with Evercore ISI. Please go ahead.
Mark Mahaney: Thanks. You talk about these kind of leaning into these kind of less mature markets and this doubling of growth rate in some of those expansion markets versus your core markets. Could you give a little more color on which countries and which markets that is? Which countries, I think in the past, you may have mentioned Brazil, but which ones you're leaning into this year? And then secondly, that U.S. app downloads increase of 60% year-over-year. That's an extremely high number for what you would think would be a reasonably well-known app and brand. So what drove that? Do you have any whys behind that? Thank you very much.
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Brian Chesky: Yes. Hey, Mark. Why don't I start? So leaning into less mature markets. So if you think about Airbnb, we're obviously in 220 countries and regions. We're one of the most global brands in the world. But our markets with the highest penetration would be U.S., Canada, Australia, France, and U.K. So those five. So the next markets that are the biggest potential TAM would be like Mexico, and Brazil, and Latin America. In Europe, it would be Germany. It would be Italy. It would be Spain. We're also starting to see some traction like Switzerland and Netherlands. And in Asia, it would be Japan. It would be Korea. It would be China. And eventually, a little bit longer game would be India. So these are, and there's a few others in Latin America. So I could kind of keep going. But those are kind of some of the really, really big travel TAMs. And Mark, maybe just one other thing I'll just say. I think a really good thing to look at is our penetration for each country. And while U.S., Canada, Australia are really, really similar, there's a really, really big drop off in a lot of these other markets that are huge travel TAMs, I mean, especially in Asia. And one of the things that we've learned is that Airbnb pretty much resonates pretty equally everywhere once there's the awareness. In fact, I could argue that Airbnb might resonate better in Asia because there's a younger travel population that's not predisposed to hotels and they're on social media. And we are disproportionately on social media versus our competitors. So I'm very, very bullish about that. Now, on U.S. staff downloads, you're right. I mean, it's grown 60% last year. It went from 49% of bookings to 54% of bookings. So at the highest level mark, what drove that was just focused on a roadmap. We have a brand that most everybody, at least in the United States has heard of. And a lot of people download our app, but we've never really focused on optimizing our app from a download perspective. And just to be clear, these numbers were driven
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we've never really focused on optimizing our app from a download perspective. And just to be clear, these numbers were driven organically, not by paid advertising. So it was really just a lot of optimization, different touch points, encouraging people at the right moment to download our app, not being intrusive. We had pushed a lot of people to just, we just pushed them to our mobile website. Our mobile website does not convert nearly at the rate of our app download. And so maybe the highest level point I'll just make is, I think what we've been able to prove in the last three years is when we focus on something, we can drive the numbers. Two years ago, supply wasn't growing, we focused on it. It's now growing 70% net quality. A year ago, we felt like app downloads weren't where they needed to be. We put a team on it, they focused. So I think we're developing a good track record to really be able to move metrics when we focus on them.
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Mark Mahaney: Thank you, Brian.
Ellie Mertz: Brian, if I could just add, I think the app download effort is really just part of our broader priority around perfecting the core and optimizing the core business. We identified that not as many of our guests were using the app as they should. And we know that the app is a much better user experience than MoWeb. So it's again, part of a broader suite of roadmap items that are intended to improve and perfect the core experience.
Mark Mahaney: Thank you, Ellie.
Brian Chesky: Thanks, Mark.
Operator: Your next question will come from the line of Richard Clark with Bernstein. Please go ahead.
Richard Clarke: Hi, good afternoon. Thanks for my questions. Just on, you mentioned on the prepared remarks and you mentioned that Q4, that Q1 would have quite a tough comp. And there's calendar effects in there as well. But you're guiding the Q2, it's going to be flat on room night growth. So is there anything you call out in Q2 that's maybe holding that back and how we should think about the rest of the year? And maybe just a similar question on margin, the Q2 guide, I guess a little bit softer than consensus had some calendar in there. Is that including any of the growth investments you talk about or are those things that may come in more the second half of the year?
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