Airbnb, Inc.

Good afternoon and thank you for joining Airbnb's earnings conference call for the third quarter of 2022. 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 Mertz, VP of Finance. Please go ahead.

Good afternoon and welcome to Airbnb's third quarter of 2022 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 third quarter of 2022. 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 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, pressed or implied in the forward-looking statements due to a variety of factors. These factors are described under 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. 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 our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. With that, I will pass the call to Brian.

All right. Well, thank you, Ollie. And good afternoon, everyone. Thanks for joining. You know, Q3 was another record quarter despite macroeconomic headwinds. We had nearly 100 million nights in experiences booked, which is up 25% year-over-year. Gross booking value was $15.6 billion. This is up 31% year-over-year. Revenue grew 29% year-over-year to $2.9 billion, our highest ever. And when you exclude foreign exchange, our revenue increased 36% year-over-year. Now, we also had our most profitable quarter ever. Net income was $1.2 billion. And this is up $400 million from a year ago. Now, this represents a 42% net income margin. Adjusted EBITDA was $1.5 billion, also our highest ever. And we generated $960 million of free cash flow. In fact, over the last 12 months, we've generated $3.3 billion in free cash flow. What our Q3 results demonstrate is that Airbnb continues to drive growth and profitability at scale. And even with the macroeconomic uncertainties, we believe that we're well positioned for the road ahead. Now, why is this? Well, new use cases, such as long-term stays and non-urban travel, are here to stay. And this is because millions of people now have the flexibility that they didn't have before the pandemic. At the same time, we've seen recovery in urban and cross-border travel, two of our strongest segments before the pandemic. And just like during the Great Recession in 2008 when Airbnb started, people today are especially interested in earning extra income through hosting. Now, during the quarter, we saw a number of positive business trends. First, Guest demand on Airbnb remains strong. Globally, we exceeded 90 million guest arrivals during the quarter. This is another record. Now, even with macroeconomic headwinds, nights and experiences both increased 25%. And during the quarter, we also continued to see longer lead times, supporting a stronger backlash for Q4. Second, guests are increasingly returning to cities and crossing borders. both segments continue to accelerate. Cross-border gross nights booked increased 58% compared to a year ago. High-density urban nights booked grew 27%. And now even as these two segments return, demand for domestic and non-urban travel remains strong. Third, guests continue to stay longer on Airbnb. Over the last year, we've seen many companies require their employees to return to the office. And at the same time, long-term stays remain 20% of our total gross nights booked on Airbnb. And finally, four, our host community continues to grow. We believe there are several factors that are driving this growth. The first reason is demand drives supply. For instance, in Q3, as guests were returning to cities, we saw urban supply accelerate. Second, since Airbnb began in 2008, hosts have consistently turned Airbnb to earn extra income. In fact, since 2008, hosts on Airbnb have earned $180 billion in our platform. Third, over the last year, we've made several product improvements to help onboard and support our hosts. But we're not stopping there. On November 16th, we're going to introduce an all-new, super easy way for millions of people to turn to Airbnb their homes as part of our winter release. We're also delivering a major upgrade to AirCover that provides even more top-to-bottom protection for every host. Now, with these upgrades and more, we aim to unlock the next generation of hosts and improve the experience for more than 4 million people that are already hosting. So, just to recap, we had a record Q3. Nights and experiences booked were our highest Q3 ever. Revenue and adjusted EBITDA were record highs. Free cash flow was $960 million, and in the last 12 months, we've generated $3.3 billion in free cash flow.