What happened

Two days of pre-earnings stock price gains culminated in a third day of gains Friday -- up 15% as of 12:45 p.m. EST -- after earnings for Airbnb (ABNB -1.02%) were reported to shareholders. In the company's first earnings report since its IPO, Airbnb announced last night that, instead of the $748 million that analysts had projected, it did $859 million in revenue in Q4.  

Granted, Airbnb also lost $3.9 billion for the quarter, but investors today don't seem to mind about that.

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Image source: Getty Images.

So what

Airbnb's revenue declined 22% year over year in Q4, and full-year revenue declined 30% to $3.4 billion. But those numbers could have been worse. "Nights and experiences booked," a measure of the amount of reservations Airbnb facilitated, actually declined 39% in Q4, and 41% in all of 2020 -- much worse than the declines in actual revenue. Indeed, when you consider that early in the pandemic and recession last year, the company had warned that revenue "could be less than half of what it was in 2019," it's hard to call 2020's results anything but a win for Airbnb.

For that matter, even Airbnb's losing $3.9 billion for Q4 doesn't sound so bad -- when you consider that this quarter included all the costs Airbnb incurred in conducting its IPO last year, and that it made up the bulk of the $4.6 billion it lost in total for the year.  

Now what

And now, things could even begin to start getting better.

"Looking forward to 2021," said Airbnb in its report, "we are preparing for the travel rebound. As the vaccine is rolled out and restrictions lift," says the company, this rebound could be "significant." Management's surveys of its customer base indicate that "more than half of those surveyed (54%) said they either already booked, are currently planning to travel, or expect to travel in 2021."

Based on these results, and on its past experience, Airbnb estimates that it will see more "nights and experiences booked" in Q1 2021 than it saw in Q1 2020, but less revenue from those reservations. That being said, as the recovery takes hold, management does believe that its Q1 2021 revenue decline will be less than the 22% decline seen in Q4 2020.

Management didn't say precisely what it expects the rest of the year to look like, but with the rebound in demand "significant," you have to figure they're even more optimistic about how things will go post-recession, and post-Q1.