Airbnb, Inc. (ABNB) Earnings

Management highlights

### Overall Business Momentum - Q2 2026 delivered the strongest business momentum in years, with results exceeding management outlook across every key metric: revenue grew 17% year-over-year to $3.6 billion, gross booking value (GBV) grew 16% year-over-year to $27.2 billion, and nights and seats booked grew 10% year-over-year, accelerating from Q1 2026. - First-time booker growth accelerated to 11% year-over-year, the highest rate in four years, with the Gen Z cohort growing fastest. Expansion markets are growing net night bookings approximately twice as fast as core markets, while growth also accelerated in major core markets including the U.S., France, U.K., and Australia. - App-native nights booked grew 23% year-over-year and now account for 64% of total nights booked, up from 59% in the prior year. ### AI Transformation - Airbnb has rebuilt its platform to be an AI-native company, which has dramatically accelerated product development: concept-to-launch time for key initiatives has been reduced by up to 60%, and the number of features shipped in the first half of 2026 increased by nearly 80% compared to the first half of 2025. - AI-powered guest experience improvements include AI-generated listing and review highlights, improved search and discovery, simplified sign-up/login, streamlined checkout, and expanded reserve now, pay later options. Upcoming launches include AI-powered side-by-side home comparisons and AI voice support for customer support. - AI tools for hosts include dynamic pricing recommendations, actionable performance insights, and faster onboarding for new hosts. AI-powered customer support is now available in 50+ languages, resolving 45% of customer issues without human intervention; Q2 customer support costs per booking declined 16% year-over-year due to AI improvements. - AI search began small-scale traffic testing in Q3 2026, with gradual expansion planned through the end of the year; the new AI-powered end-to-end user journey includes natural language search, conversational results, personalized AI-generated content, and in-page AI question answering, which management expects will drive meaningful conversion rate improvements. ### Product Expansion - The single service fee pricing structure migration is underway, with approximately half of active listings already migrated; full migration of all remaining hosts is expected to be completed by the end of 2026, improving price transparency and competitiveness. - Reserve now, pay later accounted for over 20% of total Q2 GBV, driving higher booking volumes, longer lead times, and higher ADR; the feature was expanded to more eligible booking types in July 2026. - The hotel expansion initiative is outperforming expectations, with strong inbound interest from hotels to list on Airbnb due to Airbnb's large global traffic, young user base, and favorable take rates. Hotels are accretive to the core homes business: 35% of first-time guests who book a hotel on Airbnb return to book a home later, increasing overall platform conversion. - New ancillary travel services launched in Q2 2026, with development timelines shrinking dramatically due to AI: grocery delivery took 8-9 months to develop, while airport pickups took only 6 weeks. Most new services are delivered via third-party partnerships, limiting cost investment. - Major event marketing strategy continues to drive long-term growth: as an official partner of the 2026 World Cup, Airbnb gained over 150,000 new host listings across host cities, and the playbook is being expanded to other major events including the Olympics, Tour de France, Art Basel, and NASCAR. ### Financial Performance - GAAP net income was $816 million, including a $77 million tax benefit from new guidance impacting prior year taxes. Adjusted EBITDA was $1.3 billion, representing a 35% adjusted EBITDA margin, an expansion of over 100 basis points year-over-year. - Q2 2026 free cash flow was $1.3 billion, with trailing 12-month free cash flow of $4.8 billion and a trailing 12-month free cash flow margin of 37%. Airbnb repurchased $1.1 billion of common stock in Q2, returning capital to shareholders as a core capital allocation priority.

Guidance

- For Q3 2026, management expects revenue of $4.69 billion to $4.77 billion, representing 15% to 17% year-over-year growth, including a ~3 percentage point exchange rate tailwind after hedging. GBV is expected to grow in the mid-teens year-over-year, driven by low double-digit nights and seats booked growth and moderate ADR growth. Adjusted EBITDA is expected to increase year-over-year, with adjusted EBITDA margin down slightly compared to Q3 2025 due to timing of 2026 investments. - For full-year 2026, management has raised guidance: revenue growth is now expected to be at least mid-teens year-over-year, up from prior guidance of low to mid-teens. Adjusted EBITDA margin is now expected to be at least 35.5%, up from prior guidance of 35%. - Full-year 2026 implied take rate is expected to be relatively flat compared to 2025, impacted by payment timing from reserve now, pay later and higher customer incentives for new business segments; excluding these factors, take rate would be slightly higher driven by monetization initiatives and product execution. - Management does not assume any material impact from the Middle East conflict on Q3 2026 results, after seeing smaller than expected impact in Q2 2026.

Segment performance

Airbnb reports the following segment performance for Q2 2026: 1. Core Accommodations (Homes): This is Airbnb's largest segment, representing 90%+ of total nights booked. Nights and seats booked grew 10% year-over-year overall, with high single-digit growth in North America and Europe, ~20% growth in Latin America, and high teens growth in Asia Pacific. 2. Hotels: Hotels represent a single-digit percentage of total nights booked, but hotel nights are growing approximately 3 times faster than the homes business. The segment currently contributes less than 10% of total revenue and nights booked, with rapid expansion ongoing across top global markets. 3. Experiences: Experiences remain a small portion of the overall business. In Q2 2026, supply of experiences increased nearly 80% year-over-year, and bookings accelerated both year-over-year and sequentially from Q1 2026. Growth is being scaled gradually using a one-to-ten-to-many market expansion approach, with no meaningful near-term contribution to total revenue expected. 4. New Ancillary Services: The newly launched segment including grocery delivery, car rentals, airport pickups, luggage storage, and resort passes is in early stages, but has shown strong early booking momentum. Car rentals have outperformed expectations with longer average reservation lengths than initially forecast, while luggage storage has emerged as a high-demand sleeper hit. All new services are primarily delivered via third-party partnerships, limiting Airbnb's upfront cost exposure.

Risks & headwinds

- Forward-looking statements are inherently subject to risks and uncertainties, and actual results may differ materially from projections due to factors outlined in Airbnb's SEC filings. - Management identifies AI as an existential strategic risk to the business if Airbnb failed to keep pace with AI innovation, but notes the company has now emerged as an AI leader among non-hyperscaler tech firms, turning the risk into a competitive advantage. - Regulatory and policy risk remains a ongoing risk that Airbnb will continue to manage, but management does not view it as an existential risk to the business.

Analyst Q&A

• Q: How is the hotel expansion initiative performing, and is it improving conversion in both supply-constrained and non-constrained markets? /

  A: The hotel initiative is performing significantly better than management expected. There is strong inbound interest from hotels to list on Airbnb, driven by Airbnb's large global traffic, young audience, and favorable take rates. Hotels are performing well in both supply-constrained and non-constrained markets, and add more supply that increases overall platform conversion. 35% of first-time hotel bookers return to book a home on Airbnb, so hotels strengthen the core homes business rather than cannibalizing it.

• Q: What is the long-term ambition for new ancillary products, and will Airbnb become a full-service one-stop travel OTA? Will the car rental partner acquisition change your M&A strategy? /

  A: Airbnb is in a multi-phase expansion: the first phase was attaching ancillary products to guests booking homes, the current second phase is becoming a one-stop shop for all travel needs, and longer term the business may expand beyond travel. AI capabilities enable this faster expansion into new categories. The car rental partner acquisition by Expedia will not impact the partnership, and M&A remains opportunistic, with a continued bias toward organic growth.

• Q: What is the current status of AI search rollout, and when will it become a major product feature? /

  A: Small-scale user testing of AI search began this month, with gradual expansion to more traffic through the end of 2026. Early tests have shown very strong results. The rollout will start with an optional toggle on top of the existing core search to give users time to adjust to the new experience. The full AI-powered journey includes natural language search, conversational results, personalized AI-generated highlights, and in-page question answering, which management expects will drive meaningful higher conversion.

• Q: How will AI native development impact product costs, and what operational adjustments are you making? /

  A: The impact of increased AI spend on overall margins is manageable. Airbnb does not need to make massive unplanned GPU capital investments, and AI inference costs are far outweighed by incremental revenue from higher conversion and operational efficiencies. AI is already driving a 16% year-over-year reduction in customer support costs per booking, and allows more output from existing headcount, reducing the need for headcount growth at historical rates. The updated full-year guidance already includes planned AI cost increases, and Airbnb is still expanding overall margins while absorbing these costs.