Shares had been rising based on the company's exceptional performance and massive tailwinds, and the market seemed to simply be correcting itself. Additional pressure from general market volatility probably contributed as well.
Airbnb went public at the end of 2020 when it was posting pandemic-driven declines, but eager investors snapped up shares of the disruptor's stock, sending it soaring. That eventually slowed down, but the company has been ramping it up, demonstrating a robust rebound despite travel still being pressured.
It's been able to do that because of its flexible model, which makes it easy to book stays of varying lengths in all sorts of residences and locations. This was a winner when people couldn't travel far, and it's become even more compelling as people have been working from home. And this isn't a short-term change, but a global shift in workforce trends. In fact, Airbnb itself announced last week that it will allow its workforce the option to work from home without a change to their compensation, as long as they stay in the country. I love that the company is putting its money where its mouth is, and its people where its locations are. It's very much in line with Airbnb as a founder-led company that's fueling real change in its industry.
Airbnb posted phenomenal 2022 first-quarter results yesterday that demonstrated even further growth. Revenue increased 70% year over year to $1.5 billion, and nights booked increased 59% year over year to 102 million. It posted a net loss of $19 million, even though it was profitable for the past two quarters, but it was a strong improvement over a $1.2 billion loss last year. It also delivered a record $1.2 billion in free cash flow. Loss per share of $0.03 was much better than the $0.25 that analysts had been expecting.
Living on Airbnb continued to be a strong trend, and stays of 28 days or more made up the fastest-growing category again. A new trend is that urban travel is returning, with city gross nights booked up 80% year over year. Management expects a strong summer season and is guiding for a 58% revenue increase year over year in the second quarter.
Airbnb stock is down 14% over one year, giving investors an opportunity to buy on the dip.