Today we issued our third quarter 2023 financial results. You can read the details here. Airbnb Co-Founder and CEO Brian Chesky said:
“Our Q3 results highlight a record travel season on Airbnb and our most profitable quarter ever. Over the last nine months we’ve added nearly 1 million listings globally and we continue to see demand for travel grow.”
Overview of Q3 results
Q3 marked another quarter of strong results for Airbnb. Nights and Experiences Booked exceeded 113 million, growing 14% year-over-year and accelerating from Q2 2023. Revenue of $3.4 billion grew 18% year-over-year (14% ex-FX). Net income of $4.4 billion, or $1.6 billion excluding the one-time income tax benefit, was our most profitable Q3. Adjusted EBITDA was $1.8 billion, while Free Cash Flow grew 37% year-over-year to $1.3 billion.
We continue to make significant progress across each of our strategic priorities:
Make hosting mainstream: We’re focused on making hosting just as popular as traveling on Airbnb, and we believe our approach is working. Active listings grew 19% in Q3 2023 relative to Q3 2022, and we continued to see double-digit supply growth across all regions and market types. In Q3 alone, Airbnb Hosts earned more than $19 billion. We’ll continue to raise awareness around hosting, make it easier to get started, and improve the overall experience for Hosts.
Perfect the core service: We’ve collected millions of pieces of feedback on how to improve Airbnb. Two years ago, we started doing twice-a-year product releases to address this feedback. Since then, we’ve launched more than 350 new features and upgrades to our core service. In the past year alone, this included improved customer service, total price display, and new tools to help Hosts set more competitive prices. In September, we shared the progress we’ve made to help lower cleaning fees, reduce prices and improve search and reliability. And on November 8, we’ll introduce dozens of new features aimed at making Airbnb more reliable.
Expand beyond the core: We’ve made significant progress over the past three years building a strong and profitable business. In addition to laying the foundation for differentiated offerings for our Hosts and guests, we’ve been focused on international expansion. We’re investing in under-penetrated international markets and seeing great results. Following the success we’ve seen in recent quarters in Germany and Brazil, Korea has now become one of our fastest growing countries compared to 2019, with gross nights booked 54% higher than they were in Q3 2019 on an origin basis.
Q3-2023 financial results
Here’s a snapshot of our Q3 2023 results:
Q3 revenue was $3.4 billion, up 18% year-over-year. Revenue increased to $3.4 billion in Q3 2023 from $2.9 billion in Q3 2022, driven by solid growth in Nights and Experiences Booked, a modest increase in Average Daily Rate (“ADR”) and an FX tailwind.
Q3 net income was $4.4 billion, including a one-time non-cash tax benefit. In Q3 2023, net income included a $2.8 billion one-time, non-cash income tax benefit driven by the release of a valuation allowance on certain of our deferred tax assets. Excluding the benefit of this one-time item, our Adjusted Net Income was $1.6 billion compared to $1.2 billion of net income in Q3 2022. Our Adjusted Net Income increased primarily due to our revenue growth, expense discipline and interest income. Adjusted Net Income Margin was 47%, up significantly compared to the 42% net income margin during Q3 2022.
Q3 Adjusted EBITDA was $1.8 billion, up 26% year-over-year. Adjusted EBITDA increased to $1.8 billion in Q3 2023 from $1.5 billion in Q3 2022, which demonstrates the continued strength of our business and discipline in managing our cost structure. Adjusted EBITDA margin was 54% compared to a Q3 2022 Adjusted EBITDA margin of 51%1.
Q3 Free Cash Flow was $1.3 billion, up 37% year-over-year. Net cash provided by operating activities increased to $1.3 billion in Q3 2023 from $964 million in Q3 2022. The increase in cash flow was driven by revenue and bookings growth as well as Adjusted Net Income Margin expansion. Our TTM FCF was $4.2 billion, representing a TTM FCF margin of 44%—a significant improvement from 41% a year ago2.
Q3 share repurchases of $500 million. Our Free Cash Flow generation enabled us to repurchase $500 million of our Class A common stock in Q3 2023. Since we began our share repurchases a little over a year ago, we have repurchased a total of $3.0 billion, enabling us to reduce our fully diluted share count from 698 million in Q3 2022 to 681 million at the end of Q3 2023.
Q3-2023 business highlights
Our strong quarter was driven by a number of positive business highlights:
Q3 was a record summer travel season on Airbnb. Nights and Experiences Booked grew 14% in Q3 2023 compared to a year ago. Across all geographies, we saw a sequential acceleration in the year-over-year growth rate of nights booked relative to Q2 2023, driven by increases in active bookers in each region. We were particularly encouraged by the year-over-year growth of first time bookers during Q3 2023. We are also seeing significant strength in our app relative to desktop and mobile web with 53% of our gross nights booked in the Airbnb app compared to 48% in Q3 2022.
International expansion markets are gaining momentum. Cross-border nights booked grew by 17% in Q3 2023 compared to a year ago. As international travel continues to recover, we’re building greater momentum for Airbnb in under-penetrated markets. In Asia Pacific, our business has fully recovered to pre-pandemic levels, with gross nights growing 23% in Q3 2023 compared to Q3 20193. China outbound travel increased over 100% in Q3 2023 compared to a year ago. Smaller Asia Pacific markets such as Taiwan, the Philippines, Thailand, Hong Kong, and Indonesia all experienced year-over-year growth above 30% for gross nights booked on an origin basis. In addition, we saw more guests return to cities, with high-density urban nights booked increasing by 15% in Q3 2023 compared to Q3 2022.
We’ve added nearly 1 million active listings this year. Our active listings grew by 19% in Q3 2023 relative to Q3 2022. We continued to see double-digit supply growth across all regions, with the highest growth in Asia Pacific and Latin America—the two regions that also had the most year-over-year growth in Nights and Experiences Booked. Consistent with the prior quarter, urban and non-urban supply grew at similar rates year-over-year. With over 7 million active listings, we saw relatively similar growth among individual and professional Hosts and believe the majority of new listings are exclusive to Airbnb.
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