Airbnb third quarter 2022 financial results
Today we issued our third quarter 2022 financial results. You can read the details here. Airbnb Co-Founder and CEO Brian Chesky said:
“The third quarter of 2022 demonstrates we continue to drive growth and profitability at scale. Guest demand on Airbnb remains strong, our Host community continues to grow, and this was our most profitable quarter ever.”
Overview of Q3 2022 results
Q3 was our biggest and most profitable quarter ever despite geopolitical and macroeconomic headwinds.
In Q3 2022, we had nearly 100 million Nights and Experiences Booked, up 25 percent year-over-year, and $15.6 billion in Gross Booking Value, up 31 percent year-over-year (or 40% ex-FX). Revenue grew 29 percent year-over-year (or 36% ex-FX) to $2.9 billion—our highest quarter ever.
We also had our most profitable quarter with net income of $1.2 billion, up 46 percent year-over-year, representing a 42 percent net income margin. Free cash flow of $960 million increased more than 80 percent from a year ago. And, over the last twelve months, we generated $3.3 billion in FCF, representing a FCF margin of more than 40 percent.
Our Q3 results demonstrate that Airbnb continues to drive growth and profitability at scale. And regardless of continued macro uncertainties, we believe we’re well positioned for the road ahead. There are a couple of reasons for this.
First, guest demand remains strong. We believe new use cases, including long-term stays and non-urban travel, are here to stay as millions of people have newfound flexibility in where they live and work. At the same time, we’ve also seen recovery of urban and cross-border travel, which comprised the vast majority of our business before the pandemic.
Second, we’re seeing strong growth in the number of new Hosts on Airbnb. Just like during the Great Recession in 2008 when Airbnb started, people are especially interested in earning extra income through hosting. That’s why on November 16, we’re introducing an all-new, super easy way for millions of people to Airbnb their homes as part of our 2022 Winter Release.
Q3 2022 financial results
Here is a snapshot of our Q3 2022 results:
- Q3 revenue of $2.9 billion was our highest quarter ever. Revenue grew 29% year-over-year (or 36% ex-FX) driven by the combination of growth in Nights and Experiences Booked and continued strength in ADR.
- Q3 net income of $1.2 billion was our most profitable quarter ever. Net income improved by $380 million compared to Q3 2021 primarily due to our revenue growth and expense discipline. In Q3 2022, we delivered a net income margin of 42%, up from 37% in Q3 2021, and $1.6 billion of net income in the last twelve months.
- Q3 Adjusted EBITDA of $1.5 billion was a record best. Adjusted EBITDA in Q3 2022 increased 32% compared to $1.1 billion in Q3 2021. Adjusted EBITDA margin was 51% for Q3 2022, up from 49% in Q3 2021. This further improvement in Adjusted EBITDA demonstrates the continued strength of our business and discipline in managing our cost structure1.
- Q3 Free Cash Flow of $960 million was our highest Q3 ever. Q3 2022 net cash provided by operating activities was $966 million, up from $535 million in Q3 2021. The increase in cash flow was driven by revenue growth and net margin expansion. Our TTM FCF was $3.3 billion, representing a TTM FCF margin of 41%1.
Our strong quarter was driven by a number of positive business trends:
- Guest demand on Airbnb remains strong. Even with macroeconomic uncertainties, Nights and Experiences Booked increased 25% in Q3 2022 compared to a year ago. We continued to see longer lead times for bookings in Q3 2022, supporting a strong backlog for Q4. Globally, guest arrivals during the quarter exceeded 90 million—another record.
- Guests are increasingly returning to cities and crossing borders. Even with foreign currency fluctuations, we saw cross-border travel to all regions increase in Q3 2022 from last year. Cross border gross nights booked increased 58%, while high-density urban nights booked grew 27% compared to Q3 2021. While the business mix remains very different from pre-pandemic levels, we’ve seen consistent acceleration in both areas. In Q3 2022, high-density urban nights booked was 48% of total gross nights booked (versus 58% in Q3 2019) and cross-border was 43% (versus 48% in Q3 2019).
- Guests continue to stay longer on Airbnb. Even with more companies requiring employees to return to the office, nights booked from long-term stays remained stable from a year ago at 20% of total gross nights booked. While the majority of long-term stays occurred in EMEA and North America, we also saw long-term stays become substantially more popular in Asia Pacific compared to a year ago.
- Our Host community continues to grow. Our strong supply growth during the quarter was driven by several factors. First, demand drives supply. In Q3 2022, we saw total urban supply accelerate from a year ago as guests return to cities. Second, since our founding in 2008, Hosts have turned to Airbnb as a form of supplemental income, and to date, have earned more than $180 billion. Third, we believe our product improvements—including the new Host onboarding flow, AirCover for Hosts, and Ask a Superhost—are working. But we’ve just scratched the surface in growing our Host community. We’re focused on addressing the obstacles there are to becoming a Host and on November 16, we’re excited to introduce an easier way to host on Airbnb.
1A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided at the end of the letter.
Airbnb was born in 2007 when two Hosts welcomed three guests to their San Francisco home, and has since grown to over 4 million Hosts who have welcomed more than 1 billion guest arrivals across over 220 countries and regions. Travel on Airbnb keeps more of the financial benefits of tourism with the people and places that make it happen. Airbnb has generated billions of dollars in earnings for Hosts, most of whom are individuals listing the homes in which they live. Among Hosts who report their gender, more than half are women, and one in five employed Hosts are either teachers or healthcare workers. Travel on Airbnb also has generated more than $4 billion in tax revenue around the world. Airbnb has helped advance more than 1,000 regulatory frameworks for short-term rentals, including in 80% of our top 200 geographies. In late 2020, to support our continued expansion and diversification, we launched the City Portal to provide governments with a one-stop shop that supports data sharing and compliance with local registration rules. We continue to invest in innovations and tools to support our ongoing work with governments around the world to advance travel that best serves communities.
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.
Airbnb Press Office