AirBnB reported Q4 2002 earnings this past week. EPS was $0.48 vs. $0.25 expected. Revenue was $1.9B vs. $1.86 expected. AirBnB also said that Q1 2023 revenue will be between $1.75 billion and $1.82 billion vs. $1.69B expected. ABNB 0.00 stock soared after the report.
AirBnB said Q4 2022 is the best Q4 ever in terms of revenue and net income. In the shareholder letter, AirBnB also highlighted that guests increasingly returned to cities and crossed borders post pandemic. But guests continued to stay longer on Airbnb. Gross nights booked in Q4 2022 for more than a week are 40% higher than Q4 2019. Supply on Airbnb grew by over 900,000 active listings. Average daily rates (ADR) decreased by 1% YoY to $153 in Q4 due to currency exchange. On a constant currency basis, ADR increased 5% YoY. I suppose the demand and supply is fairly well balanced despite a 16% supply increase YoY.
Overall, it was a great quarter for AirBnB. Unlike many other high-growth tech companies, AirBnB didn’t overhire during the pandemic. Compared to 2019, their headcount was down 5% while revenue was up 75%. Kudos to AirBnB for navigating through the difficult pandemic period and coming out stronger than ever.
It seems Airbnb demand rolled over this quarter. Have a look at % decline Q3 to Q4 in 2021 and 2022(Q4 is seasonally low so need normalize seasonality). Also look at disproportionate drop in fcf QoQ and the large ramp in sales and marketing spend.
We see large bumps in sales and market spend when companies trying to buy growth in a declining macro or saturated SAM/TAM environment. In this case more aggressive discounts/promos. They hit growth inflection point tjis quarter. How far the growth trend reverses is tbd. Could be a single quarter issue could be many.
All this said, they are trading at something like 50x fcf. Much less than many of the other tech companies are trading at from this recent bear market bounce.