Airbnb (ABNB) Q2 2026 earnings call transcript

Thank you so much. Good afternoon, and welcome to Airbnb's second quarter of 2026 earnings call. Thank you for joining us today. On the call with us, we have Airbnb's co-founder and CEO, Brian Chesky, and our Chief Financial Officer, Ellie Marks. Earlier today, we issued a shareholder letter with our financial results and commentary for our second quarter of 26. These items are also posted on the investor relations section of Airbnb's website. During the call, we'll make 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. That being said, we urge you to consider these factors and remind you that we undertake no obligation to update the information contained in 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 the non-GAP financial measures. We provided reconciliation to the most directly comparable GAP financial measures in the shareholder letter posted to our investor relations website. These non-GAP measures are not intended to be a substitute for our GAP results. And with that, I'll pass the call over to Brian.

All right, thanks Andrew and good afternoon everyone. Thanks for joining. Over the first half of 2026, we've delivered some of the strongest results in years. In Q2, that momentum accelerates. We consider our outlook across every key metric. Revenue grew 17% year-of-a-year to $3.6 billion, gross-looking value grew 16% year-of-a-year to $27.2 billion, and nights and seats booked grew 10% year-of-a-year accelerating from Q1. We are seeing this momentum show up across the business. Nights booked on our app grew 23% year-of-a-year, and they now account for 64% a total night's book, which is up for 59% last year.

More new guests are trying to even be than we've seen in years. In fact, growth among our first time bookers accelerated to 11%. Now, this is the highest growth we have seen in four years.

And among first-time bookers, the Gen Z cohort is growing the fastest. Our expansion markets continue to outpace our core markets, but netnights booked growing about twice as fast. But what's especially encouraging is that we're not only seeing growth accelerate in our emerging markets, we are seeing growth accelerate in many of our core markets. In fact, the US, France, UK, and Australia all accelerated in growth in Q2. Now, these results reflect something much bigger than a strong quarter. What they reflect is the fundamental shift in how we are building products. Now, I think most people naturally want to point to one product or one initiative to explain a strong quarter, but that is not what's happening here.

This is a culmination of changes we've been making over the last several years. We've rebuilt Airbnb from the ground up to be an AI native company. We have more world-class talent than ever before, and AI is transforming how we execute and build products. That's simply AI is the best thing to ever happen to Airbnb. Today, we're building testing and iterating faster than we could just a year ago. Across some of our key initiatives, we've reduced the time from concept to launch by as much as 60%. And compared to the same six months last year, we've increased the number of features and improvements we shipped this year by nearly 80%. The acceleration from AI allowed us to make hundreds of improvements across Airbnb for hosting guests.

And I want to highlight a few examples that are helping drive the outperformers we're seeing. So first, I want to talk about how we've made it easier for guests to book. I've talked in past quarters about Project Hawaii, which is our innovation blueprint where hundreds of improvements compound over time. AI is accelerating this work across search, sign up, checkout, and payments. And by reducing friction across the guest journey, we are converting more traffic into booking. And that's become one of the biggest drivers of our growth. We improved search and discovery, making it easier for guests to find and book the right home, hotel, service, or experience. And it's meaningfully improving conversions.

We also introduced AI-generated listing highlights, so guests can quickly understand the key details about a home. We also launched AI-powered review highlights, servicing what guests' reviews say about a home's location, amenities, and more. Later this year, we'll introduce AI home comparison, allowing guests to compare home side-by-side before booking. We simplified sign-up and login, making it easier for guests to get started on Airbnb. We streamlined checkout by making pricing and cancellation policy clear. And we also continue to expand Reserve Now Pay Later to more listing.

And we're making it more visible throughout the booking flow. AI is also making it easier to host. Now, we know that as hosts are more successful when they have the right price, the right insights, and the right tools. And AI is helping us improve all three. We made it easier for hosts to set competitive prices and get more booking. We also gave hosts more actionable insights to help them improve their listings and increase their earning potential. And we're rolling out AI tools that help new hosts get started faster and better understand their pricing and earning opportunities.

AI is also transforming customer support. Our AI assistant is now available in more than 50 languages. Nearly 45% of issues that start with our AI assistant are now resolved without a human agent while they're living much faster resolution times. Later this year, we will begin introducing AI voice support, extending the experience to phone calls. Now, AI isn't just making the product better. It's also making everything more efficient. And Q2, customer support costs, purple king declined about 16% year of year, given in part by improvement by our AI assistant. We expect those costs to continue to climb as our AI assistant resolves more and more issues. And of course, as we bring it to voice. But improving it, of course, really only part of the story because we're also continuing to expand what Airbnb offers.

In May, as you know, we expanded Airbnb services across grocery delivery, power rentals, air force pickups, and luggage storage. And recently, we introduced resort paths, giving gaps, day access to amenities at some of the world's fast hotels. Now, it's still early. But what we are seeing is really strong momentum in booking. And every new service that we ship, we can do faster than the service before. So we're getting much more efficient. For example, groceries took eight months, nine months, and airport pickups took about six weeks to develop. So you can see how these things are compounding.

Now, we're also seeing some more momentum with Airbnb experiences. We added a thousand new experiences across our most in-demand categories, increasing supply by nearly 80% year-over-year during Q2. While experience is still a small part of our business, bookings accelerate both year year-over-year and actually sequentially from last quarter. And we also expanded our accommodations business, adding thousands of boutique and independent hotels across comp destinations around the world.

Featured hotels come a price match guarantee and up to 15% credit that guests can use towards future booking. Roughly 35% of first-time hotel guests return to Airbnb to book a home. And what this shows is how hotels are introducing new guests to Airbnb. Many of those new guests don't just come back in book hotels. They come back in the book homes. So hotels are making homes stronger.

Well, hotels still represent a single digit percentage of night booked. Hotel nights are growing approximately three times faster than our home's business. So there's a lot of growth ahead of us. Now, finally, I want to share an update on our event strategy. Many events, major events help strengthen the Airbnb brand while driving both supply and demand. I will remind you that Airbnb started to provide housing for events. So housing for events is in our DNA.

Now, these major events introduce millions of people they are V&B, encouraging more people of become hosts, help help cities, and help cities welcome more visitors without building a new hotel. Now, while booking from any single event may be temporary, the brand awareness to trust and new hosts these partners create, benefit our business long after the event ends. And the World Cup is one example of this strategy. As an official tournament partner, Airbnb hosted millions of people during the tournament, many first-time guests.

Now, more than 150,000 homes across host cities were listed on your music first time, creating new economic opportunity for locals. And it didn't stop with just the World Cup, because we are expanding this playbook to other events, including the Olympics, the Tour de France, Art Basel, La La Plusa, La Liga, Spain, and most recently, NASCAR. Now, when you put all this together, I think there's a bigger story in this quarter.

And the story is this. There was no single product. There's no single partnership or initiative that explains our results. It's a combination of stronger execution, a real-class team, and an innovation model that is accelerated by AI. This is what's creating the momentum across our business. There is no silver bullet. And we believe it's one of the reasons we're outperforming our largest peers in travel. It's also evidence that the changes we've made over the last several years are paying off. Because those changes are rooted in the way we build and operate the business, we believe that momentum will continue through the coming quarters. It's given us so much confidence in the second of this year, but that's why we're raising our guidance.

And with that, I'll turn it over to Ellie to share more.

Thanks, Brian, and good afternoon, everyone. I'll start with Q2 financial results, then cover our outlook for Q3 and the full year 2026. As Brian shared, Q2 was another great quarter for Airbnb, with continued momentum across the business. Despite the ongoing conflict in the Middle East, we continue to see strong, underlying demand globally. And the impact to our business from the conflict was less than we had anticipated. Growth booking value grew 16% year over year to 27.2 billion, driven by strong growth in both seats, in both nights and seats booked, and ADR. ADR increased 5% year over year, or 4%, excluding the impact of FX, with noticeable strength in North America and Europe.

Nights and seats both growth were strong across every region. We saw high single-digit growth in both North America and Europe. With Europe marking a steady recovery from the Middle East-related headwinds we saw in Q1, alongside approximately 20% growth in Latin America, and high teens growth in Asia-Pacific. As Brian mentioned, we've been able to deliver these results, not from a single action, but the collective actions across our platform. For guests, these improvements have spanned search and discovery to payments and check out.

And for hosts, we've made it easier to get started and improve pricing and insights to help them become more competitive. Now, of the many changes that have collectively contributed to our strong growth, we wanted to provide an update on two that we've spoken in the past, in particular, reserve now pay later, and our simplified fee structure.

First, we continue to see reserve now pay later benefit the business. It drove more bookings, longer booking lead times, and contributed to the increase in ADR, specifically in Q2 over 20% of our total GBV was booked using this flexible payment option. Given the strong results that it delivered, in July, we expanded the types of bookings eligible for reserve now pay later. Now, beyond the immediate uplift in to lock in earlier calendar share and better aligning our payment options with guest preferences.

Second, the migration of API hosts to a single service fee helped our host price more competitively and provided greater price transparency. As a result of its success, we recently announced the broader rollout of the single fee to the majority of our remaining hosts, which we expect to be completed by year end. Approximately half of our active listings are now subject to the single service fee.

Now, let me spend some time on our Q2 financial results. Revenue grew 17% year-over-year to 3.6 billion, exceeding the high end of our outlook. In terms of profitability, our net income was 816 million, while adjusted EBITDA was 1.3 billion, representing an adjusted EBITDA margin of 35%. Our adjusted EBITDA margin expansion of over 100 basis points compared to last year, was driven by strong revenue growth and cost efficiencies in operations and support and private development, partially offset by continued investment in sales and marketing.

Meanwhile, the year-over-year increase in net income was driven by higher operating income and a 77 million tax benefit recorded in the current period related to recently published tax guidance impacting prior year taxes.

Next, our balance sheet and cash flow. We continue to benefit from our efficient and capital light business model, delivering 1.3 billion of free cash flow in Q2. Over the trailing 12 months, we've generated 4.8 billion of free cash flow, representing a free cash flow margin of 37%. Now absent the impact of reserve now pay later bookings, which deferred guest payments from the time of booking closer to the date of stay, we expect that unearned fees would have grown year-over-year in Q2. During Q2, we purchased 1.1 billion of our common stock, enabled by our strong balance sheet and significant cash flow generation. Returning capital shareholders remains a core component of our capital allocation strategy.

Now finally, let's shift to our Q3 and full year 2026 outlook. We're encouraged by the momentum we've seen so far this year and are excited about our roadmap to drive growth in 26 and beyond. Specifically in Q3, we expect to generate revenue of 4.69 billion to 4.77 billion, representing year-over-year growth of 15 to 17%. This includes an approximate 3% point for an exchange tailwind after factoring in our hedging program. We expect year-over-year GBV growth to be in the mid-teens, driven by low double digit growth in nights and seats booked, and a moderate increase in ADR be to mid-shift and price appreciation.

In Q3, we are not assuming any significant impact related to the conflict in the Middle East. On profitability, we expect adjusted EBITDA to increase year-over-year and for adjusted EBITDA margin to be down slightly compared to Q3 2025 due to the timing of investments this year. And moving to the full year, we are raising our revenue and adjusted EBITDA outlook. We now expect year-over-year revenue growth to improve through at least mid-teens, up from the low to mid-teens guidance we provided last quarter, supported by the accelerated pace of nights and seats booked we've observed across our business.

For the full year, we expect our implied take rate to be relatively flat compared to 2025, accounting for the timing of bookings versus check-in with reserve now pay later, as well as higher customer incentives related to new businesses during 2026. Absent these incentives, we would have anticipated our implied take rate to be slightly higher during the year, driven by our monetization initiatives and execution across our product roadmap.

And for full year profitability, we are now expecting our adjusted EBITDA margin to be at least 35.5% up from 35%. Now to close, our results as quarter are approved that the product and business changes we've made are translating into real financial outcomes. The improvements we shared, making Airbnb easier to use, helping host succeed, and running the business more efficiently.

These improvements are unpounding. And we believe that showing up as real out performance relative to our peers. Even against tougher comps in the back half of the year, we are raising our full year guidance for both top line growth and profitability, a reflection of the pace of innovation, the operating momentum, and the execution we're seeing across the business. And with that, I will open it up to Q&A.

Thank you. Yeah, I mean, I'll start. Justin, the hotel initiative is going significantly better than I expected, and I had high expectations.

What we told the team is our strategy is very simple. While we think that some trips are better in Airbnb, we think there's a lot of trips that are conducive to hotels, and those trips are last minute, short stays, business trips, or where we are supply constrained. And so, as we've been talking about, our goal was to build the Z best hotel booking product online. We now believe that we have the best hotel booking product online. So the second question is, can we get supply? And that is, I expected the first thing. I expected us to build the best hotel booking product online.

I did not know what the reception would be, and I thought, you know, we're known for homes. It would take a lot of effort for hotels to warm up to want to list an Airbnb, and that's where my expectations were not high enough, because after we began outreach for hotels, things flipped. And what we are now seeing is a huge amount of influx of interest from hotels wanting to list on Airbnb. It's probably no surprise why. Not only do they like our product, but they like that we have a huge amount of traffic. We are one of the most traffic travel sites in the world. We also have a young audience. We have a disproportionately American audience, relative to some of our competitors, and we have an extremely favorable take rate.

To answer your second question, we are seeing strengths in both supply-constrained markets and in not supply-constrained markets. And maybe the simple way to think about it is that not everyone comes to Airbnb with the intent to look for a home. A lot of people come to, you know, this three types of people. People only stay in homes, people only stay in hotels, and most people are willing to stay in both. And so the basic theory of our marketplace is as we add more supply of homes or hotels, conversion rate of our traffic goes up, and we see more booking. What we're also seeing is about 35% of people who come to Airbnb and book a hotel for the first time come back and book a home.

So hotels not only are bringing new guests to Airbnb, but those new guests are sometimes often choosing to book a home. So essentially, one is making the other stronger. And that's the basic theory of Airbnb. We are absolutely going to be stepping on the gas given the reception, and we are focused not just in supply-constrained markets, but all markets. So that's the answer question. They are working well in both.

And maybe just a small sub question. I guess your car hire partner has been acquired by a competitor. Does this make M&A a bit more of a near-term necessity as you build these ancillary products out? Yeah, I can take a little questions. So you can kind of think of Airbnb as probably going into like three different phases of expansion. You know, the prior era was, you know, us being just, you know, homes for travelers. And so we became a noun number of kind of like Kleenex or Xerox that was associated with just one thing. So the first phase and you are corrected in assessing this is that, you know, a lot of things will be, most people still come to Airbnb with a home in mind.

And so most of our business is going to be for the foreseeable future, certainly this year, attaching to people that have an intent to come finding a home that would be attaching a service, attaching experience, or people coming to Airbnb expecting a home but discovering hotels and looking at hotels that men have otherwise bounced because you can find a home they're looking for. That's kind of phase one. But that's the prior phase. We are now entering the next phase of expansion, which is actually not the end game. It's just the next stage. And the next stage is become a one-stop shop for travel. You'll eventually be able to get all of your travel needs through Airbnb.

And that's what you're starting to see. And then phase two would be we will go from traveling to living. In phase three, we go from traveling to living to other ways for people to connect on our platform. I think you'll expect over the next year for us to be very, very focused on the travel phase, one-stop shop for travel. But I do not think our ambition is limited to travel. The single reason why is because AI is an existential risk to everyone.

And last year, I told our company that AI is an existential risk to us. It was the only existential risk to this company. Now, policy is a risk. It's not an existential risk. It's not a risk that we will manage forever. But the existential risk to everyone was AI. Is AI good for you? Is AI bad for you? And I think at the moment of truth happened this year. Moment of truth happened.

First, we hired our CTO, Ahmed Adali. He was the leader of meta, llama models. He came in and I think we went from a company that was a middle-of-the-pack company for AI to a leader in AI, at least amongst companies that are not frontier labs or hyperscalers. And I think we are amongst the most AI-native companies now in all of Silicon Valley. And so I think because of that, this allows us to go into many new businesses in travel and eventually beyond travel that we might not have been able to go into except for the opportunity that AI affords us. When you're seeing again, we're able to develop products more quickly. We're able to attach a lot more products and services.

So to answer your question, yes, I do imagine that in the near term, in the near term being, you know, over the next year, year and a half, you will absolutely build a Airbnb with a broad travel intent. Like, I like to travel my family to somewhere in Europe. Can you recommend where I should travel? You put my whole trip together and absolutely Airbnb will be able to do that. And that is just the next phase. It's not the limiting phase. With regards to M&A, you're probably referring to car travel being acquired by Expedia. We still think that they're going to be a great partner for us with car rentals. I do not think that that's, you know, I'm very confident in that partnership.

I think we are going to be a major benefit to that company. And I think that, you know, I'm expecting that they're going to want to stay the partner with us. And I do not think this has any impact on our M&A strategy. Our M&A strategy remains opportunistic. As we go into a lot of new articles, there's a lot of M&A opportunities. We have, or we're sitting on quite a lot of cash, we generate a lot of cash. Entrepreneurs will love to be part of Airbnb and to hold stock. So I think there's a huge number of opportunities for us. But the great thing is our bias is always to grow organically and to look secondarily at acquisitions.

Yeah, so let me just get a little more color on the hotels ramp. As we've shared, we started in those markets that are regulatory constraint because it's an obvious opportunity for us to bring supply to those markets where we're not always able to fulfill demand that we already have. We've expanded our supply acquisition efforts to a top 20 number of cities. And I would say more broadly, we're looking to add inventory that can be accretive to the platform versus compete with homes. And so we're very selected with regard to what we add to make sure that it's adding, you know, great inventory that our consumers will love. More broadly, when you think about the scaling of this product, we've shared that today, hotels are only a single digit percent of night booked on the platform.

So a relatively small segment. But as we disclosed in the letter, given our efforts over the last several months, hotels, that segment is currently growing about three times as quickly as home. And we have, as Brian shared previously, we have, you know, large ambitions in terms of continuing to scale, not only the rate of growth, but obviously the contribution to the overall business in the coming years.

Yeah, I mean, maybe before I answer the second part of the question is kind of notable homes and hotels. I like to think we did the really hard business first. I'm not here to say doing hotels is easy, but I'll tell you what's harder, like helping try to create a category. Airbnb homes don't have front desk. We had to teach people hospitality. You know, we had to navigate government all over the world. We had to max client demand.

And, you know, we had to, you know, it was not a behavior that people were familiar with. Hotels are no doubt, not an easy business, but I actually think the hotels are making it an easy your business for us when you see the reception that they have, their desire to want to listen on the platform. And the fact that we've already done most of the hard work, because in fact, most of the technology tools we built for homes apply to home hotels that actually it is a very natural extension for a business. And I don't want to say it's easy. Nothing in life is easy that it is. You're probably being complacent. But it is a much more natural transition than I ever imagined.

And also the, I was always worried for years about homes being next to hotels in the platform. It does not bother customers. We have really, really good personalization. And we know now with our personalization and really driven by AI, whether someone wants to see just homes, just hotels or both. So I'm very, very, very excited. And I just wanted to like maybe highlight that point. Now to the second point on AI search, good news. We are beginning to put it in test this month. Now that test is going to be a very small percentage of our traffic. And based on those results, we're going to then begin to expand it to more traffic over the course of this year.

I just want to point out that the tests that I've seen I think are extraordinary. They're really great. That being said, you just have to remember that people come to Airbnb, often most people a handful of times a year and they have an expectation that they see a search box with a location. So it's going to take some time months and months to retrain the customer. So the way we're initially going to roll it out is the default is going to still be the core search above you'll see a toggle. Once you turn the toggle on, you're going to be able to try the new AI search. We'll have to see how it converts. I think for people who toggle it on, it's going to convert very well.

We don't want to impose that on everyone. We want, by the way, we learned this with total practice play. We start with a toggle. That toggle for those people who toggle was very positive. We want to educate people. And so I think you're going to see this play out over the course this year in the next. Now AI search, you can actually think about as really three or four major features. One is the search input. I can type in natural language, whatever I want. The second thing is, it can essentially respond to you in natural language. Rather than just saying 300 search results, it can respond to you in natural language. Then the title, the titles could actually be AI generated and they can be conversational as if we're reading a chat above much more visual.

Then you get to the product description page and the highlight or AI generated in real time personalized to you. You go down the page, you have a question, you can ask the PDP through AI. Do you see the entire journey, not just AI search, is going to be powered by AI and what this will feel like is going to feel as or almost conversational as a chatbot. Hopefully let's chat in fewer words because we think travels more visual. Very, very personalized and what this will mean is much higher conversion rate.

Thanks, Ed. Yes, so what we initially launched back in September of last year was rolling out single-service for our API connected host, which is predominantly property managers. Fast forward, we did extensive testing on a broader swath of hosts this winter and spring and have begun migrating the remainder of our host to the single-service fee. We anticipate by year end our entire supply base will be on that single-service fee. As a reminder, that single-service fee allows us to provide more simplified pricing recommendations and in aggregate has a downward pressure on pricing to allow us one to offer more value to, yes, but also ensure that we are price competitively relative to other platforms.

Okay, on the, thanks Ken, on the first question, we haven't really gotten much feedback from our core host. I mean, mostly they just want to make sure their bookings are going up and our results show they are. And if we do get asked though, I would say that the rise of the tide raises the sales of all boats. So essentially, you know, I don't, I don't need to give our hosts like, like, like a business school marketplace lessons, but if they were curious, I would tell them that what Amazon learned in the, in the 2000s was, you know, selling, selling DVDs and selling CDs, helped the sales books, did not cannibalize them. And every time they added a new category, it's strengthened and lists the boats of the prior categories.

And that the most important thing for hosts is that it's the jewelry, dish, or concept, essentially, that we bring more people to the platform. If we bring more people to the platform, then we can match the perfect supply to the exact guests that wants that supply. And so we actually see hotels being treated to the the bookings for our home host. And I think the results are showing that. So we haven't heard from them. And mostly, when we do hear from them, it's about their booking, but mostly we're seeing very positive results. Now, it's the second question. Um, you know, well, I think, you know, most, most supply, we test city by city. So hotels, we go city by city services, we go city by city experiences, we go city by city, but most software, we really do globally.

We might test in the country, but we don't really do that city by city. So to answer your question, this will be broad days trip planning that we'll be rolling out globally. And we will test it globally. Sometimes we test it in the country, but often we can test it globally.

So I'm not going to give you a specific guide for 27 and beyond, but I think looking at our track record, you can, you can see a couple of things. One is the underlying economic services are extremely strong from both an EVADOT and a free cash flow basis.

Second, last year we did have a bit of an investment cycle, but given the growth that it helped bond for the current year, we're able to both accelerate growth, invest substantially behind that growth, and also deliver an expansion in the margin. As we look forward, we're going to seek to do the same. We're constantly looking for opportunities to grow. And so where we have those opportunities, we will lean in. But I think given the track record and the somewhat steady EVADOT margins that we have delivered, I think you can see there's a relative floor in our ability to continue to invest against that.

So yeah, on pricing, I think this is one of the biggest single levers for growth that we have. I think it's significantly greater than Preserve Now Paylater. So if you want to just put it in perspective, it is, I don't know, I don't want to say a multiple, but many multiples bigger than R&PL. Now, why is this? Well, because, you know, Airbnb launched and started as affordable alternative to hotels, supportability, and value is one of the most important things we can do. We don't price the listings. The best thing we can do is show hosts that if they were to better price their listings, then they will make more money. And we are essentially building an entirely new pricing model.

No guess. No, no surprise. It will be powered by AI. AI is able to take in a lot of data sources. We're able to take in a lot of data sources of hotel prices, of Airbnb prices, events coming to town, the nature of lead time bookings. And based on that, we have a new pricing model that we're rolling out to host. I think this is going to be much more powerful. We're also going to make it much easier for them to update their prices. We're going to be able to let them just tap a button and go immediately with our recommendations. We can coach them on when events are coming to town, how they might want to change their pricing.

And what I think this is going to do is this going to hopefully be generating a huge amount of growth for the company. It's frankly one of these single biggest levers that we have to accelerate the growth of our core business. And you can think about this as us making massive changes to the host side of our app. Most people open our app. They only see the gas side. The host side is just as sophisticated and we're putting just much investment towards it. And pricing and calendar are essentially two sides at the same point because you see your prices on the calendar. Most people don't have a single price. They have different prices for every day.

And the best way to price your home, like a hotel, is to have different prices on different days and to those prices to be dynamically changed. And I think, I mean, I think that it's very possible that, you know, right down hotels have very sophisticated pricing management. They have entire teams of people doing that. I don't think anyone is going to be better than AI doing this. And so I think that our models are going to be very, very powerful. And I hope in the future, hotels can be used. Now, with our experiences, they're growing really quickly, but they're growing on a small base. It's a long term. I think the way to think about experiences is let's talk about time rides.

To drive near-term growth, it's mostly homes because that's massive scale. And so homes is the shortest horizon and the biggest drivers are pricing and project-wide features converge in rate getting more supply. The second horizon, I would describe as international expansion in hotels. And you can see billions of dollars in conventional revenue. It's nearly adjacent. And then the next horizon after that is going to be serviced in experiences. So those are on a multi-year time horizon. They're going to be a bit smaller.

But we are very, very optimistic about this. We're seeing a lot of growth. The way I'm measuring the growth of experiences is I'm not looking at the global growth rate, although it's great. I'm looking at the growth rate of markets like Paris. And then we basically have this idea of one to tend to many. Really try to get product markets in one market. Then take that to 10 markets. Then you take that to many like South markets. In fact, this is how we did with the core business. You focus the core business on New York City. Then we brought to many markets. Uber started in, I think, San Francisco. I think Dorda started in Palo Alto.

We were each started in like, I think, Toronto and Santa Monica. This one to tend to many is a tried-and-true. And we are on the 10 of markets where we're seeing growth of quite high growth. And experience will grow very quick when we take that and industrialize it to thousands of markets. And that's not this year. Sure.

Thanks. It won't affect us that much. I mean, we may have, let's back up for a second. So, you know, Chesapeake launched three and a half years ago, I think, almost four years ago, it's almost four years ago. Yeah, we are coming on the year four-year anniversary in three months of Chesapeake T. And in the nearly four years, almost all the actual business that's been generated is on the enterprise. I think I've mentioned this in the past, but I'm involved in what commented on the board. And the last batch I saw was a hundred and seventy-five companies, a hundred and fifty-nine enterprise. I think part of the reason why is a lot of companies have a nap tank or a doubt how to make money on the consumer side.

Why is this? Because the inference cost is not cheap, and there's huge capital expenditures. Well, the great thing about Airbnb is two points. Number one, we do not need to make any major capital investments. We are not buying up a whole bunch of GPUs.

Second, the inference cost of Airbnb are kind of de minimis relative to the ROI of our business model, right? We're not like in the business of information where we're trying to monetize. Our transactions are very high dollar transactions. And if AI can just increase our conversion rate just a little bit, the inference cost is so outweighed by the amount of money we make on that increased ROI. So I think that what you're seeing is the cost of token, developed products, and the inference costs run the models, is sales in comparison to the incremental revenue we generate and the incremental output or throughput we're seeing. So I'm sure we could always be a little more efficient, but I think we're really, really disciplined.

We're not like so-called token maxing, which I think is like this thing where I think all these CEOs in the year kind of like have this mandate. I want to see everyone use AI with kind of a vanity of kind of have people use as many tokens as possible. Luckily, I have a great technology leader in Ahmed, and we've been really, really rigorous and thoughtful about it's not about how many tokens do you use, it's about throughput of your product and the quality of your product designs and how much you're shipping.

And so I don't know if you want to add anything, but I think it's very efficient.

I would just add tactically, in the updated guidance that we've provided, it obviously does assume a material increase in terms of the AI spend over the course of the year. So I would note that yes, we are expanding margins while absorbing that increased cost. On the flip side, the early offsets that we're already realizing, one is obviously the improvement in our customer service costs. We can call that out in the letter, you know, the customer service cost per booking is down about 16% year over year, in large part due to the AI agent.

Second, what we're seeing is that we don't need to grow our headcount at levels that we did in the past because we're getting so much more, you know, output and speed from our existing workforce, which obviously also creates efficiencies over time.

Thanks. Yeah, so on the acceleration of first time bookers, you know, similar to the broader narrative, it is not one single thing that is causing that acceleration. It's the compounding impact of the whole product roadmap. A couple specifics I would note. So first, obviously, we're seeing outside growth and for time bookers in our expansion markets. You know, we called out a few in the letter. We're seeing really strong growth in places like India and Brazil where we're introducing large growing numbers of new years is every year.

Second, what is also supporting that number is the core market. Obviously, the growth in recent years of a first time booker in our core markets has been slower, given the level of penetration we have across those markets. And yet in recent quarters, we've also seen an acceleration of first time worker growth in effectively almost all of our core markets, inclusive of the US. When you think about some of the specific product features that have helped, you know, one is absolutely reserved now pay later. We see that that is a really attractive payment option in particular for people who have even aware of Airbnb, they're on the site, but they haven't booked with us yet. And it gives them, frankly, a lot more confidence to book that future stay when they don't need to put down, you know, a sizable credit card fee up front.

So I called out as one and then more broadly, a lot of our work just simply on signup, login, merchandising, search, all of these are additive in terms of, again, getting that first time user over the hump of trying to figure out what listing is right for them and having the confidence to go ahead and book.

Yeah, I mean, like there's probably like, you know, I think we're highly like 12 or 15 things. And those 12 or 15 things are 12 or 15 out of hundreds of things, but of course, and I won't list all 12 or 15 right now, but let me give you a couple of examples. So on the gas side, we redesigned the home page. The home page is now much more personalized, so you see things that are going to be relevant to you and we're seeing more people engage the home page, the book right off the home page. Our search results are much more intelligent, much more personalized to you. Our maps, if you go to search results maps or especially maps on each listing, we now show nearby restaurants, landmarks, transportation, so the maps have really come alive.

This thing's like a small one, but we've completely redesigned log in and signed up. We were having, we have so much traffic, we were having as many as like a few hundred thousand people failing to log in every day. This is like, you know, whether they forgot their email or just or just just the friction. Small optimizations are mapped up to redesign or sign up or log in on iOS and red web that increased a lot of conversion. We've added a lot of flexibility and log in just other ways to log in on payment. I mean, in check out, of course, there is reserve now pay later. We've added to more countries, more listings. We made it more visible on the booking flow, but we've also had more possible cancellation policies.

Our check out is completely updated. We've added interest for installments, and those are just a few of the gas side features. And then, of course, on the host side, you know, the single service fee has meant up prices have become more competitive, because a whole bunch of API hosts were accidentally mispricing because they were pricing on pair of other platforms, and our guest fee was going on top of that. So, that's been really big. You've had, you know, major improvements to insight, dashboard. Now, I'm kind of giving you a laundry list, so you get the idea. But again, there is no one thing.

I would recommend you go to our shareholder letter. We have, I think, 12 to 15 things. We also have three graphics that show some of the features step-by-step. And so, those will just give you a bit of defense. Maybe the only other thing I just want to say is we're getting momentum. In other words, a question might be, well, what's next? And the answer is there's a huge pipeline of things on the horizon. I had this theory a few years ago that there'd be like, you know, you'd get all the little hanging fruit, and each new thing would be harder and harder. Actually, it's just the opposite. Project Why taught us that, you know, you get momentum, that the team, you know, find bigger and bigger opportunities.

And so, we're kind of layering on all these different features, all these different improvements. I think what you're going to have seeing is this is not a one-time boosting growth. This is durable growth.

So, it's a little bit about the pricing strategy. You know, I would say just at a high level, our pricing strategy is to provide host the tools to make them as price competitive as possible. We want to make sure that we are consistently delivering value for money to our guests and maximizing earnings for our host. In many cases, that means we encourage our host to bring their prices down. And in some cases, it means, you know, we want to make sure that they're not leaving money on the table. I think, you know, one of the probably, you know, diseminent points over the last couple of years is that we have been aggressively pushing pricing tips and affordability across the platform, and you've seen yet the nominal ADRs rise over that period.

One thing we called out explicitly this quarter is the growth in underlying bedroom nights. One of the factors that has been driving ADR up in recent years has been the continued disproportionate popularity of larger homes. We know people come to Airbnb specifically because we are great for families, for large groups, and that obviously involves larger homes with multiple bedrooms. What we've seen is that the growth in what we call bedroom nights has one been at a higher level and also accelerated more in a year of year basis than our nights booked, which keeps you a sense of number one, what is differentiated in popular on our platform, but also that component of ADR appreciation that is durable and really a reflection of incremental value delivered, not just rising prices, which is important to note in terms of thinking about the long-term pricing strategy.

I mean, car rentals is going to be the biggest one by far just because of how big the asset is, and I think the thing that we're surprised by in a good way is that the length of the reservation is long. In fact, it's longer than the average length every stay. We thought the average length of a car rental would be shorter than Airbnb stay if actually longer. There's a variety of reasons why it might be they want the car for longer than Airbnb stay, they might be staying somewhere else after they check out. But that was the big variable in the underestimate how long the reservations would be. And we're going to now expand this globally.

I think that's going to be really huge. But at the same time, I make luggage storage. What a sleeper hit. I went on stage. And this keynote, one, I talked about all these DIY features and the biggest chair I got was luggage storage. And I finally felt cool on the internet because I was on Instagram and people are like cheering for luggage storage. So that's not the sexiest service, I would say. But I will say that like what we've learned is that every service in and of itself has value. That's how I'm going to drive a lot more revenue like our rentals and luggage storage. But what all these services have in common is they make you more likely to want to book a home on Airbnb or a hotel on Airbnb.

And so we have a pipeline of dozens of more services. Some are going to be really big like groceries where we're going to be doing international expansion, food delivery. And these are going to be partnerships. We're not building a food delivery service, but it's going to be really integrated well into the app. A lot of people don't know what food delivery or ride sharing or grocery service to use when they get to a country. It's not the same app everywhere. It's integrated. They have the address. We offer an offer deals and discounts. So they make the product really, really compelling. We're going to expand a lot more services. But we do not think that they'll incur a lot of costs because most of the big ones we're talking about are partnerships.

Partnerships mean the cost is incurred by the company. So filling the service not up. So we're essentially in a lead generation for them. And so we do not see a big incurring of cost on the hosted services. We might call first-party service whether or host. We're kind of going not category by category, but by city by city. So like, for example, like in Tulum, a lot of people go there and they want to relax. So you know, surprise sausages are really, really popular in Tulum.

And parents are not as popular. People aren't looking to relax and care. They're looking at their photos. So therefore, photography is very popular. So we're going to be looking at both hosted services, first-party services and partner services. A lot of the momentum will be partner services. We're going to be able to launch a lot of them. And we do not think they'll be much cost because they're partners.

Thanks. Can you elaborate on the question?

What do you mean by B2B? Yeah. Yeah, exactly. And something more specifically for enterprise businesses.

Blackberry is a very enterprise-first company. Apple was a very consumer-first company. And I think ultimately, consumer wins. And the consumers kind of point the enterprises. So I think the enterprise is going to be really important for us. You know, B2B strategy is kind of emerging. But we think that the best strategy, and it's the one that Apple pursued, was to get the consumers to vote. And then they tell the employer if they want to use your service and you make it really easy for them.

One thing I will say, I don't like your assets question, but I don't really see us being in the white label business. I think that Airbnb brand is so strong, it's so powerful that the last thing we want to do is strip that brand away. So I don't know either those answer your question at all.

Hopefully they do.

All right. Well, thank you all for joining today. And I just wanted to say, you know, we're really, really excited about the results as quarter. We delivered one of the strongest quarters in years. We see our outlook and we're raising our full-year guidance. But what it's nice to be most isn't the quarter. It's we're seeing broad-based momentum across Airbnb. Growth is accelerating for markets where people are looking at me for the first time and we're living faster than we've ever had before. And these results are not isolated. I think there are evidence that the change we made over the last couple years are working. And that's what gives us confidence that this momentum is here today.

I'm incredibly proud of our team that's working incredibly hard to deliver the results that we've talked about today. And I want to thank you all for being investors and partners on the journey. We'll see you next quarter.