ABNB

This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. Only one-quarter of AI use cases in customer service produce a return on investment, according to a Gartner analysis of 432 use cases released last month. Another one-quarter deliver negative returns, and 42% have unclear ROI in which support leaders say they simply don’t know the value produced. Only 11% of customer support use cases break even. Despite such unclear returns, more than three-quarters of leaders are planning to increase investment in AI in 2026. Although executives at major companies from Verizon to Airbnb tout the success of their AI chatbots, cost savings from AI investments in customer service remain elusive for most companies. Among business functions, customer service leads AI adoption in the enterprise. Gartner found that customer service and support teams are pursuing on average nearly five AI use cases and committing about 13% of their functional budget to AI. However, customer support leaders are increasingly being graded on something they can’t often prove. More than half of service and support leaders — 56% — expect to have their incentives tied directly to AI outcomes in 2026. This disconnect is a product of a top-down approach that fails to address customers’ actual needs and simplified assumptions about containment and headcount, experts say. “What we're seeing with the deployment, the backstory here is like everyone is trying to get AI,”  Antoine Nasr, head of AI at Forethought AI Agents by Zendesk, told CX Dive. “This is a top-down initiative: We need AI and customer support and customer experience.” Too often, when leadership directs customer support to implement AI, it doesn’t begin with a clear customer problem. “Too many AI rollouts begin with pressure to demonstrate a credible AI strategy to the board, rather than with a clearly defined business problem,” Julie Geller, principal research director at Info-Tech Research Group, told CX Dive via email. Many businesses expect cost savings via workforce reduction, with AI agents taking over many of the easy-to-answer questions customer service representatives field. But the rate of organizations increasing head count is equivalent to the rate reducing it, with one-quarter reporting workforce growth and about one-quarter reporting reductions, according to Gartner. As more businesses adopt AI, they also need to hire new specialized roles to manage AI. The goal of containment is also a misguided approach if it doesn’t help the customer. “Containment is also too often mistaken for success,” she said. “Delaying contact with a human agent is not the same as resolving the customer’s problem. The real test is much simpler: did the customer get what they needed, with less effort?” Gartner’s research falls in line with a recent report by Forethought AI Agents by Zendesk. While 70% of organizations have rolled out AI in customer experience, only a small percentage are producing value in the form of improving outcomes and ROI.

Airbnb’s second quarter was marked by significant acceleration in both revenue and profitability, with management highlighting broad-based momentum across the business. CEO Brian Chesky attributed the outperformance to the compounding effects of hundreds of incremental product improvements, especially those powered by artificial intelligence (AI). Notably, guest conversion rates rose due to streamlined search and booking flows, while first-time booker growth reached its highest level in four years, driven by new payment options and increased traction among younger demographics. Expansion markets and core regions like the U.S., France, and Australia all saw an uptick in growth, reflecting the effectiveness of Airbnb’s ongoing investments in product and operational enhancements. Is now the time to buy ABNB? Find out in our full research report (it’s free). Revenue: $3.61 billion vs analyst estimates of $3.58 billion (16.5% year-on-year growth, 0.8% beat) Adjusted EPS: $1.37 vs analyst estimates of $1.25 (10% beat) Adjusted EBITDA: $1.26 billion vs analyst estimates of $1.23 billion (35% margin, 2.9% beat) Operating Margin: 21%, up from 19.8% in the same quarter last year Nights and Experiences Booked: 148 million, up 14 million year on year Market Capitalization: $106.2 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Justin Post (Bank of America) asked about hotel initiative traction and conversion rates across different markets. CEO Brian Chesky confirmed hotel supply is increasing rapidly, driving conversion in both supply-constrained and unconstrained cities, and noted that hotels are introducing new guests to the platform. Richard Clarke (Bernstein) inquired if Airbnb plans to become a full-service travel agency and whether M&A is necessary for ancillary services. Chesky said the company aims to be a one-stop travel shop, leveraging organic growth and partnerships, and does not see near-term M&A as critical despite a recent partner acquisition. Lloyd Walmsley (Mizuho) asked about conversion improvements in hotel bookings and the progress of AI-powered search. CFO Ellie Mertz explained that hotels are still early in their lifecycle but growing three times faster than homes, and Chesky stated AI search is rolling out in tests with broader adoption expected over time. Jed Kelly (Oppenheimer) questioned the rollout of the single service fee for hosts. Mertz detailed that Airbnb plans to have nearly all hosts on the new fee structure by year-end, leading to more competitive pricing and greater transparency for guests. Eric Sheridan (Goldman Sachs) probed the balance between reinvesting incremental margins and letting them flow to the bottom line. Mertz highlighted Airbnb’s strategy of accelerating growth while maintaining or expanding margins through disciplined investment and operational leverage. In the coming quarters, the StockStory team will be monitoring (1) the adoption and impact of AI-powered search and dynamic host pricing tools, (2) the pace of hotel and ancillary services expansion both in supply and user adoption, and (3) execution of the global rollout of the single service fee and Reserve Now, Pay Later options. Advances in customer support automation and the ability to maintain cost efficiency amid rapid innovation will also be important markers. Airbnb currently trades at $179.96, up from $151.64 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET Vice President of Investor Relations - Andrew Slavin Co-founder and Chief Executive Officer - Brian Chesky Chief Financial Officer - Ellie Mertz Operator: Good afternoon. 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 Slavin, Vice President of Investor Relations. Please go ahead. Andrew Slavin: Thank you so much. Good afternoon. 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 2026. These items are also posted on the investor relations section of Airbnb's website. During the call, we'll make brief opening remarks. We'll 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. With that, I'll pass the call over to Brian. Brian Chesky: All right. Thanks, Andrew. Good afternoon, everyone. Thanks for joining. Over the first half of 2026, we've delivered some of the strongest results in years. In Q2, that momentum accelerated. We exceeded 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. 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. 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%. This is the highest growth that we have seen in four years. 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. 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. These results reflect something much bigger than a strong quarter. What they reflect is a fundamental shift in how we are building products. I think most people naturally want to point to one product or one initiative to explain a 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. 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%. Compared to the same six 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. I want to highlight a few examples that are helping drive the outperformance we're seeing. First, I want to talk about how we've made it easier for guests to book. I've talked in past quarters about Project Y, which is our innovation blueprint, where hundreds of improvements compound over time. AI is accelerating this work across search, sign-up, checkout, and payments. By reducing friction across the guest journey, we are converting more traffic into bookings, 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 login, making it easier for guests to get started on Airbnb. We streamlined checkout by making pricing and cancellation policies clearer. 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. We know that as hosts are more successful when they have the right price, the right insights, and the right tools, and AI is helping us improve all three. 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. 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 call. AI isn't just making the product better, it's also making Airbnb more efficient. In Q2, customer support costs 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. 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 rental, airport pickup, and luggage storage. Recently, we introduced Resort Passes, giving guests day access to amenities at some of the world's best hotels. It's still early, but what we are seeing is really strong momentum in booking. 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 eight months, nine months, and airport pickups took about six weeks to develop. You can see how these things are compounding. We're also seeing some momentum with Airbnb Experiences. We added 1,000 new experiences across our most in-demand categories, increasing supply by nearly 80% year-over-year during Q2. While experiences are still a small part of our business, bookings accelerated both year-over-year and actually sequentially from last quarter. 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 return to Airbnb to book a home. 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. Hotels are making homes stronger. While hotels still represent a single-digit percentage of nights booked, hotel nights are growing approximately three times faster than our homes business. There's a lot of growth ahead of us. 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. Housing for events is in our DNA. These major events introduce millions of people to Airbnb, encouraging more people to become hosts, and help cities welcome more visitors without building new hotels. While bookings from any single event may be temporary, the brand awareness, the trust, and new hosts these partners create benefit our business long after the event ends. 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. More than 150,000 homes across host cities were listed on Airbnb for the first time, creating new economic opportunity for locals. 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, Lollapalooza, LaLiga in Spain, and most recently, NASCAR. When you put it all together, I think there's a bigger story this quarter. The story is this: there was no single product, there's 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. 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. 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 given us so much confidence in the second half of this year, that's why we're raising our guidance. With that, I'll turn it over to Ellie to share more. Ellie Mertz: Thanks, Brian, and good afternoon, everyone. I'll start with Q2 financial results, 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, 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. For hosts, we've made it easier to get started and improve pricing and insights to help them become more competitive. Of the many changes that have collectively contributed to our strong growth, we wanted to provide an update on two that we've spoken on 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 that it's 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 hosts 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 defer 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 roadmap to drive growth in 2026 and beyond. Specifically, in Q3, we expect to generate revenue of $4.69 billion-$4.77 billion, representing year-over-year growth of 15%-17%. This includes an approximate three 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 roadmap. 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. We believe that's showing up as 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. 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 today comes from the line of Justin Post from Bank of America. Your line is open. Justin Post: Great. Thank you for taking my question. A lot to unpack. Let's just start with hotels. Can you tell us how the initiative's 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 improving conversion rates in cities where you already have a lot of inventory? Thank you. Brian Chesky: Yeah, I'll start. Hey, Justin. The hotel initiative is going significantly better than I expected. I had high expectations. What we told the team is our strategy is very simple. While we think that some trips are better on Airbnb, we think there's a lot of trips that are conducive to hotels, and those trips are last-minute, short-stays business trips, we're aware we are supply-constrained. 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. The second question is, can we get supply? 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. That's where my expectations were not high enough, because after we began outreach for hotels, things flipped. 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 trafficked 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. Maybe the simple way to think about it is that not everyone comes to Airbnb with the intent to look for a home. There's three types of people that only stay in homes, people that only stay in hotels, and most people are willing to stay in both. 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. Hotels not only are bringing new guests to Airbnb, but those new guests are sometimes, often, choosing to book a home. Essentially, one is making the other stronger. 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 on supply-constrained markets, but all markets. To answer your question, they are working well in both. Operator: Your next question comes from the line of Richard Clarke from Bernstein. Your line is open. Richard Clarke: Hi, thanks for taking my question. 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 two-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? Maybe just a small sub-question. I guess your car hire partner has been acquired by a competitor. Does this make M&A bit more of a nearer term necessity as you build these ancillary products out? Brian Chesky: Yeah, I can take both questions. You can think of Airbnb as probably going into three different phases of expansion. The prior era was us being just homes for travelers. We became a noun and a verb, kind of like Kleenex or Xerox, that was associated with just one thing. The first phase, and you are correct in assessing this, is that most people still come to Airbnb with a home in mind. 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 were looking for. That's phase I. 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. The next stage has become a one-stop shop for travel. You'll eventually be able to get all of your travel needs through Airbnb, and that's what you're starting to see. Phase II would be we will go from traveling to living. Phase III, 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 focused on the travel phase, one-stop-shop for travel. I do not think our ambition is limited to travel. The single reason why is because AI is an existential risk to everyone. 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 a risk that we will manage forever. The existential risk to everyone was AI. Is AI good for you? Is AI bad for you? I think the moment of truth happened this year. Moment of truth happened. First, we hired our CTO, Ahmed Abdalla. He was the leader of Meta Llama models. He came in, 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. I think we are amongst the most AI-native companies now in all of Silicon Valley. 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. We are seeing, again, we're able to develop products more quickly. We're able to attach a lot more products and services. To answer your question, yes, I do imagine that in the near term, being over the next year and a half, you'll absolutely be able to get onto Airbnb with a broad travel intent, like, "I'd like to travel with my family to somewhere in Europe. Can you recommend where I should travel? Can you put my whole trip together?" Absolutely, Airbnb will be able to do that. 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'm very confident in that partnership. I think we are going to be a major benefit to that company, I'm expecting that they're going to want to continue to partner with us. 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 are 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. I think there's a huge number of opportunities for us. The great thing is our bias is always to grow organically and to look secondarily at acquisitions. Operator: Your next question comes from the line of Lloyd Walmsley from Mizuho. Your line is open. Lloyd Walmsley: Thanks. 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 timeframe or scale of the opportunity. 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 if that's a gating factor to an ad product, what you think about that. Thanks a lot. Ellie Mertz: Yeah. 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 accreted to the platform versus compete with homes. 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 % of nights booked on the platform, so a relatively small segment. As we disclosed in the letter, given our efforts over the last several months, hotels, that segment, is currently growing about three times as quickly as homes. 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. Brian Chesky: Yeah. Maybe before I answer the second part of the question, it is 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, helping try to create a category. Airbnb homes don't have front desks. We had to teach people hospitality. We had to navigate governments all over the world. We had to match supply and demand, and it was not a behavior that people were 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 hotels. That actually, it is a very natural extension for our business. I don't want to say it's easy. Nothing in life is easy, and if it is, you're probably being complacent. It is a much more natural transition than I ever imagined. Also, I was always worried for years about homes being next to hotels on 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. I'm very, very excited, and I just wanted to maybe highlight that point. To the second point on AI search. Good news, we are beginning to put it in test this month. That test is going to be a very small % of our traffic, and based on those results, we are 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. It's going to take some time, months and months, to retrain the customer. 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. By the way, we learned this with Total Price Display. We started with a toggle. That toggle, for those people who toggled, was very positive. We wanted to educate people, I think you're going to see this play out over the course of this year and into next. AI search, you can actually think about as really three or four 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 you in natural language. Rather than just saying, "300 search results," it can respond to you in natural language. Then the title. The titles could actually be AI-generated, and they can be conversational, as if you're reading a chatbot, but much more 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. What this will feel like is it's going to feel as, or almost as conversational as a chatbot. Hopefully less chatty, in fewer words, because we think travel's more visual. Very personalized. What this will mean is much higher conversion rates. Operator: Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open. Jed Kelly: 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? Ellie Mertz: Thanks, Jed. Yes. What we initially launched back in September of last year was rolling out single service fee for our API-connected hosts, 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 hosts to the single service fee. 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. Operator: Your next question comes from the line of Ken Gawrelski from Wells Fargo. Your line is open. Ken Gawrelski: Thank you very much. Two, if I may. First, maybe Brian, you talked about the reception from your customers to hotels on the platform. Could you talk a little more about your hosts and their reception as you continue to roll out new cities with hotel supply? Then two, could you please maybe talk about, as you think about the personal experience that you're building, the journey on Airbnb, do you start with certain geos and build out all the experiences and figure out for each geo that you can build an experience as a trip planning? Or are you talking more broadly, like you need to have basically a global trip planning experience? Thank you. Brian Chesky: Okay. Thanks, Ken. On the first question, we haven't really gotten much feedback from our core hosts. Mostly, they just want to make sure their bookings are going up, and our results show they are. If we do get asked, though, I would say that the rise of the tide raises the sails of all boats. Essentially, I don't mean to give our hosts 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. Every time they added a new category, it strengthened and lifted the boats of the prior categories. That the most important thing for a host is that it's the jeweler-jeweler 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. We actually see hotels being accretive to the bookings for our home hosts, and I think the results are showing that. 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. Hotels, we go city by city. Services, we go city by city. Experiences, we go city by city. Most software we really do globally. We might test it in the country, but we don't really do that city by city. 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. Operator: Your next question comes from a line of Eric Sheridan from Goldman Sachs. Your line is open. Eric Sheridan: Thanks so much for taking the question. 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 into 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? Thanks so much. Ellie Mertz: I'm not going to give you a specific guide for 2027 and beyond. 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. Given the growth that it helped spawn for the current year, we're able to both accelerate growth Invest substantially behind that growth and also deliver an expansion in the margin. We look forward, we're going to seek to do the same. We're constantly looking for opportunities to grow. Where we have those opportunities, we will lean in. 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. Operator: Your next question comes from the line of Ron Josey from Citi. Your line is open. Ron Josey: Great. Thanks for taking the question. Brian, we're talking about all the new products that are coming out. One of them for hosts was called personalized recommendations, and I think it's helped hosts improve listings and calendar and pricing. I want to hear a little bit more about the pricing side and how Airbnb is helping hosts sort of decide what the optimal pricing is for each home that's available. The second question is on experiences. We know supply is up 80%, I think I heard that right, year-over-year. We're accelerating bookings as a result. We'd love to hear more on whether experiences are at a size and scale yet to actually contribute to overall nights and seats booked. Thank you. Brian Chesky: Yeah. On pricing, I think this is one of the biggest single levers for growth that we have. I think it's significantly greater than Reserve Now, Pay Later. If you want to just put it in perspective, it is, I don't know, I don't want to say a multiple, but many multiples bigger than RNPL. Why is it? Because Airbnb launched and started as an affordable alternative to hotels. Affordability and value is one of the most important things we can do. We don't price the listings. The best thing we can do is show hosts that if they were to better price their listings, then they will make more money. We are essentially building an entirely new pricing model. No surprise, it will be powered by AI. AI is able to take in a lot of data sources. We're able to take in a lot of data sources of hotel prices, of Airbnb prices, events coming to town, the nature of lead time bookings, and based on that, we have a new pricing model that we're rolling out to hosts. I think this is going to be much more powerful. We're also going to make it much easier for them to update their prices. We're going to be able to let them just tap a button and go immediately with our recommendations. We can coach them on when events are coming to town, how they might want to change their pricing. What I think this is going to do is it's going to hopefully be generating a huge amount of growth for the company. It's frankly one of the single biggest levers that we have to accelerate the growth of our core business, and you can think about this as us making massive changes to the host side of our app. Most people open our app, they only see the guest side. The host side is just as sophisticated, and we're putting just as much investment towards it. Pricing and calendar are essentially two sides to the same coin because you see your prices on the calendar, right? Most people don't have a single price. They have different prices for every day, and the best way to price your home, like a hotel, is to have different prices on different days, and for those prices to be dynamically changed. I think that it's very possible that, right now, hotels have very sophisticated pricing management. They have entire teams of people doing that. I don't think anyone is going to be better than AI at doing this. I think that our models are going to be very, very powerful, and I hope in the future, hotels can even use that. With regards to experiences, they're growing really quickly, but they're growing on a small base. It's a long-term. I think the way to think about experiences is, let's talk about time horizon. To drive near-term growth, it's mostly homes, because that's massive scale. Homes is the shortest horizon and the biggest drivers are pricing and Project Y-type features, conversion rate, getting more supply. The second horizon I would describe as international expansion of hotels. You can see $ billions incremental revenue. It's nearly adjacent. The next horizon after that is going to be services and experiences. Those are on a multi-year time horizon. They're going to be a bit smaller. We are very optimistic about this. We're seeing a lot of growth. The way I'm measuring the growth of experiences is I'm not looking at the global growth rate, although it's great. I'm looking at the growth rate of markets like Paris. We basically have this idea of 1 to 10 to many. Really try to get product market fit in one market, then take that to 10 markets, then you take that to many, like thousands of markets. In fact, this is how we did with the core business. We focused the core business on New York City, then we brought it to many markets. Uber started in, I think, San Francisco. I think DoorDash started in Palo Alto. Uber Eats started in, I think, Toronto and Santa Monica. It's 1 to 10 to many is a tried and true, and we are on the 10s of markets where we're seeing quite high growth. Experiences will grow very quick when we take that and industrialize it to thousands of markets, and that's not this year. Operator: Your next question comes from the line of John Colantuoni from Jefferies. Your line is open. John Colantuoni: Great. Thanks for taking my question. With AI helping drive faster velocity of innovations, I was hoping to get your perspective on how this transition to AI native could impact your product costs and if there are any operational adjustments you're making to help minimize the impact. Thanks. It won't affect us that much. Let's back up for a second. ChatGPT launched three and a half years ago, I think. Almost four years ago. Is it almost four years ago? Yeah, we are coming on the near four-year anniversary in three months of ChatGPT. In the nearly four years, almost all the actual business that's been generated is on the enterprise. I think I've mentioned this in the past, but I'm involved in Y Combinator on the board, and the last batch I saw was 175 companies, 159 were enterprise. Brian Chesky: Part of the reason why is a lot of companies have not figured out how to make money on the consumer side. Why is this? Because the inference cost is not cheap, and there's huge capital expenditures. The great thing about Airbnb is two points. Number one, we do not need to make any major capital investments. We are not buying up a whole bunch of GPUs. Second, the inference costs of Airbnb are de minimis relative to the ROI of our business model. Right? We're not in the business of information where we're trying to monetize. Our transactions are very high-dollar transactions, if AI can just increase our conversion rate just a little bit, the inference cost is so outweighed by the amount of money we make on that increased ROI. I think that what you're seeing is the cost of tokens to develop products and the inference costs to run the models pales in comparison to the incremental revenue we generate and the incremental output or throughput we're seeing. I'm sure we could always be a little more efficient, but I think we're really, really disciplined. We're not so-called token maxing, which I think is this thing where I think all these CEOs at the beginning of the year have this mandate. "I want to see everyone use AI," with a vanity of have people use as many tokens as possible. Luckily, I have a great technology leader in Ahmed, we've been really, really rigorous and thoughtful about it's not about how many tokens you use, it's about the throughput of your product and the quality of your product designs and how much you're shipping. I don't know if, El, you want to add anything, but I think it's very efficient. Ellie Mertz: I would just add tactically, in the updated guidance that we provided, it obviously does assume a material increase in terms of the AI spend over the course of the year. I would note that, yes, we are expanding margins while absorbing that increased cost. On the flip side, the early offsets that we're already realizing, one is obviously the improvement in our customer service cost. We call that out in the letter. The customer service cost per booking is down about 16% year-over-year, in large part due to the AI agent. Second, what we're seeing is that we don't need to grow our head count at levels that we did in the past because we're getting so much more output and speed from our existing workforce, which obviously, also creates efficiencies over time. Operator: Your next question comes from the line of Kevin Kopelman from TD Cowen. Your line is open. Kevin Kopelman: Great. Thanks a lot. Could you talk more about that 11% growth statistic that you called out for growth in first-time bookers? Anything you can call out that's particularly helping with these new customers, and with all the product improvements you've been rolling out, are you seeing anything you track, like net promoter scores, for example, increasing through these new features? Thanks. Ellie Mertz: On the acceleration of first-time bookers, similar to the broader narrative, it is not one single thing that is causing that acceleration. It's the compounding impact of the whole product roadmap. A couple specifics I would note. First, obviously, we're seeing outsized growth in first-time bookers in our expansion markets. We called out a few in the letter. We're seeing really strong growth in places like India and Brazil, where we're introducing large growing numbers of new users every year. Second, what is also supporting that number is the core markets. Obviously, the growth in recent years of first-time bookers in our core markets has been slower given the level of penetration we have across those markets. Yet, in recent quarters, we've also seen an acceleration of first-time booker growth in effectively almost all of our core markets, inclusive of the U.S. When you think about some of the specific product features that have helped, one is absolutely Reserve Now, Pay Later. We see that is a really attractive payment option, in particular for people who have maybe aware of Airbnb, they're on the site, but they haven't booked with us yet. It gives them, frankly, a lot more confidence to book that future stay when they don't need to put down a sizable credit card fee up front. I would call that out as one. More broadly, a lot of our work, just simply on sign-up, login, merchandising, search, all of these are additive in terms of, again, getting that first-time user over the hump of trying to figure out what listing is right for them, and having the confidence to go ahead and book. Operator: Your next question comes from the line of Conor Cunningham from Melius Research. Your line is open. Conor Cunningham: Hi, everyone. Thank you. I would like to get a little bit more detail, if you could just unpack the core growth expansion that you saw in the quarter. You talked about how everything's accelerated, and Brian, I know you just said you didn't want to go down to one single product, but if you could just talk about the innovation in general and how that's playing out. Then just on ADRs, I heard you talk a little bit about that, but if you could just talk about your long-term pricing strategy. I know you're going to roll out some new ADR pricing stuff to your host. Just any thoughts there would be helpful. Thank you. Brian Chesky: In our shareholder letter, I think we highlight 12 or 15 things. Those 12 or 15 things are 12 or 15 out of hundreds of things. Of course, and I won't list all 12 or 15 right now, but let me give you a couple examples. On the guest side, we redesigned the homepage. The homepage is now much more personalized, so you see things that are going to be relevant to you, and we're seeing more people engage the homepage and book right off the homepage. Our search results are much more intelligent, much more personalized to you. Our maps, if you go to search result maps, or especially maps on each listing, we now show nearby restaurants, landmarks, transportation. The maps have really come alive. This seems like a small one, but we've completely redesigned login and sign up. We have so much traffic, we were having as many as a few hundred thousand people failing to log in every day. This is whether they forgot their email or just the friction. Small optimizations are massive for us. We redesigned our sign up, our login on iOS, Android, web. That increased a lot of conversion. We've added a lot of flexibility in login, just other ways to log in. On payments, in checkout, of course, there is Reserve Now, Pay Later. We've added it to more countries, more listings. We made it more visible on the booking flow. We've also had more flexible cancellation policies. Our checkout is completely updated. We've added interest-free installments. Those are just a few of the guest-side features. On the host side, the single service fee has meant prices have become more competitive because a whole bunch of API hosts were accidentally mispricing because they were pricing on other platforms and our guest fee was going on top of that. That's been really big. We've had major improvements to insights dashboard. I'm kind of giving you a laundry list, so you get the idea. Again, there is no one thing. I would recommend you go to our shareholder letter. We have, I think, 12-15 things. We also have three graphics that show some of the features step-by-step. Those will just give you a bit of the sense. Maybe the only other thing I just want to say is we're getting momentum. In other words, a question might be, well, what's next? The answer is there's a huge pipeline of things on the horizon. I had this theory a few years ago that there'd be like, you'd get all the low-hanging fruit, and each new thing would be harder and harder. Actually, it's just the opposite. Project Hawaii taught us that you get momentum, that the team finds bigger and bigger opportunities. We're kind of layering on all these different features, all these different improvements. I think what you're going to end up seeing is this is not a one-time boost in growth. This is durable growth. Ellie Mertz: To talk a little bit about the pricing strategy? Brian Chesky: Yep. Ellie Mertz: I would say, just at a high level, our pricing strategy is to provide hosts the tools to make them as price competitive as possible. We want to make sure that we are consistently delivering value for money to our guests and maximizing earnings for our hosts. In many cases, that means we encourage our hosts to bring their prices down. In some cases, it means we want to make sure that they're not leaving money on the table. I think one of the probably dissonant points over the last couple of years is that we have been aggressively pushing pricing tips and affordability across the platform, and you've seen yet the nominal ADRs rise over that period. One thing we called out explicitly this quarter is the growth in underlying bedroom nights. One of the factors that has been driving ADR up in recent years has been the continued disproportionate popularity of larger homes. We know people come to Airbnb specifically because we are great for families, for large groups, and that obviously involves larger homes with multiple bedrooms. What we've seen is that the growth in what we call bedroom nights has, one, been at a higher level, and also accelerated more on a year-over-year basis than our nights booked. Which gives you a sense of, number one, what is differentiated and popular on our platform, but also that component of ADR appreciation that is durable and really a reflection of incremental value delivered, not just rising prices, which is important to note in terms of thinking about the long-term pricing strategy. Operator: Your next question comes from the line of Colin Sebastian from Baird. Your line is open. Colin Sebastian: Great. Good afternoon. Thanks for taking my questions. I guess, Brian, first, when we look at the expansion of the services platform outside of lodging, which of the newer categories would you say are signaling the strongest early traction and maybe even unit economics relative to expectations? Then how are you pacing investment across that group as we look ahead over the next year or two, understanding that you have other new products in the pipeline? Thank you. Brian Chesky: Car rentals is going to be the biggest one by far, just because of how big the asset is. I think the thing that we're surprised by in a good way is that the length of the reservation is long. In fact, it's longer than the average length of every stay. We thought the average length of a car rental would be shorter than an Airbnb stay. It's actually longer. There's a variety of reasons why. It might be they want the car for longer than their Airbnb stay. They might be staying somewhere else after they check out. That was the big variable, and we underestimate how long the reservations would be. We're going to now expand this globally. I think that's going to be really huge. At the same time, like luggage storage, what a sleeper hit. I went on stage in this keynote, wanted to talk about all these AI features, the biggest cheer I got was luggage storage. I finally felt cool on the internet because I posted on Instagram, people are cheering for luggage storage. That's not the sexiest service, I would say. I will say what we've learned is that every service in and of itself has value. Some are going to drive a lot more revenue, like car rentals and luggage storage. What all these services have in common is they make you more likely to want to book a home on Airbnb or a hotel on Airbnb. We have a pipeline of dozens of more services. Some are going to be really big, like groceries, where we're going to be doing international expansion, food delivery. These are going to be partnerships. We're not building a food delivery service, it's going to be really integrated well into the app. A lot of people don't know which food delivery or ride-sharing or grocery service to use when they get to a country. It's not the same app everywhere. It's integrated. They have the address. We often offer deals and discounts. They make the product really, really compelling. We're going to expand a lot more services, we do not think that they'll incur a lot of costs, because most of the big ones we're talking about are partnerships. Partnerships mean the cost is incurred by the company fulfilling the service, not us. We're essentially in lead generation for them. We do not see a big incurring of cost. On the hosted services, we might call first-party services where they're hosts, we're kind of going not category by category, but by city by city. For example, in Tulum, a lot of people go there and they want to relax. No surprise, massages are really, really popular in Tulum. In Paris, massages aren't as popular. People aren't looking to relax in Paris. They're looking at their photos. Therefore, photography is very popular. We're going to be looking at both hosted services, first-party services, and partner services. A lot of the momentum will be partner services. We're going to be able to launch a lot of them, we do not think there'll be much cost because they're partnerships. Operator: Your next question comes from the line of Doug Anmuth from J.P. Morgan. Your line is open. Doug Anmuth: Great. Thanks for taking the question. Brian, just given your AI-driven product innovation and improvements, and as you scale hotels more, just curious how you might think about a more formal B2B opportunity down the line. Thanks. Brian Chesky: Can you elaborate on the question? Doug Anmuth: Just whether you would do something that would kind of go to market more toward B2B opportunity and travel. Brian Chesky: Do you mean like what Expedia is doing by B2B? What do you mean by B2B? Doug Anmuth: Yeah. Exactly. In something more specifically for enterprise and businesses. Brian Chesky: How do I explain this? To use a computer analogy, BlackBerry was a very enterprise-first company. Apple was a very consumer-first company. I think ultimately consumer wins and the consumers kind of point the enterprises. I think that enterprise is going to be really important for us. Our B2B strategy is kind of emerging, but we think that the best strategy, and it's the one that Apple pursued, was to get the consumers to vote, and then they tell the employer if they want to use your service, and you make it really easy for them. One thing I will say, I don't know if you're asking this question, but I don't really see us being in the white label business. I think the Airbnb brand is so strong and so powerful that the last thing we want to do is strip that brand away. I don't know if either of those answer your question at all. Did they answer your question? Hopefully they did. Operator: That concludes our question and answer session. I will now turn the call back over to Brian Chesky for some final closing remarks. Brian Chesky: All right. Well, thank you all for joining today. I just wanted to say, we're really, really excited about the results this quarter. We delivered one of the strongest quarters in years. We've sealed our outlook, and we're raising our full-year guidance. What excites me most isn't the quarter, it's we're seeing broad-based momentum across Airbnb. Growth is accelerating core markets, more people are booking Airbnb for the first time, and we're innovating faster than we ever have before. These results are not isolated. I think they're evidence that the changes we made over the last several years are working. That's what gives us confidence that this momentum is here to stay. I'm incredibly proud of our team that's worked incredibly hard to deliver the results that we've talked about today. I want to thank you all for being investors and partners on the journey. We'll see you next quarter. Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Airbnb. The Motley Fool has a disclosure policy. Airbnb (ABNB) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Airbnb (NASDAQ:ABNB) shares surged 17.4% on August 7, closing at their highest price in more than four years. The move followed second-quarter 2026 results, published on August 6, that cleared expectations on nearly every line. Revenue climbed 17% year over year to $3.6 billion, gross booking value rose 16% to $27.2 billion, and adjusted EBITDA jumped 21% to $1.3 billion. It was the kind of quarter that finally shifted the narrative around a stock that had spent years going nowhere. Nights and seats booked rose 10% to 148.3 million, an acceleration from the first quarter, while GAAP EPS jumped from $1.03 to $1.37, well past the $1.22 analysts expected. Management didn't just clear the bar; it raised it for the rest of the year, guiding to at least mid-teens full-year revenue growth and an adjusted EBITDA margin of at least 35.5%, with third quarter revenue seen between $4.69 billion and $4.77 billion. The growth also broadened out. Net origin nights booked accelerated not only in newer expansion markets but in long-established ones too, including the US, France, the UK, and Australia, a sign the improvement is coming from product work rather than a one-time boost. That product work shows up everywhere. Airbnb has rebuilt itself as what it calls an AI native company, cutting the time from concept to shipped feature by as much as 60% and shipping nearly 80% more features than a year earlier. Its AI assistant, now live in more than 50 languages, resolves roughly 45% of support issues without a human agent, up from the first quarter, and has helped push customer support cost per booking down about 16% year-over-year. The company is also stretching past home rentals, adding boutique and independent hotels across more than 20 destinations along with grocery delivery, car rentals, airport pickups, and resort passes. Hotel nights booked grew roughly three times as fast as the core home business, and about 35% of first-time hotel guests come back to book a home, suggesting the expansion feeds the core rather than competing with it. With more than 9 million active listings across 220 countries and roughly 2 billion guest arrivals since 2008, Airbnb also sits on a depth of host history that AI rivals have little of their own to draw from. None of this comes cheap. Airbnb has long carried a valuation premium tied to growth expectations, and a stock that just hit a four-year high raises the bar for what needs to keep going right. Reported free cash flow also leans on a non-cash boost, since stock-based compensation made up roughly 34% of operating cash flow in fiscal 2025, meaning some of that cash generation isn't as clean as the headline number suggests. Regulation is a live risk too. New European Union rules taking effect in May 2026 require more transparency and data sharing from short-term rental platforms, adding compliance costs on top of restrictions cities like New York have already imposed. Airbnb is also leaning harder into AI tools and new service categories it hasn't run at scale before, an unproven bet that could pressure margin instead of expanding it. And the closer the company gets to hotels, the more directly it competes with the chains it's trying to list on its own platform. None of that erases the momentum in the numbers, but it explains why the stock took years to build the case this quarter just made. Hedge fund ownership rose to 87 funds from 80 in the prior quarter, pointing to institutions adding rather than trimming into the rally. Short interest sits at just 3.39% of float, low enough to suggest little organized skepticism against the stock right now. As of August 10, Airbnb trades at a forward P/E of 34.25, a multiple that assumes the acceleration in bookings and margin keeps compounding rather than leveling off. Airbnb just delivered the kind of quarter that can justify a premium multiple, with growth reaccelerating in its oldest markets while hotels and services scale faster than the core business. For the bulls, the AI-driven efficiency gains and the broader travel platform need to keep compounding the way they did this quarter. For the bears, a mid-30s earnings multiple leaves little cushion if EU regulation or a slowdown in travel demand catches up with the story. While we acknowledge the potential of ABNB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Airbnb (ABNB) stock charged higher on Aug. 7, printing a new four-year high after the short-term rentals company posted a blowout Q2 release and raised its guidance for the full year. ABNB recorded $3.61 billion in revenue, up 16.5% on a year-over-year basis, and $1.37 in earnings per share (EPS), handily beating the analyst forecast of $1.26 per share. Mark Cuban Says on a $25,000 Heart Transplant, Doctor Gets $2,200 for ‘Literally Taking a Heart Out’ — Pay $10K So They’re Not Thinking About Next ‘Boo-Boo’ Tim Cook Says There’s ‘No Better Person’ to Take Over at Apple – Here’s What AAPL Investors Need to Know About the CEO Transition The Curious Case of Oracle Stock: The Better the Business Gets, the More Investors Worry Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Versus the start of 2026, Airbnb shares are up more than 30% at the time of writing. In a post-earnings interview with CNBC, Airbnb’s chief executive Brian Chesky dubbed artificial intelligence (AI) the “number one explanation” for accelerated growth. According to Chesky, AI has reduced the product development timeline rather significantly and is helping the company ship about 80% more features year-over-year. In fact, Chesky confirmed that ABNB plans to spend “a lot more on AI,” emphasizing that the immediate top-line and productivity boost far outweigh the cost. Crucially, capitalizing on artificial intelligence is enabling Airbnb to keep its headcount flat while scaling its revenue at a fast clip. While Airbnb shares are already trading at record levels, the long-term bull case remains robust, especially after management raised its full-year revenue guidance to at least mid-teens growth and an adjusted EBITDA margin over 35%. Importantly, the derivatives market also believes ABNB will rip higher from here in the back half of 2026, with the put-to-call ratio on contracts expiring in mid-December set at 0.38x currently. According to Barchart, the upper price on those options contracts sits at nearly $200 as of writing, indicating potential for a 13% rally over the next five months. That said, Airbnb remains unattractive for income-focused investors as it doesn’t currently pay a dividend. Heading into the quarterly print, Wall Street firms had a consensus “Moderate Buy” rating on ABNB stock, with a mean price target of about $159 only. However, it’s fair to expect upward revisions as analysts move to bake in the company’s impressive Q2 and upbeat guidance for the future. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

Airbnb ABNB reported second-quarter 2026 earnings of $1.37 per share, up 33.0% year over year and beating the Zacks Consensus Estimate by 14.17%. Revenues increased 16.5% year over year to $3.61 billion and surpassed the consensus mark by 0.81%. Growth was driven by strong nights stayed and a moderate increase in Average Daily Rate (ADR). Nights and Seats Booked rose 10% year over year to 148.3 million, reflecting broad-based travel demand. Gross Booking Value increased 16% year over year to $27.2 billion and 15% excluding foreign-exchange effects. ADR reached $184, increasing 5% from the prior-year quarter and 4% on an ex-FX basis.Mobile adoption remained a notable growth driver. Nights booked through Airbnb’s app increased 23% year over year and represented 64% of total nights booked, up from 59%. Growth among first-time bookers accelerated to 11%, the highest rate in four years. Airbnb, Inc. price-consensus-eps-surprise-chart | Airbnb, Inc. Quote North America and Europe, the Middle East and Africa (EMEA) recorded high-single-digit growth in Nights and Seats Booked. EMEA improved from the first quarter as demand recovered from the Middle East-related headwinds. Latin America bookings increased approximately 20%, while Asia Pacific posted high-teens growth.Expansion markets continued to outpace Airbnb's core markets, with average origin net nights growth over the trailing 12 months running at roughly twice the core-market rate. Brazil's origin net nights increased more than 30% in the quarter, while India posted 60% growth. Total costs and expenses were $2.85 billion, up from $2.48 billion a year earlier. However, costs represented about 79.0% of revenues compared with 80.2% in the year-ago quarter. Product development declined approximately 110 bps, while sales and marketing expenses increased about 190 bps. Operations and support and general and administrative expenses, as a percentage of revenues, decreased approximately 70 bps and 140 bps, respectively.Adjusted EBITDA was $1.26 billion, up 21% year over year, with an adjusted EBITDA margin of 35%.The second quarter of 2026 operating margin expanded approximately 120 bps year over year to 21%. Airbnb highlighted that artificial intelligence (AI) is allowing it to develop and iterate products faster. On key initiatives, the company reduced the time from concept to delivery by as much as 60%, while the number of features and improvements shipped in the first half increased nearly 80% from the comparable 2025 period.AI is also benefiting customer support. Nearly 45% of issues beginning with Airbnb's AI assistant are resolved without a human agent. Customer support-related cost per booking declined approximately 16% year over year. Meanwhile, hotel nights booked grew about three times as fast as the homes business, although hotels remained a single-digit percentage of nights booked. Airbnb ended June 30, 2026, with $12.1 billion in cash and cash equivalents, short-term investments and restricted cash. Net cash provided by operating activities was $1.27 billion in the second quarter of 2026, up from $1.71 billion reported in the first quarter of 2026.Free cash flow increased 30% year over year to $1.25 billion, translating into a 35% margin. Trailing-12-month free cash flow reached $4.83 billion, representing a 37% margin. Reserve Now, Pay Later continued to affect quarterly working capital by shifting guest payments closer to the stay date.The company repurchased $1.1 billion of Class A common stock during the quarter and had $3.4 billion remaining under its repurchase authorization. For the third quarter of 2026, Airbnb expects revenues between $4.69 billion and $4.77 billion, implying growth of 15-17%. Management projects mid-teens GBV growth, supported by low-double-digit growth in Nights and Seats Booked and a moderate ADR increase.For 2026, Airbnb raised its revenue growth outlook to at least the mid-teens from its previous low-to-mid-teens forecast. The company also increased its adjusted EBITDA margin expectation to 35.5% from 35%, reflecting stronger top-line growth and operating leverage while maintaining growth investments. Airbnb currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader Zacks Computer and Technology sector include Applied Materials AMAT, Inuvo INUV and Analog Devices ADI. Each stock carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Applied Materials shares have gained 105.3% in the year-to-date period. Applied Materials is set to report second-quarter 2026 results on Aug. 13.Shares of Inuvo have plunged 58.9% in the year-to-date period. Inuvo is set to report the second quarter of 2026 results on Aug. 11.Shares of Analog Devices have rallied 39.1% year to date. Analog Devices is slated to report fiscal third-quarter 2026 results on Aug. 19. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Airbnb, Inc. (ABNB) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report Inuvo, Inc (INUV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Airbnb, Inc.? Here are five stocks we like better. Airbnb delivered a strong second quarter, with revenue up 17% year over year to $3.6 billion, gross booking value up 16% to $27.2 billion, and adjusted EBITDA of $1.3 billion. Nights and seats booked grew 10%, while app bookings rose 23%. AI and product expansion are accelerating growth and efficiency. Airbnb increased feature releases nearly 80%, reduced product launch times by up to 60%, and resolved nearly 45% of assistant-initiated customer issues without human agents; the company is also expanding hotels, services and experiences. Airbnb raised its 2026 outlook to at least mid-teens revenue growth and an adjusted EBITDA margin of at least 35.5%. The company also repurchased $1.1 billion of stock in the quarter and generated $1.3 billion in free cash flow. Why Flywire and Airbnb Could Be Quiet Winners of a Ceasefire Airbnb (NASDAQ:ABNB) reported second-quarter 2026 results that exceeded its outlook, with revenue rising 17% year over year to $3.6 billion and gross booking value increasing 16% to $27.2 billion. Nights and seats booked grew 10%, accelerating from the first quarter, while adjusted EBITDA reached $1.3 billion, representing a 35% margin. Chief Executive Officer Brian Chesky said the company’s momentum reflected a combination of product changes rather than a single initiative. He pointed to higher app usage, faster growth among first-time bookers, expansion-market gains and improving trends in several core markets. → 3 Drone Stocks That Should Soar After the Summer Slump Trip.com’s Selloff Raises a Bigger Question About Its Travel Recovery Story “There was no single product, there’s no single partnership or initiative that explains our results,” Chesky said. “It’s a combination of stronger execution, a world-class team, and an innovation model that is accelerated by AI.” Nights booked through Airbnb’s app increased 23% year over year and accounted for 64% of total nights booked, up from 59% a year earlier. Growth among first-time bookers accelerated to 11%, the highest rate the company has reported in four years, according to Chesky. Gen Z represented the fastest-growing cohort of first-time bookers. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Uber's Annual Product Showcase Reveals It Is Coming for Airbnb and Booking Expansion markets grew about twice as quickly as core markets, while the U.S., France, the U.K. and Australia all saw accelerating growth during the quarter. Chief Financial Officer Ellie Mertz said North America and Europe produced high-single-digit growth in nights and seats booked, Latin America grew about 20%, and Asia-Pacific posted high-teens growth. Average daily rate increased 5% year over year, or 4% excluding foreign exchange effects, with strength in North America and Europe. Mertz said the company’s growing mix of larger homes has supported ADR, as bedroom-night growth has exceeded growth in overall nights booked. → Jersey Mike's Serves Fresh Gains After IPO Stumble Airbnb attributed part of its growth to improvements across search, sign-up, checkout, payments and host tools. The company introduced AI-generated listing and review highlights, while expanding Reserve Now, Pay Later eligibility and visibility throughout the booking process. The flexible payment option accounted for more than 20% of total gross booking value in the second quarter, Mertz said. The company also plans to introduce AI-powered home comparison later this year and began testing AI search during the current quarter. Chesky said the feature will initially be available to a small percentage of traffic through an optional toggle, with broader expansion dependent on test results. Chesky said Airbnb has rebuilt its operations to become an “AI-native” company, allowing it to reduce the time from product concept to launch by as much as 60% for some initiatives. During the first six months of the year, the company increased the number of features and improvements it released by nearly 80% compared with the same period in 2025. Airbnb’s AI assistant is now available in more than 50 languages. Nearly 45% of customer issues that begin with the assistant are resolved without a human agent, Chesky said. Customer support costs per booking declined about 16% from a year earlier in the second quarter, partly due to the AI assistant. The company expects to begin offering AI voice support later this year. Mertz said Airbnb’s updated guidance assumes increased AI spending, but the company is expanding margins while absorbing those costs. She also said AI-driven productivity means Airbnb does not need to increase headcount at the same pace as in prior periods. Airbnb continued to broaden its offerings beyond homes, adding boutique and independent hotels, expanding travel-related services and increasing the supply of experiences. Hotels remain a single-digit percentage of nights booked but are growing about three times faster than the homes business, according to the company. Chesky said the hotel initiative has received stronger-than-expected interest from hotel operators. The company has expanded hotel supply acquisition efforts to roughly 20 cities, Mertz said, while seeking inventory that complements rather than competes directly with home listings. About 35% of first-time hotel guests subsequently return to Airbnb to book a home, Chesky said. He added that hotel inventory has improved conversion in both supply-constrained markets and markets where Airbnb already has substantial accommodation supply. Airbnb also added services including grocery delivery, car rentals, airport pickup, luggage storage and resort passes. Chesky said car rentals are expected to be the largest service category because of the size of the market and because reservation lengths have exceeded the company’s expectations. The company plans to expand car rentals internationally. Experiences supply rose nearly 80% year over year in the second quarter following the addition of 1,000 experiences in high-demand categories. Bookings accelerated both year over year and sequentially, although Chesky said the business remains small and will be a longer-term contributor relative to homes and hotels. Second-quarter net income was $816 million, aided by higher operating income and a $77 million tax benefit related to recently published tax guidance affecting prior-year taxes. Airbnb generated $1.3 billion in free cash flow during the quarter and $4.8 billion over the trailing 12 months, equal to a 37% free-cash-flow margin. During the quarter, the company repurchased $1.1 billion of common stock. Mertz said returning capital to shareholders remains a core part of Airbnb’s capital-allocation strategy. Third-quarter revenue is expected to be between $4.69 billion and $4.77 billion, representing 15% to 17% year-over-year growth. The third-quarter outlook includes an estimated three-percentage-point foreign exchange tailwind after hedging. Third-quarter gross booking value is expected to grow in the mid-teens, supported by low-double-digit growth in nights and seats booked and a moderate ADR increase. Adjusted EBITDA is expected to increase year over year in the third quarter, though the margin is expected to decline slightly from the third quarter of 2025 because of investment timing. For full-year 2026, Airbnb raised its revenue-growth outlook to at least the mid-teens and increased its adjusted EBITDA margin outlook to at least 35.5%, from a prior forecast of 35%. Mertz said the company expects its full-year implied take rate to remain relatively flat compared with 2025, reflecting the timing effects of Reserve Now, Pay Later and higher customer incentives tied to newer businesses. Excluding those incentives, Airbnb would have expected a slightly higher implied take rate, she said. Airbnb, Inc (NASDAQ: ABNB) operates a global online marketplace that connects travelers with hosts offering short-term lodging, unique accommodations and related travel experiences. The company's core platform enables individuals and professional property managers to list private homes, apartments, single rooms and entire properties, while providing search, booking and payment processing for guests. Airbnb earns revenue primarily through service fees charged to guests and hosts and offers tools to facilitate reservations, communications, and logistics between parties. Beyond accommodations, Airbnb has expanded its product portfolio to include curated experiences led by local hosts, higher-end offerings such as Airbnb Luxe, and programs aimed at enhancing quality and safety like Airbnb Plus. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Airbnb Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Airbnb, Inc. (ABNB) came out with quarterly earnings of $1.37 per share, beating the Zacks Consensus Estimate of $1.2 per share. This compares to earnings of $1.03 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +14.17%. A quarter ago, it was expected that this company would post earnings of $0.31 per share when it actually produced earnings of $0.26, delivering a surprise of -16.13%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Airbnb, which belongs to the Zacks Leisure and Recreation Services industry, posted revenues of $3.61 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.81%. This compares to year-ago revenues of $3.1 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Airbnb shares have added about 12.4% since the beginning of the year versus the S&P 500's gain of 12.8%. While Airbnb has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Airbnb was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.64 on $4.54 billion in revenues for the coming quarter and $4.93 on $13.97 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Leisure and Recreation Services is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Trip.com (TCOM), another stock in the same industry, has yet to report results for the quarter ended June 2026. This travel services company is expected to post quarterly earnings of $0.98 per share in its upcoming report, which represents a year-over-year change of -3%. The consensus EPS estimate for the quarter has been revised 8.1% lower over the last 30 days to the current level. Trip.com's revenues are expected to be $2.29 billion, up 10.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Airbnb, Inc. (ABNB) : Free Stock Analysis Report Trip.com Group Limited Sponsored ADR (TCOM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. WPP PLC (NYSE:WPP) delivered H1 2026 results in line with guidance, with like-for-like net sales down 4.7%, showing a clear sequential improvement from Q1 (-6.7%) to Q2 (-2.8%). The company achieved a strong new business performance, ranking number one in JP Morgan's net new business rankings for H1 2026, with landmark wins including Estee Lauder, Jaguar Land Rover, and Airbnb. Client retention rates improved in H1 2026, with key renewals including Huawei, Tesco, and L'Oreal, supported by a new holistic client success program. WPP PLC (NYSE:WPP) is making significant strategic progress with the launch of WPP Enterprise Solutions and a new Commerce Practice, positioning the company in high-growth markets. The company completed over 15 non-core asset disposals in H1, generating over 200 million pounds in sales proceeds, strengthening the balance sheet and financial flexibility. WPP PLC (NYSE:WPP) deepened strategic technology partnerships with Google, Adobe, Meta, AWS, and Microsoft, integrating advanced AI capabilities into WPP Open to enhance its competitive offering. The company reported a return to growth in China (up 2.6% in H1) and healthcare and auto sectors returned to growth in Q2, indicating stabilization in key areas. WPP PLC (NYSE:WPP) continues to face a challenging top-line environment, with H1 like-for-like revenue less pass-through costs declining 4.7% due to the impact of historical client losses. The company expects the drag from net new business to persist throughout 2026, with gross client losses estimated at the top end of the 500-600 basis point range. Headline diluted EPS fell 24.5% year-on-year to 15.1p, impacted by a normalized tax rate and lower profits. WPP PLC (NYSE:WPP) anticipates a significant step-up in investment in growth drivers and incentive rebuild in H2, leading to a potential 200 basis point decline in second-half margins year-on-year. The Middle East remains a volatile region, with revenue down around 10% in H1, and ongoing geopolitical uncertainty poses a risk to the outlook. The company continues to see negative trends in CPG (down 6% in Q2) and technology clients (down 8.9% in Q2), with high polarization in spend patterns across sectors. WPP PLC (NYSE:WPP) expects leverage metrics to remain elevated in 2026, with the path to reduction dependent on improving profitability and continued asset disposals. Warning! GuruFocus has detected 5 Warning Signs with WPP. Is WPP fairly valued? Test your thesis with our free DCF calculator. Q: Can you quantify the net new business contribution for 2026 and how it has evolved since the Q1 update, and what is the balance of pitches versus defense in the H2 pipeline? A: Joanne Wilson (CFO): Growth losses for the full year are at the top end of the 500-600 basis point range shared at the start of the year, around 600 basis points, with a slight easing in the second half. Growth wins are comfortably ahead of fiscal 2025 levels. Net new business will be a drag in every quarter this year, but the drag is easing quarter-over-quarter. The pipeline is very healthy and higher than last year, with a balanced mix of defensive and offensive opportunities. Q: You mentioned improving momentum in existing client spending in Q2 versus Q1. What sectors drove this, and can you provide more detail on the dramatic improvement in China and the change in WPP Media's revenue share? A: Joanne Wilson (CFO): We saw growth in the auto and healthcare sectors in Q2, while CPG and tech were impacted by client losses. China returned to growth, up double-digits in Q2, driven by timing benefits and stabilization in the media business, though we don't expect that level to continue in H2. WPP Media's share of net sales increased from 41% to 46% due to the reclassification of agencies like CMI and TMP under the media segment as part of the new reporting structure. Q: Can you quantify the deflationary impact of AI on pricing, and why are investments and restructuring costs second-half loaded, given the significant margin decline expected in H2? A: Cindy Rose (CEO): It would be hazardous to quantify the deflationary impact of AI, but it presents both risks and opportunities. AI tooling will drive productivity gains and reduce our cost to serve, and clients will expect us to pass those savings on. However, we can help clients reinvest those savings into innovation, representing an expansive opportunity to grow our footprint. Joanne Wilson (CFO): We generate a third of our profit in H1 and two-thirds in H2. H1 benefited from structural cost actions taken in H2 2025 and lower severance, but these tailwinds won't carry through. Elevate 28 savings are skewed to H2, reaching a run rate of 250 million by year-end. Incentives and investments in growth areas will ramp up significantly in H2, hence the margin guidance of 12-13% for the full year. Q: On the 200 million disposal proceeds for 2026, is this the cash impact, is it net of tax, and should we expect more in 2027? Also, what should we expect in terms of the incentive charge for this year? A: Joanne Wilson (CFO): We have 64 million in H1 cash flow from disposals, and we expect that to increase to at least 200 million for the full year, net of tax. This relates to the long tail of smaller agencies and associates, and we expect some more in 2027. On incentives, they were at an unusually low level in 2025. In 2026, we are rebuilding the incentive pot, and they will be higher than 2025, probably closer to levels seen in 2024. Q: Can you give a rough estimate of the like-for-like growth for Enterprise Solutions on a pro forma basis, and any hard numbers for the revenue and profit contribution from the Extel disposal? A: Joanne Wilson (CFO): Enterprise Solutions will report like-for-like from January 1, 2027. It's fair to assume the like-for-like is approximating what we see more broadly across WPP Creative. On Extel, it isn't in our numbers nor Kantar's numbers, and it's a significant contribution towards the 200 million, but it's a very immaterial number in terms of overall income with no impact on revenue. Q: Based on your guidance, existing clients appear to be declining around 1% this year versus 4% last year. Why are existing clients three points better? Also, what does China's stabilization mean for H2, and will the portfolio review generate bigger benefits than 200 million? A: Joanne Wilson (CFO): Last year, tariffs kicked in in April, causing a sharp decline in client spend. That has now stabilized, and we're seeing a lower drag from existing clients. On China, we expect continued stabilization in H2, certainly not at the Q2 level, but an improvement year-on-year. On the portfolio, processes are ongoing for assets identified in the review, and if successful, we will generate more cash proceeds. We'll update in due course. Q: What is your guidance for the Middle East in H2, given the 10% decline in H1? Also, will personnel costs decline at least mid-single-digit in H2? A: Joanne Wilson (CFO): The Middle East is incredibly volatile, and it's difficult to give guidance. We've been balanced in our planning assumptions, with some markets getting back to growth and others still declining. Our top priority is the safety of our people. On personnel costs, we remain disciplined on discretionary spend and focused on investing in areas that drive the highest ROI. Q: For the accounts won and lost in H1, what was called out as doing very well or very badly? A: Cindy Rose (CEO): Clients are responding very well to our integration and simplification. We're showing up as one WPP, putting the right talent in front of the right clients without the friction of our historical structure. Our WPP Open platform and data ownership narrative are very compelling and differentiated. On losses, we're in a fiercely competitive market, and defensive pitches are a feature of the landscape. We take every loss as a learning opportunity to drive continuous improvement. Q: Is reducing gross debt a capital allocation priority, and should we expect more debt tenders? A: Joanne Wilson (CFO): Maintaining an investment grade balance sheet is a priority. Our leverage is elevated at 2.18 times for the 12 months ending June, and we are focused on bringing it down. Adjusted net debt was down from 3.3 billion to 2.9 billion year-on-year. The bigger driver for leverage reduction will be improving underlying profits, alongside bringing down debt. Q: Can you quantify the easy comps from Q2 2025 and remind us of the comp profile for H For the complete transcript of the earnings call, please refer to the full earnings call transcript.