By Katherine Hamilton

Airbnb shares advanced after the company swung to a profit in the fourth quarter and said it plans to invest in new businesses later this year.

The stock rose 10% to $154.82 on Thursday after markets closed. Despite the after-hours gains, the stock is down about 11% over the past year.

The online marketplace for short-term rentals posted a profit of $461 million, or 73 cents a share, compared with a loss of $349 million, or 55 cents a share, a year earlier.

Revenue rose 12% to $2.48 billion, beating the $2.42 billion analysts polled by FactSet expected. Growth in nights stayed and a small increase in average daily rate drove revenue in the fourth quarter, Airbnb said.

Gross booking value was up 13% to $17.6 billion. Analysts were expecting $17.2 billion.

Chief Financial Officer Ellie Mertz said the company plans to increase its headcount to support the new businesses it plans to launch and scale in 2025. Airbnb plans to spend $200 million to $250 million on those new businesses, which are set to launch around May, Mertz said.

The company is investing in markets outside its five core regions, which include the U.S., Canada, U.K., Australia and France. It aims to build more domestic and cross-border travel in Asia and Latin America, as gross nights booked in those markets increased at twice the rate of its core markets in the fourth quarter, the company said.

Chief Executive Brian Chesky said the company aims to start using artificial intelligence in its trip planning services, primarily starting with customer service. Eventually, Chesky said he wants to integrate AI customer service into Airbnb's search to function as a concierge. He believes the launch of DeepSeek will make AI more affordable, faster and smarter, which will benefit Airbnb's goals to integrate models.

Airbnb expects $2.23 billion to $2.27 billion of revenue during the first quarter, below analysts expectations of $2.29 billion, according to FactSet. That represents a 4% to 6% increase from the previous year, which Airbnb said is low because the timing of the Easter holiday and Leap Day made last year especially strong.

The company is also expecting its average daily rate to decline slightly in the next quarter, largely because of changes in foreign exchange rates.

Supply growth is expected to remain muted in 2025 and Airbnb may need to make significant investments to drive its growth initiatives, Benchmark analyst Daniel Kurnos said in a note.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

February 13, 2025 17:18 ET (22:18 GMT)

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