Airbnb : Q4 2021 Earnings Corrected Transcript

Corrected Transcript

15-Feb-2022

Airbnb, Inc. (ABNB)

Q4 2021 Earnings Call

	Total Pages: 24
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Airbnb, Inc. (ABNB)	Corrected Transcript
Q4 2021 Earnings Call	15-Feb-2022

CORPORATE PARTICIPANTS

Ellie Mertz	David E. Stephenson
Vice President-Finance, Airbnb, Inc.	Chief Financial Officer, Airbnb, Inc.
Brian Chesky
Chairman, Chief Executive Officer & Co-Founder, Airbnb, Inc.

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OTHER PARTICIPANTS

Colin Alan Sebastian	Brian Nowak
Analyst, Robert W. Baird & Co., Inc.	Analyst, Morgan Stanley & Co. LLC
Naved Khan	Brian Fitzgerald
Analyst, Truist Securities, Inc.	Analyst, Wells Fargo Securities LLC
Stephen Ju	Doug Anmuth
Analyst, Credit Suisse Securities (USA) LLC	Analyst, JPMorgan Securities LLC
Bernie McTernan	Lloyd Walmsley
Analyst, Needham & Co. LLC	Analyst, UBS Securities LLC
Deepak Mathivanan	Andrew Boone
Analyst, Wolfe Research LLC	Analyst, JMP Securities LLC
Mario Lu	Mark Mahaney
Analyst, Barclays Capital, Inc.	Analyst, Evercore ISI
Jed Kelly	Kevin Kopelman
Analyst, Oppenheimer & Co., Inc.	Analyst, Cowen and Company

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Airbnb, Inc. (ABNB)	Corrected Transcript
Q4 2021 Earnings Call	15-Feb-2022

MANAGEMENT DISCUSSION SECTION

Operator: Good afternoon and thank you for joining Airbnb's Earnings Conference Call for the Fourth Quarter of 2021. 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'll now hand over to Ellie Mertz, Vice President of Finance. Please go ahead.

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Ellie Mertz

Vice President-Finance, Airbnb, Inc.

Good afternoon, and welcome to Airbnb's Fourth Quarter of 2021 Earnings Call. Thank you for joining us today. On the call today, we have Airbnb's Co-Founder and CEO, Brian Chesky; and our Chief Financial Officer, Dave Stephenson.

Earlier today, we issued a shareholder letter with our financial results and commentary for our fourth quarter and full year of 2021. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A.

Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under Forward-Looking Statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission.

We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance.

Also during this call, we will discuss some non-GAAP financial measures. We've provided reconciliations to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results.

With that, I'll pass the call to Brian.

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Brian Chesky

Chairman, Chief Executive Officer & Co-Founder, Airbnb, Inc.

All right. Thank you very much, Ellie. And good afternoon, everyone. Thanks for joining. I'm excited to share our Q4 results with you.

Q4 was another record quarter, and 2021 was the best year in Airbnb's history. In Q4, revenue was $1.5 billion, our best fourth quarter ever, and exceeded 2019 by 38%. Net income was $55 million, our best Q4 ever, compared to a loss in 2019. And adjusted EBITDA was $333 million, also our best Q4 ever. Our adjusted EBITDA margin was a positive 22%, compared to a negative 25% in Q4 2019. This is a huge improvement obviously. Now, in Q4, GBV was $11 billion, which surpassed 2019 levels by 32%, and was driven by strong ADR. Now,

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Airbnb, Inc. (ABNB)	Corrected Transcript
Q4 2021 Earnings Call	15-Feb-2022

even with Omicron, Q4 Nights and Experiences Booked were only down 3% compared to 2019, and when you exclude APAC, it was actually up 8%.

What our results show is that we've been able to respond to this changing world of travel. Nearly two years into the pandemic, it's clear that we are undergoing the biggest change to travel since the advent of commercial flying. Remote work has untethered many people from the need to be in an office, and as a result, people are spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time. For the first time ever, millions of people can now live anywhere.

And we've been able to respond to these changes because our model is inherently adaptable. Our millions of Hosts offer nearly every type of home in nearly every community around the world. But it's not just our model, it's also our culture of relentless innovation. In the last year alone, we made more than 150 upgrades and innovations across every aspect of the Airbnb service. This explains why we had our best year in our company's history, despite still being in the midst of a pandemic.

Now, there are a number of business trends that have been driving the strong performance. First, guests are staying in thousands of small towns and rural communities on Airbnb. Throughout the pandemic, we've seen growing demand for domestic and non-urban travels. In Q4, gross nights booked in non-urban markets was up nearly 45% from Q4 2019, and in the past year alone, Airbnb guests stayed in nearly 100,000 towns and cities all around the world.

Second, guests are also returning to cities. Q4 nights booked at urban destinations have nearly recovered to Q4 2019 levels, and cross-border travel also continues to recover and improved each quarter in 2021. Guests are planning to travel despite variants and surges. Despite the impact of Omicron in December, gross nights booked were up 40% and the cancellation rate was lower than a year ago. In Q1, we're already seeing strong demand for the summer travel season compared to 2019.

And finally, guests are not just traveling on Airbnb, they're now living on Airbnb. Nearly half of our nights booked in Q4 were for stays of a week or longer. One in five nights were for stays of a month or longer. And in the past year alone, nearly 175,000 guests stayed for three months or longer.

So, I'm going to follow on the footsteps of our community. Recently, I shared that I too am going to live on Airbnb. Right now, I'm doing this call from an Airbnb in Miami, and I'll be staying in a different town or city every couple of weeks. I've always wanted to do this, but before the pandemic, I had to be in office every day. Now, I have the flexibility that millions of other guests do on Airbnb. And I also think it's important that as CEO, I deeply understand the nuances and unique opportunities that this use case on Airbnb will provide.

So now, I want to recap how we did on last year's priorities. As you recall, for 2021, our single priority last year was prepare for the incoming travel rebound, and to do this, we focused on perfecting the end-to-end experience of our core service. This meant educating the world about hosting, recruiting more Hosts and setting them up for success, simplifying the guest journey, and delivering world-class service. So, let me just give you a really quick update on each.

First, we've been educating the world at what makes Airbnb different, and that is hosting. In 2021, we launched our first large-scale marketing campaign in five years to educate guests about the benefits of being hosted and inspire more guests to become Hosts. It worked. We've seen an increase in traffic to our platform in countries where we ran the campaign, and this is significantly ahead of non-campaign countries where we didn't run the campaign.

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Airbnb, Inc. (ABNB)	Corrected Transcript
Q4 2021 Earnings Call	15-Feb-2022

Second, we've been recruiting more Hosts and setting them up for success. Last year, we redesigned the Host onboarding flow, making it easier for new Hosts to get started. And we also introduced our Ask a Superhost program, pairing potential Hosts with Superhosts to answer their questions. And finally, we created AirCover, top- to-bottom protection, free for every Airbnb Host and only offered on Airbnb.

Third, we've been simplifying every part of the guest experience. Last year, we introduced I'm Flexible, a whole new way to search on Airbnb when guests are flexible about where and when they're traveling. And guests, since we've launched these features, have used I'm Flexible nearly 800 million times. We've also chipped dozens of other product features to improve the guest experience.

And finally, fourth, we've been focused on delivering world-class service to our guests and our Hosts. Now, in addition to providing protection for our Hosts through AirCover, we launched dedicated Superhost support. Now, dedicated Superhost support provides our most experienced Hosts priority access to our most experienced support agents, and as a result, we've seen fewer escalations and faster resolution times, increasing overall Superhost satisfaction.

Now, I'm incredibly proud of everything we delivered to our guests and Hosts in 2021, but it's important to note we are not stopping here. Because in 2022 and beyond, what we're going to do is accelerate our pace of innovation, and we're going to focus on three key priorities: live anywhere on Airbnb, unlock the next generation of Hosts, and Airbnb becoming the ultimate Host to our community.

So let me just give you a quick preview of each. First, live anywhere on Airbnb. As a result of the pandemic, millions of people can now live anywhere. They're now using Airbnb to travel to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time. Some people without families, like me, I can kind of live a bit nomadically, staying in different Airbnbs every week or every month.

Now, people with families probably can't do that, but we're seeing people with families are going to have a lot more flexibility over the summer, and I think this is why bookings in January for this summer by nights booked are up 25% from this time in 2019. And other people are just going to take more extended weekends.

The key point is that every length of stay on Airbnb is going up, whether it's two nights, three nights, a week, a month, or a season, all lengths of stay except for single nights are up on Airbnb, and we want to design for this new world by making it even easier for guests to live on Airbnb.

The second priority is we will unlock the next generation of Hosts. With 4 million Hosts on Airbnb, we believe we've just scratched the surface in growing our Host community. So, what we've done is we listened to thousands of people who think - who are thinking about hosting to understand what obstacles there are for them to become Hosts. And what we're going to do is systematically address each of these obstacles in order to attract the next generation of Hosts on Airbnb.

And finally, Airbnb will become the ultimate host. We believe that Airbnb can be much more than a marketplace that merely connects guests and Hosts. Our goal is to provide the ultimate service for our guests, anticipating their needs and going above and beyond, just like a good Host. Now, by offering a more personalized service, we can dramatically improve the experience for millions of guests around the world.

So that's it. Just to summarize, Q4 was Airbnb's best quarter ever. Revenue, adjusted EBITDA, and net income were all records. We're in the midst of a revolution in travel because people have newfound flexibility on how they

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