Airbnb (ABNB) - Q3 2025 Earnings Call
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Call Details
Call Title: Airbnb Q3 2025 Earnings Call
Date Held: November 6, 2025
Management Team Members Present:
Brian Chesky - Co-Founder & Chief Executive Officer
Ellie Mertz - Chief Financial Officer
Angela Yang - Director of Investor Relations
Call Summary
Financial Performance
Airbnb reported a 10% year-over-year increase in revenue for Q3, totaling $4.1 billion, outperforming guidance. Brian Chesky noted, “Our revenue increased 10% year-over-year, landing at the high end of our guidance.”
The adjusted EBITDA was over $2 billion, marking a record high for any quarter in Airbnb’s history, which corresponds to a 50% EBITDA margin.
Gross Booking Value (GBV) also showed a robust increase of 14% year-over-year, amounting to $22.9 billion. Ellie Mertz commented that “nights and seats booked increased 9% year-over-year, representing a two-point sequential acceleration from Q2.”
The company saw varied growth across regions, with the U.S. market exhibiting notable strength, partly due to the recently launched Reserve Now, Pay Later option.
Airbnb’s net income for this quarter was reported at $1.4 billion or $2.21 EPS, affected by a $213 million valuation allowance due to corporate alternative minimum tax credits.
On free cash flow, the company generated approximately $1.3 billion in Q3, with a 38% free cash flow margin, estating to a total of $4.5 billion over the last 12 months.
As of the end of Q3, Airbnb had $11.7 billion in corporate cash and investments, allowing for aggressive capital return strategies including $857 million in share repurchase, which highlights the company’s commitment to shareholder value.
Guidance
Looking forward to Q4 2025, Airbnb expects revenue between $2.66 billion and $2.72 billion, indicating a 7% to 10% year-over-year growth. Ellie Mertz stated, “The strength in bookings supports our positive outlook for the rest of the year.”
Growth in nights and seats booked is anticipated to remain in the mid-single-digit range, with expectations for a sequential acceleration from Q3 to Q4 over the next year.
The company is also guiding for an adjusted EBITDA margin at approximately 35% for the full year, adjusted up from a previous estimate of 34.5%.
Capital Allocation
Airbnb has committed to returning capital to shareholders, as emphasized by Ellie Mertz: “Returning capital to shareholders is a key component of our capital allocation strategy.”
The company has repurchased over $3.5 billion of its common stock in the past 12 months, effectively reducing the fully diluted share count by 8% since the inception of its share repurchase program.
Airbnb still retains a $6.6 billion buyback authorization, indicating ongoing stock repurchase plans.
Macro & Demand Trends
The global travel landscape sees increasing demand, particularly influenced by shifts in consumer behavior towards distinct travel offerings. Brian Chesky highlighted core growth areas and increasing first-time bookings as indicative of market strength: “For example, first-time bookers were up over 20% in Japan and nearly 50% in India on a year-over-year basis.”
International expansion efforts have gained momentum, particularly with books in newer markets growing at double the rate of core markets over the past year.
Recent improvements in guest payment options, such as Reserve Now, Pay Later, are noted to have substantially contributed to the uptick in bookings in the U.S.
AI Trends
Airbnb is doubling down on integrating AI across its platform, with more than a dozen AI work streams underway, aiming to create a smarter and personalized experience for users. Brian remarked, “Not only are we integrating AI to deepen screen engagement, but we aim to connect people in the real world.”
Notable AI updates include a smarter customer support system, significantly improving response speed and user interaction. This system was described as “smart enough to include answers to reservation and listing queries.”
Future enhancements involve AI-powered search capabilities, expected to enable conversational interactions with the app, ultimately personalizing the user experience even further.
Product Updates
Airbnb has introduced over 65 major improvements to its platform since May 2025, aimed at enhancing user experience and simplifying transactions. These improvements include expanded payment flexibility and updated cancellation policies.
The company has now initiated a hotel pilot program in key urban markets such as New York City, Los Angeles, and Madrid, with Brian stating, “We believe hotels will be a huge supplement for our supply, especially in supply constrained markets.”
Enhancements to the Airbnb map feature, providing contextual data, are expected to increase app engagement and conversion rates.
NOTABLE QUOTES
“Our revenue increased 10% year-over-year, landing at the high end of our guidance.” - Brian Chesky
“We generated $2.1 billion of adjusted EBITDA representing a 50% EBITDA margin.” - Ellie Mertz
“We’ve actually been testing it quite extensively before launching it in the U.S.” - Ellie Mertz discussing the Reserve Now, Pay Later feature.
“We’re bringing people back to Airbnb, even if they aren’t intending to book a home.” - Brian Chesky on experiences.
“If you think about the size of our market, for every person who stays in a home, about nine people stay in a hotel.” - Brian Chesky
“We believe returning capital to shareholders is a key component of our capital allocation strategy.” - Ellie Mertz
“We think this is really the beginning of a much bigger AI strategy.” - Brian Chesky
“We’re making the experience we provide our guests better and better.” - Ellie Mertz
“Our goal is to fill the gaps where hotels make more sense for guests.” - Brian Chesky
“A bet on Airbnb is a bet on AI.” - Brian Chesky
Q&A SUMMARY
Q: Richard Clark (Bernstein), [summarized question about the contribution of Reserve Now, Pay Later in U.S. bookings and cancellation rates].
A: Ellie Mertz stated that Reserve Now, Pay Later was launched at the beginning of Q3 and is “vastly popular” among U.S. consumers, with approximately 70% uptake. Though there are increased cancellations, Mertz believes the net effect is positive for overall bookings.
Q: Eric Sheridan (Goldman Sachs), [summarized inquiry about international market execution and investment].
A: Ellie Mertz answered that they have been focused on global market expansion for a few years, achieving meaningful growth in areas like Brazil and Japan. Each expansion takes a different timeframe due to localization efforts.
Q: Justin Post (Bank of America), [summarized request for updates on events and experiences].
A: Brian Chesky expressed excitement about the rapid growth of experiences since relaunching in May, noting that a significant portion of those who booked experiences did not initially intend to book accommodations.
Q: Jed Kelly (Oppenheimer), [summarized question on hotel expansion and market constraints].
A: Brian Chesky discussed the potential of hotels on Airbnb, particularly in urban markets where regulation limits home listings, stating that hotel listings can fill supply gaps without cannibalizing existing home bookings.
Q: Kevin Koppelman (TD Cowan), [summarized inquiry about new billion-dollar opportunities in the pipeline].
A: Brian Chesky outlined their intentions to launch service experiences and hotels as future billion-dollar ventures, alluding to a focus on sustainable growth rather than global rollouts immediately.
Q: Ron Josie (Citi), [summarized request for a deeper understanding of AI-powered search].
A: Brian Chesky detailed their AI strategy that begins with enhancing customer service before moving to AI search capabilities, ultimately aiming for integrated AI experiences throughout the Airbnb app.
Q: Trevor Young (Barclays), [summarized question on remaining guest and host pain points].
A: Brian Chesky responded that payment options and quality control are priorities, expressing the continual push for product improvements across the platform.
Q: Doug Anmus (JP Morgan), [summarized question on ChatGPT app integration].
A: Brian Chesky replied that the timing for integration wasn’t right and emphasized the importance of ensuring the uniqueness of Airbnb while exploring external integrations.
Q: Ken Gorelsky (Wells Fargo), [summarized follow-up on re-acceleration potential].
A: Brian Chesky conveyed confidence in the re-acceleration of the Airbnb business, citing opportunities for quality improvements and pricing adjustments that could capture a larger share of the travel market.
Q: Colin Sebastian (Baird), [summarized question about loyalty programs and advertising].
A: Brian Chesky noted that while services such as hotels are critical to growth, developing a unique loyalty program tailored to the Airbnb community remains a top priority. Advertising initiatives will be tailored to AI search paradigms.
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