“A New World of Travel”?
In Q1 FY22, the global leader in alternative travel accommodations reported the strongest quarter in the company’s history, with Nights & Experiences (N&E) booked through Airbnb crossing 100 million for the first time (+59% YoY); this reflects strength in LatAm, North America, and EMEA, offset by weakness in APAC due to subdued cross-border travel. As shown below, trailing twelve month (TTM) N&E booked were 338 million, an all-time record for Airbnb. Guidance calls for another quarter of more than 100 million N&E booked in Q2, with the TTM figure climbing to ~361 million; at current ADR’s, that’s an annual GBV of >$60 billion, up ~2x from FY18.
On top of 26% growth in N&E booked versus pre-pandemic levels (Q1 FY19), GBV and revenues both grew by >70%. That outcome is largely reflective of a nearly 40% increase in average daily rates (ADR’s), with the cost of an average night climbing from $122 in Q1 FY19 to $168 in Q1 FY22. (As noted in the letter, revenues and EBITDA are “highly sensitive” to ADR’s.)
The company reported mid-teens adjusted EBITDA margins in the first quarter, attributable to a combination of underlying business strength and the heighted cost discipline that I’ve written about previously (on a dollar basis, adjusted EBITDA in Q1 FY22 improved by nearly $500 million versus Q1 FY19). TTM adjusted EBIT margins were ~13%, a significant improvement relative to all prior reporting periods (this is my preferred metric of profitability for ABNB, which accounts for SBC and D&A). From my perspective, the financial results reported over the past 12-18 months clearly show the underlying attractiveness of Airbnb’s business. (And the balance sheet remains very strong as well, with ~$3 billion of net cash at quarter end.)