Airbnb, Inc.

first quarter of 2025 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, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our first quarter of 2025. 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 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 recommendations to the most directly comparable GAAP financial measures in the shareholder letter posted to the Ambassador Relations website. These non-GAAP measures are not intended to be a substitute for GAAP results. With that, I'll pass the call to Brian.

Well, good afternoon, everyone, and thanks for joining. We have a strong start to 2025. In Q1, guests on Airbnb spent nearly $25 billion. These results show that no matter what's happening in the world, people continue to choose Airbnb. And that's because our model is inherently adaptable. It's something we've proven time and time again. We started Airbnb during the great recession of 2008. People turned to us for a more affordable way to travel. And they started hosting Airbnb to earn extra income. Then in 2020, when the pandemic hit, we provided a way for people to travel close to home. And as a result, our business quickly rebounded. And by the end of that year, we went public. Today, things feel uncertain once again. But just as we've shown in the past, as the world changes, Airbnb will continue to adapt. And that's because we have millions of hosts offering nearly every type of home at nearly every price point from budget to luxury in neighborhoods and cities all over the world. And for hosts, Airbnb remains a great way to earn meaningful income. Now, before we get into Q1 results, I want to just talk for a moment about where we are as a company. We've been focused on driving long-term growth, as well as preparing for Airbnb's next chapter, when we'll offer more than a place to stay. And we've been laying the groundwork to make this transformation for years. And there are two key things we've done to get ready. First, we wanted to make sure that people loved our core service before we launched anything new. So we spent the last few years rolling out hundreds of upgrades to make Airbnb better for guests and hosts. It's now easier to use. more affordable, and more reliable. And just one example of this is the launch of Guest Favorites, which is a way for people to easily find the best place to stay on Airbnb. Since launch, over 350 million nights booked have been booked at Guest Favorites listings. We've also worked hard to improve affordability and price transparency, which are especially top of mind for people today. When guests told us prices weren't transparent enough, we introduced a toggle that let them see the total price upfront. Over 17 million guests have used it over the past two years. And last month, we rolled out total price display globally. So now, the price you see upfront includes all fees. But perfecting our core service wasn't enough. To expand beyond homes, we needed an app that could support new offerings. Now, until now, our app has really done one thing, which is lets you book a home. So we rebuilt the app from the ground up on a new technology stack. And now we can innovate faster and offer much more than homes. So we're ready for Airbnb's next chapter. On Tuesday, May 13th, we'll unveil the 2025 summer release. And you can visit our website that day to watch the announcement and see all the details. So with that, I'm going to turn the call over to Ellie for a financial update.

Thanks, Brian, and good afternoon, everyone. I'll start with a review of our Q1 financial results, and then I'll walk through our outlook for Q2. As Brian mentioned, we had a strong first quarter. We had 143 million nights and experiences booked, up 8% year-over-year. Looking at this year-over-year growth by region, Latin America grew in the low 20s, Asia Pacific grew in the mid-teens, Europe in the mid-single digits, and North America in the low single digits. Revenue for the quarter was $2.3 billion, up 6% year-over-year. If you exclude the impact of FX and calendar factors, revenue would have grown 11%. As a reminder, those calendar factors include Easter falling in Q1 2024 and the extra day from Leap Day last year. We generated $417 million of adjusted EBITDA, which represents an 18% margin. Next, I'll turn to our balance sheet and cash flow. We continue to generate significant cash in Q1, delivering $1.8 billion of free cash flow. Over the past 12 months, we've generated $4.4 billion, representing a free cash flow margin of 39%. At the end of Q1, we had $11.5 billion of corporate cash and investments, as well as $9.2 billion of funds held on behalf of guests. Our strong balance sheet allowed us to repurchase $807 million of our common stock during the quarter. And at the end of Q1, we had $2.5 billion remaining on our repurchase authorization. Now let's shift to our Q2 and full-year 2025 outlook. Despite the recent volatility in the global economy, we believe we're positioned to deliver strong results in Q2. We expect to deliver revenue between $2.99 billion to $3.05 billion, representing 9% to 11% year-over-year growth. This includes a benefit of approximately two percentage points due to the timing of Easter. For nights and experiences booked, we expect year-over-year growth in Q2 to moderate relative to Q1. So far in Q2, we saw strong guest demand for Easter travel in Europe and continued momentum in Latin America, which remains our fastest growing region. In the U.S., we've seen relatively softer trends, which we believe is largely driven by broader economic uncertainty. On profitability, we expect adjusted EBITDA to increase year-over-year, with adjusted EBITDA margin expected to be flat to slightly down compared to Q2 2024. Marketing expense will grow faster than revenue in Q2, mostly due to our upcoming summer release and investments in growth initiatives. For the full year, we continue to expect an adjusted EBITDA margin of at least 34.5%, in line with what we shared in February. Now that includes $200 to $250 million of investment to launch and scale new businesses in 2025. These investments will have the biggest impact on our margins in the second half of the year since our new offerings go live on May 13th. Now as these new businesses scale over the coming years, we expect them to be significant drivers of future revenue growth. Now looking ahead, our priorities remain consistent with last quarter. As a reminder, we're continuing to drive long-term growth and deliver market share gains through three key growth levers. First, we are perfecting our core service. As Brian mentioned, we've made Airbnb significantly better for both guests and hosts. We've been driving growth from product improvements like enhanced search and better merchandising. One example is a newly redesigned rare finds feature that better highlights popular high quality listing. We also simplified our checkout page to make booking easier. These are just a few examples of the product optimizations that are contributing to our top line, but we know there's still more work to do. Second, we are accelerating growth in global markets. We're taking a much more localized approach to product and marketing in under-penetrated markets around the world. This is a multi-year strategy, but we've already seen encouraging results. For the fifth quarter in a row, growth in these expansion markets significantly outperformed our core markets, In fact, the average growth rate in Q1 and expansion markets was more than double that of our core markets. Brazil continues to lead the way. In Q1, origin nights in Brazil grew 27%, and first-time bookers grew over 30%, both accelerating from Q4. Third, we are launching and scaling new offerings. This begins on May 13th, so expect more on that soon. Now, to wrap up before we go to questions, We're staying close to geopolitical and macroeconomic uncertainty and monitoring any short-term impact they could have. As Ryan mentioned in his remarks, we have an adaptable and diversified business that has been resilient during periods of uncertainty, most recently as COVID. Despite signs of near-term volatility, we remain focused on the long-term opportunity to both grow our core business and expand into new ones. We believe that our efficient operating model, financial strength, and significant liquidity give us the ability to pursue these multi-year initiatives in the current environment. And with that, I will open it up to Q&A.