Airbnb, Inc.

Good afternoon, and thank you for joining Airbnb's earnings conference call for the fourth quarter of fiscal 2020. 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 Ian Lee, Airbnb's head of investor relations. Please go ahead.

Thank you. Good afternoon and welcome to Airbnb's fourth quarter of fiscal 2020 earnings call. On the call today, we have Airbnb's co-founder and CEO, Brian Chesky, and our chief financial officer, Dave Stevenson. Earlier today, we issued a shareholder letter with our financial results and commentary for our fourth quarter of fiscal 2020. These items were also posted on the investor relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remaining time on Q&A. Before I turn it over to Brian, I'd like to remind everyone that we'll 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 on the forward-looking statements in our shareholder letter and our prospectus file with the SEC on December 11th, 2020. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also during this call, we will discuss some non-GAAP financial measures. We provided a reconciliation for the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. And with that, I'll pass the call to Brian.

Thank you very much, Ian, and thank you all for joining today. I am excited to share our results for the first time as a public company. I want to start by acknowledging that we are still in a pandemic and a lot of people are hurting, so we know how lucky we are to be in the position we're in. Now, before I go into our results, I want to share a theme that will run through each of our earnings calls. When we started Airbnb, it was about more than just travel. In 2007, my roommate Joe and I inflated three airbeds one weekend and turned our apartment into an airbed for breakfast. We hosted three guests that weekend, Michael, Kat, and Amol, and in doing so became the first host. Our guests arrived as strangers, but they left as our friends. And the connections we made that weekend made us realize maybe there's a bigger idea here. Since then, we've grown from two hosts in San Francisco to four million hosts all around the world. The idea of Airbnb is only possible because of a host. Without a host, you're an outsider to the places you visit. Without a host, you have nowhere to stay but crowded tourist districts or resorts. A great host does more than share their space. They provide a deeper connection to the places you visit and the people who live there. And they set the stage for you to be able to spend meaningful time with the people you travel with. So this is why, 14 years later, hosting is still at the center of Airbnb. As the world continues to change, people's fundamental need for connection and belonging will not. This is what we will remain focused on day in and day out, quarter after quarter. With that, let me talk about our results. 2020 was a year when nearly everything changed, the way we live, the way we work, and the way we travel. Airbnb changed as well. We started 2020 by preparing for our IPO, only to have to put on hold once the world went into lockdown. But then, in the face of the biggest crisis in the travel industry has ever seen, our business proved to be resilient, and our model was able to adapt. Through the crisis, we also sharpened our focus. We made many difficult decisions while staying true to our core principles, and we became a stronger company as a result. And we succeeded in going public after all. Now, despite a difficult year, we are encouraged by our resilient business performance. In the depths of the pandemic, we have forecasted that revenue in 2020 could be less than half of 2019 levels. Yet, we delivered $3.4 billion of full-year revenue in 2020, down only 30% compared to the year earlier. In Q4, our revenue of $859 million was down only 22% year-over-year, despite the second wave of COVID cases and widespread lockdowns. In addition to this top-line resilience, we also demonstrated focus and discipline to protect our profitability. Our adjusted EBITDA in 2020 was slightly better than 2019, and this was despite revenue being down $1.4 billion. Our adjusted EBITDA in Q4 2020 was nearly $250 million better than Q4 2019. This was despite revenue in Q4 2020 being $250 million lower than a year earlier. So we're able to achieve these results because the adaptability of our business model and because of our focus in financial discipline. We believe these two factors set us up well for the coming travel rebound. And travel is coming back. Nearly a year after lockdowns began, we believe people are yearning for what's been taken away from them, travel and human connection. When travel returns, it will be about connection. People will want to spend meaningful time with their family and friends. And because of this, as restrictions lift and borders begin to open, we expect there will be a significant travel rebound. So in 2021, our single priority is to prepare for the coming travel rebounds. To do this, what we're going to do is perfect the entire end-to-end experience of our core service. First, we're going to educate the world about what makes Airbnb different, hosting. Through our marketing and communication, we will educate guests that being hosted is a better way to travel. In addition, we will inspire more people to become hosts. Next, we will recruit more hosts and set them up for success. Once we've educated people about hosting, we'll simplify the onboarding process so it's easier for hosts to get started, and we are improving our tools and support to help them succeed. Third, to make it easier for guests to find the perfect stay, we are simplifying every part of the guest experience, as well as improving our search functionality to support more flexible travel patterns. And finally, whenever our hosts or guests need us, we need to deliver world-class service. So we're actively fixing product issues that drive community contacts, We're scaling our operations to meet the demand and continually enhancing our service. So that is our plan for 2021. Educate the world about hosting. Recruit more hosts and set them up for success. Simplify the guest experience and deliver world-class service. I want to end by just highlighting two things that we launched this week that I'm really proud of. On Monday, we launched our first large-scale marketing campaign in five years, made possible by hosts. Even though the brand of Airbnb is mainstream, the idea of hosting is not yet. Our goal with this campaign is to make a long-term investment in educating the world about our hosts. This campaign will help our guests to understand the benefits of being hosted and how this is unique to Airbnb. And it will create more awareness around the idea of becoming a host by making it more mainstream and aspirational. By using real photos of real guests on real Airbnb trips, this campaign shows what the real experience of being hosted is like, and I think it speaks directly to the need for a connection that people all over the world are feeling after nearly a year of isolation. So that is made possible by hosts. And second, finally, flexible dates. On Tuesday, we launched a new feature that we call flexible dates. Today, more people are working from home, and that means more flexibility about when and where they travel. Because of this, we're seeing a shift in how people search on Airbnb. In 2021 to date, almost 40% of people searching on Airbnb have been flexible in terms of their date or their location of their stay. This is a huge change in the search paradigm in travel. Flexible dates allows guests to search for homes in a whole new way. Instead of having to select the exact dates for a trip, guests are able to do broader searches. Now you can search for a weekend getaway, a week-long vacation, or even a month-long stay sometime in the next few months. This allows our guests to browse more options while being flexible on the exact dates of their trip, and we think this will be a very popular feature coming this travel season. So that's our plan for this year. to prepare for the coming travel rebound. We're excited about the year ahead. And with that, I look forward to answering your questions today.