Airbnb Q3 2023 financial results

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

Our Q3 results highlight a record travel season on Airbnb and our most profitable quarter ever. Over the last nine months we’ve added nearly 1 million listings globally and we continue to see demand for travel grow.

Overview of Q3 results

Q3 marked another quarter of strong results for Airbnb. Nights and Experiences Booked exceeded 113 million, growing 14% year-over-year and accelerating from Q2 2023. Revenue of $3.4 billion grew 18% year-over-year (14% ex-FX). Net income of $4.4 billion, or $1.6 billion excluding the one-time income tax benefit, was our most profitable Q3. Adjusted EBITDA was $1.8 billion, while Free Cash Flow grew 37% year-over-year to $1.3 billion.

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

Make hosting mainstream: We’re focused on making hosting just as popular as traveling on Airbnb, and we believe our approach is working. Active listings grew 19% in Q3 2023 relative to Q3 2022, and we continued to see double-digit supply growth across all regions and market types. In Q3 alone, Airbnb Hosts earned more than $19 billion. We’ll continue to raise awareness around hosting, make it easier to get started, and improve the overall experience for Hosts.
Perfect the core service: We’ve collected millions of pieces of feedback on how to improve Airbnb. Two years ago, we started doing twice-a-year product releases to address this feedback. Since then, we’ve launched more than 350 new features and upgrades to our core service. In the past year alone, this included improved customer service, total price display, and new tools to help Hosts set more competitive prices. In September, we shared the progress we’ve made to help lower cleaning fees, reduce prices and improve search and reliability. And on November 8, we’ll introduce dozens of new features aimed at making Airbnb more reliable.
Expand beyond the core: We’ve made significant progress over the past three years building a strong and profitable business. In addition to laying the foundation for differentiated offerings for our Hosts and guests, we’ve been focused on international expansion. We’re investing in under-penetrated international markets and seeing great results. Following the success we’ve seen in recent quarters in Germany and Brazil, Korea has now become one of our fastest growing countries compared to 2019, with gross nights booked 54% higher than they were in Q3 2019 on an origin basis.

Q3-2023 financial results

Here’s a snapshot of our Q3 2023 results:

Q3 revenue was $3.4 billion, up 18% year-over-year. Revenue increased to $3.4 billion in Q3 2023 from $2.9 billion in Q3 2022, driven by solid growth in Nights and Experiences Booked, a modest increase in Average Daily Rate (“ADR”) and an FX tailwind.
Q3 net income was $4.4 billion, including a one-time non-cash tax benefit. In Q3 2023, net income included a $2.8 billion one-time, non-cash income tax benefit driven by the release of a valuation allowance on certain of our deferred tax assets.Excluding the benefit of this one-time item, our Adjusted Net Income was $1.6 billion compared to $1.2 billion of net income in Q3 2022. Our Adjusted Net Income increased primarily due to our revenue growth, expense discipline and interest income. Adjusted Net Income Margin was 47%, up significantly compared to the 42% net income margin during Q3 2022.
Q3 Adjusted EBITDA was $1.8 billion, up 26% year-over-year. Adjusted EBITDA increased to $1.8 billion in Q3 2023 from $1.5 billion in Q3 2022, which demonstrates the continued strength of our business and discipline in managing our cost structure. Adjusted EBITDA margin was 54% compared to a Q3 2022 Adjusted EBITDA margin of 51%¹.
Q3 Free Cash Flow was $1.3 billion, up 37% year-over-year. Net cash provided by operating activities increased to $1.3 billion in Q3 2023 from $964 million in Q3 2022. The increase in cash flow was driven by revenue and bookings growth as well as Adjusted Net Income Margin expansion. Our TTM FCF was $4.2 billion, representing a TTM FCF margin of 44%—a significant improvement from 41% a year ago².
Q3 share repurchases of $500 million. Our Free Cash Flow generation enabled us to repurchase $500 million of our Class A common stock in Q3 2023. Since we began our share repurchases a little over a year ago, we have repurchased a total of $3.0 billion, enabling us to reduce our fully diluted share count from 698 million in Q3 2022 to 681 million at the end of Q3 2023.

Q3-2023 business highlights

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

Q3 was a record summer travel season on Airbnb. Nights and Experiences Booked grew 14% in Q3 2023 compared to a year ago. Across all geographies, we saw a sequential acceleration in the year-over-year growth rate of nights booked relative to Q2 2023, driven by increases in active bookers in each region. We were particularly encouraged by the year-over-year growth of first time bookers during Q3 2023. We are also seeing significant strength in our app relative to desktop and mobile web with 53% of our gross nights booked in the Airbnb app compared to 48% in Q3 2022.
International expansion markets are gaining momentum. Cross-border nights booked grew by 17% in Q3 2023 compared to a year ago. As international travel continues to recover, we’re building greater momentum for Airbnb in under-penetrated markets. In Asia Pacific, our business has fully recovered to pre-pandemic levels, with gross nights growing 23% in Q3 2023 compared to Q3 2019³. China outbound travel increased over 100% in Q3 2023 compared to a year ago. Smaller Asia Pacific markets such as Taiwan, the Philippines, Thailand, Hong Kong, and Indonesia all experienced year-over-year growth above 30% for gross nights booked on an origin basis. In addition, we saw more guests return to cities, with high-density urban nights booked increasing by 15% in Q3 2023 compared to Q3 2022.
We’ve added nearly 1 million active listings this year. Our active listings grew by 19% in Q3 2023 relative to Q3 2022. We continued to see double-digit supply growth across all regions, with the highest growth in Asia Pacific and Latin America—the two regions that also had the most year-over-year growth in Nights and Experiences Booked. Consistent with the prior quarter, urban and non-urban supply grew at similar rates year-over-year. With over 7 million active listings, we saw relatively similar growth among individual and professional Hosts and believe the majority of new listings are exclusive to Airbnb.

^{1. A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of the shareholder letter.}
^{2. A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of the 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 growth exclude China inbound nights.}

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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