Airbnb, Inc.

Good afternoon and thank you for joining Airbnb's earnings conference call for the third quarter of 2024. 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 it over to Angela Yang, Director of Investor Relations. Please go ahead.

Good afternoon and welcome to Airbnb's third quarter of 2024 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, Allie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our third quarter of 2024. These items were also posted on the investor relations section of Airbnb's website. During the call, we made brief opening remarks and then spent 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 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 a shareholder letter and are 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 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 reconciliation 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'll pass the call to Brian.

All right, good afternoon, everyone, and thanks for joining. Airbnb had a strong third quarter. Nights and experiences both accelerated throughout Q3 and into Q4. Despite a slower start to the quarter due to shorter booking lead times compared to last year, bookings grew steadily each month, returned to double-digit growth by the end of Q3. We had 123 million nights and experiences booked. Revenue grew 10% year-over-year to $3.7 billion. Net income was $1.4 billion, representing an income margin of 37%. And we generated $1.1 billion of free cash flow. In fact, our total trailing 12-month free cash flow was $4.1 billion, which allowed us to repurchase $1.1 billion per shares in the quarter. And as of the end of Q3, we had $4.2 billion remaining on our repurchase authorization. Now during Q3, we continue to make progress across our three strategic initiatives, which are making hosting mainstream, perfecting our core service, and expanding beyond the core. Now I'm going to share a few highlights about each. First, we're making hosting mainstream. We are focused on making hosting just as popular as traveling on Airbnb. Today, we have over 8 million active listings. with growth across all regions and market types. To retain and track new hosts, we prioritize making hosting easier. Last month, as part of our 2024 winter release, we introduced CoHost Network, an easy way to find the best local hosts to manage your Airbnb. CoHost are some of our most experienced hosts. They provide personalized support ranging from listing setup to managing bookings and communicating with guests. Second, We're perfecting our core service. Over the past three years, we've launched more than 535 new features and upgrades to make Airbnb a better service. Our 2024 winter release included over 50 upgrades for guests that make Airbnb a more intuitive and personalized app. This includes features like recommended destination, suggested search filters, and personalized listing highlights. We're also focused on one of the top issues for guests, listing quality. Since last year, we've removed over 300,000 listings that failed to meet guest expectations, and we'll continue to invest in improving the quality of guest stays. Finally, we're expanding beyond our core. Outside of a core market, there are many countries and regions that remain under-penetrated, and we're focused on these expansion markets as part of a global market strategy, and we're seeing great results. In Q3, The growth rate of Nicebook in our expansion markets is more than double that of our core markets. Now, in addition to driving growth in our expansion markets, we're also preparing for NRF&B's next chapter, which will take us beyond accommodations. And you'll see more about this next year. We also saw a number of positive business highlights in Q3. First, guest demand accelerated throughout the quarter. As I mentioned earlier, After a slower start in July, bookings accelerated each month in Q3. Global lead times also normalized throughout the quarter. Now, part of this growth has been driven by our app strategy. Nights booked on our app increased 18% year-to-year in Q3. App bookings now account for 58% of nights booked. Now, this is up from 53% in the same period last year. And we also saw continued growth of first-time bookers, which is the highest growth among young travelers. This is quite exciting. And I'm really excited to share that we recently surpassed 2 billion guest arrivals on Airbnb. Second, our market strategy, our global market strategy is working. We continue to drive growth by investing in under-penetrated markets. While our timing and investment level will vary by market, our strategy is consistent to make Airbnb local and relevant in more places around the world. Now, in each market, we focus on finding product market fit, increasing brand awareness, and driving traffic. And I want to just use one country as an example, which is Japan. Airbnb is still pretty new in Japan, and it's pretty unfamiliar to most Japanese travelers. So to raise awareness, we launched a brand campaign last month centered on domestic travel. Beyond Japan, though, we are also introducing more local payment options in countries around the world, like Vietnam, Denmark, and Poland. And in fact, by spring of next year, we expect to offer nearly 40 local payment methods around the world. Now, finally, supply quality is improving on Airbnb, We are focused on removing low-quality supply, as well as make it easier for guests to find the best places to stay. I shared that we removed over 300,000 listings last year, and we're already seeing this pay off. Customer service contact rates have decreased, guest MPS has improved, and we're also reducing host cancellations, which are now almost 30% lower than a year ago. And we've made it so much easier for guests to find the best place to stay with guest favorites. In fact, since launching Guest Favorites a year ago, last November, over 200 million nights have been booked at Guest Favorite listings. All right, next I want to share briefly some highlights from our 2024 winter release, which was last month on October 16th, starting with the Co-host Network. We know that hosting at Airbnb is one of the best ways to make money from your home, but not everyone has the time to host. So that's why we introduced co-host networks. An easy way for people to find the best, to find and hire the best local co-hosts to manage their Airbnb. Co-hosts offer personalized support for a host's needs. Everything from setting up your listing to manage your bookings and communicating with guests. These are super experienced hosts with an exceptional track record. 73% are super hosts and 84% manage a guest favorite. Now, When we announced this on October 16th, we launched the Coast Network with 10,000 co-hosts across 10 countries. And in the three weeks since we launched, we've already received interest from over 20,000 potential new co-hosts. This is huge. This is way bigger than we were expecting. By making coasting easier, we really believe that Coast Network will allow us to lock even more high-quality supplies. And we also introduced 50 upgrades for guests that make Airbnb a more intuitive and personalized app. And some of the features include a personalized welcome tour of the app for first-time guests, suggested destinations, when guests tap the search bar, we'll recommend locations on their search and booking history, and personalized listing highlights. So when a guest views the listing, we will highlight the details that are relevant to their search. And there are dozens of new features just like these. This is quite literally the beginning of a more personalized Airbnb. Now, turning to Q4, last quarter, we talked about shorter booking lead times. But as I shared, Knights and Experiences booked accelerated throughout the quarter, returning to double-digit growth by the end of Q3. While we know the comps from last year will get harder in the back of the quarter, we are anticipating that Knights booked will accelerate in Q4 relative to Q3. So with that, Ellie and I look forward to answering your questions.