Q4 2023 Airbnb Inc Earnings Call

Good afternoon, and thank you for joining Airbnb is earnings conference call for the fourth quarter of 2023. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb is website. Following this call I will now hand, the call over to Angela Yang Director of Investor Relations. Please go ahead.

Operator: Good afternoon, and thank you for joining Airbnb's earnings conference call for the fourth quarter of 2023. 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 Angela Yang, Director of Investor Relations. Please go ahead.

Okay.

Angela Yang: Good afternoon, and welcome to Airbnb's fourth quarter 2023 earnings call. Thank you for joining us today. On the call today, we have Airbnb 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 fourth 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 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 statement due to a variety of factors.

Angela Yang: Good afternoon, and welcome to Airbnb fourth quarter of 2023 earnings call. Thank you for joining us today on the call today, we have Airbnb co founder and CEO, Brian checking and our Chief Financial Officer, Dave Stevenson.

Earlier today, we issued a shareholder letter with our financial results and commentary for our fourth quarter of 2023.

Angela Yang: These items were also posted on the Investor Relations section of Airbnb website.

Angela Yang: During the call, we'll make brief opening remarks, and then spend the remainder of time on Q&A before.

Speaker Change: Before I turn it over to Brian I would like to remind everyone that we will be making forward looking statements on this call and involve a number of risks and uncertainties.

Speaker Change: Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors.

Angela Yang: These factors are described in 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 in 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.

Brian Chesky: Factors are described under forward looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission.

Speaker Change: Urge you to consider these factors and remind you too 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.

Angela Yang: Also, during this call, we will discuss some non-GAAP financial measures. We provided reconciliation to the most directly comparable gap financial measures in the shareholder letter posted to our investor relations website. These non-GAAP measures are not intended to be a substitute for gap results.

Speaker Change: Also during this call we will discuss them now non-GAAP financial measures we.

Speaker Change: We provide a reconciliation to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website.

Speaker Change: These non-GAAP measures are not intended to be a substitute for our GAAP results.

Brian Chesky: With that, I will pass the call to Brian. All right, thank you, and good afternoon, everyone. Thanks for joining us. I am excited to share our results. We wrap 2023 with another strong quarter. We had 99 million nights and experiences booked in Q4, marking our highest fourth quarter. Revenue of $2.2 billion grew 70% year over year. Net loss was $349 million, but when excluding non-recurring tax items, adjusted net income was $489 million, representing an adjusted net income margin of 22%.

Speaker Change: With that I will pass the call to Brian.

Brian Chesky: Alright, Thank you and good afternoon, everyone. Thanks for joining.

Brian Chesky: I am excited to share our results with you.

Brian Chesky: <unk> 2023 with another strong quarter.

Brian Chesky: 99 million nights and experiences booked in Q4, marking our highest fourth quarter ever.

Brian Chesky: Revenue of $2 2 billion grew 70% year over year.

Brian Chesky: Net loss was $249 million, but when excluding nonrecurring tax items.

Brian Chesky: Net income was $489 million rep.

Brian Chesky: Representing an adjusted net income margin of 22%.

Brian Chesky: For the full year, our free cash flow was $320 billion, our highest ever. Because of our strong cash flow and balance sheet, we repurchased $2.25 billion of our shares during 2023. And I'm excited to announce that today, our Board of Directors approved a new share repurchase authorization of up to $6 billion for our Class A common stock. Our strong results in 2023 will be driven by our focus on three strategic priorities. Making Hosting Mainstream, Perfecting Our First Service, and Expanding Beyond. First, we're making hosting mainstream. We've been focused on making hosting just as popular as traveling in Airbnbs. Our results show that our approach is working. In Q4, our host community grew to 5 million hosts around the globe. Active listings exceeded 7.7 million by the end of 2023, increasing 18% year-over-year. And we also saw sustained double-digit supply growth across all regions. All in all, in 2023, hosts earned more than $57 billion this year.

For the full year, our free cash flow was $3 8 billion our highest ever.

Brian Chesky: Because of our strong cash flow and balance sheet, we repurchased 225 billion.

Brian Chesky: All of our shares during 2023.

And I'm excited to announce that today, our board of directors approved a new share repurchase authorization of up to $6 billion of our class a common stock.

Our strong results in 2023 were driven by our focus on three strategic priorities.

Brian Chesky: Hosting mainstream.

Brian Chesky: Our first service and expanding beyond the core.

Brian Chesky: First we're making hosting mainstream we've.

We've been focused on making hosting just as popular as traveling and Airbnb.

Brian Chesky: Our results show that our approach is working and.

Brian Chesky: In Q4, our host community grew to 5 million host around the globe.

Brian Chesky: Active listings exceeded $7 7 million by the end of 2023, increasing 18% year over year and.

Brian Chesky: And we also saw sustained double digit supply growth across all regions.

Brian Chesky: In 2023 post spend more than $57 billion this year.

Brian Chesky: We are going to continue to raise awareness around hosting and improve the overall host experience. Second, we're perfecting our course service. Over the past three years, we've launched more than 430 new features and upgrades to our course. We've made significant improvements to make Airbnb a more affordable and reliable option, and we are already seeing a positive impact, for example. Post-cancellations have decreased by 36% in Q4 of 2023.

Brian Chesky: We're going to continue to raise awareness around hosting and improve the overall host experience.

Brian Chesky: Second we're perfecting our core service.

Brian Chesky: Over the past three years.

Brian Chesky: We've launched more than 430, new features and upgrades to our quest circles.

Brian Chesky: We've made significant improvements to make there may be a more affordable and reliable option and we are already seeing a positive impact.

Brian Chesky: For example, <unk>.

Brian Chesky: Cancellations have decreased by 36% in Q4 of 2023 and this is compared to the same period a year ago.

Brian Chesky: And this is compared to the same period a year ago, and now two-thirds of our customers offer a weekly or monthly discount. We will never stop perfecting our core service. In the year ahead, we'll remain focused on improving the quality and reliability of our service.

Brian Chesky: And now two thirds of our host offer a weekly or monthly discount.

Brian Chesky: We will never stop protecting our core service and the year ahead, we will remain focused on improving the quality and reliability upstate.

Brian Chesky: Finally... We are expanding beyond Airbnb. Is that in the question? We spent the last three years perfecting our course, and we are now ready to embark on our next chapter. We're focused on unlocking more growth opportunities by investing in underpenetrated international markets, and we're seeing some great results. Following the success that we've seen in recent quarters in Germany, Brazil, and Korea, we're now rolling out our playbook in other countries, including Switzerland, Belgium, and the Netherlands.

Brian Chesky: Finally.

Brian Chesky: We are expanding beyond the core.

Brian Chesky: Airbnb.

Brian Chesky: Is that an inflection point.

Brian Chesky: We spent the last three years perfecting our core service.

Brian Chesky: And we are now ready to embark on our next chapter.

Brian Chesky: We're focused on locking more growth opportunities by investing in Underpenetrated and national markets and we're seeing some great results.

Brian Chesky: Following the success that we've seen in recent quarters in Germany, Brazil, and Korea, We're now rolling out our playbook in other countries, including Switzerland, Belgium, and Netherlands, but this is only one piece of a much bigger strategy.

Brian Chesky: But this is only one piece of a much bigger strategy, because we've always believed that Airbnb was destined to offer more than just a place to stay. And now is the time for us to expand beyond our core business and reinvent Airbnb, and there are a few reasons why. Meet first. We want people to love our course service before offering them something new.

Brian Chesky: Because we've always believed.

Brian Chesky: Airbnb was destined to offer more than just a place to stay.

Brian Chesky: And now is the time for.

Breast expand beyond our core business and reinvent Airbnb.

Brian Chesky: And there are a few reasons why I mean.

Brian Chesky: First.

Brian Chesky: We wanted people to Lubbock, where service.

Brian Chesky: If we're offering them something new.

Brian Chesky: And with hundreds of improvements we've made over the past three years, the Airbnb service is now better than it's ever been.

And with hundreds of improvements we've made over the past three years.

Brian Chesky: They are going to be servicing now better than it's ever been.

Brian Chesky: Second.

Brian Chesky: We've been able to attract some of the best scientists in the world, and we now have the capabilities to do so much more. And third, there is a new platform shift with AI, and it will allow us to do things we never could have imagined. While we've been using AI across our service for years, we believe we can become a leader in developing some of the most innovative and personalized AI interfaces in the world. Indica, We accelerate our efforts with the acquisition of Game Planner AI, a stealth AI company led by the co-founder and original developer of Siri.

Brian Chesky: We've been able to attract the best talent the world.

Brian Chesky: And we now have the capabilities to do so much more.

Brian Chesky: And third there was a new platform shifts.

Brian Chesky: And it will allow us to do things, we never could have imagined.

While <unk> been using AI across our service for years, we believe we can become a leader in developing some of the most innovative and personalized AI interfaces in the world.

Brian Chesky: In November we accelerated our efforts with the acquisition of game plan, our AI Astellas AI company led by the co founder and original developer a theory.

With these critical pieces in place, we're now ready to expand beyond our core business.

Brian Chesky: With these critical pieces in place, we're now ready to expand beyond our core business. This will be a multi-year journey, and we will share more with you towards the end of this year. Now looking back on Q4, we also saw a number of very positive business highlights. First, we surpassed 5 million hosts on the platform and saw meaningful supply growth across all regions. We added nearly 1.2 million listings in 2023. Ending the year with over 7.7 million active, Q4 Supply Group grew 18% year over year.

Brian Chesky: Now this will be a multiyear journey and we will share more with you towards the end of this year.

Brian Chesky: Now looking back on Q4, we also saw a number of very positive business highlights first we surpassed 5 million hosting our platform and saw meaningful supply growth across all regions.

Brian Chesky: We added nearly $1 2 million listings in 2023.

Brian Chesky: Ending the year with over $7 7 million active listings.

Brian Chesky: Q4 supply growth grew 18% year over year.

Brian Chesky: Now this is a real highlight, and we saw the highest growth in regions with the highest demand. So obviously, there's a really strong network effect happening. We also continue to see relatively similar supply growth among individual and professional hosts, with the majority of these listings exclusive to Airbnb. Now, second... We continue to see strong demand on Airbnb. Now, this is especially true amongst first-time bookers, which is particularly encouraging. Nice and Experiences books grew 12% compared to a year ago, and following some volatility in October, Nice books actually accelerated throughout the remainder of the quarter, and Q4 also marked the highest quarterly growth rate of the year for first-time bookers. And additionally, we also gained momentum in app downloads and app book sales.

Brian Chesky: Now this is a real highlight and we saw the highest growth in regions with the highest demand. So obviously there is a real strong network effect happening here.

Brian Chesky: We also continue to see relatively similar supply growth among individuals and professional host with the majority of these listings exclusive to Airbnb.

Brian Chesky: Second we.

Brian Chesky: We continue to see strong demand on Airbnb now this is especially true amongst first time, bookers, which is particularly encouraging nice and experiences both grew 12% compared to a year ago and following some volatility October nice book actually accelerated throughout the remainder of the quarter.

Brian Chesky: Q4 also marked the highest quarterly growth rate of the year for first time bookers.

Brian Chesky: And Additionally, we also gained momentum in app downloads and App bookings.

Brian Chesky: 55% of gross nights booked were on our app. This is up from 50% a year ago. And finally, we're driving affordability for cats. Throughout 2023, we introduced several features to make Airbnb more affordable, from new pricing tools for hosts to increased pricing transparency for guests. Thanks for watching these features. We've seen 1.4 million hosts use similar features, which lets hosts compare the price they're listing to others in the area. Nearly 300,000 listings have removed or lowered their cleaning fees, and by year-end, nearly 40% of our active listings didn't charge a cleaning fee at all. So our work on affordability is paying off. In December, the average nightly price of a one-bedroom listing on Airbnb was $114 a night.

Brian Chesky: 55% of growth nice booked Werner App. This is up from 50% a year ago.

Brian Chesky: And finally, we're.

Brian Chesky: We're driving affordability for guest.

Brian Chesky: Throughout 2023, we introduced several features to make everybody more affordable from new pricing tools for host.

Brian Chesky: Greece pricing transparency for guest.

Brian Chesky: Since launching these features.

We've seen one 4 million host use similar listings, which led to host compared to price their listing to others in the area.

Brian Chesky: Nearly 300000 listings have removed or lower their cleaning fee.

Brian Chesky: And by year end, nearly 40% of our active listings didn't charge a clinically at all.

So our work around affordability is paying off.

Brian Chesky: In December the average nightly price of a one bedroom listing on Airbnb was $114 a night.

Brian Chesky: This is down 2% from the same period last year, while hotel prices rose 7% to $149 over the same period. Now, before I turn to Q&A, To start, Dave Stevenson is now Airbnb's first chief business officer in the past five years. They've done an incredible job as CFO, and our business is stronger than ever. One of the qualities that is so remarkable about Dave is that he's not just a world-class finance leader; he's also a world-class operator. And whenever I need someone to quickly drive a complicated series of operations together to a clear outcome that doesn't compromise our values, I turn to Dave.

Brian Chesky: This is down 2% from the same period of last year, while hotel prices rose 7%.

$149 over the same period.

Brian Chesky: Yes.

Speaker Change: Now before I turn to Q&A.

Speaker Change: I wanted to share the latest on two executive updates, we announced at the end of last year.

Speaker Change: To start <unk>.

Dave Stephenson is now Airbnb first chief business Officer.

Speaker Change: Over the past five years, Dave has done an incredible job as CFO and our business is stronger than ever.

Speaker Change: One of the qualities that is so remarkable about Dave is that he is not just a world class Finance leader. He is also a world class operator.

Speaker Change: Whenever I need somebody to quickly drive a complicated series of operations together at a clear outcome that doesn't compromise our values.

Speaker Change: I'll turn to Dave.

Brian Chesky: As we expand beyond our core, it will be paramount to have an executive dedicated to our long-term growth plans, and there is nobody better than Dave to do this. Dave will continue to drive growth across existing and new businesses. And this includes driving international expansion, growing global host supply, and leading all business and corporate development activities at Airbnb. Now, as Dave takes on this position, I am thrilled that L.E. Mertz will be our CFO. You see, Ellie's been my right hand for 11 years.

Speaker Change: As we expand beyond our core it will be Paramount, Kevin executive dedicated to our long term growth plans and there is nobody better than they have to do this.

Dave will continue to drive growth across existing and new businesses and this includes driving international expansion growing global host supply and leading all business and corporate development activities at Airbnb.

Speaker Change: Now as Dave takes on disposition.

Speaker Change: I am thrilled the early marks will be our CFO.

Speaker Change: He has been my right hand for 11 years and many of you already nowhere and are well aware of our impressive track record of Airbnb.

Brian Chesky: And many of you already know her and are well aware of her impressive track record at Airbnb. She led our IPO during one of the most pivotal moments in our company's history. And for the past several years, Ellie's overseen strategic finance and analysis, corporate development, and investor relations, and under her leadership, our company grew from adolescence to adulthood, with revenue growing over 100x. I am thrilled that she's stepping into this role.

Speaker Change: The letter IPO during the one of the most pivotal moment in our company's history.

And for the past several years L. He's overseeing strategic finance and analysis and corporate development and Investor Relations and.

Speaker Change: And under her leadership, our company grew from adolescence to adulthood adulthood.

Speaker Change: With revenue growing over 100 X.

Speaker Change: I am thrilled that she's stepping into this role Dave.

Dave Stevenson: Dave has already started as chief business officer, and Ellie will officially transition to CFO on March 1st. So, next call, you will hear from Ellie. Before we go to questions, I'd just love to hand over to Dave to share a few thoughts. Now, thanks, Brian.

Speaker Change: Dave has already started as chief business Officer, and Lee will officially transition as CFO on March 1st. So next call you will hear from Ellie.

Speaker Change: Before we go to questions I'd, just love to hand over to David share a few thoughts Dave.

David: Yes, Thanks, Brian.

Dave Stevenson: I'm really excited about my new role as Chief Business Officer. Now, in this role, I'm focused on driving Airbnb's growth by concentrating on three specific areas. First, continuing to grow our high-quality supply of stays and experiences around the world. Second, leading our global expansion efforts in under-penetrated countries.

David: Really excited about my new role as Chief business Officer in this role I'm focused on driving airbnb growth by concentrating in three specific areas.

David: First continuing to grow our high quality supply of stays and experiences around the world.

David: Second leading our global expansion efforts in Underpenetrated countries.

Dave Stevenson: And third, developing and launching new businesses as we expand beyond the. As Brian has said, this is a transformational year for Airbnb. I look forward to Ellie becoming our CFO next month.

Third developing and launching new businesses as we expand beyond the court.

David: As Brian has said this is a transformational year for Airbnb.

David: I look forward to early becoming our CFO next month, I Couldnt think of a better person to lead us into the next phase of growth.

Dave Stevenson: I couldn't think of a better person to lead us into the next phase of growth. And so, with that, let's open up the call for Q&A. At this time, I would like to remind everyone that in order to ask a question, press star, then the number one on your telephone keypad. We ask that you please limit yourself to one question only.

So with that let's open up the call for Q&A.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: Could you please limit yourself to one question only your first question comes from the line of Ron Josey from Citi. Your line is open.

Operator: Your first question comes from a line Ron Josie from Citi. Your line is open. Great, thanks for taking the question. Dave, congrats on the role, and Ellie to you as well.

Ron Josey: Great. Thanks for taking the question and Dave Congrats on the role and lead to you as well, Brian I wanted to ask a little bit more on just expanding beyond the core I think you said now is the time to do it and stay tuned towards the end of the year. But then you also talked about being a leader in personalized AI can you just give us a little more insights on how youre thinking about AI given the acquisition of game plan here.

Brian Chesky: Brian, I wanted to ask you a little bit more about just expanding beyond the core. I think now is the time to do it and to stay tuned towards the end of the year. But then you also talked about being a leader in personalized AI.

Brian Chesky: Can you just give us a little more insights on how you're thinking about AI given the acquisition of Game Planner? And then, as we think about these newer, underpenetrated markets, Switzerland, Belgium, Netherlands, talk to us about just lessons learned from, say, Germany, Korea, Brazil, that you can apply to these newer markets. Thank you.

Ron Josey: And then as we think about these newer underpenetrated market, Switzerland, Belgium, Netherlands talk to us about just the lessons learned from call. It Germany Korea, Brazil that you can apply to these newer markets. Thank you.

Brian Chesky: Yeah, absolutely, Ron. Thanks for asking the question. So yeah, let me start with AI. So I think to talk about AI, it would be good to zoom out, just lay out the landscape. One way to think about AI is to use a real world metaphor.

Speaker Change: Yes, absolutely Ron Thanks for asking the question. So let me start with AI.

Speaker Change: So I think to talk about AI. It will be good news new MAU just lay out the landscape one way to think about AI is let's use of real world metaphor I mentioned were building a city.

Brian Chesky: I mentioned we're building a city, and in that city, we have infrastructure like roads and bridges. And then on top of those roads and bridges, we have applications like cars. So Airbnb is not an infrastructure company. Infrastructure would be a large language model or, obviously, GPUs. So we're not going to be investing in infrastructure. We're not going to be building a large language model.

Speaker Change: In that city, we have infrastructure like roads and bridges.

Speaker Change: And then on top of those rates the bridges, we have applications like cars. So airbnb is not an infrastructure company infrastructure would be a large language model or obviously GPU. So we're not going to be investing in infrastructure. So we're not going to be building a large language model will be relying on obviously open AI Google makes a great model Metacritic models, so that was.

Brian Chesky: We'll be relying on obviously open AI. Google makes a great model; Meta makes great models. So those are really infrastructures. They're really developing infrastructure. But where we can excel is on the application layer, and I believe that we can build one of the leading and most innovative. AI interfaces ever created. And maybe one way to make this real is, if you were to open, say, Chat GPT or Google, though the models are very powerful, the interface is really not an AI interface.

Speaker Change: There are really infrastructure, they are really developing infrastructure, but where we can excel.

Speaker Change: The application layer and I believe that we can build.

Speaker Change: One of the leading and most innovative.

Speaker Change: AI interfaces ever created.

Speaker Change: And maybe one way to make this real is if you were to open say chassis pickier. Google. Those are models are very powerful the interface is really not an AI interface at the same interface as the 2000 and the sense of 2010 Thats a typical classical web interface.

Brian Chesky: It's the same interface as the 2000s, in a sense. The 2010s, it's a typical, classical web interface. So we feel like the models, in a sense, are probably underutilized. Here's another way of saying it. Take your phone and look at all the icons on your phone.

Speaker Change: So we feel like the models in a sense are probably underutilized here's another way of saying it take your phone and look all of the icon on your phone most of those apps have not fundamentally changed since the advent of generative AI.

Brian Chesky: Most of those apps have not fundamentally changed since the advent of generative AI. So what I think AI represents is the ultimate platform. You know, we had the internet, and we had mobile.

Speaker Change: What I think AI represents.

Speaker Change: The ultimate platform shift.

Speaker Change: We had the Internet, we had mobile Airbnb really rose during the rise of mobile and the thing about our platform shift as you know there's also a shift in power. It's a shift of behavior and so I think this is a zero zero ballgame. We're airbnb, we have a platform that was built for one vertical short term state and I think with AI generative AI.

Brian Chesky: Airbnb really rose during the rise of mobile. And the thing about a platform shift, as you know, is it's also a shift in power. It's a shift in behavior.

Brian Chesky: And so I think this is a zero-zero ballgame where Airbnb, we have a platform that was built for one vertical, short-term space. And I think with AI, generative AI, and developing a leading AI interface to provide an experience that's so much more personalized than anything you've ever seen before. Imagine an app that you feel like knows you.

Speaker Change: And developing a leading AI interface to provide experience. That's so much more personalized than anything you've ever seen before imagine an app that you feel like nosy with like the ultimate concierge and interface that is adaptive and evolving and changing in real time, Unlike know interfaced you've ever seen before that.

Brian Chesky: It's like having the ultimate concierge. An interface that is adaptive and evolving and changing in real time, unlike any interface you've ever seen before, that would allow us to go from a single vertical compass to a cross-vertical one because one of the things that we've noticed is the largest tech companies aren't a single vertical, you know, and we studied Amazon in the late 90s and early 2000s when they went from books to everything, or Apple when they launched the app And I think with AI and the work we're doing around AI interfaces, I think that's what you should expect from us. We're not going to talk specifically on this call about the specific products and services we're going to be offering, but you will see some very big announcements later this year. And as you know, we did an acquisition of Game Planner AI. It was from the creators' theory, and that was just accelerating the efforts we were already making. And then there's the term... Well, that was based off of- Oh, and sorry, my question was...

Speaker Change: And that would allow us to go from a single vertical company.

Speaker Change: Two a cross vertical company because one of the things that we've noticed is the largest tech companies arent a single vertical anti.

Speaker Change: Anti studied Amazon.

Speaker Change: In the late Ninety's early two thousands when they went from books to everything.

Speaker Change: Or apple when they launched the App store and these really large technology companies, our horizontal platforms and I think with AI and.

Speaker Change: The work we're doing around.

Speaker Change: Interfaces I think that's what you should expect us we're not going to talk specifically on this call about the specific products and services, we're going to be offering, but you will see some very big announcements later this year and as you know we did an acquisition of game plan. Our AI. It was from the creators theory and that was just accelerating the efforts we are already.

Speaker Change: And endeavoring on.

Speaker Change: And that was true.

Speaker Change: Sorry, My question was yes.

Speaker Change: I Wonder if you can just driven markets.

Brian Chesky: I learned a few things. First, we just need to make sure that we have great supply and great supply on specific nights. So even the subtleties of local holidays and ensuring that we're there, that we have at all price points, you know, different countries have different expectations of what supply growth looks like, and then just make sure we have the right product. The things we've done include installment payments in Brazil and Latin America, neighbor login in Korea, just making sure that we're showing up locally in the ways that they're expecting.

Speaker Change: A few things.

Speaker Change: First we just need to make sure that we have great supply and great supply and specific night, so even the subtleties of local holidays and ensuring that we're there. So we haven't at all price points different countries have different expectations on what the supply growth looks like and then just being truly a alright products things like we've done include installment payments in Brazil.

Speaker Change: In Latin America neighbor login in Korea, just making sure that we're showing up locally in ways that they are expecting.

Brian Chesky: And then the third is just to make sure we have a full-funnel marketing approach. You know, in some of these countries, we're now big enough where we can have a small team do very targeted social marketing, PR, communications, use influencers, search engine marketing, but build that on top of brand marketing, and have that all work together in one full-funnel approach. You know, more than 90% of our traffic remains direct or unpaid because the majority of Airbnb stays are unique to us. And that continues to drive the flywheel.

Speaker Change: Then the third is just to make sure we have a full funnel marketing approach and some of these countries. We are now big enough, where we can have a small team do very targeted social marketing PR communications use influencers search engine marketing, but can build that on top of brand marketing and how that all worked together in one full funnel approach.

Speaker Change: No lower than approximately 90% of our traffic remains director on paid because the majority of Airbnb stays are unique to us.

Speaker Change: And that continues to drive the flywheel, but having this portfolio approach is very effective when we implemented on the ground in these countries.

Operator: But having this full-funnel approach is very effective when we implement it on the ground in the environment. Your next question comes from the line of Eric Sheridan from Goldman Sachs. Your line is open.

Speaker Change: Our next question comes from the line of Eric Sheridan from Goldman Sachs. Your line is open.

Dave Stevenson: Thanks so much for taking the question. I was curious about the building blocks of sort of the way you're thinking about the macro environment and the idiosyncratic growth the company is looking at for Q1 driven by elements of both supply and demand. And what you see is sort of the exit dynamics from 2023.

Eric Sheridan: Thanks, So much for taking the question I was curious how the building blocks of sort of the way youre thinking about the macro environment and the idiosyncratic growth the company sort of looking at poor Q1, driven by elements, both supply and demand and what do you see as sort of the exit dynamics from 2023. Thanks so much.

Eric Sheridan: Okay.

Dave Stevenson: Now, you know, again, what we saw exiting 2023 was interesting, right? When we're on this call, a quarter ago, we'd seen some softness and demand in October. And then what we saw was accelerating demand in November and December. And then as we come in from that strength, you know, 17% kind of revenue growth and 12% nights growth in the fourth quarter, we're seeing really stable demand coming at the start of the year. You have to actually rewind the tapes and remind yourself that we were just exiting kind of Omicron, and there was a lot of pent up demand in January of last year, which makes for some harder comps in Q1.

Eric Sheridan: So again, what we saw exiting 2023 was interesting rate lowered on this call a quarter ago, we had seen some softness in demand in October and then what we and so we've guided to that kind of expectation and then what we saw is accelerating demand in November and December and then as we come in to from that stretch.

Eric Sheridan: 17% kind of revenue growth and 12% rates growth in the fourth quarter, particularly stable demand coming into the start of the year you have to actually rewind. The tape so to remind yourself that we were just exiting kind of Omar Khan and Theres a lot of pent up demand in January of last year, which makes for some harder comps in Q1, but against those harder.

Operator: But against those harder comps, we continue to see, you know, strong demand for travel. I think that we continue to see a very robust demand for people staying on Airbnb versus just necessarily kind of buying other things. So experiences over things continues to be a big trend. And we're excited to see the growth that we're continuing to see in our established businesses in North American Europe and even greater growth in Latin America and Asia Pacific. So as we do things, as I said in the last question about doubling down and making sure that we invest in the expansion countries that are under penetrated, I think that's going to continue to drive growth for us the rest of the year. Your next question comes from the line of Justin Patterson from KeyBank. Your line is open. Thank you very much.

Cost will continue to see.

<unk> demand for travel I think that we continue to see very robust demand for people staying on Airbnb is versus just necessarily kind of buying other things. So the experiences over things continues to be a big trend.

Eric Sheridan: And we're excited to see the growth that we're continuing to see at our established businesses in North America, and Europe, and even greater growth in Latin America, and Asia Pacific. So as we do things as you said on the last question about doubling down and making sure that we invest in the.

Eric Sheridan: These expansion countries, where we're underpenetrated I think that's going to continue to drive growth for us for the rest of the year.

Yes.

Eric Sheridan: Your next question comes from the line of Justin Patterson from Keybanc. Your line is open.

Yes.

Justin Patterson: Alright, Thank you very much.

Dave Stevenson: There's a lot of investor interest around the cross-currency fee. Actually, think about that phasing in over the course of the year and the potential financial impact from that. And then further, could you talk about just why you think now is the right time to pull that lever? Should we view this as a sign that you'll take pricing actions where there's a value to disconnect more regularly than in the past? Thanks.

Justin Patterson: A lot of investor interest around the cross currency, how should we think about that phasing out over the course of the year and the potential financial impact from that and then further could you talk about just why do you need now is the right time to pull that lever should we view this as a sign that youll take pricing actions, where theres a value disconnect more regularly than that in the past. Thanks.

Justin Patterson: Okay.

Dave Stevenson: Yeah, to be clear, you know, when we announced this recently, we updated our terms of service. And what it did is it gave us the ability to implement a cross currency fee. So we needed to update the terms of service just to allow us to do it. Now the fee only applies when the currency of the guest used to pay differs from the currency that the host set for their list. We don't anticipate this fee to affect the majority of our guests because the cross-currency transactions are only approximately 20% of our gross booking value.

Justin Patterson: Just be clear when we announced just recently, we updated our terms of service and what it did is it gives us the ability to implement across for instance, so we needed to update the terms of service just to allow us to use now the fee only applies when the currency of the guest uses to pay differs.

Justin Patterson: From the currency that the host separate they're listening. So we don't anticipate this fee to affect the majority of our guests because the cross currency transactions are only approximately 20% of our gross booking value that's different than our cross border, which is closer to 40%.

Dave Stevenson: It's different than our cross-border, which is closer to 40%, and we anticipate the majority of the fee changes to be closer to 1%. So we're going to test and evaluate and just see what the results are. And that testing will begin in April. Why now?

Justin Patterson: And we anticipate the majority of the fee changes to be closer to 1%. So we're going to test and evaluate and just see what the results are in that testing will begin in April why now there is just a point, where we understand that the size and complexity of our business.

Dave Stevenson: You know, there's just a point where we understand that the size and complexity of our business ensures that we should be making sure we're providing great value to our guests and our hosts. We did things like last year where we changed our long-term stay fees for beyond three months. That was an opportunity where we saw that maybe the fees were too high relative to the benefit we're getting.

Justin Patterson: Insurers that we should be making sure we're providing great value to our guests and our hosts who do things like last year, we had a change to our long term stay fees for beyond three months and that was an opportunity where we saw that maybe the fees were too high relative to the benefit we're getting.

Operator: I think there's just a fundamental principle where we want to make sure that we're giving more value to our guests and our hosts than we take in at our take rate over time, and we're going to continue to be more nuanced in how we make those choices. Your next question comes from Brian Nowak from Morgan Stanley. Your line is open. Great, thanks for taking the time to answer my questions. I have two, one big picture and one sort of accounting.

Justin Patterson: I think there's just a fundamental principle, where we want to make sure that we're giving more value to our guests our hosts than we take in our take rate over time, and we're going to continue to be more nuanced in how we make those choices going forward.

Justin Patterson: Okay.

Justin Patterson: Your next question comes from the line of Brian Nowak from Morgan Stanley. Your line is open.

Brian Nowak: Great. Thanks for taking my questions I have two one big picture, one sort of accounting. So big picture. One you guys have made a lot of interesting changes to the U S around I'm flexible and.

Brian Chesky: So the big picture one, you guys have made a lot of interesting changes to the US around I'm flexible and new tools for hosts, etc. Ryan, can you just sort of talk to us about areas of progress you've made on improving conversion or getting hosts to lower prices in the US and sort of what are the existing hurdles you have to overcome to kind of get power hosts and hosts to kind of lower prices more in the US? And the second one, Dave or Ellie, if there's a lot of moving pieces around this one queue guy, if we're sort of thinking through gross bookings versus revenue, and we're getting to room night growth and sort of the mid to high single digits, is that right? Or are there some other moving pieces that were missing in the room night growth calculation? Thanks. Yep, why don't I start, Brian?

Brian Nowak: New tools for host et cetera.

Brian Nowak: Can you just sort of talk to us about areas of progress you've made on improving conversion are getting host to lower prices in the U S and sort of what are the what is the existing hurdles you have to overcome to kind of get power hosts and host to kind of lower prices more in the U S and the <unk>.

Brian Nowak: Second one on <unk>.

Brian Nowak: A lot of moving pieces around this <unk> guys.

Brian Nowak: Thinking through gross bookings versus revenue and we're getting to room night growth in sort of the mid to high single digits is that right or are there sort of other moving pieces that were missing around the room night growth calculation.

Speaker Change: Yes, when I start Brian.

Brian Chesky: So, you could think of probably three really big buckets of work that are going to drive the conversion of Airbnb. One is our work on affordability. The next is really product optimization, and the third is really quality and reliability. So let me talk about all three.

Speaker Change: So.

Brian: You could think of probably like three really big buckets of where they're going to drive conversion.

Speaker Change: Airbnb one is their work on affordability.

The next is really product optimization.

Speaker Change: And a third is really quality and reliability. So let me talk about all three and I'll start with affordability.

Brian Chesky: And I'll start with affordability. You know, a couple years ago, we noticed that there was quite a lot of feedback we were getting from our guests that Airbnb was getting more and more popular. And so last year, we really hunkered down and rolled out a suite of tools for guests and hosts to make Airbnb more affordable, starting with the total price display, where you can now turn on a toggle and see the total price up front, including taxes and cleaning fees and service fees.

Speaker Change: Years ago, we noticed that there was quite a lot of call. It a feedback we're getting from our guests the airbnb whats getting more expensive and so last year, we really hunker down and rolled out a suite of tools for guests and hosts to make here being more affordable.

Speaker Change: Starting with total price display where you now can turn on a toggle and see the total price upfront, including taxes and cleaning fees and service fees. Now. This tool is really important because now we are pushing more demand to listings with better prices. We've also seen some really positive knock on effects. For example, 300000 listings have now rich.

Brian Chesky: Now, this tool is really important because now we're pushing more demand for listings with better prices. We've also seen some really positive knock-on effects. For example, 300,000 listings have now reduced or eliminated their cleaning fees, and 40% of listings globally don't even have a cleaning fee.

Speaker Change: Joost or eliminate <unk> and 40% of lithium will be doing going to have a cleaning fee.

Brian Chesky: The next thing we did was encourage more hosts to provide discounts for weekly or monthly stays. As you know, 19% of our nights are monthly stays, and more than 40% are weekly. Well, now, two out of three hosts have a monthly or weekly discount. So this has been a huge, huge improvement.

Speaker Change: The next thing we did.

Speaker Change: We encourage more hosting to provide discounts for weekly or monthly space as you know 19% of our month over night, our monthly stays in more than 40% of weekly will now two out of three host have a monthly or weekly discount. So this has been a huge huge improvements.

Brian Chesky: And we also launched a product called Compare Listings. One of the things we noticed is that hosts are more likely to have a competitive price if they see what other similar listings are charging in their neighborhood, and then they can see whether they're getting booked or not. Well, since we rolled out that tool, 1.4 million hosts have turned the tool on, and this means they'll provide more competitive listings. The result of which, Brian, is that our prices year-over-year for one-bedroom apartments globally are down 2%, while hotels are up 7%. That's a 9% swing.

And we also launched a product called compare listings one of the things. We noticed was that host are more likely to have a competitive price if they see what other similar listings are charging in their neighborhood and then week, they can see whether theyre getting booked or not well since we rolled out that tool. One 4 billion hosts have turned.

Speaker Change: To align and this means we'll provide more competitive lifting the robot was all the which Brian is that our prices year over year for one bedroom apartments globally are down 2% of our hotels were up 7% and 9% swing on.

Brian Chesky: The next step is product optimization. Here's a simple way to think about it. We did $9.9 billion in revenue last year, so let's round that to $10 billion for really simple numbers. All we have to do is increase our nights booked by 100 basis points, and that's $100 million in revenue. And if we can increase $100 million of revenue, it'd be $100 million of very high-margin revenue because we're converting, presumably, traffic we already have on the website. And so there's a number of things we're doing in product optimization to increase the conversion rate. One of the big things, as you noticed, is that I'm flexible.

Speaker Change: The Nexus product optimization, here's the simple way to think about it we did $9 9 billion of revenue last year. So let's round that to $10 billion for really simple numbers. All we have to do is.

Speaker Change: This increased our.

<unk> Nice book by 100 basis points, and that's $100 million of revenue and if we can increase of $100 million revenue would be $100 million hub very Mike high margin revenue.

Speaker Change: Yes.

Speaker Change: We're converting presumably traffic we already have in the web site and so theres a number of things we're doing on product compensation increase conversion rate one of the big things as you as you noticed as I'm flexible here's the simple way to think about it we.

Brian Chesky: Here's a simple way to think about it. We are never close to sold out on Airbnb. If we can just point demand to where we have supply by getting people to be more flexible on their dates or a little more flexible on their radius or location, that'd be massive. We also made some optimizations to get more people to download our app. And now we are, you know, very typically a top 50 application in the United States. And now 55% of our bookings are now in a native application. So those are some of the things that non-product limitations. The last thing I'll talk about is reliability.

Speaker Change: We're never close to sold out and Airbnb. If we can just point demand or where we have supplied by getting people to be more flexible dates or a little more effective at their radius or location that would be massive. We also made some optimizations to get more people to download our app and now we are very typically a top 50 application in the United States and now <unk> 55 per.

Speaker Change: <unk> of our bookings are now in our native applications. So those are kind of things are non product limitation. The last thing I'll talk about is reliability. We launched guest favorites guest favorites reasonably launch. This is for every person who stays in a hotel 90 people stay on Airbnb, sorry for every purchase isn't Airbnb 90 people stay in a hotel.

Brian Chesky: We launched guest favorites. The reason we launched this is for every person who stays in a hotel, nine people stay in an Airbnb. Sorry, for every person who stays in an Airbnb, nine people stay in a hotel. What if we could get just one of those people who stays in a hotel to stay in an Airbnb?

What if we could get just one of those people who stays in a hotel stay on Airbnb, we would quite literally double the size of our business. So when you ask people book hotels why they don't book Airbnb is two reasons. One is the virtual they've always got hotels and the other is they are comforted by the reliability the consistency of the hotel experienced and we ask what if we had.

Brian Chesky: We would quite literally double the size of our business. So when you ask people who book hotels why they don't book Airbnbs, there are two reasons. One, well, it's habitual.

Brian Chesky: They've always booked hotels. And the other reason is that they are comforted by the reliability, the consistency of the hotel experience. And we asked, what if we had a product that was as consistent as a hotel from a quality standpoint but had all the unique advantages of Airbnb? It was more affordable. It was more unique, with more character, and it was better equipped.

Speaker Change: Product that was as consistent as the hotel from a quality standpoint, but had all of the unique advantage of the Airbnb. It was more affordable it was more unique with more character and it's better equipped and Thats exactly guest favorites are the $2 million of the best listings on Airbnb based on reading review on reliability data on 500 million $500 million shifting there.

Brian Chesky: And that's exactly what guest favorites are. They're 2 million of the best listings on Airbnb based on rating, review, and reliability data on 500 million trips from Airbnb. Since we launched that product in November, we are seeing a shift in bookings towards guest favorites. That's, of course, good because, number one, they get fewer customer service contacts. The customer service costs go down. They have higher five-star trips.

Speaker Change: Base since we launched that product in November we are seeing a shift in bookings towards guest favorites that is of course, good because number one they get fewer customer service contact the customer service costs go down they have higher five star rating trips. So we have better repeat bookings and we.

Brian Chesky: So we have better repeat bookings, and we think this will attract people to Airbnb that have never considered us before. So those are just some of the things we're doing. And the last thing I'll say before I hand it over to Dave is that that's just what we did last year. You know, we had about 200 upgrades last year, 430 in the last three years, but we are just getting started, and we're going to have significantly larger upgrades this year. Peace.

Speaker Change: We think this will attract people to airbnb.

Speaker Change: Consider it as before so those are just some of the things we're doing.

Speaker Change: The last thing I'll say before I hand, it over to Dave.

Dave Stevenson: Is that that's just what you did last year.

200 about 200 upgrades last year 430 in the last three years, but.

Dave Stevenson: We are just getting started and we're going to have significantly larger upgrades this year Dave.

Dave Stevenson: In terms of the Q1 guide on room nights growth, again, I think you have to remember that we have a hard comp versus Q1 of 23, where there was a lot of pent-up demand coming out of the holidays, and we saw much stronger growth early in the year, especially in January. I think the other thing that's unusual about Q1 this year is that Easter moved from Q2 to Q1. So this actually helps our revenue by 100 to 200 basis points in Q1, but it actually is a drag on nights because we actually get fewer nights booked in the period as people are actually doing the traveling on holiday. So it'll shift some nights from Q1 to Q2. So revenue is a little bit helped, Q2 to Q1, and bookings, and nights booked are slightly hurt, Q1 to Q2, and then don't forget the hard comp. So this is why we have the language of moderating from 12% growth in Q4. Your next question comes from the line of Doug Enruff from J.P. Morgan. Your line is open.

In terms of the Q1 guide on room nights growth again, I think you have to remember that we have a hard comp versus Q1 of 'twenty three where there was a lot of pent up demand coming out of the holidays and we saw.

Dave Stevenson: Much stronger growth and early in the year, especially in January I think the other thing that's unusual about Q1. This year as Easter moved from Q2 to Q1. So this actually helps our revenue by 100 to 200 basis points in Q1, but actually as a drag on <unk>, because we actually get fewer nights.

Dave Stevenson: In the period.

Dave Stevenson: As people are actually doing the traveling on holiday. So it'll shift some nights from Q1 to Q2. So revenue is a little bit helped Q2 to Q1 and bookings a nice book to slightly hurt Q1 to Q2, and then don't forget the hard call. So this is why we have the language of moderating from 12% growth in Q4.

Okay.

Dave Stevenson: Your next question comes from the line of Doug Anmuth from Jpmorgan. Your line is open.

Operator: Thanks so much for taking the question. Ellie, can you just help us understand the commentary on EBITDA a little bit better for 24 or the incremental investments that could drag on the margins? Is that primarily about expanding beyond the core and tied to some of the new initiatives that Brian talked about that we'll learn about later this year? Or is that more around marketing or just something around the existing business? Thanks. Thanks, Doug. I was actually going to start next quarter, but thanks for pointing that out to me.

Dave Stevenson: Yes.

Doug Anmuth: Thanks, so much for taking the question.

Doug Anmuth: Can you just help us understand the commentary on EBITDA, a little bit better for 24 are the incremental investments that could drag on the margins is that primarily about expanding beyond the core and tied to some of the new initiatives that Brian talked about the oil learn about later this year or is it more around marketing or just something around kind of the.

Doug Anmuth: <unk> business. Thanks.

Doug Anmuth: Yes.

Speaker Change: Thanks, Pat I was actually going to start next quarter, but thanks for plant to me to what you saw in the end.

Ellie Mertz: So what you saw in the guidance language that we provided is that we are basically giving ourselves a floor in terms of the four-year EBITDA margin guidance. As we said, we will hold or provide a minimum of 35%, which is slightly down from what we delivered in 2023. The intent here is really to ensure that we have flexibility over the course of the year to continue to invest in a variety of growth opportunities as they appear. So what might those be?

Speaker Change: Guidance language that we've provided is that we are basically giving ourselves a floor in terms of that.

Speaker Change: Full year EBITDA margin guidance.

Speaker Change: We said, we will hold or by a minimum of 35% just slightly down.

Speaker Change: What we delivered in 2023 the intent here is really to ensure that we have flexibility over the course of the year to continue to invest in a variety of growth opportunities that Sam here, So what might those be so first.

Ellie Mertz: So first, we have a pretty robust budget in terms of our international expansion, but there are certainly opportunities at the margin to continue to invest in your markets. Second, there are always opportunities in terms of looking at our high ROI marketing channels and adding marginally at the top. Third, what we note given the ambitions around our product development roadmap is that we are obviously often constrained by our resources there. And so we may look to add incremental product resources to increase the throughput of our overall product team. And then finally, obviously, we haven't said much with regard to what the platform extensions will look like at the end of the year, but we also want to give ourselves flexibility there to ensure that we're able to share something broadly and meaningful by the end of the year. Your next question comes from Justin Post from Bank of America. Your line is open. Great, thank you. I just want to ask about room nights.

We have a pretty robust budget in terms of our international expansion, but there's certainly opportunities at the margin to continue to invest in your markets.

Speaker Change: Second there's always opportunities in terms of looking at our high ROI marketing channels and adding marginally at the top third what we know given the ambitions around our product development roadmap.

Speaker Change: Roadmap is that's obviously often constrained by our resources there and so we may look to add incremental product resources to increase the throughput of our overall.

Speaker Change: Product team and then finally, obviously you know we haven't said much with regard to <unk>.

Speaker Change: Popcorn extensions will look like in the back of the year, but we also want to give ourselves flexibility there to ensure that we're able to share something broadly and by the end of the year.

Speaker Change: Your next question comes from the line of Justin Post from Bank of America. Your line is open.

Justin Post: Great. Thank you just wanted to ask about room nights, we all know there's a tough comp in Q1, but and that was partially due to the reopening, but we're kind of over COVID-19 now and just kind of thinking about where you are in the room night cycle.

Operator: We all know there was a tough comp in Q1, and that was partially due to the reopening, but we're kind of over COVID now. And just kind of thinking about where you are in the room night cycle going forward, and what are the key drivers for nights. Is it growing supply and just getting that conversion level better? The big picture, just saying, you know, it looks like a tough comp in Q1, but how do you think about the rest of the year and where nights can grow over the medium term? Thank you.

Justin Post: Going forward and what are the key drivers for nice as a growing supply and just getting that.

Justin Post: And Virgin level better.

Justin Post: Big picture, just saying it looks like a tough comp in Q1, but how do you think about the rest of the year and we're knights can grow over the medium term. Thank you.

Dave Stevenson: Yeah, again, we are starting to see overall kind of demand normalize. I think you also look at our nights growth and the nights on Airbnb and continue to see that we take share of overall accommodations globally versus kind of traditional accommodations and are either equaling or exceeding versus our peak competition. So I think if you just look at room nights growth, we continue to see strength relative to traditional hospitality in our competition. And you're exactly right.

Speaker Change: Yes, again, we are starting to see overall kind of demand normalized I think we also look at our nice growth and the nights on Airbnb and continue to see that we take share of overall accommodations globally versus kind of traditional accommodations.

Speaker Change: Either equaling or exceeding versus our peak competition. So I think if you just look at room night growth, we continue to see strength relative to traditional hospitality in that competition and youre exactly right.

Dave Stevenson: The key focus is around supply. There's been a lot of criticism around whether or not we have sufficient supply growth. I hope that we continue to show that strength with the 7.7 million active listings, you know, they're growing 18% year over year. We saw incredible strength throughout the year, 5 million hosts, the vast majority of those listings being unique to Airbnb. And I think that that uniqueness also gives us a lot of the strength on, I say, conversion and a lot of things that Brian talked about, in terms of perfecting price, making it easier to shop and find So perfecting the core service is there. And then the last piece, which we've also talked about, is just finding the areas where we are under penetrated relative to where the opportunity is. And I think that's true in the vast majority of countries around the world.

Speaker Change: Key focus around supply there's been a lot of critique around whether or not we have sufficient supply growth I.

Speaker Change: I hope that we continue to show that strength with the $7 7 million active listings. They are growing 18% year over year, we saw incredible strength throughout the year 5 million hosts the vast majority of this listings being unique to Airbnb and I think that that uniqueness also gives us a lot of the strength on conversion and a lot of things.

Speaker Change: Brian talked about in terms of protecting price make it easier to shop and find the right home for.

Speaker Change: Each guest is incredibly important so protecting the core service is there and then the last piece was just you also talked about is just finding the areas, where we are underpenetrated relative to where the opportunity is and I think thats. The vast majority of countries around the world and when we make sure to apply a product view a marketing view.

Dave Stevenson: And when we make sure to apply a product view, a marketing view as a supply view in a targeted way, in each country, we're unlocking incremental growth. And that's what we've seen, you know, why Brazil has nearly doubled since 2019. So, yep, it's supply, it's product, it's full funnel marketing, and it's doubling down in under-penetrated countries. Your next question comes from Kevin Koppelman from TD Cowen. Your line is open. Thanks so much.

Speaker Change: As supply view in a targeted way in each country. We are unlocking incremental growth absolutely seen why Brazil has nearly doubled since 2019, so yes.

Speaker Change: Supply its product.

Speaker Change: Marketing and it's doubling down in Underpenetrated countries.

Speaker Change: Your next question comes from the line of Kevin Kopelman from TD Cowen Your line is open.

Kevin Kopelman: Thanks, so much.

Operator: I had a follow-up question on the margin question. Could you give any more color and your kind of initial thinking for the year on growing headcount and also how you're thinking about the marketing plan to support the growth initiative that you talked about? Yeah, in terms of headcount, you know, we grew headcount last year about 1%. We're planning to grow it maybe slightly more than that, you know, it could be kind of mid single digits, a low to mid single digit percent, just like Ellie mentioned. I think we will see depending on what our product development needs are, but it's not going to be above overall revenue growth. And then in terms of marketing, you know, largely, we're going to keep marketing costs as a percentage of revenue largely the same as what it was in 2023.

Kevin Kopelman: Follow up on the margin question could you give any more color on your kind of initial thinking for the year on growing head count and also how youre thinking about the marketing plan to support the growth initiatives that you talked about.

Speaker Change: Yes in terms of head count we grew head count last year about 1%.

Speaker Change: Planning to grow at maybe slightly more than that it could be kind of mid single digits low to mid single digit percent just kind of early mentioned I think we will see depending on what our product development needs are but it's not going to be above overall kind of revenue growth and then in terms of marketing.

Speaker Change: We're going to keep marketing costs as a percentage of revenue largely the same as what it was in 2023.

Dave Stevenson: In some ways, we probably could see additional leverage on marketing. But what we've seen is such great success with our brand marketing efforts in our core markets that we're actually expanding to 20 countries around the world. So that's already included in this.

Speaker Change: In some ways, we probably could see additional leverage on marketing, but what we've seen as such great success with our brand marketing efforts in our core markets, but we're actually expanding to 20 countries around the world. So that's already included in this and then we will see US there are other investments to support the newer business areas, but to the extent that there may be any incremental market.

Dave Stevenson: And then we'll see if there are other investments to support the newer business areas. But to the extent that there may be any incremental marketing, it's not going to be a materially larger percentage of revenue than it was last year. Your next question comes from a line called Lee Horowitz from Deutsche Bank. Your line is open.

Speaker Change: It's not going to be a materially larger percentage of revenue than it was last year.

Speaker Change: Your next.

Speaker Change: Question comes from the line of Lee Horowitz from Deutsche Bank. Your line is open.

Operator: Can we maybe spend some time talking through sort of the competitive dynamics and your expectations for the competitive set in the U.S. in 2024, particularly as, you know, some of the larger competitors look to lean into share gains? Are any of these investments aimed at, you know, holding share, or any of this type of investment sort of, you know, aimed at defending share against a more competitive environment? Thanks so much.

Can you maybe spend some time talking through sort of the competitive dynamics and your expectations for the competitive set in the U S and 224, particularly as some of your larger competitors look to lean into share gains.

Dae K. Lee: Are any of these investments aimed at holding share or any of this type of investments sort of differ.

Dae K. Lee: Defending share against a more competitive environment. Thanks, so much.

Dave Stevenson: Yeah, you know, we're going to continue to do what we're doing well, which is have unique supply that is outgrowing any of our competitors. And I think that by having that, we're able to drive kind of incremental nights and take share from both traditional hospitality and our competitors. I know competitors are trying to come into North America and try to take additional share. It's not what we're seeing.

Speaker Change: Yes, we're going to continue to do what we're doing well, which is have unique supply that is outgrowing any of our competitors and I think by having that.

Speaker Change: We're able to drive kind of incremental lights and take share from both traditional hospitality and our competitor or competitors I know competitors youre trying to come in to North America and take try to take additional share with its not what were seeing were not seeing success. There. We're seeing that a lot of competition is focused on professional hosts.

Dave Stevenson: We're not seeing success there. We're seeing that a lot of competition is focused on professional host supply, which is undifferentiated and often cross-listed. And I think the differentiated supply that we were able to bring on has been a material kind of net benefit to us. So that's where the strength we're seeing comes from.

Speaker Change: Supply, which is undifferentiated and often cross listed and I think the differentiated supply that we were able to bring on has been a material kind of net benefit to us. So.

Speaker Change: That's where the strength we're seeing.

Brian Chesky: And I'll just add that, you know, we have a lot of competition for where people choose places to stay. Our main competition is hotels, first of all. And we're so much smaller than hotels. For everyone who stays at Airbnb, nine people stay in a hotel.

Speaker Change: Yeah, and I'll, just I'll just add that.

Speaker Change: We have a lot of competition for.

Speaker Change: More people are choosing places stay our main competition, our hotels first of all.

Speaker Change: And we're so much smaller than hotels for everyone stays by Airbnb 90 people stay in a hotel.

Brian Chesky: So I think the bigger opportunity is for us to take market share. Because again, all you need is one of them to come to Airbnb, and we've now doubled the size of our business. I think we are only scratching the surface. We grew in every region; we maintained or grew market share in every region. As Dave said, we are the brand in this category, a noun and a verb used all over the world. We are the only ones with a custom-built platform, and we're gonna continue to strengthen our advantages, including guest favorites, the only one to offer that, and the only one to offer custom-built tools on the host side. So the best game we can play is to continue to focus on executing ruthlessly, and if we continue to do that, we are gonna continue to take share. Your next question comes from a line by Jed Kelly from Oppenheimer. Your line is open. Hey, great. Thanks. Thanks for taking my question. Just, just a couple. Just one.

Speaker Change: The bigger opportunities for us to take market share because again, all you need is one of them to come to Airbnb and we've now doubled the size of our business I think we are only scratching. The surface. We grew in every region, we maintained or grew share in every region as Dave said, we have.

Speaker Change: We are the brand in this category announce <unk> used all over the world. We are the only ones that are custom built platform.

Speaker Change: And we're going to continue to strengthen.

Speaker Change: Our advantages, including like guest favorites, the only one to offer that.

Speaker Change: The only one to offer custom built tools on the host side. So the best game. We can play is to continue to focus on executing ruthlessly. If we continue to do that we're going to continue to take share.

Speaker Change: Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.

Jed Kelly: Hey, great. Thanks, Thanks for taking my question just a couple just one can you talk about how we think we should think about demand and supply starting to converge I know you've had great supply growth up 18% should we start to see room nights catch up to that.

Operator: Can you talk about how we think about demand and supply starting to converge? I know you've had great supply growth of 18%. Should we start to see room nights catch up to that demand?

Brian Chesky: And then can you just give us an update on the health of the US short-term rental market? How you're thinking about that going into this year after, you know, what was softness in a lot of those core vacation rental destinations last year. Thanks.

Jed Kelly: Demand and then can you just give us an update on the health of the U S short term rental market, how youre thinking about that going going into this year. After what was a softness in a lot of those core vacation rental destinations last year. Thanks.

Speaker Change: Yes, so why don't I, just start on Jed I'm talking about supply growth and I'll, let David answer the rest.

Brian Chesky: Yeah, so why don't I just start Jed talking about supply growth, and I'll let Dave answer the rest. I believe in the long run that supply growth is a long-term indication of growth in Airbnb. And it's been healthy since we started the company, but you'll know that, during the pandemic, one of the biggest questions I got asked when supply growth stopped was how we're going to restart supply. The great thing about our supply growth is that most of it comes organically to us. In fact, 36% of our new hosts are prior guests. That's the highest that number's ever been. And the reason people host is that their friends typically tell them about it.

David: I believe in the long run that supply growth as a long term indication of growth in Airbnb.

David: And it's been healthy since we started the company, but youll know that during the pandemic one of the biggest questions I got asked but the pie grow stop is how we're going to restart supply growth.

The great thing about our supply growth is that most of it comes organic to us in fact, 36% of our new hosted prior cat. That's the highest that number it's ever been and the reason people host is because your friends typically tell them about it.

Brian Chesky: Last year, actually the year before, we actually began, and we really put the throttle on it last year, a new strategic priority for mainstream hosting. And we did a few things. We really focused on making it easy to get started and increasing awareness. Now, one of the reasons that we're so excited about the growth being 18%, and we hope it grows even faster, is, as you know, the more supply you have, the more pricing pressure you relieve on the inventory. So when your supply is limited, what you typically see is prices go up. When prices go up, nice growth is typically diminished.

David: The last year actually the year before we actually begin and we really put the throttle on it last year.

David: Our new strategic priority to mainstream hosting and we did a few things.

David: We're really focused on making hosting easy to get started and increasing awareness now one of the reasons that we're so excited about the growth being 18% and we hope it grows even faster is as you know the more supply you have the more pricing pressure you relief on the inventory so when you're supply constrained what you typically see as prices go.

David: And prices go up nice growth is typically.

David: Diminished. So we believe that again the total addressable market for Airbnb stays is every single person with very few exceptions, we stay in a hotel.

Brian Chesky: So we believe that, again, the total addressable market for Airbnb stays is every single person, with very few exceptions, who stays in a hotel. So if we can get the right supply at the right price, then we believe we can capture that demand and build a company significantly larger. Additionally, by having a surplus of supply, we think that that will allow us to have even tighter quality control. So to answer your question, we do think that the healthy supply growth of 18% could be a great leading indicator down the road of where demand could be. And we'd love for supply to grow even faster. Yeah, I think what's also interesting is if you actually back up and look out over multiple years, you go back, you know, four years or so and look at the total amount of supply growth versus the total amount of nights growth, it's actually fairly balanced. So there are times that supply leads demand and times that demand leads supply.

David: You can get the right supply at the right price and we believe we can capture that demand and build the company significantly larger. Additionally by having a surplus of supply we think that that will allow us to have even tighter quality control. So to answer. Your question. We do think that the healthy supply growth at 18% could be a great leading indicator down the road where demand.

David: Could be and we'd love to have supply to grow even faster.

David: Yes.

David: Yes, I think what's also interesting is if you actually back up and look out over multiple years you go back four years or so and look at the total amount of supply growth versus the total amount of nights growth. It's actually fairly consistent. So there are times that supplied leads demand in times of demand lead supply.

Brian Chesky: But I think, as Ryan mentioned, over time, those things will equalize out, and the greater supply definitely helps our overall performance. I'd say in terms of the U.S. specifically, a couple of things. You know, we're seeing overall very stable growth in the U.S. We're seeing strong inbound, cross-border growth of nights, and I think, unlike others that we're seeing in the U.S., we've seen very healthy growth in the non-urban markets, right? Urban markets have traditionally been our areas of strength. Non-urban grew substantially kind of during COVID and coming out of COVID.

David: I think as Brian mentioned over time, those things equalize out in the greater supply definitely helps our overall performance I'd say in terms of.

David: You asked very specifically a couple of things.

David: We're seeing overall very stable growth in the US we're seeing strong inbound cross border growth of lights, and I think unlike others that we're seeing in the U S. We've seen very healthy growth in the non urban markets urban markets have been traditionally our areas of strength not urban grew substantially during COVID-19 and coming out of Covid.

Dave Stevenson: We've continued to hold really great shares and growth in the non-urban areas, and now urban is coming back stronger, and that has been our traditional area of strength. Maybe a last area is our long-term stays. So, 19% of our stays were of 28 days or longer in the last quarter.

David: We've continued to hold really great share and growth in the non urban areas and now urban is coming back stronger and that has been our traditional area of strength, maybe a last area is our long term states. So 19% of our stays where of 28 days or longer in the last quarter. So.

Dave Stevenson: So, you know, it's even up a little bit from 18% prior to that. I think there's been a lot of criticism of, well, long-term stays, that's a post-COVID benefit that's going to go away. But it's still materially bigger than it was back in 2019, when it was closer to 13%, 14% of our night's growth.

David: Given up a little bit from the 18% prior to that I think there's a lot of critique of long term stays post COVID-19 benefit that's going to go away, we'll still materially bigger than it was back in 2019, when it was closer to 13% 14% of our nice growth. So.

Operator: So, we're seeing really great strength there. So, that's what we're seeing in the rough numbers. Your next question comes from the line of Timothy Shipska from JNP Securities. Your line is open. Hi, this is Nick Jones on.

David: Seeing really great strength there. So that's what we're seeing in North America.

David: Your next question comes from the line of Timothy <unk> from J P. Securities. Your line is open hi.

Timothy: Hi, this is.

Dave Stevenson: You talk a lot about, you know, focus on international expansion and being kind of under penetrated in many of these markets. You're rolling this playbook out to, I think it was, Switzerland, Belgium, and the Netherlands. Is this kind of the cadence we should expect a playbook to kind of continue to expand into additional countries? It's kind of three or four at a time.

Nick Jones: Nick Jones on.

Nick Jones: You talked a lot about.

Nick Jones: Focus on international expansion and they kind of under penetrated in many of these markets Youre Rolling This playbook out so I think it was Switzerland, Belgium, Netherlands.

Nick Jones: Is this kind of the cadence we should expect a playbook to kind of continue to expand into additional country. That's got a three or four at a time and I guess, how are you balancing rolling this playbook out to more countries.

Dave Stevenson: I guess, how are you balancing rolling this playbook out to more countries, to more countries with kind of these new initiatives that we're looking forward to hearing from later in 2024? Yeah, I think what you'll continue to see is that we're being very judicious about putting small teams on the ground at each of these locales, making sure that we have a full funnel marketing approach working well, establishing what product, you know, adjustments might be unique to a specific location that's helpful. And then we're going to we're working down our list. What's the largest opportunity? What do we have the capabilities for? And how do we kind of do it?

Nick Jones: To more countries.

Nick Jones: Just kind of these new initiatives that we're looking forward to hearing from later in 2024.

Speaker Change: Yes, I think thats, what Youll continue to see is that we're being very judicious about putting a small teams on the ground in each these locales, making sure that we have a full funnel marketing approach working well, establishing what product adjustments might be unique to a specific location thats helpful. And then we're going to work.

Speaker Change: Looking down or less what's the largest opportunity what do we have the capabilities for and how do we kind of do it. None of these are perishable things were just kind of working our way down kind of a prioritized list of our capabilities and then this sets us up well as we expand beyond the core to make sure that we have strong established base of business that you've got to build from.

Dave Stevenson: None of these are, you know, perishable things; we're just kind of working our way down a prioritized list of our capabilities. And then this sets us up well as we expand beyond the core to make sure that we have a strong, established base of business, which is going to build. I think that there are some massive opportunities in front of us, especially in Asia. We really did focus on Korea, but I think the point that should be made is if you look at our penetration into the US, Australia, Canada, France, and to maybe a lesser extent, the United Kingdom, it's significantly higher than other parts of the world. In fact, And the United States is more than a quarter of a magnitude higher penetration than Asia. There is no reason why we cannot get there today.

Speaker Change: And I'll, just I'll just add that.

Speaker Change: Okay.

Speaker Change: I think that there's some massive opportunities in front of us, especially with Asia.

Speaker Change: We really did focus on Korea, but I think the point that should be made is if you look at our penetration.

Speaker Change: I'd say U S, Australia, Canada, France and to maybe a lesser extent.

Speaker Change: Kingdom, there are significantly higher than other parts of the world in fact.

Speaker Change: In the United States is more than a foreigner magnitude higher penetration in Asia. There is no reason why we cannot get to today's U S penetration and the equivalent penetration in most of the major tourism markets around the world and we think we're only scratching the surface and are in mature market at a more mature market. So.

Brian Chesky: U.S. penetration and the equivalent penetration in most of the major tourism markets around the world. And we think we're only scratching the surface in our more mature market. So again, we are going to continue to add these countries one by one. But the other thing is, we're just getting started in Korea. We're just getting started in Germany. We're just getting started in Brazil.

Speaker Change: Again, we are going to continue to add these countries one by one but the other thing is we're just getting started in Korea. We're just getting started in Germany. We're just getting started in Brazil, Brazil is now double the size of the west pre pandemic, but its going to double again and so we're going to continue we have multiple phases of this playbook and the first phase is playing out in Korea, Japan.

Brian Chesky: Brazil is now double the size it was pre-pandemic, but it's going to double again. And so we're going to continue. We have multiple phases of this playbook, and the first phase is playing out in Korea, Japan, and Brazil.

Brian Chesky: But we're going to go on to the next phase as we continue. Your next question comes from a line James Lee from Missoula. Your line is open.

Speaker Change: But we're going to go onto the next phase ASIC, you need to add more countries.

Speaker Change: Your next question comes from the line of James Lee from Mizuho. Your line is open.

Operator: Great, thanks for taking my questions. My question is about the booking window. I think in 1Q last year, the booking window was extended as consumers tried to lock in high prices for accommodation. And I'd just curious what you're seeing this quarter so far.

Dae K. Lee: Great. Thanks for taking my questions.

Dae K. Lee: My question is about booking window I think in <unk> last year booking window was extended as can.

Dae K. Lee: <unk> tried to lock in high prices for accommodation and just curious of what you were seeing in this quarter. So far are you seeing any differences.

Dave Stevenson: Are you seeing any differences in the booking window by region? Also, that would be helpful. Thank you.

Dae K. Lee: Into by region also that'd be helpful. Thank you.

Operator: Yeah, you know, booking windows have been relatively stable; we've kind of come back to a little bit more normal booking windows over time. So there's actually not a lot to say on it. It's pretty consistent now globally, as things are returning to more normal. Your next question comes from the line of Bernie McTernan from Needham & Company. Your line is open.

Speaker Change: Yes, cookie windows spend relatively stable, we've kind of come back to a little bit more normal booking windows overtime. So there's actually not a lot to say on it it's pretty consistent now globally as things are returning to a more normal state.

Speaker Change: Your next question comes from the line of Bernie Mcternan from Needham <unk> Company. Your line is open.

Brian Chesky: Great, thanks for taking questions. Brian, just on cross-vertical, when you're talking about the new product initiatives, were you meaning more of like a full OTA and thinking about cross-vertical in travel? Or was this more thinking about like Amazon AWS, you know, moving beyond retail to all industries? And then, bringing in more first-time bookers to the platform. Any specific drivers there?

Bernie Mcternan: Thanks for taking questions.

Bernie Mcternan: Brian just on cross vertical when Youre talking about the new product initiatives were you, meaning more of like a full LTA in vivo cross vertical as in travel or was this more thinking about like Amazon AWS moving beyond retail to all industries and then.

Bernie Mcternan: Bringing in more first time bookers to the platform any specific drivers there or is that just international or anything else, we should be aware of thank you.

Brian Chesky: Is that just international or anything else we should be aware of? Thank you. Uh, yeah. Hey, Bernie.

Speaker Change: Yeah, Hey, Bernie.

Bernie Mcternan: I think that Airbnb can go far beyond travel in the coming years, but I think we're going to start with.

Dave Stevenson: I think that Airbnb can go far beyond travel in the coming years, but I think we're going to start with our core. So I think what we're going to do is start with travel, and then down the road, we can move beyond travel. So you should, we should start by doing the things that are the most logical extensions of what we already provide, and then we will move further and further out from our core as the things we launch are successful. And then what was the second part of the question? Well, it's about first-time bookers and what we see is the growth of first-time bookers. I'll start, Brian; you can round it out if I miss anything.

Bernie Mcternan: Sure.

Bernie Mcternan: What we're going to do is start with travel and then down the road. We can move beyond travel. So you should you should start by seeing US do the things that are there.

Bernie Mcternan: Most logical extension of what we already provide and then we will move further and further out from a core as the things we launch are successful.

Speaker Change: And then what was the second part of your question was about.

Speaker Change: First time bookers and yes.

Speaker Change: The growth of first time, bookers I'll start Brian and you can round it out so I Miss anything, but the key part of the reliability and making sure that they feel like we have.

Dave Stevenson: But, you know, a key part is reliability, making sure that they feel like we have, that the services can be reliable. So things like air cover have been an area that we've been promoting to get people comfortable with booking Airbnb. Doing things like reducing cancellations has been great.

Speaker Change: The servicing can be reliable so things like air recover has been an area that we've been promoting to get people comfortable on booking airbnb doing things like reducing cancellations has been great. The work that we've done to make sure that prices are moderating.

Dave Stevenson: The work that we've done to make sure that prices are moderating and then just general awareness, making sure that they're aware of it, which is the full-funnel marketing approach we take with a lot of these international countries. We're seeing strong strength in mobile downloads, as we highlighted at the top of the call. And just overall, you know, strong organic trends across the business. Yeah, I mean, I'll just highlight a few things.

Speaker Change: And then just general awareness, making sure that they're aware of it which is the full funnel marketing approach we do lot of these.

Speaker Change: International countries.

Speaker Change: Seeing strong strength in mobile downloads.

Speaker Change: Hi, there at the top of the call and just overall strong organic trends across the business.

Speaker Change: Yes, I mean other site highlight a few things and then just with data center I mean first of all our traffic and our top of funnel results are really good and one of the reasons why is.

Brian Chesky: In addition to what Dave said, I mean, first of all, our traffic and our top of funnel results are really good. And one of the reasons why is, you know, we've got number one; we're having a really successful advertising campaign. You know, as you know, we have a very different approach to marketing than our competitors. We're not really typically trying to buy customers through performance marketing. We generally, as Dave mentioned, have a full funnel approach.

Speaker Change: Number one we're having a really successful advertising campaign as you know we have a very different approach to marketing than our competitors. We're not really typically trying to buy customers through marketing, we generally as Dave mentioned and have a full funnel approach and we think of advertising more education than sales and one of the things. We noticed was that we wanted to educate people.

Brian Chesky: And we think of advertising more as education than sales. And one of the things we noticed was that we wanted to educate people about how there are some trips that are really just always better on Airbnb. If you're traveling with your family, if you're traveling in groups, being able to share a house and have your own bedroom and save money rather than getting separate hotel rooms or being crammed in one hotel room makes complete logical sense.

Speaker Change: About how there are some trips that are really just always better and airbnb.

Speaker Change: If youre staying with if you're traveling or your family, if you're traveling or groups, you're able to share a house and have your own bedroom and save money or having any type of hotel rooms are crammed in one hotel room makes complete logical sense and so we have this campaign running it's called get an airbnb. It's the most successful digital advertising campaign, we've ever done and it is now running on TV. We also are tapping into the biggest moments.

Brian Chesky: And so we have this campaign running, it's called Get an Airbnb. It's the most successful digital advertising campaign we've ever done, and it's now running on television. We also are tapping into the biggest moments of pop culture. Last year, for example, the Barbie movie came out, and we partnered with Mattel to turn a mansion in Malibu into a Malibu Barbie dream house.

Speaker Change: Pop culture last year for example, the Barbie movie came out and we partner with Mattel to turn a mansion in Malibu Malibu Barbie Dream House.

Brian Chesky: That became a phenomenon on social media, and it got more press, more articles than our IPO. In fact, three times as many articles were written about the Barbie & Al Blue Dreamhouse as Airbnb's IPO, just to give you a sense. So we have a lot of traffic coming to Airbnb. We're gonna continue to hopefully stay relevant within culture, and if we can then convert that traffic, as Dave said, through product optimization, reliability efforts, and improved customer service, then I think there are a lot of opportunities. And again, we have an entire roadmap where you can imagine hundreds of basis points of conversion and nice growth increase through some of these efforts. So we've got a pretty big arsenal of leverage. Your next question comes from the line of John Colantoni from Jefferies. Your line is open.

Speaker Change: That became a phenomenon on social media and it got more press more articles than our IPO and three times as many articles were written about the <unk> IPO just to give you a sense.

Speaker Change: We have a lot of traffic coming to Airbnb, we're going to continue to hopefully stay relevant within culture and if we can then convert that traffic as Dave said through product optimization reliability efforts improve customer service and I think there is a lot of opportunities and again, we have an entire roadmap, where you can imagine hundreds of basis points of conversion.

Speaker Change: Nice growth increase through some of these efforts. So we've got a pretty big Arsenal of letters.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of John <unk> from Jefferies. Your line is open.

Operator: Great, thanks for taking my question. Just looking across your regions, MIA is where you've sort of seen the biggest moderation, incremental nights, and experiences this year. I know there are some big travel markets where you're still underpenetrated, like Germany and now Switzerland, Belgium, and the Netherlands. Maybe you could talk about why consumer adoption has lagged in some European markets versus others and any key areas of investment you still need to make to help drive adoption rates higher in that market. Thanks.

John: Great. Thanks for taking my question.

John: Looking across your regions EMEA is where you're sort of seeing the biggest moderation incremental nights and experiences. This year I know there is some big travel markets, where you're still underpenetrated like Germany, and now, Switzerland, Belgium, and the Netherlands, maybe.

John: Maybe you could talk to why consumer adoption has lagged in some European markets versus others and any key areas of investments you still need to make to help drive adoption rates higher in that market. Thanks.

Dave Stevenson: Yeah, you know, we continue to see strength in our growth in our more established markets, you know, North America and Europe, but we're actually seeing still stronger growth relatively in Latin America and Asia. And so any kind of moderation is still just coming off of high overall growth. I mean, I'd say APAC is really encouraged to see China outbound travel gathering the kind of additional momentum that we expect by the end of the year, Chinese outbound travel should be above 2019 levels. So I'd say that we're continuing to see great strength. And this international expansion playbook that we have, I think it's going to continue to be a tailwind for growth, especially in Latin America and Asia for the rest of the year. Your next question comes from the line of Ken Gorelski from Wells Fargo. Your line is open. Thank you very much.

John: We continue to see strength in our growth in our more established markets.

John: North America, and Europe, but we're actually seeing still stronger growth relatively in Latin America, and Asia, and so any kind of moderation is still just coming off of high overall growth I mean, I'd say APAC were really encouraged to see China outbound.

John: Gathering kind of additional momentum and we expect by the end of the year, China outbound travel should be above 2019 levels. So I'd say that we're continuing to see great strength and this international expansion Playbooks that we have I think it's going to continue to be a tailwind for growth, especially in Latin America and Asia for us this year.

John: Your next question comes from the line of Ken Goralski from Wells Fargo.

Ken Goralski: Line is open.

Ken Goralski: Thank you very much and I'm sure you'll tell us more of that later this year, but could.

Operator: And I'm sure you'll tell us more later this year, but could you talk about how you think about either the build, buy, or partner strategy with respect to expanding beyond the core? Yeah, absolutely. So, I think one of the great things about Airbnb is that most of our innovation and most of our business is developed organically. And that just comes from our DNA.

Ken Goralski: Could you talk about how you think about.

Ken Goralski: Neither the build by our partner strategy with.

Ken Goralski: Respect to expanding beyond the core.

Yes, absolutely.

Ken Goralski: So.

Ken Goralski: I mean, I think one of the great things about Airbnb is.

Ken Goralski: That most of our innovation and most of our businesses developed organically.

Ken Goralski: And that just becomes from our DNA started by three product and engine product people and engineers to design and engineer and we created Joni and I created this company from nothing with really no capital whatsoever to speak off so I think.

Brian Chesky: You know, like Airbnb was started by three product people and engineers, two designers, and an engineer. And we created, Joni and I created this company from nothing with really no capital whatsoever to speak of. So I think building and organic growth is in our DNA, and it's always going to be our predisposition.

Build.

Ken Goralski: And the organic growth is in our DNA and it's always going to be our predisposition.

Brian Chesky: That being said, with the scale that we have, you know, the scale we have, having nearly 2 billion guest arrivals and more than 70 billion GBV, that is a huge asset to be able to partner with. And a number of brands have reached out to us, telling us they want to partner with Airbnb not just because of the traffic we have but also because of the strength of our brand. So we think that there's a myriad of opportunities for partnership. Now on the buy, you know, we're going to be, we're going to have a very high bar for ROI on acquisitions. We've done a number of acquisitions in the past; some have been very successful. And with our free cash flow, you know, we have generated 3.8 billion in free cash flow.

Ken Goralski: That being said with the scale that we have.

Ken Goralski: The scale, we have having nearly $2 billion guest arrivals and more than 70 billion GBP.

Ken Goralski: That is a huge asset to be able to partner and a number of brands have reached out to us telling us they want a partner or maybe not just because of the traffic we have but also because of the strength of our brands. So we think that there's a myriad of opportunities the partnership now in Dubai.

Ken Goralski: B, we're going to have a very high bar for ROI for acquisitions, we've done a number of acquisitions in the past some have been very successful and with our free cash flow. We have generated $3 8 billion of free cash flow, we absolutely have the cash and obviously the currency of our stock to make acquisitions, but we're going to be very <unk>.

Brian Chesky: We absolutely have the cash and, obviously, the currency of our stock to make acquisitions, but we're going to be very, very thoughtful. And it's always going to be build, then partner, then buy, probably in that order of prioritization. Your next question comes from a line from Mark Mahaney from Evercore ISI. Your line is open, and let me try two questions.

Ken Goralski: Thoughtful and it's always going to be build then partner then by probably in that order of prioritization.

Ken Goralski: Your next question comes from the line of Mark Mahaney from Evercore ISI. Your line is open.

Mark Mahaney: And let me try two questions. There. So there's some discussion in your shareholder letter about take rates just.

Operator: There's some discussion in your share of the letter about take rates. Just, take rates have been relatively consistent in the last couple of years. Is there any reason to think that that pattern won't change, or will change going forward? Is there a reason why take rates would actually go up?

Mark Mahaney: Take rates have been relatively consistent in the last couple of years is there any reason to think that that pattern won't change going forward or will change going forward is there a reason why take rates would actually go up and then secondly, Brian you talked about the ability to really expand in Asia and I don't know if there and I understand the momentum that you've got in Korea Asia. It seems like it's generally been a tough <unk>.

Dave Stevenson: And then secondly, Brian, you talked about the ability to really expand in Asia. And I don't know if, but I understand the momentum that you've got in Korea. Asia, it seems like it's generally been a tough market for a lot of, you know, Internet companies that have tried to expand there. And there's China, which seems to be relatively off limits. So just talk through a little bit more about why you see grounds for optimism in that region. And I know there's a lot more to Asia than just China, but I wanted to ask that question.

Mark Mahaney: But for a lot of Internet companies have tried to expand there and there is China. So it seems to be relatively off limits. So just just talked to you a little bit more about why you see grounds for optimism in that region and I know theres a lot more to Asia than just China, but just wanted to ask that question. Thank you.

Brian Chesky: Hey, Mark, yeah, when we do Rupert, I'll do Asia, and then Dae will do Take Right. I mean, no doubt that internet companies have struggled in Asia. I think, in particular, they have struggled in China.

Speaker Change: Hey, Mark why don't know when we do all the Asia and then Dave will take take rate so.

Mark Mahaney: I mean, no doubt that internet companies have struggled in Asia I think in particular they struggled in China.

Brian Chesky: And we do not have an inbound business, a domestic business, in China any longer. Although obviously, there are a lot of stories of companies doing well in other countries in Asia. So let me just talk about why I think Airbnb is unique.

Mark Mahaney: And we do not have a inbound business the domestic business in China any longer. Although obviously there is a lot of stories of companies doing well in other countries in Asia. So let me just talk about why I think Airbnb is unique the reason why as you know is that we're a global travel network and so 44% of our nights booked were cross border.

Brian Chesky: The reason why, as you know, is that we're a global travel network. And so, you know, 44% of our nights booked were cross-border. And, you know, if you're in Japan, and you want to stay in Germany, and you don't want to stay in a hotel, then, you know, where are you going to go?

Mark Mahaney: And.

Mark Mahaney: If youre in Japan.

Mark Mahaney: And you want to de in Germany.

Mark Mahaney: And you don't want to stay in a hotel.

Mark Mahaney: And then where are you going to go you're going to want to go to a global platform, probably not a Japanese platform and the reason if youre going to Germany from Japan, and Youre not going to use the Japanese platform. It because the Japanese platform would have to get German homes on that platform and that is probably not going to happen and so we think that.

Brian Chesky: You're going to want to go to a global platform, probably not a Japanese platform. And the reason why you're going to Germany from Japan and you're not going to use a Japanese platform is because the Japanese platform would have to get German homes on that platform, and that is probably not going to happen.

Brian Chesky: And so we think that, you know, we think this is a global market. This is a global network, not a regional network. And one of the things we've noticed is that Airbnb seems to work about as well in every single country that we've entered. You know, there's a big question about Latin America, for example; we were massively underpenetrated. And there was a question, well, this is an emerging market. Will Latin America work well? And then, of course, Brazil, Ecuador, and Peru have grown very, very quickly.

Mark Mahaney: We think this is a global market. This is a global network not a regional network and one of the things. We've noticed is that Airbnb seems to work about as well in every single country that we entered there's a big question about Latin America. For example, we were massively underpenetrated and there was a question well. This is an emerging market Latin America work, well and then of course.

Mark Mahaney: Brazil, Ecuador, Peru have grown very very quickly and we and also I'd just say the success of Korea has been phenomenal and the other thing is that the population in Asia is generally younger than the population in Europe, and North America and the other thing. We know is that young people tend to gravitate more to <unk>.

Brian Chesky: And also, I just say the success of Korea has been phenomenal. And the other thing is that the population in Asia is generally younger than the population in Europe and North America. And the other thing we know is that young people tend to gravitate more to Airbnb than older cohorts. So I just think the amount of people that are on mobile applications that are young, where Airbnb, they're not predisposed to book a hotel, the strength of network effects, the fact that there's going to be really strong cross-border travel and Airbnb is a cross-border network are all the reasons why I think Asia will be no different than any other region It might just take a little bit more time.

Mark Mahaney: B than older cohorts. So I just think the amount of people that are mobile applications that are young.

Mark Mahaney: Theyre not predisposed to book a hotel the strength of network effects and the fact that there is going to be really strong cross border travel and Airbnb is a cross border network are all the reasons why I think Asia will be no different than any other region on airbnb and might just take a little bit more time.

Brian Chesky: Yeah, and then Mark, in terms of take rates, no, they should be consistent; there's no real reason why they should be going up on kind of a time-adjusted basis. We have not maturely changed our pricing as a percentage of GBV when you adjust for the timing. So, you know, we are testing the cross-currency fee, as we mentioned earlier in the call, but you shouldn't count that as a major expansion of fees this year. In Q1, the implied take rate, revenue over gross booking value, it's gonna be higher, but then again, that's largely due to timing, right, a little more revenue coming in Q1, largely due to the Easter timing. So, longer term, I am excited about the opportunity to drive revenue with our experiences and services and that ability to drive incremental revenue and incremental margin. So, over a longer period of time, I think our margin expansion will absolutely come from hosting guest services and experiences. But here, in the short term, there's no real change on a time-adjusted basis.

Mark Mahaney: Dave.

Dave Stevenson: Yeah, and then Mark in terms of take rates no. There should be consistent there is no real reason why there should be going up on kind of all time adjusted basis, we have not materially changed our pricing.

Speaker Change: As a percentage of <unk> when you adjust for the timing so.

Speaker Change: We are testing the cross currency.

Speaker Change: Earlier in the call, but it shouldnt count that as a major expansion of these this year in Q1, the implied take rate revenue over gross booking value as it can be higher but that again thats largely during the timing a little more revenue coming in Q1, largely due to the Easter timing. So now longer term I am excited about the opportunity for <unk>.

Revenue driving with arch experiences and services and that ability to drive incremental revenue and incremental margins. So over a longer period of time I think our margin expansion will absolutely come from hosting guest services and experiences but here in the short term there is no real change on a time adjusted basis towards.

Dave Stevenson: Again, if you'd like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Alex Brignall from Redburn Atlantic. Your line is open.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Again, if you'd like to ask a question press star one on your telephone keypad. Your next question comes from the line of Alex <unk> from Redburn Atlantic Your line is open.

Operator: Good evening, thank you very much for taking the questions. The first one would just be on the Q1 guide, just trying to understand what you're implying on the take rate expansion, because there's obviously one comment, which is Easter timing, which is 1-2% on revenue. But it seems like the comment of notably higher take rates would be more than just 1-2% extra on The Revenue. So if you just please pull out, and then obviously, it feeds back into the room night. And then the second one, just in terms of a little bit more detail on the cross currency, it sounds like what you're saying is that it now is another lever that you have, which is fantastic, but it's something that you're going to test with. Is there an amount of friction that you expect when you add it? Do people have the chance to not pay the fee?

Alex: Good evening. Thank you very much for taking the question.

Alex: The first one would just be on that.

Alex: The Q1 guide just trying to understand.

Alex: What youre implying on.

Alex: The take rate expansion, because that's obviously, one comment which is Easter timing, which was once 2% of revenue, but it seems like the comments of notably higher take rates would be more than just 1% to 2% extra.

Alex: The revenue so if you can just cut.

Alex: Cut out and that obviously feeds back into the room nights.

Alex: And then the second one just in terms of a little bit more detail on the cross currency it sounds like.

Alex: What youre, saying is that it now is another lever that you have which is fantastic.

Alex: Something that Youre going to test with is there an amount of friction that you expect when you add it to people have the chance to not pay the fee why wouldn't it be display to consumers.

Dave Stevenson: Where will it be displayed to consumers? And your last comment, Dave, on the take rate not expanding. Presumably, that means that in terms of its contribution to the take rate, it's going to be relatively immaterial. Thank you so much.

Alex: And the last comment Dave on the take rate not expanding presumably that means that in terms of its contribution to take right. It's going to be relatively immaterial. Thank you so much.

Dave Stevenson: Yeah, so the tour is, the reason why we say the take rate expansion in Q1 is because there's a double hit; you have the increased revenue in Q1 due to the timing, and you have decreased gross booking value that shifts from Q1 to Q2. So you both increase revenue and decrease gross booking values in the period by some amount, say one to 200 basis points, and then you get that greater expansion of, you know, fees, revenue, and overgrossed booking value. So that's why we give the guidance that way.

Dave Stevenson: Yes, so the tour is.

Speaker Change: The reason why we say.

Speaker Change: Particularly the expansion Q1, just because theres a double hit you have the increased revenue in Q1 due to the timing decreased gross booking value that shifts from Q1 to Q2. So both increased revenue and decreased gross booking values in the period.

Speaker Change: By some amount say one to 200 basis points, and then you get that greater expansion of.

Fees revenue over gross book value. So that's why that's why we give the guidance that way, yes in terms of cross country Cross currency, we will we're going to be tough here, we'll be launching in April.

Dave Stevenson: Yeah, in terms of cross-country, cross-currency, we're gonna be testing it. We'll be launching it in April. We need to understand what the impact is on demand overall. I mean, if you just step back, it's actually a unique capability that the vast majority of other platforms either don't have or they charge a substantial premium for.

Speaker Change: We need to understand what the impact is to demand overall I mean, if you can just step back to it it's actually a unique capability that the vast majority of other platforms, either don't have or they charge a substantial premium store. So we've been largely giving away this benefit for no incremental costs and we were just mark.

Dave Stevenson: So we've been largely giving away this benefit for no incremental costs, and we were just monitoring and have the capability of adjusting that fee if we so chose. And we will, but we'll be mindful about it to make sure that we're thoughtful in terms of the impact overall. We have reached the end of our question and answer session. I will now turn the call back over to Mr. Brian Chesky for some closing remarks. All right, well, thanks everyone for joining us today. Just to recap, you know, revenue was another incredibly strong quarter. Revenue was $2.2 billion, 70% higher.

Speaker Change: Returning and how have the capability of adjusting that fee. If we so chose and we will but we will be mindful about it to make sure that we're thoughtful in terms of the impact on overall demand.

Speaker Change: We have reached the end of our question and answer session I will now turn the call back over to Mr. Brian Chesapeake for some closing remarks.

Brian Chesapeake: Alright, well thanks, everyone for joining us today, just to recap revenue was another incredibly strong quarter revenue was $2 2 billion, 70% higher adjusted net income and adjusted EBITDA were both Q4 records and our trailing 12 month free cash flow of $2 8 billion.

Brian Chesky: Adjusted net income and adjusted EBITDA were both Q4 records and the trailing 12-month pre-cash flow at $3.8 billion. And this, of course, represents the pre-cash flow margin at 39%. I'm really proud of what we've been able to accomplish this past year, and there's more to come. You know, 2024 marks the beginning of a new chapter for Airbnb, and I look forward to sharing more throughout the year.

Brian Chesapeake: And this of course represents a free cash flow margin of 39%.

Brian Chesapeake: I'm really proud of what we've been able to accomplish this past year and theres more to come.

Brian Chesapeake: 24, and marks the beginning of a new chapter for Airbnb.

Brian Chesapeake: Look forward to sharing more throughout the year. Thank you all very much.

Operator: Thank you all very much. This concludes today's conference call. Thank you for your participation. You may now disconnect. Please wait; the conference will begin shortly.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Please wait the conference will begin shortly.

Speaker Change: Sure.

Speaker Change: [music].

Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].