Airbnb Q3 2026 Earnings Call Transcript

Airbnb (NASDAQ:ABNB) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://events.q4inc.com/attendee/385199759

Summary

Airbnb Inc. reported its fastest revenue growth in over three years with a 19% year-over-year increase, reaching $4.9 billion in Q3 2026. Gross booking value grew 21% to $27.7 billion, and nights and stays booked increased 16% to 155 million.

The company highlighted strategic initiatives including the launch of Neighborhood Pages to enhance guest experience, expansion of AI functionalities in its app, and the introduction of new services like car rentals and partnerships with airlines and American Express.

Airbnb raised its full-year revenue and adjusted EBITDA margin outlook, with expectations of high teens revenue growth and an adjusted EBITDA margin of approximately 36%. The company plans further growth in its hotel segment and is exploring a potential loyalty program.

Operational highlights include the appointment of Pepijn Rijvers as Chief Business Officer, the success of Reserve Now, Pay Later contributing to an increase in bookings, and a focus on dynamic pricing as a significant growth lever.

Management emphasized the role of AI in accelerating product development, with AI now resolving 40% of customer support issues autonomously and aiding in the development of a custom-designed AI-native travel experience.

Full Transcript

OPERATOR

Good afternoon and thank you for joining Airbnb’s earnings conference call for the third quarter of 2026. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb’s website. Following this call, I will now hand the call over to Andrew Slabin, Vice President of Investor Relations. Please go ahead.

Andrew Slabin (Vice President of Investor Relations)

Good afternoon and welcome to Airbnb’s third quarter of 2026 earnings call. Thank you for joining us today. On the call with us we have Airbnb’s co‑founder and CEO Brian Chesky and our Chief Financial Officer Ellie Mertz. Earlier today we issued the shareholder letter with our financial results and commentary for our third quarter of 2026. These items were also posted on the Investor Relations section of Airbnb’s website. During the call, we will make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I’d 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.

That being said, 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 could 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’ve 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 turn the call over to Brian.

Brian Chesky (Chief Executive Officer)

All right. Hey everyone, thanks for joining. When you look back at our results over the last several quarters, there is a clear story emerging: Airbnb is back in growth mode. It’s rare for a marketplace of our size to reaccelerate growth, but that’s exactly what we’re doing. Q3 was our fastest revenue growth in more than three years. Revenue grew 19% year over year to $4.9 billion. Gross booking value grew 21% to $27.7 billion and nights and stays booked grew 16% to 155 million.

We’ve also exceeded our outlook across every key metric. And we’re seeing the self‑acceleration across the business. In Q3, every region delivered double‑digit nights growth. Growth accelerated in all five of our core markets: the US, France, UK, Canada and Australia. And in nearly all of our expansion markets in North America, nights booked grew at our fastest pace in four years. We’re also seeing more guests return to Airbnb and more people try it for the first time. First‑time booker growth accelerated 13%—this is the highest it’s been since early 2022.

And the fastest growing segment is Gen Z. Our nights booked in our app grew 29%, and now 66% of our total nights booked are in our app. Now I want to start by explaining what’s driving this growth. This did not happen overnight. Airbnb grew incredibly fast when we started, but eventually our technology and the way we operate couldn’t keep up. So a number of years ago we started by rebuilding the foundation. This was immediately after our IPO. We spent years rebuilding our technology platform. We redesigned the app, we improved our core experience. And a lot of this was pretty, pretty thankless at the time because we had to trade in some near‑term growth to make these very important investments.

We did this for the long‑term growth of the company. And technology alone was not enough. We also had to fundamentally change how the company operates. We organized Airbnb around a single roadmap. We brought all these teams together. We focused small teams on very specific problems. Then we developed an entirely new way to build products. And it was inspired by the original early days of Airbnb with my co‑founders and Project Hawaii. What I’ve talked about in prior earnings calls was our first big point.

I took a very small team. I worked with them nearly daily. We had one job: make it easier to find and book a home. And this team, they worked relentlessly. They shipped hundreds of improvements that generated hundreds of millions of dollars in revenue. And so we’re like, wow, that works. Let’s take this approach and we started applying it to other teams. So we took this and we applied it to the pricing team and they were able to deliver hundreds of millions of dollars in incremental revenue.

Then we took it to international expansion. We gave them more autonomy, moved really quickly, and we’re seeing results of that team as well. For example, in Q3, nights booked by guests in our expansion markets grew at their fastest pace in nearly three years. Brazil grew more than 30% and India grew more than 60%. We also began building new businesses, including hotels and services. We brought in experienced leaders to help scale them and then AI changed the speed of everything. We’d spent years laying the groundwork, but now AI is helping us build, test and improve products faster than we’ve ever done before. In Q3 alone, we shipped more than 50 products and features—nearly 70% more than a year ago because of AI. So when you put it all together, that’s what’s driving our growth.

We spent years changing how Airbnb operates, and now we’re seeing the results. Now let me share a few updates in the quarter, starting with our fall update. When people book a trip, they don’t just care about the home, they care about where it’s located. In fact, 75% of our guests use Airbnb maps when deciding where to stay. That’s why we introduced Neighborhood Pages, which help guests get a better feel for an area before booking, including the best restaurants, activities, and more. Now, we started these Neighborhood Pages in Paris where we saw a really big, meaningful increase in bookings.

So now what we’re doing is we’re bringing these Neighborhood Pages to over 1,500 neighborhoods around the world on Airbnb by the end of the year. Now this is going to be massive because when you stay in Airbnb, you’re often staying in a neighborhood. And how do you get that information? It’s really hard to find on Google. This is going to be really useful. We’re also helping guests plan trips and plan trips with recommendations from friends and family. We expanded connections so guests can see where people they know have stayed and what they recommend. And our new travel map brings those trips and recommendations together in one place.

Now for hosts, we designed our multi‑listing calendar. It makes it easy to manage multiple listings, update pricing and fill open nights. In this first month of early access, nearly one in four eligible hosts has opted in. We’re also bringing in world‑class leaders to help drive our next phase of growth. In September, Pepijn Rijvers joined us as Chief Business Officer. Pepijn was one of the key leaders behind Booking.com’s growth. He ran its entire accommodations business, including hotels and homes, and led one of the largest performance marketing operations in the world. He now leads Airbnb’s homes and hotels businesses, as well as our international expansion.

Now, one of the biggest opportunities ahead of us is hotels, and we started small with a pilot in just four cities. Today we have thousands of boutique and independent hotels on Airbnb across more than 60 top destinations. And hotel bookings accelerated again in Q3. Now what’s even more exciting is that hotels are bringing new guests to Airbnb. In fact, approximately 35% of guests whose first booking is a hotel come back and book a home within a year.

So hotels aren’t just a new business for Airbnb. They’re also helping us grow our homes business. Services are also becoming a bigger part of Airbnb. We launched car rentals this summer, and they’ve quickly become one of our fastest growing services. In Q3, we announced new services including meal delivery, laundry, baby gear, and we also have local offerings like ski gear if you’re going skiing, or boat rentals if you’re near an ocean or lake. And one of our biggest untapped growth opportunities is actually partnerships. Because for nearly 18 years, partnerships really weren’t a major part of how we grew. It was mostly just organic. That’s changing because we partner with airlines like Delta, Qantas and TAP Air Portugal to reach millions of travelers through companies they already use. In October, we launched our biggest partnership ever, an exclusive partnership with American Express, bringing more than 1 million Airbnb listings to Amex Travel.

Now, it’s still early, but we’re seeing thousands of bookings for Amex Travel, with nearly a quarter of them coming from guests who are new to Airbnb. We’re seeing a higher share of Luxe bookings than we typically see on Airbnb. So of course they’re bringing in a really high‑end segment of travelers that we haven’t typically had as much access to. Now, I want to spend a few minutes talking about AI. I believe AI is one of the best things to ever happen to Airbnb and I want to give you a few examples of what we’re doing with it. In Q3, we brought AI into more of the guest and host experience. For guests, we introduced AI search so they can describe what they’re looking for in their own words and find the right home, service, experiences for the trip. So if you want to see AI search, just go to our app or website and you’ll see at the very top of the page there’s a toggle.

If you turn the toggle on, you can basically type entire sentences in natural language And then it will basically deselect all the filters. It’s working really well. It’s especially popular with Gen Z and younger travelers or very AI-native. AI can also suggest relevant search filters. It can summarize important details of homes and help guests compare places they’re saving. For hosts, we’re using AI to make it easier to create 3D floor plans. These are really cool. They can help you price your homes competitively and understand how the listings are performing.

Now we’re also using AI to transform customer support. Our AI assistant is now available in more than 50 languages. And this next stat is really key. In Q3, approximately 40% of all customer support issues were resolved without a human agent, and this is up from a third in Q2. So this has been huge for us. And we’re expanding our assistant to voice support in the US so guests and hosts can get faster help over the phone. What this means is that customer support cost per booking has declined more than 17% year over year, driven in large part by improvements to our AI assistant.

And if you’re wondering, customer service NPS is as high as it’s ever been. But these improvements are just the beginning. You know, there’s a lot of discussion about whether people will eventually use one AI agent to do everything. And if they do, what does that mean for Airbnb? Are we going to be in? Are we going to be cut out? Well, I don’t think people are going to use one agent for everything. You see, today’s AI agents like Muse and Instinct are good at simple, routine tasks like making a restaurant reservation or scheduling an appointment.

But planning a trip is different. Travel is aspirational. Discovering where to go and where to stay is part of the experience. In fact, 80% of travelers say they enjoy spending time researching trips. People want to look at photos, they want to compare homes, they want to make decisions with people they’re traveling with. And I don’t think the general-purpose agents are the best to do that. So that is why we are building our own AI agent. And we have three distinct advantages when we build our own agent. First, we understand the Airbnb marketplace better than anyone. For nearly 20 years, we’ve helped guests find places to stay with millions of hosts. Every home is different. Guests care about the home, the location, the reviews, and the person hosting them. And we’ve spent years learning how guests make decisions and how hosts operate.

So this understanding gives us a significant advantage in building an AI agent to help people find and book the right place to stay. Second, we are part of the reservation itself. Now, this is important because we know that travel doesn’t end with a booking. In fact, that’s when it starts. Because Airbnb handles reservations, payments, and customer support, our agent is able to help guests throughout the trip. This means we can manage reservations, we can help you make changes to your plans, and access Airbnb support and protections when you need them. These are things an outside agent cannot do easily on their own.

And third, and perhaps most importantly, we’re building a new interface specifically for travel. We don’t think the traditional chatbot is the right way to plan travel. It’s the wrong interface. So what we are doing is developing a custom-designed, AI-native experience that responds to what guests are looking for. So instead of relying on traditional chat alone, which is very text-heavy—which again is definitely not the way you should plan travel—our agent draws from a library of hundreds of travel-specific interface components—maps, photos, comparisons, calendars, itineraries—and composes them in real time to match what they’re looking for. This is going to feel a little bit like generative UI in the sense that it’s going to offer up the right interface at the right time for your specific travel needs.

Now it’s going to help guests explore options, make decisions with people they’re traveling with, and take action directly on Airbnb. And over time, we want our agent to help guests plan their entire trip on Airbnb all in one place. We’re going to start rolling it out to guests in the first half of next year. So I’m going to end where I started. Airbnb is back in growth mode. We’re excited about what we’re building with the momentum we’re seeing across the business. We’re raising our full-year outlook. With that, I’m going to turn it over to Ellie.

Ellie Mertz (Chief Financial Officer)

Thanks, Brian, and good afternoon, everyone. I’ll start with Q3 results and then cover our outlook for Q4 and the full year 2026. As Brian shared, Q3 was a strong quarter with a meaningful acceleration across the business. Gross booking value was nearly $28 billion, up 21% year over year, a 5 percentage point acceleration from Q2. This was driven by strong growth in Nights and Experiences Booked and a moderate increase in ADR. Nights and Experiences Booked grew 16% year over year, accelerating significantly from Q2 with strength across all major regions and market types.

Q3 nights benefited from a 3% net lift from the expansion of Reserve Now, Pay Later, but excluding the impact of RNPL, Nights and Experiences Booked growth was approximately 13%, still accelerating from Q2. ADR was up 4% year over year, or 5% excluding FX. It was up across all regions with notable strength in North America and Europe. On a regional basis, we saw low double-digit growth in North America, mid-teens growth in EMEA, and over 20% growth in both Latin America and Asia Pacific.

These results were an acceleration across all four regions relative to Q2. Turning to our Q3 financial results, revenue grew 19% year over year to $4.9 billion, or 16% excluding FX, significantly exceeding the high end of our outlook. Net income was $1.9 billion, a 39% net income margin. Net income benefited from a $135 million reduction in our provision for income taxes as the prior year included a $213 million valuation allowance related to KMT credit. Adjusted EBITDA grew 22% year over year to $2.5 billion, representing an adjusted EBITDA margin of 52%, up from 50% in Q3 of last year.

Margin expansion in Q3 was driven by strong revenue growth and cost discipline, including operating leverage from AI-driven efficiencies in customer support, as well as the shifting of certain marketing expenses to Q4. Let me take a moment on monetization and take rate. Our implied take rate was 17.6% in the quarter, down slightly year over year. That was primarily due to the expansion and strength of Reserve Now, Pay Later, where guests book further in advance, increasing GBV before we recognize the associated revenue, and to a lesser extent higher incentives and credits related to new business initiatives. Partially offsetting these pressures to implied take rate are guest travel insurance and our migration to the single service fee.

Guest travel insurance continues to build momentum. Revenue grew nearly 70% year over year with higher attach rates in every region. Lastly, in October we completed the final phase of our fee simplification initiative, whereby nearly all of our remaining hosts have now moved to the single 15.5% service fee. We have already seen that the single service fee helps hosts price more competitively and creates greater transparency for our guests. Next, our balance sheet and cash flow. We continue to benefit from our efficient and well-capitalized business model, delivering $1.4 billion of free cash flow in Q3, up modestly year over year. We expect that free cash flow would have grown more in Q3 absent the impact of Reserve Now, Pay Later bookings on working capital. RNPL defers guest payments from the time of booking closer to the date of stay, impacting the seasonality of unearned fees. Free cash flow during Q3 was also impacted by a $75 million increase in purchases of property and equipment driven by our new office building in New York City.

Over the trailing 12 months we generated $4.9 billion of free cash flow, a 35% free cash flow margin. Finally, during Q3 we repurchased $700 million of our common stock, enabled by our strong balance sheet and significant cash flow generation, leaving $2.7 billion remaining under our existing authorization. And today we’re pleased to announce board approval of a new $12 billion share repurchase program on top of this existing authorization. This reflects continued confidence in our business performance, our ability to generate strong free cash flow, as well as our commitment to returning capital to shareholders, which remains a core component of our capital allocation strategy.

Now let’s turn to Q4 and full-year 2026 outlook. We’re encouraged by the meaningful acceleration we’ve delivered as well as the momentum we’re seeing into year end. Although we’re closely monitoring ongoing developments in Europe, underlying global travel demand remains healthy, and our faster pace of product innovation continues to drive results, and our Q4 outlook reflects it. For Q4 we expect revenue of $3.22 billion to $3.28 billion, representing year over year growth of 16% to 18%.

This includes an approximate 2 percentage point FX tailwind after factoring in our hedging program. We expect our implied take rate to be up slightly year over year. We expect GBV growth in the mid-teens, driven by at least low double-digit growth in Nights and Experiences Booked and a modest increase in ADR in Q4. We are not assuming a material, persistent impact related to the unrest in Europe, specifically France, or the conflict in the Middle East, but are closely monitoring trends in both regions.

On profitability, we expect adjusted EBITDA to increase year over year and adjusted EBITDA margin to be slightly down compared to Q4 2025, partially due to the timing of marketing spend noted earlier. Now for the full year, once again, we’re raising our revenue and adjusted EBITDA margin outlook. Despite facing more difficult comparisons as we head into Q4, we now expect year over year revenue growth in the high teens, up from at least mid-teens last quarter and our expectation at the beginning of the year of low double-digit growth. We now expect full-year adjusted EBITDA margin of approximately 36%, up from at least 35.5% last quarter. During 2026, due to the expansion of Reserve Now, Pay Later and its impact on the timing of working capital, we expect full-year adjusted EBITDA margin to be modestly above our free cash flow margin.

To close, Q3 demonstrates that the product and business changes we’ve made are translating to real financial outcomes—faster growth and expanding margins. We’re encouraged by the progress we’ve made so far and the durability of our results. Lastly, our product roadmap is robust and gives us a clear path to driving growth into the future. With that, I will open it up to Q&A.

OPERATOR

Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to one question only. Your first question comes from the line of Richard Clark from Bernstein. Your line is open.

Richard Clark (Analyst)

Good afternoon or good evening. Thanks for taking my questions. I guess firstly on dynamic pricing—at Q2, Brian, you said you thought dynamic pricing was a bigger opportunity than Reserve Now, Pay Later. You’ve been out with that product for about a month now—just early learnings. What’s the sign-up you’re getting from hosts, and do you still stick with that? And just very quickly, Ellie, I think you said take rate up in Q4. Why the reversal there? Is that because you’re now lapping Reserve Now, Pay Later? Is there any other initiative that’s adding to the take rate in the fourth quarter?

Brian Chesky (Chief Executive Officer)

Hey, Richard, how you doing? So I’ll take the first part. So, yeah, I think, I think—well, I think generally pricing is probably one of the biggest levers we have. Certainly, dynamic pricing. Just to give you a quick anecdote, you know, a couple months ago we hired Pepijn Rijvers from Booking.com. He’s now our new Chief Business Officer, and he was really instrumental in the early days of Booking. And one of the things he said when he joined, he said, if you think reserve now, pay later is big, wait till you see what we can do with pricing.

And it actually kind of makes sense. If you sell a product, customers care about two things: how good is the product and what does it cost. So it’s only 50% of the buying equation. And affordability is a forcing point for Airbnb because we have a lot of young travelers. You know, it’s much more economic staying at home. We’re very much Gen Z based. We don’t have any data to share today about dynamic pricing, but the adoption is really great. You know, I think one of the things we’ve noticed—this is a really key point—is that there is this win-win where dynamic pricing can generally lower prices across the marketplace and still allow hosts to make more money. So some nights they make more money, others they make less. Well, we’re really able to find these sensitivities where if you just charge like $10 less, you’ll make enough more bookings that you’ll actually make a lot more in the long run because your occupancy is much higher.

And that is, like, not an intuitive thing. And it’s good for the guests because it makes it a little more affordable. And so it’s a really huge lever. It’s extremely early. This is something that, like, AI is really good at tuning. And the thing about AI is, like, you need to tune it and get more data. So I think in the coming quarters we should be able to have some more results. But again, I’ll just kind of summarize by saying pricing is a massive lever. And actually dynamic pricing is one of many things we’re doing around pricing.

Ellie Mertz (Chief Financial Officer)

Great. And Richard, to answer your take rate question about Q4, just to double click on Q3 to explain the changing dynamic from quarter to quarter. In Q3 we got an outsized impact of reserve now, pay later on gross booking value in-quarter, whereas obviously the revenue from those bookings is delayed. And so in Q3 you see the impact—reserve now, pay later increases the denominator, bringing down the implied take rate. That’s somewhat reversed versus in Q4.

You should expect a modest increase in implied take rate. More broadly, I would say from quarter to quarter, there are some small timing movements that do impact take rate, but I wanted to call out that the single service fee as well as insurance should provide, over a longer time period, a modest increase in terms of the overall.

OPERATOR

Your next question comes from the line of Lloyd Walmsley from Mizuho. Your line is open.

Lloyd Walmsley (Analyst)

Thanks for taking the question. A couple, if I can. First, just on the hotel effort, can you kind of give us an update of how growth here is performing relative to the core, maybe, or any other helpful quantification, and sort of where do you think this could be over the next few years as a tailwind? And then second one, appreciate all the color about agents in the shareholder letter—very helpful. Curious, Brian, do you sort of see a path to your agent helping customers with travel sort of beyond the walls of Airbnb?

Or do you think it’s more limited to taking action and sort of managing services that you all provide yourselves? Like, how do you see that evolving over time? I know it’s early, but curious to get your vision on that as well.

Brian Chesky (Chief Executive Officer)

Yeah. Okay, so hotels and agents beyond the walls of Airbnb. Hotels are growing markedly faster than our core business. That’s not the core business growing slow—just hotels are a $900 billion market off of a very, very tiny base. You know, I certainly don’t want to put any, like, projections out there or a forecast. But it’s undoubtable that we will do multiple billions of dollars in revenue in hotels in the coming years. And we don’t even need to, like, win this market to be a significant player and make billions of dollars.

And part of the reason why is we have a huge amount of traffic. Most people who come to Airbnb are looking for a place to stay. If somebody doesn’t find a place on Airbnb, they’re probably going to another app or website, booking a hotel. So we don’t have to win. We just have to get the people in our store to buy something before they leave. And they know that—we know they want something. They’re in the store in the first place. And the other thing is we’re seeing this. This next thing was very surprising to me. You know, when we started Airbnb, I was a little ideologically, like, not—you know, I was kind of against hotels, let’s be honest. My first tagline was “Forget hotels.” And so, you know, we had a little animosity with the hotel industry, like in 2010, 2011, 2012. But over the last six, seven years, I’ve really changed my tune and approach. I like to think of this as, you know, growing up a little bit and being practical.

And our guests told us, hey, we love hotels. We bought hotels the night before the pandemic, but we really decided to get serious about hotels a couple years ago. And basically one of the things we learned is that actually most people like staying in homes and hotels. It just depends on the type of trip, and we don’t campaign about why people stay in homes. But if you’re booking last minute for business travel, you know, one night, hotels are really great.

So we expected people to want to book hotels. The thing I wasn’t expecting was the reception from the hotel industry, and it was a complete 180. I think hotels suddenly saw Airbnb as a major ally. They really loved the way they were merchandised. They loved the fact that we were an entirely new audience. We were disproportionately Gen Z. We are not just really affordable travel, we’re actually really high-end travel because we have really big villas.

We are a much more global audience, and they just liked the fact there was this whole other channel. So all that is to say, when we got really serious about hotels—it’s not the only reason I hired Pepijn Rijvers, but it was definitely a big thing. I told Pepijn this is a major opportunity for Airbnb and it is going to be huge. And, by the way, Pepijn Rijvers ran the largest performance marketing organization ever at Booking.com. Now, I don’t think performance marketing is a very important part of our core business, but I think with hotels, it’s a commodity.

I think we’re going to be able to do performance marketing really efficiently because hotels are so high ADR. Booking.com shows us it’s very profitable. But the best thing is we don’t need to do a lot of it because we have so much organic traffic already coming in. So all this to say it’s going to generate many billions of dollars of revenue. I don’t know what the timeline is, but it’s a huge opportunity. With regards to agents going outside the walls of Airbnb, yes, of course we are going to be. That will be through MCPs. We’re going to be integrating a number of MCPs with our trip agent in the first half of next year. I won’t give away too much more. We like to do these big product launches. You know, we don’t want to build a general agent—just to double click for one second.

The problem—if I just want to double click on a second—one problem with the general agent is you have to create, like, a general interface because the agent has to be able to do everything. So the general interface generally becomes almost entirely text-based, right, because when you can ask about travel, medical information, deliveries, you can’t know what they’re going to ask. As you get more specialized, you can develop a really custom interface that is perfectly bespoke for that type of use case.

So with travel, we’re able to design these really custom components. If you want a car rental, the agent generates this little UI of a car, and it’s, like, a beautifully and custom-generated interface. If you want to invite co-travelers, the agent helps you. So there’s going to be, I think, an incredible user interface experience that—what I would describe as a kind of post-chatface interface. It’s going to have a chat element to it, and so that’s what we’re going to be doing.

It will be able to go out of the walls of Airbnb, but it’s going to stay within travel, and expect in the first half of next year.

OPERATOR

Your next question comes from the line of Ken Gurelski from Wells Fargo. Your line is open.

Ken Gurelski (Analyst)

Thank you very much. Appreciate it, Brian. I appreciate the commentary and in the prepared remarks in the shareholder letter around the agent launch. Could you talk a little bit more—and you just kind of elaborated that it actually could leave the walls of Airbnb. Can you talk about, are you talking about actually direct, maybe direct integrations with airlines and et cetera to kind of complete the full trip? Because I guess the question is, for a vertical agent, if you don’t have all supply, you don’t have all attractions, you don’t have all hotels, how do you think about the tradeoffs for the customer between that horizontal general purpose agent—which may not be ideal for travel, but at least it sees everything? That’s question one.

And two, the second one, please, if you don’t mind, could you just—and I apologize if I may have missed some of this—but could you talk a little bit just about what you’re seeing with RNPL as you continue to expand there? Could you give us some confidence around cancellation rates and anything new you might be seeing there? Thank you.

Brian Chesky (Chief Executive Officer)

All right, yeah, I’ll do the agents and I’ll hand over to Ellie for reserve now, pay later. So the short answer is, yes, we are going to do integrations with a lot of providers. I don’t want to give away too much again about our kind of product roadmap, but I think it’s safe to say we’re going to do every part of travel. There’s not one part of travel that we’re not eventually going to do. And every part of travel will have MVPs, will have APIs, and eventually we do anticipate all bookings going through the app for every vertical in travel.

I don’t want to put a timeline on it. Just to give you an example, like, say, car rentals. Right now, car rentals is done through a partnership called our Trawler, and it’s a what we call link-off. So it’s an API, but it’s a link-off. The next phase is to do the reservation booking directly on Airbnb. And so that’s what we’re doing with a number of these partnerships. So the kind of way we’re going to do a lot of these partnerships is to get mass scale—we’re kind of doing link-offs. The link-offs appear to feel like Airbnb. So that’s really in, like, a web view that’s designed in our custom interface. With groceries, with luggage storage, with car rental. And over time, we’re going to develop a much more native booking integration. And obviously the good of that is it’s a little more seamless, you take a little bit greater of the revenue, but you also have to handle customer service.

So you got to make sure you’re ready for that. Now, the great thing about the link-off is we can kind of decide and test which things we want to integrate when. But the end game is, yes, the end game is eventually we’d like all travel to be able to be booked natively through the app of Airbnb, but we’re not going to put a timeline on it. And then the other part of your question was general versus horizontal, right? Okay. So with regards to general versus horizontal and trade-offs, I mean, listen, there is going to be a reason for general agents. I’m not saying— that there won’t be general agents, but I want to just give my view. I don’t think. I think a lot of people are looking at general chat agents and they’re trying to connect it to Google. Like there was one homepage of the internet, it was called Google, and you went there and everything started at Google. This is just my opinion. I do not think that’s going to happen with chatbots. I don’t think there will be one chatbot that’s like Google and it’s the front page and it is the orchestra conductor for every other app.

I’ll tell you a couple reasons why I don’t think that will happen. The first problem is if that were to exist, I think it would have to exist at the operating system level. That exists at the Android operating system level. At the iOS operating system level, the operating system is the right substrate to control your apps, because one app was the homepage. You’re really saying an app is going to control all the other apps? By the way, do you really think Apple is going to allow an app to control their entire computer, considering all the potential issues for privacy, security, and that they can get actually cut out of their own user experience?

I’m actually quite skeptical of that. So I do think that general chat agents are going to be successful and popular. I just don’t think they’re going to be able to do everything. And the burden of a general chat agent doing everything is they basically almost become an operating system. That is a lot to put into an app, and I just don’t think that’s going to happen. So I do think general chat agents will be popular for simple, everyday things. I think as they get really, really complicated, specialization is going to win.

Now, the chat agent can hand over to a specialized agent, but a lot of people are going to go direct to the specialized agent. Just like they discover Airbnb on Google and they come back direct — they don’t just keep going through Google. That is generally my thought. Now, a general agent does have a bunch of data because you use a general agent more frequently, right? At the same time, we can connect MCPs of Gmail and Google Calendar. If you connect an MCP of Google Calendar or Gmail or other MCPs, we can actually pull in, with the user’s consent, a ton of other data. So actually there’s many ways we can get as much data or nearly as much data as a chat agent you use every day, and this is just through basic MCP handoffs.

So I think basically the way to think about it is, in order for specialization to win, it must not be 20% better. It must be like 2, 3, 5x better than a general agent at its task, because you do have the inertia and the switching costs. So our job isn’t to be 20% better, it’s to be multiples better. And that’s the bar I’m holding the team to. We’ll see if we can get there, but I’m pretty confident.

Ellie Mertz (Chief Financial Officer)

Great. Ken, let me tell you just a little bit more about what we’re seeing on Reserve Now, Pay Later. Just as a reminder, Reserve Now, Pay Later — we began to launch a year ago in the US. We expanded amongst our flexible and moderate cancellation policy listings at the beginning of the year to rest of world, and then most recently at the beginning of Q3, we expanded eligibility of Reserve Now, Pay Later to limited and firm cancellation policies. In doing so, it obviously grew materially the total eligibility of GBV on the platform for this product. As of Q3, it was over 40% of GBV that was eligible to use RNPL.

In doing that expansion, we’ve seen a couple of things. First is a material lift to bookings. In particular, in Q3 we saw a full 3 points of net nights lift associated with both the expansion and the past eligibility offering. This was an incremental point or more relative to the impact we saw in Q2. Candidly, the expansion this summer was even better than we had tested. In terms of the reception for consumers, I think it’s probably pretty obvious, but this product makes traveling more affordable.

You don’t need to pay upfront, and what we see is that people not only book more, they book earlier — so our lead times have expanded — and they book more expensive listings, which is one of the reasons that ADR is up. Specific to your question, cancellation rates in aggregate are up 200 to 300 basis points from a year ago. And this is, you know, if you think about the nominal levels, a year ago our cancellation rates were on the order of about 16%. They’re now about 19%, which we think is very healthy in the travel space. The final comment I will make, because I’m sure we’ll get questions on it later, is the impact of RNPL in Q4. I just want to remind everyone that we had called out last quarter that Q3 would be the peak in terms of net impact of RNPL on our numbers.

That’s because we get the growth benefit in terms of the lift to bookings before we see the full cancellations, and so the net impact to nights booked will come down sequentially in Q4.

OPERATOR

Your next question comes from the line of Justin Post from Bank of America. Your line is open.

Justin Post (Analyst)

Great. Maybe one for Brian and a quick one for Ellie. Can you remind us what percent of your inventory is really proprietary for Airbnb, and how have you thought about using that as an asset, maybe with agent negotiations? How do you really take advantage of that? And then, Ellie, just quick on the insurance, can you give us anything on what the penetration is of bookings or how much is contributing to take rates? Thank you.

Brian Chesky (Chief Executive Officer)

Yeah, you know, over 60% of our inventory, we believe, is exclusive to Airbnb. You know, and so that’s the first part of the question. What’s the other part of the question? It’s the penetration of insurance products.

Ellie Mertz (Chief Financial Officer)

Yeah, insurance products are growing quite nicely. It’s a single, single-digit percent of bookings that have an attach. That is up materially from a year ago. I think what’s exciting about our insurance products is not only the growth, but also the opportunity to provide more insurance products. We’re looking across the host of offerings that we could provide, both guest and host. And I should note that the margins are great on those attached insurance products.

Brian Chesky (Chief Executive Officer)

Sorry, Justin, you said, how does that factor into agent negotiations — exclusive inventory? Can you elaborate on that?

Justin Post (Analyst)

Yeah. How are you thinking about that as an asset either for your own internal agents or maybe in negotiations with external agents — getting good financial terms or any strategic advantages there?

Brian Chesky (Chief Executive Officer)

I’m not sure yet. I mean, I think it’s really, really— I think as far as speculating what the relationship is between unique inventory and, like, potentially leverage negotiating with, like, other partners, I think it’s really early. I don’t know. But let me just tell you my philosophy on unique inventory. I don’t pay a lot of attention looking at what percent of inventory is unique anymore. It’s helpful — the more unique, the better, there’s no question.

The most important thing is, as we go into categories, our philosophy is it’s okay to have commodities like hotels, it’s okay to have some cross‑listed homes as long as there are a lot of unique things that you can’t get anywhere else. And I think the percentage is not as important — it’s the absolute amount, right? So, like, imagine there’s two stores. They all have the same products, except one store has a bunch of other stuff this other store doesn’t have. The percentage of unique stuff in that store doesn’t matter — just how many of the items are unique in that store the other store doesn’t have. And so as a theoretical mental model, imagine there’s two stores and they have almost all the same inventory, but one has just some more unique stuff. If you have 10% more unique stuff, you might get more than 10% more traffic because suddenly it’s a major difference.

So we don’t really look at the percent mix. I mean it’s good to know — of course we track it — but, you know, we are growing really, really quickly by processing inventory and getting those really competitive nights. And actually, one of the notes on Reserve Now, Pay Later is this helped us become way more competitive at getting those nights, and the host‑only fee has been really competitive with us keeping more competitive prices. And so why I say this is just to finish off this point: with services, a bunch of our inventory is commodity inventory, like car rentals — you can get those cars elsewhere — but then we have a bunch of inventory you can’t find anywhere else, like masseuses, chefs, and photographers.

There are experiences. We’re now offering tickets — you can get a bunch of those tickets on their website — but we also have exclusive experiences. So, kind of category by category, we’ll get a bunch of the commodities. We always want to make sure that we have unique stuff, and when we have unique plus commodities, then we become the one‑stop shop. You don’t need to go in or out.

OPERATOR

Your next question comes from Benjamin Black from Deutsche Bank. Your line is open.

Benjamin Black (Analyst)

Great, thank you for taking my question. So, Brian, it seems that you’re increasingly adding social and travel discovery elements through Connections, through travel maps, through neighborhood pages, even personalized recommendations. So how do these features change the role you guys play before guests actually choose a destination or before they’re ready to book? And could greater discovery and discovery elements eventually lead to sort of a more natural opportunity for sponsored listings?

And then, secondly, you know, as you add hotels, you expand the number of experiences, you add services — you know, how does that change your thinking around loyalty more broadly? Thank you.

Brian Chesky (Chief Executive Officer)

Two good questions. So, social and travel discovery — let me just, like, before I answer the question, let me back up. So I remember, like, 22 years ago when Facebook first came out. It came out in 2004. I couldn’t use it right away because I just missed it — I just graduated from college right before Facebook. I had to wait two years before they opened up to everyone. But I remember Facebook when it used to be a social network and it was basically your friends, and you could keep in touch with people and you could message them and see what they were doing.

And that was around 2004 to 2006, 2007, 2008 — let’s call it the golden age of social networking. And at some point, social networking morphed into social media and our friends became our followers, and we stopped connecting, we started performing. And a very bizarre phenomenon happened where the social network, in a sense, was invented and kind of, for a large part of the world, uninvented. Like, I no longer have a social graph. I no longer know whose birthdays my friends are unless they’re close friends. I no longer know when something happened in someone’s life. I no longer know how to keep in touch with people, except I’ve got to message them in WhatsApp or my messaging platform. So there really aren’t social graphs anymore.

I mean, LinkedIn is kind of a resume graph, but really there’s no social graphs anymore. And we thought, what if we brought back the social graph, but instead of being an online social graph, it was a social graph in the real world of the people you travel with and the people you meet along the way of your travels. We thought this could be really interesting. So we started building these social travel features this year. We launched them in May. We launched a travel map, and we started realizing this might be the beginning of something massive. And we are going to be launching a lot more social features and social connected features next year. I think this is maybe one of the single most underestimated parts of our business. I mean, might be because we don’t talk about it much. That’s okay. I don’t want to give away too much of the roadmap, but I can just say a couple things. Number one, it’s a great proxy for trust. If I were a host and I were to get a reservation for somebody, I don’t know them, but I can see how they’re connected to me, how many degrees away, that’d be a really good proxy for trust.

And as you build this social graph, you increase trust. As you trust, you potentially go into a lot of the businesses. I’ll let your imagination run wild what’s possible. You can also see where your friends have traveled and stayed. So you can see like, you know, if my friend stayed in Paris, now I can message them and ask what to do in Paris. I can eventually see. We can eventually bring that into search results. Right now that’s on the profile tab.

But we eventually are going to bring that into search results. I mean, you see the map, you’ll be able to see where your friends have traveled in search results and maps, you’ll be able to see listings your friends have stayed, you’ll be able to see who’s been traveling there recently, where they’re going. So there’s going to be a lot of these features. These features are going to A, make things more sticky, B, it’s going to make group travel much more collaborative, C, it’s going to make it much easier to get great recommendations.

It’s going to increase trust in the platform. And the other thing, I’ll just say the last thing is I’ve been doing, you know, I occasionally do these roundtables and with customers and I recently did a Gen Z roundtable. You know, basically kids that are like college age and they were kind of like a little younger than the age I was when I started Airbnb. And I think I heard two things from Gen Z and again, I just say Gen Z is like the fastest growing segment and it’s the prime advertising segment. They basically two things. One, they want, they want to save money. Young people always want to save money.

But in age of a rising cost of living, with a lot of college debt, with tuition going up, and the ladder being pulled up a little bit with AI, a lot of entry level jobs are harder to come by because AI can do them more than ever. They’re looking for affordability. But even more so we’re hearing a lot of college and recent grads think they want to meet people. And a lot of people, they meet people at work, in school, church, bowling alleys. Well, a lot of these things aren’t around as much anymore.

And a lot of kids, if they don’t have a job, they’re not gonna meet someone at work. So we’re starting to see that a lot of these social features are gonna be especially popular with Gen Z. But surprisingly we’re also seeing like on the other barbell, empty nester kids are out of the house. They want to travel, they want to meet people. So there’s a lot of opportunities here with the social features. With regards to sponsored listings, the relationship between them, I don’t know.

I think the thing I’ll say about sponsored listings in particular is we are developing our AI agent and we are developing sponsored listings, but they’ll be developed in the context of the AI agents. We first need to launch the AI agent, we need to refine it, then we need to figure out how ads work in that new world. By the way, everyone’s figuring this out. ChatGPT is figuring this out. So I don’t think it’s a clear, it’s not clear what the implementation is, but I think if anyone can figure out, I think our design team could. With regards to a loyalty program, I mean, you know, I don’t. Again, I want to not break any news, but we are absolutely looking at a loyalty program. We’ve been looking at it for a long time. I think I’ve said for a long time the best loyalty program is plus customers loving your product. Disney and Apple for years. Well, Apple doesn’t have a loyalty program. People love their product, but at the same time, we’re like the only major traveler in the world that doesn’t have one. And I think we have been at a disadvantage because we don’t have a loyalty program.

A lot of people want to use Airbnb, say, I want to use you, but you don’t have a program, so I almost feel like I can’t use you. So we are absolutely looking at a loyalty program. I don’t have anything announced, but I can say that as we add more verticals, we just have a lot more to work with. So adding verticals makes a loyalty program more compelling.

OPERATOR

Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.

Jed Kelly (Analyst)

Hey, great. Thanks for taking my questions. Just, just looking at the guidance, it looks like your EBITDA margins are going to be in that 36% range, so above 35%. But if I look at your growth, you’re growing 12%. I think, Brian, knowing you, you like faster growth. So can you just talk about how we should think about threading the needle between these, between double digit room night growth and maintaining, you know, margins above 35, 36%. Thank you.

Ellie Mertz (Chief Financial Officer)

Jed, are you talking about Q4 or ’27? What’s the reference?

Jed Kelly (Analyst)

Just, just, just, just balancing profit versus growth. Given that you’re seeing accelerating growth and what your preference is.

Ellie Mertz (Chief Financial Officer)

Yeah, yeah. I mean, I think Brian and I have been very clear over the last two years that we have very been prioritizing growth, focused on driving growth in this business. And I think the results, the last couple of quarters show that we have been able to deliver that growth. Behind that, we continue to invest in growth. But at the same time, the last couple of years, what you’ve seen is that we’ve been capable of reinvesting upside in order to continue the momentum.

Obviously in the midst of ’27 planning right now and the prioritization around continuing this momentum continues to be the top priority. The good news is that this business is extremely profitable, has incredible cash flow dynamics that give us a lot of room to invest within a very strong profitability envelope.

OPERATOR

Our next question comes from a line of Matthew Cost from Morgan Stanley. Your line is open.

Matthew Cost (Analyst)

Hi, thanks for taking the questions. I guess firstly on the hotels and the people that are using the hotel product, are they generally new to Airbnb and bringing in incremental bookings? Are they a high end and low end consumer? How are they retaining? I guess tell us a little bit more about the behavior of those people that are booking hotels. And then secondly, Brian, I was wondering if you just respond to some of the data that’s out there about early adoption of these agents that show showing agents like Muse and Instinct, that’s showing that a lot of commercial activity happening there is travel related.

Is that something you think shrinks in the mix over time or how does that gel with your overall view of how people use these horizontal tools? Thank you.

Brian Chesky (Chief Executive Officer)

Maybe I’ll start with the second one. And just what’s top of mind then? Ellie, you can go to the first one. So we’re not seeing, we’re not seeing a lot of traffic and even fewer bookings from Instinct yet. You know, we do have nearly half a million bookings a day and a very non-material number of bookings happen on Instinct. So, you know, we’re talking very, you know, very low numbers. So we’re not seeing a lot of traffic today and it’s not really increased over the last four weeks.

So it kind of peaked in early October. It’s kind of been stable in the last four weeks. So we’re kind of watching it. You know, my general philosophy on agents are I’m generally excited about them. I don’t see them as a threat. I see them kind of like Google as an opportunity for more people to discover Airbnb. So I think there’ll be great handoff to us. There will be people that will want to book a one-off flight or something directly on an agent. So I’m not saying that will never happen. But, you know, travel is maybe this is like just a framework to think about. There’s item-based retailers and project-based retailers. So just as an analogy, you go to Walgreens, you don’t like plan to go to Walgreens. You know you need to get something so you go to Walgreens. You go to IKEA or Home Depot.

That’s a project-based retailer. Right? You don’t go to those places to get one item. Airbnb, we’re really long term. We want to be in the business of the entire trip. That’s an entire project. It involves, you know, where to stay, what to do, how to get there, all one place. It’s highly logistical. Our guests typically travel in groups of three or more. You know, 90% of people message the host. The host wants to know who’s in their home. So they want to have a connection. They don’t want to offload it to an agent.

If I’m hosting somebody, I want to talk to the person, not the agent, on behalf of the person. It’s very visual. People typically look at a dozen listings or more. They look at 25 photos per listing often. So it’s very visual, it’s very collaborative. It’s a very complicated, complicated experience. And the other thing, I mentioned this in my opening remarks, is there’s a lot of studies that show people enjoy anticipating travel more than actually traveling.

Here’s a fun fact. Most of our traffic happens during nine to five hours. These people are supposed to be working and they’re not. We have evidence people are actually secretly using Airbnb. Maybe they’re trying to escape their job, but the idea is that it’s highly aspirational. So I don’t think a lot of people want to offload all that to an agent. I think they want to offload the things they don’t enjoy, not the things they do enjoy. So it’s small.

We’re watching it. We are definitely open to