Airbnb's Stock Soars by 11% as Q4 Revenue and Profit Surge

Airbnb recently reported a significant financial turnaround for the fourth quarter of 2024, showcasing a 12% year-over-year increase in revenue to $2.5 billion, driven by robust growth in booking volumes and average daily rates (ADR). The company announced a net profit of $461 million, marking a shift from previous losses and achieving a profit margin of 19%. This impressive performance led to an 11% rise in the company's stock price in after-hours trading.

Throughout 2024, Airbnb outperformed the travel industry with continued momentum. The gross booking value for the fourth quarter reached $17.6 billion, a 13% increase and the year's highest growth rate, reversing the slowdown seen in the second and third quarters. A significant contributor to this growth was the increased usage of its app, which accounted for 60% of all bookings, jumping from 55% the previous year, along with a notable rise in first-time bookers.

For the entire year, Airbnb's lodging and experience bookings surpassed 491 million, with total bookings nearing $82 billion. Bolstered by strong demand and ADR growth, the company achieved $11 billion in annual revenue. Adjusted EBITDA reached $4 billion, growing by 11%, and the adjusted EBITDA margin came in at 36%. In terms of cash flow, the company reported a healthy free cash flow of $4.5 billion.

Brian Chesky, Airbnb's co-founder and CEO, emphasized that Airbnb's revenue and bookings have doubled since their 2020 IPO, with the company continuing to outpace industry averages. Looking ahead to 2025, Airbnb plans to advance its long-term strategies, focusing on enhancing core services, expanding globally, and rolling out new products and services at scale.

By the end of 2024's fourth quarter, Airbnb had over 5 million hosts and 8 million active listings worldwide. The strong demand in both urban and non-urban areas, especially in high-demand regions like Latin America and Asia-Pacific, was noted. Latin America, particularly Brazil, saw a significant increase in first-time bookings due to local payment options, while Asia-Pacific's growth was driven by a 27% rise in cross-border bookings.

Continuing its innovative approach, Airbnb is looking to integrate artificial intelligence into its customer service ecosystem, as announced by Chesky. The company plans to launch AI-driven customer support to manage the millions of inquiries it receives annually, translating extensive documentation into actionable customer insights. Chesky believes those platforms that leverage AI effectively will stand out, particularly in travel and lifestyle domains.

For the first quarter of 2025, Airbnb anticipates revenues between $2.23 billion and $2.27 billion, reflecting a year-over-year increase of 4% to 6%. Despite facing foreign exchange challenges potentially impacting ADR, adjusting for these factors indicates a prospective growth of 7% to 9%. The company plans to invest aggressively in new initiatives later in the year, with expected temporary impacts on profit margins but long-term revenue growth and a forecasted adjusted EBITDA margin of at least 34.5% for the entire year.