Airbnb, Inc. (ABNB) Earnings Call Transcript

Good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the Second 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.

Thank you so much. Good afternoon, and welcome to Airbnb's second 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 a shareholder letter with our financial results and commentary for our second quarter of '26. These items are 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. That being said, we urge you to consider these factors and remind you that we undertake no obligation to update the information contained in 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 Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. And with that, I'll pass the call over to Brian.

All right. Thanks, Andrew, and good afternoon, everyone. Thanks for joining. Over the first half of 2026, we delivered some of the strongest results in years. In Q2, that momentum accelerated. We exceed our outlook across every key metric. Revenue grew 17% year-over-year to $3.6 billion. Gross booking value grew 16% year-over-year to $27.2 billion, and Nights and Seats Booked grew 10% year-over-year, accelerating from Q1. We are seeing this momentum show up across the business. Nights booked on our app grew 23% year-over-year, and they now account for 64% of total nights booked, which is up from 59% last year. More new guests are trying Airbnb than we've seen in years. In fact, growth among our first-time bookers accelerated to 11%, but this is the highest growth rate we have seen in 4 years. And among first-time bookers, the Gen Z cohort is growing the fastest. Our expansion markets continue to outpace our core markets, with net nights booked growing about twice as fast. But what's especially encouraging is that we're not only seeing growth accelerate in our emerging markets, we are seeing growth accelerate in many of our core markets. In fact, the U.S., France, U.K. and Australia, all accelerated in growth in Q2. Now these results reflect something much bigger than a strong quarter, what they reflect is a fundamental shift in how we are building products. Now I think most people naturally want to point to 1 product or 1 initiative to explain the strong quarter, but that is not what's happening here. This is a culmination of changes we've been making over the last several years. We've rebuilt Airbnb from the ground up to be an AI-native company. We have more world-class talent than ever before, and AI is transforming how we execute and build products. Said simply, AI is the best thing to ever happen to Airbnb. Today, we're building, testing and iterating faster than we could just a year ago. Across some of our key initiatives, we've reduced the time from concept to launch by as much as 60%. And compared to the same 6 months last year, we've increased the number of features and improvements we shipped this year by nearly 80%. The acceleration from AI allowed us to make hundreds of improvements across Airbnb for hosts and guests. And I want to highlight a few examples that are helping drive the outperformance we're seeing. The first I want to talk about how we've made it easier for guests to book. I've talked in past quarters about Project Hawaii, which is our innovation blueprint, where hundreds of improvements compound over time. AI is accelerating this work across search, sign-up, checkout and payments. And by reducing friction across the guest journey, we are converting more traffic into booking, and that's become one of the biggest drivers of our growth. We improved search and discovery, making it easier for guests to find and book the right home, hotel, Service or Experience, and it's meaningfully improving conversion. We also introduced AI-generated listing highlights so guests can quickly understand the key details about a home. We also launched AI-powered review highlights, surfacing what guest reviews say about a home's location, amenities and more. Later this year, we'll introduce AI home comparison, allowing guests to compare homes side-by-side before booking. We simplified sign-up and log-in, making it easier for guests to get started in Airbnb. We streamlined checkout by making pricing and cancellation policies clear. And we also continue to expand Reserve Now, Pay Later to more listings, and we're making it more visible throughout the booking flow. AI is also making it easier to host. Now we know that our hosts are more successful when they have the right price, the right insights and the right tools. And AI is helping us improve all 3. We made it easier for hosts to set competitive prices and get more bookings. We also gave hosts more actionable insights to help them improve their listings and increase their earning potential. And we're rolling out AI tools that help new hosts get started faster and better understand their pricing and earning opportunities. AI is also transforming customer support. Our AI assistant is now available in more than 50 languages. Nearly 45% of issues that start with our AI assistant are now resolved without a human agent, while delivering much faster resolution times. Later this year, we will begin introducing AI voice support, extending the experience to phone calls. Now AI isn't just making the product better, it's also making Airbnb more efficient. In Q2, customer support cost per booking declined about 16% year-over-year, driven in part by improvements by our AI assistant. We expect those costs to continue to decline as our AI assistant resolves more and more issues and of course, as we bring it to voice. But improving the core experience is really only part of the story because we're also continuing to expand what Airbnb offers. In May, as you know, we expanded Airbnb Services across grocery delivery, car rentals, airport pickups and luggage storage. And recently, we introduced resort passes, giving guests day access to amenities at some of the world's best hotels. Now it's still early, but what we are seeing is really strong momentum in bookings. And every new service that we ship, we can do faster than the service before. So we're getting much more efficient. For example, groceries took 8 months, 9 months and airport pickups took about 6 weeks to develop. So you can see how these things are compounding. And we're also seeing similar momentum with Airbnb Experiences. We added 1,000 new Experiences across the most in-demand categories, increasing supply by nearly 80% year-over-year during Q2. While Experience is still a small part of our business, bookings accelerated both year-over-year and actually sequentially from last quarter. And we also expanded our accommodations business, adding thousands of boutique and independent hotels across top destinations around the world. Featured hotels come with price match guarantee and up to 15% credit that guests can use towards future bookings. Roughly 35% of first-time hotel guests returned to Airbnb to book a home. And what this shows is how hotels are introducing new guests to Airbnb, and many of those new guests don't just come back and book hotels, they come back and they book homes. So hotels are making homes stronger. While hotels still represent a single-digit percentage of nights booked, hotel nights are growing approximately 3x faster than our homes business. So there's a lot of growth ahead of us. Now finally, I want to share an update on our event strategy. Many events -- major events help strengthen the Airbnb brand, while driving both supply and demand. I will remind you that Airbnb started to provide housing for events. So housing for events is in our DNA. Now these major events introduce millions of people to Airbnb, encouraging more people to book and become hosts, help welcome cities and help cities welcome more visitors without building new hotels. Now while bookings from any single event may be temporary, the brand awareness, the trust and new host these partners create benefit our business long after the event ends. And the World Cup is one example of this strategy. As an official tournament partner, Airbnb hosted millions of people during the tournament, many first-time guests. Now more than 150,000 homes across host cities were listed on Airbnb for the first time, creating new economic opportunity for locals. And it didn't stop with just the World Cup because we are expanding this playbook to other events, including the Olympics, the Tour de France, Art Basel fairs, Lollapalooza, La Liga in Spain, and most recently NASCAR. Now when you put all together, I think there's a bigger story this quarter. And the story is this. There was no single product. There is no single partnership or initiative that explains our results. It's a combination of stronger execution, a world-class team and an innovation model that is accelerated by AI. This is what's creating the momentum across our business. There is no silver bullet. And we believe it's one of the reasons we're outperforming our largest peers in travel. It's also evidence that the changes we've made over the last several years are paying off. Because those changes are rooted in the way we build and operate the business, we believe that momentum will continue through the coming quarters. It's giving us so much confidence in the second half of this year that that's why we're raising our guidance. And with that, I'll turn it over to Ellie to share more.

Thanks, Brian, and good afternoon, everyone. I'll start with Q2 financial results and then cover our outlook for Q3 and the full year 2026. As Brian shared, Q2 was another great quarter for Airbnb with continued momentum across the business. Despite the ongoing conflict in the Middle East, we continue to see strong underlying demand globally and the impact to our business from the conflict was less than we had anticipated. Gross booking value grew 16% year-over-year to $27.2 billion, driven by strong growth in both Nights and Seats Booked and ADR. ADR increased 5% year-over-year or 4% excluding the impact of FX, with noticeable strength in North America and Europe. Nights and Seats Booked growth was strong across every region. We saw high single-digit growth in both North America and Europe, with Europe marking a steady recovery from the Middle East-related headwinds we saw in Q1, alongside approximately 20% growth in Latin America and high teens growth in Asia Pacific. As Brian mentioned, we've been able to deliver these results not from a single action, but the collective actions across our platform. For guests, these improvements have spanned search and discovery to payments and checkout. And for hosts, we've made it easier to get started and improved pricing and insights to help them become more competitive. Now of the many changes that have collectively contributed to our strong growth, we wanted to provide an update on 2 that we've spoken in the past, in particular, Reserve Now, Pay Later and our simplified fee structure. First, we continue to see Reserve Now, Pay Later benefit the business. It drove more bookings, longer booking lead times and contributed to the increase in ADR. Specifically in Q2, over 20% of our total GBV was booked using this flexible payment option. Given the strong results it has delivered, in July, we expanded the types of bookings eligible for Reserve Now, Pay Later. Now beyond the immediate uplift in nights booked, we believe this provides a longer-term competitive benefit, enabling hosts to lock in earlier calendar share and better aligning our payment options with guest preferences. Second, the migration of API host to a single service fee helped our host price more competitively and provided greater price transparency. As a result of its success, we recently announced the broader rollout of the single fee to the majority of our remaining hosts, which we expect to be completed by year-end. Approximately half of our active listings are now subject to the single service fee. Now let me spend some time on our Q2 financial results. Revenue grew 17% year-over-year to $3.6 billion, exceeding the high end of our outlook. In terms of profitability, our net income was $816 million, while adjusted EBITDA was $1.3 billion, representing an adjusted EBITDA margin of 35%. Our adjusted EBITDA margin expansion of over 100 basis points compared to last year was driven by strong revenue growth and cost efficiencies in operations and support and product development, partially offset by continued investment in sales and marketing. Meanwhile, the year-over-year increase in net income was driven by higher operating income and a $77 million tax benefit recorded in the current period related to recently published tax guidance impacting prior year taxes. Next, our balance sheet and cash flow. We continue to benefit from our efficient and capital-light business model, delivering $1.3 billion of free cash flow in Q2. Over the trailing 12 months, we've generated $4.8 billion of free cash flow, representing a free cash flow margin of 37%. Now absent the impact of Reserve Now, Pay Later bookings, which deferred guest payments from the time of booking closer to the date of stay, we expect that unearned fees would have grown year-over-year in Q2. During Q2, we purchased $1.1 billion of our common stock, enabled by our strong balance sheet and significant cash flow generation. Returning capital to shareholders remains a core component of our capital allocation strategy. Now finally, let's shift to our Q3 and full year 2026 outlook. We're encouraged by the momentum we've seen so far this year and are excited about our road map to drive growth in '26 and beyond. Specifically, in Q3, we expect to generate revenue of $4.69 billion to $4.77 billion, representing year-over-year growth of 15% to 17%. This includes an approximate 3 percentage point foreign exchange tailwind after factoring in our hedging program. We expect year-over-year GBV growth to be in the mid-teens, driven by low double-digit growth in Nights and Seats Booked and a moderate increase in ADR due to mix shift and price appreciation. In Q3, we are not assuming any significant impact related to the conflict in the Middle East. On profitability, we expect adjusted EBITDA to increase year-over-year and for adjusted EBITDA margin to be down slightly compared to Q3 2025 due to the timing of investments this year. Now moving to the full year. We are raising our revenue and adjusted EBITDA outlook. We now expect year-over-year revenue growth to improve to at least mid-teens, up from the low to mid-teens guidance we provided last quarter, supported by the accelerated pace of Nights and Seats Booked we've observed across our business. For the full year, we expect our implied take rate to be relatively flat compared to 2025, accounting for the timing of bookings versus check-in with Reserve Now, Pay Later as well as higher customer incentives related to new businesses during 2026. Absent these incentives, we would have anticipated our implied take rate to be slightly higher during the year, driven by our monetization initiatives and execution across our product road map. And for full year profitability, we are now expecting our adjusted EBITDA margin to be at least 35.5%, up from 35%. Now to close, our results this quarter are proof that the product and business changes we've made are translating into real financial outcomes. The improvements we shared, making Airbnb easier to use, helping hosts succeed and running the business more efficiently, these improvements are compounding. And we believe that's showing up as a real outperformance relative to our peers. Even against tougher comps in the back half of the year, we are raising our full year guidance for both top line growth and profitability, a reflection of the pace of innovation, the operating momentum and the execution we are seeing across the business. And with that, I will open it up to Q&A.

[Operator Instructions] Your first question today comes from the line of Justin Post from Bank of America.

A lot to unpack. Let's just start with hotels. Can you tell us how the initiative is going and what you're seeing in maybe the cities where you have a lot of inventory, not just the cities where you might have had some regulatory restrictions, but is it gaining -- improving conversion rates in kind of cities where you already have a lot of inventory?

Yes. I mean I'll start. Justin, the hotel initiative is going significantly better than I expected, and I had high expectations. What I -- what we told the team is our strategy is very simple. While we think that some trips are better in Airbnb, we think there's a lot of trips that are conducive to hotels. And those trips are last-minute short-stays business trips or where we are supply constrained. And so as we've been talking about, our goal was to build the best hotel booking product online. We now believe that we have the best hotel booking product online. So the second question is, can we get supply? And that is -- I expected the first thing. I expected us to build the best hotel booking product online. I did not know what the reception would be. And I thought we're known for homes. It would take a lot of effort for hotels to warm up to want to list on Airbnb. And that's where my expectations were not high enough because after we began outreach for hotels, things flipped. And what we are now seeing is a huge amount of influx of interest from hotels wanting to list on Airbnb. It's probably no surprise why. Not only do they like our product, but they like that we have a huge amount of traffic. We are one of the most traffic travel sites in the world. We also have a young audience. We have a disproportionately American audience relative to some of our competitors, and we have an extremely favorable take rate. To answer your second question, we are seeing strength in both supply-constrained markets and in non-supply-constrained markets. And maybe the simple way to think about it is that not everyone comes to Airbnb with the intent to look for a home. A lot of people come to -- there's 3 types of people. People only stay in homes, people only stay in hotels and most people are willing to stay in both. And so the basic theory of our marketplace is as we add more supply of homes or hotels, conversion rate of our traffic goes up and we see more bookings. What we're also seeing is about 35% of people who come to Airbnb and book a hotel for the first time, come back and book a home. So hotels not only are bringing new guests to Airbnb, but those new guests are sometimes often choosing to book a home. So essentially, one is making the other stronger. And that's the basic theory of Airbnb. We are absolutely going to be stepping on the gas given the reception, and we are focused not just in supply-constrained markets, but all markets. So to answer your question, they are working well in both.

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

I guess I'd just love to understand the sort of ultimate ambition from all the ancillary products you're rolling out. Are these simply sort of attach rates, someone books a home and then we'll add on car hire and other stuff? Or could you imagine a world where you go to Airbnb and say, please book me a 2-week trip to Scotland, and it will be able to fulfill the whole trip and be a sort of full-service travel OTA in that regard? And maybe just a small sub question. I guess your car hire partner has been acquired by a competitor. Does this make M&A a bit more of a nearer-term necessity as you build these ancillary products out?

Yes, I can take both questions. So you can kind of think of Airbnb as probably going into like 3 different phases of expansion. The prior era was us being just homes for travelers. And so we became a now verb kind of like Kleenex or Xerox that was associated with just one thing. So the first phase, and you are correct in assessing this, is that a lot of things will be -- most people still come to Airbnb with a home in mind. And so most of our business is going to be for the foreseeable future, certainly this year, attaching to people that have an intent to come finding a home. That would be attaching a service, attaching Experience or people coming to Airbnb expecting a home but discovering hotels and booking a hotel that might have otherwise bounced because they didn't find a home they're looking for. So that's kind of Phase 1. But that's the prior phase. We are now entering the next phase of expansion, which is actually not the end game. It's just the next stage. And the next stage has become a one-stop shop for travel. So you'll eventually be able to get all of your travel needs through Airbnb, and that's what you're starting to see. And then Phase 2 would be we will go from traveling to living. In Phase 3, we go from traveling to living to other ways for people to connect on our platform. I think you will expect over the next year for us to be very, very focused on the travel phase, one-stop shop for travel. But I do not think our ambition is limited to travel. The single reason why is because AI is an existential risk to everyone. And last year, I told our company that AI is an existential risk to us. It was the only existential risk to this company. Now policy is a risk, but it's not an existential risk. It's not -- it's a risk that we will manage forever. But the existential risk to everyone was AI. Is AI good for you? Is AI bad for you? And I think at the moment of truth happened this year, moment of truth happened. First, we hired our CTO, Ahmad Al-Dahle. He was the leader of Meta Llama models. He came in, and I think we went from a company that was a middle of the pack company for AI to a leader in AI, at least amongst companies that are not frontier labs or hyperscalers. And I think we are amongst the most AI native companies now in all of Silicon Valley. And so I think because of that, this allows us to go into many new businesses in travel and eventually beyond travel that we might not have been able to go into except for the opportunity that AI affords us. And we are seeing, again, we're able to develop products more quickly. We're able to attach a lot more products and services. So to answer your question, yes, I do imagine that in the near term, in the near term being over the next year, 1.5 years, you will absolutely be able to get to Airbnb with a broad travel intent, like I like to travel my family to somewhere in Europe. Can you recommend where I should travel? Can you put my whole trip together? And absolutely, Airbnb will be able to do that. And that is just the next phase. It's not the limiting phase. With regards to M&A, you're probably referring to CarTrawler being acquired by Expedia. We still think that they're going to be a great partner for us with car rentals. I do not think that, that's -- I'm very confident in that partnership. I think we are going to be a major benefit to that company. And I think that I'm expecting that they're going to want to continue to partner with us. And I do not think this has any impact on our M&A strategy. Our M&A strategy remains opportunistic. As we go into a lot of new verticals, there's a lot of M&A opportunities. We have -- we're sitting on quite a lot of cash. We generate a lot of cash. Entrepreneurs would love to be part of Airbnb and to hold stock. So I think there's a huge number of opportunities for us. But the right thing is our bias is always to grow organically and to look secondarily at acquisitions.

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

Two, if I can. First, just the hotel commentary sounds super encouraging. Maybe you can give us a sense of maybe anecdotes on markets where you're seeing particular conversion rate improvement or areas where you're comprising a meaningful portion of hotels bookings. Anything you can give us that would help us understand better either the time frame or scale of the opportunity? And then the second one, just wondering how the AI search tests are going, when you expect that to be a bigger part of the product? And what that -- if that's a gating factor to an ad product, kind of what you think about that?

Yes. So let me just give a little more color on the hotels ramp. As we've shared, we started in those markets that are regulatory constrained because it's an obvious opportunity for us to bring supply to those markets where we're not always able to fulfill demand that we already have. We've expanded our supply acquisition efforts to a top 20 number of cities. And I would say, more broadly, we're looking to add inventory that can be accretive to the platform versus compete with homes. And so we're very selective with regard to what we add to make sure that it's adding great inventory that our consumers will love. More broadly, when you think about the scaling of this product, we've shared that today, hotels are only a single-digit percent of nights booked on the platform, so a relatively small segment. But as we disclosed in the letter, given our efforts over the last several months, hotels, that segment is currently growing about 3x as quickly as homes. And we have -- as Brian shared previously, we have large ambitions in terms of continuing to scale not only the rate of growth, but obviously, the contribution to the overall business in the coming years.

Yes. I mean maybe before I answer the second part of the question, it is kind of notable homes and hotels, I like to think we did the really hard business first. I'm not here to say doing hotels is easy, but I'll tell you what's harder, like helping try to create a category. Airbnb homes don't have front desk. We had to teach people hospitality. We had to navigate governments all over the world. We had to match supply and demand. And we had to -- it was not a behavior that people are familiar with. Hotels are no doubt, not an easy business, but I actually think the hotels are making it an easier business for us. When you see the reception that they have, their desire to want to list on the platform. And the fact that we've already done most of the hard work because in fact, most of the technology and tools we built for homes apply to home, hotels. That actually, it is a very natural extension for our business. And I don't want to say it's easy, nothing in life is easy. And if it is, you're probably being complacent. But it is a much more natural transition than I ever imagined. And also the -- I was always worried for years about homes being next to hotels in the platform. It does not bother customers. We have really, really good personalization. And we know now with our personalization and really driven by AI, whether someone wants to see just homes, just hotels or both. So I'm being very, very excited, and I just wanted to like maybe highlight that point. Now to the second point on AI search, good news. We are beginning to put it in test this month. Now that test is going to be a very small percentage of our traffic. And based on those results, we're going to then begin to expand it to more traffic over the course of this year. I just want to point out that the tests that I've seen, I think, are extraordinary. They're really great. That being said, we just have to remember that people come to Airbnb often most people a handful of times a year, and they have an expectation that they see a search box with a location. So it's going to take some time, months and months to retrain the customer. So the way we're initially going to roll it out is the default is going to still be the core search above, you'll see a toggle. Once you've turned the toggle on, you're going to be able to try the new AI search. We'll have to see how it converts. I think for people who toggle it on, it's going to convert very, very well. We don't want to impose that on everyone. We want -- by the way, we learned this with total price display. We start with a toggle. That toggle for those people who toggled was very positive, we want to educate people. And so I think you're going to see this play out over the course of this year and into next. Now AI search, you can actually think about as really 3 or 4 major features. One is the search input. I can type in natural language whatever I want. The second thing is it can essentially respond to a natural language, rather than just saying 300 search results, it can respond to in natural language. Then the titles, the titles could actually be AI generated and they can be conversational as if you're reading a chatbot but more to a visual. Then you get to the product description page and the highlights are AI generated in real-time personalized to you. You go down the page, you have a question. You can ask the PDP through AI. You see the entire journey, not just AI search is going to be powered by AI. And what this will feel like is it going to feel as -- or almost as conversational as a chatbot, hopefully less chatting in fewer words because we think travel is more visual, very, very personalized. And what this will mean is much higher conversion rate.

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

Great. Just following up on the changes in fees. Are you planning to roll that out to every host? Or is that mostly still geared towards professional property managers?

Thanks, Jed. Yes. So what we initially launched back in September of last year was rolling out single service fee for our API connected host, which is predominantly property managers. Fast forward, we did extensive testing on a broader swath of hosts this winter and spring and have begun migrating the remainder of our host to the single service fee. And we anticipate by year-end, our entire supply base will be on that single service fee. As a reminder, that single service fee allows us to provide more simplified pricing recommendations and in aggregate, has a kind of downward pressure on pricing to allow us, one, to offer more value to guests, but also ensure that we are priced competitively relative to other platforms.

Your next question comes from the line of Ken Gawrelski from Wells Fargo.

Two, if I may. First, maybe, Brian, you talked about the reception from your customers on -- to hotels on the platform. Could you talk a little bit more about your hosts and their reception as you continue to roll out new cities with hotel supply? And then two, could you -- could you please maybe talk about -- as you think about the personal experience that you're building, the journey on Airbnb, do you think you're going to go -- is it -- do you start with kind of certain geos and build out all the Experiences and figure out for each geo that you have -- you can build an experience of trip planning? Or are you talking more broadly like you need to have basically a global trip planning experience?

Okay. On the -- thanks, Ken. On the first question, we haven't really gotten much feedback from our core host. I mean, mostly, they just want to make sure their bookings are going up, and our results show they are. And if we do get asked though, I would say that the rise of the tide raises the sails of all boats. So essentially, I don't mean to give our host like a business school marketplace lessons. But if they were curious, I would tell them that what Amazon learned in the 2000s was selling DVDs and selling CDs helped the sales books did not cannibalize them. And every time they added a new category, it strengthened and list the boats of the prior categories. And that the most important thing for host is that it's the jewelry decipher concept essentially that we bring more people to the platform. If we bring more people to the platform, then we can match the perfect supply to the exact guest that wants that supply. And so we actually see hotels being accretive to the booking for our home host. And I think the results are showing that. So we haven't heard from them. And mostly, when we do hear from them, it's about their bookings, but mostly, we're seeing very positive results. Now to the second question, I think most supply, we test city by city. So hotels, we go city by city. Services, we go city by city. Experiences we go city by city. But most software, we really do globally. We might test in the country, but we don't really do that city by city. So to answer your question, this will be broad-based trip planning that we'll be rolling out globally, and we will test it globally. Sometimes we test it in the country, but often we just test it globally.

Your next question comes from the line of Eric Sheridan from Goldman Sachs.

You've been in an investment cycle for quite a while now, and now you're building a lot of demand coming out of some of the building blocks you put in place over the last couple of years. Can you talk a little bit about the interplay between incremental margins in the business over the long-term? And how much of that incremental margin you think needs to be reinvested back into the operating momentum as opposed to how much of that incremental margin might drop to the bottom line?

Yes. Thanks, Eric. So I'm not going to give you a specific guide for '27 and beyond. But I think looking at our track record, you can see a couple of things. One is the underlying economics of this business are extremely strong from both an EBITDA and a free cash flow basis. Second, last year, we did have a bit of an investment cycle. But given the growth that it helps on for the current year, we're able to both accelerate growth, invest substantially behind that growth and also deliver an expansion in the margin. As we look forward, we're going to seek to do the same. We're constantly looking for opportunities to grow. And so where we have those opportunities, we will lean in. But I think given the track record and the somewhat steady EBITDA margins that we have delivered, I think you can see there's a relative floor in our ability to continue to invest against that.

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

Brian, when we're talking about all the new products that are coming out, one of them for host is called personalized recommendations. And I think this helps host improve listings and calendar and pricing. So I want to hear a little bit more about the pricing side and how Airbnb is helping host sort of decide what the optimal pricing is for each home that's available. And then the second question is on Experiences. And so we know supply is up 80%. I think I heard that right, year-over-year, and we're accelerating bookings as a result. But would love to hear more on whether Experiences at a size and scale yet to actually contribute to overall Nights and Seats Booked.