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    ABNB
    Earnings call· Jun 2025(Q2 FY25)

    Airbnb Q2 FY25 earnings call ABNB

    Aug 6, 2025 Source

    Executive summary

    Airbnb Q2 FY25 — Strong Bookings and Margin Growth, New Services and Experiences Gaining Traction

    Airbnb delivered a strong second quarter, exceeding expectations in bookings, revenue, and profitability, driven by accelerating travel demand and strategic execution. The company is focused on perfecting its core service, expanding in global markets, and scaling new offerings like services and experiences, which are showing promising early traction. While anticipating tougher year-over-year growth comparisons in the latter half of the year due to prior-year acceleration and increased investments, management remains confident in its multi-year strategy to reaccelerate growth and create long-term value.

    Highlights

    5

    • Nights and seats booked grew 7% year-over-year, with acceleration from April to July.

    • Revenue for Q2 was $3.1 billion, up 13% year-over-year.

    • Adjusted EBITDA reached $1 billion, representing a 34% margin, up from 32.5% last year.

    • Generated $1 billion of free cash flow in Q2, with TTM FCF margin of 37%.

    • New services and experiences received an average guest rating of 4.93 out of 5 stars, outperforming homes (4.8 average), and attracted over 60,000 host applications.

    Concerns

    4

    • Year-over-year comparisons for nights booked are expected to get tougher towards the end of Q3 and into Q4, putting pressure on growth rates.

    • Adjusted EBITDA margin in Q3 and Q4 is expected to be lower year-over-year due to investments in new growth and policy initiatives.

    • The $200 million investment towards new businesses in 2025 is not expected to generate meaningful revenue in the near term.

    • U.S. nights booked growth is in the low single digits, despite being a large market with significant growth potential.

    Guidance & targets

    9
    CategoryTargetConfidence
    Q3 Revenue
    $4.02 billion to $4.1 billion
    high materiality
    High
    Q3 Revenue Growth YoY
    8% to 10%
    high materiality
    High
    Q3 Nights and Seats Booked Growth
    similar rate to Q2 2025
    high materiality
    Medium
    Q3 ADR Growth YoY
    increase modestly year-over-year
    medium materiality
    Medium
    Q3 Adjusted EBITDA
    exceed $2 billion
    high materiality
    High
    Q3 Adjusted EBITDA Margin YoY
    lower than in Q3 2024
    high materiality
    High
    Q4 Adjusted EBITDA Margin YoY
    similar year-over-year decline
    high materiality
    Medium
    Full-Year FY25 Adjusted EBITDA Margin
    at least 34.5%
    high materiality
    High
    Full-Year FY25 Investment in New Businesses
    approximately $200 million
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Latin America
    Grew in the high teens. Has taken about 200 basis points of business share within Airbnb from North America, contributing more meaningfully to growth.
    Nights and seats booked growth: high teens
    		—high teens——
    Asia Pacific
    Grew in the mid-teens.
    Nights and seats booked growth: mid-teens
    		—mid-teens——
    EMEA
    Grew in the middle single digits.
    Nights and seats booked growth: middle single digits
    		—middle single digits——
    North America
    Grew in the low single digits. Has seen business share shift to Latin America.
    Nights and seats booked growth: low single digits
    		—low single digits——

    Operational metrics

    27
    Nights and Seats Booked
    134 millionup 7% year-over-year
    Q2 FY25

    New metric including nights booked for stays and seats booked for services and experiences. Seats booked are currently immaterial.

    Revenue Growth YoY
    13%year-over-year
    Q2 FY25
    Adjusted EBITDA
    $1 billion
    Q2 FY25
    Adjusted EBITDA Margin
    34%up from 32.5% last year
    Q2 FY25
    Net Income Growth YoY
    16%year-over-year
    Q2 FY25
    EPS Growth YoY
    20%year-over-year
    Q2 FY25
    Free Cash Flow Margin
    37%
    TTM
    Cash & investments balance
    $11.4 billion
    Q2 FY25

    As of end of Q2.

    Funds Held on Behalf of Guests
    $11.1 billion
    Q2 FY25

    As of end of Q2.

    Share buyback
    $1 billion
    Q2 FY25

    Repurchased common stock during the quarter.

    Share buyback authorization remaining
    $1.5 billion
    Q2 FY25

    Remaining on existing repurchase authorization.

    New share buyback authorization
    $6 billionadditional
    announced Q2 FY25

    Authorization to purchase up to an additional $6 billion of Class A common stock.

    Fully Diluted Share Count Reduction
    8%
    since 2022

    Since introducing share repurchase program in 2022.

    Human Agent Contact Reduction (AI)
    15%
    Q2 FY25

    Reduced the percentage of hosting guests who need to contact a human agent.

    First-Time Bookers Growth
    15%year-over-year
    Q2 FY25

    Driven by more domestic travel after a brand campaign.

    Press Stories Generated
    13,000+
    Q2 FY25

    Generated by the 2025 summer release (Airbnb Services and Experiences).

    Social Media Impressions
    660 million
    Q2 FY25

    Generated by the 2025 summer release (Airbnb Services and Experiences).

    Average Guest Rating
    4.93outperforms 4.8 average for homes
    since launch

    Out of 5 stars.

    Applications to Host Services/Experiences
    60,000+
    since launch
    Airbnb Originals Bookings from Locals
    40%
    Q2 FY25

    Bookings from locals or people in the local area where the booking occurs.

    Co-host Managed Listings
    100,000
    current

    Listings managed by co-hosts.

    Nights Hosted by Co-hosts
    10 million
    cumulative
    Verified Identities
    200 million+
    current

    More than almost any other platform of any kind on the Internet.

    Booking Lead Times
    down about 7%year-over-year
    April

    Heavily compressed in April, normalized by end of Q2, and lengthened heading into Q3.

    Services Bookings from Locals
    10%
    Q2 FY25

    Bookings from locals or people nearby in their own city.

    Homes Supply Increase
    more than 50%
    prior to Olympics

    Increase in homes on Airbnb in Paris due to hosting for the Olympics.

    Traffic from Direct and Unpaid Sources
    90%
    current

    Majority of bookings come from repeat bookers.

    Product announcements

    3
    ProductTypeDetails
    Airbnb Serviceslaunch
    Airbnb Experienceslaunch
    Airbnb Applaunch

    Deals & partnerships

    4
    Tour de France3-year partnership3 years

    Helps accelerate growth in key markets, build brand awareness, and grow supply. Many hotels are not along the route, but homes are.

    LollapaloozaGlobal live music partnership

    Helps build brand awareness and grow supply in key markets.

    International Olympic Committee (IOC)Continued partnership for upcoming Winter Olympics

    Helps build brand awareness and grow supply in key markets. Partnering with Italian policymakers, providing housing in Milan and Cortina.

    FIFA3-year partnership for the World Cup3 years

    Largest event in the world. Working with cities across the U.S., Canada, and Mexico to provide housing and open relations with regulators.

    Risks & headwinds

    4
    Tougher year-over-year comparisons for nights bookedQ3 and Q4 FY25

    expected to get tougher towards the end of Q3 and into Q4

    Mitigation: Focus on reaccelerating growth through strategic priorities (core, global markets, new products).

    Year-over-year decline in Adjusted EBITDA marginQ3 and Q4 FY25

    lower than in Q3 2024 (Q3), similar year-over-year decline (Q4)

    Mitigation: Primarily due to investments in new growth and policy initiatives, with a multi-year view on returns.

    New businesses (services and experiences) not expected to generate meaningful revenue in the near termnear term

    $200 million investment in 2025

    Mitigation: Building with a multi-year view, believing the opportunity is significant.

    Low single-digit growth in U.S. nights bookedQ2 FY25

    low single digits

    Mitigation: Focus on improving pricing affordability, targeting underpenetrated demographics, increasing supply in constrained markets, and onboarding hotels.

    What to watch in Q3 FY25

    5

    Nights and Seats Booked Growth

    Q3 FY25
    Current7% YoY (Q2 FY25)
    TargetSimilar rate to Q2 FY25 (expected for Q3 FY25)

    Why it matters

    This is a key top-line metric, and management expects tougher YoY comparisons towards the end of Q3 and into Q4, potentially leading to deceleration.

    We expect nights and seats booked to grow at a similar rate to Q2 2025 and for ADR to increase modestly year-over-year, primarily driven by FX.

    Q&A highlights

    6

    What are the success metrics for Experiences, particularly attach rate, and how long to achieve them?

    Brian Chesky highlighted strong awareness and high guest ratings (4.93 stars vs. 4.8 for homes). While no specific attach rate target was given, the company aims for significantly higher rates than the prior iteration by focusing on quality supply (vetting every experience), better integration into the core flow, and increased awareness. They are testing in key cities like Paris to understand potential global attach rates.

    “I'm very, very bullish. I think a large percent of travelers on Airbnb would love to use Airbnb experiences.”

    asked by Mark Stephen Mahaney · answered by Brian Chesky

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities and Q2 Execution

    Airbnb successfully executed on its three strategic priorities in Q2: perfecting the core service through improvements in checkout, messaging, and flexible payments; accelerating growth in global markets with expansion markets growing at twice the rate of core markets for six consecutive quarters; and expanding beyond stays with the launch of Airbnb Services and reimagined Experiences. These efforts contributed to exceeding expectations across key metrics.

    02

    Global Market Expansion Success

    The company highlighted significant success in expansion markets like Japan, where a brand campaign led to increased domestic travel and a 15% YoY increase in first-time bookers in Q2. Latin America and Asia Pacific showed strong growth in the mid-to-high teens, contributing to a diversification of the global business away from North America. India and other parts of Latin America were also noted for strong performance.

    03

    New Offerings: Services and Experiences

    The 2025 summer release, featuring Airbnb Services and reimagined Experiences, was the biggest launch to date, generating over 13,000 press stories and 660 million social media impressions. Both offerings have received exceptionally positive guest feedback, with an average rating of 4.93 stars, surpassing homes (4.8 stars). Over 60,000 applications have been submitted to host services or experiences, indicating strong supply interest.

    04

    Impact of Major Partnerships

    Airbnb leveraged high-profile partnerships with events like the Tour de France, Lollapalooza, the Winter Olympics in Milan, and the FIFA World Cup to build brand awareness, drive supply growth in key markets, and strengthen relationships with local governments. These events serve as a "low commitment, high urgency" way to attract new hosts, many of whom continue hosting long-term.

    05

    AI Integration and Future Vision

    Airbnb is adopting an AI-first approach, starting with customer service where a custom AI agent has reduced human contact by 15% in the U.S. The company plans to expand this to more languages and make it more agentic, eventually integrating AI into travel search by next year. This transition aims to transform Airbnb into an AI-native application, enhancing travel planning and booking.

    06

    U.S. Market Growth Strategy

    Despite low single-digit growth in the U.S., management sees significant room for expansion, particularly by converting hotel users and targeting underpenetrated demographics like the U.S. Hispanic population and Heartland states. Strategies include improving pricing affordability, increasing supply in constrained markets, and onboarding more hotels, especially independent boutiques, to supplement home listings.

    AI-generated summary of the company’s earnings call. Not investment advice.