Airbnb: 2021 provides best financial results in the company’s history

1. Key Highlights

Revenue: $1.53 billion +78% year-over-year (YoY)

Gross Profit: $1.24 billion +90% YoY

Net Income: $54.5 million compared to a loss of $3.89 billion YoY

2. Wall Street Expectations

Revenue: $1.46 billion (beat by 5%)

Adjusted Earnings per Share: 0.03 (beat by 60%)

Source: Zachs

3. Business Activity

In Q4 2021, Nights and Experiences Booked of 73.4 million represented a significant increase of 59% YoY and slight a decrease of 3% compared to Q4 2019 levels. Continued strength in Nights and Experiences Booked in North America, EMEA and Latin America have driven significant YoY growth.

Strong recovery in Nights and Experiences Booked combined with higher Average Daily Rates (‘ADR’) drove over $11 billion of Gross Booking Value (‘GBV’) in Q4 2021. Both Q4 and FY 2021 saw significant increases in GBV from a year ago as well as from pre-COVID periods in 2019.

Nearly half of all nights booked in Q4 were for stays of a week or longer. One in five nights booked were for stays of a month or longer. In the past year alone, Airbnb guests stayed in about 100,000 towns and cities around the world, with nearly 175,000 of them booking stays for three months or longer.

4. Income Statement

During the quarter, Airbnb grew its top line by 78% YoY. Gross profit is following a similar trajectory and increased by 90%, with gross margin also improving from 76% to 81% YoY. 

Operating expenses decreased by 69% to $1.16 billion during the quarter. The main driver here was product development expenses which decreased by 82% to $367 million. In Q4 2020, product development expenses included $1.81 billion related to stock-based compensation (SBC) from one-time IPO-related costs. Excluding the impact of SBC expenses, product development expenses increased 20% YoY.

The level of spending on sales and marketing expenses is an area I pay particular attention to. At one stage, Airbnb was spending 73% of its revenue on sales and marketing expenses alone. This was an anomaly in Q4 2020 as a result of one-time IPO-related SBC costs. Overall the trend is moving in the right direction and has decreased to 23% at Q4 2021. 



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