Airbnb(ABNB) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2025, Airbnb reported nearly $25 billion in guest spending, indicating strong demand despite global uncertainties [5] - Revenue for the quarter was $2.3 billion, up 6% year over year, with an adjusted EBITDA of $417 million, representing an 18% margin [12][13] - Free cash flow for Q1 was $1.8 billion, with a 39% free cash flow margin over the past twelve months [14] Business Line Data and Key Metrics Changes - Nights and experiences booked reached 43 million, an 8% increase year over year [12] - Growth by region showed Latin America growing in the low twenties, Asia Pacific in the mid-teens, Europe in the mid-single digits, and North America in the low single digits [13] Market Data and Key Metrics Changes - The U.S. market has seen a decline in foreign travelers, with inbound travel from Canada significantly reduced, but domestic travel remains strong [30] - Latin America continues to be the fastest-growing region, with origin nights in Brazil growing 27% and first-time bookers increasing over 30% [21] Company Strategy and Development Direction - Airbnb is focused on long-term growth and preparing for a transformation beyond just accommodations, with significant upgrades to its core service [8][10] - The company plans to launch new offerings on May 13, 2025, which are expected to drive future revenue growth [11][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current economic volatility but expressed confidence in Airbnb's adaptability and resilience, citing past recoveries from downturns [6][22] - The outlook for Q2 includes expected revenue growth of 9% to 11% year over year, with a focus on maintaining strong adjusted EBITDA margins [15][17] Other Important Information - Airbnb has repurchased $807 million of its common stock during the quarter, with $2.5 billion remaining on its repurchase authorization [14] - The company is investing $200 to $250 million to launch and scale new businesses in 2025, which will impact margins in the second half of the year [17][18] Q&A Session Summary Question: Travel corridor changes and market share impact in the U.S. - Management noted a decline in foreign travelers to the U.S., but emphasized that this segment is a small portion of overall business, with strong domestic market share maintained [30][31] Question: U.S. guest behavior and booking trends - Management observed higher income travelers remain stable, while short lead time bookings are growing, indicating a wait-and-see approach for longer-term bookings [36][37] Question: Strategies for reaccelerating unit growth - The focus is on perfecting core services, enhancing usability, affordability, and reliability, with significant potential for international growth [41][46] Question: Urban market strategies and margin guidance - Management sees hotels as a significant opportunity for Airbnb, with plans to expand hotel offerings and maintain margin guidance despite macro uncertainties [50][53] Question: Growth trends and expansion market performance - Growth in expansion markets, particularly Latin America, has been strong, with localized marketing and product strategies driving momentum [60][110] Question: Pricing flexibility and ADRs - Management indicated that hosts have more pricing flexibility compared to hotels, which can drive better room nights and align with customer affordability [95][100]