Airbnb Q1 2025 Earnings Report

Airbnb EPS Results

• Actual EPS: $0.24
• Consensus EPS: $0.25
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.41

Airbnb Revenue Results

• Actual Revenue: $2.27 billion
• Expected Revenue: $2.26 billion
• Beat/Miss: Beat by +$12.89 million
• YoY Revenue Growth: +7.40%

Airbnb Announcement Details

• Quarter: Q1 2025
• Date: 5/1/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 1, 2025
• Conference Call Time: 4:30PM ET

Airbnb (NASDAQ:ABNB) is a global, web-based marketplace for short-term rentals and house-sharing arrangements. The company was founded in 2008 as AirBedandBreakfast.com after roommates Brian Chesky, and Joe Gebbia came up with the idea they could turn their apartment into a bed and breakfast if they had a website. The two brought on Nathan Blecharczyk as Chief Technology Officer, and by August of that same year, the company was up and running.

At first, the platform was solely for the trio's own use and they had their first customers soon after launching. The next year the trio was offered the chance to join the Y Combinator business incubator for the cost of a 6% ownership in the company. That deal got them $20,000 in capital they used to go to New York to promote and garner new investors. They came back to California with a plan to expand the business including the shift toward brokering deals rather than providing a room. At the end of 2009, the company had served more than 10,000 users and had more than 2,500 listings.

The next few years saw the company expand rapidly with the help of investors like Sequoia Capital and Google (now Alphabet). The company also retooled its website and appearance and launched a new logo. The logo is called Bélo and is meant to represent inclusiveness and belonging. During this time, the company also began its international expansion, opening offices first in London and then later in Singapore.

Airbnb owes much of its growth to acquisitions. The company has made more than a dozen major acquisitions over its short lifespan. Acquisitions include both expansions of territory as well as the depth of offerings and include CrashPadder in 2012 and HotelTonight in 2021. The company went public in 2020 to much fanfare, raising more than $3.5 billion in its first day of trading. That gave the company a valuation greater than $100 billion making it one of the largest IPOs in the travel industry ever recorded.

Today, Airbnb operates through a network of subsidiaries as a technology-based travel and leisure company. It operates a web-based platform that enables property owners to offer rental time to consumers globally. The platform works across devices and enables users to book complete travel packages or individual travel services. The company’s revenue was just short of $6 billion in 2021 due to the incredible boost from COVID-19 and social distancing. The event was a game-changer for this rapidly growing company and helped to cement it as the leader in its industry.

As of the end of the year 2021, the company had more than 4 million listings with more than double that number of beds. This puts it first worldwide and larger than the top 4 hotel brands combined. Revenue in 2022 topped $8.25 billion, a growth of 37.5% in only 2 years, and the company was only reaching a small fraction of its $3.4 trillion addressable market.

Airbnb Q1 2025 Earnings Call Transcript

Key Takeaways

• Airbnb reported Q1 2025 revenue of $2.3 billion (up 6% Y/Y, 11% ex-FX/calendar) with $417 million adjusted EBITDA (18% margin) and $1.8 billion free cash flow.
• Guests booked 43 million nights & experiences in Q1 (8% Y/Y), led by Latin America (low-20s% growth) and solid mid-teens growth in Asia Pacific.
• For Q2, Airbnb guides revenue of $2.99–3.05 billion (+9–11% Y/Y), expects moderated nights growth, robust Easter demand in Europe and Latin America, and softer U.S. trends, with flat-to-slightly down adjusted EBITDA margin.
• Airbnb is investing $200–250 million this year to launch new offerings beyond home stays on May 13, while targeting a full-year adjusted EBITDA margin of at least 34.5%.
• Key strategic levers include perfecting the core with features such as Guest Favorites (350 million nights booked) and global total price display, driving localized expansion in under-penetrated markets, and leveraging a rebuilt app for faster innovation.

Presentation

[Operator]

Good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the First Quarter of twenty twenty five. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section

[Operator]

of

[Operator]

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, Director of Investor Relations at Airbnb]

Good afternoon, and welcome to Airbnb's first quarter twenty twenty five 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 first quarter twenty twenty five. These items were also posted on the Investor Relations section of Airbnb's website.

[Angela Yang, Director of Investor Relations at Airbnb]

During the call, we'll make brief opening remarks and then spend the remainder of time on Q and 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.

[Angela Yang, Director of Investor Relations at Airbnb]

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've provided reconciliations to the most directly comparable GAAP financial measures in the shareholder letter posted to the Investor Relations website. These non GAAP measures are not intended to be a substitute for our GAAP results. With that, I'll pass the call to Brian.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Well, good afternoon, everyone, and thanks for joining. We had a strong start to 2025. In q one, guests on Airbnb spent nearly $25,000,000,000. These results show that no matter what's happening in the world, people continue to choose Airbnb, and that's because our model is inherently adaptable. It's something we've proven time and time again.

[Brian Chesky, Co-Founder and CEO at Airbnb]

We started Airbnb during the great recession of two thousand eight. People turned us for a more affordable way to travel, and they started hosting Airbnb to earn extra income. Then in 2020, when the pandemic hit, we provided a way for people to to travel close to home. And as a result, our business quickly rebounded. And by the end of that year, we went

[Brian Chesky, Co-Founder and CEO at Airbnb]

public. Today,

[Brian Chesky, Co-Founder and CEO at Airbnb]

things feel uncertain once again. But just as we've shown in the past, as the world changes, Airbnb will continue to adapt. And that's because we have millions of hosts offering nearly every type of home at nearly every price point from budget to luxury in neighborhoods and cities all over the world. And for host, Airbnb remains a great way to earn meaningful income. Now before we get into q one results, I wanna just talk for a moment about where we are as a company.

[Brian Chesky, Co-Founder and CEO at Airbnb]

We've been focused on drawing drive driving long term growth as well as preparing for Airbnb's next chapter when we'll offer more than a place to stay. And we've been laying the groundwork to make this transformation for years, and there are two key things we've done to get ready. First, we want to make sure that people love our core service before we launched anything new. So we spent the last few years rolling out hundreds of upgrades to make our Meet better for guests and hosts. It's now easier to use, more affordable, and more reliable.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And just one example of this is the launch of guest favorites, which is a way for people to easily find the best place to stay on Airbnb. Since launch, over 350,000,000 nights booked have been booked at guest favorites listings. We've also worked hard to improve affordability and price transparency, which are especially top of mind for people today. When guests told us prices weren't transparent enough, we introduced the Choggle that let them see the total price upfront. Over 17,000,000 guests have used it over the past two years.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And last month, we rolled out total price display globally. So now the price you see upfront includes all fees. But perfecting our core service wasn't enough. To expand beyond homes, we needed an app that could support new offering. Now until now, our app has really done one thing, which is lets you book a home.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So we rebuilt the app from the ground up on a new tech technology stack, and now we can innovate faster and offer much more than homes. So we're ready for Urban Bee's next chapter. On Tuesday, May 13, we'll unveil the twenty twenty five summer release, and you can visit our website that day to watch the announcement and see all the details. So with that, I'm gonna turn the call over to Ellie for a financial update.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Thanks. Thanks, Brian, and good afternoon, everyone. I'll start with a review of our q one financial results, and then I'll walk through our outlook for q two. As Brian mentioned, we had a strong first quarter. We had a 43,000,000 nights and experiences booked, up 8% year over year.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Looking at this year over year growth by region, Latin America grew in the low twenties, Asia Pacific grew in the mid teens, Europe in the mid single digits, and North America in the low single digits. Revenue for the quarter was 2,300,000,000.0, up 6% year over year. If you exclude the impact of FX and calendar factors, revenue would have grown 11%. As a reminder, those calendar factors include Easter falling in q one twenty twenty four and the extra day from Leap Day last year. We generated 417,000,000 of adjusted EBITDA, which represents an 18% margin.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Next, I'll turn to our balance sheet and cash flow. We continue to generate significant cash in q one, delivering $1,800,000,000 of free cash flow. Over the past twelve months, we've generated 4,400,000,000.0, representing a free cash flow margin of 39%. At the end of q one, we had 11,500,000,000.0 of corporate cash and investments as well as 9,200,000,000.0 of funds held on behalf of guests. Our strong balance sheet allowed us to repurchase $807,000,000 of our common stock during the quarter.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And at the end of q one, we had 2,500,000,000.0 remaining on our repurchase authorization. Now let's shift to our q two and full year 2025 outlook. Despite the recent volatility in the global economy, we believe we're positioned to to deliver strong results in q two. We expect to deliver revenue between 2,990,000,000.00 to 3,050,000,000.00, representing nine to 11% year over year growth. This include includes a benefit of approximately two percentage points due to the timing of Easter.

[Ellie Mertz, Chief Financial Officer at Airbnb]

For nights and experiences booked, we expect year over year growth in q two to moderate relative to q one. So far in q two, we saw strong guest demand for Easter travel in Europe and continued momentum in Latin America, which remains our fastest growing region. In The US, we've seen relatively softer trends, which we believe is largely driven by broader economic uncertainty. On profitability, we expect adjusted EBITDA to increase year over year with adjusted EBITDA margin expected to be flat to slightly down compared to q two twenty twenty four. Marketing expense will grow faster than revenue in q two, mostly due to our upcoming summer release and investments in growth initiatives.

[Ellie Mertz, Chief Financial Officer at Airbnb]

For the full year, we continue to expect an adjusted EBITDA margin of at least 34.5%, in line with what we shared in February. Now that includes 200 to $250,000,000 of investment to launch and scale new businesses in 2025. These investments will have the biggest impact on our margins in the second half of the year since our new offerings go live on May 13. Now as these new businesses scale over the coming years, we expect them to be significant drivers of future revenue growth. Now looking ahead, our priorities remain consistent with last quarter.

[Ellie Mertz, Chief Financial Officer at Airbnb]

As a reminder, we're continuing to drive long term growth and deliver market share gains through three key growth levers. First, we are perfecting our core service. As Brian mentioned, we've made significant we've made Airbnb significantly better for both guests and hosts. We've been driving growth from product improvements, like enhanced search and better merchandising. One example is a newly redesigned Rare Finds feature that better highlights popular high quality listings.

[Ellie Mertz, Chief Financial Officer at Airbnb]

We also simplified our checkout page to make booking easier. These are just a few examples of the product optimizations that are contributing to our top line, but we know there's still more work to do. Second, we are accelerating growth in global markets. We're taking a much more localized approach to product and marketing in underpenetrated markets around the world. This is a multiyear strategy, but we've already seen encouraging results.

[Ellie Mertz, Chief Financial Officer at Airbnb]

For the first fifth quarter in a row, growth in these expansion markets significantly outperformed our core markets. In fact, the average growth rate in q one in expansion markets was more than double that of our core markets. Brazil continues to lead the way. In q one, origin nights in Brazil grew 27%, and first time bookers grew over 30%, both accelerating from q four. Third, we are launching and scaling new offering.

[Ellie Mertz, Chief Financial Officer at Airbnb]

This begins on May 13, so expect more on that soon. Now to wrap up before we go to questions, we're staying close to geopolitical and macroeconomic uncertainty and monitoring any short term impact they could have. As Ryan mentioned in his remarks, we have an adaptable and diversified business that has been resilient during periods of uncertainty, most recently as COVID. Despite signs of near term volatility, we remain focused on the long long term opportunity to both grow our core business and expand into new ones. We believe that our efficient operating model, financial strength and significant liquidity give us the ability to pursue these multiyear initiatives in the current environment.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And with that, I will open it up to q and a.

[Operator]

Thank you. We will now begin the question and answer Your first question comes from the line of Justin Post from Bank of America. Your line is open.

[Justin post, Managing Director at Bank of America Merrill Lynch]

Great. Thank you. Wonder if you could expand a little bit on the letter on travel corridor changes. Are you seeing any differences in like total volumes of bookings from quarter changes like in Europe? And I know you already mentioned Canada.

[Justin post, Managing Director at Bank of America Merrill Lynch]

Is that driving any change for you? And then do you think there's any market share impact in The U. S? Or do you think you're holding in your share, it's just the whole kind of country is a little depressed? Thank you.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Great. Brian, why why don't I take this? Let me let me first talk a little bit about, travel corridors. And in particular, you mentioned Canada. We we called it out in the letter.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Let me tell tell you a little bit about what we are seeing in particular with regard to the inbound quarter to The US. We absolutely have seen, a decline in popularity of foreign travelers coming to The US. What we have seen is that, number one, you know, it's less popular to come to The US from a year ago, also relative to the beginning of the year. And what we're seeing in that segment is is two things. One is that that segment is a very small portion of our overall business.

[Ellie Mertz, Chief Financial Officer at Airbnb]

As a reminder, US travel is predominantly domestic. And as a result, that corridor of foreign travelers coming to The US is approximately two to 3% of our overall business. So it's it's it's frankly not quite material. At the same time, what we're seeing is within that corridor, guess who would have, in a prior year, come to The US are simply choosing a different location. So I think Canada is is the most obvious example where we see Canadians are traveling at a much lower rate to The US, but they're traveling more domestically.

[Ellie Mertz, Chief Financial Officer at Airbnb]

They are traveling to Mexico. They are going to Brazil. They're going to France. They're going to Japan. And I think what you tell the what that tells you about the distribution is that in this moment, it's not necessarily that people don't want to travel.

[Ellie Mertz, Chief Financial Officer at Airbnb]

They are just choosing different, destinations. And Airbnb as a platform, given our distributed supply, it provides an adaptable way for them to find a new a new location. So that that's the comment I would say on the on the corridors. In terms of market share in The US, I would say that we continue to have very strong market share in The US. We are not seeing, any any losses in market share, much to the contrary.

[Ellie Mertz, Chief Financial Officer at Airbnb]

We continue to gain market share in The US, but we do see generally that as a market. North America for the last several quarters has been, the slowest grower across the industry.

[Operator]

Your next question comes from the line of Richard Clark from Bernstein. Your line is open.

[Richard Clarke, Managing Director at Bernstein]

Hi there. Thanks for taking my question. Just wanted to delve a little bit into what is the behavior you're actually seeing from The U. S. Guests' slowdown?

[Richard Clarke, Managing Director at Bernstein]

Is it delayed booking windows? Is it higher cancellation rates, shorter trips trading some nature of what you're actually seeing? And I guess we've heard from maybe a few travel companies that things got a little bit better towards the April. Are you seeing that? Is there any sort of light at the end of the tunnel there with regard to bookings picking up in the last few days or weeks?

[Ellie Mertz, Chief Financial Officer at Airbnb]

Yes. Thanks for the question, Richard. So let me double click. I just talked about the quarter that is inbound to The U. S.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Let me talk now what we're seeing with regard to US domestic travel, which, again, is a lion's share of overall US destination. A a couple things to comment on. One is we are seeing the higher income traveler somewhat unimpacted by the current macro conditions. We see, in particular, the higher ADRs of our bookings, the growth is very stable and and and very healthy for The US traveler. In terms of lead times, we're seeing something else.

[Ellie Mertz, Chief Financial Officer at Airbnb]

We're seeing that the short lead times, so that would be bookings that are, you know, just around the quarter. They could be in two days or a week or two weeks. We're seeing relatively strong growth there. Whereas in the longer lead times, and in particular, those bookings that are for more than, say, a month out, that is where we're seeing the relative softness. And so I think what you what you take from that double click in terms of the lead times is that we do have some US consumers that are, you know, waiting and seeing before they book their their summer travel.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And I think the the one thing that gives us some amount of comfort in terms of seeing the weakness at those longer lead times is that we have seen movements in terms of lead time shift many times in the past. I think the most recent to call out was last summer where we saw in June and July a truncation of lead times, somewhat similar to what we're seeing today. And what we saw then is that people waited for a while, but they did end up booking that trip. It was just closer to the check-in day. So that's something that we're obviously monitoring quite closely, both globally, but also in particular to The US as we believe The US is obviously the most impacted by a lot of the headline noise currently.

[Ellie Mertz, Chief Financial Officer at Airbnb]

The one thing I would also add is we haven't particularly seen consumers trade down in terms of choose a lower ADR bar booking or a shorter trip. That that has not been any behavior that we've seen.

[Operator]

Your next question comes from the line of Mark Mahaney from Evercore ISI. Your line is open.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

I wanted to ask about what you think are the best chances for reaccelerating your units, your Knights and Experiences. If we just leave aside experiences for now, like what in terms of the core accommodations unit growth, I think you're investing to get back to double digit unit growth. And of the different things you're rolling out, co hosting, is it really leaning into the expansion markets? Is there something else maybe marketing? What are those do you are you counting on to be most impactful in order to get that recovery back to double digit nights growth?

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Thank you very much.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Yeah. Hey, Mark. I don't if you take this. So, yeah, I I guess I would just say we think we're just scratching the surface of how much bigger our core business could be. You know?

[Brian Chesky, Co-Founder and CEO at Airbnb]

And there's no reason to think it could not be double the size that it is today. And then the question is, well, what would you have to believe? I think the first thing we want to do is to continue to perfect the core service. To do that, we really have to do three things. We gotta make everything easy to use.

[Brian Chesky, Co-Founder and CEO at Airbnb]

We gotta make it more affordable, and we gotta make it more reliable. So just, for example, starting with reliability, you know, for every person who books an Airbnb, we estimate about nine people are booking hotels. So if we could just get one of those nine people to book an Airbnb, that essentially would double the size of our business. And the number one reason people say they don't use an Airbnb is they don't find it historically as reliable as a hotel. That's why we're really trying to elevate the best homes in Airbnb and and remove the worst.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So we now guest favorites, 350,000,000 nights have been booked in guest favorites. We've also removed 450,000 listings. This has created, you know, a lot higher customer satisfaction, reduced customer service tickets, and we think over time, more and more people are gonna come to Airbnb. So we're gonna do a lot more, Mark, on making Airbnb more reliable. On affordability, we know that that's a big driver of growth.

[Brian Chesky, Co-Founder and CEO at Airbnb]

You know, Airbnb started as affordable alternative to hotels. We lost, I think, a little ground versus hotels during the pandemic, but I think in the last couple of years, hotel prices have gone up more than Airbnb. I wanna call out that as of last month, we have rolled out total price display globally. So now the price you see before taxes in The United States and, you know, really inclusive taxes, say, Europe include all fees. So and and I think this is really important because it drives customers to the best value Airbnb, which we rank higher and incentivize the best behavior for hosts.

[Brian Chesky, Co-Founder and CEO at Airbnb]

You know, on the usability standpoint, you know, the vast majority of our people come to Airbnb don't find a booking. Airbnb last year was accessed by, you know, over 1,500,000,000 devices. So think about, like, how many people come here and maybe they don't find a place to stay. Part of this is having the right homes for them, but also having the right tools. So we think perfecting the core is a huge driver to grow, but that is really gonna be a big driver in our core markets.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Our core markets are US, Australia, Canada, UK, and France, the four English speaking countries plus France, which makes about 70% of our growth or our business. But the the, you know, more, you know, growth markets, emerging markets would be Spain, Italy, Germany, Mexico, Brazil, and then the big four countries in Asia are China, India, Korea, and Japan. And these markets are actually growing twice as fast as the aforementioned five core markets, and we're gonna step on the gas. And I think that international will be one of the biggest growth drivers that will get us back to double digit growth on Airbnb. So that's just a little bit.

[Brian Chesky, Co-Founder and CEO at Airbnb]

It's really through horizons. Horizon one, the biggest near term opportunity is continue to increase conversion rate by making everything be, you know, easier to use, more affordable, more reliable. Horizon two really is international growth. And then, of course, the longest horizon will be expanding our core business to, you know, offerings beyond the place today.

[Operator]

Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

Hey, great. Thanks for taking my question. Just circling back on The U. S, I think I've asked this before, but just in some of these urban markets, do you think about leaning more into hotels? And then just on the full year guidance, you reiterated your margin guidance.

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

But any reason, given the macro uncertainty for not widening the margin range? Thanks.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Yeah. I can take hotels, and I'll let Antalya take this any part, Jed. So, yeah, we I we think hotels is a massive opportunity for Airbnb. You know, in 02/2019, we acquired Hotel Tonight, and that was basically under the philosophy that while people came to Airbnb looking for a unique place of stay, typically a home, the vast majority of people come to Airbnb, don't end up booking. And one of the reasons is they're window shopping and they're not ready to book.

[Brian Chesky, Co-Founder and CEO at Airbnb]

But sometimes, especially in popular markets, urban areas, when, a lot of people are traveling, Airbnb homes are booked and we have a fairly high occupancy and we need other places to stay, and hotels are a great way to fill in network gaps. You know, during the pandemic, we had to pause some of our efforts and some of our progress because we really want to focus on getting back to the basics. But now that we've made a huge amount of progress on our core business, making over 500 improvements and upgrades over the last three years, we are prepared to expand beyond our core. And, actually, one of those expansions is hotel. One of the things you saw was we just did a promotional hotel tonight.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So now if you book a hotel and hotel tonight, we're offering 10% credit towards an Airbnb booking. This, of course, increases, conversion rate on hotel tonight, but also introduces the number of hotel travelers to Airbnb. Over the coming years, we're gonna be doing a lot more though on Airbnb's application to bring more great hotels onto Airbnb. We think, you know, almost all the hoteliers in the world would love to have Airbnb as a distribution channel, and so we think there's a lot of opportunity, over the coming years. So absolutely gonna be part of our strategy.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Again, on the second question with regard to the margin guidance, you know, we reiterated the plan that we had shared in February. We believe it gives us, you know, considerable room to continue to focus on strengthening the core business while investing in growth initiatives and no material change in terms of that investment profile for the year.

[Operator]

Your next question comes from the line of John Calentone from Jefferies. Your line is open.

[John Colantuoni, Equity Research Analyst, Internet at Jefferies]

Great. Thanks for the question.

[John Colantuoni, Equity Research Analyst, Internet at Jefferies]

I wanted to start with sort of momentum in the business. With growth in 2024 peaking in December and strength continuing in early twenty twenty five, I'm curious how growth has trended throughout the quarter and into April. Is growth sort of at a low point right now for the year? Or did it sort of dip a little bit earlier in the quarter and it's since improved from there? And second question, just sort of looking specifically at the expansion markets, curious if you could just sort of characterize how growth has progressed there specifically this quarter compared to last quarter when you called it out as key contributor to the strength that you saw?

[John Colantuoni, Equity Research Analyst, Internet at Jefferies]

Thanks.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Thanks, John. Let me let me start with the first question in terms of how growth has trended effectively year to date. So I think it's actually interesting to understand the path that both we and, I think, the industry went through in q one. If you recall, January was a very strong month followed by softness in February. You'll recall, you know, there was a bunch of revisions to guidance in terms of the airlines.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And I think what they saw, but, we saw a slightly less degree of it was there was a step down from January to February that coincided with a pretty meaningful decline in consumer sentiment over that sequential month to month period. And yet when we look at our our full quarter results for q one, that softness that we saw in February, effectively rebounded and recovered in March, such that the full quarter was was generally in line with our expectations. So I think when we fast forward today, and the headlines are, you know, quite volatile, I think we do have to recall that since the beginning of the year, there has been some temporal shifts, in terms of when people are booking. But, you know, from that q one period, what you what you gauge is that people may pause on the booking, but but what we've seen today is that they come back and do it. So I wouldn't say that April is necessarily below.

[Ellie Mertz, Chief Financial Officer at Airbnb]

There has been some week to week and month to month volatility since the the beginning of the year. On the expansion markets, what would I say? I would say, generally speaking, we see nice nice momentum in those markets. I think, in particular, what I would say is that Latin America accelerated over the course of full year 2024. And if you look at Latin America's growth in q one, it's actually above where we were in q one of last year, which I think gives you a sense of, you know, if we're able to achieve momentum in a particular market based on our products and marketing localization, we can maintain it and accelerate it over time.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Obviously, the the the nuance of every country is is slightly different, but I think, you know, anchoring on the performance that we've had across Latin America, but in Brazil, in particular, gives you a sense of of the ability to build momentum in these relatively underpenetrated markets.

[Operator]

Your next question comes from the line of Lee Horowitz from Deutsche Bank. Your line is open.

[Lee Horowitz, Co-Head Internet Equity Research at Deutsche Bank]

Hey, thanks for taking the question. Two, if I could. Last quarter, you guys talked about the ability to leverage marketing expense in some of your core markets, which gives you the ability to invest in the growth markets. I guess as things perhaps slow a little bit, how do you think about perhaps leaning into that slowness to take some more share, to take advantage of a weaker market to pick up share, particularly relative to, say, some of your competitors that have talked to trying to be more aggressive as things slow. Do do you still think you can leverage, marketing in your core markets under those assumptions?

[Ellie Mertz, Chief Financial Officer at Airbnb]

Yeah. I would say absolutely. You know, obviously, we we start the year with a a full year marketing plan, and yet every month, we're looking at the relative efficiencies by channel, by market, and adjusting accordingly. So I would say, broadly speaking for the year, we retain quite a bit of flexibility to, you know, put more money into channels that are working and markets that are working and to, you know, cut where where we see, you know, less desirable results. And so so far this year, we've been doing that on a regular basis as we would in prior years.

[Operator]

Your next question comes from the line of Ron Josey from Citi. Your line is open.

[Ron Josey, Managing Director at Citi]

Hi. Thanks for taking the question. Two, I want to ask just on the new product launch on May 13 and experiences or something else. Talk to us a little bit more about the plans, integration plans across the site and how you think or whether any contribution from these new products are included in guidance. And then on the affordability or just the volatile headline, Sally, that we've been talking about, would love your thoughts on just how Airbnb's affordability initiatives could drive greater bookings.

[Ron Josey, Managing Director at Citi]

We saw the summer travel data where I think U. S. Guests are prioritizing staycations and more plan to drive. Maybe that's an opportunity for the team. Talk talk to us about that,

[Ron Josey, Managing Director at Citi]

please. Thank you.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Okay. So on the on the first question, I believe it was what's the impact of the new business launches, with regard to our guidance? So I would say, the launch date is m thirteen, and we're extremely excited in terms of what is to come and what is to start on that day, but it is it is just the beginning. And so the impact from a top line in the current quarter will be relatively modest. Whereas as we scale those offerings, they will obviously increasingly contribute to the top line.

[Ellie Mertz, Chief Financial Officer at Airbnb]

In terms of the expense and the investments associated with that launch, they are building over the course of the beginning of the year. And as we said in the in the guidance language, you will see them more meaningfully hit EBITDA in terms of compression in the the back half of the year as we scale the investments behind the the launch. In terms of affordability, I think your thesis here is, you know, exactly right. What we saw and it's not a it's not a purple perfect comp, but I do think it is instructive here. What we saw, five years ago in terms of the pandemic was when, you know, certain, portions of travel were inaccessible, people found other things to do on our platform.

[Ellie Mertz, Chief Financial Officer at Airbnb]

You know, as Brian and I shared in terms of the opening, just to remind everyone, this business model has a huge amount of diversity in its offering, which allows us to be, you know, extremely resilient and adaptable as consumer behavior changes. And so as I think about the current environment that we are in, you can think about, for example, The US guest. There's an opportunity for us to merchandise the lower cost listing or the the more proximate listing where the guest doesn't need to travel for the doesn't need to take a flight for the summer, but they can drive. There's there's a huge amount of optionality with regard to the diversity of our offering that can allow us to better merchandise what is applicable to the guests in the current moment.

[Operator]

Your next question comes from the line of Justin Patterson from KeyBanc. Your line is open.

[Justin Patterson, Managing Director at KeyBanc Capital Markets]

Great. Thank you. Could you talk more about the behavior of the guests who are booking primarily in app versus those who are rising, through the web? Are you just saying greater frequency rates, repeat rates, so on and so forth? Thank you.

[Ellie Mertz, Chief Financial Officer at Airbnb]

So, broadly, I would say, the demo is slightly different in terms of the app relative to, the web. I would say the the broader thing to take away in terms of the movements we've made in terms of booking share moving to the app is that we know the app is a much better experience for the consumer. You know, we see this most notably just in terms of of conversion rates, getting people to use our apps, you know, as compared to, in particular, MoWeb. It's a much better experience that we have have designed, and so we wanna migrate people to that experience. You can see the the booking share has gone up quite dramatically over the last couple of years as we've encouraged people to use our app.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And as a result, it's additive in terms of the consolidated conversion level.

[Operator]

Your next question comes from the line of Doug Enmuth from JPMorgan. Your line is open.

[Analyst]

Great. Thanks for taking my questions. Is Dave on for Doug. I have two. So first one, Brian, you've been pretty vocal about user experience and travel.

[Analyst]

So curious to hear how you experience on Airbnb to change as you move beyond places to stay and new choices introducing new frictions. And then secondly, how do you guys think about the long term sustainability of your margins as your efforts to move beyond the core scales over time? Thank you.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Hey, Doug. I let me just start by saying, you know, I think one of the superpowers of Airbnb is our design team and our ability to make something incredibly easy to use. You know, when we started Airbnb, we we didn't really invent the idea of vacation rentals. They existed before us, but what was what was true is that they were very hard to book. You know, before Airbnb, you couldn't actually book a vacation rental online.

[Brian Chesky, Co-Founder and CEO at Airbnb]

The messaging platforms really were nonexistent or very rudimentary. Very few people actually left reviews. People didn't really have an account. And so kinda one of things we really tried to do when we created Airbnb was design the system of trust, and as something is easier, more people do it. So what we're noticing, for example, is many of the new business we're going into, they also have similar frictions as our core business did or vacation house did before we basically created a category, which is what we've now call Airbnb.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And so that's one of the things because we're gonna try to you know, the things we're gonna offer want to be instant book. We wanna be, like, really easy. We wanna have that great Airbnb design. But the other thing is a couple other things with user experience. You know, I think a lot of companies have tried to, like, design, you know, an end to end travel.

[Brian Chesky, Co-Founder and CEO at Airbnb]

I think designing end to end travel is very, very hard. It's funny. You know, there's this funny thing. One of the most common startup ideas for entrepreneurs is to do a travel planning app, and yet travel planning apps almost always fail. So it's almost like a riddle.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Why do travel planning apps fail and every everyone really tries to do it? And the reason why is because to plan travel, it's very complicated. In fact, it's so complicated. Many people have assistance, and a big part of the job is to plan travel for them. And yet you use it infrequently.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So it's a very difficult thing to do, and you do it infrequently. And so, therefore, a lot of companies have failed to design, you know, like, a so called connected trip. So I think, you know, to do this, a lot of it is to design a really good user experience. And I think that's one of the things that we're gonna try to do, to really design a great end to end experience, be able to book your entire trip and much more. I think user interface will be important.

[Brian Chesky, Co-Founder and CEO at Airbnb]

I think AI will be important way to do this as well. You know, AI is I I think, as I said before, we're really we're really focused on customer service and solving the most difficult problems for customers and working backwards towards travel inspiration. Just one thing I'll say about AI, which is definitely making the customer experience easier, is we just rolled out our AI customer service agent this past month. 50% of US users are now using the agent, and we'll roll it out to a hundred percent of US users this month. We believe this is the best AI supported customer's travel agent in travel.

[Brian Chesky, Co-Founder and CEO at Airbnb]

It's already led to a 15% reduction in people, needing to contact, live human agents, and it's gonna get significantly more personalized and agentic over the years to come. So, essentially, that's what we're focused on. We're focused on making everything instant book and easy to use. We're trying to make sure that the end to end travel experience is really, really wonderful with, great Airbnb design, and we're gonna bring more AI into the application so that Airbnb, you can really solve your own problems with great self solve through AI customer service agents.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Great. Let me talk a little bit let let me talk a little bit about long term margins. I think just starting with our core business, obviously, our core business has extremely strong EBITDA margins and cash flow generation abilities. I think you've seen us, you know, bring that up over time in particular subsequent to the pandemic. And where we sit today, we see incremental efficiencies that we can continue to drive across that core business.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And every year, we're seeking to do is strengthen and make more efficient that core business so that we have incremental room to invest in growth. From year to year, we may, you know, choose to invest more in growth relative to the efficiencies that we generate. I think you're seeing that in in the current year. But the intent both with the core and the new businesses is to invest in growth upfront and to optimize the margins over time. I think that the portfolio over time, we expect to have quite compelling margins.

[Operator]

Your next question comes from the line of Nick Jones from Citizens. Your line is open. Your next question comes from the line of Ken Gorelski from Wells Fargo. Your line is open.

[Ken Gawrelski, Analyst at Wells Fargo]

Thank you very much. Appreciate the question. Brian, a question for you on how do you think about the ADRs and the opportunity? The balance, if you go back over the last couple of years, you've talked about making, Airbnb's more affordable, and there's been various initiatives, including the rooms initiative to make, Airbnb's more affordable. Do you you expect maybe more flexibility in ADRs and room night prices, on Airbnb's relative to hotels a period of weaker consumer spending, especially in The U.

[Ken Gawrelski, Analyst at Wells Fargo]

S, maybe in urban areas? I'm just curious as how you think about the balance between potential ADRs versus room nights in North America. Thank you.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Sorry. I'm not clear what the question is.

[Ken Gawrelski, Analyst at Wells Fargo]

I'm sorry. Let me rephrase. Do you as you think about the opportunity if you just think about the balance between pricing ADRs, average daily room nights relative to total room nights volume, do you think that there's an opportunity to to have more for your host to have more flexibility on ADRs and to see more affordability drive better room nights and and ultimately greater share over the long term in a in a period where there's maybe more consumer, consumer weakness or or, some pressure on on the consumer wallet?

[Brian Chesky, Co-Founder and CEO at Airbnb]

Yeah. Okay. Yeah. Absolutely. The answer is, yes.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And I'll I'll try I'll try to explain why this is the case. You know, hotels let let us contrast two hotels. I assume you're referring to Airbnb versus hotels. So hotels have most hotels, hotel rooms all hotel rooms have a cost base. Right?

[Brian Chesky, Co-Founder and CEO at Airbnb]

And so they need to build in a profit margin on their, you know, on their room. They call this RevPAR revenue brand. And, and it's it's really important that for them that they stay within some margin. The vast majority of people on Airbnb list only their home only on Airbnb. We believe most listings are exclusive to Airbnb, and most of these homes are either primary homes or the second homes.

[Brian Chesky, Co-Founder and CEO at Airbnb]

But the homes don't exist to list on Airbnb. They exist for somebody to live in summer all the time. And so most of the income that people make on Airbnb the average host in Airbnb in The United States, for example, makes about $15,000 a year. This is supplemental income. And so it's all up it's it's typically all upside for them.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So what this means is there's typically a little bit more flexibility on an Airbnb host than, say, hotel to be able to move their prices up or down because, you know, like, if they didn't rent on Airbnb they before Airbnb, they didn't rent. That night was completely lost. So, really, any price is upside for them as compared to hotel. One of the things we do is we try to build really great host tools for them, and four out of five hosts on Airbnb are now using our host tool. To give you a couple examples, compare listings.

[Brian Chesky, Co-Founder and CEO at Airbnb]

More than 2,000,000 listings in Airbnb have used the compare listings tool. What the compare listings tool does, it shows you how your price compares to prices of similar Airbnbs in your area. We found that when host host have more visibility, they tend to provide more competitive prices. Another is weekly and monthly discounts. Now the vast majority of hosts on Airbnb offer a discount if you rent by the week or if you rent by the month.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So these are just some of the tools that we offer, and we're gonna continue to offer more and more tools so our hosts are increasingly responsive. But, yes, to answer your question, we do believe that there's more flexibility. And, ultimately, while a higher ADR can benefit Airbnb's financial outlook on the short term, In the long run, you know, affordability aligns our interest with customers, which is the best long term incentive to alignment to align with, shareholders. So we always wanna drive as much value as possible to our guest.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Can can I just also add that when we test elasticity, we often see that, you know, driving down prices is more than, compensated by increased volume. And that's why when we think about our pricing tools, we are not trying to necessarily drive host to offer higher prices. We're trying to get them to the best price for their listing that will drive more bookings. And in many cases, that will be to reduce your price.

[Operator]

Your next question comes from the line of Kevin Kopelman from TD Cowen. Your line is open.

[Kevin Kopelman, Managing Director - Equity Research at TD Cowen]

Thanks. Another one on ADRs. Given FX, the guide seems to point to the softer ADRs for q two. How much of that is geo mix versus softening within the key regions or other factors? And what, and what are you assuming for FX benefit in q two?

[Kevin Kopelman, Managing Director - Equity Research at TD Cowen]

Thanks.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Yeah. So if we if we look at the guide, for q two, what what what is happening? We're seeing a couple of different factors. One is there is underlying real price appreciation, which is which is a a tailwind in terms of bringing prices up. There is a movement in terms of the FX headwinds.

[Ellie Mertz, Chief Financial Officer at Airbnb]

So the FX headwind relative to q one is dissipating in q two. And then the third component is, as our business mix shifts away from North America in particular, that is a headwind. Right? It it moderates prices because The US prices are significantly above, frankly, ADRs around the world. I would note we do we do not get the same FX benefit as maybe other platforms in that our exposure to, for example, the euro is is much more limited than some other platforms.

[Operator]

Your next question comes from the line of Tom White from D. A. Davidson. Your line is open.

[Tom white, Managing Director, Senior Equity Analyst at D.A. Davidson Companies]

Great. Thanks for taking my question. Just one on the international expansion markets. I was hoping you guys could just update us on kind of how those markets are tracking in terms of profitability relative to your kind of core markets, both in terms of like absolute level and also just curious about the kind of pace at which they're tracking that way. And then if you could just share a little color on exactly what kind of investments you guys are finding or helping in those markets or helping drive the acceleration in growth you talked about?

[Tom white, Managing Director, Senior Equity Analyst at D.A. Davidson Companies]

Thanks.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Sure. So when we think about, you know, our expansion markets, what I would say generally about this business is we're able to generate very attractive contribution profit at a variety of ADRs, and that typically is the biggest determinant on the overall level of profitability at a market level, like the the the relative ADR. I would say, broadly speaking, when we think about investing in a new market, there is some fixed cost upfront in terms of, say, launching brand campaigns, and that does drag margins down. But over time, we are able to, you know, scale into the marketing load as well as make some efficiencies in terms of the underlying variable costs if they have not already been localized. And so I'll go back to my first comment that, you know, independent of of a pretty wide range of ADRs, we're able to deliver very attractive unit economics across the globe.

[Ellie Mertz, Chief Financial Officer at Airbnb]

In terms of, like, what the types of investments we're making in those markets are, it really falls into two very simple buckets. One is product and the other is marketing. On the product side, we have been taking a localized approach to look at specific markets to say, what do we need to do to either the the the global product or, for example, the payment stack to enable more local customers to to use Airbnb. And, you know, we've been very choiceful with those localizations to make sure that they're they're worth the effort and they aren't too localized. But when they're important, they can be quite meaningful in terms of driving growth in a particular market.

[Ellie Mertz, Chief Financial Officer at Airbnb]

I think in some of the obvious cases are around adjusting the the booking flow to be locally nuanced and, in particular, to offer the right payment methods for a specific type of of customer. So that's one area of investment on product. The next is is obviously marketing. When we talk about going into a particular expansion market, what that means is that we are applying effectively the full funnel of our marketing approach to that market. So it's inclusive of some amount of brand marketing, performance marketing, comms, policy, etcetera, such that we are, you know, hands on to deliver differential outcome for that market, versus the light touch approach of some of our long tail markets.

[Operator]

Your next question comes from the line of Steven Ju from UBS. Your line is open.

[Stephen Ju, Analyst at UBS Group]

Great. Thank you. So Brian and Ellie, I think we and the analyst community sort of out searching in are always probably overly focused on the advertising and the monetization angle of product development. And, you know, both, can we talk about, like, in recenter where your priorities are? Because based on everything that you're talking about, whether it's experiences or the international expansion, the cohosting and, you know, Brian, your prior analogy with lateral things to sell like Amazon, it does sound like we should be thinking more about transaction growth versus things that you are doing to capture a greater portion of the unit economics.

[Stephen Ju, Analyst at UBS Group]

So can you kind of recenter us in terms of, like, what do you think the the primary drivers of gross bookings will be and revenue will be? Thanks.

[Brian Chesky, Co-Founder and CEO at Airbnb]

I mean, maybe I can talk at a high level, Ellie. Feel free to, elaborate. But, yeah, you have the right mental model. I've always believed that what we should do is focus on the things that are either most perishable opportunities or things that our guests and hosts are asking for. And so most of what we've done is to try to do one of those two things.

[Brian Chesky, Co-Founder and CEO at Airbnb]

So whether we're increasing reliability, affordability, making it be more more use more easier to use, those are really in response to what our guest and hosts are telling us. That's, I'd say, the first priority is being, responsive to their feedback and listening to them. And the vast majority of the 500 improvements we made over the last three years was based on feedback from our guests and hosts. So then everything else is really a matter of, you know, just a sequencing. And the sequencing that we've chosen is just based on some of the opportunities that are most perishable.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And so, frankly, number one would actually be beyond improving our core business. It would be international expansion. And so the international markets are critical. We think, you know you know, like, what Latin America and what Asia have in common, for example, is that the average population is younger in these markets. They're more likely to be on social media and therefore also less predisposed to staying in hotels.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And there's huge populations, huge economies growing very, very quickly. So we think these are huge opportunities for investment. And one of the most important things that we can do at Airbnb is to continue to grow our network effect, and this network effect is really a global network. And so we really wanted to match the travel corridors. And then, obviously, expanding beyond a place to stay, we are prioritizing things that increase, yeah, volume growth versus human economics.

[Brian Chesky, Co-Founder and CEO at Airbnb]

That being said, there are a number of things that we are looking at that would increase monetization of Airbnb, especially on the host side. And the reason why is because almost everything we've done for host, we've given away without charging anything incremental from a take rate standpoint in the last five years. You know, we've increased air cover coverage to $3,000,000. We don't charge more. You know, we can go down the list of other things that we offer.

[Brian Chesky, Co-Founder and CEO at Airbnb]

We don't take any additional take rate on, cohost listings. They just host an Airbnb. We wanna grow unit volume. So we think that, growing network effect, increasing market share is the most important priority for us in the near term.

[Operator]

Your next question comes from the line of Deepak Mathivanan from Cantor Fitzgerald. Your line is open.

[Analyst]

Thanks guys. This is Jack on for Deepak. Just one for you real quick. Are you guys seeing hosts adjust pricing for some of the early demand softness in The US? And kind of, moreover, do you expect the marketplace to be relatively price sticky, or is it gonna be more dynamic should the macro get any worse from here?

[Analyst]

Thank you.

[Ellie Mertz, Chief Financial Officer at Airbnb]

I would say we haven't seen any, meaningful shift to the downside in terms of host resetting their pricing. But to, you know, parts of of the call earlier, I do think there's considerable opportunity for us to encourage hosts, to bring down their their prices generally, but but certainly in this macro to capture more demand. So I would call it an opportunity as opposed to, something that we're seeing hosts actively do today.

[Operator]

Your next question comes from the line of Connor Cunningham from Melius Research. Your line is open.

[Conor Cunningham, Analyst at Melius Research LLC]

Hi, everyone. Thank you. So airlines and hotels spend a ton of time talking about the resiliency of loyalty programs during downturns. I know you guys don't want to copy them, but can you just give us some updated thoughts on a subscription model or a loyalty program? It just seems much more likely that that thing is that type of opportunity is on the table after you you move into experiences or or something else along that line.

[Conor Cunningham, Analyst at Melius Research LLC]

So if you could just talk about that, that would be helpful. Thank you.

[Brian Chesky, Co-Founder and CEO at Airbnb]

Yeah. I mean, totally agree with you. I think it is absolutely something that we're looking at. I've been actively thinking about this as well. What I what I've always what I've always was very intentional about was that we never wanted to necessarily have a, essentially, like, a point subsidy program, which to me is in a way the price for not having a lot of loyalty on your platform.

[Brian Chesky, Co-Founder and CEO at Airbnb]

And, we have a lot of loyalty. You know? The you know, a lot of these a lot a lot of these, other programs, they try to get people to join a loyalty program so they even have an account information. They even have a relationship with a guest. Everyone at Airbnb, we verify their identity.

[Brian Chesky, Co-Founder and CEO at Airbnb]

The vast majority of people have profiles. We have 200,000,000 verified identities on the platform on Airbnb today. I think that's more than any or almost any other platform in The United States, for any not just travel, but beyond travel. You know, around two out of three people who book in Airbnb leave a review. So we have really good retention.

[Brian Chesky, Co-Founder and CEO at Airbnb]

We have really good participation. But I've always thought that there could be a membership program, potentially even a paid subscription or membership program Airbnb where you pay more to get, you know, differentiated offerings and better service. And I think we're looking at a variety of models there where if not necessarily subsidizing the business we already have, but, you know, really increasing usage and increasing share of wallet. And I think that, you know, Amazon Prime, one of the things that's compelling about it is they actually were able to get people not just to come back to Airbnb to Amazon, but to use it more frequently. And so I think any program that increases share of wallet or gets people not necessarily to come back to Airbnb, but to use it more frequently for a greater part of their lives, not necessarily just every year, but imagine every month or every week, including in your own city would be really, really compelling to us.

[Operator]

Your next question comes from the line of Alex Sprignall from Redburn Atlantic. Your line is open.

[Alex Brignall, Managing Director - Research Analyst at Redburn Atlantic]

Good evening. Thank you very much for taking the question. As of Q4 results, when you talked about the margin target, said that FX was a headwind because of the transaction exposure that you have, more of your costs and dollars. That's obviously and I think you I'm not 100% sure. I think you said that margin certainly wouldn't have gone down as much, maybe not even down if FX wasn't going against the piece.

[Alex Brignall, Managing Director - Research Analyst at Redburn Atlantic]

Tell me I'm wrong, I am on that. Obviously, FX is done entirely the other way now and it would be a tailwind to your numbers. So I would have imagined that all else equal, which is what it's not, that the margin target for the full year would have seen a tailwind from the fact that FX will benefit your U. S. Dollar cost base relative to your revenues.

[Alex Brignall, Managing Director - Research Analyst at Redburn Atlantic]

Could you just talk about why that's not happening? Thank you.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Yes. Thanks for the question, Alex. Certainly, yes. Between now and February since, sorry, since February, we have seen a change in the in the FX rates. As of February, we were assuming that FX would be a pretty meaningful headwind for the remainder of the year.

[Ellie Mertz, Chief Financial Officer at Airbnb]

Fast forward to where we are today, it's obviously less of a headwind. A couple of things that that I would note. One is that we you know, the the the positivity we've seen out of Europe in terms of the weakening of the dollar is not necessarily relevant for our entire portfolio. We do have some we do continue to have some FX headwinds out of Latin America that do impact a certain portion of our business. Second is we do do some revenue hedging such that, you know, the tailwind that that some are seeing does not entirely materialize in terms of our hedge portfolio for revenue.

[Ellie Mertz, Chief Financial Officer at Airbnb]

And then I would say third, in terms of managing to the guidance that we provided you, there are some puts and takes with regard to overall volume, underlying ADR as well as FX adjusted ADR.

[Operator]

And that concludes our question and answer session. I will now turn the call back over to Brian for closing remarks.

[Brian Chesky, Co-Founder and CEO at Airbnb]

All right, everyone. Well, thanks for joining us today. We're incredibly proud of the results, and I'm really excited to share what we've been working on at Airbnb. So make sure to watch our twenty twenty five summer release to see what's next. Until then, thank you.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Angela Yang, Director of Investor Relations
• Brian Chesky, Co-Founder and CEO
• Ellie Mertz, Chief Financial Officer

Analysts

• Justin post, Managing Director at Bank of America Merrill Lynch
• Richard Clarke, Managing Director at Bernstein
• Mark Mahaney, Senior Managing Director at Evercore ISI
• Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.
• John Colantuoni, Equity Research Analyst, Internet at Jefferies
• Lee Horowitz, Co-Head Internet Equity Research at Deutsche Bank
• Ron Josey, Managing Director at Citi
• Justin Patterson, Managing Director at KeyBanc Capital Markets
• Analyst
• Ken Gawrelski, Analyst at Wells Fargo
• Kevin Kopelman, Managing Director - Equity Research at TD Cowen
• Tom white, Managing Director, Senior Equity Analyst at D.A. Davidson Companies
• Stephen Ju, Analyst at UBS Group
• Conor Cunningham, Analyst at Melius Research LLC
• Alex Brignall, Managing Director - Research Analyst at Redburn Atlantic