Airbnb Aktie

Okay. All right, everybody hanging in, everyone has their coffee. We're making way through day 1. It's my pleasure to welcome back to the conference, Brian Chesky, CEO of Airbnb. Brian has been one of the more engaging conversations over the last couple of years. So I always love the opportunity to sit down. Brian, thanks so much for being part of the conference again.

Thank you for having me here.

All right. So I'm going to dust off my law degree and read the safe harbor. Airbnb would like to remind you that during the fireside chat today, they may make forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially from those statements. The company may discuss or make reference to both GAAP and non-GAAP financial measures. Statements made today are effective only today will not be updated to reflect subsequent events or circumstances that may arise.

Well done.

Thank you. I went all the way to law school to learn how to read. Let's start with the platform. When I think of this company, and I think of you, it always comes back to what are you building? What are you scaling and how are you evolving the platform. The platform has been on quite a journey over the last couple of years. Talk a little bit about what has most excited you as the platform has changed and grown and evolved, then we'll use that as a jumping off point to get into a whole array of topics.

Yes. Airbnb was essentially for a long time, kind of a one-hit wonder. Our brand is now a verb, it means to stay in house for a short period of time. And for like 15 years, we were just that. And imagine you're building a house and the house is a one-storey house. And now you want to add 10 floors to the house. Most ranch houses, you can't just add 10 floors to. You need to rebuild the house and the ground up. And so around 2021, 2022, we realized, okay, this core business is going really, really well. But if Amazon had just sold books, they would have been a much smaller company. And we felt like there was a lot of platform extension we could do, but be able to do that, we had to basically rebuild the company from the ground up.

Now I'll be honest, if I was a professional CEO and it wasn't the founder. I might not have the courage to do that because we had to take some growth hits for a couple of years. It took a little longer than I thought, but we laid the foundation. We basically rebuilt the company to the ground up. We had a vision to become AI native. And our idea was we're going to go from homes to everything for travel and eventually to living and beyond.

And so obviously, our core business is quite large. It's going to be approaching $100 billion in GBV. We have service and experiences. There really is no Amazon for services. There's really just 2 popular services in the world, food delivery and ridesharing, What about the other 100 types of services? Why can't you hit a button and get those services to your home? Do we think that's a huge opportunity? Experiences, concert tickets are like more popular than ever. People want to have experiences.

I like to think you'd want to bet on a trend or opposite of trend, Artificial Intelligence. The keywords artificial. So the opposite artificial is authentic, real and the age of artificiality, people are going to want things that are real, real experience real people in the real world. And then we realized, wait a second, if we can do nearly $100 billion in our core business, there's this other business that's like 10x larger, it's called hotels. And for years, I mean, our first tagline was, forget hotels. I thought we'd never put hotels in Airbnb. But our customers ask for it. And at some point, I stopped being ideological, I started becoming practical and said, okay, they want hotels.

And then I realized, actually, half of the hotels in the world are independent hotels. They're small hotels, they're B&Bs and they actually don't want any part of this oligopoly. They want to actually come on Airbnb. We have a lower commission. We have younger travelers. So we started going into hotels. Then we realized, wait a second. Airbnb has a lot of homes in the platform for short-term rentals. What if we could offer longer-term rentals? We can be the biggest housing platform in the world.

As we started realizing like Amazon, they went from books to DVDs to CDs, but eventually, they went to everything. We started realizing, this platform is incredibly extensible. And so that's the journey we've been on from homes to everything for travel to eventually things beyond travel.

So with that in mind, what have you learned the most about the consumer landscape and the way the consumer sort of interacts with your company and your brand more broadly? Because I think there was a perception of the company around COVID and then there was a perception coming out of COVID. And as you sit here today, what are you learning the most about how consumers want to evolve with you as a company?

It's a pretty different company. So a lot of travel people start on Google and chatbots. The thing about Airbnb is because it's now a verb, a lot of people come to directly to Airbnb. Nearly 90% of our traffic is direct or organic. So we've learned that like the brand that's got like a huge affinity for people.

We've also realized people want more from Airbnb. A lot of people, their first way of trying Airbnb now is through a service or experience. And in fact, One of the reasons we're doing a hotels, we think it's a gateway to get all these people that never stay in Airbnb to be able to come back and book a home. 1 in 3 people book a hotel and they come back to book a home. So there are people that only book hotels, we'll offer them a hotel. And there are people that come and then will book other businesses.

The other thing we've realized is Airbnb basically works equally well in every country in the world. It's one of the only business in the world where it works really well everywhere. It's a universality that people like to host, people like to travel. Brazil is our third biggest market in the world. Our 70% of our business is in 5 countries, 4 of the 5 countries are accelerating. So the weird thing is our mature business isn't actually mature. We still have Asia, where we're basically no penetration, but to global network effects, you would imagine Japan, Korea could be huge. India is growing 50% year-over-year. So we have a huge amount of opportunities. So I think maybe the story is, it's a story of a flywheel. And the flywheel as it gets stronger, to growth begets more growth begets more growth.

Okay. Maybe sticking with that theme of international. What do you see as the key investments you have to make to capitalize on the investment opportunity. How much of it is on the country-by-country management side of the equation, the supply growth side of the equation, making sure consumers know what you can offer in a given country? How do you execute against the international...

It's just 3 things. You need to have the right supply, you need to localize the product and you need to make sure people know about the product essentially marketing. I think the first thing you got to do is localize your product. It doesn't take a lot to do that, but like the app has to be like 90% of the same everywhere and that last 10% is where you live and die in like India, in Asia, like people like more dense information. So you have to be more of a browse-based. In Japan, they don't use search as much to use browse, you have to like just know these nuances. The way you pay in India is like really, really critical. You have to have local payment providers.

Once you do that, now you have to know to get supply. And so basically, if you want to get like Chinese travelers, you need to ask where a Chinese traveler is going or they're going to Japan. So now we need to basically connect all the corridors. So you basically get the right supply and the right market at the right price based on where you get demand and then you basically connect supply and demand. It's not that expensive. The great thing about our business is pretty capital-light. We basically have remained pretty steady 35% margins. And it's really actually hard to invest a lot of money in this business because you're kind of building supply, building demand, building supply, building demand. There's no major capital expenditures. So it's just really just keeping the pedal on the metal.

Okay. You talked earlier about direct traffic, the level of app engagement you have with users. That's an enviable position relative to a lot of the industry that relies on search marketing, SEO and traffic from a lot of other sources. How do you take that advantage around the app usage and direct traffic and turn it into more frequency, loyalty, scale behavior on the user side of the equation?

Yes, it's a great question. So number one, the more things you offer, the more people will come to you. You're going to get more share of wallet. So if you go from home to hotels and service experiences and you go into like living and other verticals, you're going to get people to use the app more frequently. That's number one.

Number two, we're not just a store. Most people take their app with them. They take their phone with them when they travel. They use their media to like check-in, right? They have their itinerary. So what we're realizing is the moment you're on your trip is a great point of sale. We can sell you things when you arrive in your destination. So we're not just -- it's not just like a chatbot where it's a demand generator. It's a companion on your trip.

We have a messaging app that's one of the biggest messaging apps in the world. Like more than 5 billion messages are sent between our platform between guests and host. We have one of the biggest calendar apps in the world. We're the biggest -- one of the biggest reservation app. So Airbnb is kind of like 5 or 6 apps in 1. And it's just this flywheel where we continue to crank the flywheel.

And maybe I'll just say something about where I think travel search is going because I get a lot of questions about like, well, ChatGPT now can control your computer. It can book on behalf of you. What is your opinion on chatbots? What's your opinion on AI? What's your opinion on consumer? So maybe I can just share a couple of thoughts. I think that right now, most of the value is going to the stack and to enterprise. If you think about consumer, there's been almost no change to the daily life in 4 years. AI has not changed the world, not even come close. Go to a random state, ask a random person from the time you wake up, time you go to bed, how does your life change comes to AI. I use the chatbot once in a while. AI has not changed daily life at all, at all. It changed our companies to business. It's changed how investors invest, hasn't changed the world at all. We are -- if technology doubles every year for 10 years, that's 1,000x. So I believe we're at the beginning of a 1,000-year journey.

I also do not think there's a cycle. We are not in AI cycle. We're in a 1,000-year cycle. We're not in a window where you got to get into OpenAI or Anthropic and it's over. There's going to be 50 more Anthropics. There's going to be 50 more, maybe 100. This is the beginning of a cognitive revolution. And most of the money, I believe, is going to go to the consumer layer, not enterprise, not the GPU stack, not the data centers, it's going to be the consumer and we haven't seen that revolution yet. If you open your phone and you look at all the apps on your home screen and ask what apps have changed since the launch of ChatGPT, including ours, almost no app has changed. The as people have daily life change, hasn't changed yet.

This is me being bullish on AI. This is me saying that most of the value hasn't yet been created. I don't know when this consumer revolution happens. I think it's the next 18 months to 24 months. I think we're going to see a massive shift from enterprise to consumer.

And I'll give you an example. I'm on the board of Y Combinator. There's 175 companies of Y Combinator are last batch. 159 were enterprise. No one wants a new consumer. Everyone is afraid to do consumer. It's hard, it's a hit-driven business. But I think there's a clue here. Most of the public is against AI in the United States. They're against it. Most people are against data centers, it's not because of power. It's not because of water, it's because thy are afraid it's going to replace them, not just their job, their entire way of being.

But I think part of why we're getting it wrong is we're using stupid words like super intelligence. And we should never use that word. We should just stop saying the word super intelligence because to an ordinary person, it sounds like an alien species. We should stop freaking say in that word. And actually, maybe we're underestimating how intelligent we are. And maybe this is a cognitive revolution where AI doesn't become smarter than us that we actually ride AI that we can actually ride this cognitive revolution.

And also, maybe the other reason that people are against AI is because we are not creating applications to make their daily life better. We still have the opportunity for everyone to have a first-tier doctor. Everyone have a great tutor. I mean we could go down the list of ways AI can completely change people's lives. And it's starting to ChatGPT has started to scratch the surface, but a chatbot is not the right interface for 90% of things. The problem of the chatbot is this text-based.

Here's a huge problem of AI. It's a single player. You cannot collaborate with other people on Anthropic and OpenAI models yet. It's very difficult. Most of the revolution is going to happen when it's multiplayer. And they can do it, but that's a big thing. AI is still text-based LLM, large language model. The biggest revolution is going to be video generation, photo generation and multimodal world models. I believe when these things converge, and in the future, we're not going to be typing. We're going to be speaking to computers, maybe not in a coffee shop, you might still be typing. But I think you've ever seen Iron Man, that's what computers will look like, you will speak to them. And I think that -- all of this suggests that we are in the first inning. And I believe that Airbnb is part of this first inning. We are not going to be a company that develops AI, but we're going to be a company that applies AI. And my goal is for Airbnb to become an AI native company, that basically uses this once-in-a-generation opportunity to take this existential risk that enters to everyone that becomes therefore an existential opportunity. And for us to use this to go into businesses, we had no business going into before.

Okay. I want to stick on that theme. So when you think about deploying AI and changing your own company outward looking into users, how much of this is about eventually making AI conversational as you talked about? And how much of it is about just improving discovery of what you even offer to consumers?

I mean, it's all probably wrapped into one, just starting with AI. So nearly half of our customer service tickets are now handled by AI. It's pretty amazing. It doesn't mean human is being replaced. It means we're now taking those people, training them to do more premium customer service because the AI can do more self-serve.

I don't think the chatbot is the right interface for Airbnb for 4 reasons. Number one, it's text-based. Number two, it's really hard to compare, right? AI, you have to go back into a thread. Number three, it's a single player. It's not multiplayer. The average Airbnb is 3 guests. So you need to design AI to be collaborative. It's not been designed to be collaborative. That is maybe the biggest flaw of consumer AI right now. And the fourth is there's really not this notion of messaging, have an identity, Everyone in Airbnb has to have a verified identity. They have the same messages. So what we think is there's something between our e-commerce paradigm and a chatbot, something that's much more visual, that is conversational, but it's not a chatbot. We haven't developed it yet, we're in pilot, I don't know if we'll be the ones to do it but I do think that that's going to be where AI goes. It's going to be very, very rich, very, very visual.

And here's a question, why is TikTok and Instagram more popular than Twitter? I think because photos and videos are more popular than words. I think literacy is going to go down. Fewer people are going to read. I don't know -- I'm not saying it's a good thing, but I think that's where it's going. I think young people want to be visual. And so I think that photo and video is going to be where the future of AI is, not words. And I think that early adopter Silicon Valley are on Claude Code, I don't think that, that is an indication of the late adopters. I think the late adopters are going to be doing is doing much more visual stuff.

Okay. Interesting. Just sticking on the theme of AI. You talked a little bit about the way you use it internally as a company. Talk a little bit about what AI has done for your business, how it's created efficiencies, how possibly, it's created elements of you being able to reinvest back in the business and capitalize on some of these growth?

Yes. I mean it's kind of crazy. It's actually -- I didn't know if AI would be good or bad for Airbnb. And a lot of people thought it would be bad for Airbnb. And it was a totally reasonable expectation that it would be bad for us because couldn't you just go to a chatbot and like search for every Airbnb and every hotel and then why do you need us? Are we just a data layer. And that was a real risk. And it was an existential risk to the company.

But my thought experiment was the following: if AI is existential risk to Airbnb then isn't it kind of existence risk to everyone? And if it's existential risk to everyone, it means it's existential risk to our competitors and the business we haven't gone into. So therefore, it could be an opportunity.

And the key other insight that we had was that ChatGPT and Anthropic and Google, we have access to the same technology they do because the models they develop, they sell. So we can use Astra, we can use Fable. We can use all their models. And so then the question is, can we be better at specializing in one area that gives us a reason for people to come directly to Airbnb. So we basically, last year, it got very like AI-pilled, I guess is the name of the term. Everyone got on Claude Code. And we now ship 80% more features than a year ago. It's nearly double the output.

Now we don't really care about how much code is shipped by AI. I don't care how many tokens we're using. I just care how many features are developing. Pretty soon we're going to be shipping at twice the rate we used to. Customer service has been completely revolutionized. Customer service is really, really difficult. Imagine we have no SKUs. A guest and host speak different languages. It's all said and seen. They say they're locked out. They say, there's an odor in the house. No photo can prove it, and you've got these seasonal workers trying to adjudicate and they want the solution answered right now. AI can look at the last 10,000 times an exact situation like that happen and can recommend to the agent how to solve it. A human can never have done that before.

From a search standpoint, Airbnb search is really difficult. If you search on Google, you want one answer. You search for a home in Paris, you don't want one answer. There's 100,000 homes what's the right home for you. And now let's add all the other permutation. Oh, by the way, let's add like 2 other opinions on the trip and all of the variables. There's literally billions of permutations for every type of trip, if you're completely open ended. No search algorithm can do that, you need AI.

So we basically have like 20, 25 features. It's basically across the board. I basically think -- I did a talk a few years ago that Paul Graham wrote an essay, he called it, Founder Mode. It basically meant like acting like a founder, being in the details, being like a changemaker. I think in the age of AI, everyone has to be in Founder Mode, even professional managers because we have to reinvent our business on the ground up. And so it started with me. I basically said I have to be completely AI pilled, I basically downloaded a huge amount of context of my life on to Claude Code. I did it really securely, but I basically took like 1 million e-mails and 50,000 Google documents, 2,000 keynote slides, and I use it to train to provide me context.

And one of the biggest challenges the CEO has is none of us know what the hell is going on in our company. We just don't. And so when we do these things called meetings to figure out what helps going on and all our executives, they're well-intentioned, but they manage up and they tell us what they want to -- what we want to hear, if we have really healthy cultures, they'll tell us bad news, but still, you're at the mercy of what they tell you.

Now with AI, you have an intelligence layer. You can just know what's going on before people tell you anything. You can tell meetings, but those meetings, they're much more productive. So this thing has become like a superpower. I can have more information, 24/7, I can cut through the bulls***, it's a lot more fair. We know who the high performers are, who the low performers are. It's just been a total revolution how we operate, and it's -- AI is not distributed equally. I think the winners of AI aren't the people that are most advanced technically, they're most advanced culturally. I don't know if that makes sense. In other words, we all have access to the same technology. Like Airbnb and every one of our competitors and everyone is on stage, especially in consumer, we all have the same model. The question is who has the culture to adapt quickly. So AI becomes who -- which companies can move the speed of AI. That becomes a cultural thing. And that's probably the biggest thing is I can't point to any one feature. I can only point to the culture of Airbnb being a culture of being AI native.

Okay. Understood. And a lot of interesting stuff in there. Let me stick with the culture of Airbnb because I think one of the more unique things in the last couple of years, which you referenced is you're pushing beyond the core of the product. The analogy you've used on earnings calls is Amazon. When you think about growing the supply side of your market and moving into new areas, as a leader, what do you think about in terms of the market opportunity relative to the incremental friction to get into a new area, whether it's experiences or hotels or things like that, how does that get factored into your management process?

I think that we had a big debate years ago, should we stay focused on our core or should we do vertical expansion? And we ultimately realize that every time we add a category, it not only expands our business, but it makes the core stronger. That was the general thing we found.

We took us 1.5 years to develop service and experiences. It took us like 8 months to develop car rentals. It took us a few months to develop like resort passes. So every new business, we're able to launch faster and faster because we can reuse components. I eventually want to be able to launch dozens and dozens of categories. So the supply acquisition is getting faster because every time we add a new supply type, we basically reuse the tools from a prior technology.

So for example, services, if you want to like get a massage, there's like a platter of like 3 types of massages and that page we reuse for hotels because the hotel has multiple rooms. So like basically, what we wanted to do is we want to reuse components on the back end, and AI can essentially create listings really, really easily. You can even source leads for you. It can help the salespeople.

The big challenge becomes discovery. If we add 50 categories and people think about us as one thing, how do you discover everything? And so that's the thing I think we're still trying to crack. How do you basically merchandise a lot of things in a very narrow amount of real estate. I think the answer to this becomes personalization. We have to know much more about people. We've been living in a 30-year paradigm of e-commerce, essentially eBay and Amazon. What is the paradigm of e-commerce? Anonymous customer, you don't know much about them. All you know is the last thing they click or bought. They go to a search box, they type something in, they get results, they see a page, they book it.

I think we're starting to live in a world where the AI knows a lot more about you and everyone gets a very different experience. Some people will come to Airbnb to only see hotels. They'll never see a home because they don't like hotels, they don't like homes. Some people hate hotels, you're never going to see a hotel in Airbnb. Some people only want to use Airbnb for car rentals, we'll see that. So we need to really understand people. The more personalized we can be, the more the stronger the flywheel is going to be.

Okay. When you look at the scope for where the platform can go over the next 3, 5-plus years, are there any adjacencies you're intrigued by or areas that you're always interested in exploring as potential extensions of what you built?

I mean, yes. So like, for example, with travel, there's a lot of -- we can like, you imagine all the things we've done in travel, we launched car rentals. Car rental is a fast-growing category in our business. It's been like a huge boom and will probably be one of the biggest like sellers of car rentals in the world at one point.

There's a lot of other verticals of travel that I could point to, a lot of types of verticals of services. But I think there's opportunity in housing. I think like longer-term rental is a huge opportunity for us. We're probably one of the biggest housing platforms in the world. It's not that hard to go from short-term rentals to longer-term stays. It doesn't take a lot of incremental exposure to be able to do that.

And then I think there's a lot more around living. You can literally use Airbnb not to just travel, but to live. There's a lot of verticals around that. And then I think eventually, human connection. I think it's really hard for people to meet one another one day today. And I think that a lot of people are using Airbnb to meet one another. So I think traveling then living, then human connection, those are probably the 3 horizons. We're still mostly focused on travel. So I think that will be the big folks in the next 3 to 5 years, but you're going to start to see us moving into living.

Okay. Sticking with this idea of the supply side and lodging, as you get into short, long-term living, lodging broadly and you bring hotels on the platform, What have you learned about how to bring supply into your ecosystem like hotels, where there's both commoditized and noncommoditized inventory to also retain the uniqueness that Airbnb has as a platform because you're known for sort of unique offerings that people can't find. How do you merge supply like hotels into that ecosystem and retain your brand around in...

It's a really good point. So well, first of all, we're starting with the most unique hotels. And it turns out about half the hotels in the world are independents and boutiques, and we started really by going after them. Here's the interesting thing. The boutiques and independents are underserved. They pay a higher commission on Booking and Expedia than chains. So if you're a Marriott -- here's the dynamic to happen in the hotel industry. There's a lot of independent hotel owners. They want to stay independent. But Hilton and Marriott, in particular, are rolling up these independents. And a lot of these independents feel forced to sell because the Marriott and Hilton have loyalty programs. And also they can negotiate lower commission rates on Expedia booking. And so the independent hotels are having trouble competing.

And so when we launched hotels, we had a huge number of independent hotels come to us. What is it, the enemy of my enemy is our friend? So they came to us because we had a lower commission. They weren't second-class citizens. They were unique not commoditized, and that's what our brand stands for. They wanted younger travelers. We have the -- our first-time bookers are the fastest, they've been in 4 years and 50% are Gen Z. So we're the brand, the new generation. The great thing about young people is more of them every year. So it's kind of a good trend to have on your side.

So that's what we've learned, start unique, but also be personalized. So it doesn't mean we can't add commodity inventory. As long as Airbnb always has enough unique inventory to come to us direct, we can supplement with commodities. But our heart and soul will always be in unique inventory. But the great thing is the TAM, if you add commodities, is unlimited.

Okay. I wanted to ask about the World Cup this summer. It's obviously one of the biggest global events that's ever happened. What were some of the key learnings out of that event where there's a lot of people in the world coming to one country, and it's not just a lodging event, but it's also an experiential event that played out across social media and social influencers and things like that. What does a company like Airbnb learn from an event like the World Cup this past summer?

Well, I mean, let me just back up for a second, like events or how Airbnb started. I mean I was 26 years old, 25, turning 26. I was completely broke living in San Francisco, a design conference, an event was coming to San Francisco, all the hotels are sold out. And I said, what if we turned our house into a bed and breakfast for the conference. How many beds? We pulled out 3 airbeds, and we call it Air, bed and breakfast, hence the Airbnb. Then we launched a Democratic National Convention. Then we launched in inauguration in 2009.

Then we -- here's the dynamic. Events built Airbnb. The reason why is many people, regular people put their home in Airbnb with the intention of only hosting for 1 week for an event. And nearly half the people continue hosting. That's the secret of Airbnb, events built Airbnb. And these people are regular people, they're not property managers. And so we realize that events shine Airbnb strengths. See, a lot of cities think every is a problem. But when events happen, we become a solution to their problem because the hotels are sold out, they're gouging customers, so they're driving up rates. And we basically allow a city to expand their supply inventory that improves our relations with cities. It attracts a lot more host. And it creates a very like cultural experience of people staying.

For example, the mission of the World Cup is to bring the world together through football, soccer. Our mission is essentially trying to bring the world together through travel. They're very, very adjacent. And just like the Olympics, these events are really big. So we -- Paris, we had 600,000 people stay in Airbnbs for the Olympics. We had tens of thousands new supply types. Our relations in Paris were better after the Olympics. And we realized there's a lot of big events. There's also a lot of small events. What if we were to industrialize this event strategy and really use this as our supply acquisition strategy. So a big way we get homes in Airbnb is by promoting for events. A lot of people live on about half the people continue hosting.

Okay. Interesting. When you think about where the business stands today, how should investors think about where there's the biggest opportunity to monetize all of the utility and activity that you're seeing on this platform. When you think about building continuous varied streams of revenue in the years?

I mean it's -- so from a growth standpoint, I think category expansion is where it's at from a top line, but I think from a -- and international. But I think from a margin standpoint, it's probably seller services. If you think about Amazon, if you think about Alibaba, you think about Etsy, you think about many of these marketplaces, they take a huge margin on the supply side. And so I think there's a lot of different services we can sell to host. I mean the obvious one that everyone talks about is sponsor listings, essentially an ad-based platform. That is a pretty easy straight shot to $1 billion incremental high-margin revenue based on like what other brands have done.

But I think even that is just part of a platter of host services. So that's probably the obvious one. I mean we have a very high-margin insurance product, travel insurance does quite well. So that's obviously also going to grow a lot as well.

Okay. So we only have a few minutes left. And I always like to end on -- and you've talked a lot about it as you always do and when we get an opportunity to speak. But talk a little bit about your vision for the company, leave investors with what are your key strategic priorities, and what are you most focused on executing on for the company in the years ahead?

There are 3 things that we're trying to do. The first thing we're trying to do, and I talked a lot about is go from providing homes for travelers, to everything you need, to travel and live and connect around the world. And so you're going to see a lot of vertical expansion. And every month, you'll see an acceleration in new verticals launching. That's number one, category expansion.

Number two, I think we're going to invest a lot more in the customer and the community and building out profiles. We're going to have some major announcements next year. I can't share too much, except to say that I think I want to shift here from a marketplace, to much more of a community, a community where people feel like they're a part of the brand, we know more about them, we have a deeper relationship. Maybe the analogy is like kind of AmEx, right? AmEx is not just a credit card company. It feels like you have a membership. And in fact, the former CEO of AmEx, Ken Chenault is on our Board. So I think that's a real road map for where we can go.

And the third is just using AI to be completely native. The one thing I'll just say before I go is somebody asked me recently, what's most surprised you about our company. What surprised me about our company is our mature business is not mature at all. Every time we keep thinking the growth is going to slow down and it reaccelerates. I mean our growth last year was 10%. Last quarter, I think it was like nearly double. And so almost every market is accelerating. Almost every country is accelerating. And it's hard to explain why. I mean, one explanation is we're just executing really well.

The other explanation is maybe the market was so much bigger than we ever thought. Maybe that every time I raise money, the question was, how big can this market be. And I had no evidence, I'm like, well, the markets as big as we are. And it just kept growing and growing and growing. So I think our core business could probably be double the size. This is our core business before you enter into any other verticals. And then you have international expansion, you all different verticals.

So I think the TLDR is just -- it's very, very early. And I was just entering before this and someone said, you were running at me for like 19 years, you're like an OG and I'm like, man, I guess, am I that old? In the age of AI actually I feel old, if you're a 45-year-old in this industry. But I still think it's really, really early. And I don't think Airbnb's a mature company. And I'd like to have this thought that like we're getting younger every year because the road in front of us is longer the road behind us.

And I like to think that we are more fired up than we've ever been. That's what Founder Mode is really about. It's about like having the enthusiasm that you had the first day you started the company. It's about -- a lot of people say founders set the vision. I think more importantly, founders set the pace. We set the pace because the vision is just something you discover day to day, but I wake up every day with a sense of urgency every day with a sense of like we need to like seize this moment. We have this once-in-a-generation opportunity, and we are here to reinvent ourselves. So I'm just so excited. I don't think we've ever had more fun as a company. I think it's really early. And I think we went from the sixth inning back to the second inning, if that makes sense.

Great. Well, Brian, thank you so much for being part of the conference. Thank you for taking Airbnb.

Thank you.

Good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the Second Quarter of 2026. 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 Andrew Slabin, Vice President of Investor Relations. Please go ahead.

Thank you so much. Good afternoon, and welcome to Airbnb's Second Quarter of 2026 Earnings Call. Thank you for joining us today. On the call with us, we have Airbnb's Co-Founder and CEO, Brian Chesky, and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our second quarter of '26. These items are 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.

That being said, 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. Also during this call, we will discuss some non-GAAP financial measures. We 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. And with that, I'll pass the call over to Brian.

All right. Thanks, Andrew, and good afternoon, everyone. Thanks for joining. Over the first half of 2026, we delivered some of the strongest results in years. In Q2, that momentum accelerated. We exceed our outlook across every key metric. Revenue grew 17% year-over-year to $3.6 billion. Gross booking value grew 16% year-over-year to $27.2 billion, and Knight and Seas book grew 10% year-over-year, accelerating from Q1. We are seeing this momentum show up across the business. Nights booked on our app grew 23% year-over-year, and they now account for 64% of total nights booked, which is up from 59% last year. More new guests are trying even than we've seen in years. In fact, growth among our first-time bookers accelerated to 11%, but this is the highest growth rate we have seen in 4 years.

And among first-time bookers, the Gen Z cohort is growing the fastest. Our expansion markets continue to outpace our core markets, with net nights booked growing about twice as fast. But what's especially encouraging is that we're not only seeing growth accelerate in our emerging markets, we are seeing growth accelerate in many of our core markets. In fact, the U.S., France, U.K. and Australia, all accelerated in growth in Q2. These results reflect something much bigger than a strong quarter, what they reflect is a fundamental shift in how we are building products. Now I think most people naturally want to point to 1 product or 1 initiative to explain the strong quarter. but that is not what's happening here. This is a culmination of changes we've been making over the last several years. We've rebuilt Airbnb round up to be an AI-native company.

We have more world-class talent than ever before, and AI is transforming how we execute and build products. Said simply, AI is the best thing to ever happen to Airbnb. Today, we're building, testing and iterating faster than we could just a year ago. across some of our key initiatives, we've reduced the time from concept to launch by as much as 60%. And compared to the same 6 months last year, we've increased the number of features and improvements we shipped this year by nearly 80%. The acceleration from AI allowed us to make hundreds of improvements across Airbnb for hosting guests. And I want to highlight a few examples that are helping drive the outperformance we're seeing. The first I want to talk about how we've made it easier for guests to book.

I've talked in past quarters about Project Hawaii, which is our innovation blueprint where hundreds of improvements compound over time. AI has accelerated this work across search, sign-up, checkout and payments. And by reducing friction across the guest journey, we are converting more traffic in the bookings, and that's become 1 of the biggest drivers of our growth. We improved search and discovery, making it easier for guests to find and book the right home, hotel, service or experience and is meaningfully improving conversion. We also introduced AI-generated listing highlights so guests can quickly understand the key details about a home. We also launched AI-powered review highlights, servicing what guest reviews say about a home's location, amenities and more.

Later this year, we'll introduce AI home comparison. allowing guests to compare homes side-by-side before bookings. We simplified sign-up and login, making it easier for guests to get starting Airbnb. We streamlined checkout by making pricing and cancellation policy clear. And we also continue to expand reserve now pay later to more listings, and we're making it more visible throughout the booking flow. AI is also making easier to host. Now we know that as hosts are more successful when they have the right price, the right insights and the right tool. And AI is helping us improve all 3. We made it easier for host to set competitive prices and keep more bookings. We also gave host more actionable insights to help them improve their listings and increase their earning potential.

And we're rolling out AI tools to help new hosts get started faster and better understand their pricing and earning opportunities. AI is also transforming customer support. Our AI assistant is now available in more than 50 languages. Nearly 45% of issues that start with our AI assistant are now resolved without a human agent while delivering much faster resolution times. Later this year, we will begin introducing AI voice support, extending the experience to phone call. Now AI isn't just making the product better. It's also making more efficient. In Q2, customer support cost per booking declined about 16% year-over-year, driven in part by improvements by our AI assistant.

We expect those costs to continue to decline as our AI system resolves more and more issues and of course, as we bring it to voice. But improving the core experience is really only part of the story because we're also continuing to expand what we offer. In May, as you know, we expanded Airbnb services across grocery delivery, car rental, airport pickup and luggage storage. And recently, we introduced resort passes, giving guests day access to amenities as some of the world's fast hotels. Now it's still early, but what we are seeing is really strong momentum in bookings. And every new service that we ship we can do faster than the service before. So we're getting much more efficient.

For example, groceries took 8 months, 9 months and airport pickup took about 6 weeks to develop. So you can see how these things are compounding. And we're also seeing similar momentum with therapy experiences. We added 1,000 new experiences across our most in-demand categories, increasing supply by nearly 80% year-over-year during Q2. While experience is still a small part of our business, Bookings accelerated both year-over-year and actually sequentially from last quarter. And we also expanded our accommodations business, adding thousands of boutique and independent hotels across comp destinations around the world. Featured hotels come a price match guarantee and up to 15% credit that guests can use towards future bookings.

Roughly 35% of first-time hotel guests returned to Airbnb to book a home, and what this shows that have hotels are introducing new guests to Airbnb and many of those new guests don't just come back and book hotels, they come back and they book home. So hotels are making home strongly. While hotels still represent a single-digit percentage of nights booked, hotel nights are growing approximately 3x faster than our homes business. So there's a lot of growth ahead of us. Now finally, I want to share an update on our event strategy. many events, major events help strengthen the Airbnb brand, while driving both supply and demand. I will remind you that Airbnb started to provide housing for events. So housing for events is in our DNA. Now these major events introduced millions of people Airbnb, encouraging more people to book become hosts of welcome cities and help cities welcome more visitors about building new hotels.

Now while bookings from any single event may be temporary, the brand awareness to trust and new host these partners create benefit our business long after the event ends. And the World Cup is 1 example of this strategy. As an official tournament partner, Airbnb millions of people during the tournament, many first-time guests. And more than 150,000 homes across host cities where listed in Airbnb for first time, creating new economic opportunity for local and it didn't stop with just the World Cup because we are expanding this playbook to other events, including the Olympics, the Tour-de-France [indiscernible] LalaPluza, LaLiga in Spain and most recently, NASCAR. Now when you put all together, I think there's a bigger story this quarter. And the story is this. There was no single product. There's no single partnership or initiative that explains our results. It's a combination of stronger execution, a world-class team and the innovation model that is accelerated by AI.

This is what's creating the momentum across our business. There is no silver bullet. And we believe it's 1 of the reasons we're outperforming our largest peers in travel. It's also evidence that the changes we've made over the last several years are paying off. Because those changes are rooted in the way we build and operate the business, we believe that momentum will continue through the coming quarters. It's giving us so much confidence in the second half of this year, but that's why we're raising our guidance. And with that, I'll turn it over to Elli to share more.

Thanks, Brian, and good afternoon, everyone. I'll start with Q2 financial results, then cover our outlook for Q3 and the full year 2026. As Brian shared, Q2 was another great quarter for Airbnb with continued momentum across the business. Despite the ongoing conflict in the Middle East, we continue to see strong underlying demand globally and the impact to our business from the conflict was less than we had anticipated. Gross booking value grew 16% year-over-year to $27.2 billion, driven by strong growth in both seats -- in both nights and [indiscernible] book and ADR. ADR increased 5% year-over-year or 4% excluding the impact of FX with noticeable strength in North America and Europe.

Nights and seats booked growth was strong across every region. We saw high single-digit growth in both North America and Europe, with Europe marking a steady recovery from the Middle East related headwinds we saw in Q1, alongside approximately 20% growth in Latin America and high teens growth in Asia Pacific. As Brian mentioned, we've been able to deliver these results not from a single action, but the collective actions across our platform. For guests, these improvements have spanned search and discovery to payments and checkout, and for Host, we've made it easier to get started and improve pricing and insights to help them become more competitive.

Now of the many changes that have collectively contributed to our strong growth, we wanted to provide an update on 2 that we've spoken in the past, in particular, Reserve now pay later and our simplified fee structure. First, we continue to see Reserve Now Pay Later, benefit the business. It drove more bookings, longer booking lead times and contributed to the increase in ADR. Specifically in Q2, over 20% of our total GBV was booked using the flexible payment option. Given the strong results that is delivered in July, we expanded the types of bookings eligible or Reserve Now Pay Later. Now beyond the immediate uplift in nights booked, we believe this provides a longer-term competitive benefit, enabling hosts to lock in earlier calendar share and better aligning our payment options with guest preferences.

Second, the migration of API host to a single service fee helped our host price more competitively and provided greater price transparency. As a result of its success, we recently announced the broader rollout of the single fee to the majority of our remaining hosts, which we expect to be completed by year-end. Approximately half of our active listings are now subject to the single service fee. Now let me spend some time on our Q2 financial results. Revenue grew 17% year-over-year to $3.6 billion, exceeding the high end of our outlook. In terms of profitability, our net income was $816 million, while adjusted EBITDA was $1.3 billion, representing an adjusted EBITDA margin of 35%. Our adjusted EBITDA margin expansion of over 100 basis points compared to last year was driven by strong revenue growth and cost efficiencies in operations and support and product development. partially offset by continued investment in sales and marketing.

Meanwhile, the year-over-year increase in net income was driven by higher operating income and a $77 million tax benefit recorded in the current period related to recently published tax guidance impacting prior year taxes. Next, our balance sheet and cash flow. We continue to benefit from our efficient and capital-light business model. delivering $1.3 billion of free cash flow in Q2. Over the trailing 12 months, we've generated $4.8 billion of free cash flow, representing a free cash flow margin of 37%. Now absent the impact of reserve now pay later bookings, which deferred guest payments from the time of booking closer to the date of stay, we expect that unearned fees would have grown year-over-year in Q2.

During Q2, we purchased $1.1 billion of our common stock, enabled by our strong balance sheet and significant cash flow generation. Returning capital to shareholders remains a core component of our capital allocation strategy. Now finally, let's shift to our Q3 and full year 2026 outlook. We're encouraged by the momentum we've seen so far this year and are excited about our road map to drive growth in '26 and beyond. Specifically, in Q3, we expect to generate revenue of $4.69 billion to $4.77 billion, representing year-over-year growth of 15% to 17%. This includes an approximate 3 percentage point foreign exchange tailwind after factoring in our hedging program. We expect year-over-year GDV growth to be in the mid-teens, driven by low double-digit growth in nights and seats booked and a moderate increase in ADR due to mix shift and price appreciation.

In Q3, we are not assuming any significant impact related to the conflict in the Middle East. On profitability, we expect adjusted EBITDA to increase year-over-year and for adjusted EBITDA margins to be down slightly compared to Q3 2025 due to the timing of investments this year. Now moving to the full year, we are raising our revenue and adjusted EBITDA outlook. We now expect year-over-year revenue growth to improve to at least mid-teens, up from the low to mid-teens guidance we provided last quarter, supported by the accelerated pace of nights and seats book we've observed across our business. For the full year, we expect our implied take rate to be relatively flat compared to 2025 accounting for the timing of bookings versus check-in with reserve now pay later as well as higher customer incentives related to new businesses during 2026.

Absent these incentives, we would have anticipated our implied take rate to be slightly higher during the year, driven by our monetization initiatives and execution across our product road map. And for full year profitability, we are now expecting our adjusted EBITDA margin to be at least 35.5%, up from 35%. Now to close, our results this quarter are proof that the product and business changes we've made are translating into real financial outcomes. The improvements we shared making Airbnb easier to use, helping host succeed and running the business more efficiently. These improvements are compounding, and we believe that showing up as a real outperformance relative to our peers. Even against tougher comps in the back half of the year, we are raising our full year guidance for both top line growth and profitability. a reflection of the pace of innovation, the operating momentum and the execution we are seeing across the business. And with that, I will open it up to Q&A.

[Operator Instructions] Your first question today comes from the line of Justin Post from Bank of America.

A lot to unpack. Let's just start with hotels. Can you tell us how the initiative is going? And what you're seeing in maybe the cities where you have a lot of inventory, not just the cities where you might have had some regulatory restrictions, but is it gaining -- improving conversion rates in kind of cities where you already have a lot of inventory? .

Yes. I mean I'll start. Justin, the hotel initiative is going significantly better than I expected. And I had high expectations. What I -- what we told the team is our strategy is very simple. While we think that some trips are better in Airbnb, we think there's a lot of trips that are conducive to hotels. And those trips are last minute short stays, business trips, we're aware we are supply constrained. And so as we've been talking about, our goal was to build the best hotel booking product online. We now believe that we have the best hotel booking product online.

So the second question is, can we get supply? And that is -- I expect the first -- expected us to build the best hotel booking product online. I do not know what the reception would be. And I thought we're known for homes who would take a lot of effort for hotels to warm up to want to list on Airbnb. And that's where my expectations were not high enough because after we began outreach for hotels, things flipped, and what we are now seeing is a huge amount of influx of interest from hotels wanting the list on Airbnb. It's probably no surprise why not only do they like our product, but they like that. We have a huge amount of traffic. We are one of the most traffic travel sites in the world. We also have a young audience. We have a distortionate American audience relative to some of our competitors, and we have an extremely favorable take rate.

To answer your second question, we are seeing strength in both supply-constrained markets and in non-supply-constrained markets. And maybe the simple way to think about it is that not everyone comes Airbnb with the intent to look for a home. A lot of people come to -- there are 3 types of people. People only stay in homes, people only stay in hotels. And most people are willing to stay in both. And so the basic theory of our marketplaces as we add more supply or hotels, conversion at of our traffic goes up and we see more bookings. What we're also seeing is about 35% of people who come to Airbnb and book a hotel for the first time come back and book a home. So hotels not only are bringing new guests to Airbnb, but those new guests are sometimes often choosing to book a home.

So essentially, One is making the other stronger. And that's basically the area of Airbnb. We are absolutely going to be stepping on the gas given the reception, and we are focused not just on supply consumer markets, but all markets. So to answer your question, they are working well in both.

Your next question comes from the line of Richard Clarke from Bernstein.

I guess I'd just love to understand the sort of ultimate ambition from all the ancillary products you're rolling out. Are these simply sort of attach rates, someone books a home and then we'll add on car hire and other stuff. Or could you imagine a world where you go to Airbnb and say, please book me a 2-week trip to Scotland, and it will be able to fulfill the whole trip and be a sort of full service travel OTA in that regard? And maybe just a small sub question. I guess your car hire partner has been acquired by a competitor. Does this make M&A a bit more of a near-term necessity as you build these ancillary products out?

Yes, I can take at questions. So you can kind of think of Airbnb as probably going into like 3 different phases of expansion. The prior era was us being just homes for travelers. And so we became a [indiscernible] kind of the CleanX or Xerox that was associated with just 1 thing. So the first phase, and you are correct in assessing this, is that a lot of things will be -- most people still come to Airbnb with a home in mind. And so most of our business is going to be for the foreseeable future, certainly this year, attaching to people that have an intent to come finding a home that would be attaching a service, attaching experience or people commentary be expecting home discovering hotels and booking a hotel that men have otherwise bounce because they didn't find the home they're looking for. That's kind of Phase 1. But that's the prior phase.

We are now entering the next phase of expansion, which is actually not the end game. It's just the next stage. And the next stage has become a one-stop shop for travel. So you'll eventually be able to get all of your travel needs through Airbnb. And that's what you're starting to see. And then Phase 2 would be we will go from traveling to living. In Phase 3, we go from traveling to living to other ways for people to connect on our platform. I think you will expect over the next year for us to be very, very focused on the travel phase, one-stop shop for travel. But I do not think our ambition is limited to travel. The single reason why is because AI is an existential risk to everyone. And last year, I told our company that AIs isn't existential risk to us. It was the only existential risk to this company. Now policy is a risk, but it's not an existential risk. It's not -- it's a risk that we will manage forever. But the existential risk to everyone was AI. Is AI good for you? Is AI bad for you.

And I think at the moment of truth happened this year. Moment of Truth happened. First, we hired our CTO [indiscernible] he was the leader of Meta, LAMA models. He came in, and I think we went from a company that was a middle-of-the-pack company for AI to a leader in AI, at least amongst companies that are not Frontier Labs or hyperscalers. And I think we are amongst the most AI native companies now in all of Silicon Valley. And so I think because of that this allows us to go into many new businesses in travel and eventually beyond travel that we might not have been able to go into, except for the opportunity that AI affords us. And we are seeing, again, we're able to develop products more quickly, we're able to attach a lot more products and services.

So to answer your question, yes, I do imagine that in the near term, in the near term being over the next year, 1.5 years, you will absolutely build Airbnb with a broad travel intent, like I'd like to travel my family to somewhere in Europe, can you recommend where I should travel? Can you put my whole trip together? And absolutely, you will be able to do that. And that is just the next phase. It's not the limiting phase. With regard to M&A, you're probably referring to [indiscernible] being acquired by Expedia. We still think that they're going to be a great partner for us with car rentals. I do not think that that's -- I'm very confident in that partnership. I think we are going to be a major benefit to that company. And I think that I'm expecting that they're going to want to continue to partner with us. And I do not think this has any impact on our M&A strategy.

Our M&A strategy remains opportunistic as we go into a lot of new verticals, there's a lot of M&A opportunities. We have -- we're sitting on quite a lot of cash. We generate a lot of cash. Entrepreneurs would love to be part of Airbnb and the hold stock. So I think there's a huge number of opportunities for us, but the great thing is our bias is always to grow organically and to look secondarily at acquisitions.

Your next question comes from the line of Lloyd Walmsley from Mizuho.

Two, if I can. First, just The hotel commentary sounds super encouraging. Maybe you can give us a sense of maybe anecdotes on markets where you're seeing particular conversion rate improvement or areas where you're comprising a meaningful portion of hotels, bookings. Anything you can give us that would help us understand better either the time frame or scale of the opportunity? And then the second one, just wondering how the AI search tests are going? When do you expect that to be a bigger part of the product? And what that -- if that's a gating factor to an ad product, kind of what you think about that?

Yes. Let me just give a little more color on the hotels ramp. As we've shared, we started in those markets our regulatory constraint because it's an opportunity for us to bring supply to those markets where we're not always able to fulfill demand that we already have. We've expanded our supply acquisition efforts to a top 20 number of cities. And I would say, more broadly, we're looking to add inventory that can be accretive to the platform versus compete with homes. And so we're very selective with regard to what we add to make sure that it's adding great inventory that our consumers will love. .

More broadly, when you think about the scaling of this product, we've shared that today, hotels are only a single-digit percent of nights booked on the platform. So a relatively small segment. But as we disclosed in the letter, given our efforts over the last several months, hotels, that segment is currently growing about 3x as quickly as owned -- and we have -- as Brian shared previously, we have large ambitions in terms of continuing to scale not only the rate of growth, but obviously, the contribution to the overall business in the coming years.

Yes. I mean, maybe before I answer the second part question, it is kind of notable. Homes and hotels, I like to think we did the really hard business first. I'm not here to say doing hotels is easy, but I'll tell you what's harder, like helping try to create a category Airbnb home don't have front desk. We have to teach people hospitality. We had to navigate government all over the world. We had the max supply and demand. And we had -- it was not a behavior that people are familiar with. Hotels are no doubt, not an easy business, but I actually think the hotels are making it an easy business for us. .

When you see the reception that they have, their desire to want to list on the platform. And the fact that we've already done most of the hard work because, in fact, most of the technology tools we built for homes apply to home, hotels that actually, it is a very natural extension for our business. And I don't want to say it's easy, nothing in life as easy and if it is, you're probably being complacent, but it is a much more natural transition than I ever imagined and also the -- I was always worried for years the homes being next to hotels in the platform. It does not bother customers. We have really, really good personalization. And we know now with our personalization and really driven by AI, whether someone wants to see just homes, just hotels for both.

So I'm very, very excited and I just wanted to like maybe highlight that point. Now to the second point on AI search, good news, we are beginning to put it and test this month. Now that test is going to be a very small percentage of our traffic. And based on those results, we're going to then begin to expand it to more traffic over the course of this year. I just want to point out that -- the tests that I've seen, I think, are extraordinary. They're really great. That being said, we just have to remember that people come to Airbnb off in most people a handful of times a year, and they have an expectation that they see a search box with a location. So it's going to take some time months and months to retrain the customer. So the way we're initially going to roll it out is the default is going to still be the core search above, you'll see a toggle.

Once you turn the toggle on, you're going to be able to try the new AI search. We'll have to see how it converts. I think for people who toggle it on, it's going to convert very well. We don't want to impose that on everyone. We want -- by the way, we learned this with total prices play. We start with a toggle that [indiscernible] those people who toggled was very positive, but we want to educate people. And so I think you're going to see this play out over the course of this year and into next. Now AI search, you can actually think about as really 3 or 4 major features. One is the search input. I can type in natural language whatever I want. The second thing is it can essentially respond to a natural language rather than just saying 300 search results, it can respond to you natural language, then the title the titles could actually be AI generated and they can be conversational as if we're getting a chatbot, but more to a visual.

Then you get to the product description page and the highlights or AI generated in real-time, personalized to you. You go down the page, you have a question, you can ask the PDP through AI. Do you see the entire journey, not just AI search is going to be powered by AI. And what this will feel like is going to feel as -- or almost a conversational with a chatbot, hopefully, less chatting fewer words because we think travel is more visual, very, very personalized. And what this will mean is much higher conversion rate.

Your next question comes from the line of Jed Kelly from Oppenheimer.

Great. Just following up on the changes in fees, are you planning to roll that out to every host? Or is that mostly still geared towards professional property managers?

Thanks, Jed. Yes. So what we initially launched back in September of last year was rolling out single service fee for our API connected host, which is predominantly property managers. Fast forward, we did extensive testing on a broader swath of hosts this winter and spring and have begun migrating the remainder of our host to the single service fee, and anticipate by year-end, our entire supply base will be on that single service fee. As a reminder, that single service fee allows us to provide more simplified pricing recommendations. And in aggregate, has a kind of downward pressure on pricing to allow us, one, to offer more value to guests, but also ensure that we are priced competitively relative to other platforms. .

Your next question comes from the line of Ken Gawrelski from Wells Fargo.

Two, if I may. First, maybe, Brian, you talked about the reception from your customers on to hotels on the platform. Could you talk a little bit more about your hosts and their reception as you continue to roll out new cities with hotel supply? And then 2, could you please maybe talk about as you think about the personal experience that you're building, the journey on Airbnb, do you think you're going to go -- is it -- do you start with kind of certain geos and build out all the experiences and figure out for HGO that you have -- you can build an experience and a trip planning? Or are you talking more broadly like you need to have basically a global trip planning experience.

Okay. On the first question, we haven't really gotten much feedback from our core host. I mean mostly, they just want to make sure their bookings are going up and our results show they are. And if we do get asked though, I would say that the rise of the tide raises the sales of all boats. So essentially, I don't mean to give our host like a business school marketplace lessons. But if they were curious, I would tell them that what Amazon learned in the 2000s was selling DVDs and selling CDs help the sales books do not cannibalize them. And every time they added a new category, it strengthened and listed boats of the prior categories. And that the most important thing for a host is that it's the jewelry [indiscernible] concept essentially, that we bring more people to the platform.

If we bring more people to the platform, then we can match the perfect supply to the exact guest that wants that supply. And so we actually see hotels being accretive to the bookings for our home host. I think the results are showing that. So we haven't heard from them and mostly when we do hear from them, it's about their bookings, but mostly we're seeing very positive results. Now to the second question, I think most most supply, we test city by city. So hotels, we go city by city. Services, we go city by city, experiences we go city by city, but most software they really do globally. We might test in the country, but we don't really do that city by city. So to answer your question, this will be broad-based trip planning that we'll be rolling out globally. And we will test it globally. Sometimes we test in the country, but often we test it globally.

Your next question comes from the line of Eric Sheridan from Goldman Sachs.

In an investment cycle for quite a while now, and now you're building a lot of demand coming out of some of the building blocks you put in place over the last couple of years. Can you talk a little bit about the interplay between incremental margins in the business over the long term? And how much of that incremental margin you think needs to be reinvested back into the operating momentum as opposed to how much of that incremental margin might drop to the bottom line?

Yes. Thanks, Eric. So I'm not going to give you a specific guide for '27 and beyond. But I think looking at our track record, you can see a couple of things. One is the underlying economics of this business are extremely strong from both an EBITDA and a free cash flow basis. Second, last year, we did have a bit of an investment cycle. But given the growth that it helps on for the current year, we're able to both accelerate growth, invest substantially behind that growth and also deliver an expansion in the margin. As we look forward, we're going to seek to do the same.

We're constantly looking for opportunities to grow. And so where we have those opportunities, we will lean in -- but I think given the track record and the somewhat steady EBITDA margins that we have delivered, I think you can see there's a relative floor in our ability to continue to invest against that.

Your next question comes from the line of Ron Josey from Citi.

Brian, when we're talking about all the new products that are coming out, one of them for host is called personalized recommendations, and I think that's helped host improve listings and calendar and pricing. I want to hear a little bit more about the pricing side and how Airbnb is helping host sort of decide what the optimal pricing is for each home that's available. And then the second question is on experiences. And so we know what supply is up 80%. I think I heard that right, year-over-year, and we're accelerating bookings as a result. But would love to hear more on whether experience is out of size and scale yet to actually contribute to overall night and seats booked.

So yes, on pricing, I think this is 1 of the biggest single levers for growth that we have. I think it's significantly greater than Reserve Now Pay Later. So if you want to just put it in perspective, it is -- I don't know. I don't want to say a multiple, but many multiples thicker than RNPL. Now why is it? Because Airbnb launched and started as an affordable alternative to hotel supportability and values 1 of the most or things we can do. We don't price the listings. The best thing we can do is show host that if they were to better price their listings, then they will make more money.

And we are essentially building an entirely new pricing model. no guess -- no surprise. It will be powered by AI. AI is able to take in a lot of data source. We're able to take in a lot of data sources of hotel prices of Airbnb prices, events coming to town, the nature of lead time bookings. And based on that, we have a new pricing model that we're rolling out to host. I think this is going to be much more powerful. And we're also going to make it much easier for them to update their prices. So we're going to be able to let them just tap a button and go immediately with our recommendations. We can coach them on when events are coming to town, how they might want to change their pricing. And what I think this is going to do is it's going to hopefully be generating a huge amount of growth for the company.

It's, frankly, 1 of the single biggest lever that we have to accelerate the growth of our core business. And you could think about this as us making massive changes to the host side of our app. Most people open our app, they only see the guest side. The host side is just a sophisticated, and we're putting just much investment towards it. And pricing in calendar are essentially 2 sides to the same coin because you see your prices on the calendar right? Most people don't have a single price. They have different prices for every day. And the best way to price your home like a hotel is to have different prices. on different days and to those prices to be dynamically changed.

And I think that it's very possible that right now, hotels have very sophisticated pricing management. They have entire teams of people doing that. I don't think anyone is going to be better than AI at doing this. And so I think that our models are going to be very, very powerful. And I hope in the future, hotels can even use that. Now with regard to experiences, they're growing really quickly, but they're growing on a small base. It's a long term. I think the way to think about experiences is let's talk about time right. To drive near-term growth, it's mostly home. Because that's massive scale. And so homes is the shortest horizon and the biggest drivers are pricing and project features, conversion rate, getting more supply.

The second horizon I would describe as international expansion and hotel. And you can see billions of dollars incremental revenue. It's nearly adjacent -- and then the next horizon after that is going to be services and experiences. So those are on a multiyear time horizon. They're going to be a bit smaller. But we are very optimistic about this. We're seeing a lot of growth. The way I'm measuring the growth of experiences, I'm not looking at the global growth rate, although it's great, I'm looking at the growth rate of markets like Paris. And then we basically have this idea of 1 to 10 to many, really try to get product markets in 1 market. then take that to 10 markets, then you take that to many like thousands of markets. In fact, this is how we did with the core business. We focused the core business on New York City, then we brought into many markets. Uber started in, I think, San Francisco. DoorDash started in Paulo Alto, Uber Eats started in like, I think, Toronto and Santa Monica. So one [indiscernible] to many is a tried and true, and we are on the like tens of markets where we're seeing growth of quite high growth. And experience will grow very quick when we take that and industrialize it in thousands of markets, and that's not this year.

Your next question comes from the line of John Colantoni from Jefferies.

With AI helping drive faster velocity of innovations, I was hoping to get your perspective on how this transition to AI native could impact your product costs and if there are any operational adjustments you're making to help minimize the impact.

It won't affect us that much. I mean, we may have -- let's back up for a second. So ChatGPT launched 3.5 years ago I think -- almost 4 years ago. It's almost 4 years ago. Yes. We are coming on the near 4-year anniversary in 3 months of ChatGPT. And in the nearly 4 years, almost all the actual business that's been generated is on the enterprise. I think I've mentioned this in the past, but I'm involved in what commented on the Board and the last batch I saw was 175 companies, 159 were enterprise. I think part of the reason why is a lot of companies have not tankered out how to make money on the consumer side. Why is this? Because the inference cost is not cheap, and there's huge capital expenditure. .

Well, the great thing about Airbnb is 2 points. Number one, we do not need to make any major capital investments. We are not buying up a whole bunch of GPUs. Second, the inference cost of Airbnb are kind of de minimis relative to the ROI of our business model, right? We're not like in the business of information where we're trying to monetize. Our transactions are very high dollar transactions. And if AI can just increase our conversion rate just a little bit. The inference cost is so outweighed by the amount of money we make on that increased ROI. So I think that what you're seeing is the cost of token developed products and the inference costs to run the model is sales in comparison to, the incremental revenue we generate and the incremental output or throughput we're seeing.

So I'm sure we can always be a little more efficient, but I think we're really, really disciplined. We're not like so-called token maxing which I think is like this thing where I think all the CEOs at the begin of the year kind of like have this mandate -- I want to see everyone use AI with kind of a vanity of kind of have people use -- joke as possible. Luckily, I would great technology leader in Amid and we've been really, really rigorous and thoughtful about -- it's not about how many tokens to use. It's about the throughput of your product and the quality of your product designs and how much you're shipping. And so I don't know , you want to add anything, but like I think it's very efficient. .

I would just add tactically in the updated guidance that we provided, it obviously does assume a material increase in terms of the AI spend over the course of the year. So I would note that, yes, we are expanding margins while absorbing that increased cost. On the flip side, the early offsets that we're already realizing. One is obviously the improvement in our customer service costs. We can call that out in the letter. The customer service cost per booking is down about 16% year-over-year. in large part due to the AI agent. Second, what we're seeing is that we don't need to grow our head count at levels that we did in the past because we're getting so much more output and speed from our existing workforce, which obviously also creates efficiencies over time. .

Your next question comes from the line of Kevin Kopelman from TD Cowen.

Great. Could you talk more about that 11% growth statistic that you called out for growth in first-time bookers anything you can call out that's particularly helping with these new customers. And with all the product improvements you've been rolling out, are you seeing anything you track like Net Promoter Score, for example, increasing through these new features?

Yes. So on the acceleration of first time bookers, similar to the broader narrative, it is not 1 single thing that is causing that acceleration. It's the compounding impact of the whole product road map, a couple of specifics I would note. So first, obviously, we're seeing outsized growth in first-time bookers in our expansion markets. We called out a few in the letter. We're seeing really growth in places like India and Brazil, where we're introducing large growing numbers of new users every year. Second, what we -- what is also supporting that number is the core market. .

Obviously, the growth in recent years of a first-time bookers in our core markets has been slower, given the level of penetration we have across those markets. And yet in recent quarters, we've also seen an acceleration of first-time booker growth in effectively almost all of our core markets, inclusive of the U.S. When you think about some of the specific product features that have helped one is absolutely Reserve Now Pay Later. We see that, that is a really attractive payment option, in particular for people who have maybe aware of Airbnb, they're on the site, but they haven't booked with us yet. and it gives them, frankly, a lot more confidence to book that future stay when they don't need to put down a sizable credit card fee upfront.

So I'll call that out as one. And then more broadly, a lot of our work just simply on sign-up, login, merchandising, search, all of these are additive in terms of, again, getting that first-time user over the hump of trying to figure out what listing is right for them. and having the confidence to go ahead and book.

Your next question comes from the line of Conor Cunningham from Melius Research.

I'd like to get a little bit more detail. If you could just unpack the core growth expansion that you saw in the -- in the quarter, you talked about how everything is kind of accelerated. But just -- and Brian, I know you just said you want -- you didn't want to go down to 1 single product. But if you could just talk about the innovation in general and how that's playing out. And then just on ADRs, I heard you talk a little bit about that. But if you could just talk about your like long-term pricing strategy. I know you're going to roll out some new ADR pricing stuff to your house. So just anything there. The only reason why I flagged that is just the fact that you're seeing ADRs kind of grow faster than hotels at this point. So just any thoughts there would be helpful.

Yes, I mean, like it's probably like -- in our shareholder letter, we -- I think we highlighted like 12 or 15 things, and those 12 things are 12 to 15 out of hundreds of things. But of course, and I won't list all to over 15 right now, but let me give you a couple of examples. So I think that side, we redesigned the homepage. The home page is now much more personalized. So you see things that are going to be relevant to you, and we're seeing more people engaged homepage in both right off the home page. Our search results are much more intelligent, much more personalized to you. our maps. If you go to search result maps or especially maps on each listing, we now show nearby restaurants, landmarks, transportation. So the maps have really come alive.

This seems like a small one, but we've completely redesigned login and sign up. We were having we had so much traffic. We were having as many as like a few hundred thousand people failing to lock in every day. This is like whether they forgot through e-mail or just -- or just the friction small optimizations [indiscernible] so we designed or set up or log in on iOS, Android web, that increased a lot of conversion. We've added a lot of flexibility and log-in just other ways to log in. on payments. I mean, in checkout, of course, there is reserve now pay later. We've added to more countries, more listings. We made it more visible on the booking flow. But we've also had more flexible cancellation policies, Our checkout is completely updated. We've added interest rate installments. And those are just a few of the guest side features.

And then, of course, on the host side, the single service fee has meant prices have become more competitive because a whole bunch of API hosts were accidentally miss pricing because they were pricing on other platforms and our SP was going on top of that. So that's been really big. You've had major improvements insights dashboard. Now I'm kind of giving you a laundry list. So you get the idea. But again, there is no 1 thing. I would recommend you go to our shareholder letter. We have, I think, 12 or 15 things. We also have free graphics that show some of the feature step by step. And so those will just give you a bit of the sense. Maybe the only thing I just want to say is we're getting momentum.

In other words, a question might be, well, what's next? And the answer is there's a huge pipeline of things on the horizon. I had this theory a few years ago that there'd be like you can get all the low-hanging fruit and each new thing would be harder and harder. Actually, it's just the opposite. Project Y taught that you get momentum that the team find bigger and bigger opportunities. And so we're kind of layering on all these different features, all these different improvements. I think what you're going to seeing is this is not a onetime boost in growth. This is durable growth.

You talk a little bit about the pricing strategy? I would say, just at a high level, our pricing strategy is to provide a host of tools to make them as price competitive as possible. We want to make sure that we are consistently delivering value for money to our guests and maximizing earnings for our host. In many cases, that means we encourage our host to bring their prices down. And in some cases, it means we want to make sure that they're not leaving money on the table.

I think 1 of the probably [indiscernible] points over the last couple of years is that we have been aggressively pushing pricing tips and affordability across the platform, and you've seen yet the nominal ADRs rise over that period. One thing we called out explicitly this quarter is the growth in underlying bedroom night. One of the factors that has been driving ADR up in recent years has been the continued disproportionate popularity of larger homes. People come to Airbnb specifically because we are great for family for large groups, and that obviously involves larger homes with multiple bedrooms.

What we've seen is that the growth in what we call bedroom night has 1 been at a higher level and also accelerated more on a year-over-year basis than our nights booked which gives you a sense of, number one, 1 is differentiated and popular on our platform, but also that component of ADR appreciation that is durable and really a reflection of incremental value delivered, not just rising prices, which is important to note in terms of thinking about the long-term pricing strategy.

Your next question comes from the line of Colin Sebastian from Baird.

I guess, Brian, first, when you look at the expansion of the service platform outside of lodging, which of the newer categories, would you say you're signaling the strongest early traction in maybe even unit economics relative to expectations, and then how are you pacing investment across that group as we look ahead over the next year or 2, understanding that you have other new products in the pipeline .

I mean car rentals is going to be the biggest 1 by far just because of how big the asset is. And I think the thing that we're surprised by in a good way is that the length of the reservation is long. In fact, it's longer than the average length ever you stay. We thought the average length of a car rental would be shorter than Airbnb stay actually longer. There's a variety of reasons why it might be they want a car or longer than they ever going to say they might be staying somewhere else after they check out. But that was the big variable, and we underestimate how long the reservations would be. And we're going to now expand this globally. I think that can be really huge. But at the same time, like luggage storage, what a sleeper hit. I went on stage in this keynote, I kind of all the features and the biggest [indiscernible] I got was a storage. And I finally felt cool in the Internet because I focus on Instagram and people are like cheering for luggage stores. So that's not the sexy of service, I would say. But I will say that like what we've learned is that every service in and of itself has value that some are going to drive a lot more revenue like car rentals and luggage storage.

But with all these services have in common is they make you more likely to want to book a home on Airbnb or a hotel on Airbnb based. And so we have a pipeline of dozens of more services. Some are going to be really big, like groceries, where we're going to be doing international expansion, food delivery. And these are going to be partnerships. We're not building a food delivery service, but it's going to be really integrated well into the app. A lot of people don't know what food delivery or ridesharing or grocery service to use when they get to a country. It's not the same app everywhere. It's integrated. They have the address. We often offer deals and discounts. So they make the product really, really compelling. We're going to expand a lot more services, but we do not think that they'll incur a lot of costs. because most of the big ones we're talking about are partnerships.

Partnerships mean the cost is incurred by the company, fulfilling the service not so we're essentially in lead generation. for them. And so we do not see a big incurring of cost on the hosted services, what you might call first-party service, where they're host. We're kind of going not category by category, but by city by city. So like, for example, like in Tulum, a lot of people go there and they want to relax, so no surprise, massages are really, really popular in Tulum. and Paris massages aren't as popular. People weren't looking to relax in Paris. They're looking at their photo. So therefore, photography is very popular. So we're going to be looking at both hosted services, first-party services and partner services, A lot of the momentum will be partner services. We're going to be able to launch a lot of them, and we do not think there'll be much cost because they're partnerships.

Your next question comes from the line of Doug Anmuth from JPMorgan.

Brian, just given your AI-driven product innovation and improvements and as you scale hotels more, just curious how you might think about a more formal B2B opportunity down the line?

Can you elaborate on the question?

Just whether you would do something that would kind of go to market more towards B2B opportunity in trade like .

Do you mean like what Expedia is doing by B2B? What do you mean by B2B?

Yes, exactly. And something more specifically for enterprise businesses.

I think we're like -- I think how do I explain this. Do use a computer analogy, BlackBerry is a very enterprise first company. Apple was a very consumer-first company. And I think, ultimately, consumer wins and the consumers kind of appoint the enterprises, so I think the enterprise is going to be really important for us. Our B2B strategy is kind of emerging, but we think that the best strategy and it's the 1 that Apple pursued was to get the consumers to vote and then they tell the employer if they want to use your service and you make it really easy for them.

I don't -- the 1 thing I will say, I don't know if you're asking this question, but I don't really see us being in the like the white label business. I think that Airbnb brand is so strong, it's so powerful, but the last thing we want to do is strip that brand away. So I don't know if either those answer your question. at all? Did I answer your question? Hopefully, did did.

And that concludes our question-and-answer session. I will now turn the call back over to Brian Chesky for some final closing remarks.

All right. Well, thank you all for joining today. And I just wanted to say, we're really, really, really excited about the results this quarter. We delivered 1 of the strongest quarters in years. we see our outlook, and we're raising our full year guidance. But what excites me most isn't the quarter, is we're seeing broad-based momentum across Airbnb. Growth is accelerating in core markets, where people are looking at [indiscernible] for the first time, and we're dibbing faster than we've ever had before. And these results are not isolated. I think they're evidence that the changes we made over the last several years are working. .

And that's what gives us confidence that this momentum is here to stay. I'm incredibly proud of our team has worked incredibly hard to deliver the results, we've talked about today, and I want to thank you all for being investors and partners on the journey. We'll see you next quarter.

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

Good afternoon, and thank you for joining Airbnb's earnings conference call for the first quarter of 2026. 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 Andrew Slabin, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome to Airbnb's First Quarter of 2026 Conference Call. Thank you for joining us today. On the call, we have Airbnb's Co-Founder and CEO, Brian Chesky; and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our first quarter of '26. 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 the 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 the 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 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. And with that, I will pass the call over to Brian.

All right. Thank you, and good afternoon, everyone. Thanks for joining. Airbnb had a strong start to 2026. Last quarter, we talked about the path we've been on to rebuild our foundation, innovate faster and accelerate growth.

In Q1, network continued to pay off. Revenue grew 18% year-over-year to $2.7 billion, which exceeded the high end of our guidance. Net gross booking value grew 19% year-over-year, driven by strong demand and continued pricing strength. And nights and seats booked grew 9% after accounting for an approximate 100 basis point headwind for the conflict in the Middle East.

We're seeing this momentum show up across the business. Nights booked in our app grew 22% year-over-year, and they now account for 63% of total nights booked, which is up from 58% a year ago. Growth in first-time bookers also accelerated to 10%. Now this is the highest growth rate since 2022, with the strong acceleration in Brazil, Japan and India. And net nights in our expansion markets grew at roughly twice the rate of our core market.

This is project-wide at work, the blueprint that I talked about last quarter where we create small elite teams and give them a clear mandate. We start with simple improvements, shift, learn quickly and double down what works. And eventually, we tackle bigger, more ambitious bets. And last year, it drew hundreds of millions of dollars in revenue. And this quarter, you can see it really showing up more broadly across our business.

So I want to give you a few examples. First, new features for [ guest notes. ] Now we shifted a ton of improvement for guests in Q1. Reserve Now, Pay Later is obviously one of them. We introduced it last year to give guests a more flexible way to pay, and the response has been incredible. In Q1, we expanded to more markets around the world. And as a result, roughly 20% of global GBV came from Reserve Now, Pay Later bookings. This increased flexibility is changing how guests book. We're seeing longer lead times, as well as a mix shift towards larger, higher-priced homes.

Now in addition to Reserve Now, Pay Later, we're also improving search. Guests now see more relevant listings, and it's having a positive impact on bookings.

On the host side, we're building more of what hosts have been asking for. We redesigned sign-up flow to make it easier to start hosting, and we're testing host insights, which are personalized recommendations to help host improve their listing and stay competitive. And finally, we're upgrading our pricing tools to make it easier for hosts to set prices based on demand and seasonality.

Second, we're expanding what Airbnb can offer. In Q1, we continue piloting new Airbnb services to make every part of the trip better. Now you'll hear more about what's new at our May 20 launch in 2 weeks. We also continued scaling experiences, and early results show that's becoming a demand flywheel, almost 1/4 of new guests who booked an experience go to book a stay or a service, and about 1 in 3 people who book an experience book a stay within 90 days. So service experiences are about more than just stand-alone products. They are a great way to introduce new guests to everything Airbnb has to offer. We're also expanding our partnership with Delta Airlines so that travelers can earn Delta Miles and qualifying Airbnb experience and services in addition to home; and to capture even more trips, we're scaling our boutique and independent hotel pilot to more mature markets around the world.

Early results are strong, especially in cities where supply of homes isn't meeting demand or where supply is constrained because of regulation. Now bringing more hotels onto the platform helps us serve guests when a hotel might be the right choice. It also induces more new guests to Airbnb, and roughly 55% of guests who booked a hotel on Airbnb come back and they book a home.

Third, we're using big events to drive a business. Now big events is how we -- how Airbnb got its start, and we've spent years refining our strategy around them. They do a few big things for the business. First, they help us bring on thousands of new host to scale. Many hosts who joined for big events are running out their home for the first time, and they may continue hosting long after the crowd flees. Events also strengthen our relationship with cities and governments that need new ways to host millions of visitors. And of course, they give Airbnb a global stage to do what we do best, which is bring people together from all over the world.

We saw this playbook in action this February during the Winter Olympics in Italy. As an official Olympics partner, almost 200,000 guests stayed on Airbnb with supply and host markets growing about 30% and GBV more than tripling. Our marketing campaigns generated around 1 billion impression. And we met with dozens of government officials and community leaders during the game, strengthening our relationships across Italy.

The World Cup is the next chapter in our event strategy, and we expect to host more guests than any event in Airbnb's history. Since we started outreach in October, over 100,000 homes have listed on Airbnb for the first time. Now it's also worth noting that this isn't just a strategy for a big global events because we have a playbook that works at every scale that can be targeted about where and when we grow supply.

Finally, AI. It's changing how we build and innovate. Nearly 60% of the code our engineers produce is now written by AI, which we estimate is about twice the industry average. That means our teams are shifting more features and iterating more quickly. But it's not just about speed, it's about delivering a better experience for our guests and host. And customer support is a really great example of this. You see when guests contact us through our AI assistant, over 40% of issues are now resolved without a human agent. And this is up from about 1/3 in Q4 with significantly faster resolution time. We've seen the cost per booking decrease about 10% year-over-year in Q1, and we expect to see more of this as we improve AI customer support this year.

So you can see why we're really excited about the year ahead, and our guidance reflects -- we're raising our guidance for 2026 and now expect year-over-year revenue growth to accelerate to low to mid-teens, and we anticipate our adjusted EBITDA margin to be at least 35%.

And all of this is happening against the backdrop of macroeconomic and geopolitical uncertainty. In moments like this show just how resilient Airbnb's model is. Because when travel patterns shift, Airbnb adapt with them. When [indiscernible] led to fewer people traveling to the U.S. last year, they came to Airbnb and found somewhere else to go. And we're seeing a similar dynamic now. We have millions of homes everywhere in the world at nearly every price point. And that's something most travel companies can't replicate, and it's the core reason we're able to deliver consistent results even in challenging environments.

Now while we can't predict each quarter with precision, we can control the speed of our innovation. And in the long run, that's what leads to more growth.

Lastly, I just want to remind everyone that our 2026 summer release is coming up 2 weeks from next Wednesday -- 2 weeks from Wednesday on May 20. I'm really proud of what the team is building, and I'm really excited for you to see it, so I hope you all tune in. And with that, I'll turn it over to Ellie.

Thanks, Brian, and good afternoon, everyone. I'll start with Q1 financial results, then cover our outlook for Q2 and full year 2026.

Q1 was another great quarter for Airbnb with continued momentum seen across the business. Gross booking value grew 19% year-over-year to $29 billion, representing consistent sequential acceleration for the last 4 quarters, driven by both strong growth in nights and ADR. During the quarter, we saw nice growth accelerate from January to February. However, we saw a slight deceleration in March largely due to conflict-related cancellations across EMEA and APAC. Absent the impact of the conflict, we estimate growth of nights and seats booked would have been approximately 10% year-over-year, an acceleration compared to Q1 2025.

ADR increased 9% year-over-year or 4% excluding the impact of FX with noticeable strength in North America.

Continuing on the progress we made last year, we've been steadily making it easier to find and book a home on Airbnb. Last quarter, I shared 3 initiatives in particular that helped drive the continued momentum across our business. The broader expansion of Reserve Now, Pay Later, updates to our cancellation policies and the migration of certain hosts to a simplified fee structure.

First, we expanded Reserve Now, Pay Later to more markets, and adoption continues to increase. In addition to driving longer booking lead times and contributing to the increase in ADR, Reserve Now, Pay Later is driving a meaningful lift to all booking metrics, net of cancellations. We believe this is a longer-term competitive benefit, walking in earlier calendar share and better aligning our payment options with guest preference.

Second, as shared previously, we redesigned our cancellation policies to give guests more flexibility and confidence to book.

And lastly, we began migrating our API host to a single service fee. We believe this simplification of fee structure will help our host price more competitively and provide greater price transparency. Over 1/4 of our active listings is now subject to the single service fee.

In total, we estimate these 3 features delivered approximately 3 points of nights booked growth and approximately 4 points of GBV growth in Q1. We're testing the expansion of the single service fee to more hosts this year, and we'll continue iterating to simplify pricing, improve transparency and help our host stay competitive.

Now turning to our Q1 financials. Revenue grew 18% year-over-year to $2.7 billion, exceeding the high end of our outlook by 2 percentage points, largely driven by the positive impact of our product updates and FX to a lesser extent. In terms of profitability, our net income was $160 million, while adjusted EBITDA was $519 million, up 24% year-over-year, also exceeding guidance. Net income was negatively impacted by a onetime adjustment of approximately $70 million to certain deferred tax assets as a result of changes in the U.S. corporate alternative minimum tax effective in Q1. For 2026, we anticipate our effective tax rate to be in the high teens, down from 20% in 2025 due to the One Big Beautiful Bill Act, primarily due to how foreign earnings are taxed.

Next, our balance sheet and cash flow. We continue to benefit from our efficient and capital-light business model, delivering $1.7 billion of free cash flow in Q1. Over the trailing 12 months, we generated $4.5 billion of free cash flow, representing a free cash flow margin of 36%. Absent the impact of Reserve Now, Pay Later bookings, which deferred guest payments from the time of booking closer to the date of stay, we expect that earner fees and free cash flow would have both grown year-over-year in Q1. Specifically, Reserve Now, Pay Later results in lower unearned fees in Q1 and Q2 and higher unearned fees in Q3. Our strong balance sheet and cash flow generation allowed us to repurchase $1.1 billion of our common stock in Q1. As a reminder, returning capital to shareholders remains a key component of our capital allocation strategy. And lastly, in Q1, we received investment-grade ratings from the major agencies and subsequently completed a $2.5 billion senior unsecured debt offering for debt repayment and general corporate purposes. We believe establishing a presence in the corporate bond market expands our access to financing, diversifies our investor base and supports long-term optimization of our cost of capital.

Now let's shift to our Q2 and full year 2026 outlook. We're encouraged by the momentum we've seen so far this year and are excited about our road map to drive growth in 2026. In Q2, we expect to generate revenue of $3.54 billion to $3.6 billion, representing year-over-year growth of 14% to 16%. This includes an approximate 3% foreign exchange tailwind after factoring in our hedging program. We expect GBV to increase in the low double digits year-over-year driven by growth in nights and seats booked and a moderate increase in ADR. We expect the FX tailwind to ADR to be significantly lower in Q2 than in Q1. Finally, in Q2, we expect year-over-year growth in nights and seats booked to decelerate slightly relative to the 9% growth we saw in Q1. The assumes an approximate 100 basis points headwind related to the conflict in the Middle East. On profitability, we expect adjusted EBITDA and adjusted EBITDA margin to be up year-over-year in Q2.

Finally, for the full year 2026, we are raising our guidance and now expect year-over-year revenue growth to accelerate to low to mid-teens. The upward revision to our revenue outlook reflects meaningful progress across our growth initiatives and improvements to monetization through a simplified fee structure and our insurance programs, which are expected to lift our full year take rate. We remain optimistic about our continued momentum even as we face tougher comps in the back half of this year against the rollout of Reserve Now, Pay Later and current headwinds from the Middle East.

For profitability, we're now expecting our adjusted EBITDA margin to be at least 35%. We'll continue to prioritize reinvestment to support further growth across the business, specifically on efficient marketing spend, international expansion and AI initiatives.

To close, our confidence in the increased full year outlook we provided is grounded in the trends we're seeing. Underlying demand is strong, our product improvements are working, our monetization initiatives are gaining traction, and our balance sheet and significant liquidity gives us the flexibility to keep investing. And with that, I will open it up to Q&A.

[Operator Instructions] Your first question comes from the line of Ron Josey from Citi.

I wanted to ask 2, please. First, on just the app room nights more booked through the app, the 22% growth and the 2/3 coming. Brian, talk to us about the changes in the app that you've made that's driving that? And then maybe a larger, bigger picture question. I think recently you had some comments on the podcast. It's about rebuilding or rethinking how teams restructure given the world of AI. Any insights on there would be helpful just on how the organization is organized.

Sure. On the app room nights growth, one of the general trends we're seeing is that more and more people are gravitating to using our mobile application. Obviously, it's been happening for practically over a decade. And there's a couple of reasons for this. Number one, we've been more aggressive over the last year, 1.5 years, in pushing people that open Airbnb on a mobile website to download the app. So we've just been a bit more aggressive about that. Just really letting them know we have a much better experience. Increasingly, also, we have more and more people opting the notifications. Notifications pull people back into the app. We also -- the way we do e-mails, we try to like really try to create a lot of hooks for people to use the application. And also, we're just seeing a lot of momentum on download in the App Store. I think that every year, our top rank in the App Store within the global 50 apps keeps going up year-over-year. So I think a lot of it is just general improvements in optimization. I don't think there's a silver bullet here.

With regard to the broader comment on how teams are being restructured for AI, here's what I would say, I think it's really, really early. And I think we're at the very, very beginning of how AI is going to change how we all do our jobs. I will say, though, that one of my principles is that Airbnb has to move at the speed of AI. AI, I think we should think of it as an accelerant to everything. And we can think of it as a disruptive technology. I actually think of it more as an accelerating technology. I think the #1 characteristic of AI is speed. It just speeds every single thing up. I also think it makes -- it requires everyone to be more hands-on and requires everyone to be more nimble and more adapted to change.

I think one of the benefits of the way Airbnb is run is that -- and I think there was a term that was coined, Paul Graham, Founder Mode, based on a talk I gave, but it's really this notion that leaders should be hands on. I do not think there's going to be as much of a role for pure people managers, said differently, 30,000 feet and is off managers. I think everyone is going to have to be much more hands on, much more in the details of the company and all the data. I think now data inside of companies completely democratized. You don't need to inquire the data scientists to get data. We all have self-serve dashboards. I'm seeing like many of our design managers and engineering managers going back to coding or using quad code. We have 60% of our code being authored by AI. This is significantly higher than our peer set and our benchmarks. And so these are some of the things we're seeing. And so I think generally, it's just about being -- moving faster and being more hands on. What the implications are about how we structure our teams in the future, it is way too early to say.

Your next question comes from the line of Richard Clarke from Bernstein.

I just want to ask a couple on the Delta partnership you set out today. I guess you talked about expanding take rate. I assume that this partnership comes at a bit of a cost. Is it just small enough that it doesn't affect your take rate trajectory? Are there more partnerships like this you can do? And I guess, embedding yourself into another airline partnership, how should we think about your own ambitions to do loyalty or your own ambitions to sell air tickets going forward? Are those held back at all by this partnership?

So let me speak a little bit about Delta, and then Brian, you want to talk about loyalty. We're excited about the Delta partnership that we announced earlier this week. I think it's a great opportunity for us to work with partners and effectively share in demand.

In terms of economics, it is a rev share program. You shouldn't anticipate that it has a negative impact on our take rate this year. Instead, as we called out in the letter, you should see modest upside to our take rate from both the migration to the single fee structure as well as our insurance programs. So you shouldn't see this as a negative to our take rate, instead, we think it's a great effective and high ROI way to generate demand.

And with regards to flights and loyalty, they're absolutely both on the table. And with loyalty, what I would say is, I've always believed the best loyalty program is people loving your product and coming back. That is the best loyalty program. That being said, it's pretty remarkable how successful Airbnb has become, given we're probably the only lodge traveler in the world that does not have a loyalty program. I've always said that we're looking at something, but if we do, we wouldn't do an out of the -- points program. We are looking at our version of a really compelling program. I don't have anything to announce today, but I can assure you that when we do something, it will be truly differentiated and unique to Airbnb.

And with regard to flights, our vision is to really build a global community you can travel with anywhere. How you get there is part of that vision. So again, we don't have any announcements to say on flights, but I think it's certainly on the table as part of our future vision.

Your next question comes from the line of Jed Kelly from Oppenheimer.

Great. Great. Just have noticed an improvement in sort of the hotel product in New York City. Can you give us an update just how room nights are trending in some of your hotel test markets?

Yes. I would say we're really excited about the work that we've done on hotels. We're obviously actively scaling the number of great, high-quality boutique and independent hotels on the platform. And at the same time, I'm glad to see that you've noticed, we've fundamentally upgraded the product experience for hotels. We've upgraded the product display space for individual hotels so that they have the right information that a consumer is looking for from a hotel versus a home. We're making it much easier for consumers to find hotels if that's what they're looking for and to know when they're looking at a hotel relative to a home.

What we've shared about the scaling is that hotels today is a relatively small portion of the business. It's a single-digit percentage number of nights. But over the last couple of quarters, what we've seen is that all the top line metrics for hotels are growing more than double that of the entire business. So we're seeing really nice scaling both on the supply side as well as bookings, and we're excited about the path forward in terms of building this into a meaningful portion of our business.

One thing I would note in terms of the overall hotel strategy is that when you think about why we've entered a hotel, it's for a couple of reasons. One is the size of the market. Today, as we've said many times, Airbnb only represents about 1 in 10 nights aid in accommodation. And by adding hotels to our platform, it does really 3 things that Brian mentioned in his opening remarks. One, it allows us to satisfy demand in markets where, for regulatory or other reasons, we don't have sufficient supply. Second, it allows us to fill in those travel nights for many of our loyal guests who -- sometimes the hotel is a better offering for a particular trip, whether it be last minute, one night traveling by yourself. We want to make sure that we have an accommodation that fits any of your travel needs. And then the third, which is probably one of the largest opportunities is we believe having hotels on the platform is a nice onboarding ramp for those global travelers who have not yet tried Airbnb. We believe we can bring in new guests to the Airbnb ecosystem and, one, start them on hotels; and over time, migrate them to homes as well. What we noted is over 55% of people who booked a hotel on the platform come back to book a home. So we're already seeing that onboarding ramp. And we're really excited about the path for hotels on Airbnb.

Yes. And maybe the only other thing I would just add is we're going to have some updates to our hotel product and strategy on May 20.

Your next question comes from the line of Ken Gawrelski from Wells Fargo.

If I could just follow up maybe on the hotel point. Could you talk a little bit about your -- what you expect the customer -- the user experience to look like? Will it look more like booking where you're searching for lodging and there will be both homes and hotels all co-mingled? Or do you expect kind of separate tabs and separate experiences and separate entry points for users? That's question one.

And question two, if you think about -- can you talk about early learnings from the AI search experience? What are the early learnings? It seems like you've expanded it somewhat from a smaller test. Could you just talk a little bit about what you've learned?

All right. Yes. Thanks, Ken. On hotels, I think our experience is going to be quite different than other OTAs. I think, first of all, is we care a lot about conversion, but first and foremost, we really, really care about doing something in a differentiated way and doing it in a design-forward way.

With regards to inventory being co-mingled versus tabs, I'll say 2 points. Number one, if you were to search right now in New York City, it is comingled, but we are testing a variety of user interface components like a carousel. So carousel is obviously left to right where it's got a title and there's a left or right swipe. So it allows a distinct type of inventory within a search result page. This works really, really well. So that's one thing we're doing.

The second thing is with regards to hotel tabs, doesn't take away too much of our product strategy, but we are probably going to have more tabs in the future for people that want to find something very, very specific.

But the more important and broader answer is neither of those. The more important answer is personalization. There are people that only want to book hotels. They should only see a hotel. There are people that only want to book home. They should only see home. There are people that would book homes or hotels and depends on the trip type. So if you are going to search last minute for one night on a business trip and we know all that, and we know you sometimes book hotels, we're probably going to show you hotels. If you're looking for a family vacation, you're traveling with 4 other guests, you're going to stay for a week in Italy, in Tuscany, a hotel is probably not right. We're probably going to show you an Airbnb, a home. And so I think the ultimate, like, paradigm is not this tab versus co-mingle inventory. I believe that's a pre-AI paradigm. I think post an AI paradigm that we're moving towards and this relates in a second to AI search is deep personalization, understanding every user, every member. And I just want to remind everyone listening that 100% of people who booked have an account, and they have to have a verified ID. You cannot book as a guest. You have to have account, you have to be a member of the community. Therefore, we know something about you. We can infer a lot, not only about what you're clicking on your -- on the site, but all of your past booking activities.

So the best answer to all of this -- and the best answer is not necessarily tabs, although I do think we want tabs as navigation for people buying things. Think in the age of AI, we know about you. We know your intent and we give you exactly what you're looking for. I think this is what most all e-commerce sites will look like in the age of AI. And that is point number one.

Okay. So now let's talk about AI search. What we've learned. So I'm going to talk about Airbnb's strategy, and I'm going to also talk for a moment about where I see AI search going for travel and e-commerce more generally. So let me talk first about AI search. Okay. So our strategy with AI is actually quite different than our competitors because many of our competitors decided to start top of funnel: Where should I travel? We decided to start bottom of the funnel. The reason we decided to start with this is we want to focus on the hardest problem in AI, which we thought was customer service. The reason why is the stakes are high, you have -- you cannot hallucinate, you have to answer things very, very quickly because they are calling and they have problems. You have to be multilingual, often in the same conversation because sometimes guests and hosts don't speak the same language. You have to adjudicate very difficult things. You have to escalate to human accurately, especially if it's timely or there's a trust and safety incident. And you have to deal with personally identifier information that means that you have to be able to protect the booked data, you have to be able to read and train based on nearly 100 policies, tens of thousands of evolving conversations and look at like millions of data points of how a prior case was adjudicated to be able to answer correctly. This is very, very hard. In fact, entire start-ups like I think Sierra's got like a $15 billion market cap, just to solve this problem. So it's a very, very difficult problem.

I'm proud to say that we've made a lot of progress. And over 40% of people connect with our AI assistant self-solve. And I believe it's, by far, the best AI self-solve in all of travel. I'm pretty confident of that.

So from bottom of the funnel, then we move mid-funnel. And mid-funnel would be things like people go on the Airbnb listing page. And we have hundreds of millions of views on Airbnb. And one of the things our guys told us is when they get to an Airbnb, it's great when they see like 100 reviews, it's awesome, but they don't have time to read all 100 reviews. So we now have AI summaries. And AI summaries are really great. We have filters, we have AI summaries. We're now using AI for matching. AI is really helping our search ranking and our relevance. So these are -- on May 20, again, to plug one more time, we're going to see a bunch more AI features in the mid funnel. So that's mid-funnel.

Finally, it's top of funnel, which you would call AI search. This is top of funnel. And this is what we're currently testing. And we -- I think the first point I want to make is AI feels like magic, but of course, it's not magic. Nothing is really magic. It just feels like it. And when you break AI under the hood, you realize that you need -- in order to be good at AI, you need to be really good at technology, foundational, you need to be really good data and infrastructure. So what we have been doing over the last few years is really getting our data warehouse really, really clean because your AI is only as good as your data. We've done that. Of course, as I mentioned in our last earnings call, we hired Ahmad, our CTO, who was the leader of the Meta LLaMa model. So we are probably one of the only technology companies in the world certainly only in travel that has an AI-native person running as the entire technology stack. And we are essentially piloting a variety of different ways to use AI, whether it's in the search box, whether it's once you search, interrupting on the search, it's the filter panel once you book a trip. So we're trying a lot of different things. We're really in the exploration, research development mode.

And I think this goes to my final point, which is I don't think anyone figured out AI for travel or e-commerce yet. Let me use an example, ChatGPT. Last year, ChatGPT announced the creation of enablement of third-party apps. And then this past March, they shut that project down. And one of the things we noticed is that while ChatGPT is -- traffic converts higher than Google traffic when it's sent to Airbnb, we think the design of a chatbot fundamentally as its currently constructed today does not work for travel e-commerce.

There's essentially 4 problems. The first problem with the chatbot is there's too much text. Chatbot are LLMs, large language models, they're language, and most of e-commerce is not language forward, it's photo forward. That's the first problem. The second is there's no direct manipulation. You can't touch anything. You have to type everything. And that's great for a conversation. But if you want to like move the price [indiscernible], that's much easier and type, well show me X, Y and Z. The third problem is comparison. You go to Airbnb in Paris, there's tens of thousands of homes, I think over 100,000 homes. Imagine trying to compare 100,000 homes in a chat bot, you get lost. And so it wants to show you just 3 options. You want to see more than 3 and pretty soon you get confused in a thread. And the fourth problem is that almost all bookings of Airbnb have multiple guests, what we call multiplayer. Chat bots are primarily single player. This doesn't account for the fact that 85% of people booking Airbnb send a message to 100% have an account. And also chat bots are not MAP native.

So there's a whole bunch of reasons why I don't think travel or e-commerce for AI has been figured out. That's why I think, while AI is a risk to us and everyone. If it's a risk to us, it's a risk to everyone, just everyone is an opportunity for us. And so I believe that over the next year, you can see a lot of innovation around AI search, AI-native interfaces. And I think not only can we solve this for home sharing, I think we can solve it for all parts of travel and maybe even parts of living.

Your next question comes from the line of Nick Jones from BNP Paribas.

I guess I'd like to touch on World Cup in North America. Can you kind of talk about booking patterns? Do you feel kind of a lot of the bookings are done so far? How should we think about the shape of that? I guess through the group phase -- group stage and see what happens. But any thoughts on kind of how that will unfold or what we should be paying attention to?

And then can you also speak to what happens to the supply after the event? You added, I think you said 100,000. Do those stick around? And is there kind of like follow through after the event where people kind of still access that supply?

Thanks, Nick, for the question. So we're extremely excited about the World Cup. So far, in terms of what we've seen in cumulative bookings heading into the event, the World Cup is slated to be the largest event on Airbnb's history. What's particularly exciting about this event is not just the scale of total nights booked or guests that we expect to serve. It's the breadth. Obviously, 16 cities across 3 countries really gives us a large opportunity in terms of driving brand awareness and sentiment, driving supply and also building on the kind of community and policy opportunities that such a partnership creates.

In terms of what we're seeing so far, I would say we're happy with the performance in terms of bookings leading up to the game. I think one thing to note relevant for all the headlines that probably you're referring to is what we've seen in terms of past events, both previous World Cup as well as both most recent Olympics, is that a lot of the booking activity happens close to the actual games. People -- the games approach, people get increasingly excited, as in this case, the tournament to continue. People know who's playing and what game and so many of the bookings are closer to the actual date than, say, typical travel. And so where we are today, we feel really good about how big this is going to be, one, just for general enthusiasts of football, but also for the Airbnb brand and business.

In terms of supply, yes, we commented that in the 16 host cities for the World Cup, we have attracted an incremental 100,000 listings across those markets in advance of these games. What we -- to give you a data point in terms of supply retention. What we saw with Paris was that, say, 6 months after the games, we have retained in excess of half of the listings that had come on specifically for the games. And when we think about the supply acquisition for these events, candidly, we don't need all of the supply to stay because these are peak moments in these cities. But what we tend to see, and it's consistent with the Paris data point I just provided, is that hosts often come to Airbnb for these events knowing it's a unique opportunity for them to earn some incremental income around a big event, and then many of them stay because they realize the benefits of being a host on Airbnb.

Your next question comes from the line of Eric Sheridan from Goldman Sachs.

I know we talked about the hotel side growing in the business prior in the call. But on the core alternative accommodation side of the business. Can you talk a little bit to the opportunities and challenges that exist in continuing to grow the supply base of alternative accommodations. So I'd be curious, any views you have on that AI might play a role in either finding or sourcing less easily discoverable supply that would align with that side of the business as well over the medium to long term.

Yes, Eric, I think you can think about our core accommodations business of homes as a few different categories. So you have essentially hosts that connect via an API. You might call that host API partners. These are primarily property managers. That's one category. Then we have primary homes, homes that people live in primarily, so typically more than 180 days a year. Then you have vacation homes, then you have things like private rooms. So you have to think about each -- and I would break them into 2: The API; and the primary homes or vacation homes. These are 2 buckets.

I think with the host API partners, I think it's more about AI enabling us to build more tools. I think we've been a little bit lagging behind third parties and building great tools for host API partners. And as a segment, the host API hosts are growing really, really fast, and we see a really big opportunity to better serve them. One of the things we found is that the more properties you manage at Airbnb, the lower your rating is. And so said differently, our customers have higher satisfaction with individual hosts over property managers.

Now on the one hand, that's encouraging because that inventory is more unique and exclusive to Airbnb; other hand, we see that as opportunity. And one of the things those API partners say is, well, we want to be better host, but we need better tools. So AI is a like -- maybe here's an analogy. In the old world, you might need a team of 20 engineers. In a new world, an engineer can spin up 10 agents. And those agents can work 24/7. I mean I'm kind of exaggerating a little bit. You have to be there to prompt them and the amount of work they can do without supervision isn't overnight, typically for most tasks, but you can see a huge amount of leverage. So the fact that we're adopting AI tools is a way for us to get a lot more leverage around the software for most API partners. And just to give you a really finer point, originally, we didn't have the resources to do all of the host API work we want to do. And now with AI, we're reevaluating how much productivity we have, and we're able to accelerate the development of this work. So that one is more about not acquiring properties, but about enabling them to be successful in expanding. AI, especially though, can help the sourcing discovery in the listing of primary homes. So without, again, giving away some of the things we'll show in 20, May 20, we do find that AI can make it much easier to list your property. So right now, you have to type everything in, you type in your address, you type in d your title, you have to type in your listed description. Eventually, I imagine a world where you can just say like, list my place, you put in your address, it can scrape information on the Internet. You can take photos. It can even write your description based on computer visioning of the photo.

So it's very, very difficult for a regular person to list a property. A business has no problem. It's their job. They'll have an employee list of [indiscernible] Airbnb. So removing friction is not as important for host API partners, but the partners want power tool, we'll build those regular. People want things to be easy. Hence, AI makes things easy, so it can help find properties and help us target what properties we need in which neighborhood. They can help us understand what the down is and how much we'll pay in this neighborhood versus that neighborhood and then make it easier to list. So yes, AI is one of the best things that happened in Airbnb, and these are some of the reasons why.

Your next question comes from the line of John Colantuoni from Jefferies.

Okay. Great. On the expansion of the Reserve Now, Pay Later offering, maybe you could talk about how consumer adoption and awareness has evolved since rolling the product out to more markets? And any notable observations around cancellations or conversion improvements compared to the U.S. market.

John, thank you for the question. So just to give a little bit of color in terms of the expansion and results. You note at the time line of last year, we initially launched Reserve Now, Pay Later in the U.S. in Q3 to great results. Over the course of Q4, we began merchandising up funnel so that there was broader awareness to the consumer before they got to check out. We saw that, that was incremental to lift as well. And then most recently in Q1, we rolled out our NPL to most of the rest of the world. I would say there are slight differences in terms of growth lift by geo, but not necessarily material differences. What I would say is that in every market that we have launched, Reserve Now, Pay Later, there is a material lift to gross bookings. And in all cases, we tested extensively to ensure that the net lift to bookings was positive. So certainly, with the offering, there's a very elevated level of cancellations that come with the program. But across all regions, what we see is that the net impact is positive to the business.

In terms of -- I'm just going to give you a little more color here. In terms of relative adoption, the U.S., we are seeing the highest level of adoption, but the other markets are not far behind.

Your next question comes from the line of Lloyd Walmsley from Mizuho.

I've got 2 on -- both on hotel. First, where are you guys in terms of just ironing out the kinks here on the API or otherwise? Ellie, you mentioned sort of nailing or redesigning the merchandising page, but like what is left to do before starting to expand to more cities?

And then the second one, probably more for Brian. Outside of just filling inventory gaps, like how do you see Airbnb competing in hotel? Like why would a consumer who is intent on a hotel shop on Airbnb rather than just like stumbling on it while looking in a region where there's not a lot of short-term rental supply. Like help us understand how you compete there.

So let me just talk a little bit about like what is left to do. I would say we have had great success out of the gate in terms of building a product that works for our hotel partners. Obviously, there is a continued road map to make sure that we have the tools that hotels need that are obviously very different from our homes hosts. At the same time, I think there is considerable opportunity ahead not necessarily in the back end, but on the front end, making sure, as Brian had spoken about earlier, making sure that our product services hotels at the right time to the right guest to ensure that they get booked. It's obviously a bit of a different user case in terms of when and how we should merchandise and that we continue to test and refine to make sure that we're not just bringing on high-quality hotels, but we're also getting them booked.

Yes. And not to keep plugging May 20, but I think part of your answer will be answered in 2 weeks on why they book on Airbnb. But what I would say is we want to be able to have a lowest price guarantee. We want to have best-in-class merchandising. If you, for example, search say New York, you'll see -- I think we already have probably the best merchandising of hotels of any of the major travel sites. And that's our B1 with a new business we barely entered. So I think that you're going to see that there's a lot more improvements, a lot more iterations, a lot more customization.

There's a lot of reasons people have book hotels in Airbnb, but I think -- I don't want to pass over this one point. We have billions of visits already on Airbnb. So hotels can be a multibillion dollar revenue business without anyone intending to ever come there to meet a booked hotel. I think we have so much traffic. And our conversion rate is significantly lower than, say, Booking.com. And so I think there's a massive increase in conversion rate by just converting the travelers already in our site. And so think about it as, they're already in our store. They've told us in our store, they're looking for a place to stay, but they don't find a home, they're probably going to another store and booking a product we don't have. We have the product another aisle, then a whole bunch of people are going to book. We think there is enough upside that without attracting people to every 4 hotels, you can still build the giant business. Now of course, we wanted people to come to Airbnb to book hotels as well. And I think that really requires us to disclose a bit of a product road map. But I can say that we are envisioning a differentiated strategy where we have the lowest prices, the best quality hotels and the most differentiated product offering.

Your next question comes from the line of Colin Sebastian from Baird.

I wanted to follow up on the comments around the acceleration of first-time bookers, maybe the regions or demographics that are driving that expansion and whether those users are showing different booking windows or property preferences compared to historical cohorts. And maybe that's related to that is just momentum in expansion markets. So what you'd say are the biggest drivers there in terms of things like localization and payments. And that's the follow-up.

Great, Colin. Thanks. So let's just start with first-time bookers. We're really excited to see the continued acceleration there. Where we've seen it, I would say, it's in demographics. Obviously, it's the expansion markets that we called out. These are relatively new markets for us. So the opportunity set in terms of attracting new guests is frankly huge. I would say, second, in terms of kind of age cohorts, we're seeing great strength in terms of younger and in particular, I would say, Gen Z customers. So 2 kind of pools of guess where we have a huge opportunity to build out the base of loyal guests going forward.

In terms of more broadly, our expansion markets, how it's going, I would say, we're seeing great indicators that the strategy is working. Obviously, Brazil is the market that we've been in the longest as a specific expansion market. We spent the last couple of years there investing from a marketing perspective and a product perspective. And you can see the compounding growth at scale is fantastic. As we shared, I believe last quarter, a couple of years ago before we had targeted Brazil as an expansion market, it was fairly in the top 10 of our markets, and now it's consistently 3, 4 or 5, and yet it's continuing to compound at over 20%. So it gives us real confidence that the country-by-country approach where we are tailoring our marketing messages. We are tailoring the product to be relevant for local consumers is a great approach that can help us get better penetration outside of our core markets.

A couple of things that I would call out of late is we've been really localizing the marketing messages. As we said in the letter, in Q1 alone, we had 16 local marketing campaigns that really try to capture the local like zeitgeist of cultural moments to drive awareness and consideration of Airbnb. We've also continued to make product changes at the margin to be helpful for a particular market. So some examples would be restructuring how we do some of the displays for popular bed and breakfast in Italy, a popular specific type of inventory there. We've also tried to make the feature set for each of the various countries specific to what specific cultures care about. I give you one interesting example. Germans care a lot about cleanliness. And so that's something that we have particularly highlighted for those guests because we know it's particularly relevant for them. We're trying to do that increasingly at the country level so that when you open Airbnb, it feels like it's local and relevant for you.

Your next question comes from the line of Doug Anmuth from JPMorgan.

Ellie, can you just help us understand the confidence in the higher revenue growth for the year and then also the slight uptick in view on EBITDA margin?

And then, Brian, just given the Reserve Now, Pay Later penetration, curious if you think there are other payment innovations or services that you could see as an opportunity on the platform.

Great. Let me talk a little bit about the revenue revision upwards. So what does that reflect? I would say it reflects the momentum we've seen year-to-date in terms of our growth initiatives. In particular, I would say we have more confidence in our underlying nights book forecast for the year. We have more confidence in terms of the durability of slightly higher ADRs over the course of the year. And third, as we called out in the letter, we're starting to see the benefit from some of our monetization efforts. And so you should see a slightly higher implied take rate in the back half of the year. It's really those 3 components that round out the upward guide on the top line.

In terms of the bottom line, thank you for noticing the slight change in the language around the 35% EBITDA guide. What we're seeing right now is, obviously, relative to a quarter ago, there is upside on the top line. And with that upside, we are actively looking to reinvest to drive growth. The handful of things that we are reinvesting in that we called out in the letter, obviously, marketing channels where we see high ROI; expansion markets where we see opportunities to lean in and capture more growth; and also things like policy opportunities where we see an opportunity to be more aggressive in a particular city to get a better outcome in our favor, we will do that.

And then finally, yes, we are -- as Brian has talked about extensively, we are obviously ramping up our use of AI internally. And so I would anticipate that, that is an expense that will ramp over the course of the year. And the way we've managed the P&L and delivered efficiencies over time, we have the ability to absorb that in the strong margin that we are confirming and updating here.

And then with regard to payments, obviously, Reserve Now, Pay Later. We're still actually in early innings. So for example, we're doing a global rollout. We're bringing it to desktop. And also, we don't really merchandise that much. So one of the things we can do is it can merchandise the top of the funnel. But that's just the beginning. There's a lot of other things. We have payment installments. This has been huge in Brazil. There's a lot to do in many different countries. A lot of countries have unique payment methods they want to be able to use. Having more updated flexible cancellation policies. We got rid of the very strict cancellation policy. A lot of them move to flexible or medium-level flexibility policies, which has helped a lot. We have an entire road map around payments and pricing. And I think the payments and pricing road map will deliver -- it has the opportunity to deliver hundreds of millions of dollars in kind of revenue each year. So there's an entire team. It's essentially the project why that model, we have an entire team on pricing, and there's going to be a lot to do. I think Reserve Now, Pay Later is a uniquely large bullet, but there are dozens of different projects that can deliver growth.

Your next question comes from the line of Brian Nowak from Morgan Stanley.

I have 2. The first one, just go back to the hotels. Can you maybe just sort of walk through what is the what is the biggest hurdle or constraint that we should be thinking about that will sort of dictate how quickly the hotels will roll across the platform this year and into next year?

And then number two, maybe a bigger picture, Brian, I agree. You have a massive shop of people in your store, and there's so many things you could do with it to drive more revenue per transaction. How do you think about adding air, adding a car service, adding a grocery offering, adding a much more complete travel experience through an agentic offering. Is that too big of something to think through? Do you have teams working out this? Walk us through sort of the ancillary revenue opportunities that are on your front burner?

Okay. Well, let me start with the second question. Is that too big? No, definitely not. We are thinking very, very expansively. And you've rattled off a number of things. I -- maybe just to like zoom out for a second. I do see Amazon as a pretty good inspiration for us. Obviously, there's many things that are different about Airbnb and Amazon. We're a much more capital-light business. Design is kind of very central to how we approach things. But I do think that the model that they had where they went from books to kind of everything for retail is a really good model for us, and they considered all these businesses actually categories, category expansion. And so we think there's a lot of category expansion, and some will be first party and some will be third parties. So for example, we've already announced grocery. That's a third party. We're working into car. We've realized they've been doing this for over a decade. We don't need to learn how to do grocery delivery. And then some of the first-party services we do like photography, there's really -- we didn't see any site that was doing that really, really incredibly well, and we felt like that was very much unique to Airbnb and host. So that's an example of that.

I think the way to think about this is that we're seeing ourselves building an ecosystem. And I think that today, people think of the home as the sun of the solar system of Airbnb. If you really ask yourself, if you could paint a picture of Airbnb, what would the image of Airbnb home? I think in the future, it will be a member, a guests, and we really want to see is a constellation of services of ancillary offerings. I think a home, a hotel, service experience are really just the beginning. Even within services, I think there's a huge endless opportunity.

And then the natural question comes out, well, if you're doing all those things, aren't you going to get distracted? Well, the answer to this, again, we learned from Amazon, is that every subsequent offering we offer is less work than the prior offering because once you solve one service, the next service is only 20% different. And once you solve that service, the next service is only 10% different. So every new service gets more and more efficient. And what we find is that each new service, each new experience, each new offering brings in a different type of guest. And sometimes people come in, not to book a home, but maybe to book a service, to book experience, book a hotel and they might book a home later. So we are really seeing this as an ecosystem and we do imagine offering just about everything that a traveler needs or just about anything someone needs to live somewhere, especially for less than a year. This is where really Airbnb shine, bookings in the real world.

With regard to the biggest hurdles for hotels, I don't -- there's no like really large hurdle. It's really about relentless optimization execution. It's really just about speed. And I think we have of MVP, a minimum viable product, that's excellent, but it is the minimum, and it's not the maximum. We're going to make it excellent. And what we wanted to do is we really crack a few cities. And a lot of it is about supply and demand. It's really about like making sure we have the right prices for the right hotels in the right markets. We want to have the best prices online. We want them to be the best hotel, the best price and the best merchandising in the most features. And we want to make sure that people can discover and find them. So a lot of this is just about optimization, and this is going to be a little bit of time. I think we can do it very, very quickly. We're hiring some great people from -- some people are internal. Some people come from the hotel industry. And I'm very, very optimistic.

One thing I want to say about hotels is hotels want to be on Airbnb. I think this is a really, really important point. We're not coming kicking and screaming on the site. They're very enthusiastic. And one of the things we heard from them is they want another channel, especially boutiques and independents that typically pay higher commissions than the chains on the OTAs. And many of the independents have told us that they're feeling pressure to franchise. And not all of them want to join a franchise. And one of the reasons why is because they don't have a membership or loyalty program. And again, they can't negotiate the lower commission rates with the OTAs. So I think Airbnb can become a very appealing channel for them. So it's going to be a lot of relentless optimization in execution.

And that concludes our question-and-answer session. I will now turn the call back over to Brian for closing remarks.

Right. Well, thanks, everyone, for joining us today. Again, I'm incredibly proud of where our team continues to deliver. Revenue grew 18%. We beat and raised guidance. And the momentum is showing up across every part of the business. And I'll have more to share at our summer release on May 20. Thank you for joining.

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

Good afternoon, and thank you for joining Airbnb's earnings call conference call for the fourth quarter of 2025. 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 Andrew Slabin, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome to Airbnb's Fourth Quarter of 2025 Earnings Call. Thank you for joining us today. On the call, we have Airbnb's Co-Founder and CEO, Brian Chesky; and our Chief Financial Officer, Ellie Mertz.

Earlier today, we issued a shareholder letter with our financial results and commentary for our fourth quarter of 2025. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll provide some brief opening remarks and then spend the remainder of time on Q&A.

Before I turn it over to Brian, I'd like to remind everyone that we'll 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 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. And with that, I'm pleased to turn the call over to Brian.

All right. Thank you, Andrew, and good afternoon, everyone. Thanks for joining. I'm going to start with a quick recap of our Q4 results. And then I'm going to spend a little more time on what's driving them because that's really where the story is.

Now in Q4, we delivered strong results across the board. Revenue grew 12% year-over-year to $2.8 billion, exceeding the high end of our guidance. Gross booking value grew 16% year-over-year to $20.4 billion. This was our highest growth quarter in more than 2 years. Nights and seats books grew 10%, our strongest quarter of the year.

But what matters most is the momentum that we're gaining. In a marketplace, reaccelerating growth isn't as simple as stepping on the gas pedal. It's more like turning to cruise ship. It takes time and discipline, and you don't always see it from 1 quarter to the next. The acceleration that you're seeing didn't happen by accident. It's a result of a deliberate path that we've been on for the past few years. So let me walk you through it.

Airbnb grew incredibly quickly in the years leading up to our IPO, faster than we've ever imagined. We were like a company built to be a 2-story house. But when went public, we want to keep building, but you can't add 10 floors to a house that wasn't designed for it. You need a stronger foundation. So we rebuild our tech platform. We built the app cab by cab. And over the last few years, we improved nearly every part of the guest in host experience.

But rebuilding the foundation wasn't enough. We also need to innovate faster. Now, when I look back and what drove Army's early success, it wasn't just the idea. It was how we worked. In the early days, Joe, Nate and I would say in our apartment and obsess over every detail.

We shift something, learn quickly and double down on what works. That cycle, focus, shift, learn, scale is what compounded our initial growth. As companies grow, they often lose that speed and focus. So 2 years ago, we made a deliberate decision. We are going to recreate the same innovation formula inside Airbnb, but at a global scale. We called it Project Why.

We created a small lead team and gave them a really clear mandate make it easier to find and book a home on Airbnb. We start with the little things that make booking hard than it needed to be, simple improvements like better search filters and small tweaks to the booking flow. When those changes work, we went bigger. We improved how we convert high intent visitors to long-term users using simple web promise to drive more app downloads. We made search more flexible, helping guests discover homes they wouldn't have seen before. That drove an even greater impact. Eventually, we tackle bigger opportunities like completely redesigning the checkout flow to make bookings simpler and more intuitive.

Now these are just a few of the hundreds of improvements the team shipped driving hundreds of millions of dollars in revenue in 2025 alone. And we believe Project Why will deliver hundreds of millions more this year.

Now once we saw this blueprint work, we began applying it across the company. So what I want to do is highlight four areas where the Why innovation model is driving growth.

The first is pricing, hidden fees at one of the biggest friction points in travel. We created the pricing team with a clear goal make pricing simple and more transparent. The first major step was showing the total price upfront to guests. In the U.S., we are the first major travel platform to do this. When price transparency was just the beginning. We launched dozens more updates for more flexible cancellation policies to better pricing tools for host. These changes stacked. Then we made the biggest move of all. Reserve now pay later. For the first time, guests in the U.S. could book eligible stays paying zero dollars upfront. The response was immediate driving booking ancillaries in Q4, especially for larger high-priced homes. We're now expanding this to new markets and is a key part of the strength we're seeing in Q1.

Now we believe that pricing initiatives will drive as much revenue this year is Why and will remain a strong tailwind for years to come.

Next up, supply. Most of our supply growth is organic with host coming directly cut, but we also build a supply engine that lets us feed surgical about where we grow. And the best example is how we lean into large events.

For example, in Paris, we added over 40,000 listings for the 2024 Summer Olympics. Now we're repeating that same playbook for the biggest event on Earth, the 2026 FIFA World Cup across 16 cities in North America. At the same time, we're also improving quality. We've removed over 0.5 million low-quality listings, while Guest Favorites, the very best listings in Airbnb grew 30% in 2025 compared to 2024. And in Q4, Guest Favorites made up nearly half of all bookings on Airbnb.

We also apply the Why model in international growth. Airbnb operates in nearly every country in the world, but roughly 70% of our revenue comes from just five countries. Now that's a massive opportunity, and we're unlocking it by going deep in a small number of priority countries. And Brazil is a great example.

A few years ago, Brazil was a smaller market for us, so we put a focused team on it. We introduced features that we know matter to the Brazilian market like interest repayments or local payment methods, and we lead at the cultural moments like Carnival. We also invested in local campaigns to build relevant. The results have been incredible. Brazil moved from a top 10 market to a top 5 market on Airbnb.

In Q4, it was our second largest contributor to first-time bookers behind only the U.S. This shows what happens when you pair global scale with local execution, and we're applying the same playbook to our highest priority countries in every region.

Finally, we're applying the Why model to new businesses. We launched services experiences globally in May, but to better scale them, we're taking a city-by-city approach. We're going deep in one place, reaching product market fit and expanding from there. We started with Paris for experiences and LA for services, and we're really seeing great results. We're also starting to test new services like grocery delivery and airport pickups to make each trip better from the very beginning.

And to capture even more trips, we're bringing fatigue and independent hotels onto the platform. so that no matter what kind of stay a guest wants, they can always find it on Airbnb.

Now it's still early, but the opportunity in hotels is massive, and we plan to share more about our approach later this year.

But the big idea here isn't just building a bunch of stand-alone businesses. These are all part of a much larger vision, the Airbnb trip. We are one app and one brand where every part of the trip makes the other parts stronger. There are multiple entry points in the Airbnb. In multiple ways to drive more bookings against might book a service or experience then discover a home for the trip or they might book a hotel for a business trip, then come back to it on me to book a home for a family vacation. Each part of the trip reinforces the others.

The final piece that accelerates everything we do is AI. Now we've taken a really intentional path here. While other companies rush to both chat bots into the existing apps, we started by solving the hardest problem, customer support. We built a custom AI agent trained on millions of our support interaction. It's already resolving a 1/3 of the support issues without needing a live specialist. And resolution times are significantly faster. It's live across North America, and we're planning to roll it out globally.

But that's just the beginning. Because we're building an AI native experience where the app doesn't just search for you. It knows you. It will help guests plan their entire trip, help us better run their businesses and help the company operate more efficiently at scale.

That's the big reason we brought in Ahmad Al-Dahle as our CEO. Ahmad is one of the world's leading AI expert. He spent 16 years at Apple most recently led the generative AI team at Meta that built that Llama model. Even expert appear in massive technical scale with world-class design, which is exactly how we're going to transform the Airbnb experience.

This approach is also our strongest defense against dis-remediation. A chatbot can give you a lift of home, but it can't give you the unique point you find an Airbnb. At chatbot doesn't have or 200 million verified identities. Or our 500 million proprietary reviews. And it can't message the host, which 90% of our guests do. They can't provide global payment processing, customer support or insurance. By layering AI over the entire event experience. We believe we're building something that's impossible to replicate.

So you can see why we're so excited about the year ahead, and our guidance reflects that. We expect revenue growth to accelerate to at least low double digits in 2026. We expect adjusted EBITDA margin to be stable year-over-year. It will do all of this without investing billions or tens of billions of dollars. We don't need massive capital investment to grow. We don't own homes. We don't operate experiences, and we're not building data centers. What we're doing is finding small wins and scaling those profitably. That's why we've been able to generate free cash flow at nearly 40% of revenue and nearly $19 billion of cumulative free cash flow since our IPO. It gives us the ability to reinvest back in our business while strengthening our balance sheet and maintaining healthy margins.

Now as you look ahead to 2026, we can't predict every quarter with precision. Travel is influenced by everything from currency to macroeconomic conditions to global events. But what we can control is the speed of our innovation. In the long run, that's what leads to more growth.

So in summary, we rebuilt major parts of the company. We adopted a new blueprint for innovation. And now we're seeing increased momentum. That doesn't happen by accident. It's a result of an incredible team rowing in the same direction at global scale. So to everyone the Airbnb team is listening, thank you. The business is stronger because of you.

With that, I'll turn it over to Ellie to walk through the financials in more detail.

Thanks, Brian, and good afternoon, everyone. As Brian just shared, we're seeing increased momentum in our business. I'll start with Q4 financial results, and then I'll cover our outlook for Q1 and the full year 2026.

Q4 was a great quarter for Airbnb. Gross booking value grew 16% year-over-year to $20.4 billion, driven by strong growth in both bookings and price. Night and seats booked increased 10% year-over-year and acceleration from Q3, with strength seen across all regions.

By region, Latin America grew in the high teens, Asia Pacific grows to mid-teens, EMEA accelerated in the high single digits and North America grew in the mid-single digits. Now going into the quarter, we expected a tough comp given the particularly strong Q4 in 2024. And as the quarter played out, we saw a slightly better macroeconomic environment than anticipated.

But more importantly, our product road map delivered a material lift to the business. As Brian shared, we've been selling making it easier to find a book of home on Airbnb.

In Q4, a few updates in particular helped drive our acceleration. The launch of reserves now pay later, updates to our cancellation policies and the beginning of our migration to a simplified fee structure.

Reserve now pay later, saw significant adoption among eligible guests in Q4. It's also led to longer booking lead times and it may shift towards larger and higher home especially those with 4 or more bedrooms contributing to the increase in ADR.

And as Brian mentioned, given the positive results, we've decided to roll it out to more guests globally into cross-border states in the U.S.

Our updated cancellation policies and simplified fees also contributed to both night and GDP growth in the quarter. As a reminder, Beginning in October, we started simplifying our fee structure, which we believe will help our host price more competitively. We began migrating our API host to a single service fee and now plan to migrate more host in 2026.

Host on a single service fee can adjust their prices to maintain the same net earnings, while guests continue to see the full price outcome.

In total, we estimate these three features delivered over 200 basis points of growth in nice book and roughly 300 basis points of growth in GBV in Q4. In 2026, we'll continue iterating to simplify pricing, improve transparency and help our hosts stay competitive.

Now turning to our Q4 financials. Revenue was $2.8 billion, up 12% year-over-year and exceeded our guidance driven by the impact of our product update.

In terms of profitability, we generated $786 million of adjusted EBITDA, representing a 28% adjusted EBITDA margin, also exceeding guidance.

Finally, net income was $341 million, and was negatively impacted by roughly $90 million of onetime non-income tax.

For 2025, our full year effective tax rate was 20% and including onetime discrete items that increased our provision for income taxes in Q3.

Starting in 2026, we expect the One Big Beautiful Bill act to materially reduce our effective tax rate to the mid- to high teens primarily due to how foreign earnings are taxed, which will benefit our consolidated earnings.

Next, to our balance sheet and cash flow. We continue to generate significant cash in Q4, delivering $520 million of free cash flow. In 2025, we generated $4.6 billion, representing a free cash flow margin of 38%. At the end of Q4, we had $11 billion of corporate cash and investments as well as a $7 billion of funds held on behalf of our guests. Our strong balance sheet allowed us to repurchase $1.1 billion of our common stock in Q4, up from $857 million in Q3. And in 2025, we repurchased $3.8 billion of our common stock, using over 80% of our free cash flow. Returning capital to shareholders remains a key component of our capital allocation strategy.

Since introducing our share repurchase program in 2022, we've reduced our fully diluted share count by about 9%.

Now let's shift to our Q1 and full year 2026 outlook. We're encouraged by the momentum we've seen so far this year and excited about our road map to drive growth in 2026. In Q1, we expect to generate revenue of $2.59 billion to $2.63 billion, representing year-over-year growth of 14% to 16%. This includes an approximate 3-point FX tailwind after factoring in our hedging program. We expect gross booking value to increase in the low teens year-over-year, driven by high single-digit growth in licenses book and a moderate increase in ADR to price appreciation and FX.

On profitability, we expect Q1 adjusted EBITDA margin to be approximately flat year-over-year. And for the full year 2026, we expect year-over-year revenue growth to accelerate to low double digits with an ambition to grow even faster than that. While FX tailwinds should fade as the year progresses, we're encouraged by healthy demand and execution across our growth initiatives.

We're also excited about major events this year, including the Winter Olympics happening now in Milan and the FIFA World Cup coming this summer. Cities continues to look to Airbnb to help meet demand around large events. And our global supply positions us well to support that demand.

Overall, we believe continued progress against our product optimization, pilots and new offerings, together with broader macro conditions will support incremental growth in 2026.

And finally, across the full P&L, we're continuing to drive efficiencies in our platform. We plan to reinvest most of these efficiencies into marketing, product and technology to support our growth. As a result, we expect our 2026 adjusted EBITDA margin to be stable year-over-year.

At the close, 2025 was an exciting year, and I'm incredibly proud of what the team delivered. We're carrying that momentum into 2026 with an ambitious set of goals. We'll continue strengthening our core business while accelerating innovation to drive growth.

And with that, I will open it up to Q&A.

[Operator Instructions] Your first question comes from the line of Richard Clarke from Bernstein.

I guess, AI is the topic du jour, and you gave some helpful remarks about why the bots today can't match what Airbnb do, but given the sort of speed of innovations going on, why do you think those AI platforms couldn't launch a short-term rental platform over time?

And maybe secondly, do you see any risk that you'll have to share your economics with an AI platform at some point going forward? Or do you expect you'll be able to retain the same level of direct traffic you have today in an AI world?

Yes. I mean it's a great question. Let me start by saying this. The vast majority of what is Airbnb is not the app that you see. First of all, we have a whole host staff, which is really critical, and we build this over 18 years. We handled more than $100 billion in payments through the platform.

Customer service is one of the most difficult problems in Airbnb. We don't have SKU people, we need to adjudicate between people speaking different languages. We provide insurance and protection for everyone.

We do a lot of verifications. 90% of people who book in Airbnb send a message, you can't send a message to verify ID. We have 200 million verified IDs, which is more than U.S. passport in circulation. The vast majority of our homes in our unique inventory is only on Airbnb. We're adding more offerings over time. And we think people are going to want to put them together into an itinerary that they could bring on -- in their phone with them when they're traveling.

I think these chatbot platforms are going to be very similar to search. They're going to be really good top of funnel discoveries. And in fact, what we've seen is I think they're going to be positive for Airbnb. And I'm very, very deep in this space. And what we see is that traffic that comes from chatbots convert at a higher rate than traffic that comes from Google.

But the other thing to know, and this is the most important point, is that these models are not proprietary. The model ChatGPT, the models in Gemini, the models in Claude, the models like QE are available in every single company. And so pretty soon, every company becomes an AI platform if they make the shift. We will be able to do everything everyone else will have if we use their models. And we believe specialization will win in travel. Because if somebody wants to find an Airbnb or have a trip, we can take their model, the same model they use that we can post train and tune it based on our milling interactions. We can connect it to our customer support agents. We can connect it to our host. And that's fundamentally what we think. It's why we've hired Ahmad Al-Dahle, one of the foremost leading experts in AI. Ahmad Al-Dahle in fact, build one of the model. He built the Llama model. And we want to build a team to make our company much more of an AI native company.

So I think that for chatbots or AI companies to win we don't need to live in a world where everyone else has to lose. I don't think that one company is going to own everything. I think we're going to be able to work together. And these companies will be very helpful, top of funnel traffic generators for Airbnb just like Google.

Your next question comes from the line of John Colantuoni from Jefferies.

I wanted to ask one on Asia region. Nights growth was still strong at the mid-teens at mid-teens, but did moderate from recent quarters. I know it's your smallest region, but I was hoping you could talk to what drove the slowdown and how you think about the growth opportunity in Asia Pacific over time?

And second, I was curious on the services and experiences, have you seen any signs that they're helping you acquire new customers that you can convert to accommodations given that over half of your experiences weren't attached to an accommodation bookings?

Let me start with the Asia question. So when we look at our performance on APAC from a destination perspective. Overall growth has been, I would say, relatively stable over the course of 2025. That being said, we see a tremendous amount of opportunity in terms of future growth for the region. .

What I would say in terms of APAC is that, obviously, there is different pockets in terms of where we have seen substantial growth. As you're probably aware, we have relatively high levels of penetration in Australia, which factor into that number, whereas we're relatively nascent in some of the, I would say, continental countries in particular, places like India, Southeast Asia, Korea, et cetera.

What we shared in the letter is that we're seeing Night's performance in those markets that we have begun focusing on. So in particular, what I would call out is domestic Japan. That's a marketing segment that we began our expansion playbook back in Q4 of '24, and it seems some Night's results. Second, I would call out India, which we mentioned in the letter, huge market where we are seeing really substantial growth. So 50% growth in the last quarter. Very strong, and we see opportunities to accelerate that growth in '26.

So the broad story in APAC, it is stable. We are seeing some very positive signs in particular markets that we're meeting into and it's the focus of our international market expansion strategy going forward.

Second question. Yes. I mean what we called out in terms of the dynamics of where we are finding the experience booking. The call out in the letter that we provided is about 50% of our experienced bookings today come from guests that are unattached to a home booking, meaning they are not already staying with us in a home and therefore, attached to the trip, an incremental experience. They maybe staying in a hotel in that market. They maybe not traveling at all.

And what I would say there is it's a very saying opportunity for us in a couple of forms. One is it provides a new segment of guests that we can, in the future, convert to home guests. It also gives us signs that with these new products and offerings, we have the opportunity to have a higher frequency of guest usage beyond just a day trip. So for example, something that we see in Paris is that there's been a really nice uptick in terms of, in particular, our Airbnb original experiences by local Parisian, which tells us that category of inventory, albeit highly differentiated is a great opportunity for us to attract local craft to our app.

Yes. I think One of the things that I called out in my opening remarks is -- so we're seeing a lot of momentum about getting new offerings off the ground and piloted. And our basic idea is -- it's not dissimilar from Amazon in the late '90s where they started to both retailer. The unifying idea of Amazon though, probably was the cardboard box. In other words, everything that you could send in a cardboard box, and so you could send all these different things and they added one category after the other.

I think its giving a fine idea if there is the trip. We take a very -- by the way, broad definition of the trip, including 30-day stay even longer, but there are so many different components that we can offer. And the basic idea is we want every new offering to be strong out to stand-alone, the better together.

And so the hotel is a great example. There are some people that only stay in Airbnb. There are some people that only stand hotels. Most people are willing to stay in both. And some trips are better in Airbnb and then some trips, if you need a last minute stay, you're traveling for business, you're doing one night, it's really good for hotels.

So we think that all these components can make the overall offering better. There's a lot of synergies.

Your next question comes from the line of Lee Horowitz from Deutsche Bank.

I guess can you give us a sense of how reserve now pay later cancellations have been pacing relative to your expectations perhaps particularly in the face of weather disruptions in 1Q and how you're thinking about baking in cancellation expectations to full year adjusted EBITDA guide?

And then secondly, in the past, you've talked about how AI search will preclude your deployment of sponsored ads. Can you maybe just unpack that a bit more and explain how AI search particularly may help you bring sponsored ads to it a bit more quickly?

So first, on the question of reserve now pay later and the impact of cancellations. If we back up for a moment, before we launched reserve now pay later the U.S. back in summer of 2025, we excessively tested the product to ensure that by the time of cohorts opting into the product had reached their check-in date that it was not beneficial to the business, meaning that the growth lift in bookings was larger than the net increase in the cancellations to be more check in. We're doing that level of testing as incremental segments. We are considering expanding reserve now pay later out to ensure that the net benefit is obviously positive for the business.

What I should say is that in the segment that we have launched this offering, the cancellation curves have been very close to what we saw from a tested perspective. And so we feel frankly quite good about the progress and the performance of that offering.

In terms of its impact over the full year, obviously, there is a bit of a pull forward in terms of when people make their bookings, but we are already absorbing the elevated level of cancellations from that product. I think One piece of perspective is that -- in terms of the aggregate nominal increase in cancellations, right, it's approximately 1%. So an average of maybe 16% cancellation rates historically going to [ 17% ]. It's obviously higher within the cohort that chooses that product, but it's not a hugely material relative to the bladder cancellations on the platform.

Final thing I would just add on with reserve now pay later as we've called out, is length in lead times, which I think is good from a competitive perspective. And second, it has a modestly positive impact in terms of increasing ADR as consumers who don't need to extended a huge purchase on their credit cards are more likely to choose probably nice listing.

Yes. And then on the AI search now past sponsor listings. I've been asked quite a few earnings calls about sponsor listings. And one of the things to being really clear with the -- after the launch of ChatGPT was that traditional search was going to become essentially a conversational AI search. And that what we wanted to do is really design AI search really see how that works. And then if we are going to do sponsored listings, we designed that ad unit in that form factor.

So we're focused, first and foremost, on the most perishable opportunity, which is AI search. Actually, funny enough, we are doing tests as we speak. So AI search is live to a very small percent of traffic right now. We're doing a lot of experimentation. The way we do things with AI is much more rapid iteration, not big launches. And over time, we're going to be experimenting with making AI search more conversational, integrating it into more the trip. And eventually, we will be looking at sponsoring as a result of that. But we want to first nail AI search.

Your next question comes from the line of Brian Nowak from Morgan Stanley.

Brian, maybe to go back to that last question on AI search. I just ask sort of another bigger picture one. As you sort of sit here in early 2026, if we're sitting here a year from now, what are the areas you're most focused on? You're seeing improvements to the platform using AI this year? That's one.

And then two, maybe One just on the P&L impact. Any help at all on how you're thinking about the impact on gross margins from increased AI investment this year versus last year?

Yes. I can answer a answer both of them. And I'll start with the second one. I think one of the great things about Airbnb is that we have a very, very cost-efficient innovation model. So unlike other companies, we're not building models. We do not have a huge CapEx cost base. So our investment in AI will not affect the P&L. I don't think you'll see it in the P&L. That's number one.

Number two, it's a year from now. If we're successful AI would have be seen, I think three or four things. Number one, let's start with customer service. Right now, nearly 30% of tickets in North America, there English-based, are handled by an AI agent. A year from now, if we're successful, significantly more than 30% of tickets will be handled by a customer service agent in many more languages, in all the languages where we have live agents. And AI customer service will not only be chat, it will be voice, you can actually call and talk to an AI agent. We think this is going to be massive because not only does this reduce the cost base even customer service. But the kind of quality of service is going to be a huge step change. Not only can you get a response in a second, but the agents using AI are going to be significantly more productive. That's number one.

Number two, it's going to make our engineers and everyone arm be significantly more efficient. More than 80% of engineers are now using AI tools. That will be 100%. But of course, that metric is a bit of a van metric.

The real question is what's the culture of the company? Are you at start-up? Are you highly adaptable to the changing currency of AI? And I think Airbnb certainly within our space, is the most adaptable. We are designed to adapt to not move like a cruise it, but to move very nimbly. So that's partly why we hired Ahmad Al-Dahle. We wanted to be on the frontier of AI, at least for the non-native AI companies. And I think you're going to see a lot more productivity and a lot more innovation velocity.

The third is you're going to start to see AI through the booking experience and the listing experience. AI search will eventually -- I can't put a timeline on it because AI is obviously highly unpredictable. But we want to be -- we would love to be the first company in e-commerce that really nails AI, search, conversational search. I think it's really hard not just in travel, but all e-commerce.

One of the reasons that chatbots are real hard for commerce is because they're very visual, their photo forward. They need to be able to compare. You need to be able to open different tabs. So a tax forward chatbot interface is not the ideal so we have to actually innovate on the user interface. We're also using AI across the board, like being able to lister space much more easily. So if we are successful 1 year from now, in summary, AI customer service will be voice and chat across all languages. It will penetrate many more ticket types that it will be massively accelerate our innovation, and we'll be as an as any other company in our space or more. And then finally, the experience for guests and hosts will be materially better.

Your next question comes from the line of Doug Anmuth from JPMorgan.

This is Dae Lee on for Doug. I have two. First of all, looking at the 2025 revenue acceleration guide, could you help us think through the acceleration drivers across the core markets, expansion market services and perhaps any tailwinds from major events like the World Cup and Olympics? And are you anticipating any top line benefits from some of these AI innovations that you discussed?

Certainly. So when we think about the growth outlook for 2026, we are certainly taking into account the momentum that we've seen coming off the launches that we've mentioned driving the Q4 results. We anticipate those will continue to benefit the top line in the beginning of '26, and we're obviously looking to expand upon.

Beyond those that I mentioned, we're obviously continuing to invest in several other growth levers. In particular, we're investing in incremental supply. We're investing in our expansion markets and several other key initiatives. In terms of the back half of the year, we'll obviously be comping some of the launches that we had in Q4. So we'll lap those, but intend to have incremental growth levers throughout the year to support that. You asked just about the major events.

Obviously, the Milan Olympics is happening right now, and we're looking forward to FIFA this summer. I would say those two events, in particular, they are large events on the platform, but in scale are very small portions of the overall business. So we're looking forward to them. They will be additive in the quarters that they hit. But I would say on the larger events, the benefit of those events is not just the bookings during the period of the event instead of the benefits we get from increasing overall awareness of the brand, driving incremental supply in those markets and more broadly, the brand halo we get from connecting our brand with such beloved global events.

What we've seen actually for the current Olympics and the past Olympics is that guests who know of the brand partnership between Airbnb and the Olympics have a more favorable impression of the brand. So many reasons that we do those only one is the in-period impact to the business.

And then in terms of the contribution from AI, I would say, as Brian shared, we will be -- we are currently piloting AI search. We have nothing baked into our outlook in terms of the benefit from that deployment.

Your next question comes from the line of Lloyd Walmsley from Mizuho.

Two, if I can. First, just on hotel. When we talk to hotels and connectivity partners, we hear like an enthusiastic response on working with you guys, but there's also -- it sounds like a lot of friction with the connectivity APIs and sort of supporting multiple rates. It seems like there's a lot of friction today.

Just wondering, are you sort of committed to building or rebuilding those connectivity layers? And what other things are you guys doing to sort of build foundations on hotel?

And then second question, just stepping back, opening up the aperture of inventory, whether that's more mainstream hotel or experiences, it would seem like you could unlock significant TAM by just going a bit more mainstream.

Brian, how do you feel about having more of that type of content on the site and the trade-off between sort of keeping things unique versus addressing bigger and bigger portions of the market? Would love to just hear how you think about that.

Yes. It's a great question. Again, I've gone back to Amazon as a pretty good reference point for us. They started with one category books. They became synonymous with that single category and eventually, they rebuilt their platform to expand in many categories. That's our strategy. And so the answer to your question, yes, we are opening the aperture. We're opening the aperture and accommodations. We're opening the aperture beyond accommodations and beyond places to stay.

One of the reasons we are able to do this is AI allows us to personalize. Some people come to Airbnb and all they want to see our unique homes. And before AI, like personalization was a little more primitive. So if they saw a hotel, it might be jarring.

Now we can really personalize. So people who just want to see Airbnbs can see Airbnbs. People just want to see hotels, we can eventually personalize, they can just see hotels. If people want to see both, we can know if you're booking last minute, night, then we're going to show you a hotel. If you're booking a family of five in Italy, we're going to show you a home. So it really goes back to personalization. The more personalized we are, the more types of inventory we can offer. So this then, I think, goes to our broader strategy.

What is our strategy for hotels? Our strategy for hotels used to be that we thought of them as filling in network guests when a home is booked and when homes are high occupancy, you can get a hotel.

What we've now evolved to is a much bigger strategy, a much more expansive strategy. It turns out, obviously, as we spend a lot of time with our guests that a lot of guests love to book homes and hotels. And we ran an ad campaign, some trips are better on Airbnb, but it also means some trips are better in hotels. And so if you're booking last minute, if you're booking 1 night, if you're booking for business, if you're staying for a conference, this might be a really good reason for the hotel.

But also, we're really focusing on boutiques and independence and a large percent of the inventory hotel inventory in the world are boutique and independent. They're providing threat hospitality. I mean these hotels really fit the ethos of the Airbnb brand. And these are not niche. This is a huge percentage of the hotels in the world. And as we spoke to these affiliates, they've been very, very enthusiastic. They want to list on their channel. They like their local mission. They love the merchandising. We love the type of travel work we have.

So we think that as we add more offerings, as we add more category, it strengthens all the other businesses. So we think as we get more graft hotels, not only did it open up the aperture to a huge TAM of hotels have actually strengthened home.

Your next question comes from the line of Stephen Ju from UBS.

Great. So Brian, can we revisit the halo effect that you might have seen following the Paris Olympics and how that might have helped you from either an awareness or greater user, I guess, experience or comfort perspective and how that might go through after the World Cup here in the United States.

And Ellie, even at the low end of your revenue guidance to keep margins flat, you have to figure out a way to spend some $800 million more year-over-year. So -- just wondering where the larger spend buckets are going to be for this year.

All right. So let's start with the Paris Olympics and how it may -- what it might portend for the World Cup. Compares to Olympics was massive for our business, not just in tariffs, but really all over France and globally. One of the things that happened was events are likely the very best way for us to add new supply. And one of the great things about adding supply for events is it's usually everyday people listing homes that are often exclusive to Airbnb.

So this is really, really compelling. And in fact, now we start Airbnb. As many of you know the founding story, we started to provide housing for events. And we designed and built our platform for them during the very beginning. The great thing about events in Airbnb is a lot of people have no intention of becoming a host. They have no intention in doing this year around. But an event come to town and they want to make money 1 week, and they list their place and they introduced the concept hosting and they realize they like it and they continue hosting. 40,000 people who list their homes in Paris have continued hosting, and that's been really, really powerful for us.

So the other value is really powerful from a policy standpoint. I think everybody goes from sometimes a problem cities have to deal with to a solution to the problem. And what we know is these large events, hotels can't accommodate everyone. So it's a bit of a reset moment where we can actually come into all cities that we and we actually can be a solution to your challenge. And it is just a great way to experience Airbnb because it's a great way to bring cultures together.

And the thing about the World Cup that's so powerful is obviously, as you know, it's in three countries, and so it allows us to handle really important markets. Not only important markets in the United States, but like Toronto and Mexico City, two of our most important markets in the world. So I think the World Cup will be massive. We have the Milan Olympics happening right now. The Milan Olympics was not only great for Milan, not only great for Northern Italy, but was great for our relationship with the Italian government. And I think that we don't just need the World Cup. We don't just need the Olympics. We actually can work with smaller events, like Lollapalooza. We can work with really local event. So the event strategy scales from big global events, down to local events, and we think they're one of the best ways to recruit supply, and that's what we're going to do to grow our supply in Airbnb.

Let me answer the second question about EBITDA. As we look at the construction of the '26 P&L relative to 25, obviously, the top of our P&L in terms of cost of revenue and option support will scale. If somewhat lately, we'll have some efficiencies there, but they will be overly with -- obviously, the growth in revenue. Where you will see some incremental investment to drive growth is obviously in sales and marketing. This is both in the form of percentage, but more so in terms of our go-to-market efforts, what this means is of our efforts around acquiring supply, not just homes but obviously also for experienced services and hotels. And then we will also continue to grow our investments in product development. to allow for a greater accelerated pace of innovation.

I would say more broadly talking about the '26 P&L. Hopefully, it was clear in our opening remarks as well as in the letter. Our ambition needs to accelerate the top line, and we're giving ourselves the flexibility within the stable margin compared to last year to invest to achieve that acceleration. We're quite proud of the level of profitability that we have achieved historically. And the focus right now is, again, accelerating growth within those very strong stable margins.

Your next question comes from the line of Justin Post from Bank of America.

Brian, in your prepared remarks, you talked about app improvements and obviously moving supply. Are you seeing any improvement in repeat rates or customer service scores? Or what kind of feedback are you getting on that?

And then Ellie, maybe you could talk about the U.S. room net growth. It definitely has got back to mid-singles. What's your outlook for that as we look forward?

Yes. I mean I can start with one of the things we noticed is the repeat rate of Airbnb is pretty much you can simplify it down to the satisfaction of the gap. The gap satisfaction to guests first and foremost is attach to home. And then if something goes wrong, the satisfaction of customer service. That's why we focus first and foremost on just quality. Now that guest favorites are approximately half of our bookings. The quality -- the trip quality, which is the score we look at, has gone up significantly. That means satisfaction has gone up. That means satisfaction has gone up. That means that repeat use is stronger. It's really strong. And I think that explains a bunch of our re-acceleration.

And customer service is better than ever. We track NPS and it's the strongest it's been since pandemic by far, and it's accelerating. And I think, again, it's not just the hard work the team is doing -- but again, I think the quality of the management of our marketplace, all the supply management we do. We think it's unprecedented in our category, what we do. We're moving more than 500,000 listings, you have Guest Favorites. We're really, really tight on quality control and then the customer service that we have, which is best in class, we think, in our category and with AI supporting it, I think it's going to continue to improve. So yes, it's been a huge tailwind for us.

U.S. or more broadly North America, certainly, at the beginning of '25, so Q1 and Q2, the growth in that region was quite modest low single digits. We're excited to be able to accelerate that in Q3 and then once again in Q4. That is a byproduct, I think one of a slightly stronger macro, but more importantly, the product changes that we have discussed in the letter and on the call.

I would say heading into '26, we continue to see great momentum for North America at large. And it is one of the underpinnings of our opportunities around like this.

Our next question comes from the line of Mark Mahaney from Evercore ISI.

Two questions, please. When do you think -- what's a realistic expectation for when hotels will be big enough to actually start moving the needle in terms of that revenue growth acceleration? Or do you think that, that is one of the factors behind the revenue growth acceleration this year?

And then secondly, could you just talk about the take rate dynamics in Q1 what's embedded in your guidance, your revenue growth is sort of accelerating versus Q4, but your room night growth seems like it's slightly decelerating or similar growth and your bookings growth ex FX is slightly decelerating. So is there something that's boosting take rate in Q1 that caused that revenue growth to accelerate?

Sure. In terms of hotels, just to size hotels today. So as of Q4, hotels was a single-digit percentage of total Night's book. but growing nearly double that of the overall platform. So it will take some time for that business to scale them a meaningful contribution to growth, but the current momentum is quite strong. What we -- as Brian share period they will be expanding the hotel supply over the course of the year. And intend to exit '26 with hotels being a meaningfully larger percent of the overall business going forward.

In terms of the take rate expansion in Q1 and what's going on with the, I would say, high level of growth in Q1 relative to Q4. A couple of dynamics. First is the impact of ADR and FX. As we called out in the letter, the realized tailwind of FX in Q1 will be quite strong at nearly 3 percentage points. We're also getting the benefit of earlier lead times of bookings in Q4 that will realize in states and hit revenue in Q1.

And then in terms of the implied take rate it should be modestly above where we were in Q1 of last year, mostly due to some timing consideration. One other small components to give you both. The laundry list is Easter this year is on the kind of -- in the middle, effectively is on April 5. So you don't see as big a quarterly swing as we have seen in prior years when Easter moved materially in and out of Q1, but we anticipate it will support about 50 basis points of incremental revenue in Q1 and 50 basis points less revenue in Q2.

Your next question comes from the line of Jed Kelly from Oppenheimer.

Great. Just, I guess, going back to hotels. And I get how the company was built unique supply, but can you just talk about like why not lean into more brand hotels just because it could give the user and open up more supply and potentially bring in more new users to the platform?

Yes. I mean we're a large percent of hotels are boutiques and independent. And we want to just start there. We're not saying what we will we not do in the future, but we think that we want to like just start with a huge number of boutiques and independents that are typically paying a higher commission in the chain and have been really aggressive with us reaching a saying that they would love to have another channel. So that's our starting place.

We're not saying where we're eventually going, but this is where we're focused right now. So we're focused on our top markets in the world where there's a proliferation of great fatigue, great independent. We had more than 100 hotels in New York with more than 20,000 rooms available on the site, just New York City alone.

Your next question comes from the line of Kevin Kopelman from TD Cowen.

Great. I wanted to ask about the new all-in commission structure for PMS connected host or some of the benefits you're seeing from that change? And could you see Airbnb moving all of its host over to that structure longer term?

So I think you're probably aware of our historical structure. The business was set up with a dual structure where there was a 3% host fee and then a variable debt fee on top of that.

What we found over time is that, that dual key structure makes it difficult for house to effectively price their listing. It's frankly a little bit complicated. And in particular, for those lists that are cross-listed and property managers, it often leads to incorrect pricing, meaning what they get fees is not what the host intend. And in many cases, that means that listing can sometimes be more expensive on Airbnb, but it's crosses somewhere else.

So for the migration that we completed back in October, which was to migrate all of our API connected post to the single-service fee, we've seen great results. Number 1 is we obviously very delicately manage the communication with our host to ensure that they did not perceive this as a fee increase. And in making the migration, what we found is that many of the host did not take up their rates instead the effected ADR to guests came down modestly, which, obviously, you can conclude is really great from an affordability perspective as well as elasticity. And that is the reason our contributor to growth in Q4.

We are currently piloting in certain countries, a further migration for our individual homes. Again, from the July structure to the single service game we think a more expansive migration, number one, allows it to be easier for the host to understand what they should price it allows us to make sure that we are pricing all of our listings contently. And we also think it's a foundational move that will allow us to one being more dynamic with our pricing tools as well as our fees.

Your next question comes from the line of Ken Gawrelski from Wells Fargo.

Two if I may, please. First, with on loyalty. Brian, could you talk a little bit about -- you on past calls, have talked a little bit about a different approach to loyalty. It really hasn't come up as much, I don't think, on this call. and I apologize if I missed it. But could you talk a little bit about your vision for loyalty and how that spans across the different products and services that you aspire to offer on the platform?

And the second thing is maybe referring back to the shareholder letter, where you talk about the speed -- and I think you called out the Project Why in terms of the speed of decision-making and new product releases, will this impact at all the way you think about -- you've been on a biannual, every 6-month cadence for new product releases, consumer, either to the consumer or to the host, could you talk a little bit about how you may be what you've learned or the experience you've had with this new more efficient decision-making has -- could inform the product release going forward?

Yes, sure. Maybe I'll start with the second question and then with the first. So we're scoping to do final product release moments, but our methodology is going to be a little bit different.

Last May was kind of a once a onetime like build in the platform, we had to basically rebuild our app from a home platform to a platform you can focus any part of the trim hence total nation more need more than Airbnb basically, every caveat change.

What we're now doing is we're not waiting for a release to ship. We're shipping every minute and every hour of every day. So the teams are shipping. We still will have a release where we'll showcase the stuff we're doing, but we're not holding back when they're ready, we will ship them and we used may a bit more to showcase of what the product improvements are you can affect this summer. So that makes sense. It's more of a potentially marketing showcase, a product marketing showcase versus us holding back features. But we still do think telling a story a couple of times a year to our guest, our host and our shareholders and not the improvement innovation we make. It's a really good thing. I think releases are a really good way to tell the story. But again, why it means that we don't wait for release to ship. We shipped a moment it's ready. And especially in each of AI, giant moments aren't the way to do it. You want to iterate it consistently.

I think the second question was on loyalty, right? That was the first question. So yes, so we -- and I think the thing that I would like to point out is the results we've had without loyalty without sponsor listing. So I think that with loyalty, we think that to be a massive accelerant for our company. We are absolutely looking at this. I've said before that if we do a loyalty perk, you wouldn't want to do an out-of-shopping program. We want to do something much more unique. And we are actually testing a lot of different tracks.

So we're attempting different benefits that could be in a loyalty program. And based on results of those tests will eventually package them and release a loyalty program. But right now, we are investing.

So I think that was the last question. I think now we can go to closing remarks. So we are out of time.

I just want to thank everyone for joining us today. I also -- I'm incredibly proud of what our team here we delivered in 2025. We developed the blueprint innovation that we're now using across the company, and you are starting to see that in our results.

As this momentum builds, we believe the opportunity ahead is even bigger than what you're seeing today. I look forward to seeing you next quarter. Thank you.

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

Good afternoon, and thank you for joining Airbnb's earnings conference call for the third quarter of 2025. 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.

Good afternoon, and welcome to Airbnb's Third Quarter of 2025 Earnings Call. Thank you for joining us today. On the call today, we have Airbnb's Co-Founder and CEO, Brian Chesky and our Chief Financial Officer, Eli Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our third quarter of 2025.

These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties.

Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission.

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

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

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

All right. Thanks, Angela, and good afternoon, everyone. Thanks for joining. I am excited to share that Airbnb had another strong quarter. Revenue increased 10% year-over-year, landing at the high end of our guidance. Adjusted EBITDA was over $2 billion, and this is our highest in any quarter ever.

Gross booking value increased 14% year-over-year, while [ night ] and Seats book rose by 9%. Both metrics have started in Q2, and they both exceeded our expectations, and they were driven by the strength in the U.S. market and ADR. We are driving this growth by focusing on 4 key areas: making our service better, bringing Airbnb in more parts of the world, expanding will we offer and integrating AI across our app.

So what I want to do is I want to share just a few highlights on each of these 4 growth levers. First, we're making Airbnb better for our hosting guests. So we know that the better our product is, the more people use it. And since last -- this past May, we didn't stop. In fact, we accelerated development by making 65 major improvements that we think will help further drive growth.

And here are just a few of them. We know that guests want more flexibility in ways that they can pay. So we introduced Reserve Now Pay Later in the United States. And not unexpectedly, this helped drive licenses booked in Q3. So we're going to continue to roll it out more broadly next year. We also announced improved maps. One of the things we noticed was a lot of people were come to Airbnb, they didn't have enough context on the map on Airbnb when we were leaving our app. Going to Google Apple Map somewhere else. And sometimes it wouldn't come back to our app.

So we built a lot more context about our map on Airbnb. We added nearby landmark, public transit, restaurants. We even are offering different map views, like satellite view, street view, transit view. And this is, we think, going to be a huge user experience improvement and we'll keep people on our app and increase conversion.

Finally, we updated our cancellation policy, so it's even easier for us to earn more than yes to make changes. Post can now choose a new policy allows guests to cancel for free up to 14 days before check-in and all guests can counter free within 24 hours if they book more than 7 days for check-in. So these changes are reducing a huge amount of customer service cases and increasing annualized bookings. But again, these are just a few of the 65 major improvements that we just made that makes our service better.

Number two, we're bringing Airbnb to more parts of the world. International expansion is a multiyear strategy, but we're already off to a great start. Over the past 12 months, average night book in our expansion markets have grown at double the rate of our core markets. And we're also attracting new users to the platform in key markets.

For example, first-time bookers were up over 20% in Japan and nearly 50% in India on a year-over-year basis. So this is really encouraging. Number three, we're driving growth by expanding what we offer. In May, we took the first step in expanding Airbnb beyond stage the launch of Airbnb services and experiences.

Now since then, back from guests has been amazing. Service and experiences are receiving an average rating of 4.3 out of 5 stars. And now in our core business, it's 4.8 out of 5 stars. So this is really encouraging as a sign of growth to come. If people love your product, sell use it more. service experiences are also bringing more people to the platform. So in Q3, almost half of the people who booked an experience did not have an Airbnb stay.

So we're giving people another reason to use Airbnb and we're also scaling supply of high-quality service experiences. In fact, we received over 110,000 applications from a potential host. So not only do we think the demands can be there but the supply is there as well. And that is almost double last quarter, the 110,000 applications, and it means people see the value of reaching new customers through Airbnb.

But we're not just adding more service experiences. We know one of the top reasons guest book experiences because they want to meet other people. So we're making experiences more social. Now before I guess books and experience, we're going to show them who else is going and where they can -- where they're from. So guests can also request to directly message other guests they met during an experience to keep in touch or playing their experience right in the app.

And in the connection section of the Airbnb Profile tab, guests can see the people they've met on experiences, so it's easy to reconnect. This is really just about giving guests what they want and doing it Airbnb does best, which is bringing people together in the real world.

Now outside of surface experiences, we're also launching hotels in Airbnb. While a small number of hotels list Airbnb in the past, we haven't had a true hotels business until now. We started with a hotel pilot in L.A., New York City and Madrid, and we're partnering directly with both boutique and independent hotels.

As part of this pilot, we've improved how hotels show up on Airbnb with new search filters, updated hotel page displays and the ability to choose to room type. So in other words, we built a custom-built product just for hotels. We've also been active recruiting hotels in key markets where there aren't a lot of Airbnb. And our goal is to fill the gaps where hotels make more sense for guests like a 1-night stay trip in the middle of the city.

Finally, we're integrating Airbnb -- sorry, finally, we're integrating AI extensively across the app. Over the past year, we've been laying the foundation for a more intelligent, more personalized Airbnb. From rebuilding our tech stack to launching a series new AI features. We now have more than a dozen AI work streams underway, and they're all focused on really creating a more personal experience for guests and hosts and make it easier discover what we offer.

Now this is part of a major transformation for Airbnb, and I want to share just 2 highlights from Q3 with regard to AI. This quarter, we rolled out smarter and faster AI customer support. Our AI customer support assistant has smarter responses that include answer reservation or listing and also provide quicker, more precise responses. It also lets you take common actions like canceling or changing reservation dates directly from the chat.

So what we did is we designed this custom user interface, that's not just text base, but it's got us rich user interface module. So it's a really custom-built AI interface built right into the messaging platform. Now we initially launched in the United States, where it's already reduced people need to contact a human agent by 15%. So now we're going to expand it to more countries in more language, and we expect this to be in over 50 languages next year.

Now we're also building out AI-powered search. And this is a really, really big part of our strategy. You're going to see this. We're testing it now. You'll see this rolling out through the app next year. And this will let people have a conversation with the app just like a chat bit about what they're looking for, so we can help them design the perfect trip.

And remember that we have access to all the same models that every other chat bot and AI application has. So we think this is going to be a really delightful product to use. Now this is just the beginning of a much bigger AI strategy because we're integrating AI across our app to make every smarter, more personal and easier to use.

But I think what makes our approach different is that we're not just using AI to pull people deeper into the screen. We're using it to get them off their phones and help them connect in the real world. Because I believe in the age of AI, more and more what's going to happen is with on a screen will be artificial. You won't know if it's real or not.

And the age of AI, people are going to increasingly want which real and which real is in real life, they're going to create real experience or real people in the real world. And I think that's especially true for younger generations who grew up on social media are now surrounded by AI-generated content. So we think Airbnb is the best way to experience the magic of the real world.

So while other companies are using it to keep you online, we're really trying to do the opposite, get you off your phone and into the real world. And so in that sense, a bet on Airbnb is a bet on AI because it's a bet that the more AI proliferates the content we consume on devices, the more people are going to earn for real connection with real people in the real world.

So with that, I'll turn it over to Eli.

Thank you, Brian, and good afternoon, everyone. I'll start with a review of our Q3 financial results, and then I'll walk through our outlook for Q4. As Brian mentioned, Q3 was another strong quarter for Airbnb. Gross booking value grew 14% year-over-year to $22.9 billion, driven by strong growth in both bookings and price.

Nights and seats booked increased 9% year-over-year, representing a 2-point sequential acceleration from Q2, primarily due to the strength in the U.S. In Q3, nights growth across each of our major regions remain steady or accelerated sequentially. Latin America grew in the low 20s, Asia Pacific grew in the mid-teens, and both North America and EMEA were up in the mid-single digits.

Notably, we saw a meaningful acceleration in the U.S. from Q2 to Q3, in part due to the launch of our Reserve Now Pay Later payment offering. Now turning to our Q3 financials. Revenue for the quarter was $4.1 billion, up 10% year-over-year.

In terms of profitability, we generated $2.1 billion of adjusted EBITDA, representing a 50% EBITDA margin. And finally, net income was $1.4 billion, while EPS was $2.21, growing 4% year-over-year. Now net income was impacted by a onetime $213 million valuation allowance related to corporate alternative minimum tax credits as a result of the enactment of the one big beautiful Bill Act on July 4.

On a go-forward basis, starting in 2026, we anticipate that the one big beautiful bill will materially reduce our effective tax rate due to the preferential changes to tax on foreign earnings. Next, I'll turn to our balance sheet and cash flow. We continue to generate significant cash in Q3, delivering $1.3 billion of free cash flow.

Over the past 12 months, we've generated $4.5 billion, representing a free cash flow margin of 38%. At the end of Q3, we had $11.7 billion of corporate cash and investments as well as $7.2 billion of funds held on behalf of our guests. Our strong balance sheet allowed us to repurchase $857 million of our common stock during the quarter.

And during the trailing 12 months, we have repurchased over $3.5 billion of our common stock, using approximately 3/4 of our free cash flow. We believe returning capital to shareholders is a key component of our capital allocation strategy. reflecting our confidence in the business and our commitment to delivering long-term value.

As of the end of Q3, we still had $6.6 billion remaining on our repurchase authorization. Since introducing our share repurchase program in 2022, we've reduced our fully diluted share count by 8%. Now let's shift to our Q4 and full year 2025 outlook. As we start the fourth quarter, we're encouraged by the continued momentum. Despite more difficult year-over-year comps, we're seeing strength in longer lead time bookings, partly driven by our Reserve Now Pay Later offering in the U.S.

The strength in bookings support our positive outlook for the rest of the year. In Q4, we expect to generate revenue of $2.66 billion to $2.72 billion, representing year-over-year growth of 7% to 10%. This includes a small foreign exchange tailwind after factoring in our hedges. We expect our GDV to grow low double digits year-over-year, benefiting from a small -- or excuse me, from a modest increase in ADR due to price appreciation and FX as well as continued growth in nights and seats booked.

For Q4, we anticipate year-over-year growth of nights and seats booked in the mid-single-digit range. Last year, we saw a meaningful acceleration of growth from Q3 to Q4. Our Q4 2025 guide takes this tougher comp into consideration. But on a year-over-year basis, we do anticipate a sequential acceleration from Q3 to Q4.

On profitability, we now expect our full year adjusted EBITDA margin to be approximately 35%, up from the 34.5% for previously shared. As we look forward to 2026, we're focused on maintaining strong margins while continuing to invest in growth initiatives. We will share more about our 2026 outlook on the next earnings call in February.

In closing, our Q3 results demonstrate our disciplined execution across our strategic priorities as we continue to build a stronger company for the long term. And with that, I will open it up to Q&A.

[Operator Instructions] Your first question comes from Richard Clarke with Bernstein.

I guess you've mentioned the Reserve Now Pays Later quite a lot during the prepared remarks there. Just what percentage of the acceleration in the U.S. has come from that -- any early signs of what cancellation rates might look like on those bookings or your expectations of what they might look like? And any other payment tools you've maybe bring out that might help drive an acceleration of bookings into next year.

Yes, certainly. Thanks for the question, Richard. So in terms of the Reserve Now Pay Later offering, we launched it at the beginning of Q3. It is specifically something that is being offered to U.S. customers who are traveling domestically and are choosing listings that have a flexible or moderate cancellation policy.

So it is not offered to the entirety of the U.S. guest population. That being said, of those that we offer or provide the offering to, it is vastly popular. So about 70% of people that we offer reserve now pay later take us up on that offering.

Now to your question of cancellations, we obviously tested this product pretty extensively before launching it in the U.S. to ensure that the benefit of the incremental bookings from the payment offering was not more than offset by increased cancellations.

So yes, there are increased cancellations, but we're highly confident that the net impact of the product is a lift to net bookings.

The next question comes from Eric Sheridan with Goldman Sachs.

As you look out over the next 2 to 3 years, can you talk a little bit about how investors should be thinking about the duration of execution and depth of investment needed to accomplish your goals with respect to international markets and improving sort of the density of the business beyond its core markets today?

Yes. Thanks for the question, Eric. So we began our efforts around global market expansion really in earnest about 2, 3 years ago, selecting specific markets to obviously take a more local approach by local approach, I mean, making sure that the product was appropriately localized as well as our marketing messages localized as well.

And we have been, I would say, quite judicious in terms of choosing the markets and making sure we are having a somewhat comprehensive approach to make ourselves seem local and relevant. What you see is that each of them take a little bit of a different time line. So I think our earliest expansion markets were in Latin America, Brazil being kind of the first key expansion market. And you've seen -- in that case, we have been at it for a handful of years, and we've been able to achieve not only significant market share in that market, but we continue to see incremental meaningful market share gains every year.

So I think Latin America is really at the front of what can -- what is possible in terms of the global markets efforts. Other markets we have focused on more recently, the more recent target market is Japan. It was just a year ago that we began our efforts there in terms of, in particular, local marketing to make our cell team locally relevant, in particular for domestic stays.

And hopefully, you saw from the investor letter, we are making progress there. It's just earlier. So the kind of short answer to the long story here is that each market is going to take a little different amount of time, but we're seeing really good success in terms of those markets that we've targeted and we've stayed consistent in terms of our investments.

The next question comes from Justin Post with Bank of America.

Great. I'd love to hear an update on events and experiences. Both is it contributing any -- so far, do you expect a bigger contribution next year? And then second, people who do book those, are you seeing better retention or any signs that's helping the velocity of the overall platform?

Yes, I can take that, Justin. Thanks for asking the questions. So yes, we're really, really excited about the progress of experiences on Airbnb since we launched the product in -- on May 13 earlier this year. A couple of things we're seeing. The first thing we're seeing is that a large percentage of people that are booking experience is about half don't have an Airbnb stay associated with the reservation.

And with services, for example, 10% of people have never even booked on Airbnb before. So the first thing we think is we think this is bringing a new audience to Airbnb. We also think that this is bringing people back to Airbnb even if they aren't intending to book a home. And we think that services and experiences could eventually pull people to book service for home to also add an Airbnb home to their reservation. That's the first thing.

The second thing we're starting to see is actually we're starting to see local demand for service experiences. Now this product was primarily conceived for travelers, but we launched Airbnb Originals. Originals are featured experiences. They're some of the most interesting people in the world that provide experiences. And I'll just give you an example.

In Paris, 70% of Airbnb originals are booked by local. And so we think with Airbnb originals, we figured out a product that is appealing to people in our own city. And this is really, really hard to provide an experience business, so interesting. People have booked it in their own city. Now as far as when this provides meaningful income or revenue for the company, it's going to be a few years for this to happen.

We're really focused on getting a few markets right, just to go back to how we founded Airbnb people don't know this, but while we're in over 100,000 cities around the world, in the first 2 years of our existence, the majority of revenue was in just 1 city, New York City. If you look at DoorDash, you look at Uber, Uber Eats, most of these market boys have to go city by city.

And that's what we're doing with service experiences, even though it's a wide platform. So we're focused on tariffs. Books in L.A. We're seeing a lot of traction in these markets. And as they grow, we're going to be rolling out a dozens of cities around the world this expanded playbook and then hundreds more cities. It's going to take 3 to 5 years, I think, for services experiences to become a material part of our business, but I'm very, very bullish on them. And as far as the retention velocity, it's a little bit early to see on retention.

We really would want to see 12 months to really get a really good indicator of retention of what people use for everyone. But 1 of the things we're also seeing is that service experience is a great way to market homes. So for example, we used to just do advertisement of our homes product. Now when we do an ad, we have home surface experiences in one ad.

And what we're finding is not only does the promote service experiences, it also makes people more inclined to book a home because that makes our offering more unique and differentiated. So we think this is kind of like a win-win-win for the platform.

The next question comes from Jed Kelly with Oppenheimer.

Great. Just looking going forward and sort of it's good to see, but you're getting reacceleration in the U.S. How should we think about potentially layering on hotels more, especially in some of the markets where you shut out of?

Yes, I think hotels are a really promising opportunity for Airbnb. As you know, we've been a proud owner of the Hotel Tonight app for a long time. But we've always believed that the biggest opportunity for hotels is on Airbnb itself because we don't need to market hotels for people to come to Airbnb we have billions of visitors a year. Airbnb is accessed by the last I checked, 1.6 billion devices every year.

And there's a huge amount of traffic -- and in City of New York, for example, there are millions and millions of searches out of that market. And so we went to hotels in New York City, some of the most interesting boutiques and independents.

And we said, we have a huge amount of traffic of people coming to New York City. We believe that the majority of people come to New York on Airbnb would be open to booking a hotel if there wasn't a home available, we believe many of these people are opening other apps and booking hotels and other apps. As we said, if we added hotels, we added your hotel, we gave you a best-in-class commission.

We had a beautiful life product page where we custom bill hotels onto the platform and we had a lot of demand and not just a lot of demand, but of high income, young, often American travelers, which are some of the most appealing kind of consumer sets for these hotels, would you be interested? And they said, yes, enthusiastically interested. So we've been doing pilots, we've been pilots in L.A., New York City and Madrid.

New York City and Madrid, for example, are 2 markets that are constrained or corporate strain from a regulatory standpoint. Hotels are very excited to participate. And these are just pilots but we're seeing a lot of interesting momentum. If for example, you tighten New York City on Airbnb next week and you can see some of the hotels that show up.

They're really interesting. I think the way we present them are beautiful. And our general philosophy on hotels is the following. We are running a bad campaign that says some trips are better than Airbnb, and we believe that. We believe that the traveling with the group, you travel with the family, you're staying longer than a few nights or you want a more authentic travel experience or you're staying outside of the city, then a home is the best way to travel.

But if you're going to urban market, made [indiscernible] crop business, you're staying for one night, you're booking last minute, maybe for business, you need plug-and-play experience or you need to be on-premise for a conference, then probably a hotel is a better option or if you search an Airbnb and homes aren't available, then hotels are a great option.

And so we think that hotels will be a huge supplement for our supply, especially in supply-constrained markets. So we actually do think that the 2 can fit together. We don't see a large cannibalization between homes and hotels. We think they're primarily different use cases, different audiences, and we also think hotels are a great way to fill our supply gap. And again, the most important thing is we already have the demand. We don't need to spur demand.

And so to add hotels is not really an incremental investment at all. And to recruit hotels, it's actually much easier in recruiting homes because the hotel, you-- they have a phone number, you can call them. homes, you have to primarily come organically, it's more difficult. So it's just fundamentally, I think, a more efficient business to scale, especially with the demand we have.

And so we're excited about this being supplemental to our core business.

The next question comes from Lloyd Walmsley with Mizuho.

I wanted to stay on the hotel team and really just understand the long-term scope of your ambitions here. It makes sense that you're using this for sort of backfill in areas where you don't have a lot of inventory in the traditional rental side.

But do you see a path to really expand the hotel merchandising and booking experience beyond the backfill -- we get the question a lot from investors like why would I go to Airbnb book a hotel, like is there a long-term case beyond the backfill, I guess, is the question?

Yes, it's a good question, Lloyd. I think so. I mean I think I'd imagine Airbnb in the future is going to be the best 1 top shop for travel. And for us to be a one once-off shop for travel, I think we're going to need not just homes, not just services, not just experience because we're going to need a portfolio of offerings on Airbnb.

And so hotels is certainly one of those things. I think our philosophy is the following: we are focused on botiques and independence. A large percentage of hotels in the world, as you can imagine, are boutiques independents, especially in Europe, for example. And what we're hearing from them is they would love another channel to list on. And so I think we're like -- we're dipping our toes in the water, where we want to make sure that we still provide -- that our hotels business is incremental.

But yes, I think over time, it's really about use cases. I think what we want to do in the future, and this is Brian, now going back to our AI strategy is knowing more about the customer, understanding what their intensive. And if people are traveling for business last minute one night, we should probably prioritize the hotel for them.

Some people do want a more hotel-like experience. Other people are hardcore about the original philosophy of Airbnb. They want to feel like a local when they're traveling. Those people probably should not see hotels very much.

So I think it's really in the future, going to be much more about personalization. Right now, it's a little bit more backfill billing and supply gaps and producing hotels when it's the last minute, say, one night stay. But I think over time, it's really about personalized experience for every guest and understanding what kind of guests are you? What is your intent. And as we do that, I think we can expand our hotel offering a bit more.

The next question comes from Kevin Kopelman with TD Cowen.

Great. Brian, in the past, you talked about launching 1 to 2 new billion-plus opportunity products and services each year. How are you thinking about that for 2026? Should we expect that those this focus for next year are the initiatives you've already been discussing today such as hotels and AI integration and continuing experiences in services? Or do you anticipate additional new major launches next year that have been discussed yet?

Yes, Kevin, I would say, number one, I would say that we essentially have 3 businesses this year. We launched service experiences and now we're beginning to pilot hotels. We believe service experience and hotels could each be multibillion-dollar businesses.

So that really brings us from home to home service [indiscernible] hotels. And I think that we are on pace to every year having at least a new business. So I probably shouldn't say too much more beyond that for next year. But I'm very, very excited about what we're working on. The other thing that I want to just maybe add is the following.

I think that we're finding a really good model for innovation for incubating new businesses. We used to think about like, oh, my God, we have this huge company in like over 100,000 cities in 220 countries regions, and in we launch a business that's got to be ready globally in every market, and it kind of increases the bar for what you can ship.

I think we've decided to take a more entrepreneurial approach. And we've learned this in sort of experiences where we can test and incubate businesses and we can test them in one city. And so I imagine going forward, we are going to be simultaneously testing half a dozen, maybe even a dozen new business at a time in one market. Now it doesn't mean if we test in a market, we ever ship it.

But it does mean that we can kind of develop a lot of pilots over in parallel. And then we can decide when something is working, then we can scale it up. And that's what we're going to -- that's how we're going to really approach a lot of these new businesses, kind of really starting with the pilot market Hotels is an example. We're starting with 3 pilot markets. We know hotels were going to expand. There's no question.

There are other businesses where we're testing them out and we'll see where they go. Just to give an example of not a business we're going to launch, but a segment that we're seeing a lot of promise in its Lux. One of our fastest-growing segments is high ADR. And we think that's a big opportunity for us.

So I'm not reviewing that we're going to launch something there, but I'm just showing there's a lot of segments, a lot of supply types that we think could be really, really competing for us. And we're going to be really going city by city and then when we figure out the playbook, we'll be expanding more aggressively. So yes, you should expect every year to see new businesses.

The next question comes from Ron Josey with Citi.

Brian, I want to follow up on the 2 comments you made earlier. I think in the prepared remarks, you talked about testing the new AI-powered search coming online and rolling out next year. I would love to hear your thoughts on just the experience overall, the interactivity and just -- any early thoughts on in the testing you've done, how it's changed sort of the use case or the interactivity within Airbnb overall?

And then you talked, I think, I think you might have said that it could take 3 to 5 years for experiences and services to be material to the business but you have supplies doubling quarter-to-quarter. We're seeing great results thus far, particularly expanding beyond the core Airbnb stays. So talk to us about from here to 3 years, what we can look forward for milestones.

Yes. Maybe I'll start with the second question, and then I'll answer your question on AI, and I'll try to give a robust answer on AI cause I'm anticipating some questions on that. I always want to kind of under-promise and over-deliver. So we're going to be cautious on how we want to test the milestones. But on surface experiences, what I've essentially told the team is I want to approach the experiences kind of like the way we approach core business in 2009.

It's going to be a little different but what we tried to do is get to essentially what I think in token valley called product market fit right? Product market fit is essentially this indication that we think the business is essentially working and we have a playbook, and we're now ready to scale. And so the service experiences, what I've really tried to do is say, hey, let's pick a couple of cities, we decided to pick a few cities in the world on Airbnb, which are Paris and L.A.

And they are different cities. One in Europe, one in L.A. one in the United States. They are different enough that you can test a lot of the hypothesis in these 2 cities. And we said we really want to try to figure out how to get these businesses to product market fit. And then we're going to pick another about a dozen cities and go really, really deep and build out our library of supply.

We learned a lot. One of the milestones -- one of the lessons we learned in Paris for example, is that there are really 3 types of people. There's people where it's their first time to a city like Paris, there are people who've been to Paris repeatedly and then there's local. And that each of them want totally different types of supply. So for people for whom it's the first time to a city, they really want to go to the landmark.

They want to see Eiffel Tower. They want to see Louvre. They need to see [indiscernible] And this is really what you see when you see other platforms where they're really focused on traditional or experiences. So we've been adding a lot of landmark experiences. We think we provide some of the very best high-quality experiences that are very local in nature, but they're very much appealing to first-time visitors to a city.

And this has been very, very popular. Then you've got people who come into the city already. This is nearly as big and in many cities, it's a bigger market. A lot of people they've got to Paris, they have been there before. If it's your second or third time to Paris, you're not going to Eiffel Tower. You want to see something different. So now you want more local experience. You're not going to do a cooking class. Now you might do some other type of activity.

And then locals want to do something really unique, really [indiscernible] They want to book original as we see these 3 audiences. And that's been really interesting. And the year-over-year growth in Paris has been very encouraging. So by focusing on these cities, we've been able to like rapidly iterate software. We've been able to rapidly like figure out in Paris, for example, there's different supply types for different types of guests based on how many time they've been there. And we can bring these lessons to other cities.

In Los Angeles, we've been really focused on building a library of supply for a 10 major category. So when we launch, we are really deep in photography because photography or traditional travel services, we've gotten very deep now on personal trainer and [indiscernible] and Chef and we're starting to see that normally travelers booking that people book on their own city.

So again, the milestones are going to be us determining that we have efficiently reached product market fit, and we can roll off the deep playbook city by city. Now with regards to -- and I'll let Eli expand if she would like to elaborate on other milestones over the next few years. But with regards to AI, maybe I'll just answer it more broadly.

Okay. So our AI strategy is pretty unique. I think that Airbnb probably more than most other companies, especially companies in travel can benefit from probably the reason why is because primarily, we don't have SKUs. Most of our homes, most of our service experiences, they're not SKUs, they're one of a kind and therefore, the issue type customer service is really challenging, right?

Oftentimes, customer service agent will carry an issue that they've never heard before because it's from a host that might be a first-time host and the guests and hose might be speaking different languages, there might be somebody locked out in a small town in a foreign country, you can imagine how complicated some of the stuff is. So we decided with AI to start with the hardest single problem we got to think of, which was customer service.

Customer service, we think, is a lot harder than say travel search. And the reason why is because the stakes are highest. You can't lucinate, you have to handle sensitive customer data. You've got to be fast in real time. You got to escalate to the agent, if there's a trust and safety incident. And we are finding that it's working really well.

And in fact, we can go from solving a problem hours to solving a problem in a second. We wanted to then go to the top of the funnel, and that's with AI search. What we're testing now is if you go to the search box and your BB there's wear, location, when, date, who guests, we're testing a [indiscernible] and what is a free text natural language input, which is similar to ChatGPT or Gemini, you will type it in -- and based on that, we're going to essentially -- you're going to see like natural language results. So the search cards, not just will be structured data, but it will be essentially natural language generated hope and search results.

That's Phase 1. Phase 2, it's going to become, I guess, you'd call an AI multiturn I think is just a fancy way saying conversational. So you'll be able to have a conversation. So you'll be able to like the information of the card, my vision, is instead of saying like 2-bedroom, 2-baths, $60 [indiscernible] views, a pool hot tub that no 2 people see the same copy just like 2 people typing in the ChatGPT see different outputs based on the memory and the type of questions they have.

So we want Airbnb to be the same way where the output is also natural language, it's unique. And you're going to start to see this iterably happen over the course of next year. Eventually, it will become more conversational. And then finally, what we want to do is take AI search, which is conversational AI customer service and the messaging platform, which is conversational and integrate them to one AI assistant or concierge.

And eventually, the entire app will act like an agent on the top of the funnel through your trip, on reservation in leading review and then bringing you back to the app end-to-end. And we think that we're going to be very successful at this because, number one, we have access to all the same frontier models as the leading AI companies. We have access to the same models as Google opening eyeteeth company because they're all available by API.

So really, you're not going to win or lose on the model because they're all available. You're going to win to lose on what you do with them. And our thesis of AI is that specialization will win in travel. That's our theory. It's a specialization of win. We have a lot of unique capabilities. We understand travel. We have one of the best design teams in the world so we can design custom interfaces.

We do not think the way AI search will work in the world of travel is this text. It's going to have a rich user interface experiences. We're adding a lot more verticals. So we do think Airbnb could be a one-stop shopper travel. And we have a lot of capabilities that no one else has built and we don't think AI companies will want to develop.

Like a messaging platform in the vast majority people who book an use the messaging platform. Verified identity to book or host, you must verify your identity. We have more verified identities $200 million that are U.S. path with circulation. We have a payments platform where 1 in every $1,100, $200 spent or $1 goes to our payments platform in the world. So this is essentially how we're thinking about AI. I think it's extremely exciting.

And I think it's going to benefit argon probably more than other travel platforms just because we don't have SKUs. And I think AI can kind of level the pain field.

The next question comes from Trevor Young with Barclays.

Brian, you highlighted some of the 65 major improvements you've made to the app. Some are enhancements, some are policy or payment adjustments that remove friction or pain points for guests. What are some of the remaining pain points that you see that still need more work either from a guest or a host perspective?

Trevor, yes, I mean, we have -- yes, we made 65 improvements. I mean I think the way to think about it, first of all, is there's not a lot of silver bullets in our business. It's going to be hundreds and hundreds and hundreds of improvements that you're going to see over the coming years. So I think my first thing I would say is the most important thing we can do is have rapid product development velocity. Velocity.

We think the team that moves the fastest will win in travel, and we want to make sure that we have a huge amount of velocity. Now that being said, I do want to answer your question directly, what are some of the features. Reserve Now Pay Later tells us is the more types of payment instruments you add and the more flexibility you get people on the way to pay, the faster the growth.

So for example, in Brazil, we added installments. This is a huge boon to growth. And in countries all over the world, we want to continue to offer more ways to pay, more flexibility. We have flexible cancellation policies we're experimenting with. We are going to have -- we're going to be testing different offers -- so essentially different guests can have different types of discounts depending upon who they are and how often they've used Airbnb.

Quality is a huge one. We are focused a lot on quality, for every person who stays in Airbnb, approximately 9 people stay in a hotel. The number one reason they stay in hotel is quality control and consistency of experience. So we're investing a lot on quality in Airbnb. We think that's a really, really big area. Pricing tools for Host actually is critical.

The more competitive prices, the more bookings we get, the more pricing tools we build, the lower the prices become I think if you noticed over the last 2 years, hotel prices have appreciated faster than Airbnb. I think that's a good testament to the pricing tools we're making are working. So these are just some of the examples. Maps and location information. It's going to be massive. The vast majority of people booking Airbnb interact with the map.

Our maps historically have not been that great. They're becoming first class in Airbnb. And again, these are some of the opportunities. But it's really -- again, I'm giving a little bit of a laundry list because there are not silver bullets in our business. It's really about metronomic high velocity of hundreds of improvements across the platform, but those are just a few.

You made a point of no silver bullet, I think, in particular, quality and affordability we've made huge strides over the last couple of years, but the road map ahead is still vast with opportunity to make the product better on both fronts.

And so you'll see us continue to focus there, you'll see continued iteration around how we make ourselves more price competitive, how we make ourselves more value appropriate for consumers and then consistently raising the bar in terms of the quality of the experience that we provide our guests.

The next question comes from Lee Horowitz with Deutsche Bank.

So going back to Brian's comments on another new business next year and perhaps related to the 3- to 5-year time frame for services and experience to scale. You guys are doing about, what, $200 million of incremental investments this year with some pieces that presumably rolling off next year.

I said your comments on margins for '26, while not specific may suggest some of this 200 proof sticky into next year. Can you maybe unpack that a bit more as to what sort of the incremental investment plan looks like for 2026? And then secondly, there's still a perception in the market that your core homes offering in some of your largest regions has matured quicker than anticipated.

Brian, can you maybe just comment on how you are seeing things as to the level of maturity and why perhaps homes as a percentage of leisure may have slowed in the last couple of years and why it could pick up in the future coming years?

Eli do you want to take the first, and I can take the second?

Yes, sure. I think the question is probably just generally about how we're thinking about 2026 margins. Obviously, we're not providing explicit guidance for 26 margins today. That being said, you obviously noted in the shareholder letter, we said we're focused on maintaining strong margins while continuing to invest in growth initiatives next year.

That is the case. When we think about the investments that we made in 2025 behind services and experiences, as Brian described, it's going to be a multiyear path for us to get those businesses to a material scale. At the same time, 2025 was a very heavy investment year for us to launch them, get them into market and make sure there was awareness around them.

And as we look to '26, we anticipate that, one, obviously, we're scaling the revenue associated with those businesses. And while there is ongoing investment, we don't have the same heaviness of the kind of first year launch. So you should anticipate that across experience services across hotels, across AI, we will be investing in those next year to drive growth.

But where we sit today, we feel like we can afford those investments while continuing to deliver great core efficiencies from our core business and in doing so, deliver net-net and continued strength of margins. So more color on that to come.

And maybe just to expand on that before I talk about our core business. I think 2025 was a unique year because -- it was the first time we really expanded beyond our core business at homes, and we were doing 2 business at once. They were quite different than our core and we basically had to rebuild the platform from the ground up.

And so almost every part of the platform and every cab was different, we had to change the nature of the organization. I think our theory is that every incremental new business we launch is going to be more efficient to launch than the prior businesses, especially now that we're going with pilot city by city.

And so we can really get to a decent product market fit in ROI as we're then expanding to new cities. So we do think that the investment curve should pay back faster as we launch more and more businesses. That is just the kind of flyer we're looking to do, and I think that will take a few years to materialize. What took our sofa business.

I do not think our business is even close to mature. And it's so funny. We started raising money, and I think our first fundraising round was in 2009. And the question was, how big is this market? And then the question came in 2011, how big this market 2012, 2014 all the way up until the IPO.

And every step along the way, we've always kind of been surprised at how big this market is. And while I don't know how big the Airbnb market is, again, if you just think about the size of our market, for every person who stays in the home, about 9 people stay in the hotel. I could imagine that the market could at least double the core market for homes.

And the reason why is, number one, people love home, that's why they live in them. A large percent of people increasingly are traveling with groups or families. Hotels have limitations for people staying as groups. One of the biggest challenges historically with Airbnb has been quality control, not having a front desk and just making sure we're price competitive.

As we've built a great supply machine add better pricing tools, the prices are increasingly getting more effective. We now show total price upfront. There's no cleaning fees that a gas cover fees. We think this is helping us become more competitive. We're making the product significantly higher quality. And so -- and we're also building machines to recruit supply where we have homes.

So there is a huge amount of opportunity for us to grow our core business. I don't think it's mature in any market. And I think we are looking at the possibility of reaccelerating our core business in every country in the world over the coming years because I think there's a new generation of travelers that aren't [indiscernible] to be in hotels, especially young travelers, Gen Z and eventually Gen Alpha, I think for many of them, Airbnb is going to be the go-to way to travel. And that social media is taking over at the travel discovery, I think everyone home are going to be one of the like people want to post unique content, what's more unique than staying in a local [indiscernible] have.

The next question comes from Doug Anmuth with JPMorgan.

Brian, Airbnb was notably absent from ChatGPT's app integration launch when other major travel players were there. Can you just talk about your thought process here? And why you wouldn't explore that top of the funnel while also building out your own enhanced discovery and AI-powered search?

Doug, the simple answer is we just didn't think the integration was ready. We care a lot about how Airbnb shows up in the world. And when I looked at the -- what the demonstration, I thought it was a great concept. It was a little bit hard to discover at the time you had to actually download the app, the company's application.

We didn't want to be positioned as essentially a data layer like a commodity. There are certain tools that we had to build. When you book an Airbnb, we want to make sure that you see personal lines results to you that you have to have an account in Airbnb, messaging is core platform. So it's really about making sure that we had enough features.

But we are not at all opposed to integrating into like chat box. And I would imagine in the future that you would see be across a large surface area of the Internet. We just have a couple of principles when we are integrating -- number one, we want to make sure that while we like the idea of being a launch partner, we still have -- we like to have custom integrations if we're going to be a launch partner.

And we want to make sure that, that integration is really well developed. Number two, we don't want to cure as a commodity. Number three, we certainly don't want to be a data layer. And number four, we really want to make sure that people understand the uniqueness of Airbnb when they're seeing results. So for example, we chose not to integrate with Google Hotel Finder because Airbnb were positioned like commodities next to hotels, and we just didn't think that was the right presentation.

And we want to train people to go to look at Airbnb as commodities that were interchangeable with hotels. But that being said, I think with great integrations, you could absolutely see us on chat box going forward. And obviously, I'm close to the people that open the eye, and I think there's a lot of opportunities for us to work together.

The next question comes from Ken Gawrelski with Wells Fargo.

Two, if I may, please. First, I want to just press a little bit more, Brian, on the idea of reaccelerating the business. I think you spoke at the Skip Travel conference in mid-September and talked about how you believe that the business should reaccelerate?

I think you've even said into the low teens, although I don't want to misquote you. Maybe if you could just elaborate a little bit on that. And then the second one, maybe stepping back a little bit more on the AI search, et cetera. When you think about how do you think, Brian, about your about third-party apps kind of creating a discovery experience on Airbnb.

And you kind of just spoke a little bit about this, but maybe a little bit deeper relative to you developing your own search AI-powered search experience, do you think they will coexist? Do you -- are you very firm on you'd only have the proprietary search experience built by Airbnb that would be able to access your inventory.

Ken, Yes, let's start with reaccelerating the core business. So yes, I guess the reason we believe that we can reaccelerate core business is the following. I'll start to keep repeating the staff for every person stays in Airbnb, about 9 people stay in a hotel. When you interview the 9 people stay in a hotel, a large number of people are willing to find a home.

In fact, many people stay in homes and hotels. They stay in homes when they are going to Italy with their family and they're going for a league but we don't get the right share of wallet for the rest of their trips. They tell us that if we address affordability, quality, we add services to the homes and we have more supply that we would get a greater share of wallet. So that's what we're trying to do.

We're getting more homes in the top 3 into markets around the world. As we get more supply, we'll, of course, sell more homes. But as we get more supply, prices will come down, as prices come down, we get more bookings as we to supply, we get more bookings. And these are going to be things that we think will massively be accretive for the company, and we do believe that we can reaccelerate the core business.

Again, the question is, what's the TAM? What is the sheer number of people that would stay in a home if the prices were good, there was a home available the home with high quality and the services attached. And the answer is, it's a significantly larger audience than today. So it's just a matter of creating metronomic improvements every single day, but we did not see a single market in the world that is truly mature.

The only type of maturity is when there's a policy constraint. And there's just a limit to how much supply you can add. And then you really are looking to supplement it with hotels. With regards to AI search and third-party apps, I don't want to say -- I want to be -- we're going to be open. I mean this is a fast-evolving landscape.

90% of our traffic is direct or unpaid. We believe we provide the best travel search experience on the Internet. And we think we're going to continue to provide that. We do think specialization will win in travel. That's our opinion. We'll see if we're right. That being said, like we're open-minded to other platforms, having our inventory on them. it's probably just a matter of which type of inventory and what do they bring to the party.

And so we're keeping an open mind. But I do imagine eventually you're going to see Airbnb on a lot of surface areas, a lot of different apps, a lot of different integrations. So we're just going to be very mindful. We're going to take them one kind of case by case one app at a time.

The next question comes from Colin Sebastian with Baird.

I know this is a follow-up to some of the other questions. But in terms of focus areas for the year ahead and sort of the new testing paradigm, you outlined, Brian, could you talk about what impact that has on the time frame for other initiatives that you've mentioned before, like loyalty or even advertising? Or are those still on track to whatever time frames you were planning?

I think they can be done in parallel. So I think like a business like service experience hotels are really like supply-based businesses that you can do city by city. I think our new testing paradigm allows us to test and incubate a lot more businesses at a time and then selectively pick which ones we want to scale.

I think loyalty and advertising, you could still pilot city by city. They are a little bit more platform businesses though, they're a little bit different, and you could probably scale those more quickly. That would be my assumption. We are absolutely looking at both. And like starting with loyalty, it's quite remarkable. I think we're the largest [ cabo ] brand in the world that doesn't have a loyalty program.

I've always said that I think the best loyalty program is people loving your products and coming back, and we have really the loyalty on Airbnb. That being said, I think we're succeeding in spite of having a loyalty program. And I think that we could do something really, really special. If we do something, we're not going to do an [indiscernible] points program. We want to do something that's unique, custom design for our community.

The rewards the very best people on Airbnb, so this is something we're absolutely looking at. And with regards to advertising, we've been looking at this for a long time. One of the things that's really changed is the entire paradigm of search is changing in the age of -- so what we did want to do was design a like kind of ad unit model around old search to then disrupt the ad model AI search. So we really want to nail AI search so that as we think about advertising, we integrate it into this new search paradigm, which we're looking at right now. So that's the status.

I don't have -- and obviously, we don't preannounce things. We are sharing that we are going to be launching AI search imminently. But beyond that, we're not disclosing other consumer launching, but expect more in this next year.

This concludes the question-and-answer session. I'll turn the call to Brian for closing remarks.

All right. Well, thanks, everyone, again for the questions and for joining us today. I think you've heard about is designed to help grow our business. And over the long term, it's going to really help us create a global community, what's built on trust.

And the basic idea is not just that we're a platform for vacation rental. We really want to be a community where you can travel with anywhere. And we're moving closer to our vision with every product we build and every improvement we make I'm just so incredibly proud of the team, if anyone listening, thank you for all of your hard work and what we've accomplished together.

I am excited for what ahead, and I appreciate all of you, our investors, as our partners, helping build the future of Airbnb. So thank you very much.

This concludes today's conference call. Thank you for joining. You may now disconnect.