Airbnb, Inc.

Good afternoon, and thank you for joining Airbnb's earnings conference call for the second quarter of 2021. As a reminder, this conference call is being recorded and will be available for replay from the investor relations section of Airbnb's website following this call. I will now hand the call over to Ellie Merckx, VP of Finance. Please go ahead.

Good afternoon, and welcome to Airbnb's second quarter of 2021 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, Dave Stevenson. Earlier today, we issued a shareholder letter with our financial results and commentary for our second quarter of 2021. 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 remainder of time on Q&A. Before I turn it over to Brian, I'd 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 violence 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. 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 reconciliations to 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 will pass the call to Brian.

all right thank you ellie and hey everyone thanks for joining us today i'm dialing in from an airbnb listing in italy and i'm very excited to share our q2 results with you since the beginning of the year we've been preparing for the travel rebound after months of being stuck at home millions of people have been yearning to travel explore the world and connect with others and we anticipated a travel rebound unlike any other in history and in q1 we saw the start of this rebound. And now that Q2 is behind us, we can definitively say that the travel rebound is upon us and Airbnb is leading the way. But as we predicted, travel is different than before. Airbnb has benefited from our adaptable business model, which is able to meet the changing needs of our guests. But we haven't just been sitting passively around waiting for travel to return. For the past year, We've been relentlessly driving product innovations to meet this historic moment. And as a result, Airbnb has emerged from this crisis faster than others, and we're better positioned for the future of travel. Now, while we recognize the persistence of COVID and the Delta variant, we expect Q3 to be our strongest revenue quarter ever. The fact that we expect Q3 revenue to be our highest revenue quarter ever speaks to the inherent resiliency of our business. So now, turning to our Q2 results. As vaccination rates increased and travel restrictions lifted in Q2, we saw consistent strength in North America, followed by significant recovery in Europe. One year ago in Q2, our business was significantly impacted with the onset of COVID. Now, like many others, our year-over-year comparison to 2020 does show a dramatic improvement, but What is most notable are our results relative to pre-COVID levels. Across all key metrics, we nearly met or exceeded our Q2 2019 performance. Q2 nights and experiences booked nearly tripled from a year ago. More importantly, Q2 nights and experiences booked nearly matched pre-COVID levels in 2019. Gross booking value of $13.4 billion more than quadrupled from a year ago, and it also shot up above 2019 levels by 37% based on the recovery of nights combined with the strength of our ADR. Meanwhile, Q2 revenue of $1.335 billion also nearly quadrupled from a year ago, and it exceeded 2019 levels by 10%. What this demonstrates is an acceleration in our recovery from Q1. Our Q2 results not only demonstrate our leadership in the Travel Rebound, but also our continued operating discipline. Our adjusted EBITDA profit was $217 million. Now, this represents a 16% EBITDA margin. This was more than $600 million of improvement in EBITDA from a year ago. And it represents 20% or 2,000 basis points margin expansion from 2019. And this is on a similar level of revenue. Now, over the past year, as our top line recovered, we consistently focused on improving our profitability. For example, over the last four quarters, We've improved EBITDA margins on average more than 20% every quarter as compared to periods in 2019. Now, that is a 2,000 basis point improvement on average every single quarter. And we've done this by improving our variable cost, by driving up marketing efficiency, and by very tightly managing our fixed cost. Now, I'm really proud of these results. And what they demonstrate is that we are emerging from this crisis as a stronger and more efficient company. Now, turning to business highlights and travel trends, despite the continued impact of COVID around the world, we have seen clear evidence that travel is recovering. We're incredibly encouraged by what we've seen in Q2. And what we've seen is an accelerating pace of global travel, particularly in Europe, as well as continued popularity of non-urban and domestic destinations. In Q2, We had the highest number of gross nights booked of any quarter in our history. And we just had the biggest night on Airbnb since the pandemic began. Last Saturday night, more than 4 million guests from around the world were staying in an Airbnb. That is more people than the entire population of Los Angeles. And we're also seeing travelers once again cross borders and visit cities. These two categories of travel have been historic strengths of Airbnb, and we're really excited to see them begin to recover. But at the same time, the way that people travel and live continues to change. We believe that many of the new booking trends that emerged over the past year are here to stay. People are traveling to many more destinations than before, and when they travel, they're staying longer. We believe these two categories of travel are, in fact, here to stay. And as a result, what we focused on are product innovations that support these new ways that people travel. You see, many people have a greater freedom about where and when they travel. And we've improved our product to better meet their needs. Our new search products offer guests the flexibility they want when planning and booking trips. And finally, we're seeing more people around the world consider hostings. We ended Q2 with the largest number of active listings in Airbnb's history. Now, there are a couple of reasons for this. First, our demand is driving supply. This is what's so powerful about our model. For example, in Q2, our highest supply growth was actually in high demand destinations. And second, our marketing and product initiatives have been really accelerating to support host recruitment and they're working. So now let me go into a little more detail what we've been doing to prepare for and support this travel recovery. Now, as a reminder, our single priority in 2021 has been to prepare for the travel rebound. To do this, we've been perfecting the end-to-end experience of our core service. And this includes four themes. First, Educating the world about hosting. Second, recruiting more hosts. Third, simplifying the guest journey. And finally, delivering world-class service. So let me just briefly give you an update on how we're executing on each of these four areas. So first, we're educating the world about what makes Airbnb different, and that is hosting. In Q1, we launched our first large-scale marketing campaign in five years, made possible by hosts. and we expanded this campaign to Q2. We're educating guests about the benefits of being hosted, and we're also inspiring more people to become hosts. Now, we continue to be really encouraged by the results of this campaign in terms of traffic, first-time bookers, interest in hosting, and brand favorability. Second, we are recruiting more hosts, and we are setting them up for success. On May 24th, just a few months ago, we launched a completely redesigned host onboarding flow that makes it simpler for anyone to start hosting. This new flow has made it faster to become a host, which has helped drive our listings growth in Q2. Third, we are simplifying every part of the guest experience. On May 24th, we expanded the tools for guests to offer more flexibility when they're searching for a place to stay. We announced flexible dates, flexible destinations, and flexible matching. And all three of these features are to support the new ways that guests are looking to plan and book trips. And finally, whenever our hosts or guests need us, we must deliver world-class service. So we recently launched a redesigned help center. We've more than tripled our supported languages, and we've updated our safety resources. And all of this is to ensure that we are supporting our guests and hosts whenever they need us. So to summarize, travel is recovering and our Q2 results show that Airbnb is leading the way. For the past year, we've been preparing for this rebound. We've driven product innovations to support changes to the way people are traveling and living all over the world. And as a result, we've emerged from this crisis faster than others and as a stronger, more efficient company. So with that, I look forward to answering your questions.