Good afternoon, and thank you for joining Airbnb's earnings conference call for the fourth quarter of 2022. 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 Ellie Mertz, VP of Finance. Please go ahead.

Thank you. Good afternoon, and welcome to Airbnb's Fourth Quarter of 2022 Earnings Call. Thank you for joining us today. On the call today, we have Airbnb's Co-Founder and CEO, Brian Chesky, and our Chief Financial Officer, Dave Stephenson. Earlier today, we issued a shareholder letter with our financial results and commentary for our fourth quarter of 2022. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we'll make brief opening remarks and then spend the remainder of time on Q&A. Before I turn it over to Brian, I would 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. 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 should 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 provided reconciliations to the most directly comparable GAAP financial measures in the shareholder letter posted to our IR website. These non-GAAP measures are not intended to be a substitute for our GAAP results. And with that, I will pass the call to Brian.

All right. Well, thank you very much, Ellie, and good afternoon, everyone. Thanks for joining. Before I share our results, I want to tell a quick personal story. As you may have seen, I've started hosting again. Last November, I listed my guest room on Airbnb. My listing is called Beyond the Airbed. The run is a historically themed around the early years of Airbnb. There's memorabilia on the walls, from the receipt for the original airbed to old photos and me hacking boxes of Obama Os and Cat McCain breakfast cereal. When guests arrive, I have a welcome basket waiting for them. And the first night, we make dinner together, followed by dessert. We bake chocolate chip cookies from my cherished family recipe that I got off Google. The next day, we tour the Airbnb office with my golden retriever, Seltenova, and I tell the story of building Airbnb. Now why am I doing this? Well, because I love hosting. Joe and I were the first hosts on Airbnb 15 years ago. Having guests stay at your home with you is the original idea behind Airbnb. It's been an amazing way to connect with people. But I also believe that companies that make the best products create products for themselves. And Airbnb will only be as successful as our hosts. The best way to understand our hosts is to be one. Since I've resumed hosting, I've gained new first-hand insights that have informed some of the new products we'll be releasing, including some exciting updates this May as part of our 2023 summer release. Now before we get into our quarterly results, I want to recap the full year of 2022. While we're three years out from the start of the pandemic, we are still living with this impact. We've also seen high inflation, recessionary fears, and the war in Ukraine, all of which we are still dealing with in 2023. And yet, through all this, people continue to travel. 2022 was a record year for Airbnb. Revenue of $8.4 billion grew 40% year-over-year. When you exclude foreign exchange, our revenue increased by 46% year-over-year. Net income was $1.9 billion, marking 2022 as our first profitable full year on a GAAP basis. Free cash flow was $3.4 billion, which represented a free cash flow margin of over 40%. Because of our strong balance sheet, we were able to begin buying back stock last year, repurchasing $1.5 billion in shares in just the past five months. Now during the height of the pandemic, we made some very difficult choices to reduce our spending, making us a leaner and more focused company, and we've kept this discipline ever since. Over each of the past two years, we have only modestly increased our headcount. In fact, compared to 2019, our headcount is actually down 5%, while our revenue is up 75%. In every single quarter in 2022, we outperformed past comparable periods. In Q4, net income was $319 million, which is $264 million higher than a year ago. Adjusted EBITDA was $506 million, which is 52% higher than Q4 of 2021. We generated $455 million of free cash flow, 20% higher than Q4 2021. During the quarter, we saw several positive business trends. First, guest demand at Airbnb remains strong. Nights and experiences booked increased 20% in Q4. We had our highest number of active bookers ever in Q4, demonstrating guest excitement for travel on Airbnb despite evolving economic uncertainties. During the quarter, we also continued to see guests booking trips further in advance, supporting a strong backlog for Q1. Second, guests are increasingly returning to cities and crossing borders, which was the bread-and-butter before the pandemic. Now both segments continue to accelerate, while non-urban and domestic travel remains strong. Cross-border growth in nights booked increased 49% compared to last year. High-density urban nights grew 22%. Globally, we saw cross-border travel to all regions increase, despite continued foreign currency volatility. Third, guests continue to book longer stays on Airbnb. During Q4, long-term stays remained stable at 21% of total gross nights booked on Airbnb. Finally, we saw tremendous growth in our supply on Airbnb. We ended 2022 with 6.6 million active listings. Excluding all the Mainland China listings we removed in July, we grew supply by 900,000 listings, or 16% compared to a year ago, representing an acceleration in growth in listings relative to Q3. Now why are listings accelerating in growth? We believe there are probably two factors driving this growth. First, demand drives supply. Hosts are attracted to the supplemental income they can earn on Airbnb, which is often critical during tough times. Second, our product improvements are working. Over the past two years, we've made it more attractive and easier to become a host. Just this past November, we introduced Airbnb set up, where prospective hosts can connect with Superhosts for free, one-to-one guidance through their first reservation. The number of new active hosts recruited with the help of our Superhosts increased by more than 20% compared to pre-launch. But we are not stopping there. In 2023, we are focused on three strategic priorities. First, we want to make hosting mainstream. If you're listening to this call, you've likely traveled on Airbnb or know someone who has. We want hosting on Airbnb to be just as popular. To achieve this, we'll continue to raise awareness around hosting, make it easier to get started, and provide even better tools for hosts. Second, we are perfecting our core service. We want people to love our service, which means obsessing over every detail. We've listened to our hosts and guests, and based on their feedback, we're making a large number of upgrades to our service this year, including improving customer service, making it easier to find the right home, and delivering greater value, among other enhancements. And you'll see more of this in the coming months, especially after our release. Finally, we are expanding beyond the core. We have some pretty big ideas for where to take Airbnb next. This year, we are going to build the foundation for new products and services that will provide incremental growth for many years to come. With that, Dave and I look forward to answering your questions.

Your first question today comes from Jed Kelly with Oppenheimer.

Great. Great quarter and great execution. Just two, if I may. Can you talk about how your urban supply is trending and some of the initiatives you're doing around apartments? And then, Brian, you did mention headcount. In Silicon Valley, there's obviously a lot of layoffs. You're one of the companies that are growing, having expanding margins. So can you talk about your ability to attract top tech talent to execute on some of the initiatives you just talked about?

Yes, absolutely. Let's start with urban supply growth. First, let me talk about how we think about supply. The good thing about our supply is that the vast majority of hosts that come to Airbnb do so organically, and that's because of our global network. In fact, the number one source of hosts are prior guests. In Q4, 36% of our hosts were prior guests. One key observation is that the fastest-growing market where we have supply is also the fastest-growing market for demand. Many of our hosts are regular people. As they receive more bookings, they often tell their friends, creating a self-growing effect. Alongside this, we've been focused on making hosting easier with initiatives like Airbnb Set Up. Between that and a new campaign called Airbnb, which promotes the idea that if you have a space, you have an Airbnb, we’ve seen twice the amount of traffic to our host landing page. Additionally, last November, we announced a new initiative called Airbnb from the apartment. This initiative can unlock a significant amount of inventory in multifamily homes in urban areas. We are working with Greystar and several of the largest real estate developers in the U.S. We have 175 buildings in cities like Phoenix, Jacksonville, and Houston, and the response from landlords has been very positive. So we're observing significant traction in urban supply. Dave, do you want to add anything before I address headcount?

You covered that really well. Our urban business has historically been a strength, and it's taken a while for it to recover. However, it’s now exceeding 2019 rates and is contributing to our growth in Q4. Early adoption of Airbnb-friendly apartments has been promising, and we are excited about its potential.

On the topic of headcount, something really interesting happened. In 2020, we made some tough decisions that reduced our size, making us a more focused company. The result of that was we became more efficient and more profitable. However, there was a less obvious outcome: we ended up with fewer people in meetings, which allowed us to move faster. We concentrated all of our best people on a few key challenges. This strategy has made Airbnb a more attractive workplace, as it's easier to get work done. We have an overarching philosophy of attracting the very best people in every function. Unlike many tech companies that are laying off staff or freezing hiring, we are stepping on the gas. Stepping on the gas doesn't mean adding a large number of people; we will continue to remain lean, focusing on hiring in key positions. We view ourselves as a special forces team, not a giant Navy, so we've already seen a lot of success in attracting talent.

To add on, our headcount is still 5% lower than where it was in 2019 while our revenue has increased by 75%. Our Live and Work Anywhere approach emphasizes the importance of intentional in-person collaboration, which is both respectful of employees' time and more effective for the company.

Your next question comes from the line of Richard Clarke with Sanford C. Bernstein.

Two, if I may. The first regarding changes that might come over the next few years with regard to the distribution landscape. One of your rivals is going to wrap their vacation rental business into a loyalty program. There’s also talk around conversational AI and its impact on distribution. Any comments on whether Airbnb needs to do anything further on its distribution platform? The second question, regarding Q4, it appears to have been a very good quarter for take rate. Have you done anything specific to achieve that?

Dave, do you want to start with take rate and I'll conclude with distribution?

With regard to take rate, there's nothing specific we’ve done to achieve that. On a time-adjusted basis, the percentage we take from each night's stay has remained very stable. Any fluctuation in take rate or revenue over gross booking value is just variation quarter-to-quarter, so no specific changes to report.

Just to clarify, Richard, when you mention the distribution landscape, are you referring to the competitive environment or something else? We have numerous competitors across multiple categories, but Airbnb stands distinctly on its own. We operate in multiple markets worldwide, not limited to the US or Europe, and we offer unique products. About 90% of our traffic comes directly to us because of the uniqueness of our offerings. We're focusing on enhancing guest experiences and delivering excellent marketing strategies. We believe our competitive edge lies in our unique assets that most other travel brands lack. For example, last year, there were 600,000 articles published about Airbnb. We have extensive presence on social media, and we're often discussed there. Our approach to distribution focuses on continuously innovating our product. The best loyalty program is a product that people love so much they return without needing incentives like payment. We take a comprehensive approach to marketing that includes public relations and education around our new offerings. On the technology front, I am quite excited about the potential of AI for Airbnb. It could uniquely benefit us since Airbnb poses unique challenges—unlike hotels, we do not have standard inventory. Our 6.6 million listings are unique, and parsing 100 million reviews annually is quite complex. Using AI should assist us significantly in matching guests with the right homes. Stay tuned for updates on this front.

Your next question comes from the line of Ron Josey with Citi.

Brian, you mentioned investments for 2023 and extending beyond the core. Could you provide any insights on this—whether it involves building out tech infrastructure or newer products coming down the pipeline? Additionally, I believe in the letter, there was mention of 1.4 billion cumulative guest arrivals. Can you elaborate on the brand and overall awareness as well as the user mix in terms of returning versus new users?

Yes, absolutely. While we're investing this year in new products and services to expand beyond our core, I don't envision any significant changes to our P&L statement. We liken our current situation to what I experienced with my friends when we began—initially without many resources, we developed our global network. This allows us to incubate new products and services at a relatively low investment. In terms of innovations, you can expect developments on both the guest and host sides. Our guiding principle is to deliver increased value to hosts without charging more. We maintain a 3% take rate on the host side, providing many services for free, such as AirCover. We launched AirCover for hosts two Novembers back, and NPS for claims has significantly improved. Generally, we believe in providing most of our innovative products and services at no cost to hosts but expect some opportunities for optional services for which hosts may pay. On the guest side, we have made modest strides by launching travel insurance, available in eight countries, which has been highly successful, and there are more opportunities for additional services. We've been ramping up Airbnb experiences and anticipate more engagement with that product in the future. Moreover, we see the potential in creating innovative solutions that enhance the overall travel experience for guests, connecting them to suitable homes and unique experiences. Regarding brand awareness, we focus on a full-funnel marketing approach. Our traffic has maintained at about 90% being direct since going public. We see high efficiency in performance marketing and are striving to ensure that people understand our unique offerings. 90% of our bookings come from past guests, which reflects our strong guest retention over the years. We have had millions of new users introduced since COVID, who are performing well with bookings comparable to our historical guests. We have a robust mix of both returning and new users.

Yes, the majority of our bookings come from past guests, and we've been able to introduce Airbnb to millions of new users since COVID. Their performance appears to be strong, showing similarities to our historical type of users.

Your next question comes from the line of Mark Mahaney with Evercore.

Okay. Two questions, please. I know you mentioned the guest to host ratio, which you indicated is around 36%. I assume you have cohort data showing the percentage of guests that convert to hosts. Could you qualify or quantify this? Additionally, regarding China, can you remind us how material that market was to your business in 2019, so we can evaluate the opportunity as it gradually reopens?

Sure, Mark. In Q4 2022, we've seen that 36% of new active hosts started as Airbnb guests. This is an increase compared to the previous year and is indicative of Airbnb's growing popularity. As Airbnb becomes more ubiquitous, more guests discover the potential of hosting themselves. The majority of new listings come from individuals rather than property managers, creating a network effect where guests become hosts. Regarding China, we expect recovery to be gradual. The primary opportunity lies in the outbound business, as we anticipate hundreds of millions of people looking to travel from China to other destinations. We believe this offers a unique chance for younger travelers who desire authentic experiences worldwide. Nonetheless, we anticipate a slow recovery overall.

Prior to COVID, China accounted for a low single-digit percentage of our gross booking value. While it could be substantial over time, the recovery will likely take a while.

The cohorts are definitely trending positively. For example, in Q4 2021, 33% of guests became hosts; in 2020, it was 28%; and in 2019, it was 23%. So we are seeing solid growth in this area.

Your next question comes from the line of Brian Nowak with Morgan Stanley.

I have two questions. First, could you explain how quickly your new guests grew during 2022? Looking ahead to 2023, how do you expect new guest growth to correlate with EBITDA margins? Second, can you provide any updates on metrics or quantifying adoption around flexible tools to improve the balance between supply and demand?

Yes, Dave, feel free to add as well. While we don’t disclose the exact number of new guests, I’m pleased that we have introduced Airbnb to millions of new guests since COVID, and they are performing similarly or even stronger than historic guests regarding rebooking rates. Our brand marketing plays a significant role in ensuring that Airbnb is a top consideration for potential guests. I don’t have much to add regarding flexible tools besides that we’ve seen strong adoption of them; they help us balance supply and demand more effectively as we continue to improve our matching processes.

Indeed, the new guests introduced have similar or better booking frequency rates than our historical guests. Our marketing approaches and strategies have contributed significantly to introducing Airbnb to millions of new users.

Additionally, we have observed a permanent shift in travel booking behaviors on Airbnb since the pandemic. One of the most enduring changes is an increased demand for flexibility. More people are searching with multiple location options and utilizing flexibility features in their searches. Even prior to incorporating these features, we noticed that people frequently search with various combinations of destinations. The long-term perspective indicates that while there will always be business travelers and families who know precisely where they want to go, we're positioned in a unique market. With 100,000 unique locations available, many potential guests are unaware of the diverse travel destinations available.

Your next question comes from the line of Lee Horowitz with Deutsche Bank.

Regarding ADRs, you continue to outperform expectations, with FX-neutral growth likely landing in the mid-single digits year-over-year. As you consider pricing initiatives and mix for '23, how do you see these factors impacting your ability to grow? When assessing overall industry strength, why should ADRs grow again?

Regarding ADRs, we were pleasantly surprised. ADRs were up 5% year-over-year in Q4, excluding foreign exchange impacts. While foreign exchange adjusted lower, we forecast a modest decline in ADRs year-over-year, driven largely by mix changes as demand shifts back to urban areas, which have lower ADRs. This dual impact can affect financial results, as higher ADRs typically drive more revenue and profitability. While we’ve seen increased ADRs, we continue to provide great value, furthering the appeal of Airbnb. As such, we want to ensure that we're rigorous in managing our cost structure to support the anticipated decline in ADRs, which is why we anticipate our EBITDA margins for the full year to remain roughly consistent with 2022.

Understood. And on supply, what are you considering to sustain impressive growth rates, especially since you will continue to iterate on the supply funnel to facilitate onboarding hosts?

I'm proud of our continued growth in supply, which is crucial for maintaining a balanced marketplace. An unbalanced supply could lead to hosts becoming dissatisfied if they're not getting enough bookings, or guests may feel frustrated with limited options. Since 2019, we've experienced a 26% growth in supply, with nights and experiences booked rising by 24%. Overall, this shows a well-managed balance between supply and demand, and I'm thrilled that we've consistently had active listings reaching 6.6 million in the past year.

We seem to have a growing muscle around this area, and it's been a key focus for us, ensuring we maintain healthy growth in supply. Our initiatives in product innovation, awareness, and targeted supply development in crucial markets have been key strengths for us.

Your next question comes from the line of John Colantuoni with Jefferies.

I wanted to start with the new pricing and discounting tools you're rolling out. It seems like the anticipation is these tools might become a net headwind to ADR. Can you walk us through the strategic reasoning for these new products? I assume it's about improved customer experience. Secondly, nights and experiences appear to be trending back to pre-pandemic seasonality in 4Q and 1Q. Can we think of this as an accurate indicator of the trend for the rest of the year?

On pricing and discounts, let's take a step back. Airbnb started 15 years ago as an affordable alternative to hotels. Affordability and great value continue to be essential elements of Airbnb's appeal, and it's something we strive to maintain. There are three key initiatives we're implementing. First, we are introducing transparent pricing with an all-in pricing display. In many regions, including Europe, we currently display total prices. In the U.S., the traditional method for pricing shows a base rate, with additional fees added during checkout. Based on feedback from our guests, we rolled out all-in pricing to show total price upfront. Though we anticipated some impact, the initial response has been neutral for bookings. Furthermore, we implemented a price toggle that allows people to control how prices are displayed. This positive user experience helps strengthen the guest's understanding of our pricing variations. The second initiative focuses on improving listing value in search results. Third, we’re building new pricing tools for hosts to ensure they understand the final prices being presented to guests. While this may have a modest short-term impact on ADR, we expect it will drive demand significantly in the long run.

We’re not anticipating major declines in ADR due to these pricing tools; the aim is to be transparent and assist hosts in setting appropriate pricing for their listings. Regarding the trends in nights and experiences, I expect that we'll be reaching a point where year-over-year comparisons become more consistent, making forecasting easier for 2023.

Your next question comes from the line of Mario Lu with Barclays.

Regarding the growth in listings, I was curious if you could provide additional breakdowns for the 900,000 year-over-year increase in listings. Were most of these new listings completely new, or were many reactivated, especially in urban areas? I'm trying to understand how much of this growth is organic versus a product of a return to normalcy in travel.

The reality is listings consist of new entries, reactivations, and deactivations. Overall trends show improvement, with fewer deactivations and a rising rate of new activations. Although I do not have an exact percentage breakdown, we’ve captured strong listing growth worldwide, and the increased numbers span various types and regions, including strong urban growth.

For my second question, regarding lead time for bookings, your outlook indicates that Europeans are booking summer travel earlier. What do the global lead times look like compared to pre-pandemic, and how should we understand the sustainable growth in room nights?

We're pleased to see Europeans booking summer travel earlier than in previous years, demonstrating optimism about travel. Generally, we’ve seen longer lead times for bookings on Airbnb, which bodes well for confidence in our summer season. Overall, this shows a positive outlook for bookings as we head into the upcoming travel period.

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

Can you provide the mix for Asia in '22? Also, how do you view the Asia recovery, particularly with China and how it might affect results over the next 12 months?

Asia remains in recovery, down versus 2022 and 2019; however, it was the fastest-growing region in Q4. We're optimistic about the region's trajectory, especially with respect to Chinese outbound travelers; they represent a considerable long-term opportunity for us. In the fourth quarter, APAC accounted for 12% of our business.

The Asia Pacific region represents a significant growth opportunity for us moving forward. While recovery has been slower here due to its cross-border focus, which differs from the more robust domestic markets elsewhere, we see a pent-up demand building among travelers, especially amongst Gen Z, which we believe plays to Airbnb's strengths.

Your next question comes from the line of Lloyd Walmsley with UBS.

Can you help us think about the range of outcomes for ADRs in the 1Q '23 guidance? If we consider guidance suggesting take rates remain similar to 1Q '22 and potentially reach around $20.7 billion in gross bookings, we could potentially see flat ADRs. Could you detail what needs to happen for ADRs to be flat or better year-over-year in 1Q?

For ADRs to maintain or improve, we'd need to see stronger overall pricing and a more favorable mix. If urban growth does not outperform, we could see declines in ADR. Our ADR projection for Q1 is grounded in anticipated continued growth in urban and cross-border travel. This is the reason for forecasting a slight year-over-year decline.

Okay, thanks. Can you provide any updates on the product side concerning expansion opportunities? Specifically, should we think of hotels in this light or focus more on core experiences?

I think we should focus on all the above. Hotels serve as a mechanism to fill network gaps. Our goal is to ensure users find something unique on our platform. Our core business remains viable and holds immense growth potential. We aim to enhance the guest experience, making it easier to discover suitable Airbnb listings and provide better service. Additionally, we’re working on emerging use cases like longer stays, which account for over a fifth of total nights booked, and ramping up Airbnb experiences while addressing network gaps. Lastly, we’re investing in new products and services to ensure a balanced portfolio with scope for development.

Your next question comes from the line of Kevin Kopelman with Cowen.

Given you have $10 billion in cash and generated $3 billion last year, could you update us on your capital allocation and thoughts on share repurchases? Can we expect repurchases to go beyond just offsetting stock compensation?

We're pleased with our cash position, ending the year with $9.6 billion after buying back $1.5 billion in stock. There remains $500 million on stock repurchase approval that we plan to execute early this year. However, we are still in growth mode and want to ensure our cash reserves are adequate for potential M&A opportunities as well as supporting long-term business growth. Share repurchases will be our primary means to return cash to shareholders, and we’ll manage stock compensation through these buybacks while remaining focused on long-term growth.

Your next question comes from the line of Stephen Ju with Credit Suisse.

Can you describe the typical behavior of new hosts once they're onboarded? Do they generally begin by making only a limited number of days available, increasing over time as they gain comfort with hosting? Additionally, how does aggregate availability growth compare to the growth of the number of hosts?

Certainly, Stephen. The trend shows that newcomers to Airbnb usually intend to host more casually at first, sometimes even listing a single event, like a special weekend or holiday. Over time, many hosts gradually increase the number of days they are available and grow more productive as they become accustomed to hosting. We also see some hosts add multiple listings depending on their individual market circumstances. In general, hosts exhibit increased productivity that leads to more bookings, and as they earn positive reviews, their average daily rates also tend to go up.

Your next question comes from the line of Doug Anmuth with JPMorgan.

I’d like to revisit your comments regarding EBITDA margins for 2023. You mentioned that the margins would be maintained despite varying costs due to lower ADR. Could you elaborate on the cost efficiencies you see on the horizon? Additionally, how should we interpret the shifting of marketing spending, particularly around branding in Q1?

Our anticipated EBITDA margins this year balance headwinds we see from possible ADR declines by effectively managing our fixed cost structure. We expect modest growth in headcount around 2-4%, allowing for disciplined fixed costs. We've made considerable progress in variable cost reductions, including cuts in community support, payment processing, and infrastructure expenditures. We remain in growth mode, and instead of maximizing short-term profits, we have commitments to invest in long-term profitability. Regarding marketing, this year reflects strategic shifts. While it's anticipated that marketing expenses as a percentage of revenue will remain consistent with 2022, we've shifted the timing to advance our messaging ahead of the busy summer season.

Your next question comes from the line of Nick Jones with JMP Securities.

Could you give us more context on how you're onboarding property managers into the Airbnb-friendly apartment initiative? How many apartments under management are becoming available, and what opportunities do you foresee in key markets to grow this collaboration?

This new program came from the growing interest we received from real estate developers. We've collaborated with companies like Greystar and other significant real estate firms to create appealing buildings for young renters in specific urban markets. Currently, we have 175 buildings in cities like Houston, Jacksonville, and Phoenix, with the majority of these units suitable for Airbnb listings. Tenants sign subleases allowing rentals for a fixed number of days, typically fewer than 180 days. This model presents multiple benefits for landlords, such as greater visibility and control over activities in their properties and access to free demand through Airbnb exposure. Given the positive reception thus far, we're optimistic about expanding this program considerably and fostering relationships with many key landlords across the U.S.

Your next question comes from the line of Bernard McTernan with Needham.

Concerning margins, you observed impacts on ADRs from mix shifts along with pricing; while the mix shift is reflected in the guidance you posed for flat EBITDA margins in '23, can you achieve those margins even if pricing doesn't compensate modestly for ADRs? Also, what is the expected impact from FX on EBITDA margins this year?

As you noted, we anticipate moderate ADR declines based on mix shifts. We're committed to ensuring we can retain our EBITDA margins, regardless of any challenges that arise from potential ADR fluctuations throughout the year. Exact impacts from foreign currency exchange may involve several hundred million dollars affecting our performance, but we can discuss calculations off-line.

Your next question comes from the line of Tom White with D.A. Davidson.

Can you provide insights on guest cohorts that joined during the pandemic compared to guests acquired pre-pandemic in terms of metrics like frequency, spending levels, and repeat rates?

Overall, the acquisition of guests during the pandemic saw consistent frequency and spending patterns relative to pre-COVID guests. We are optimistic about our ongoing quest to convert new guests into long-term users, showing their behavior has not diverged significantly in purchasing patterns.

Your next question comes from the line of Deepak Mathivanan with Wolfe Research.

I have two questions. First, while supply growth is encouraging, can you elaborate on trends regarding the utilization side? I know you don’t consider occupancy in typical terms, but what impact have product initiatives like altering the search experience or flexible booking had on utilization or occupancy? Second, with long-term stays maintaining around 20%, how should we think about that mix for 2023? Is there potential for growth in that segment, and what product initiatives might further elevate that percentage?

When assessing supply growth, I think it's best reflected in the fact that we've grown listings by 26% from 2019 while nights and experiences booked increased by 24%. We're maintaining a healthy balance between supply and demand. As for long-term stays, if we look back, they made up about 13% of our nights in Q1 of 2019, increasing to approximately 16% that year. Currently, long-term stays hover around 21%. While short-term stays have slightly outpaced long-term stays recently, their overall volume remains elevated compared to pre-COVID.

This concludes our Q&A session for today. I turn the call back over to Brian for closing remarks.

All right, everyone. Thank you for joining us today. To recap, we had another record year in 2022—revenue and adjusted EBITDA were both at record highs and free cash flow was $3.4 billion. I'm truly proud of these results. Before I conclude, I'd like to express my immense pride in our team. Considering the challenges we've faced over the past three years—initially losing 80% of our business and rebuilding the company from the ground up—our focus has made us a disciplined company with substantial momentum. We're already witnessing strong demand in Q1. Consumer confidence in travel remains high. Regardless of global happenings, people have a desire to travel. For many, the office has become Zoom, shopping has shifted to Amazon, and entertainment is now Netflix. Travel is evolving into a vital way to experience the world this year. This is shaping up to be an exciting year for Airbnb and global travel. Thank you all, and we'll talk to you next quarter.

This concludes today's conference call. Thank you for attending. You may now disconnect.