Good afternoon, and thank you for joining Airbnb's earnings conference call for the first quarter of 2022. As a reminder, this conference call is being recorded and will be available for re-replay from the investor relations section of Airbnb's website following this call. I will now hand the call over to Ellie Mertz, VP of Finance. Please go ahead. Good afternoon, and welcome to Airbnb's first quarter of 2022 earnings call. Thank you for joining us today. On the call today, we have Airbnb's Co-founder and CEO, Brian Chesky, and our Chief Financial Officer, Dave Stephenson. Earlier today, we issued a shareholder letter with our financial results and commentary for our first quarter of 2022. These items were also posted on the investor relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission. We urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also, during this call, we will discuss some non-GAAP financial measures. We provided reconciliations to the most directly comparable GAAP financial measures in the shareholder letter posted to our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. With that, I will pass the call to Brian. All right. Thank you very much, Ellie. Good afternoon, everyone. Thanks for joining. I'm excited to share our Q1 results with you. Now, despite the pandemic, the war in Ukraine, and macroeconomic headwinds, Q1 was another incredible quarter. We exceeded 100 million nights and experiences booked for the first time ever. GBV was $17 billion, which was 73% above Q1 2019. Revenue was $1.5 billion, exceeding Q1 2019 by 80%. Net loss was $19 million. Now, this is a significant improvement from the same periods in 2018 and 2021. Adjusted EBITDA was $229 million. Now, this is our first positive adjusted EBITDA Q1, and this represented adjusted EBITDA margin of a positive 15%. Now, this is compared to a -7% a year ago and a -30% in Q1 2019. Finally, we generated $1.2 billion of free cash flow in the quarter. This was also an all-time high. What these results show is that 2 years into the pandemic, Airbnb is stronger than ever before. Now, why is this? Well, millions of people are now more flexible about where they live and they work. As a result, they're spreading out to thousands of towns and cities, and they're staying for weeks, months, or even entire seasons at a time. Now, through our adaptability innovation, we've been able to quickly respond to this changing world of travel. These incredible results were driven by a number of positive business trends. First, guests are booking more than ever before. In Q1, gross nights booked grew 32% compared to Q1 2019. This is despite the pandemic, the war in Ukraine, and macroeconomic headwinds. People are also more confident booking travel further in advance, and we're seeing strong demand for summer bookings and beyond. Second, guests are returning to cities and they're crossing borders. While guests continue to travel domestically and continue to go to rural destinations on Airbnb, we are also seeing guests return to cities and cross borders at or even above pre-pandemic rates. Third, guests are also staying longer, even living on Airbnb. Now, while short-term stays rebounded strongly in Q1 2022, stays of a month or longer continue to be our fastest-growing category by trip length compared to 2019. Nearly half of our nights booked in Q1 were for stays of a week or longer, and one in five nights booked were for stays of a month or longer. The world is clearly becoming more flexible about where people can work. In getting ahead of this trend, last week, we announced that Airbnb employees can live and work anywhere, and we've designed a way for them to live and work around the world while collaborating in a highly collaborative way and experiencing the in-person connection that makes Airbnb special. Now, fourth, our innovations are inspiring guests to discover thousands of new places. In 2021, we delivered more than 150 upgrades across every aspect of our service. Among these upgrades was the innovative I'm Flexible feature. Now, the I'm Flexible feature has now been used more than 2 billion times. 2 billion. Guests who use I'm Flexible are more likely to book homes in less popular locations. This is really important because this allows us to point demand to where we have supply and helps distribute guests more widely in communities all around the world. We're not stopping there. On May eleventh, next Wednesday, we will be announcing the Airbnb 2022 summer release. This is a new Airbnb for a new world of travel. With a completely new way to search, guests will be able to discover millions of unique homes in Airbnb they never thought to search for. When they book, guests will have the confidence knowing that Airbnb has their back each step of the way. You can watch this announcement right on our homepage next Wednesday at 9:00 A.M. Eastern Standard Time. 9:00 A.M. Eastern Standard Time next Wednesday, right on our homepage. I hope you can tune in because I'm really excited about what we have to share. Finally, our community, our host community continues to expand. We see destinations with the strongest demand showing the most supply growth, with non-urban active listings actually growing 15% globally. We're also showing an increase in total urban supply as demand returns to cities. We believe that the upgrades we announced last year, including our new host onboarding flow and AirCover, are supporting this growth and enabling success for new hosts. To recap, we had our best Q1 ever. Nights and experiences booked and GBV were our highest ever. Revenue and adjusted EBITDA were records for Q1, and we generated more than $1 billion in free cash flow in the quarter. With these results, Airbnb is stronger than ever before. Now, before I go to questions, I just want to talk for a minute about our efforts in Ukraine because over the past few months, millions of lives have been devastated by the war. When the crisis broke out, we knew that our platform could help refugees fleeing the crisis. Within four days of the invasion of Ukraine, we announced that Airbnb.org would provide free housing for up to 100,000 refugees fleeing from Ukraine. Over 30,000 hosts have already signed up to open their homes to refugees for free or for a discount. Something even more remarkable happened. People started booking homes for hosts in Ukraine, hosts they never intend to stay with, just to provide relief aid. Soon, more than 170,000 people joined in, and they booked approximately 600,000 nights booked in Ukraine. Because we waived our fees, $20 million went directly to hosts in Ukraine. I think this speaks to the power of our community, and they are a reminder that in a world of darkness, in a world of destruction, kindness still exists. While I'm really proud of our business results this quarter, I'm also proud of how helpful we've been able to be to thousands of people in need. With all that, Dave and I look forward to answering your questions. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question comes from Colin Sebastian with Baird. Please proceed. Thanks. Good afternoon, and congrats on the strong quarter. A couple of questions from me. I guess first off, Brian, drilling down a bit on some of the broader use cases that emerged through the pandemic. At a high level, the trends clearly sound very good. I'm hoping you could unpack that a little bit more in terms of the sustainability of longer stays and other use cases in markets that are furthest along in the recovery, where offices are reopening and lives are sort of getting back to normal, if you're able to break that down a bit more. Secondly, on the plans for advertising and marketing, you're keeping that, it looks like, fixed as a percentage of revenue, so a little bit higher spend on marketing and advertising. Can you talk about that? Is that with all the product updates, the rebound in travel, maybe the competitive landscape? If you could talk about the strategy with respect to the advertising and marketing. Thank you. Yeah, excellent. Yeah. Thanks, Colin. Why don't I answer these at a high level, and Dave, feel free to jump in with some more specifics. Let's start with the question of, Colin, some of the broader use cases you talked about. Let's back up. When we started Airbnb, it was really just a way for people to book a home for just a few days at a time. Even before the pandemic, actually long-term stays of a month or longer were our fastest-growing category or segment of trip by trip length. This was already growing very quickly before the pandemic. I think what the pandemic did is it accelerated the adoption of longer-term stays on Airbnb by hard to say how many, but certainly by years. I think it's important to understand why this is happening. Right now, what's happened is that for millions of people, they don't need to go back to an office five days a week, and the vast majority of companies are not requiring employees to come back to an office. Many have moved to a hybrid or entirely remote model. I think that what we're gonna see going forward is we're gonna see more and more flexibility because I think companies ultimately want to attract the very best people, and the best people are gonna be everywhere. So long as we believe that people don't need to go back to an office five days a week, millions of people, then we believe in a world of more flexibility. So long as we believe in a world where people will continue to dial in on Zoom, we will again believe in a world of more flexibility. What we are gonna continue to see, we think, over the coming years is continued and sustained growth for stays of longer than a month and stays of longer than a week. I don't think this is a temporary phenomenon. I think that the genie's out of the bottle, and flexibility is here to stay, and I think flexibility after compensation will probably be the most important benefit that an employer can offer. Just to give you a small anecdote, last week, last Thursday, we announced that Airbnb employees can live and work anywhere in the world. The response internally was great, but even more impressive was the response externally because our career page was visited 800,000 times after that announcement. I think that this just speaks to the durability of this use case, and I think that it's gonna continue. Now, with regards to advertising, I think it's just important that I share a little bit of a recap of how we think about marketing. Dave, feel free to talk a little more in detail. We have, Colin, a little bit, obviously, different approach to marketing and advertising than our peers. We take a full-funnel approach to marketing that combines PR, brand marketing, and performance marketing. We're not really focused on buying customers. We're focused primarily in investing in our brand and educating the world about what makes Airbnb unique. We think of marketing primarily as education. I think this explains why 90% of our traffic or more is direct or unpaid. Airbnb is a noun and verb used all over the world, and it was really not advertising, but PR and word of mouth that built our brand. Just to give you an example, since the pandemic started, there have been more than 1 million articles written about Airbnb. 55% of articles that have the word travel in it also have the word Airbnb in it. It's pretty. Advertising is really a form of supplemental education for us. It's not the core driver of growth. We think the core driver of growth at Airbnb is innovation. It's about building a product that people love. The role of marketing isn't to buy customers. The role of marketing for us is to educate people about our new features and our new offerings. Dave, I don't know if you wanna go into a little more detail about advertising. No, I think you covered it incredibly well. I mean, we're very proud of the approach to marketing. This, the full-funnel approach is working incredibly well for us. As you said, we are actually increasing our marketing dollars. We're just keeping the marketing expenses as a percentage of revenue relatively consistent to the level we had in 2021, and we think it's being really effective for us. Thanks very much. Thank you. Thank you. The next question comes from Bernie McTernan with Needham & Company. Please proceed. Great. Thank you so much for taking the questions. Just first, just wanted to get any insights on how supply and demand are growing relative to each other versus what was happening before the pandemic. Maybe even just utilization, how it's trending, how it was trending before the pandemic and how it's trending now. Secondly, on capital allocation with over $1 billion of free cash flow in the quarter, $9 billion of cash on the balance sheet, can you remind us and just your thoughts on if there's any sort of capital allocation, whether it's returning it to shareholders, M&A, continuing to invest in the product? Would love to hear your thoughts there. Great, Bernie. Why don't I do this? Let me just talk at a high level about the first question. Then Dave, why don't you take both questions at a more specific level. Let me just say at a high level around supply and demand, number one, I think we're gonna have plenty of supply this summer for the demand. We're expecting a lot of demand for the summer, but we are not supply constrained any night of the year, not even close at a global level. You know, the challenge of most travel companies is that a lot of people try to go to the same place, the same city, on the same date. Cities essentially, like travel OTAs typically get sold out. Like, a lot of people try to go to New York City on New Year's Eve, and there's only so many places to stay in New York, and so you tend to get sold out. Now, key is Airbnb. We're in 100,000 towns and cities all over the world, and we see a couple phenomena I think it's important to point out. The first thing we see is the fastest-growing supply markets are actually our fastest-growing demand markets. As a market experiences more demand, more supply gets unlocked. I think the reason why is primarily because the vast majority of hosts in Airbnb are individuals. The vast majority of new hosts get a booking within three days. When a regular person gets a booking, and the booking might be $300, $400, $500, they tend to tell their friends about it. As more people get booked, they create more word of mouth, and this unlocks more supply. We have a global network where demand, in a sense, stimulates more supply. Additionally, the I'm Flexible feature is critical because it allows us to point demand to where we have supply. If somebody types in Paris on June fourth to fifth, we are limited to the properties in Paris on those dates. If somebody says they're flexible, we can point them to other dates in Paris that are a little lower season or other towns around Paris that have available supply. I think these are really important. Dave, I don't know if you want to go into a little more specifics about either utilization and also kind of the capital allocation theory. Yeah. Just double-click on a couple areas. I mean, one is we just have more supply than we've ever had in our history. As Brian kind of mentioned on the call, you know, the fact that we grow more supply in the areas that we have the greatest demand, like non-urban active listings grew 21% in North America and 15% globally. You know, it's the area where it's kind of self-healing, where we have the demand is where we end up having the supply. This redistribution is also incredibly important because, you know, we have listings in all types of markets. We're not globally constrained at any given night, which is different than if you only had supply in one type of market. When demand spikes in that particular more narrowed market type, like vacation rentals, you don't have anywhere else to distribute demand. Because we're all around the world in every kind of community, we end up with the benefit of being able to redistribute demand to other places. I think that's been incredibly strong for us. Regarding the capital allocation, you know, we have $9.3 billion. I mean, I think as a CFO in the continued pandemic, having a strong balance sheet continues to allow us to sleep well at night. We have noted previously that we're going to use about $1 billion of our cash to pay for employee tax obligations as they exercise their shares. That will be a use of cash this year. Beyond that, we're continuing to be in growth mode. We will continue to have a balance sheet that enables us to be ready to invest when and where we find that it's appropriate. It does enable us to do M&A in the future if desired, although M&A is not our primary, you know, driver of growth. We still plan to grow organically as our primary means. We'll continue to evaluate our balance sheet use and make sure that we are deploying capital appropriately. Great. Thank you both. Thank you. The next question comes from Mario Lu with Barclays. Please proceed. Great. Thanks for taking the questions. The first one's for Brian. It's a high-level strategy question. Now that the total room nights have fully recovered versus 2019, how do you decide when is the right time to extend the company's focus to other potential growth areas such as experiences, hotels, and flights versus continuing to hone in on the core product? Great. Yeah. Let me take that. Thanks, Mario. Basically, we learned some really important lessons during the pandemic. You know, I started this company with my two friends when I was 26. I just turned 26, I started this company, and we had this enormous amount of success. One of the things that happens when you're a first-time entrepreneur, enormous amount of success, is you do something well, and you think you can kind of do everything well. We pursued a lot of things before the pandemic. I remember growing up, I had a teacher who said, "You can do everything you want in your life, not at the same time, though." I think that when the pandemic happened, there was a silver lining to the crisis for us, which is we got really focused. We took all of our best people, we paused a lot of the new initiatives, and we put our very best people on the most important problems of the company, which was stimulating core business. I think what we saw is not only did that happen, but the total addressable market for short-term stays is bigger than we ever imagined, and we are also able to extend it to long-term stays. Our general approach now going forward is to be incredibly focused. We're gonna absolutely be pursuing new opportunities, but we wanna focus on the most perishable opportunities right now. Right now, the most perishable opportunity is this. Last year, we had what was probably the travel rebound of the century. Certainly, I'd never seen a travel rebound like last year since I started Airbnb. I think this year is gonna be even bigger than last year, because last year it was a little bit tempered by the Delta and other strains. I think what you're gonna see this year is a true pickup of demand and cross-border travel. We're focused on this year is the perishable opportunity of trying to capture as much market share as possible and get as many people who haven't traveled in a couple of years to try Airbnb. Because for many people, Airbnb is no longer an alternative way to travel, it's the default. With that being said, we are absolutely looking at new opportunities and new services. Nothing we paused from the pandemic is off the table to resume. Airbnb Experiences, for example, is a big area of investment in the coming years. We're starting to ramp up that product this year. I think more, even more next year, you're gonna see some major new offerings around Airbnb Experiences and a significant demand. I think that some of our best ideas are ahead of us. You know, I'm 40, and I don't wanna feel like the best ideas we had were in my twenties or thirties. I think that there's some really big opportunities going forward. The name of the game is focus. Just a few things at a time, the most perishable opportunities, get as much scale as possible, get that scale into an ecosystem, and then you can do a variety of line extensions for guests and for hosts. Great. That's awesome. Thanks, Brian. Just one on the travel demand post the summer months. I know you guys talked about the fourth quarter being a little bit higher than historical. How do we, you know, compare that versus the 30% figure that is provided in terms of the summer travel season? Is it higher or lower? Anything you can say in terms of the demand post-summer? Yeah. Dave, I'll let you take that. You know, I'd say that, with the 30% in the summer periods, we're seeing consistent, that strong or stronger on a relative basis in Q4. I think that's the fact that people are willing to plan out into the fourth quarter that far, and at higher rates than they've done in the past, it just shows the resilience that people have for traveling. Yeah, the Q4 demand is as strong relative to the Q3 demand or stronger. Great. Thanks, Dave. Thank you. The next question comes from Brian Nowak with Morgan Stanley. Please proceed. Great. Thanks for taking my questions. Brian, I have a couple for you. The 2 billion I'm Flexible searches, you know, that's up quite a bit from, you know, 800 million last time around. I guess I'd be curious to hear about, you know, what are you seeing when people use that I'm Flexible? Is that leading to higher conversion? Is that leading to higher utilization of some radius of the search, sort of? What are you seeing that's sort of driving that quick inflection in that product? Then to go back to one of your earlier answers about your innovation in your 40s now. What are still the areas on the host front where you see sort of low-hanging fruit opportunities to improve it to drive more host growth? Yeah, these are great questions, Brian, and good to talk to you again. Yeah, let me start with guest, and let me then go to host. You're right. I think that I only just preface by saying that last year we launched I'm Flexible. The reason we launched it is we saw more people were flexible. The challenge is this, you know, for 25 years, travel search has basically been the same. There's a search box, and the search box asks you where are you going, and it presumes that you know where you're going. In fact, you have to come to these websites for intent. Asks you when are you going. Most OTAs aren't really in the business of inspiration, they're in the business of converting traffic into booking. This is good, but we always thought this, the holy grail of like online travel was to inspire people about where to go. Now, the results of I'm Flexible has succeeded our expectations. It's been used 2 billion times. For a travel product to be used 2 billion times, and people only use a travel product typically a couple times a year, is pretty unusual. What are we seeing the results? I think the primary thing we're seeing with I'm Flexible is we're seeing a very strong amount of engagement. With I'm Flexible, people see a lot more properties in a lot more markets. We're seeing people book properties outside of a lot of the popular tourist destinations, and we're seeing an ability to redistribute travel demand, beyond the top popular hotspots like Rome, Paris, Las Vegas, New York, Los Angeles. That's really the most important thing that I'm Flexible can do. I'm Flexible can be in the inspiration game and point demand to where we have supply. Our measures of success are how often do people come back to the website, how many properties do they wish list, how frequently are they engaged with the product on the inspiration side. On the demand side, how well are we pointing demand to where we have available supply, rather than just kind of being at the mercy of wherever they think they wanna go and when they wanna go when they come to Airbnb. I think that what you're seeing in the Q1 results is that clearly the product is working, you know. Because I think that I'm Flexible as a feature has helped drive a fair amount of that growth. Now, with regards to the host front, you're right, it's very important that we continue to innovate on the host side. Last year, we made a number of improvements to the host side of our product. Number one, our general principle is the easier you make something, the more people do it. That's a really basic principle of the internet. If you make something easy and you reduce friction, more people do it. In hosting, the easier we make it, the more people become a host. So what we did last year is we reduced the number of steps to being a host to 10 easy steps. We added a new product called Ask a Superhost. I think 170,000 prospective hosts have used the product to where they, if they have a question, they can ask one of our very best hosts. Probably most importantly, Brian, last year, we launched AirCover for Hosts. AirCover provides $1 million protection against property damage, $1 million personal liability coverage, and it's free. We do not charge anything incremental to our transaction fee, and we're the only company in travel that offers this for free, all these feature sets to our hosts. Now, going forward this year, we have a number of new innovations that I'm really excited about. I'm not gonna go into all the details. I'd like to kind of save it until we announce it. I'll say at a high level, we are looking at features that bring more people into hosting ecosystem. We want to provide even more ways to make it easier for hosts to list. We wanna provide more support for them to make it easier to host, and we wanna provide even more kind of control so people can decide, you know, yeah, like who sees their property, when it's available, things like that. We have some really exciting announcements. On May eleventh, you'll hear some interesting features that are gonna be launching, and then we're also gonna have a product release later in the year, in November as well. We'll have a couple big updates on those two fronts. Again, it's all about making hosting easier and making it even more appealing for people who aren't hosts to become hosts. If we can do that and make hosting mainstream, that will fulfill our growth for years to come. Great. Thanks, Brian. Super helpful. Thank you. Thank you. The next question comes from Naved Khan with Truist. Please proceed. Yeah. Thanks a lot. Question for Dave. Dave, on last time around, you kind of set expectations for ADRs to be down for the year in aggregate. Is that still where you expect to be? What are you baking in terms of this new product release that's coming up next week? Right. On ADR, you know, what was shown in the past is that, you know, ADRs are up substantially from where they were back in 2019. They, you know, they were up 37% year-over-year over three years. What we saw throughout the time in 2021 was that by Q4, about half of that ADR increase was driven by just mix. Regional mix like North America and Europe, and the type of home, so non-urban whole home. Mix was driving about half of the price appreciation. The other half was driven by price appreciation itself, so about half and half on the drivers of ADR. Here in Q1, price appreciation has become a larger percentage overall of the driver of ADR, and mix has been a little bit less than half, so it shifted even a little bit more. What we're gonna see, and we've shown this in the outlook, is that Q2 of this year, ADRs will be relatively flat with Q2 of the prior year. That'll give you a sense that ADRs were remaining elevated, both due to mix and due to price appreciation. You know, we think that they will likely moderate throughout the back half of the year as mix continues to adjust more towards cities, more cross-border, which have lower average daily rates. Price appreciation has remained high and stickier. I think the level of decrease in ADR will be maybe lower than what we anticipated at the beginning of the year. I don't know. Give me more on your question around new product introductions that we'll be talking about next week. Yeah, just what are you maybe seeing? We'll give you those details in May. in terms of contribution? Does your outlook contemplate any contribution from those products? Yeah. I mean, our outlook for Q2 clearly includes, you know, a lot of the results from the investments we've made to date, and we're very bullish on these continued improvements to continue to drive the strong results that you've seen. We're not giving kind of guidance out beyond Q2 at this time. Got it. Thank you. Thank you. The next question comes from Stephen Ju with Credit Suisse. Please proceed. Okay. Thank you. Brian, you know, the rising consumer demand for longer term stays has been something you've been highlighting, you know, in terms of a fundamental change in behavior for some time now. You know, can you share with us how the reception from the host has been in terms of their willingness to accept longer term stays versus the more traditional shorter bursts? Because I guess what I'm trying to get at is whether there's any sort of extra push you guys may need to do in order to enable that longer duration supply, you know, with the 6 million hosts you have now. Is this just a matter of, you know, demand, as you say, lighting up the supply? I guess, second, I get that things are pretty depressed right now, but going back to the world pre-pandemic, like what were some of the bigger corridors of travel in Asia, so we can start thinking about what the shape of the recovery there can be. Thanks. Yeah. Thank you very much, Stephen. Now, yes. Let's start with rising demand for long-term stays. What has been the reception of hosts? You know, this is actually one of the most interesting points, I would say. Which is, I think when we really started looking at this category, my assumption was it would be a different type of host, right? Some hosts wanted to list their place for short-term basis, and other different hosts wanted to list their properties for a long-term basis. This is what you see on Craigslist, right? There's a short-term stay category, and there's apartment categories, and they're not the same people. On Airbnb, it's totally different. The vast majority of hosts on Airbnb who initially list their homes for a short-term basis have now included a monthly stay discount, and that's critical. We have a large percent of people that have a monthly stay discount or are available to host on a long-term basis. I think that's the most important thing I would say, which is that they absolutely are interested in it. Now, why are hosts interested in this? Well, there's a number of reasons. One is seasonality. Some people live in highly seasonal areas where on high season they want to rent by the night because they have a really great yield, but during low season they have low occupancy, so they'll move towards the month. In some markets, in urban markets, there are some restrictions on the number of nights you can rent on a short-term basis below 30 days. But they don't have restrictions on 30+ days. For the most part, what hosts see long-term stays as is a way to increase their annual occupancy, and they generally want to go nightly to get as many bookings as possible. During low season or where there's limits, they'll go to monthly, and they're really the same hosts. Now, there are some hosts that only do short term. There are some hosts that only do long term. What we see is generally open-mindedness from most hosts to offer both. The great thing about our product is you hardly have to do anything different to offer long-term stays. You know, having long-term discounts is key. There's some new amenities. Having verified Wi-Fi is important if you're going to live someplace. There's a number of like tactical things. I think generally speaking, the product as it exists work for short-term or long-term stays. The vast majority of hosts are open to it. The answer is they're very receptive. Now, I think your second question was what were the biggest corridors in Asia? Well, yeah. Let's start. Asia is a highly cross-border market. Let's kind of break it out. Asia-Pacific. Let's start actually with Australia, which is of course part of the Asia-Pacific. Australia is a primarily outbound market, and it's very much a cross-border international market because obviously Australia is very much in a kind of corner of the globe. We're seeing a real rapid recovery in our Australian demand business. Japan has historically been an inbound business, and a lot of our demand in Japan has come from other countries. That is, you know, starting to see some uptick, but that's going to take a little bit of time. China is primarily an outbound business. People go to China, but primarily they travel and leave China, and they go to other communities, especially around Asia. What we see in Southeast Asia primarily is these are absolutely inbound and outbound markets. They're very much cross-border. I guess the high level is the vast majority of these markets in Asia-Pacific are cross-border. A lot of the travel is intra-Asia travel. There's a fair amount of travel, though, where it's inside and outside of Asia. I'm very, very optimistic about the ability of our Asia business to more than fully recover. Because what we've seen is the longer people can't travel, the more pent-up demand there is. I don't think travel ever is going to go out of style. People are going to continue to travel, and so I think that we're very, very optimistic that Asia is going to follow the recovery curves of Europe, North America, and Latin America, just on a little different timescale. Sorry, just to give you a couple stats on the first question. 87% of all available listings on Airbnb accept long-term stays. 52% of hosts offer a monthly discount, and these discounts are 85% of our long-term stays. Thank you. Thank you. The next question comes from James Lee with Mizuho. Please proceed. Great. Thanks for taking my questions. Two here. Just curious, is inflation having an impact on consumer behavior, maybe for example, consumer trading down from hotels to home accommodation? Also in terms of market share within home accommodation, as you see mix shift to urban markets where you have strength in supply, how does that compare versus your peers who may be more non-urban focused? Thanks. Why don't we do this. Dave, why don't I answer a high level of the second question because I just wanted to share a point about our urban business, and then maybe you can go into the details about both the inflation's impact on consumer behavior and kind of how we're comparing to our peers in urban markets. James, the thing I would just say about our business is, you know, I think that our business is uniquely resilient in a uniquely adaptable model. The reason our model is adaptable is because we're not just a US business, we're not just a European business, we're a global business, and we're strong in Europe, North America, Asia, Latin America, Africa. We're global. We're in 220 countries and regions. One of the most global companies in the world. We're not just a vacation rental business. We're in vacation rental markets, but our bread and butter is urban. Cross-border was really how we got our start, so we're very much an urban, a rural, a vacation rental, and an off the grid. We even have homes totally off the grid. We have homes that are $20, $30 a night and tens of thousands of dollars a night, so we're really at all price points. We cater to families and individuals, so we have nearly every type of home at nearly every price point in every type of space, in nearly every type of community around the world. I think that we've been able to be uniquely resilient. The other thing I'll just say about our urban market business is we're seeing record long-term stays. I'm doing this call, for example, from New York City in an Airbnb where I have for a month. We're seeing in New York City, for example, a huge uptick in long-term stays because a lot of people have to come here, working remotely for months at a time. That's just a little bit of how we think about it. Dave, I'll hand it over to you and go into a little bit more detail. Yeah, I mean, we're just not seeing price appreciation impact our business negatively. You know, we had our strongest quarter ever. We have even stronger demand for Q3 and Q4 than we've ever had. I think Brian, you know, hits the nail on the head, that because we have every type of home and every type of community, everything from budget, even shared homes to luxury homes, people can make a choice about what kind of property fits their particular budget and their needs. I think it's that strength of diversity of product that will continue to support our business going forward. I think you also hit on it, which is this mix shift to urban markets, which has traditionally been our strength at Airbnb. When you compare it to others, who don't have the same amount of supply and capabilities built in those cities, it's gonna give us kind of a further tailwind. Really what we're seeing right now is continued strength of the domestic business. That was up 65% versus 2019. Strength in our non-urban business. That was up 80% versus 2019, Q1 2019, and that remains incredibly strong. Now we're seeing the mix shift towards urban markets back towards 2019 and the cross border back to 2019. I think that tailwind is gonna continue to help our business going forward. Great. Thank you. Yeah. Thank you. The next question comes from Jed Kelly with Oppenheimer. Please proceed. Hey. Great. Thanks for taking my question. Just thinking about, you know, on how higher interest rates and like a potential recession, you know, how do you think that would impact your supply? Just thinking about the top line for the back half of the year, you know, with APAC opening up and more and more cross-border, more urban, do you think revenue or I guess bookings will be driven more by volume or by ADRs? Thank you. Yeah. Why don't I take the first question about higher interest rates or a recession's impact on supply, and Dave can take the second question. Jed, no way to know for sure on your question, but I'm pretty sure I have a sense of it. Airbnb, we launched on August 11, 2008. You'll remember what the world was like in August 2008. We really got going January, February, March of 2009, in the depths of the Great Recession. The reason that Airbnb initially grew was that people were having trouble paying their rent, having trouble keeping their homes, and people turned to Airbnb to list their homes. What we generally see is in recessions, people change their behavior based on kind of price considerations. What we'll generally expect in a recession, if that were to happen, is that probably more people would turn to hosting. That would be number one. That's what we would expect. Number two, travelers would probably become more budget conscious. That would probably have a benefit to Airbnb as well. Now, the downside, of course, a recession is oftentimes fewer people travel, but again, I think we're a pretty resistant business, you know, whether it's economy's good or bad, we're a pretty adaptable model. That's what I would expect on the supply side, that the more difficult the economy is, the more people are gonna need supplemental income, and a lot, a handful of them will turn to hosting. Dave, I'll hand it over to you. Yeah. Just to double-click on that, I think in a recessionary environment, if people are more constrained on the dollars they have to spend to travel, they often will come back to Airbnb because we're a better value in that travel. Going back to the earlier point, we have all types of price points, you know, budget to luxe, and consumers can figure out what meets their best budget needs. I think it actually, we are a better option than many other alternatives in a recessionary environment. In terms of the back half of the year expectations, you know, the revenue will be driven more by volume than ADRs. We give our outlook on ADRs for Q2 of being flat year over year. They may moderate a little bit in the back half, depending on mix. I think that the biggest driver of, you know, revenue maybe outperforming current expectations would be maybe further strengthening of the European business or acceleration of that. Maybe normalization of cancellation rates across the globe could also be a tailwind. APAC coming back, more strongly, more quickly will certainly help the results, but I don't think it'll be the major driver this year. You know, North America and European travel is still, just such the large percentage of our business at the moment. You know, APAC will be super important over the long term, but less of an immediate driver here in 2022. Thank you. Thank you. The next question comes from Mark Mahaney with Evercore. Please proceed. Okay. Hey, Brian, I wanna applaud you, by the way, for your efforts with the Ukraine. You came up with a creative and direct way for people to help out. I applaud you for that. Thank you. I also want to give you some comfort in terms of your thoughts on innovation and age. I think most studies show that peak innovation occurs when people reach 50, so if you can just make it through the next 10 years, you'll be good. Finally, just 'cause you touched on that most of the questions I thought about have already been asked, but let's get back to experiences. It sounded like maybe you're. I know you got the core business, and that's what you're really focused on, but it sounds like you may start leaning in a little bit more to experiences. Just flesh that out a little bit. I know it's, you know, relatively small versus the core opportunity now, but, you know, at some point, I assume you're gonna lean more aggressively into experiences, and I assume that there'd be host demand to do that, so 'cause there's probably a lot of win-wins all around that. Just talk about the timing of, you know, when you think you may wanna lean more aggressively into experiences. Thank you. All right. Well, thanks, Mark. It's great to hear from you again. First of all, yes, I'm 40. I hope I got a good 10 years in me, and I think I'm a pretty late bloomer, so maybe give me even more than 10 years. What do I wanna do with that time? Well, one of the things I wanna do is experiences. I think that experiences is a massive opportunity. You know, when we started Airbnb homes took off. I remember saying at the time, Mark, "Well, we've monetized people's biggest asset already, which is their home. What do we do next? We go to the next largest asset?" It actually turns out your home is not your largest asset from a latency standpoint. I think it's your time for most people. Your time ultimately can generate more revenue for the average person than their property can. That's a bit of an insight of where experiences came. It also came from the fact that a lot of people book Airbnb not just to save money, but to have a local travel experience, and I think experiences are a great way to do that. I was expecting 2020 to be the breakout year for experiences, and we prepared for that, and of course, the opposite happened. The pandemic occurred, and we put the product on hold. In the last two years, when people aren't really comfortable leaving their house, they have to have a mask on, it's not really been the right conditions to double down on experiences. Now that the light is at the end of the tunnel of the pandemic, we think people's first trips won't be to meet strangers and go on experiences. We think the first trips people wanna have are to reunite with family, unite with friends, get a big home together. We think that this summer, though people will book experiences, I think this summer is still a little more about homes just because people are getting comfortable getting out of their house. That being said, I think this summer you're gonna start to see a ramp-up of experiences, and I think next year and beyond, it's gonna be a massive opportunity, and I am incredibly excited about it. One of the reasons I'm so excited about it is that our guests actually, from a customer satisfaction standpoint, like experiences more than homes. They actually leave a significantly higher five-star rating as a percentage of their ratings for experiences than homes, but people like homes. The retention's really good. We think this is just scratching the surface. To answer your question definitively, we are gonna be ramping up. We're gonna be getting more aggressive experiences. It will be a slower on-ramp this year, but by next year, we're gonna be going full throttle, and I'm really excited about this opportunity. It's a little hard. I don't wanna make too many predictions about how big it will become, but my general sense is it's gonna probably be bigger than most of us imagine just because I think people are looking for interesting things to do with people. People are lonely. They wanna meet one another. They wanna do activities. They can only go to so many restaurants. They can only watch so many shows on Netflix, and many physical communities are being digitized. People ultimately wanna have a real experience in the real world. I think travel is a great way to do that. The final thing I'd say, Mark, is increasingly, people aren't just booking homes in Paris. You go to Paris, and you can see the Eiffel Tower. You can go to the Louvre. If you go to a small town in France, what do you do other than go to a restaurant? Experience is a great way to do something interesting in nearly every community in the world, especially ones that don't have the Eiffel Tower. Those are just some of the reasons why I am incredibly bullish about this product, but it's gonna take some time to really ramp up. Okay. Thank you, Brian. Thank you. The next question comes from Justin Post with Bank of America. Please proceed. Great. Thank you. A lot of my questions have been answered, but on the urban supply side, I imagine you had some churn on health issues and other factors. What are you seeing in urban markets and could you see a big uptick there as demand comes back? How are you thinking about that? Then maybe one follow-up. Yeah. Dave, do you wanna take this one? Sure. I think one of the key things to remember about our supply is that the vast majority of our hosts are individual hosts, and they don't get rid of their home, you know, and they're using their own home or maybe a second home to host. Even in the midst of a pandemic or other kind of recessionary environment, they're not getting rid of their own home or their second home, which means that they're ready for hosts, and they'll be there when the demand is coming back. That's what we're seeing now with our urban demand. You know, the urban demand is starting to come back. It's now back towards 2019 levels, and our hosts are ready for them, and our growth in hosts in the urban markets has also increased. We're seeing an increase in our listings for both our high density and urban markets overall, and that's what we kinda continue to see. As the demand comes back, the supply is there to meet it. Great. Follow-up on ADRs. I think you're saying around flat year-over-year. Could you just talk about the normal seasonality for ADRs? Why is it mix that causes them to down, and how do you think about the back half seasonality on ADRs? Yeah. I think if you could. You know, again, we've been up 5% year-over-year in Q1. You know, it's gonna be flat relative on year-over-year basis in Q2. You can kind of see a little bit of the decrease of seasonality for Q3, Q4. You can maybe look at some of the seasonality back to 2019, which will show you that Q3 and Q4 have moderately lower ADRs, not substantially. I think you could use that as a little bit of a guide. Just know that the mix change is being offset a lot by strong price appreciation that is, you know, continuing to prop up the ADR overall. So I think that is a bit of the unknown for exactly where ADR is gonna land in the back half of the year. What I can see is, you know, very clearly what's gonna happen in Q2, which will be, you know, flat year-over-year. Great. Thank you. Thank you. The next question comes from Ron Josey with Citi. Please proceed. Great. Thanks for taking the question. I wanted to ask a little bit more about cross-border, just given the rebound that we saw this quarter and the rebound we've been seeing. Just can you talk about the dynamics, maybe Brian, on whether this cross-border is mostly, call it, North America users going overseas, or are we seeing more EMEA users coming to the US? Are there any sort of insights around there? And then Dave, on just overall EBITDA, understood more leverage and margin expansion in the first half, but it's really impressive to see the continued, call it, leverage across most of your line items. Can you just remind us ops and support and gross margin, what's driving that? Thank you. Yeah. Hey, Ron, I can just start. The cross-border is, I would say North America, Europe, Australia, Latin America, pretty much everywhere but Asia, and it's really going in all directions. People are coming into North America, people in North America are leaving, they're absolutely going to Europe. There's a lot of travel within Europe, and we're now also seeing Europeans come to the United States and go, kind of, in other locations as well. The great thing is the network effect is kind of moving in multiple directions, whereas say last year, it was much more domestic and kind of really limited. The corridors are really starting to open. Dave, I'll let you take the rest of the answer. Yeah. On the EBITDA, I'm really pleased and proud of the work that we've done to improve our overall profitability. We made some really difficult choices, in the midst of the pandemic to reduce our overall workforce and focus on the core of our business. We think that actually that focus is enabling us to deliver even more. Like, I think we've actually delivered more innovation and productivity as a company by being very deliberate and focused in a more narrow area versus trying to do everything all at once, and that's been really effective with us. You know, we actually have 16% fewer people at the end of Q1 2022 than we did at the end of Q1 2020 before we had our layoffs, and yet we, I think we're being more productive than ever before. We're getting nice improvement in our variable costs. On top of that fixed cost leverage, yes, we're getting nice improvement in our variable costs. Our ops and support, you know, it was, you know, 15% of revenue here in the first quarter and seeing nice improvement versus our ops and support in the prior quarters, right? The ops and support, you know, will include largely our community support operations and our trust and safety activities. Those are the elements that are within ops and support. We're gonna continue to invest in those areas because we think those are differentiators for us, and I think doing those really well supports our individual host community. We're making nice strides and improvement in leverage so that we gain continued profitability. One of the things we noted in the letter is that we're expecting, you know, for the full year, a modest expansion in our overall EBITDA margin rate. That's nice to see versus 2021. I'm really excited that in 2022, you know, we'll have our first full of net income profitability. Just on a full net income basis, to be profitable this year feels excellent. That's great. Thank you, guys. Thank you. The next question comes from Lee Horowitz with Deutsche Bank. Please proceed. Great. Thanks for taking the questions. Two if I could. High level, you know, demand across the alternative accommodations industry has proved incredibly sticky through the front half of this recovery. Your comments suggest, you know, even into the back half. To what do you kind of owe this stickiness in consumer patterns in terms of the way that they travel even as things open up and hotels perhaps gain a bit of share? Maybe a bit on cost as well. You know, wage inflation and the inability to kind of find talent has been cropping up across a lot of the names that we cover. You guys haven't necessarily commented too much here, but how, if at all, are you seeing wage inflation potentially play through the model as we move through 2022? Thanks so much. All right. Dave, do you wanna take this? Sure. Sorry. You know what? Sorry, actually, Lee, I didn't quite understand the first question. Can you ask it again? Just in terms of the The wage inflation they are able to take. Yeah, can you clarify the first question? Yeah. What about consumer demand for- The first question is the industry. Yeah, for alternative accommodations has proven incredibly sticky, you know, despite reopening. You know, more hotels. Yeah Coming online, those sorts of things. I guess, to what do you owe this kind of stickiness in any consumer travel patterns? Why is it sticky? So sorry, I just wanna make sure I understand. Like, it was obvious why people were booking homes last year because people weren't traveling for business, they weren't going to urban markets, they weren't crossing borders, they were staying nearby. You're asking why when urban markets are reopening. They were trying to travel less densely. Why they're still sticky. Okay, got it. Yep. Okay, I got it. Thank you. And then let me do that, and then Dave, you can take the second question. I mean, I think it's just important to just note, Lee, that, like, we were growing really fast before the pandemic. The reason we were growing fast is, number one, I think a lot of people wanna have a local experience when they travel. Number two, they wanna save money when they travel. Number three, Airbnb allows them to travel with groups, and increasingly, people are traveling in groups. Number four, Airbnb allows them to travel and stay in nearly every community in the world. Hotels are in limited markets around the world. Number five, the longer you're away from home, the more you wanna be in a home, and length of stay is going up. I think all those reasons explain the stickiness. Maybe said another way, here's another way of saying it. Rural demand increased during the pandemic, and people are still traveling to rural areas. People are still traveling domestically, which was a very popular demand use case during the pandemic. People don't have to go back to the office five days a week, so people are still booking weekly stays and monthly stays. Again, domestic, non-urban, and longer stays were three use cases that weren't really our original bread and butter. Our original bread and butter was urban, cross-border, short-term. These three trends are sustaining. They're still sustaining. The reason why is I think the genie's out of the bottle. People have permanent flexibility, and people now realize there's a lot of great places to go beyond the top 100 tourist destinations. That being said, what we're seeing is a recovery of cross-border in urban. It's actually both above 2019 levels. In short, the bread and butter of Airbnb, cross-border, urban are back, and the new use cases or the use cases that were accelerated in the pandemic are here to stay. The combination of those two things is why I think this business is so sticky. Maybe a more fundamental way of saying it is people love the experience they have, and so when people love something, they tend to do more of it. Dave, I'll hand it over to you. You know, in terms of wage inflation, we did $1.5 billion of revenue in Q1 with just 6,200 people, and we don't need. As I said, we actually have 16% fewer people than we did in Q1 of 2020. We don't need to add incremental people to have this business grow dramatically. We're significantly larger today as a business with significantly fewer people. Really, wage inflation is not a really major driver of costs. We are investing in our employees in order to enable them to live anywhere, move anywhere within the country. If they move someplace else, we're not going to alter their pay for being in a different part of the country. We're gonna support them to work 90 days in other countries around the world. We think that kind of investment will benefit us by having lower attrition and being able to attract the best talent in the world. We think that's gonna be a great investment for the future to have the best talent to unlock all the innovation that Brian has talked about on the call today. Great. Incredibly helpful. Thank you both. Thank you. That concludes the Q&A session. I would like to pass the conference back to Brian Chesky for additional remarks. All right. Well, thank you all for joining us today. You know, I'm incredibly proud of what we accomplished this quarter. We hit new records with nights and experiences booked and GBV. We had our first positive Q1 Adjusted EBITDA and our highest free cash flow ever, $1.2 billion free cash flow. We're just getting started because we are gonna be accelerating our pace of innovation, and I'm really excited to announce the biggest change to Airbnb in a decade. It's gonna be next Wednesday, May eleventh at 9:00 A.M. Eastern Standard Time. You can watch the special event right from our homepage. Until then, thank you all. See you soon. That concludes the Airbnb Q1 2022 earnings call. Thank you for your participation. You may now disconnect your line.