Earnings Call Insights: Airbnb (ABNB) Q4 2025
Management View
- CEO Brian Chesky reported “strong results across the board” for Q4, highlighting 12% year-over-year revenue growth to $2.8 billion and a 16% increase in gross booking value to $20.4 billion. Chesky stated, “This was our highest growth quarter in more than 2 years. Nights and seats booked grew 10%, our strongest quarter of the year.” He attributed the acceleration to a deliberate strategy, including foundational technology rebuilds and the launch of Project Hawaii, a focused innovation initiative aimed at making it easier to find and book a home on Airbnb. Project Hawaii drove “hundreds of millions of dollars in revenue in 2025 alone” and is expected to deliver similar results in 2026.
- Chesky described new pricing initiatives as a key growth driver: “Reserve Now, Pay Later” launched in the U.S., letting guests book eligible stays with $0 upfront, “driving booking acceleration in Q4, especially for larger high-priced homes.” He said, “We believe that pricing initiatives will drive as much revenue this year as Hawaii and will remain a strong tailwind for years to come.” The company also removed over 0.5 million low-quality listings, while guest favorites grew 30% in 2025.
- International expansion was cited, with Brazil moving into Airbnb’s top five markets and becoming the second largest contributor to first-time bookers in Q4.
- The company announced a deeper push into new businesses: “We launched services experiences globally in May… We’re also starting to test new services like grocery delivery and airport pickup… bringing boutique and independent hotels onto the platform.” Chesky emphasized AI as a central pillar, noting the introduction of a custom AI agent now resolving “1/3 of the support issues without needing a live specialist.”
- Chesky introduced Ahmad Al-Dahle as CTO, calling him “one of the world’s leading AI experts,” to further drive the company’s AI strategy.
- CFO Ellie Mertz stated, “Q4 was a great quarter for Airbnb. Gross booking value grew 16% year-over-year to $20.4 billion, driven by strong growth in both bookings and price.” She highlighted the product roadmap’s positive impact, including Reserve Now, Pay Later, cancellation policy updates, and a move to a simplified fee structure. Mertz said, “Revenue was $2.8 billion, up 12% year-over-year and exceeded our guidance, driven by the impact of our product updates.”
Outlook
- Chesky stated, “We expect revenue growth to accelerate to at least low double digits in 2026. We expect adjusted EBITDA margins to be stable year-over-year.”
- Mertz guided for Q1 2026 revenue of $2.59 billion to $2.63 billion, representing year-over-year growth of 14% to 16%, including an approximate 3-point FX tailwind. She added, “We expect gross booking value to increase in the low teens year-over-year, driven by high single-digit growth in nights and seats booked and a moderate increase in ADR due to price appreciation and FX.”
- The company expects the One Big Beautiful Bill Act to “materially reduce our effective tax rate to the mid- to high teens” in 2026.
- Mertz added, “For the full year 2026, we expect year-over-year revenue growth to accelerate to low double digits with an ambition to grow even faster than that.”
Financial Results
- Q4 revenue was $2.8 billion, up 12% year-over-year.
- Adjusted EBITDA was $786 million, representing a 28% margin.
- Net income was $341 million, negatively impacted by approximately $90 million of one-time non-income tax.
- Free cash flow for Q4 was $521 million; for 2025, free cash flow was $4.6 billion (38% margin).
- The company held $11 billion of corporate cash and investments at the end of Q4.
- Share repurchases in Q4 totaled $1.1 billion, up from $857 million in Q3.
Q&A
- Richard Clarke, Bernstein: Asked about AI competition and the risk of sharing economics with AI platforms. Chesky responded that most of Airbnb’s value is in proprietary features, “We will be able to build everything everyone else will have if we use their models.”
- John Colantuoni, Jefferies: Questioned Asia-Pacific growth moderation and the impact of services and experiences. Mertz noted “stable” growth in APAC with strong results in India and domestic Japan, and highlighted that about 50% of experience bookings are from guests not staying in Airbnb homes.
- Lee Horowitz, Deutsche Bank: Asked about Reserve Now, Pay Later cancellations. Mertz said, “The cancellation curves have been very close to what we saw from a tested perspective… the aggregate nominal increase in cancellations rate, it’s approximately 1%.”
- Brian Nowak, Morgan Stanley: Asked about AI’s impact on gross margins. Chesky said, “Our investment in AI will not affect the P&L. I don’t think you’ll see it in the P&L.”
- Lloyd Walmsley, Mizuho: Inquired about hotel strategy and platform expansion. Chesky explained, “We’re opening the aperture and accommodations… AI allows us to personalize.”
- Justin Post, BofA Securities: Asked about improvements in repeat rates and customer service. Chesky stated, “Customer service is better than ever. We track NPS, and it’s the strongest it’s been since the pandemic by far, and it’s accelerating.”
Sentiment Analysis
- Analysts frequently pressed on AI risks, the scalability of new initiatives, pricing dynamics, and the hotel strategy, signaling a tone of cautious curiosity and some skepticism.
- Management maintained a confident and optimistic tone throughout, repeatedly emphasizing innovation and strategic focus. Chesky stated, “We believe we’re building something that’s impossible to replicate.”
- Compared to the previous quarter, management’s tone was more assertive regarding acceleration and the impact of new initiatives, while analysts maintained a similar level of curiosity and scrutiny.
Quarter-over-Quarter Comparison
- Q4 saw a more pronounced focus on the roll-out and impact of pricing innovations (Reserve Now, Pay Later), explicit expansion into hotels and services, and the AI-native vision, compared to Q3’s broader focus on product improvements and initial pilots.
- Guidance was more specific, with Chesky projecting at least low double-digit revenue growth for 2026, whereas Q3 guidance deferred specifics to the next call.
- Share repurchases increased, and the effective tax rate outlook improved with the One Big Beautiful Bill Act.
- Analysts focused on the scalability and financial implications of recent initiatives, while management showed increased confidence in the scalability of innovation and margin stability.
Risks and Concerns
- Management acknowledged that “we can’t predict every quarter with precision. Travel is influenced by everything from currency to macroeconomic conditions to global events.”
- Chesky highlighted AI as a strategic defense against disintermediation but noted the unpredictability of AI evolution.
- Analysts questioned the risks associated with AI platform integration, expansion into hotels, and the impact of cancellation policies.
- Mertz addressed potential impacts of Reserve Now, Pay Later cancellations, describing the increase as modest and under control.
Final Takeaway
Airbnb closed 2025 with strong momentum, driven by deliberate innovation in pricing, AI, and platform expansion, including new services and hotels. Management emphasized a stable margin outlook, robust free cash flow, and a strategic focus on scaling successful pilots globally. With guidance pointing to at least low double-digit revenue growth in 2026 and ongoing investment in technology, the company is positioning itself for accelerated growth while continuing to return capital to shareholders.