Airbnb (ABNB) 2 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Ellie Mertz	Vice President, Finance
Brian Chesky	Co-Founder and Chief Executive Officer
Dave Stephenson	Chief Financial Officer
Lloyd Walmsley	UBS
Naved Khan	Truist Securities
Nick Jones	JMP Securities
Brian Fitzgerald	Wells Fargo
Brian Nowak	Morgan Stanley
Doug Anmuth	JPMorgan
Justin Post	Bank of America
Mario Lu	Barclays
Bernie McTernan	Needham & Company
James Lee	Mizuho
Richard Clarke	Bernstein
Mark Mahaney	Evercore ISI
Stephen Ju	Credit Suisse
Eric Sheridan	Goldman Sachs
Ron Josey	Citi
Deepak Mathivanan	Wolfe Research
Lee Horowitz	Deutsche Bank
Brad Erickson	RBC Capital Markets

Call transcript

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Operator

Good afternoon and thank you for joining Airbnb’s Earnings Conference Call for the Third Quarter of 2022.

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 Ellie Mertz, VP of Finance. Please go ahead.

Ellie Mertz

Good afternoon and welcome to Airbnb’s third quarter of 2022 earnings call. us joining for you today. Thank

shareholder today, On also website. our CEO, Earlier third Airbnb’s financial posted a and quarter Airbnb’s of items the have Chesky the today, and and were for issued Stephenson. on call of Brian Dave our Co-Founder Officer, Investor our section These we Chief commentary with letter XXXX. we results Financial Relations

opening remarks time During and spend make the call, of we the on brief Q&A. will remainder then

forward-looking over it everyone be undertake obligation forward-looking statements that Exchange factors Securities the These our turn a Before to these factors you may I remind implied, expressed in filings statements risks this Brian, call or on differ I and like to and you consider of or reflect to results variety shareholder the in and to that of recent would most call subsequent in this circumstances. to uncertainties. no number described events we making remind are to Actual we the under factors. involve update our information with materially, contained Commission. due urge We letter and forward-looking will a that on statements

measures. the substitute to our call letter estimates pass financial aware the We statements be intended discuss this provided in during posted comparable Relations that, a shareholder that of measures to You are should future Also Investor With Brian. I GAAP non-GAAP non-GAAP are for should GAAP not website. financial reconciliations our only to to be results. most will be these not These measures considered and performance. guarantee will directly a call, some the we

Brian Chesky

you million record joining. This billion, and everyone. Experiences was which our XXX exclude Ellie year-over-year. highest up thank ever. $XX.X Well, Gross year-over-year. was headwinds. is macroeconomic XX% when Booked, had $X.X year-over-year. We another despite and you, Alright. nearly to XX% billion. And Thanks our grew quarter revenue XX% increased is year-over-year XX% value Nights afternoon, for foreign good up booking Revenue QX exchange,

quarter $X.X Now, from And profitable is most we also this had Net $XXX our ago. up billion. million income a ever. year was

Now, Adjusted million highest ever free was our cash we generated billion, $X.X income also margin. EBITDA this net XX% represents and of a $XXX flow.

over ahead. And fact, results we $X.X QX demonstrate we XX the in believe cash and last continues growth for even In are flow. Airbnb positioned macroeconomic the to months, that billion with road uncertainties, well our at that have the scale. drive is profitability free What generated we

two the cross-border is why before XXXX, interested started, when are stays of because urban And new especially such through travel, seen cases millions is they And the earning Great the that like extra we Well, stay. time, At the people during pandemic. didn’t long-term have and use pandemic. everything strongest in flexibility same people income are Now have this? as and hosting. in here before now travel segments have of the just recovery our this non-urban Recession in to today

saw we number business quarter, of the Now a positive during trends.

XX Globally, First, on is another exceeded strong. guest Airbnb million this record. during remains demand and quarter arrivals the we guest

QX. to increased headwinds, a macroeconomic see during Booked quarter, with even Experiences also we lead XX%. for backlog And and stronger the Now Nights supporting continued times, longer

nights two Both as return, borders. nights are And booked these XX% cities density Cross-border Second, to increased ago. High increasingly compared even to guests segments remains to grew booked now for domestic strong. segments a non-urban gross demand continue returning accelerate. and urban XX%. year travel and crossing

Airbnb. continue to guests Third, on stay longer

four, nights booked to this that our And of remains host return time, total require employees continues And our long-term driving have to we XX% at the year, their stay factors grow. growth. several finally, We last the are believe companies there Over community gross many are same the office. on to seen Airbnb.

supply. the is demand reason first The drives

in instance, QX, returning to we guests were For supply cities, as saw accelerate. urban

Second, earn income. churned to since extra in posts XXXX, Airbnb have Airbnb consistently began

In platform. fact, have billion hosts on earned Airbnb in XXXX, $XXX since our

year, we made product last turn onboard XX, homes people support way as there. help our to stopping are release. but to and we millions of hosts, over to all-new On super Third, several part their easy Airbnb to improvements for November are winter going we not of an our introduce

provides major more host. a every or that top We protection to upgrade are for bottom even also delivering AirCover

hosts people upgrades more with and the for are and aim X these Now hosting. we experience more, of already million next that than improve generation the unlock to

EBITDA So flow. QX, flow record $X.X just last in cash Booked QX Experiences revenue and our to months, recap, were ever, was adjusted record we cash and And free a the generated million. Nights free $XXX billion we high, XX were have in highest had

Dave So that, with to your and questions. forward I answer Question-and-Answer Session look

Operator

our at take Lloyd question Instructions] Walmsley first Thank [Operator you. from UBS. we will And

Lloyd Walmsley

I if Two, can. Thanks.

anything kind to And are macro about invest classic should anything guys we you heading seeing year? the just into talked is of cost Thanks. ADRs into year? one next would you are in macro again weaker globally, of then Experiences. think XXXX? keep lid how if that kind are be around warning – are step on just in outlook flag have the bookings would kind early back, heading heading growth into second guys of you And where costs pockets a we little to next that or in light a First, questions you of there you you bit doing any starting about trends guess I question, seeing sign

Brian Chesky

and Lloyd, is high Dave, these of the at I’ll level more into high going at you don’t go I can But a to it am Thanks, specifically you level. a answer and Lloyd. little do answer side then a I can booking question. Alright. why go what

much think spending, in particular, and travel. is the many home, Netflix, pulling Airbnb. why one still of we your see words, They is your family, now on and experiences. travel, seen to as So And in memories. they why I is other area Amazon. the continue where theater get reason to back now want people lot one to them seen have think mass type still The are of And turn just have travel, have haven’t things a can movie of that go not their mall from still to I travel. travel more despite want the I working that’s house. And people see the now of like because just meaningful is out meaningful to want inspirational that They pullback on you friends, is, consumers

people as of going words, we quarter, value year. strong being are and are slows because than nights really we booked longer a booked for fifth like work have and our just the nights economy the or the lifestyle. deals continue having down. flexibility to to than home is think new to basically have has week. And that provide. half that a value month And strong In urban so are businesses At of work driver able that other the people we this are of our same And demand the hybrid because been from and a this travel a our incredibly key essentially be for cases great cross-border time, longer of sticking. a And again, and use expect next Airbnb a boon

I supply everyone Great just time, income. the Airbnb Recession. people to On extra that remind XXXX And in earn that side, were during started would to turning we at the many Airbnb

on time for a think great we also is will on this which hosting, consider millions are XX. be focused this so we November And to people of why

we is into to answer feeling Experiences of investment very question work. we and really incorporating Experiences path don’t just thing have incorporating marketing existing forward. So have a about much Experiences, very to incremental into Experiences really your the make matter products. regards existing simply, are about great the our more our to more positive this With It’s to

So perspective take Dave, I year anything from don’t at free you add. next that P&L want feel in think all. you cost see a else to to – will the

Dave Stephenson

a in I areas. few No, double just will click

of between what the impact in quarter, are just that’s click in year-over-year. excluding our On here. this incredibly year-over-year, as double for seeing strength included stated, QX. and impact a maybe revenue the urban it’s We we trends just XX% year-over-year not excluding I the well in changes growth are the and And of behavior saw XX% seeing environment. QX, actually are foreign are here, things really we booking anticipating overall are XX%. doing one in QX cross-border, in exchange. The macroeconomic And XX%, any QX grew we take We to weeks And XX% we we our behaviors our the will promising seeing XX% is stays, XX% in we last we despite grew had strong minute because just that is year. stabilizing nights and strong experiences difference future renewed the foreign cancellations guests. X interest guidance And that seeing our in exchange. guidance And from to growth in continued bookings. revenue of

seeing decel that bookings after is we QX XXXX If year, increasing rates, really demand where QX. a demand you here QX stable really on strong The to actually QX we to and comp are we hard from Omicron. before back QX at for actually go from historic Delta into into last see had

a stronger growth APAC in above is kind highlight in to of kind year-over-year the And and go it that and increasing compare our of hard areas stable XXXX, across actually have you XXXX the demand if excluding really back to XX% some aimed we letter, APAC. is growth, comp. APAC is this so And had now seeing And back of see are level. And you to globe. China,

major So, that’s of XXXX. to been the kind of to return last kind region

Lloyd Walmsley

Okay, thank you.

Operator

at next will Truist move Khan to We Naved Securities.

Naved Khan

the decline incremental the a there I question to other Europe, And share out ROI had of seeing you more anything travelers sales the lot. European demand dollars? opportunities thanks can outside just of calling worth terms in terms you more on advertising that are broadly? given And these on for area? then the is of Yes, Is in deploy currencies in in from advertising, anything

Brian Chesky

don’t answers. Naved. can take I round Yes, Dave you these, the – Why out

Dave Stephenson

Sure.

business In hard just to regions European in terms places maybe be the material where strong. we dollar business. the the going given our European of to U.S., to impact see euro. travel XXX a than so say U.S. strong the come to It’s of the the likely of from And seeing where is overall conversely, world. stronger part the demand, like it the less around the European and dollar countries being materiality is It’s size not demand the is are U.S.

travel of of offset impact within that of kind because isn’t we So there. to the regions. terms regional either the then our large their had. or foreign as in in Overall, pleased advertising domestically with More there And strategy really is have are marketing own impacts. ROI, business the exchange on some of approach the people we

results delivering with of marketing it’s been excellent return. to expanding Our results brand we are countries. rate a overall are actually And so more successful that strong

be this will the expand what you more to advertising. is brand that’s year course so be our And to next still seeing support of over countries

Naved Khan

you. Thank Great.

Operator

We’ll to Jones at go next Nick JMP Securities.

Nick Jones

take questions. guess taking kind when on in the U.S. in interest the U.S. of durability helping we the I more question Thanks I second of Great. which is then overseas? less look And travel, mean, at they ADRs, at dollar going to Thanks. more guess maybe than of strength the first, drive international these for making maybe to of be are may from kind host lower here. prices as I going are home be durable likely think? we kind rate to elevated willing to

Brian Chesky

take you second. the question, can I don’t first why take Dave, the

Dave Stephenson

kind clearly part business quite the strength enables said, the we just to have again, international, issues not have of overall the dollar, large intra-regional, in a is U.S. exchange really domestic so the travel travel are currencies, that more on of on what’s And of U.S. the business, well which and I and as some are as given necessarily because region. to there. seeing a impact not as Again, pronounced abroad do drive we U.S. you is the foreign going things the material also the of more strong and not Yes. have that’s travel Again, Americans offsets nice within to of weaker of

Brian Chesky

find mean prices to because that out, just a people regarding Airbnb, home average can come I hotel get what more than you think I often daily zoom to value. and And significantly on And does can rate just room. to Airbnb for money your great they a elevated

that really to that continuing we tools competitive have amenities. You better to means we a for an need that more can important need season. their is to for tools price home give often And be get means to really host, prices. be to them going And for to the with we listings. deliver lot able travel And sure that entire value of next make

little the things rate, prioritize is all-in more we going ranking see our rate. great a search you nightly of of towards of one seeing when we deal So, doing bit are going more And you going see move to then are pricing, to instead a to of fully loaded are value, for pricing, the fully to price. continue loaded more where is great a a

tools competitive. is are will so discount and to do guests I help I believe are these competitive they think they more even really we be them see and what all-in we will understand pricing features standpoint then and to all charging we today. if can host pricing are and than this what tools we more more understand for provide going give to to And other allow we a from remain are hosts things, going their

Nick Jones

Brian. Thanks, Great.

Operator

take from at Brian will question next We Wells Fargo. our Fitzgerald

Brian Fitzgerald

Thanks, guys.

but to supply local have a talk pain also winter more about Brian, maybe with upcoming zoning? bit about talk what if that release, and you think like you see just could you supply wondering say continuing host, maybe little around just regulations you I as will for and structural drivers Thanks. to points the

Brian Chesky

yes. Yes,

me dive pretty this, topic. let because a So this into is important

past means XX% that we growth of supply. started we where where just our is see demand see to of we out, zoom growth typically example, highest highest drives And our of to a this bookings network available supply. that new quarter, as you guests. global where Just give also our have hosts approximately And an had

tend host supply that tell get this and friends they really way. their more strong to it, more we host as guests is they and where then become about a So network the bookings, get

recruiting think, one things that’s so interested really increasingly be of on because really, about want is, And putting hosts think Airbnb, softening we we important. to Airbnb than is more that, great And make ever now to are I this beyond supplemental But in of the this a their aggressive before, the homes economy, more obviously, to because time. very people income.

considering too, as the talked that us your pain points? would I So hosting, told question, things. to to are answer people what two we’ve highlight are they have

host. they first it want be started. they to thing help to getting The is get that need easier said They started becoming a

The in second about strangers are a is they nervous thing house. having their little

of about And to tackled way am all we excited put super so for November on On one, going winter are of home release, our unveil people XX, have I number easy of new pretty an we both these. Airbnb. this. as to their part millions

We this have on been quite a working for while.

I are on demand the unlock for which providing AirCover we of are more XXX% people have momentum we do is adding Maybe their Airbnb, seen unlock It’s some is improvements ever the highlight in we think night supply. instead Holy search to people host. more matter to I’ll make help then supply have whole to that where in significantly we say we feel Airbnb, and huge upgrades amounts their home, people of homes have type and the supply, the you on pointing available. to have to is just the you know thing addition putting supply things, Airbnb we we close box, real are browse come of categories already theory will in have just in which occupied. globally and these pointing on where Grail can in final other demand If available hoping of supply, is place have experience lot to that we that Airbnb, going the greater I of around a QX. a top two Second, to comfortable we in to where And going people because this are a homes more everyday having be about

So strategy. this our holistic is

as of from large And regulatory to I lot have us, of actually the been of a we a to redistribution as points, because As far out like opportunity see can a a pain of from local seen lot and everywhere. away standpoint, cities things mean, one as very is we’ve reaching kind the far communities city they provide. economic

about So markets, we very for feeling are optimistic really, we XXXX. our are really working these closely with but supply

Dave Stephenson

too of on of we more that tourism-related local in on money. zoning normalizes double of we’ve And amount globe. Let collection, especially is I jurisdictions governments, taxes terms have click $X for billion that XX,XXX it – can to I material because this a And governments. the than regulations, when had I it they future really important And couple Brian’s me it partnerships actually the around tax believe think taxes, really hosting. with points, be foundation are think a these just growth. delivered local because we you in over do in collecting normalize regulation reasonable remitting hosting, a like of mean, we

So to future. and be you this actually way, in a it we actually think reasonable that a in the tailwind growth do will

Brian Fitzgerald

Got Thanks, guys. it.

Operator

Next, Brian Morgan we at to will Nowak Stanley. move

Brian Nowak

my question. two. I taking have for Thanks

can those one, a cut to to driving per versus that’s spend maybe came stairs bit how COVID, And or the have during how way. little the many active cohorts have so balance improvements supply sort us trying just etcetera. now? is bookers growth the in first tell aged booker one, right you say, COVID of from about about business try of COVID. to you What of then conversion the demand, The business to the in And traffic they had you can sort where that you and it tell was, different cohorts now prior us XXXX? and load versus versus over What platform unflexible made in Brian, years which to second your the

Brian Chesky

do Yes, Alright. Dave, you take first want question? the to

Dave Stephenson

of of COVID terms in to the active I our at great brand marketing the incredibly We’ve of bookers. had and driving we XX% in investment unpaid the overall direct on been look be active on less to for we’ve has engine since a approach on think been reliant marketing. in to Airbnb focus continue effective pre has step of kind which of and Yes, kind that bookers, COVID sense at remains really accelerated back new search you return that that traffic is or and

as think I has they the were we’re than so And that the than in stronger not quite terms And travel actually strong and seeing right of people sticky, and have strong, not The cohorts to experience really cohorts of we’re actually return in been since on new that that willing even cohorts are COVID. and are that coming kind now are the getting to in previously. are as if Airbnb are new, COVID of prior we good. the saw stronger

Operator

to go next will We the...

Brian Chesky

Alright.

answer conversion unflexible. sorry, I of to Sorry, want for traffic just about

goals people are increase little go down is they planning year-over-year traffic, in high who conversion, launch more coming actually a scenario are at about is and can even conversion generally up. a we Categories, dreaming you one the was yes, level, the we were basis bit increase it So inspiration And conversion say, would Brian, When on And to actually broadly. there example, increased But a for you just are think a not traffic. initially I Airbnb because can but travel. and there of more was actually where that business.

known we have our with Airbnb look launched really homes in metronomic XXX But stays seen over want than would viewed times at have conversion listings never rate. conversion Categories on improvement longer to XX you But we May more in time. been since of have have a otherwise actually they million So period and existed.

their bringing is really more guests, Airbnb, people reliability. making to more would So be bringing are experience the feel supply, funnel. traffic which we’re between assured about of us is Airbnb making really There a and more progress allowing which were a consistent about lot AirCover plenty for of excited we half demand form top Categories,

I this, to think course, product to that experience. we’re will a And conversion. from to to step guest going in see of lead continue a in the greater change improvement continue

Brian Nowak

Thank Great. both. you,

Operator

to Anmuth next We JPMorgan. will go from Doug

Doug Anmuth

Thanks two. for have questions. I taking the

you in on the First, new opportunities. about seeing new Thanks. know can of interest and homes macro is the the secondly, might add pressure them then you there in And that, second your just Brian, lot little categories. seeing Is on I update you in you a is talked rates about if talk anything around or But hosts putting that growth incremental spring within conversion income bit rates, early environment a strong view? and returns could any bookings? what be

Brian Chesky

economy I’ll Dave have. mean, highest the fill I make either ways the I it’s supplemental think looking But In pretty as are think detail. on income Doug, down, more assets for yield level, they simple. actually – more in, I slows Yes, to or let at like greater the in people

And economy for people going so when generally be to more turning Airbnb a to as more presumably we see moment a hosting. are selling and

provide to just so Airbnb. And so I on or homes think a sure opportunity it’s make there they And going continue to great people primary we that we want tools be us. for is for lift whether big to pretty homes, second

as XXX the seen, and As Airbnb as up. experiences more steadily far been we’ve has I million have said, of times. picked conversion metrics some than Homes again, viewed

the spread chilly on have kind of we more Holy is one which more of to homes. for is Grail to have guests, the important AirCover another on we of which bookings in a out really we made fuel be because one hand, of the can this incredible We’re variable this is guests point upgrade continue demand With seeing addresses a hand, very that a which one-of-a-kind consistency. AirCover us is markets, be the for Airbnb, bit bit supply. and to Other

it’s that we unlikely we’ve a as more to even cancels home since event described. you and provide for a rates host get we’ve launched what I not probably we’ve seen is dissatisfied seen with or when guess up. so NPS it up in rebooking protection also is AirCover is guests, the And and And AirCover importantly,

And we business, do things: already point the can front the more demand continue to so in have on if be end, two inspiration these supply.

sure in expectations. continue On event Airbnb’s the for that right, are unlock are And that it your in rare going meeting they we significantly the the us make ahead. growth to year end, don’t, these make back to greater then

Dave Stephenson

on Just second to double impact the – home strong the quick question.

If you go back business and think about have the X very others. million a many hosts that different we than

get So this shock hosts. hosts own of big exact our return don’t those a get are cost home, home. XX% period, ownership first arbitrage they get professional maybe home individual secondary They doing of they specific we of the their hosts during people COVID are that – property are and getting people maybe an kind strength necessarily and that business, primary of rid alternatives. even an that a of their very saw home that other don’t rid or They different is primary can a on in secondary of on economic which of is the a versus than investment

buffer on our impacts I those so think individual host kind helps community. any of that that of And businesses, this

Doug Anmuth

Thank you.

Operator

to Bank Justin next of Post go will We America. at

Justin Post

for growth. probably the we that Guidance XX some say or about QX. then next well could And potential picture, over pressure. implies do for quick one. year? When backlog XX% think growth ADRs face ‘XX Is revenue on QX? year-over-year solid Great, Thank quarter-over-quarter you. in How you thanks. with much bookings revenues associate or that in One bigger

Brian Chesky

Dave, can I think one. Alright, this you take

Dave Stephenson

Sure.

the pressure On year-over-year. QX year-over-year ADR QX for – is the

seeing to of but growth little ‘XX, back demand. for look strong seeing the when XXXX, And to said, historic of we’re a to continued overall. to tell, for what you travel it’s we’re In I terms stable increasing demand early backlog really, levels like back is

We the there for but books will have fewer bookings into XXXX. kind books then of be tails strong on it yet QX, on off the for

to seeing further. of people’s willingness say. travel. little no hints to and just little to it’s a we’re early much in a early So It’s decline But a demand extrapolate

Justin Post

thank Great, you.

Operator

We will Mario next to at Lu Barclays. move

Mario Lu

the for questions. taking Thanks

First one is Brian. for

priority should this you. expect And and what redesigning to top potentially? to earlier How that pricing an we one much uplift this could mentioned for see? is conversion a You be changes transparency better of

Brian Chesky

Mario, yes. Yes.

Just to give those rate. to and pricing. about that primarily then Airbnb Right service then a choose now, you pricing fee nightly fees. add And to actually a can paying listening a little get been Post, guests, is of displayed are heard have more about we cleaning one and context more ad we they what the on hearing they people we’ve loud things Airbnb. little it that that a is and like clear, would transparency from first to when

how and not a on the the better And going so surprise Airbnb, so for Airbnb, we understand pricing it’s are working people they total on redesigning at them. price are works arrive to pay moment they

transparency. star north is on this matter for the think I us So

I make think want charging. to of – benefit to understand what we it to be host going also easier is the they a this are for

are hosts they than that of they And the you intended on not more they aware charge that to are host guests tell fee a top the us that charging occasionally and we add know, paying sometimes service because to. what as guest price are of

competitive. And the so are we allow what are and tools for more charging, this understand will be to they of updating make them some hosts to easier to it

when that, to a out, course, guest making X-star better updating some home to rating. value. our that refinements leave a And they we’re ranking addition of checks going a offer We’ve algorithm. be been In to prioritize search

up. to season to in And we results. tools be in prioritized tools, was we get do really to competitive, the believe search new know higher the addition discounting host home be do that, making peak If a to go more discounting bookings a obviously And to And things up, like questions goes this, announcements competitive. the is and of all scale goes conversion we on offer great this, to I’ll discounts and X to soon. we will seasonal discounts, this X, value final weekly continue more is discounts, is will going to rate One even we’re one more conversion I of get say a just on rate competitive. some updates are the as soon. some of thing as in value and develop make up ask how have the prices of prices good going tools

Mario Lu

Brian. above the thanks, and take past much changed just rate. one believe the still on few I Great, over not years. operational it’s has And XX%

demand? are or And So is one, thoughts adjusting down what up your that firstly, on correct? in to so, future drive if the

Brian Chesky

start Mario. Yes, and I in mean in income, not flow. question, obviously, jump in. I’ll intention nearly free an the more it’s a feel rate. Dave, free to net quarter take $X than billion this is billion you $X great to a of that, do last cash have company increase We can did

on they there but we think we we I have and do for, allow monetization levers rate opportunities a of we don’t pay could there services that charge do. increase to is So think to for take to that. words, lot is In to that host increase to Airbnb, I other can think additional like

improve areas lower potentially There rate So a a take to are ways bit of lot on long-term some there probably is and like be increase going space. can on we take optimize little where and Airbnb. to the rates

into place this bit. a for don’t were to a months, rate booking current I little cut the you’re think take we our would go If might X we conversion But if business. X, up lower rate X, think

I actually keep bookings think on platform. more the that might

will and even great think optimization, the are better. look And on value of think we in coming to we discount I we some but these some Airbnb the continue that I we at to if a make provide get think value. future, going changes pricing So

We’re general view going of remain we should our is our opportunities That’s there to monetization if more. on And going our going forward. to expenses. a disciplined But lot charge is Star. we’re provide North more,

Operator

[Operator to Company. Bernie Instructions] next Needham McTernan We & go will at

Bernie McTernan

from consumer. question. yet Thank you of think about are travel? macro see a Airbnb any seeing is Great. consumers negative environment, you your playing the you could think potential that or the than broader that more impact any makes different not you guys be impact saying the you’re scenarios and resilient demographic recessionary from as But realize cohort taking for data I on that out there you

Brian Chesky

it’s level I high you mean I Bernie, could can answer go very great in. question. the I mean, Dave, a and

of One American the I the the – European business, of of is Airbnb adaptable in the all a the think North just why lessons noticed And business the the business. not just things of is model pandemic pandemic most we we’re one during travel. not we’re is reason

We business. truly global are a

world. XXX,XXX We’re the all cities in over

not We’re a vacation just rental business.

also business. urban an cross-border also We’re a business,

just not business. We’re family a

nearly with every We’re millennials, also Z of price at and type retiree point. popular Gen

is Most think that’s things guests which Airbnb, demand more are I become will in And however increases, about hosts. a one to So tends our travel we able regular be tell of It’s friends changes, supply. network, people hosts market global it a why that adapt. model. when itself about the their great that create occupancy

environment. these you this Dave, given to to So anything why the of challenging our add want don’t we I ability macroeconomic excited adapt if some feel continue very to it? to reasons are know very, about

Dave Stephenson

the I’ll home they on a very they smaller different anything that great person right, which their can certain to based double have maybe or that they I type fewer than are can hotels. of it’s diversity amenities if them offerings click. is of such value us, do a And it of budget. budget place they choose well to constraint, want can we Airbnb that people has in pick budget from that, a with can enables And just might they Yes, flexibility further adjust think kind out, uniquely the like slightly I a a maybe get to place provide, just mean, with has luxe.

Operator

to Mizuho. at Lee We next will move James

James Lee

when are my And taking in hoteliers questions. for to with we spoke the ADRs they think and general, I planning levels. with Thanks reduced staffing Great. keep high

guest thinking, fees for the to just price tighter So given what present consumer product gain are a opportunity more that And charging – to your considering budget? does demand structure price and share? you also considering dynamically change Thanks. also curious an you’re you

Brian Chesky

I to more share. as more they to as be to then be will give gain dynamically continue Yes, competitive. can we And think able James, more to yes, they host we that competitive, price, tools more are

more allows at it actually value, – than more We changing allows we’re displayed share. looking transparent, not not So anything – for don’t to to and other will value to make structure. a that pricing fundamental be offer our how we’re to better greater change pricing intuitive continue

Operator

next to move will We Bernstein. at Richard Clarke

Richard Clarke

taking my Alright. Thanks question. for

bigger then as seeing in on regionally, that back? what skewed American the you pre-COVID. cases quantify can than were ADR the headwind based you you’re continues North urban And question mix over you’re more in maybe those changes we well? that commentary, are the just do come to expect or wondering, use because Just might coming the a And as How are America factor further back. same urban North normal at be Is moment? market mix possibly geographical time you the to in

Brian Chesky

you to take want Dave, one? Yes, this

Dave Stephenson

Sure.

be in XXXX, urban higher It’s where back, terms quarter. In continues to each such may higher strengthening overall back and percentage never was it mix. quite like non-urban of a we because to strength great is our our coming just be it in of not and but urban quite see it

that And side. side. think it’s the similar the trend And so seeing urban the cross-border on on that’s I international we’re actually

where XXXX. cross-border we like to level. be cross-border XXXX XX% every back We’re back to quite back not where a nights were continues a is of Gross greater in in kind were just we’ve And in not we’re what but greater, were we percentage XXXX. quarter, to seen were

Operator

next move to will Evercore at ISI. We Mahaney Mark

Mark Mahaney

Okay, thanks.

adjust flow see. the just are cash margins I that ask could free David, truly question impressive. over-earning very Let’s you the

somebody kind to roughly here? quarters basis. about they for know from higher Just a is at just can earlier. you quite think those materially XX-month on sustainable? the margins And there features What for the a demand impact. plus trailing match major would three last asked have to really reason you of – out take these to or a can be Categories? that one or long I them up see cause used supply are to that that’s that have widely they the do then roughly adopted better the doubt Thanks. of broadly it’s and could, how long impacting and start used all you of Categories with time sometimes there? helping Or Brian, to can people those lower going go ask a XX% get that I take is And you’ve kind about and But I supply think this been think really this

Brian Chesky

Alright.

we two So have questions.

Dave, first Categories. I one, can I’ll the then take and think, you take

Dave Stephenson

Excellent.

cash proud the delivery flow margin. the our free free really flow the yes, cash and cash of of flow, So free I’m

be We’ve for thanks made out. calling of marketing it costs. to our improvement metronomic the overall variable our improvement radically made we’ve business, We’ve So in I our in just expenditures mean substantially lower. right? substantial profitability adjusted

We’re leverage fixed seeing costs. great in our

disciplined growth, will fixed our continue incredibly cost being going We’re that in forward. and

of all so will to our or over able tailwinds maintain free even increase those And be cash time. flow being to margins

ago, in be add things immediate have the average longer-term. little flow that or maintain next As put margins. to or there time. us incremental activities us bit that host announcements does free you What of the continue towards would in our variable services could over fixed flow cash more is we a to a ‘XX, Brian incremental but I in daily cash revenue about of that that, should margin it year, for us major anticipate increase drive improvements of guests greater we margin. rates the and moderate costs headwind our And margins and a period even a over over some bit of think focus and will that know extended little be leverage enable that But or talked for to for kind no cost incremental changes will is the should free expansion a

Brian Chesky

answer the a great Airbnb of of adoption Categories, wide for timing about your Yes. other it’s to question kind question. And

I zoom to a a there go you travel And to what know, search. you a have think of as and way. is years want to XX the out, trained results. box, you where kind last And of go list certain just to is you over you then in get a been, of to customers type that website, search search way is

and discover to they apps websites, a refine retrain is make search be year different how really great some seeing year. But think Again, And the people we see I You existed. going next to results, for we’re travel knew to compare sometimes they momentum never Airbnb. to different you think start on home about a the then of can customers already going I are you booking. kind transition this

to engage to year. million more categories. a seeing going XXX be continue The We are single more with and lot homes this improvements we been categories viewed are have to than times, making people every

in two some going some And November. out weeks are coming have We upgrades of upgrades well. beyond you course, to that see in as

part a becoming a more think when to to are the book really out Airbnb. much to Airbnb opportunity people you figure travel, again, you business ideas typically of The sites. travel for they And because or go flexible going do travel, top more content way So, to little we website us. if I to to funnel you vacation think from more more the these typically be, this is And they the in travel, then because are of third the the open concentrated to be this and great site, hotel idea go are housing. we where is of increasingly travel, next to your used get the funnel. travel and at flight, thing one get Then your are your is

but three some step getting for everything with of from step is like step one. from is was Airbnb So, one, three. think I kind of to to take to This of sight Airbnb retraining there. definitely go kind there three line going to step to we And a go to step

Operator

We will at next go to Stephen Suisse. Ju Credit

Stephen Ju

Hi Okay. Thank Brian. you.

Brian Chesky

Hey.

Stephen Ju

domestic It’s took little China happening is plus business. – the So, there too tell get of about previously worry from only a guys international your the there early acquisition funnel Airbnb bit guess isn’t Thanks. as took a anything international? guess a the customer maintained we standpoint is was case versus what probably outbound to outbound you I yet. out use or of going off probably reduced should you lot But and I to, because but you guys supply, Chinese for, retention traveler to

Brian Chesky

I inventory business. outbound business. higher the the for mean the domestic of There lot the Stephen, crown average competition business is going higher. was And China business a always be why our was Yes. thought is it reason for was take rate than the The and always was less is more China we the is jewel and rate to unique. the outbound daily

And what business. So, always business was the are our we part price of on. that’s the outbound focused

you prepared they as but eventually do. they right And leaving country are when know, we the Now, of of course. want will, be people for now, to not lot a

we and first going And they are to probably And would core to to and so leaving to two, are going number intra-region. are be invest brand people are call China, are countries. going the go other with two traveling number doing countries, if these place, the in prepare they primary they to things are one, we to China. is, we the And continuing our in

to be the will and recover. the especially will going come United presumably they they the Europe maybe And So, of Southeast further then presumably go to of Japan. this kind of is are States, cities. how I kind coastal going Korea, to travel to Eventually, think they little some a Asia, back may

more of I more to results. effective, learned we and a actually more sure outbound our by makes in lot brand these achieve I our one so having only are, business, can invest thing that, on an have corridors the And to have supply think make is to efficient. what our just and we we we do a is China. in more focus focused we investments are need likely continue actually lot it cost And enough in all And

are we feeling. what that’s So,

people It’s the country of and for feeling payoff are China. traveling not longer to leaving like the We now. the about fact a actually of prospects a going because lot are really be right just confident than that

Operator

to next go will We Goldman Sheridan at Eric Sachs.

Eric Sheridan

revenue Maybe to that organization, within are taking for talent pruning thinking second be your of you But think goals crisis organizations. economy we to that question not their travel technology the of like the broader slowing investing what’s hiring, Thanks did growth hiring upgrade a XX if I a over through part companies are of question. is, XX soft How closely two-parter, the about existential months? or slow strategy. out talent quarters? that economy Obviously, growth aligning so a a over soft patch if more possibly of in you expense of do the with in you you a XXXX. a on couple about lot next investment Brian? spring the the see would have sort talking in belt the the positions And then Thanks possibly philosophy of months And obviously, much. how can patch

Brian Chesky

talk you. investments. just Hey to Yes. to about and we Yes, Eric, good expense let me recap management how think

in business, elite lean, we wait or breakeven going million we And going be going decision run like cost course, lean of an weren’t made $XXX perspective. seal, In were a a loss our for XX% crisis, we and of we recession we the from to we is our a doing other of of how go hit, under invest completely Navy Before Navy company that little change a that economy to a changed the another regardless to words, we we economy. weakened were crisis, we decision. small, the structure. out or another pandemic to And the essentially we from were to EBITDA group. nearly And pandemic, the lost the made the in business

And so we are we organized. are team, functionally a small

people more year. the in We this than slightly of beginning X,XXX are only

took the economy to words, we X% hire had worst, we to were more the employees. X% planning a be had a profitable a only plan a for for obviously, turn In to storm. plan still really we and other Before

the can in learned actually we in actually about XX our because change history. regardless faster more not profitable, only have had plans ever move. don’t smaller faster. the we months can are, of were to have have hiring we is not can to nimble economy And so a of anything we next one intend than And are, the we we XX been a we our our grow the And anything change about We months the lessons more hiring we more productive we be plans.

We made have the than service. core across upgrades in more innovation XXX

really of hiring still best trying are our attract generation lot to but people. the we this company, to So, aggressive a doesn’t of mean that about

partly organization, We are really embracing functional being structure. which a lean our is

are would you We not four organization departments. business marketing have a where

be allows of other And in organization, quite slowness to adaptable. to I a us your regardless economy. what leaner. functional the goes is our model We which to highly economy, and the is Well, have guess happens one bit that so question, that

traffic is a than very expense spend with low competitors we vast direct. And our less majority of the base. We are on a lot our marketing have efficient We marketing. pretty and

for I have have changes to think of to I how lot cash are proven generating, are where change happens we position to, make way to much in we run won’t if lean are. we us the of I good course, of whatever we will. So, the of But because because ever pretty a we But already think don’t to we we a expect have economy, have the company. we how

Dave Stephenson

the this where of I and people Anywhere year, I enabled is that they Live double-click in policy has if regardless Work announced live. one best hire and that think to on our us And world we area the

this in sure has we talent fewer, been more make to areas, more Brian’s so and clearly in about the And to are the experts world. that hiring point getting best able senior,

Brian Chesky

us think had going one I last lessons I I more were never a companies other say lot made a much challenge focused, we forget from earlier lessons years the year better the than learned the so a But X are made just is a thing to hard because the or we tech maybe much commitments early. so of And of is the we probably of we company. And a that just will think pandemic. Yes. lot we the hit adversity,

we going are, faster. become lose we more to disciplined discipline. only are more profitable, focused We to we but more never our not innovate the Because actually the are,

principles are those here stay. to so And

Operator

at Citi. Josey Ron to next move will We

Ron Josey

Maybe taking question. bigger Great. Brian, you on guidance. Dave, and a just one picture for question Thanks first, then the for

in will We AirCover Brian, clearly know think week guidance, franchise. more in it winter We have as expand on you we about how guests, talk you think, I franchise this intra-quarter in But being to picture, about for how But about weeks. just AirCover longer term. next talking more longer updates see for Dave, bigger hear I just might the Just were a two a for then, or maybe we release. letter, lead just forward. XQ. we stronger bookings, going And backlog host. will for here major us the see time it the mentioned Clearly,

Just might periods Thank time. in we compare where trying the prior maybe how understand at that to you. were to same

Brian Chesky

the I Alright. Thanks. take obviously Ron. will one, first

take analogy, around AirCover, longer-term So yes, questions just AirCover. strategy around explain the maybe let’s And as to of kind way the take an let’s Amazon.

core back even ago, and is competing their will an the recollection something my this was out And go selection of on back But because and Amazon most a of Internet, prices. then, the they the heel. Amazon was Amazon, lowest have had were years, problem XX an They amount So, business they moment. Achilles’ with amazing with years XX walking in taking retail maybe the store at the Achilles’ heel had they that product.

Prime, Amazon they which addressing the And core was obviously was things Achilles’ created heel, so which one of was the shipping.

has to understand business every what think is. potential weakness I its

we property. structurally great have unlike one we widest our can’t Airbnb’s the of and great at We similarly But control is it inventory have I of accommodations every and is about model is a truly consistent. we probably thing hotel, the a selection value. as think expect the kind everything be always cannot a don’t challenge

addresses off Amazon of question for this say, something what And this huge on the side, NPS. table, in shipping, host have for to if similar consistency we AirCover consistency. So, led the Prime similar to with did to a increase protections could is what which take the

happened for to after is XX. AirCover a over host something your And home. for is NPS this Our

a say popular a years, would bring book be offer it of the there reason we I And focused it’s going program, can and having we it be But North a huge a the cases. what to customer that’s are this inventory – that was the And by a some anywhere would to popular was AirCover go our to on be more AirCover different go or where that not AirCover be on. think And customer clearly, different for other direct want the across just membership of to and version but Star increasingly this if more really and opportunities paid hit. down like continue every the road, road, AirCover be guests. that alone, to protection, but we on may use to offer is for can we are was think very type is to our this I else. it then And down So two most let’s we over another decided request. single home standard to for and only I book want is compelling for make category. Airbnb. Airbnb Airbnb websites, coming gold coverage improvements so service listing was year, more And of website, in And so

Operator

next I go We apologize. to will Deepak –

Dave Stephenson

then too. And question to – guidance, of in answer the on terms

that we of timing the historic indicate we longer just Delta we guidance, growth of the have levels on revenue that the demand have Omicron. seeing the XXXX for growth, in uniqueness demand that of is demand and QX softening And in the between already not accelerating the you XXXX, a books It’s largely to are of and lead to bookings growth guests just world. of bookings On stable quarter of any to deceleration especially back the between due when for QX the from the look and our that times that around rest to this QX articulation right. for is

think uncertainties. get of macroeconomic travel, I out wanting to stability their it the just regardless the people to wanting So, of homes, shows just

Operator

to now at Wolfe Research. Deepak We will move Mathivanan

Deepak Mathivanan

Great. Thanks for taking the questions.

Just a ones. quick of couple

much room the been first, certain So or this or it being more many the anecdotal people house of second nicely, growth. drivers of whether growing hosts. have is of Brian. to like bigger flexibility sort just is this mix on there near has like for nights mean how helping trying rental pretty it? anything understand maybe your And but curious a like as right pretty just markets you this the platform, even noise this – kind XX% of trend. just But XQ macro out of talked whether there your very press is about for is the there. and strong, about seasonal keeping I is recently stays guidance lifestyle or Is is sort question, on stabilizing to platform are occupancies helping then lot down of now there maybe a how difficult Long-term also that’s for

beyond Just kind currently. markets you understand of travel much to trying how into are reaching already addressable the

Brian Chesky

are for bookings for speak to this bookings. just anecdotal – think to change. I free on that I the dive results level, not in, at there is think just some whether can at bookings some your mean I is Yes. especially themselves. can It’s There the continuing both, down. I travel I were the they high for take I descriptions possible down, And level, mean this. to Dave are – up. macro I QX the then mean our host and And question feel of host are many are on hosts. – explanations will down bookings answer

prioritizing pricing our the though is other the of value. rank algorithm One things all-in best with search and host is that

depends basis. – up. are And primarily obviously, one it’s take bookings might a have is what again, really So, be explanation. possible really it’s case-by-case it But overall, seen it But that on possible have anecdotal. to you we

fact, a record In quarter. it’s

to of fundamental I beyond I Now, are stays flexibility the making fifth really And big surface. here years, A stays some our in with coming for only is than month. just this this nights to that in I the category. before travel, regard improvement would think product longer is long-term mean stay. feedback, have this to we scratched say a And book

people years are going in work X a from way to than today. I do more think remotely hybrid they now

also to going people is but And years to I want think abroad places. And think increasingly, parts there of are the no things people more not will, say the one going going X-year just people time flexibility real but States, opportunity. periods we have are leases, and fewer of live to different people in to isn’t live that see in over going United short and the for are of different coming countries. going the to live different choose we are are to more to in a to value one

to too. think going cross-border we business, more are start So, long-term we to see

do, tools that going stay take So, already. long-term of and I we housing will And are to a improvements. as the we and we making longer their And to are to there I features of a into many most have provide people more large make the to offering mean our you term that think would to business to that in to be need market. life built for But lot of we have tap market. And some continue more continue it’s their we going opportunities upgrades largest costs. housing, this stay expense here. is their is

Operator

move Lee will to Deutsche at Horowitz Bank. we Next,

Lee Horowitz

Great. Thanks.

So, building about on growth. expense earlier the comments

advertising product purely environment How ROI advertising. about about customers your longer-dated the and away flexing brand strategy set? moved and investments in that think a the actively teach into demand say, advertising more continue linked advertising that from, you environment macro versus retrain your has spend to to Given towards tougher your a ever-expanding down performance perhaps customers do investing –

Brian Chesky

to this? you do Dave, want with start

Dave Stephenson

in over should it, amount of if actual it’s on a as are be and going at spending we strategy mean you relatively anticipate I to ‘XX, money and percentage revenue of look Sure. flat the our advertising ‘XX marketing ‘XX. from you similar

we with And line so can revenue. in certainly it flex

be that it grow, of kind substantial within reasonably already seeing actually invest it face I able we can is, that that even dramatically be mindful lower we new moderate hundred we as wanting we But countries. of success flat anticipate to can to Certainly, because other but are what we kind are we we But so rate. flex we seen such to a in already and this a keeping dropping have are of that. And points it’s kind extent will over have hit the actually are basis headwinds the revenue it wouldn’t over low growth. We of we with us of what here few there. that in time, overall

Brian Chesky

jump buy our And way just I more obviously, XX% a traffic mentioned, we I have mean of customers or we don’t really direct as – organic. will marketing to is because, as in. of to think say than just

to we main and And marketing. people full And our drivers is PR. traffic actually thing approach biggest is of actually marketing. product of then of a And is take so communication. a the educate We the And brand is more top to features. our marketing we about actually, think want And PR bit important. we like the that’s think funnel funnel one new the

that’s demand we educating and people Categories and more So, Airbnb to more marketing. think a marketing in the rather efficient, year. and get that approach amount efficient to marketing of supply way right And performance very about advertising laser are allows this think for every balance we that than very a And a large customers. way the then now, way should dynamic a purchased AirCover. we of is And essentially single about

Operator

will we Markets. And Erickson from Capital final question take at our Brad RBC

Brad Erickson

Thanks. Few Hey. follow-ups.

a First, light bit nights had of we where it came all just up forecasted.

to but those maybe QX? on backlog, asked look little the pockets this know message a are your affect So, minute you obviously, you curious Are here seeing booked that’s just tools ago spoke of a guess But nights in moves booking I the those Dave, you way. then on that about or saying are basically hosts you expand I seeing on Thanks. seeing more Just And elasticity out second, years sending softness. some to pricing you we any a prior windows of in are than making moves? softness, different start of any bit as in to event you are price, if hosts cases where us. making

Brian Chesky

Yes. the question. will Brad, take I first

prices we have give than do Yes, do do or think being is their think second. would Dave and less hosts there more bring probably dynamic more up take as the question, that I down make hosts said, tools mean opportunities I is I us competitive. can hotels. many prices for see frequently down. visibility what or but many That do, up your demand prices adjust adjust To think to prices, I even their answer hosts their that more goes they

prices are in a where coming little will build periods let dynamic we more changes, to as of provide be the more But continue competitive. generally might be we we question. slower. in Dave industry, down so I And will be tools – next And bit time to more take

Dave Stephenson

of is side. not couple Yes. are optimizing Well, focused things. One on a thing night we just

a kind of drive looking have and drive I just a But pays the bills. to lot nights. we rate Like growth drive revenue trying also that could and driver nights them balance of think nights And and obviously of growth. towards it’s overall measure, revenue important making and growth lower try we are to an sure of we demand. important an is nights

people I are to and seeing highlight too, happy results. think in back goes And demand, just seeing QX interest of are are am that growth And just you to are guess impressed is with is we travel. business. with the why their it willingness our our in so strong in the backlog, to travel I traveling Airbnb. stable full guests very increasing having I we and that resiliency kind guide reason like and on the we said, confidence of the And we really

There that, So, – there some that. windows yes, what are year-over-year. little up booking is we seeing are a seasonality the bit are in is

booking So, bit a windows they from actually little QX. down are

up I being away. so lead you are from – able historical to travel, should important thing take times the just because And are confident think levels as the the in people that’s

Operator

back turn over that the Brian conference for the session. this And concludes End remarks. question-and-answer any Q&A to I concluding time, will At of

Brian Chesky

are believe are Alright. for XXXX you positioned well all the just proud for weeks say hope just first you in incredibly winter release. want all, for join thank us we of future our all I and today. I we joining of recap I to Well, incredibly ahead. And results. two

all on is from watch will November then. You to will able you you a.m. see X our right Wednesday, Thank homepage be this Eastern. I it XXth, and

Operator

call. conference participation. for you concludes And that Thank your today’s

You disconnect. may now

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