Airbnb Q2 2023 financial results

Yesterday we issued our second quarter 2023 financial results. You can read the details here. Airbnb Co-Founder and CEO Brian Chesky said:

Our Q2 results show the desire to travel and host on Airbnb remains strong. We had over 115 million nights and experiences booked and added a record number of new listings – ending Q2 with over 7 million total active listings. We also saw 18% year-over-year revenue growth and Free Cash Flow of $900 million.

Overview of Q2 results

Q2 marked another quarter of strong results for Airbnb. Nights and Experiences Booked exceeded 115 million. Revenue of $2.5 billion grew 18% year-over-year (19% ex-FX). Net income was $650 million—our most profitable Q2 on a GAAP basis. Adjusted EBITDA was $819 million, while Free Cash Flow was $900 million, growing 13% year-over-year.

We also continued to make significant progress across each of our strategic priorities:

Make hosting mainstream: Supply growth stagnated at the beginning of COVID. Since then, we’ve been focused on making hosting mainstream by raising awareness, making it easier and improving our tools. Through these efforts, we’ve seen great results. In Q2 2023, active listings grew 19% year-over-year, with strong growth across all regions, market types and price points. In fact, we added more net active listings than in any previous quarter in Airbnb’s history to exceed 7 million total active listings.
Perfect the core service: We want people to love our service, and that means obsessing over every detail. Millions of people have given us feedback on how to improve Airbnb. We’ve listened. Based on feedback from our community, we introduced over 50 new features and upgrades as part of our 2023 Summer Release. For example, we introduced several initiatives aimed at increasing affordability, including new pricing tools for Hosts. Since the Release, more Hosts have adopted our discounting tools and lowered their prices.
Expand beyond the core: We’ve spent the last few years perfecting our core service. Today, it’s stronger and more profitable than ever. But we’re not stopping there. We have some big ideas for where to take Airbnb next, and we’re building the foundational capabilities for new products and services that we plan to launch in the years to come.

Q2 2023 financial results

Here’s a snapshot of our Q2 2023 results:

Q2 revenue was $2.5 billion, up 18% (19% ex-FX) year-over-year. Revenue increased to $2.5 billion in Q2 2023 from $2.1 billion in Q2 2022, driven by solid growth in Nights and Experiences Booked and stable Average Daily Rate (“ADR”).
Q2 net income was $650 million, up 72% year-over-year . Net income increased to $650 million in Q2 2023 from $379 million in Q2 2022 primarily due to our revenue growth, expense discipline and interest income. In Q2 2023, we delivered a net income margin of 26% – our highest second quarter ever – up from 18% in Q2 2022.
Q2 Adjusted EBITDA was $819 million, up 15% year-over-year. Adjusted EBITDA increased to $819 million in Q2 2023 from $711 million in Q2 2022. This demonstrates the continued strength of our business and discipline in managing our cost structure. Adjusted EBITDA margin was 33% compared to Q2 2022 EBITDA margin of 34%¹.
Q2 Free Cash Flow was $900 million, up 13% year-over-year. Net cash provided by operating activities increased to $909 million in Q2 2023 from $801 million in Q2 2022. The increase in cash flow was driven by revenue and bookings growth as well as net margin expansion. Our TTM FCF was $3.9 billion, representing a TTM FCF margin of 43% – a significant improvement from 39% a year ago².
Q2 TTM share repurchases of $2.5 billion. Our TTM Free Cash Flow generation enabled us to repurchase $2.5 billion of our Class A common stock over the trailing twelve months. In total, our share repurchases since the start of our buyback program in August 2022 have helped to reduce our fully diluted share count from 705 million in Q2 2022 to 686 million at the end of Q2 2023.

Business highlights

Our strong quarter was driven by a number of positive business trends:

Guest demand on Airbnb remains strong. Nights and Experiences Booked grew 11% in Q2 2023 compared to a relatively hard comparison a year ago. We saw an improvement in year-over-year Nights and Experiences Booked growth during the quarter from 10% in April to 15% in June. In particular, we were encouraged by the acceleration in year-over-year nights in North America throughout the quarter, and the recovery in EMEA in June following challenging holiday comparisons in May. In the quarter, we saw active bookers growth in every region, as well as more first time bookers compared to a year ago. Since starting Airbnb, we’ve had more than 1.5 billion guest arrivals.
Guests are traveling farther. Cross-border nights booked grew by 16% in Q2 2023 compared to a year ago. While the mix of international travel hasn’t yet returned to pre-pandemic levels, we’ve continued to see strong year-over-year growth across all regions. In particular, cross-border travel to Asia Pacific grew over 80% in Q2 2023 compared to the same period a year ago, while cross-border travel to North America increased by 20%. We also saw more guests return to cities, with high-density urban nights booked increasing by 13% in Q2 2023 compared to Q2 2022.
Guests are staying longer on Airbnb. As part of our 2023 Summer Release on May 3, we launched several new features for long-term stays (28 nights or longer). Following the release, year-over-year growth in bookings for long-term stays accelerated every month during the quarter. Overall, nights from long-term stays were stable with the prior quarter at 18% of total gross nights booked in Q2 2023. For the past six quarters, long weekends have been the fastest growing trip type on Airbnb. As our guests continue to have flexibility to travel and work remotely, they’re opting to stay an extra night or two on Airbnb.
Supply growth continued to accelerate. In every quarter since our 2020 IPO, we’ve seen acceleration in the year-over-year growth of our total active listings (excluding China). In Q2 2023, we grew supply 19% compared to Q2 2022, up from 18% in Q1 2023, and we added more net active listings than any quarter in our company’s history³. We continued to see double-digit supply growth across all regions, with the most growth in Asia Pacific and Latin America – the two regions that also had the most year-over-year growth in Nights and Experiences Booked. In addition, urban and non-urban supply grew at similar rates year-over-year.

^{1. A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of the Q2-2023 shareholder letter.}

^{2. A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of the Q2-2023 shareholder letter.}

^{3. In July 2022, all mainland China listings were taken down based on our decision to close the domestic business in China and instead focus on the outbound China business. As such, for comparative purposes, references to supply and supply growth exclude listings in China from prior periods.}

About Airbnb

Airbnb was born in 2007 when two hosts welcomed three guests to their San Francisco home, and has since grown to over 5 million hosts who have welcomed over 1.5 billion guest arrivals in almost every country across the globe. Every day, hosts offer unique stays and experiences that make it possible for guests to connect with communities in a more authentic way.

About Airbnb.org

Airbnb.org is a nonprofit organization dedicated to facilitating temporary stays for people in times of crisis around the world. Airbnb.org operates independently and leverages Airbnb, Inc.'s technology, services, and other resources at no charge to carry out Airbnb.org's charitable purpose. The inspiration for Airbnb.org began in 2012 with a single host named Shell who opened up her home to people impacted by Hurricane Sandy. This sparked a movement and marked the beginning of a program that allows hosts on Airbnb to provide stays for people in times of need. Since then, the program has evolved to focus on emergency response and to help provide stays to evacuees, relief workers, refugees, asylum seekers, and frontline workers fighting the spread of COVID-19. Since then, hosts have offered to open up their homes and helped provide accommodations to 100,000 people in times of need. Airbnb.org is a separate and independent entity from Airbnb, Inc. Airbnb, Inc. does not charge service fees for Airbnb.org supported stays on its platform.

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