Airbnb (ABNB) Q4 2025 Earnings Call Transcript

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Date

Thursday, Feb. 12, 2026 at 5:00 p.m. ET

Call participants

• Chief Executive Officer — Brian Chesky
• Chief Financial Officer — Ellie Mertz
• Head of Investor Relations — Andrew Slaban

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Takeaways

• Revenue -- $2.8 billion, up 12% year over year, and above the high end of guidance due to successful product updates, and pricing initiatives.
• Gross Booking Value (GBV) -- $20.4 billion, up 16% year over year, marking the fastest growth in over two years, driven by both increased bookings and higher prices.
• Nights and seats booked -- Increased 10% year over year, the highest growth of any quarter in fiscal 2025, with broad-based strength across all regions.
• Adjusted EBITDA -- $786 million, with a 28% margin; both figures exceeded company guidance.
• Net income -- $341 million, including a negative impact of approximately $90 million from one-time, non-income tax items.
• Free cash flow -- $529 million for the quarter and $4.6 billion for fiscal 2025, producing a 38% free cash flow margin.
• Stock repurchases -- $1.1 billion in Q4 and $3.8 billion in fiscal 2025, reducing fully diluted share count by about 9% since 2022.
• Liquidity -- $11 billion in corporate cash and investments at quarter end, plus $7 billion in funds held on behalf of guests.
• Pricing initiatives -- Reserve Now, Pay Later, simplified fee structures, and transparent pricing collectively delivered over 200 basis points of growth in nights booked in fiscal 2026 and roughly 300 basis points in GBV during Q4.
• Regional performance -- Latin America grew in the high teens %, Asia Pacific in the mid-teens %, EMEA at high single digits %, and North America at mid-single digits %.
• Brazil market -- Advanced to a top-five market, achieving the second-largest share of first-time bookers by implementing features tailored to local preferences.
• AI customer support -- An in-house AI agent resolved nearly one-third of North American support tickets, significantly accelerating resolution times and slated for global rollout.
• Hotel segment -- Accounted for a single-digit % of nights booked in Q4 and is growing nearly twice as fast as the platform average.
• 2026 outlook -- Revenue projected to advance at least at low double-digit %, with adjusted EBITDA margin expected to remain stable, and effective tax rate to fall to the mid-to-high teens % range.

Summary

Airbnb (NASDAQ:ABNB) cited the rollout of Reserve Now, Pay Later, transparent pricing, and a streamlined fee structure as major drivers of accelerating growth, while emphasizing continued gains from a deliberate company-wide innovation strategy labeled Project Y. Management confirmed international expansion by deepening focus in priority countries, citing Brazil's rapid ascent as a template for other markets, and highlighted AI as fundamental to scaling efficiency and future product differentiation. Expanded supply initiatives for major global events and progress in integrating independent hotels were portrayed as critical levers for both demand capture and platform resilience.

• Ellie Mertz stated the fiscal Q1 2026 revenue outlook is $2.59-$2.63 billion, representing 14%-16% year-over-year growth, supported by a roughly three-point FX tailwind.
• Chief Executive Officer Chesky described the addition of over 40,000 Paris listings for the 2024 Olympics, asserting "we are repeating that same playbook" for the 2026 FIFA World Cup across 16 North American cities.
• CFO Mertz projected gross booking value to rise in the low teens % in fiscal Q1 2026, driven by high single digit % growth in nights and seats booked, and moderate ADR gains stemming from pricing and FX.
• Mertz projected the One Big Beautiful Bill Act should "materially reduce our effective tax rate to the mid to high teens," beginning in 2026 due to changes in foreign earnings taxation.
• Brian Chesky declared, "AI customer service will be voice and chat across all languages" and expects it to become a "massive" cost-base reducer and quality driver within one year.
• About 50% of experience bookings in Q4 came from guests not booking a home stay, indicating new avenues for customer acquisition and incremental engagement.
• Mertz stated that the single-service fee migration for API-connected hosts resulted in "the effective ADR to guests came down modestly," improving affordability and contributing to growth.
• U.S. and North American growth accelerated from low single digits in early fiscal 2025 to mid-single digits in Q4, mainly attributed to product changes rather than macro environment shifts.
• The average cancellation rate rose by 1% (from ~16% to ~17%) after the launch of Reserve Now, Pay Later, but this was described as "not hugely material relative to the broader cancellations on the platform."
• Chesky outlined the event-driven supply playbook as a strategic solution for city partnerships, noting that "40,000 people list their homes in Paris have continued hosting."

Industry glossary

• GBV (Gross Booking Value): Total dollar value of all bookings on Airbnb’s platform before cancellations and adjustments during the measured period.
• ADR (Average Daily Rate): The average nightly price paid per booking for all listings transacted over a given period.
• Reserve Now, Pay Later: A feature allowing eligible guests to book accommodations with deferred payment, designed to increase bookings and booking windows.
• API host: Host partners who connect listings to Airbnb’s platform via automated Application Programming Interface (API) integrations, typically property managers or large-scale hosts.
• Single service fee: Unified host fee model replacing separate host and guest fees, aimed at improving price transparency and competitive pricing across channels.
• Guest Favorites: Airbnb’s highest-rated and best-performing listings, measured by guest satisfaction and other proprietary quality standards.

Full Conference Call Transcript

Andrew Slaban: Thank you for joining us today. On the call, we have Airbnb, Inc.'s cofounder and CEO, Brian Chesky, and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our 2025. These items were also posted on the Investor Relations section of Airbnb, Inc.'s website. During the call, we will provide some brief opening remarks, and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors.

These factors are described under forward-looking statements in our shareholder letter, and in our most recent filings with the Securities and Exchange Commission. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also during this call, we will discuss some non-GAAP EPS 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 am pleased to turn the call over to Brian. Alright. Thank you, Andrew, and good afternoon, everyone. Thanks for joining. I am going to start with a quick recap of our Q4 results. And then I am going to spend a little more time on what is driving them. Because that is 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 two years.

Nights and seats booked grew 10%, our strongest quarter of the year, but what matters most is the momentum that we are gaining. In a marketplace, reaccelerating growth is not as simple as stepping on the gas pedal. It is more like turning a cruise ship. It takes time and discipline. And you do not always see it from one quarter to next. The acceleration that you are seeing did not happen by accident. It is a result of a deliberate path that we have been on for the past few years. So let me walk you through it. Airbnb, Inc. grew incredibly quickly in the years leading up to our IPO. Faster than we ever imagined.

We were like a public we were like a company built to be a two-story house. But we went public, we want to keep building. But you cannot add 10 floors to a house that was not designed for it. You need a stronger foundation. So we rebuilt our plat our tech platform. We rebuilt the app cab by cab, and over the last few years, we improved nearly every part of the guest and host experience. But rebuilding the foundation was not enough. We also need to innovate faster. Now when I look back at what drove Airbnb, Inc.'s early success, it was not just the idea. It was how we worked.

In the early days, Jody and I would sit in our apartment and assess over every detail. We would shift something, learn quickly, and double down on what worked. That cycle focus, shift, learn, scale is what compounded our initial growth. As companies grow, they often lose that speed and focus. So two years ago, made a deliberate decision. We are gonna recreate the same innovation formula inside Airbnb, Inc. but at a global scale. We called it Project Y. We created a small lead team and gave them a really clear mandate. Make it easier to find and book a home on Airbnb, Inc. We start with the little things that make booking harder than 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 into long-term users, using simple web prompts to drive more app download. We made search more flexible, helping guests discover homes they would not have seen before. That drove an even greater impact. Eventually, we tackled bigger opportunities, like completely redesigning the checkout flow to make booking 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 Y will deliver hundreds of millions more this year.

Now we want once we saw this blueprint work, we began applying it across the company. And what I want to do is highlight four areas where the Y innovation model is driving growth. The first is pricing. Hidden fees are one of the biggest friction points in travel. So we created a 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. But price transparency was just the beginning. We launched dozens more updates, from more flexible cancellation policies to better pricing tools for hosts. These changes stack.

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 euro dollars upfront. The response was immediate, especially for larger high-priced homes, driving booking acceleration in Q4, and we believe that pricing initiatives will drive as much revenue this year as Y. We are now expanding this to new markets, and it is a key part of the strength we are seeing in Q1, and will remain a strong tailwind for years to come. Next up, supply. Most of our supply growth is organic, with hosts coming directly to us.

But we have also built a supply engine that lets us be 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 are 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 are also improving quality. We have we have removed over half a million low-quality listings, while Guest Favorites, the very best listings on Airbnb, Inc., grew 30% in 2025 compared to 2024. And in Q4, Guest Favorites made up nearly half of all bookings on Airbnb, Inc.

We also applied the Y model to international growth. You know, Airbnb, Inc. operates in nearly every country in the world, but roughly 70 of our revenue comes from just five countries. Now that is a massive opportunity. And we are 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. They put a focused team on it. We introduced features that we know matter to the Brazilian market like interest-fee payments and local payment methods, and we leaned at the cultural moments like Carnival. We also invested in local campaigns to build relevance. The results have been incredible.

Brazil moved from a top 10 market to a top five market on Airbnb, Inc. was our second largest contributor to first-time bookers, in Q4, behind only the U.S. This shows what happens when you pair global scale with local execution. And we are applying the same playbook to our highest priority countries in every region. Finally, we are applying the Y model to new businesses. We launched services experiences globally in May. But to better scale them, we are taking a city-by-city approach. We are going deep in one place, reaching product market fit, and expanding from there. We started with Paris for experiences and LA for service and we are really seeing great results.

We are also starting to test new services like grocery delivery and airport up to make each trip better from the very beginning. And to capture even more trips, bringing the Teague and independent hotels onto the platform. So that no matter what kind of stay a guest wants, they can always find it on Airbnb, Inc. Now it is still early, but the opportunity on hotels is massive. And we plan to share more about our approach later this year. But the big idea here is not just build 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, Inc., and multiple ways to drive more bookings. A guest 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 here for 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 have taken a really intentional path here. While other companies rush to both chatbots into existing apps, we started by solving the hardest problem. Customer support.

We built a custom AI agent trained on millions of our support interactions. It is already resolving a third of the support issues without needing a live specialist. And resolution times are significantly faster. It is live across North America, and we are planning to roll it out globally. But that is just the beginning. Because we are building an AI-native experience where the app does not just search for you. It knows you. It will help guests plan their entire trip, help those better run their businesses, and help the company operate more efficiently at scale. That is a big reason we brought in Ahmed Al-Dahle as our CTO. Ahmed is one of the world’s leading AI experts.

He spent sixteen years at Apple and most recently led the generative AI team at Meta that built the Llama model. He is an expert at pairing massive technical scale with world-class design, which is exactly how we are gonna transform the Airbnb, Inc. experience. This approach is also our strongest defense against disintermediation. A chatbot can give you a list of homes. But it cannot give you the unique points you find on Airbnb, Inc. A chatbot does not have our 200,000,000 verified identities, or our 500,000,000 proprietary review. And it cannot message the host, 90% of our guests do. It cannot provide global payment processing, customer support, or insurance.

By layering AI over the entire Airbnb, Inc. experience, we believe we are building something that is impossible to replicate. So you can see why we are 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 margins to be stable year over year, and we will do all of this without investing billions or tens of billions of dollars. We do not need massive capital investment to grow. We do not own home. We do not operate experiences. And we are not building data centers. What we are doing is finding small wins and scaling them, profitably.

That is why I have been able to generate free cash flow at nearly 40% of revenue, and nearly $19,000,000,000 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 if you look ahead to 2026, we cannot 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 is what leads to more growth.

Brian Chesky: So

Andrew Slaban: in summary, we rebuilt major parts of the company. We adopted a new blueprint for innovation. And now we are seeing increased momentum. That does not happen by accident. It is a result of an incredible team rowing in the same direction at global scale. So to everyone the Airbnb, Inc. team is listening, thank you. The business is stronger because of you. With that, I will turn it over to Ellie to walk you through the financials in more detail.

Operator: Thanks, Brian, and good afternoon, everyone.

Ellie Mertz: As Brian just shared, we are seeing increased momentum in our business. I will start with Q4 financial results. And then I will cover our outlook for Q1 and the full year 2026. Q4 was a great quarter for Airbnb, Inc. Gross booking value grew 16% year over year to $20,400,000,000.0, driven by strong growth in both bookings and price. NICE and seats booked increased 10% year over year, an acceleration from Q3, with strength seen across all regions. By region, by region, Latin America grew in the high teens, Asia Pacific grew in the 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 a particularly strong Q4 2024. And as the quarter played out, we saw a slightly better macroeconomic environment than anticipated. But more importantly, our product road map delivered material lift to the business. As Brian shared, we have been steadily making it easier to find and book a home on Airbnb, Inc. Few updates in particular helped drive our acceleration.

Brian Chesky: In Q4,

Ellie Mertz: the launch of Reserve Now, Pay Later, updates to our cancellation policy, and the beginning of our migration to a simplified fee structure. Reserve Now, Pay Later saw significant adoption among eligible guests. It is also led to longer booking lead time, in Q4, and a misshift towards larger entire home, especially those with four more bedrooms, contributing to the increase in ADR. And as Brian mentioned, given the positive results, we have decided to roll it out to more guests globally and to cross-border states in the U.S. Our updated cancellation policies and simplified fees also contributed to both nights and GBV growth in the quarter.

Brian Chesky: As a reminder,

Ellie Mertz: beginning in October, 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 hosts 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 up. In total, we estimate these three features delivered over 200 basis points of growth in Knight’s book in 2026. We will continue iterating to simplify pricing and roughly 300 basis points of growth in GBV in Q4. Improve transparency, and hope our help our host stay competitive. Now turning to our Q4 financials.

Revenue was 2,800,000,000.0, up 12% year over year, and exceeded our guidance, driven by the impact of our product update. In terms of profitability, we generated $786,000,000 of adjusted EBITDA, representing a 28% adjusted EBITDA margin, also exceeding guidance. Finally, net income was $341,000,000 and was negatively impacted by roughly $90,000,000 of one-time non-income tax. For 2025, our full-year effective tax rate was 20%, including onetime discrete items that increased our provision for income taxes in Q3. Now 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 $529,000,000 of free cash flow. In 2025, we generated 4,600,000,000.0 representing a free cash flow margin of 38%. At the end of Q4, we had $11,000,000,000 of corporate cash and investments as well as $7,000,000,000 of funds held on behalf of our debt. Our strong balance sheet allowed us to repurchase $1,100,000,000 of our common stock in Q4 upfront $857,000,000 in Q3. And in 2025, we repurchased 3,800,000,000.0 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 have reduced our fully diluted share count by about 9%. Now let us shift to our Q1 and full year 2026 outlook. We are encouraged by the momentum we have seen so far this year and excited about our road map to drive growth in 2026. In Q1, we expect to generate revenue of 2,590,000,000.00 to 2,630,000,000.00 representing year over year growth of 14 to 16%. This includes an approximate three-point FX tailwind after factoring in our hedging

Brian Chesky: program.

Ellie Mertz: We expect gross booking value to increase in the low teens year over year driven by high single-digit growth in nights and seats booked 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 below double digit with an ambition to grow even faster than that. While FX tailwinds should fade as the year progresses, we are encouraged by healthy demand and execution across our growth initiative.

We are also excited about major events this year, including the Winter Olympics happening now in Milan, and the FIFA World Cup coming this summer. Cities continue to look to Airbnb, Inc. 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 pilot and new offering together with broader macro conditions will support incremental growth in 2026. And finally, across the full P&L, we are 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, I am incredibly proud of what the team delivered. We are carrying that momentum into 2026 with an ambitious set of goals. We will continue strengthening our core business while accelerating innovation to drive growth. And with that, I will open it up to Q&A.

Operator: Thank you. We will now begin the question and answer session. Your first question comes from the line of Richard J. Clarke from Bernstein. Your line is open.

Richard J. Clarke: Hi. Good afternoon.

Richard J. Clarke: I guess AI is the topic du jour, and you gave some helpful remarks about why the AI bots today cannot match what Airbnb, Inc. do. But given the sort of speed of innovations going on, why do you think those AI platforms could not launch a short-term rental over time? And maybe secondly, do you see any risk that you will have to share your economics with a AI platform at some point going forward, or do you expect you will be able to retain the same level of direct traffic you have today? In an AI world.

Brian Chesky: Thanks.

Brian Chesky: Yeah. I mean, a great question. Let me let me start by saying this. The vast majority of what is Airbnb, Inc. is not the app that you see. First of all, we have a whole host app. Which is really critical. We built this over eighteen years. We handle more than a $100,000,000,000 in human through the platform. Customer service is one of the most difficult problems in Airbnb, Inc. You know, we do not have SKUs. People, we need to we need to, you know, adjudicate between people speaking different languages. We provide insurance and protection for everyone. You know, we do a lot of verifications. 90% of people who book on Airbnb, Inc. send a message.

You cannot send a message without a verified ID. We have 200,000,000 verified IDs, which is more than U.S. passports in circulation. The vast majority of our homes our unique inventory is only on Airbnb, Inc. We are adding more offerings over time, and we think people are gonna want to put them together into an itinerary that they could bring on in their phone with them when they are traveling. I think these chatbot platforms are gonna be very similar to search. Gonna be really good top-of-funnel discoveries. And in fact, what we have seen is I think they are gonna be positive for Airbnb, Inc. You know, I am 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 this is the most important point, is that these models are not proprietary. The model of uncharted PT the models in GEVINI, the model is in Claude, and the models like Qiwi, are available at 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 model, 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, and we can post train it and tune it based on our millions of interactions. We can connect it to our customer support agent. We can connect it to our host. And that is fundamentally what we think. It is why we have hired Ahmed Al-Dahle one of the foremost leading experts in AI. Ahmad Al-Dahle, in fact, built one of the models. He built the Llama model. And we want to build a team to make our company much more of an AI-native company.

Brian Chesky: So

Brian Chesky: I think that for chatbots or AI companies to win, we do not need to live in a world where everyone else has to lose. I do not think that one company is gonna own everything. We are gonna be able to work together, and these companies will be very helpful top-of-funnel traffic generators for Airbnb, Inc. just like Google

Operator: Your next question comes from the line of John Robert Colantuoni from Jefferies. Your line is open.

John Robert Colantuoni: Okay. Great. Thanks for taking my questions. I want to ask one on Asia. Region. Knight’s growth was still strong. At the mid-teens mid-teens, but did moderate from recent quarters. I know it is your smallest region, but I was hoping you could talk to what drove the slowdown and how you think about growth. The growth opportunity in Asia Pacific over time? And second, you know, I was curious on the services and experiences have you seen any signs that they are helping you acquire new customers that you can convert to accommodations. Given over half of your experiences were not attached to an accommodation bookings? Thanks.

Ellie Mertz: Let me 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 know, where we have seen substantial growth. As you are probably aware, we have, you know, relatively high levels of penetration in Australia, which we factor into that number.

Whereas we are relatively nascent in some of the, I would say, you know, continental countries, in particular, places like India, Southeast Asia, Korea, etcetera. What we shared in the letter is that we are seeing nice performance in those markets that we have begun on. So in particular, what I would call out is domestic Japan. That is a that is a bargain and statement that we began our expansion playbook back in '24, and it seems a nice result. Second, 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 you know, very strong, and we see opportunities to accelerate that growth in '26. So the broad story in APAC is it is stable. We are seeing some very positive signs in particular markets that we are leaning into. And it is the focus of our international markets expansion strategy going

Brian Chesky: Second question?

Ellie Mertz: Yes. I mean, what we call out in terms of the dynamics of where we are finding experience booking. The call out in the letter that we provided is about 50% of our experience bookings today. Come from, you know, guests that are unattached to a home booking.

Brian Chesky: Meaning

Ellie Mertz: they are not already staying with us in a home and therefore attached to the trip an incremental experience. May be staying at a hotel in that market. They may be not traveling at all. And what I would say there is it is a very exciting opportunity for us in a couple of forms. One is it provides a new segment of guests that we can, you know, in the future, convert to home Yes. It also gives us signs that with these new products and offerings, we have the opportunity have a higher frequency guest usage beyond just a big trip.

So for example, you know, something that we see in Paris is that there has been really nice uptick in terms of our Airbnb original experiences. By local Parisian. Which tells us that you know, that category of inventory, you know, albeit highly differentiated, is a great opportunity for us to attract global crowds to our app.

Brian Chesky: Yeah. I think one of the things that I called out in my opening remarks is that we are seeing a lot of momentum about getting new offerings off the ground and piloted. And our basic idea is, you know, it is not just similar from Amazon in the late nineties where they the book 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 all these different things, and they added one category at the other. I think the unifying idea for me is the trip.

We take a very, by the way, broad definition of trip, including thirty days stays and 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 enough to stand alone, the better together. And so hotel is a great example. You know, there are some people that only stay in Airbnb. There is some people that only stay in hotel. Most people are will not stay in bowl. And some trips are better in Airbnb. And then some trips, if you need a last-minute stay, you are traveling for business, you are doing one night, really good for hotels.

So we think that all these components can make the overall offering better. There is a lot of synergy. Your next question comes from the line of Lee Horowitz from Deutsche Bank. Your line is open. Great. Thanks so much. 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 the 1Q, and then how you are thinking about baking and cancellation expectations to full-year adjusted EBITDA guide? And then secondly, in the past, you have 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 market a bit more quickly? Thanks so much.

Brian Chesky: Okay. So first,

Ellie Mertz: on the question of Reserve Now, Pay Later, and the impact of cancellation. If we if we just back up for a moment, before we launched Reserve Pay Later in the U.S. back in 2025. We extensively tested the product to ensure that by the time the cohorts opting into the product had reached their check-in date, that it was not beneficial to the business, meaning that the growth was in booking was larger than the net increase in cancellations before check-in. We are doing that level of testing for each incremental segment. We are considering expanding Reserve Now, Pay Later out to ensure that the debt benefit is obviously positive for the business.

What I should say is that in the statement that we have launched this offering, the cancellation curves have been, you know, very close to what we saw from a tested perspective, and so we feel you know, 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 booking. But we are already absorbing the elevated level cancellations from that product. I think one piece of perspective is that in terms of the aggregate nominal increase in cancellations rate, it is approximately 1%.

So, you know, an average of maybe 16% cancellation rate is historically going to 17. It is obviously higher within the cohort that chooses that product. But it is not hugely material relative to the broader cancellations on the platform. Final thing I would just note on later. We have called out. Is lengthened lead times, which we think is good from a competitive perspective. And second, it has a modestly positive impact in terms of ADR as consumers who do not need to you know, extend a huge purchase on their credit card. Are more likely to choose a slightly nicer listing.

Operator: Yeah. And then on the

Brian Chesky: AI search and how it does impact sponsor listing, you know, I have been you know, quite a few earnings calls about sponsor listings. And one of the things that being really clear with the after the launch of Check to Be Key was that traditional search was gonna become essentially 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 gonna do SponsoredLinX, we design that ad unit in that form factor. So we are 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 are doing a lot of experimentation. The way we do things with AI is much more rapid iteration, not big launches. And over time, we are gonna be experimenting with making AI search more conversational, integrating it into more than trip, and, eventually, we will be looking at sponsor listings as result of that. But we want to first nail AI search.

Brian Chesky: Your next question

Operator: comes from the line of Brian Thomas Nowak from Morgan Stanley. Your line is open.

Brian Thomas Nowak: Great. Thanks for taking my questions. Brian, maybe to go back to that

Brian Chesky: that last question on AI search. Let me just ask you sort of another bigger picture one. As sort of sit here in early 2026, if we are sitting here a year from now, what are the areas you are most focused on or seeing improvements to the platform using AI this year? That is one. And then two, maybe one just for on the P&L impact. Any help at all on how you are thinking about the impact on gross margins from increased AI investment this year versus last year? Thanks.

Richard J. Clarke: Yeah.

Brian Thomas Nowak: I can answer actually, I can answer both of them. I will start with the second one. I would I think one of the great things about Airbnb, Inc. is that we have a very, very efficient innovation model.

Brian Chesky: So unlike other companies, not building models. We do not have

Brian Thomas Nowak: a huge CapEx cost base. So our investment in AI will not affect the P&L. I do not think you will see it in the P in the P&L. That is number one.

Brian Chesky: Number two, it is a year from now.

Brian Thomas Nowak: If we are successful, AI would not be seen. I think three or four things.

Brian Chesky: Number one, let us start with the let us start with customer service. Right now, nearly 30% of tickets in North America, they are English based. Are handled by an AI agent. A year from now, if we are successful, significantly more than 30% of tickets will be handled by a custom 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. We can actually call and talk to an AI agent. We think this is gonna be massive because not only does this reduce the cost base,

Brian Thomas Nowak: Airbnb, Inc. custom service, but the kind of quality of service is gonna be a huge step change.

Brian Chesky: Not only can you get a response in a second, but the agent is using AI, gonna be significantly more productive. That is number one. Number two,

Brian Thomas Nowak: gonna make our engineers and everyone in Airbnb, Inc. significantly more efficient. More than 80% of engineers are now using AI tools. That still will be a 100%. Of course, that metric is a bit of a vamming metric.

Brian Chesky: The real question is, what is the culture of the company? Are you a start up? Are you are you are you highly adaptable to the changing current of AI? And I think Airbnb, Inc., certainly within our space,

Brian Thomas Nowak: is the most adaptable. Know, we are designed to adapt. To not move like a cruise ship. But to move very nimbly. So that is partly why we hired Amel Dali. We wanted to be on the frontier of AI, at least for the non-native AI companies. And I think you are gonna see a lot more productivity and a lot more innovation velocity. The third is you are gonna start to see AI through the booking experience and the listing experience. AI search will eventually I cannot put a timeline on it because AI is obviously highly unpredictable.

Brian Chesky: But we want to be we would love to be the first know, company in ecommerce that really nails

Brian Thomas Nowak: AI search

Brian Chesky: conversational search. I think it is really hard not just to travel. But all ecommerce. One of the reasons that chatbots are really hard for e for commerce is because they are very visual. They are photo forward. Need to be able to compare. You need to be able to open different tab.

Brian Thomas Nowak: So a text-forward chatbot interface is not the ideal. We have to actually innovate on the user interface. We are also using AI across the board. Like being able to list your space much more easily.

Brian Chesky: So if we are successful one year from now, in summary, AI customer service will be voice and chat across all languages. It will penetrate many more ticket types,

Brian Thomas Nowak: that it will be it will massively accelerate our innovation. It will be as AI needed as any other company in our space or more. And then finally, the experience for guests and hosts will be materially better.

Operator: Your next question comes from the line of Douglas Till Anmuth from JPMorgan. Your line is open.

Brian Chesky: This is Tayo for Doug. Thanks for taking my questions. I have two. First one, looking at the 2026 revenue acceleration guide,

Brian Thomas Nowak: could you help us think through the acceleration drivers across the core markets? Expansion markets,

Brian Chesky: and I think those two are broader strategy. What is our strategy for hotel? Our strategy for hotel used to be that we thought of them as filling in network gaps when a home is booked. And when homes are high occupancy, you can get a hotel. What we have now evolved to is a much bigger a much more expansive strategy. It turns out, obviously, as we spend a lot of time with our guests, that a lot of a lot of guests a lot of guests love to book homes and hotels. And, you know, we ran an ad campaign. Some trips are better than Airbnb. But it also means some trips are better in hotel.

And so if you are booking last minute, if you are booking one night, if you are booking for business, if you are staying for a conference, this might be a really good reason for a for a hotel. But, also, we are really focusing on boutiques and independence. And a large percent of the inventory in hotel inventory in the world are boutiques and independent. They provide incredible hospitality. Mean, these hotels really fit the ethos of the Airbnb, Inc. brand. These are not niche. This is a huge percentage of the hotels in the world. And as we spoke in these hoteliers, they have been very, very enthusiastic. They want to list another channel.

They like our low commission. They love the merchandising. They love the type of travelers work we have. So we think that as we add more offerings, as we add more categories, it strengthens all the other business. So we think as we get more grab hotels, not only do we open up the aperture to a huge Tampa hotel, it actually strengthened home.

Operator: Your next question comes from the line of Stephen D. Ju from UBS. Your line is open.

Stephen D. Ju: Great. Thank you. So Brian,

Brian Thomas Nowak: can we read this at 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 ripple through after the World Cup here. In the United States.

Brian Chesky: And, Ellie, even at the low end of your

Brian Thomas Nowak: revenue guidance, to keep margins flat yet, you know, you have to figure out a way to spend some $100,000,000,000. More year over year. So just wondering where the larger spend buckets are gonna be for this year. Thanks.

Brian Chesky: Alright. So let us start with the Paris Olympics and how it may what it might portend for the World Cup. The Paris Olympics was massive for our business, not just in Paris,

Brian Thomas Nowak: but really

Brian Chesky: all over France and globally. One of the things that happened was you know, 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 is usually, you know, everyday people lifting homes that are often exclusive to Airbnb, Inc. So this is really, really compelling. And in fact, they have now started Airbnb, Inc. Many of you know the founding story, we started to provide housing for events. And we designed and built our platform for the from the very beginning. The great thing about events from your Airbnb, Inc. is a lot of people have no intention of becoming a host.

They have no intention of doing this year round. But an event comes to town, and they want to make money one week. And they list their place, and they get introduced to the concept of hosting. And they realize they like it, and they continue hosting. 40,000 people list their homes in Paris have continued hosting, and that has been, like, really, really powerful for us. So the other thing was really power powerful from a policy standpoint. You know, I think everything goes from you know, sometimes a problem cities have to deal with to a solution to the problem. And what we know is these large events, hotels cannot accommodate everyone.

So it is a bit of a reset moment where we can actually come and tell cities that we actually can we actually can you know, be a solution to your challenge. And it is just a great way to experience Airbnb, Inc. because it is a great way to bring cultures together. And the thing about the World Cup that is so powerful is, obviously, as you know, it is in three countries. And so it allows us to handle really important markets. Not only important markets in the 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.

You know, we have the Milan Olympics happening right now. Milan Olympics was not only great for Milan, not only not only great for Northern Italy, but it was great for our relationship with the Italian government. And I think that we do not just need the World Cup. We do not just need the Olympics. We actually can work with smaller events like Lollapalooza, can work with really local events. So the event strategy scales from big global events down to local events. We think they are one of the best ways to recruit supply what we are gonna do to grow our supply in our main bay.

Ellie Mertz: Sure. Next to turn let me answer the second question about EBITDA. As we look at the construction of 26 P&L relative to 25, obviously, the top of our P&L in terms of cost of revenue and often support will scale you know, somewhat literally. We will have some efficiencies there, but they will scale somewhat linearly 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 programmatic marketing. But more so in terms of our go to market

Brian Chesky: effort.

Ellie Mertz: What this means is all of our efforts around acquiring supply, not just home, but obviously also for experience services and hotels. And then we will also continue to grow our investment in product development. To allow for, you know, 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 is to accelerate the top line. And we are giving ourselves the flexibility within the stable margin compared to last year to invest to achieve that acceleration. We you know, we are quite proud of the level of profitability that we have achieved to

Brian Chesky: historically.

Ellie Mertz: And the focus right now is, again, accelerating growth within those very strong, stable margins.

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

Justin Post: Great. Thank you. Brian, in your prepared remarks, you talked about app

Brian Chesky: improvements and, obviously, improving supply. Are you seeing any improvement in repeat rates or customer service scores or a high what kind of feedback are you getting on that? And then Eli, maybe you could talk about the U.S. room night growth. It is it definitely has got back to mid singles. What is your outlook for that as we look forward? Thank you.

Brian Thomas Nowak: Yeah. I mean, I can start with

Brian Chesky: you know, one of the things we noticed is, though, the repeat rate of Airbnb, Inc. is pretty much even simplified down to the satisfaction of the gap. The satisfaction of guest, first and foremost, is satisfaction of home, and then if something goes wrong, the satisfaction of customer service. That is why we focus first and foremost on both quality, you know, now that Guest Favorites are approximately half of our booking, the quality the trip quality, which is for the look at, has gone up significantly. That means satisfaction is gone up. That means that with GPUs, it is stronger. It is really strong. And I think that explains bunch of our reacceleration.

And customer service is better than ever. We track NPS and it is the strongest it is been since the pandemic by far, and it is accelerating. And I think, you know, again, it is 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 is unprecedented in our category, what we do. We are moving more than 5,000 listings via Guest Favorites. We are really, really tight on quality control.

And then the customer service that we have which is best in class, we think, in our in our in our category, and with AI supporting it, I think it is gonna continue to improve. So yeah, it is been a huge tailwind for us.

Ellie Mertz: Think the U.S. are 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 are excited to be able to accelerate that in Q3 and then once again in Q4. You know, 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 this call. I would say heading into '26, we continue to see great momentum for North America at large. And it is, you know, one of the underpinning points of our opportunities around

Brian Chesky: Your next

Operator: question comes from the line of Mark Mahaney from Evercore ISI. Your line is open.

Brian Thomas Nowak: Thanks. Two questions, please. What do you think what is the real expectation for when hotels will be big enough to start moving the needle in terms of that revenue growth acceleration? Or do you think that, that is one the factors behind the revenue growth acceleration this year? And then secondly, could you just talk about the take rate dynamics in Q1 what is embedded in your guidance? Your revenue growth is sort of accelerating versus Q4, but your room night growth seems like it is slightly decelerating or similar growth, and your bookings growth ex FX is slightly decelerating. So is there something that is boosting take rate in Q1 that it caused that revenue growth to accelerate?

Thank you.

Ellie Mertz: Sure. In terms of hotels, it is a it is hotels was single-digit percentage of total size hotel today. So as of Q4, nights booked. But growing, you know, nearly double that of the overall platform. So you know, it will take some time for that business to scale and a meaningful contribution to growth. But the current momentum is quite strong. We will be, as Brian shared previously, will be expanding the hotel supply over the course of the year. And intend to exit '26 with being a meaningfully larger percent of the overall business going forward.

In terms of the take rate expansion in Q1 and, you know, what is going on with the high level of growth in mid 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 three percentage points. We are also getting the benefit of earlier lead time of bookings in Q4 that will realize in days and hit revenue in Q1. And then in terms of the implied take rate, you know, it should be modestly above where we were in Q1 of last year, mostly due to some timing consideration.

One other small component to give you the laundry list is Easter this year is on the in the middle effectively, on April 5. So you do not 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, you know, 50 basis points less revenue in Q2.

Operator: Next question comes from the line of Jed Kelly from Oppenheimer. Line is open.

Jed Kelly: Hey, great. Thanks for taking my question. 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

Operator: it could give the user and open up more supply and potentially bring in more new users to the platform. Thanks.

Brian Chesky: Yeah. I mean,

Brian Chesky: we are we are we are there are you know, a large percent of the hotels are boutiques and independent. And we want to just start there. We are not saying what we will or we are not doing in the future. But we think that we want to, like, just start with a huge number of Atika independence that are typically paying a higher commission than the chain and have been really aggressive with us reaching out saying that they would love to have another channel. So that is our starting place. We are not saying we are eventually going, but this is where we are focused right now.

We are focused on know, our top markets in the world. Where there is a proliferation of great fatigue great independence, be it more than a 100 hotels in New York with more than 20,000 rooms available on the site. Just in New York City alone.

Operator: Your next question comes from the line of Kevin Campbell Kopelman from TD Cowen. Your line is open. Great. Thanks. I wanted to ask about the new all-in commission structure for, P S PMS, connected host. What are some of the benefits you are seeing from that change? And, could you see Airbnb, Inc. moving all of its hosts over to that structure longer term? Thanks.

Ellie Mertz: Yes. So I think you are probably aware of our historical structure. You know, the business was set up with a dual fee structure where there was a 3% host fee and then variable debt fee on top of that. What we found over time is that dual fee structure makes it difficult for hosts to effectively price their listing. It is frankly a little bit complicated, and in particular for those with these that are cross listed and in particular by property managers, it often leads to, you know, incorrect pricing, meaning what they get these is not what the host intends.

And in many cases, that means that a listing can sometimes be more expensive on Airbnb, Inc. when it is cross listed somewhere else. So for the migration that we completed back in October, which was to migrate all of our API connected hosts, to the single service fee we have seen great results. Number one is know, we obviously very diligently 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 hosts did not take up their rates.

Instead, the effective ADR to guests came down modestly, which obviously you can conclude is really great from a affordability perspective as well as elasticity and has that is the reason drives our contributors growth. In Q4. We are currently piloting in certain countries a further migration for some for our individual home. Again, from the dual fee structure to the single service team. We think a, you know, more expansive migration. Number one, allows

Brian Chesky: it

Ellie Mertz: easy to be easier for the for the host to understand what they should try. It allows us to make sure that we are pricing all of our listings competitively. We also think it is a foundational move that will allow us to one, be more dynamic with our pizza, our pricing tools as well as our

Operator: Your next question comes from the line of Kenneth James Gawrelski from Wells Fargo. Your line is open.

Kenneth James Gawrelski: Thank you so much. Two, if I may, please. First,

Brian Thomas Nowak: 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 in really has not come up as much, I do not think, on this call, and I apologize if I missed it.

Brian Chesky: 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 it the Project Y, in terms of the speed of decision making and new product releases. This will this impact at all the way you think about, you know, you have you have been on a, you know, a biannual, you know, every single month cadence for new product releases. Consumer either to the consumer or to the host.

Could you talk a little bit about how you maybe what you have learned or the experience you have had with this new more efficient decision making has could inform the product release going forward. Yeah. Sure. Maybe I will start with the second question. Then go to first. So we are still gonna do final product release moments, but our methodology is be a little bit different. Last May was kind of a once

Brian Thomas Nowak: a one time, like,

Brian Chesky: rebuilding of the platform. We had to basically rebuild our app from a home platform to a platform you can book with any party you have shared. Hence, it has, like, now you can move more than a air more now you can have to meet more than Airbnb, Inc. Basically, avenue has changed. What we are now doing is we are not waiting for a release to ship. We are really chipping every minute and every hour of every day. So the teams are shipping. We still will have the May release where we will showcase the stuff we are doing, but we are not holding up back. When they are ready, we will ship them.

We will use May as a bit more of a showcase of what the product improvements are you can expect this summer. So if that makes sense, it is more of a potentially marketing showcase a product marketing showcase versus us holding back features. But we still do think you know, telling a story a couple times a year to our guests, our hosts, and our shareholders about the improvements innovation make. It is a really good thing. I think releases are a really good way to help for it. But again, Y means that we do not wait for release to shift. We shift the moment it is ready.

And especially in the age of AI, moments are not the way to do it. You want to iterate consistently. I think the second question was on loyalty. Right? So that was the first question. Yeah, so we and I think the thing that I would like to point out is

Brian Thomas Nowak: the results we have had without loyalty and without sponsor listing.

Brian Chesky: So I think that you know, with loyalty, we think that could be a massive accelerant for our company. We are absolutely looking at this. I have said before that if you do a loyalty program, you would not want to do an out-of-the-tube program. We want to be putting much more unique. And we are actually testing a lot of different tracks. So we are testing different benefits that could be in a loyalty program. And based on results of those tests, we will eventually package them and release a loyalty program. But right now, we are in testing. 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.

Brian Thomas Nowak: I can say also, I am incredibly proud of what our team

Brian Chesky: here at Airbnb, Inc. delivered in 2025. We developed a blueprint for innovation that we are 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 are seeing today. I look forward to seeing you next quarter. Thank you.

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

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