Q4 2024 Earnings Summary
- Airbnb is gaining market share globally, primarily from hotels, and leading in total supply growth. Ellie Mertz stated that in Q4, Airbnb "continue to gain market share on a year-over-year basis, both globally as well as at a regional level... [with] market share gains coming from hotels." Additionally, "we continue to see that on the supply side, we are... leading in terms of total supply growth," with the majority of new listings being exclusive to Airbnb.
- Investments in targeted global markets are driving significant growth, with these markets growing at double the rate of core markets. Ellie Mertz mentioned that "those markets that we've targeted are growing about double the rate of our core markets." This indicates successful localization efforts and a meaningful impact on overall growth.
- Launching and scaling new offerings could contribute significantly to future revenue, with each new business potentially reaching $1 billion in revenue over time. Brian Chesky stated that "each business could take 3 to 5 years to scale. A great business could get to $1 billion of revenue." These new offerings are intended to be strong standalone businesses that also strengthen Airbnb's core service.
- Challenges in Gaining Market Share in Urban Markets: Airbnb is facing difficulties in increasing its market share in North American urban markets where hotels are heavily dominant. Brian Chesky mentioned that while they are making efforts to improve their service to attract hotel travelers, the timing for significant growth in these markets is uncertain. He stated, "I can't possibly predict when this will happen."
- Growth in Expansion Markets Not Significantly Boosting Overall Growth Rate: Despite strong growth in targeted expansion regions, overall Nights and Experiences Booked growth in Q1 2025 is expected to be relatively in line with Q1 2024. This suggests that the success in these regions isn't significantly lifting the company's overall growth rate. Ellie Mertz explained that while expansion markets are growing about double the rate of core markets, it doesn't necessarily pull up the overall growth rate due to the scale of the core markets.
- Regulatory Risks in Key Urban Markets: Regulatory challenges remain a concern for Airbnb, particularly in urban markets like New York City, which has banned the majority of Airbnb's business. Brian Chesky acknowledged that "New York City remains an outlier" and such regulations could impact their operations. He also noted that despite the ban, rents haven't decreased as intended, indicating the complexity of regulatory impacts.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q1 2025 | no prior guidance | Expected to be between $2.23B and $2.27B, representing 4% to 6% YoY growth or 7% to 9% growth excluding FX headwinds | no prior guidance |
Nights and Experiences Booked | Q1 2025 | no prior guidance | Year-over-year growth is expected to be relatively in line with Q1 2024, excluding the leap day impact | no prior guidance |
Adjusted EBITDA Margin | Q1 2025 | no prior guidance | Expected to decline compared to Q1 2024 due to calendar and FX headwinds—with margins remaining relatively flat when excluding these factors | no prior guidance |
Full‑Year 2025 Adjusted EBITDA Margin | FY 2025 | no prior guidance | Expected to be at least 34.5% | no prior guidance |
Impact of New Business Investments | Q1 2025* | no prior guidance | Negative impact on adjusted EBITDA margin will be most pronounced in the first nine months of 2025, with revenue contributions expected to pick up as new products are launched and scaled | no prior guidance |
EBITDA Margin for Q4 2024 | Q4 2024 | Guided at around 27% to 28%, reflecting margin compression versus Q4 2023 | no current guidance | no current guidance |
Investment Philosophy for 2025 | Q4 2024 | Emphasized continued growth investments – including core optimizations, global market expansions, new products/services, and maintaining a capital‑light model | no current guidance | no current guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Market share and competition with hotels | Q1-Q3: Consistent messaging about gaining share from hotels. Mentioned ratio of 1 Airbnb user to 9 hotel users. Highlighted pricing advantages vs. hotels. | Q4: Continued emphasis on market share gains from hotels, citing top supply, product improvements, and brand awareness. | Recurring (still a central focus) |
Supply growth dynamics (including removal of low-quality listings) | Q1: 17% YoY supply growth, removed thousands of low-quality listings. Q2: Removed 200k listings globally, strong supply in Paris. Q3: 10% YoY supply growth, removal of 300k low-quality listings. | Q4: Claim to lead in total supply growth, no explicit mention of removals in Q4. | Recurring (major focus on supply quality) |
Investments in underserved or global expansion markets (Latin America, Asia-Pacific, etc.) | Q1: Targeting LATAM & APAC; double the core growth rate. Q2: Noted fastest growth in LATAM & APAC; extensive localization. Q3: Expansion markets grew at double the rate of core, showcased Brazil & Japan successes. | Q4: Highlighted strong growth in Brazil, early brand marketing in Japan, $200M-$250M allocated in 2025. | Recurring (increasing emphasis on global markets) |
New business lines or offerings with potential for $1B+ in revenue | Q1: No direct $1B+ references. Q2: Mentioned potential by adding hotels, referencing “$0.5B to $1B”. Q3: Plans to launch 1-2 new businesses yearly, each possibly $1B+. | Q4: Reiterated each new line could be $1B+ in revenue. Strategy to integrate into the main Airbnb app. | Recurring (more detail on scale and roadmap) |
Regulatory challenges in key urban markets (e.g., New York City and California) | Q1: No mention. Q2: California regulations on price display and grace periods. Q3: NYC ban described as a cautionary tale; rent +3.5%, hotels +7%. | Q4: NYC called an “outlier,” LA cited disaster relief work, 80% of top 200 markets have regs. | Recurring (increasing clarity on challenges) |
Booking lead times (short-term vs. long-term stays) | Q1: Stable lead times, strong Q3 backlog. Q2: Shorter lead times grew, long-lead softness. Q3: Normalized lead times, ending quarter with double-digit booking growth. | Q4: Summer lead times contracted but rebounded in fall, showing strong demand reemergence. | Recurring (shift from volatility to normalization) |
Seasonal or event-driven strategies (Olympics, World Cup, top events) | Q1: Events (Olympics, etc.) drive brand and supply benefits. Q2: Emphasis on Paris Olympics, top 1,000 events globally. Q3: Paris Olympics success (700k guests) as a model. | Q4: No mention. | No longer mentioned (in Q4) |
Mobile app usage and user engagement gains | Q1: App downloads +60% in US, 54% of nights via app. Q2: 19% YoY app bookings, 55% of total. Q3: 18% YoY increase, app at 58%. | Q4: 60% of overall bookings via mobile, up from 55%. | Recurring (steady growth in app adoption) |
Affordability initiatives (total price display, weekly/monthly discounts) | Q1: Total price display, 300k hosts lowered fees, weekly/monthly discounts. Q2: No direct mention beyond CA price-reg rules. Q3: 2/3 of hosts offer discounts; total price display expanded. | Q4: Integrated total price display leads to higher-value bookings, weekly/monthly deals stressed. | Recurring (broader host adoption) |
Margin and profitability trends (EBITDA margins, front-loaded investments) | Q1: Guided ≥35% margins, noted marketing/product dev investments. Q2: Aiming for 35% margin, investing in core expansions. Q3: Q4 margin of 27%-28%; front-loaded investments. | Q4: Expects 34.5%+ 2025 margin with $200M-$250M in new business investments, heavily weighted in early 2025. | Recurring (high margin focus, modest compression) |
Changes in demand or growth in core vs. expansion markets | Q1: Expansion markets grew twice as fast as core. Q2: Non-core outpaced core significantly. Q3: Expansion bookings still >2x core, citing strong Brazil results. | Q4: Underserved markets at double the rate of core; core is 70% of GBV. | Recurring (expansion outpacing core growth) |
Impact of supply outpacing demand on pricing and margins | Q1: More supply -> lower prices vs. hotels. Q2: No direct mention on margin impact. Q3: Supply outpaced demand by a few points, no direct margin effect stated. | Q4: No mention. | No longer mentioned (in Q4) |
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Capital Allocation and Margins
Q: Will the capital allocation process change in 2025?
A: Airbnb plans no meaningful changes to its capital allocation strategy in 2025. The company will continue investing in core operations, pursuing value-enhancing M&A opportunities, and returning capital to shareholders. Despite planned investments of $200 million to $250 million in new businesses, Airbnb expects to maintain strong margins. Share repurchase activity in 2025 is anticipated to be similar to 2024, with adjustments based on stock price. -
AI Investments and Efficiencies
Q: How will AI impact internal efficiencies and margins?
A: Airbnb sees significant potential for AI to enhance internal efficiencies, particularly in customer service and engineering productivity. The company plans to roll out AI-powered customer support later this year, capable of handling millions of contacts, operating 24/7 in every language, and accessing vast information. While AI hasn't yet led to a fundamental change in engineering productivity, Airbnb anticipates a 30% increase in medium-term engineering efficiency from AI tools. -
New Products and Growth Opportunities
Q: What friction points are you addressing with new products?
A: Airbnb aims to expand beyond its core by introducing new businesses closely adjacent to travel, such as services and experiences that enhance guests' stays. Each new business is expected to scale over 3 to 5 years and could potentially reach $1 billion in revenue. The company focuses on solving guest and host pain points, adding value to the core business, and increasing usage frequency from once or twice a year to once or twice a week. -
Market Expansion and Localization
Q: How long does localization in new markets take?
A: The duration varies by market. For example, Brazil has been a huge success, achieving significant scale over the past two years through brand marketing investments. In contrast, Japan may take longer due to lower domestic awareness. Overall, targeted markets outside the top five core countries are growing at double the rate of core markets, significantly contributing to Airbnb's growth. -
Competition and Market Share
Q: Is Airbnb gaining market share over competitors?
A: Yes, Airbnb continues to gain market share both globally and regionally, with gains primarily coming from hotels. The company is leading in total supply growth, and the majority of new listings are exclusive to Airbnb, enhancing its differentiated supply. In markets where competitors like Vrbo operate, Airbnb is performing well, especially in non-urban U.S. markets, which were among its fastest-growing segments. -
Regulatory Environment Impact
Q: How is regulation affecting urban demand?
A: Airbnb sees increasing cooperation with cities, with 80% of top 200 markets having regulations in place. Cities like Paris view Airbnb as a solution to accommodate visitors during events like the Olympics, where Airbnb housed 700,000 guests. However, New York City remains an outlier, having banned most of Airbnb's business without seeing intended benefits on rents or housing supply. Airbnb believes other cities are unlikely to follow New York's approach. -
North American Market Opportunity
Q: How do you view growth in North America?
A: Despite its scale, North America is still dominated by hotels, presenting significant room for growth. Airbnb aims to increase penetration by targeting demographics where it underperforms, such as the Latino population and Heartland states. Efforts include improving consideration and tailoring offerings to these segments. -
Product Innovation and Tech Stack
Q: How is the new tech stack enhancing product innovation?
A: Airbnb has rebuilt its tech stack over the past six years, with most work now complete. This allows for increased feature rollout, with 535 upgrades made in the past two years. The upcoming summer release will be significantly larger, enabling fewer engineers to ship features faster and improving product velocity to support growth initiatives. -
Take Rate Expectations
Q: What are the expectations for take rates in 2025?
A: Airbnb introduced an FX service fee mid-2024, adding approximately 20 basis points to the implied take rate. In 2025, without one-off offsets experienced in 2024, the company expects the full-year implied take rate to benefit from this increase, contributing positively to revenue. -
Conversion Improvements and Growth
Q: How are product enhancements affecting growth?
A: Product optimizations in search, merchandising, and booking have led to increased conversion rates. Efforts include personalized welcomes, encouraging mobile app usage (with mobile bookings up to 60% of total), simplifying the checkout process, focusing on affordability with total price display, and improving reliability through initiatives like Guest Favorites and host quality standards. These enhancements lifted booking growth by a couple of hundred basis points exiting Q4. -
Co-host Network Performance
Q: Where is the Co-host Network working best?
A: The Co-host Network is performing well in markets like the U.S., U.K., Canada, France, and Australia, where top hosts manage listings for others. Listings managed by co-hosts earn about twice as much as other listings due to higher quality—most co-hosts are Superhosts, and a significant portion of their listings are Guest Favorites. The network plans to expand to Japan and Korea next. -
Advertising Services Potential
Q: What's the update on advertising services?
A: Airbnb sees advertising services as a significant opportunity, potentially worth $1 billion. While not a current priority, the company acknowledges it's a matter of when, not if, they will explore this area in the future. -
Impact of AI on Customer Service
Q: How will AI improve customer service?
A: Airbnb plans to launch AI-powered customer support as part of its summer release. This AI can handle millions of contacts, operate 24/7 in every language, and quickly access vast information, significantly enhancing customer experience and efficiency. -
Marketing Spend and Growth Regions
Q: How can marketing spend be flat amid expansion?
A: Airbnb manages marketing spend by focusing on brand marketing, which is a fixed amount per market. Growth in expansion regions is funded by keeping core market spend modest and reallocating funds to new markets. The company doesn't rely heavily on variable performance marketing, allowing it to maintain a flat percentage of revenue while supporting growth in new regions. -
Urban Markets and Regulation
Q: Do you see regulations becoming more favorable?
A: Airbnb believes the trend is towards cities viewing the platform as a partner and solution rather than imposing restrictive regulations. While Europe has heavy regulations, Airbnb doesn't see significant changes impacting its business. The company continues to work with cities to demonstrate the benefits of Airbnb to local economies.
Research analysts covering Airbnb.