The Airbnb Inc (NASDAQ: ABNB) stock price was trading down 0.74% premarket following yesterday’s 13.4% rally after the release of its 2022 financial results that were positive on most fronts. The company recorded its first profitable full year since its founding in August 2008.
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The short-term rentals platform saw its revenues surge 40% to $8.4 billion compared to 2021, while its net income rose to $1.9 billion, making 2022 its first full profitable year. The company generated free cash flows of $3.4 billion, representing a free cash flow margin of over 40%.
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Airbnb attributed its financial success to the drastic measures it had taken over the past two years when it modestly grew its headcount. The firm noted that compared to 2019, its headcount had fallen 5%, while its revenues had surged 75%.
In addition, the company revealed that its performance across all four quarters of 2022 was better than the comparable quarter in 2021. For example, its Q4 2022 profits were $319 million, while its Q4 2021 income was $55 million. The same trend also applied across other financial metrics, such as gross sales and free cash flow levels.
Airbnb also outlined its strategy for 2023 to focus on providing a better experience for its guests and to make hosting mainstream. The company pointed out its unique business model and highlighted areas where it was seeing fast growth in demand and were also experiencing significant growth in hosts.
The company also pointed out that due to its difficult decisions in 2020 regarding its headcount and the shift to a radically lean organisation, it is not firing employees like many of its tech peers. Airbnb is not looking to expand its workforce by a significant number. Instead, it focuses on critical hires in areas it need specific skills and is looking for the best professionals.
The company has massive cash reserves, which stood at $9.6 billion at the end of 2022. The firm's stock repurchase plan returns $2 billion to shareholders. The firm is also looking to invest in growing its business and in potential M&A transactions if they emerge.
*This is not investment advice.
The Airbnb stock price fell 0.74% to trade at $136.00, from Wednesday’s closing price of $137.01.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
