$ABNB
Comfort of a weekend (or weekday) getaway
Financially, Airbnb has experienced top line growth of 14% compared to 2022, this was due to an increase in their Nights and Experiences Booked. Airbnb has two key business metrics that they look at: Night and Experiences Booked and Gross Booking Value. Starting with the first, N&E measures the scale of the irbnb platform and represents the sum of total number of nights booked for stays and the totla number of seats booked for experiences, net of cancellations and alterations that occurred in that period. From the 10-K, the company says that these experiences (bookings or cancellations) are only recorded for the period that the customer makes this booking / cancellation (ie booking made in February would be recorded in March 31 quarter and if that same booking was canaceled on May 15, the cancellation would be recorded in June 30 quarter). This makes me think about how this metric doesnt allow us to align for the actual timing of the booking itself (theoretically speaking, could there be a bunch of booking for vacations in June made in January, (increase in Q1 bookings) but then people cancel in June (increase in Q2 cancellations). Further diligence on the cycliatliy of these bookings / cancellations would be an interesting point to look int. Two ways to grow this platform are 1) attract new customersand 2) have repealed guests increase their activity. IN 2023, the company reported 448.2mm Night and Experineces books vs. 393.7mm in 2022 (14% increase). Gros Booking value is the dollar value of booking ont he platform inclusive of host earnings, service fees, cleanin fees and taxes. The timing o frecording GBV and any related cancellations is similar to how night sna decperince booked. The entire amoutnof a booking is reflected in GBV during the quarter in which the booking occurs whether the quest pay entire amount upfront of elects to use the Pay Less Upgfront (this seems to make sense given that if this was accounted for only when the booking was made, before the actual vacation happened, then if the customer were to use additional service, etc. these fees / services would eb disjointed form the original booking). Overall, the company has performed strongly with positive net income in 2022 (rouighly 1.9bn in 2022 and 4.8bn in 2023) and FCF of 3.4bn in 2022 vs. 3.8bn in 2023. THe company has also shown strong margins with adj. EBITDA margin of 35% and 37% for 202 and 2023 respectively.
The company has shown great diversity geographically, with only 33% of N&E booked in North AMerica, 42% in EMEA, 14$ in Latin AMerica and 11% in APAC. However, when looking at Gross Booking Value, North America has the highest percentage of 48$, EMEA has 36%, then Latin AMerica and APAC both have 8%. What it sems is that N&E booked in North America are perhaps more expensive.
If we dissect the P&L, ABNB has a pretty typical is. The walk from Revenue to net income includes costs and expenses (of which G&A and Sales & Marketing make up the most with about ~20% of Revenue) and COGS and operations and support being a close second. After the Costs and Expenses, we are left with Operating Profit of 16% margin . IN 2023, the company had a benefit from income taxes of 2.7bn which drastically juiced its bottom line (from $1.9bn in 2022 to 4.8bn in 2023)--for example pre-tax income from ~2.0bn to 2.1bn seemed to be more inline for the bottom line growth from 2022 ad 2023. Looking more into top line, we see that revenue consists of service fees, net of incentive and refunds charged to customers. For stays, service fees are a percentage of the value of bookings and vary on specific factors to the booking (ie duration, geography, host type). For experiences, Airbnb only owns a Host fee. A majority of revenues comes from the stays booked on the platform.