There was a lot going on last week and I don't want to deprive you of the summary of the analyst conference of $ABNB (-4.7%) (Airbnb) for the fourth quarter of 2024.
Brian Chesky, co-founder and CEO of Airbnb, emphasized that Airbnb outpaced the growth of the travel industry in 2024. He mentioned that the company has implemented over 535 features and upgrades in recent years to improve the experience for guests and hosts. Enhancements include "Guest Favorites" to make it easier to find the best accommodations and the "Co-Host Network" that makes it easier to find local co-hosts. Chesky also highlighted product optimizations such as improved search features, more detailed maps and flexible payment options. Airbnb has rebuilt its platform from the ground up with new listing management tools and a unified messaging system.
For 2025, Chesky announced the start of a new chapter for Airbnb, with the aim of expanding beyond expand beyond short-term rentals and introduce new offerings.
Ellie Mertz, Chief Financial Officer, presented the financial results and outlook for the first quarter of 2025. In the fourth quarter, booked nights and experiences increased by 12% and revenue by 12% to 2.5 billion US dollars. Net profit amounted to USD 461 million and adjusted EBITDA to USD 765 million. For the full year, adjusted EBITDA amounted to USD 4 billion, which corresponds to a margin of 36%. Airbnb generated a free cash flow of 458 million US dollars in the fourth quarter and 4.5 billion US dollars for the full year, which corresponds to a margin of 40%.
The company bought back shares worth USD 838 million in the fourth quarter and USD 3.4 billion for the year as a whole. Revenue for the first quarter of 2025 is expected to be between USD 2.23 and 2.27 billion, which corresponds to growth of 4 to 6% compared to the previous year. Adjusted EBITDA and margin are expected to decrease compared to the first quarter of 2024, influenced by calendar effects and currency fluctuations.
For 2025, Airbnb plans to invest USD 200 to 250 million in the launch and scaling of new businesses. Despite these investments, an adjusted EBITDA margin of at least 34.5% is expected.
The subsequent Q&A session focused on the following points:
Global localization: It was discussed that the duration of localization depends on the respective market. Airbnb invests in markets outside the top 5 (USA, UK, Canada, France, Australia), which account for around 70% of gross booking value. Investments are mainly in marketing and product development, including building teams, increasing awareness and accelerating product development.
Artificial intelligence (AI): Airbnb is initially focusing on AI-powered customer support, which will later be integrated into search and expanded into a travel and accommodation concierge. There are also efficiency gains in customer service and potentially in engineering productivity.
New products and services: New business areas will initially be closely linked to travel and include services that enhance guests' stays. Airbnb plans to offer a broader range of services, similar to how Amazon has expanded from books to a variety of products.
North America: Airbnb can grow faster in North America, especially by targeting populations where Airbnb does not yet have a strong presence. There are four factors that influence the choice between hotels and Airbnb: Booking convenience, reliability, service offering and affordability.
Advertising services: Placing ads on the platform represents a $1 billion revenue opportunity, according to the CEO, but will not be addressed this year. However, it is definitely coming.
To summarize, Airbnb ended 2024 with accelerated growth, strong free cash flow and a solid balance sheet. CEO Chesky emphasized that this is just the beginning and that Airbnb's next chapter begins in 2025.
I hope you enjoyed this summary.
Stay tuned!
