Airbnb, Inc.

Best of 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.

Thank you. Good afternoon and welcome to Airbnb's third quarter of 2023 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 2023. 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'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 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. 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 GAAP results. With that, I'd like to pass the call to Brian.

All right. Well, thank you, Ellie. And good afternoon, everyone. Thanks for joining. I'm excited to share results with you. Q3 was another strong quarter for Airbnb. We had over 113 million nights and experiences booked. Revenue of $3.4 billion grew 18% year over year. Net income was $4.4 billion. Now, this includes a one-time income tax benefit from the release of a valuation allowance of $2.8 billion. But even excluding this tax benefit, adjusted net income was $1.6 billion, our highest ever. It represented an adjusted net income margin of 47%. And free cash flow for the quarter was $1.3 billion. In fact, on a trailing 12-month basis, our free cash flow was $4.2 billion, which is also our highest ever. And because of our strong cash flow and balance sheet, we repurchased over $500 million of our stock. Now, during the quarter, we saw a number of positive business highlights. First, we have added nearly 1 million active listings this year. Our supply grew 19% in Q3 compared to a year ago. We once again saw double-digit supply growth across all regions, with the highest growth in regions with the highest demand. Urban and non-urban supply increased at nearly the same rate. And we saw relatively similar supply growth among individual and professional hosts with a majority of new listings exclusive to Airbnb. Second, Q3 was a record travel season on Airbnb. Nights and experiences booked grew 14% in Q3 compared to a year ago. We saw an acceleration in nights growth across all geographies. And we were particularly encouraged by the growth of first-time bookers during Q3. And we saw more nights than ever booked in the Airbnb app, with 53% of gross nights booked in the app compared to 48% in the same period last year. And finally, international expansion markets are gaining momentum. Cross-border nights booked increased 17% in Q3 compared to a year ago. In Asia Pacific, our business has fully recovered to pre-pandemic levels. And we're seeing significant growth and Asia Pacific markets such as Taiwan, Thailand, and Indonesia, all experiencing year-over-the-nights growth above 30% on an origin basis. Now, we've been able to achieve these results by continually making progress on our three strategic priorities. First, we're making hosting mainstream. We've been focused on making hosting as popular as traveling, and our Q3 results show that our approach is working. We ended the quarter with our highest number of active listings, and we saw strong active listings growth across all regions and market types. And hosts are benefiting. During Q3 alone, Airbnb hosts earned more than $19 billion. We'll continue growing supply by raising awareness around hosting, making it easier to get started, and improving the overall experience for hosts. Second, we're perfecting our course service. We've collected millions of pieces of feedback on how to improve Airbnb. And two years ago, we started doing twice a year product releases to address this feedback. And since then, we've launched more than 350 new features and upgrades across our entire service. And in the past year alone, this has included things such as improved customer service, total price display, and new tools to help host set more competitive prices. These upgrades are paying off for both guests and hosts. For example, We redesigned our tool and we made it easier for hosts to add discounts and promotions. And now, almost two-thirds of hosts offer weekly or monthly discounts. We also added a new feature called Similar Listings that lets hosts see listing prices in the area so they know what to charge. And since we launched the Similar Listings tool, nearly one million hosts have used this feature. And in September, We shared progress we've made to help lower cleaning fees, reduce prices, and improve search and reliability. We have even more improvements coming as part of our November 8th winter release next Wednesday, where we'll introduce dozens of new features aimed at making Airbnb more reliable. And finally, our third strategic priority is to expand Airbnb beyond our core. Now, we've made significant progress in the past few years in building a strong and profitable business. And in addition to laying the foundation for new services and offerings, we've been focused on international expansion. We are investing in underpenetrated international markets, and we're seeing great results. Following the success we've seen in recent quarters in Germany and Brazil, Korea has now become one of our fastest-growing countries compared to 2019, with gross nights booked, 54% higher than they were in Q3 2019 on the origin basis. As international travel continues to recover, we're building greater momentum for Airbnb and under-penetrated markets. So those are results for Q3. With that, Dave and I look forward to answering your questions.