1. Demand

Airbnb beat revenue estimates by 2.2% & beat the midpoint of its guidance by 3.3%. This is despite a 700 basis point (bps) foreign exchange (FX) headwind vs. a 600bps headwind it assumed in its guide. Strong result.

Results were roughly in line with abstract total nights and experiences booked guidance offered last quarter.

More Demand Context:

Airbnb gained share in global nights stayed vs. 2021 & 2019 — across all markets.
Generated $8.4 billion in 2022 revenue growing 40% YoY (46% FXN).
YoY listings growth ex-China accelerated vs. last quarter to 16% YoY. New host initiatives are working.
- It removed all listings in China in 2022 to focus entirely on its outbound business there.
Cross border & high density urban growth vectors continue to recover while Airbnb’s long term and off the grid stays remain resilient. Good combination.
Guest cancellations are still above 2019 levels but fell YoY.
Take rate rising YoY is a matter of reservation booking timing. “On a time adjusted basis take rate is very stable” per CFO Dave Stephenson
Q2 2021 and throughout 2021 is when it got pent up demand release. The easy comps = why growth was so rapid at that time.

2. Margins

Beat EBITDA estimates by 16.8% and beat its EBITDA guide by 23.4%.
Beat GAAP EBIT estimates by 34.3%.
Beat GAAP EPS estimates of $0.27 by $0.21.
More than DOUBLED free cash flow estimates.

More Margin Context:

Continued operating leverage in Q4 2022 has been extremely rare among all of the large cap companies that I cover. Most companies are seeing margin contraction. Wonderful deviation from that trend here.
Airbnb generated $1.9 billion in 2022 GAAP net income vs. ($352M) in 2021. It grew FCF YoY by 49% in 2022. Cost controls are not taking the shine off of its demand growth. Airbnb’s headcount is down 5% vs. pre-pandemic with revenue up 75%. It cut marketing spend yet continued to find robust demand growth.
- That’s why margins are exploding higher and why it’s so nice to be a verb. Where should we stay? Just Airbnb it.