Airbnb Inc Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stephen Ju - UBS Investment Bank - Analyst : Okay, thank you. So I think in the past, in terms of the global sort of localization effort, you've talked about Brazil, and I think in the shareholder letter, you're showing your localization effort for Japan. So I was wondering how long it typically takes for one of these efforts to localize in any given country, it takes to come together. You guys have mentioned Argentina, Germany, South Korea, and other places. And Ellie, I guess the $200 million to $250 million of investments that you're planning to incur, I guess in the front half of this year for the most part, what is that primarily going to be geared to? Is it going to be marketing, is it going to be engineering, staff up, or any color would be helpful. Thank you.

Question: Richard Clarke - Sanford C. Bernstein & Co. - Analyst : Hi, thanks for taking my questions. I just want to ask about the launch we've seen of Agentic AI out there. I think Airbnb avoided some of the volatility that some of your peers had, but are you leaning into those operators or are you confident you can kind of control the AI flow through the Airbnb platform?

Question: Eric Sheridan - Goldman Sachs - Analyst : Thanks so much for taking the question. Maybe just one quick follow up, Brian, and then if I could ask a follow up. With respect to the AI, I appreciate your answer with respect to outward looking and how it might change the landscape. What do you think the potential is internally to apply AI for efficiencies inside the company and create an additional layer of potential? Margin efficiency and or free cash flow conversion in the years ahead. And then in terms of the way you guys framed the year with exiting at a higher margin trajectory post some of the investments you called out, will there be any change or thought about how your capital allocation process might evolve as you move through 2025? Thanks so much.

Question: Justin Patterson - KeyBanc Capital Markets Inc. - Analyst : Great, thank you very much. Brian, could you teeth out how you're thinking about the pace of product innovation versus the past? It sounds like this new tech stack should be beneficial to product velocity. So I'm curious where you saw friction points on the prior tech stack and how you think this new tech stack really positions you to execute on those growth initiatives you outlined at the start. Thank you.

Question: Brian Nowak - Morgan Stanley - Analyst : Great, thanks for taking my questions. A good guide, guys. Just two questions. One, so Brian, as you're thinking about sort of the new products and new use cases to come from the some of the growth opportunities launching in May, can you just talk us through some of the larger points of friction or opportunities high level that you see from a guest and a host perspective you're looking to address with some of these products. And then the second one, Ellie on the full year margin guide, the at least 34%. Can you just sort of walk us through how you're thinking about the contribution from the investments in the back half? How are you sort of gauging the origin markets versus the expansion markets sort of growth throughout the year and as you kind of tumble through the comps for the margin guide?

Question: Brian Nowak - Morgan Stanley - Analyst : That's right, yeah, so the $200 million to $250 million, the new businesses you want to.

Question: Ronald Josey - Citigroup, Inc. - Analyst : Great, thanks for taking the question. Brian, I wanted to ask a little bit more on the Here & Now. In the letter, you talked about recent product enhancements around search and better merchandizing. I'd love to hear your thoughts on what you're finding, what you're seeing with search and merchandizing and learnings there to help inform these newer experiences and products that are coming down the pike. And then the next question is just on nights and experiences both to the acceleration this quarter. Talk to us about the contribution between just the broader travel market being relatively healthy and these newer products that are launching like Co-Hosting or Experiences or the Next 9. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 9:30PM, ABNB.OQ - Q4 2024 Airbnb Inc Earnings Call

Question: James Lee - Mizuho Securities USA - Analyst : Great. Thanks for taking my questions. I'm sorry I joined the call a little bit late, so I apologize my question has been repeated. Two questions here. One on experiences. Can you guys talk about maybe some of the frictions you're able to resolve in the upcoming launch, and any indication that you can give us on the confidence of successful launch this time. And secondly, I just want to double click on Brian's commentary on beyond the court. Are you thinking about maybe some sort of concierge service, meaning like grocery shopping, access to spa, to gym, maybe some kind of access to recreation. Is that what we should think about when we think about adjacency to travel? Thanks.

Question: Jed Kelly - Oppenheimer & Co. Inc. - Analyst : Hey great thanks for taking my questions. Just first, can you talk about as you kind of increase your reliability, where are you potentially partnering with some larger companies that might be able to provide these enhanced services. And then just circling back to North America, I mean how do REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 9:30PM, ABNB.OQ - Q4 2024 Airbnb Inc Earnings Call you view that market opportunity? I know Room Nights accelerated mid single digits, but I'm sure you want it to grow faster. So just how should we view the North American market? Thank you.

Question: Douglas Anmuth - JPMorgan - Analyst : Thanks for taking the questions. Brian, can you just talk about in what markets or for what kind of listings you're seeing the co-host network work best and what's really driving them to earn twice as much as other listings? And then Ellie, I'm just curious where you might be finding the most traction in managing the cost structure to make room for some of these new investments coming up. Thanks.

Question: Lee Horowitz - Deutsche Bank AG - Analyst : Great, thanks for taking the question. Maybe just on some of the growth markets. You guys highlighted some really healthy growth rates in these expansion regions and obviously put up nice numbers in the 4Q. But as we look out to the first quarter, night's growth is sort of reverting back to what you did for much of '24. So can you maybe help us unpack why the success you're seeing in some of these regions is not necessarily pulling up the overall growth rate in the first quarter. And then maybe relatedly to the marketing comments you just made in terms of it being sort of flat year on year, I guess how do we maybe put together the pieces of marketing intensity, perhaps flat year on year with a number of different growth regions still out there that are probably not quite as large as you want at this point. Like do you no longer really have to invest in them or have you reached sort of an investment sort of threshold on those or you start to get leverage on the investments that you've made in those regions? How come they don't necessarily need more marketing dollars to deleverage next year? Thanks so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 9:30PM, ABNB.OQ - Q4 2024 Airbnb Inc Earnings Call

Question: Justin Post - BofA Securities - Analyst : Great, thanks for a couple of questions. Looks like we've already covered it. US accelerated. Looking back, what might have pressured the growth rates, and on a macro level, and do you see those pressures changing this year? And then, maybe Ellie you could talk a little bit about the take rates contemplated in your outlook. What are some of the positives and negatives for take rates? Thank you.

Question: Ken Gawrelski - Wells Fargo - Analyst : Thank you. Two if I may. First, just on the expense side, maybe Ellie, could you talk a little bit looking beyond '25, how do you think about the fixed investments you've made to prepare for the product launches in '25? How should we think about that fixed versus variable component and be in '26 and beyond? And then second maybe for Brian, you talked about how there's still opportunity in North America and the bookings of alternative accommodations relative to hotels and still it's very heavily weighed to hotels. Could you talk about some of the elements you think that that could change that kind of price to value equation for consumers, especially in maybe in urban markets where alternative accommodations have had tougher time gaining share versus vacation markets where you picked up a ton of share. Thank you.

Question: Kevin Kopelman - TD Cowen - Analyst : Thanks. Could you give us an update on how you're thinking about advertising services in your priority list as you're rolling out new businesses. Thanks.

Question: Naved Khan - B. Riley Securities - Analyst : Okay, thanks. Maybe just on the urban demand, Brian, and you talked about how a lot of people just book hotels. Can you maybe touch on regulation and do you think, do you see movement there in terms of how that might become more favorable, especially larger cities like New York might start to open up, give us some thoughts there. And then if I have to think about regulation maybe at a bigger scale, so, I think Europe has been pretty heavy on regulation, especially on the larger platforms. Anything in terms of either becoming a deemed gatekeeper or not, just any parts that would be helpful. Thank you.

Question: Colin Sebastian - Baird - Analyst : Thanks and good afternoon. I guess two quick ones for me. First off, I guess from a competitive standpoint, Brian, the tone of the letter comes across, I think, is quite a bit stronger in terms of leading the industry. So I'm curious if that's more the result of your performance to date or is that more about what's to come in terms of putting more distance between Airbnb and competitors. And then secondly, on Experiences, I know we don't have the formal relaunch yet, although I enjoyed a nice food to your recently purchased the platform. But just curious on the progress you're seeing in repopulating the marketplace or ingesting more and higher-quality Experiences before the relaunch. Thank you.

Question: John Colantuoni - Jefferies - Analyst : Thanks so much for my questions. First one on conversion. When you look at how travelers interact with your booking experience and begin to think about how best to layer in new services over time, talk about how you're planning to evolve search and discovery to help balance steering users to your new services while simultaneously maintaining conversion on accommodations. And second, I'd be curious to get your perspective on the opportunity to use new services to create some flywheel effects by which maybe you're acquiring new customers through new products or driving more multiproduct bookings to help increase customer lifetime value. Thanks.