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Here's our initial take on Airbnb's (NASDAQ: ABNB) fourth-quarter financial report.
Key Metrics
| Metric | Q4 2023 | Q4 2024 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $2.2 billion | $2.48 billion | +13% | Beat |
| Earnings per share | -$0.55 | $0.73 | n/a | Beat |
| Free cash flow | $46 million | $458 million | +896% | n/a |
| Nights and experiences booked | 98.8 million | 111.0 million | +12% | n/a |
Airbnb Sees Resilient Growth
Airbnb benefited from resilient travel demand in the fourth quarter, fueled by "acceleration in growth" in nights and experiences booked, particularly in Asia and Latin America.
The company grew nights and experiences by 12% for the quarter and 10% for the year, helping Airbnb to exceed expectations in the quarter. Cross-border travel drove the growth in the Asia Pacific region as Airbnb continues to see the benefit of a gradual post-pandemic recovery of outbound travel from China.
In North America, the subject of some concern last summer, Airbnb saw "mid-single digit" nights and experiences growth and higher revenue due to price appreciation and mix shift. Improvements in the mix were in part due to more Americans returning to the workplace: Growth in short-term stays outpaced long-term stays, boosting profitability.
Airbnb generated $458 million in free cash flow, up nearly 900% from a year ago, but that fourth-quarter 2023 number included a one-time tax withholding expense and lodging tax reserve. The 2024 figure was up only slightly from Airbnb's $455 million in free cash flow in the fourth quarter of 2022.
Immediate Market Reaction
Airbnb investors were pleased with the results. The company's stock was up 12% in after-market trading following the earnings release but ahead of the company's post-earnings call with investors.
What to Watch
The theme for 2025 is Airbnb's big push beyond accommodations, with the company saying it plans to invest $200 million to $250 million beginning in May to launch and scale new products like tours, classes, and workshops.
CEO Brian Chesky has said he expects the new businesses to add $1 billion or more in revenue annually in the years to come.
The core business is expected to keep the momentum going. Airbnb forecasted nights and experiences booked growth at a "relatively stable" pace compared to last year, though there could be some turbulence due to currency fluctuations.
Airbnb faces tough comparisons in the first quarter, as Easter was early last year and there was an extra Leap Year day, but excluding calendar factors and foreign exchange headwinds, Airbnb expects revenue growth of between 10% and 12% in the current quarter.