What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-13 compared with 2024-02-16 · 150 added, 166 removed, 242 unchanged (57% of the section changed)

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Except as otherwise noted, all references to 2024 refer to the year ended December 31, 2024, references to 2023 refer to the year ended December 31, 2023, and references to 2022 refer to the year ended December 31, 2022.

This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.

This section of this Annual Report on Form 10-K discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.

Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 16, 2024.

Glossary of Terms

Active booker An active booker is a unique guest who has booked a stay or experience in a given period.

Active listing We consider a listing of a home or an experience to be an active listing if it is viewable on Airbnb and has been previously booked at least once on Airbnb (excluding HotelTonight).

Available listings Available listings are accommodations and experiences that are viewable on a certain date on our platform (excluding HotelTonight).

Check-ins Check-ins represent individual stays or experiences that occur during a period that have not been canceled.

Co-hosts Co-hosts are experienced hosts who provide personalized support based on the hosts’ needs, from listing setup to managing bookings and communicating with guests.

Guest arrivals Guest arrivals represent an individual and all co-travelers included on a reservation for a stay for completed check-ins during a given period.

Hosts We count the number of hosts on our platform based on the number of users with available listings as of a certain date.

Payments to customers

We make payments to customers as part of our referral programs and marketing promotions, and refund activities.

The payments are generally in the form of coupon credits to be applied toward future bookings or as cash refunds.

We are a community based on connection and belonging—a community that was born in 2007 when two hosts welcomed three guests to their San Francisco home, and has since grown to over 5 million hosts who have welcomed over 2 billion guest arrivals in almost every country and region across the globe.

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2024 Financial Highlights

In 2023, revenue increased by 18% to $9.9 billion compared to 2022, primarily due to a 14% increase in Nights and Experiences Booked of 54.5 million combined with higher average daily rates driving a 16% increase in Gross Booking Value of $10.0 billion.

The growth in revenue demonstrated continued strong travel demand.

On a constant-currency basis, revenue increased 17% in 2023 compared to 2022.

Net income in 2023 increased by 153% to $4.8 billion, compared to the prior year, driven by our revenue growth, increased interest income, discipline in managing our cost structure, and the release of a portion of our valuation allowance on deferred tax assets of $2.9 billion (see Note 14, Income Taxes, to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details).

The increase in net income was partially offset by an increase in business and operational taxes of $991 million, the majority of which was non-recurring.

Adjusted EBITDA 1 increased 26% to $3.7 billion in 2023 demonstrating the continued strength of our business, a modest increase in ADR, and discipline in managing our cost structure.

In 2024, revenue increased by 12% to $11.1 billion compared to 2023, primarily due to a 10% increase in Nights and Experiences Booked of 43.3 million combined with higher Average Daily Rate (“ADR”) driving a 12% increase in Gross Booking Value of $8.5 billion.

The growth in GBV and revenue demonstrated continued strong travel demand.

In 2024, net income decreased by 45% to $2.6 billion, compared to the prior year, primarily due to the release of the majority of our valuation allowance on U.S.

federal and state deferred tax assets of $2.9 billion in 2023, and the recognition of deferred tax expense related to the utilization of some of those assets in 2024 (see Note 14, Income Taxes, to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details).

This was partially offset due to a decrease in withholding taxes, associated fees, and penalties and interest expense due to a withholding tax settlement related to Italy of $770 million, $196 million and $64 million respectively.

Adjusted EBITDA 1 increased 11% to $4.0 billion in 2024 demonstrating the continued strength of our business, growth in revenue and discipline in managing our cost structure.

Our net cash provided by operating activities was $4.5 billion in 2024, compared to $3.9 billion, in the prior year.

We generated Free Cash Flow 1 of $4.5 billion for the year ended December 31, 2024, compared to $3.8 billion, in the prior year.

The increase was primarily driven by growth in revenue, unearned fees and net income.

During 2023, we repurchased an aggregate of 17.9 million shares of Class A common stock for $2.3 billion, through two share repurchase programs.

As of December 31, 2023, we had $750 million available to repurchase shares of Class A common stock under our share repurchase program.

The COVID-19 pandemic, and measures to contain the virus, including government travel restrictions and quarantine orders, had an unprecedented impact on the global travel industry and materially and adversely affected our business, results of operations, and financial condition.

In May 2023, the World Health Organization formally declared an end to the COVID-19 global health emergency.

While countries around the world are generally open for international travel, it remains difficult to predict with any certainty the impact any future new strains or variants of the virus may have on the travel industry and, in particular, our business.

More recently, inflation and other macroeconomic pressures in the United States and the global economy, such as rising interest rates, and foreign currency fluctuations, as well as evolving geopolitical conflicts, have contributed to an increasingly complex business environment.

During 2024, we repurchased an aggregate of 24.5 million shares of Class A common stock for $3.4 billion.

As of December 31, 2024, we completed the repurchases under the August 2, 2022 share repurchase program and had $3.3 billion available for repurchase of Class A common stock under the May 9, 2023 share repurchase program.

Inflation and other macroeconomic pressures in the United States and the global economy, such as tariffs, foreign currency fluctuations, as well as wars and other geopolitical conflicts, have contributed to an increasingly complex business environment.

As a result, our future operational results may be subject to volatility.

Additionally, further health-related events, political instability, geopolitical conflicts, acts of terrorism, significant fluctuations in currency values, sustained levels of increased inflation, sovereign debt issues, and natural disasters, are examples of other events that could have a negative impact on the travel industry in the future.

Despite these factors, we have witnessed a healthy recovery of travel demand, following the COVID-19 pandemic.

Additionally, health-related events, political instability, acts of terrorism, and natural disasters, are examples of other events that could have a negative impact on the travel industry in the future.

Key Business Metrics and Non-GAAP Financial Measures

We track the following key business metrics and financial measures to evaluate our operating performance, identify trends, formulate financial projections, and make strategic decisions.

The financial measures are not calculated and presented in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) (“non-GAAP financial measures”).

We believe that these key business metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.

We track the following key business metrics and financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) (“non-GAAP financial measures”) to evaluate our operating performance, identify trends, formulate financial projections, and make strategic decisions.

Accordingly, we believe that these key business metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.

We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance, and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their U.S.

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A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S.

GAAP is provided under the subsection titled “— Adjusted EBITDA” and “— Free Cash Flow” below.

GAAP is provided under the subsection titled “— Adjusted EBITDA Reconciliation” and “— Free Cash Flow Reconciliation” below.

Investors are encouraged to review the related U.S.

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We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies that may calculate similarly titled metrics in a different way.

The following table summarizes our key business metrics, for each period presented below (in millions):

1 A reconciliation of non-GAAP financial information to the most comparable U.S.

GAAP financial measures is provided under the subsection titled “Key Business Metrics and Non-GAAP Financial Measures— Adjusted EBITDA Reconciliation” and “— Free Cash Flow Reconciliation” below.

The following table summarizes our key business metrics, for each period presented below (in millions, except percentages):

2023 2024 % Change

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A night can include one or more guests and can be for a listing with one or more bedrooms.

Nights and Experiences Booked grows as we attract new customers to our

1 A reconciliation of non-GAAP financial information to the most comparable U.S.

GAAP financial measures is provided under the subsection titled “Key Business Metrics and Non-GAAP Financial Measures— Adjusted EBITDA” and “— Free Cash Flow” below.

platform and as repeat guests increase their activity on our platform.

Nights and Experiences Booked grows as we attract new customers to our platform and as repeat guests increase their activity on our platform.

A seat is booked for each participant in an experience.

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We believe Nights and Experiences Booked is a key business metric to help investors and others understand and evaluate our results of operations in the same manner as our management team, as it represents a single unit of transaction on our platform.

In 2023, we had 448.2 million Nights and Experiences Booked, a 14% increase from 393.7 million in 2022.

The increase in our Nights and Experiences Booked was driven by strong growth across all regions.

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Growth in GBV reflects our ability to attract and retain customers and reflects growth in Nights and Experiences Booked.

In 2023, our GBV was $73.3 billion, a 16% increase from $63.2 billion in 2022.

The increase in our GBV was primarily due to an increase in Nights and Experiences Booked, combined with a modest increase in ADR.

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Non-GAAP Financial Measures

Our non-GAAP financial measures include Adjusted EBITDA, Free Cash Flow, and revenue growth rates in constant currency, which are described below.

Our non-GAAP financial measures include Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin, which are described below.

A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S.

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GAAP financial measures.

Adjusted EBITDA and Adjusted EBITDA Margin have limitations as a financial measure, should be considered as supplemental in nature, and are not meant as a substitute for the related financial information prepared in accordance with U.S.

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, including net income and net income margin as well as our other U.S.

GAAP results.

Free Cash Flow and Free Cash Flow Margin have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of other U.S.

GAAP financial measures, such as net cash provided by operating activities and net cash provided by operating activities margin.

Free Cash Flow and Free Cash Flow Margin do not reflect our ability to meet future contractual commitments and may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure.

Non-GAAP Measure Definition Purpose of Non-GAAP Measure

Adjusted EBITDA &

Adjusted EBITDA Margin Adjusted EBITDA :

Net income adjusted for:

• provision for (benefit from) income taxes;

• other income (expense), net;

• interest income;

• depreciation and amortization;

• stock-based compensation expense;

• acquisition-related impacts consisting of gains (losses) recognized on changes in the fair value of contingent consideration arrangements, and

• lodging taxes for which we may have joint and several liability with hosts for collecting and remitting such taxes, withholding taxes on payments made to hosts and any related settlements, and transactional taxes where there is significant uncertainty as to how the taxes apply to our platform.

Adjusted EBITDA Margin :

Adjusted EBITDA divided by revenue.

• Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business.

• Used by management to make operating decisions such as evaluating performance, performing strategic planning, and budgeting.

Free Cash Flow & Free Cash Flow Margin

Free Cash Flow:

Net cash provided by operating activities less purchases of property and equipment.

Free Cash Flow Margin :

Free Cash Flow divided by revenue.

• Indicator of liquidity that provides information to our management and investors about the amount of cash generated from operations, after purchases of property and equipment, that can be used for strategic initiatives.

The following table summarizes our non-GAAP financial measures, along with the most directly comparable U.S.

GAAP measure, for each period presented below (in millions):

$ 1,893 $ 4,792

GAAP measure, for each period presented below (in millions, except percentages):

Net income $ 4,792 $ 2,648

Net income margin

Adjusted EBITDA $ 3,653 $ 4,041

Adjusted EBITDA Margin

Net cash provided by operating activities $ 3,884 $ 4,518

Net cash provided by operating activities margin

Free Cash Flow $ 3,837 $ 4,484

Adjusted EBITDA

We define Adjusted EBITDA as net income or loss adjusted for (i) provision for (benefit from) income taxes;

(ii) other income (expense), net, interest expense, and interest income;

(iii) depreciation and amortization;

(iv) stock-based compensation expense;

(v) acquisition-related impacts consisting of gains (losses) recognized on changes in the fair value of contingent consideration arrangements;

(vi) net changes to the reserves for lodging taxes for which management believes it is probable that we may be held jointly liable with Hosts for collecting and remitting such taxes, and the applicability of withholding taxes on payments made to such Hosts;

and (vii) restructuring charges.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of payments of these items is unpredictable, not driven by core results of operations, and renders comparisons with prior periods and competitors less meaningful.

We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance.

Moreover, we have included Adjusted EBITDA in this Annual Report on Form 10-K because it is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluating performance, and performing strategic planning and annual budgeting.

Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with U.S.

These limitations include the following:

• Adjusted EBITDA does not reflect interest income, interest expense, and other income (expense), net, which include unrealized and realized gains and losses on foreign currency exchange, investments, and financial instruments;

• Adjusted EBITDA excludes certain recurring, non-cash charges, such as depreciation of property and equipment and amortization of intangible assets, and although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy;

• Adjusted EBITDA excludes acquisition-related impacts consisting of gains (losses) recognized on changes in the fair value of contingent consideration arrangements.

The contingent consideration, which was in the form of equity, was valued as of the acquisition date and is marked-to-market at each reporting period based on factors including our stock price;

• Adjusted EBITDA does not reflect net changes to reserves for lodging taxes for which management believes it is probable that we may be held jointly liable with Hosts for collecting and remitting such taxes and reserves, and the applicability of withholding taxes on payments made to such Hosts;

• Adjusted EBITDA does not reflect restructuring charges, which include impairment of operating lease right-of-use assets and leasehold improvements.

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, including net income (loss) and our other U.S.

GAAP results.

Free Cash Flow Margin

Adjusted EBITDA Reconciliation

The following is a reconciliation of Adjusted EBITDA to the most comparable U.S.

GAAP measure, net income (in millions, except percentages):

The following is a reconciliation of net income to Adjusted EBITDA (in millions, except percentages):

Revenue $ 9,917 $ 11,102

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Provision for (benefit from) income taxes (2,690) 683

Other (income) expense, net

Interest expense 24 83

Other expense, net

Interest income (721) (818)

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Acquisition-related impacts (3) (7)

Lodging tax reserves and reserves for Host withholding taxes

Restructuring charges 89 —

Lodging taxes, host withholding taxes, and transactional taxes, net

Adjusted EBITDA $ 3,653 $ 4,041

Adjusted EBITDA Margin

The increases in Adjusted EBITDA and Adjusted EBITDA Margin for the year ended December 31, 2023, compared to the prior year, were primarily driven by the continued strength of our business, a modest increase in ADR, and discipline in managing our cost structure.

The above items are excluded from our Adjusted EBITDA measure because they are non-cash in nature, or because the amount and timing of these items are unpredictable, not driven by core results of operations, and renders comparisons with prior periods and competitors less meaningful.

The increase in Adjusted EBITDA for the year ended December 31, 2024, compared to the prior year, was primarily driven by growth in revenue which was driven by the increase in the number of check-ins relating to Nights and Experiences Booked and a modest increase in ADR.

During 2023, we released $2.9 billion of our valuation allowance related to our U.S.

deferred tax assets and is included in provision for (benefit from) income taxes (see Note 14, Income Taxes, to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for further details).

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment.

We believe that Free Cash Flow is a meaningful indicator of liquidity that provides information to our management and investors about the amount of cash generated from operations, after purchases of property and equipment, that can be used for strategic initiatives, including continuous investment in our business, growth through acquisitions, and strengthening our balance sheet.

Our Free Cash Flow is impacted by the timing of GBV because we collect our service fees at the time of booking, which is generally before a stay or experience occurs.

Funds held on behalf of our customers and amounts payable to our customers do not impact Free Cash Flow, except interest earned on these funds.

Free Cash Flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our other U.S.

GAAP financial measures, such as net cash provided by operating activities.

Free Cash Flow does not reflect our ability to meet future contractual commitments and may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure.

Free Cash Flow Margin is defined as Free Cash Flow divided by revenue.

federal and state deferred tax assets (see Note 14, Income Taxes, to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for further details).

Free Cash Flow Reconciliation

The following is a reconciliation of Free Cash Flow to the most comparable U.S.

GAAP cash flow measure, net cash provided by operating activities (in millions, except percentages):

The following is a reconciliation of net cash provided by operating activities to Free Cash Flow (in millions, except percentages):

Revenue $ 9,917 $ 11,102

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Free Cash Flow Margin

Other cash flow components:

Net cash used in investing activities $ (28) $ (1,042)

Net cash used in financing activities $ (689) $ (2,430)

The increase in Free Cash Flow for the year ended December 31, 2023, compared to the prior year, was primarily driven by increased income from operations and interest income driven by increased interest rates on higher cash balances.

Constant Currency

In addition to revenue growth rates derived from revenue presented in accordance with U.S.

GAAP, we disclose below the percentage change in our current period revenue from the corresponding prior period by comparing the change in revenue using constant currencies.

We present constant currency revenue growth rate information to provide a framework for assessing how our underlying revenue performed excluding the effect of changes in exchange rates.

We use the percentage change in constant currency revenues for financial and operational decision-making and as a means to evaluate period-to-period comparisons.

We believe the presentation of revenue on a constant currency basis in addition to the U.S.

GAAP presentation helps improve the ability to understand our performance because it excludes the effects of foreign currency volatility that are not indicative of our core operating results.

We calculate the percentage change in constant currency by determining the change in the current period revenue over the prior comparable period where current period foreign currency revenue is translated using the exchange rates of the comparative period.

Our Free Cash Flow is impacted by the timing of GBV because we collect our service fees at the time of booking, which is generally before a stay or experience occurs.

Funds held on behalf of our customers and amounts payable to our customers do not impact Free Cash Flow, except interest earned on these funds.

Geographic Mix

Our operations are global, and certain trends in our business, such as Nights and Experiences Booked, GBV, revenue, GBV per Night and Experience Booked, and Nights per Booking vary by geography.

Our operations are global, and certain trends in our business, such as Nights and Experiences Booked, GBV, revenue, ADR, and Nights per Booking vary by geography.

We measure Nights and Experiences Booked by region based on the location of the listing.

2022 % of Total 2023 % of Total

2023 % of Total 2024 % of Total % Change

(in millions, except percentages)

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Total $ 9,917 100 % $ 11,102 100 % 12 %

We saw a 2% increase in GBV per Night and Experience Booked in 2023 compared to the prior year, primarily due to higher GBV per Night and Experience Booked in EMEA, which increased from $127.99 to $140.40.

Our total Company average nights per booking, excluding experiences, decreased 4% in 2023 compared to the prior year, primarily due to our geographic mix and changes in traveler behaviors.

Specifically, average nights per booking in 2023 was 4.1 for North America, 3.9 for EMEA, 3.9 for Latin America, and 3.3 for Asia Pacific, with a total average of 3.9 nights.

We saw a 2% increase in ADR in 2024 compared to the prior year, primarily due to higher ADR in EMEA, which increased by 5%.

Our total Company average nights per booking, excluding experiences, was 3.8 in 2024 compared to 3.9 in 2023.

Average nights per booking in 2024 was 4.1 for North America, 3.8 for EMEA, 3.7 for Latin America, and 3.3 for Asia Pacific.

We expect that our blended global average nights per booking will continue to fluctuate based on our geographic mix and changes in traveler behaviors.

No single city represented more than 2% of our revenue before adjustments for incentives and refunds during the years ended December 31, 2023 and 2024, or more than 1% of our active listings as of December 31, 2023 and 2024.

Results of Operations

The following table sets forth our results of operations for the periods presented (in millions, except percentages):

Amount % of Revenue Amount % of Revenue

Amount % of Revenue Amount % of Revenue % Change

Revenue $ 9,917 100 % $ 11,102 100 % 12 %

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2,025 20 1,185 11 (41)

Restructuring charges

Total costs and expenses 8,399 84 8,549 77 2

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Interest income 721 7 818 7 13

Interest expense (24) — (83) (1)

Other income (expense), net 25 — (54) (1)

Income before income taxes

Other expense, net

(137) (2) (40) — (71)

Income before income taxes 2,102 21 3,331 30 58

Provision for (benefit from) income taxes

(2,690) (27) 683 6 (125)

$ 1,893 23 % $ 4,792 48 %

(1) Includes stock-based compensation expense as follows (in millions):

Net income $ 4,792 48 % $ 2,648 24 % (45) %

(1) Includes stock-based compensation expense as follows (in millions, except percentages):

2023 % of Total

2024 % of Total

Operations and support $ 68 6 % $ 90 6 % 32 %

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Substantially all of our revenue comes from stays booked on our platform.

Incentives include our referral programs and marketing promotions to encourage the use of our platform and attract new customers, while our refunds to customers are part of our customer support activities.

Incentives include our referral programs and marketing promotions to encourage the use of our platform and attract new customers.

We experience a difference in timing between when a booking is made and when we recognize revenue, which occurs upon check-in.

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Revenue $ 9,917 $ 11,102 12 %

Revenue increased $1.5 billion, or 18%, in 2023 compared to 2022, primarily due to a 14% increase in Nights and Experiences Booked combined with higher ADRs.

On a constant-currency basis, revenue increased 17% compared to 2022, due to a weakened U.S.

dollar against the Euro and British Pound.

Revenue increased $1.2 billion, or 12%, in 2024 compared to 2023, primarily due to an increase in the number of check-ins relating to Nights and Experiences Booked and a modest increase in ADR driven by our North America and EMEA regions.

Cost of Revenue

Cost of revenue includes payment processing costs, including merchant fees and chargebacks, costs associated with third-party data centers used to host our platform, and amortization of internally developed software and acquired technology.

Because we act as the

merchant of record, we incur all payment processing costs associated with our bookings, and we have chargebacks, which arise from account takeovers and other fraudulent activities.

Cost of revenue may vary as a percentage of revenue from year to year based on activity on our platform and may also vary from quarter to quarter as a percentage of revenue based on the seasonality of our business and the difference in the timing of when bookings are made and when we recognize revenue.

Because we act as the merchant of record, we incur all payment processing costs associated with our bookings, and we have chargebacks, which arise from account takeovers and other fraudulent activities.

Cost of revenue may vary as a percentage of revenue from year to year based on activity

on our platform and may also vary from quarter to quarter as a percentage of revenue based on the seasonality of our business and the difference in the timing of when bookings are made and when we recognize revenue.

(in millions, except percentages)

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Percentage of revenue 17 % 16 %

Cost of revenue increased $204 million, or 14%, in 2023 compared to 2022, primarily due to an increase in merchant fees and chargebacks of $163 million and $10 million, respectively, due to an increase in pay-in volumes, and an increase in cloud computing costs of $31 million due to increased server and data storage usage.

Cost of revenue increased $175 million, or 10%, in 2024 compared to 2023, primarily due to an increase in merchant fees of $173 million, due to an increase in GBV, the impact of certain one-time incentives in 2023, and an increase in cloud computing costs of $26 million, due to increased server and data storage usage.

These increases were partially offset by a reduction in chargebacks of $34 million.

Operations and Support

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Percentage of revenue 12 % 12 %

Operations and support expense increased $145 million, or 14%, in 2023 compared to 2022, primarily due to a $105 million increase in third-party community support personnel and customer relations costs, a $25 million increase in payroll-related expenses primarily due to growth in headcount and increased compensation costs, and a $16 million increase in insurance costs due to higher Host Liability Insurance premiums resulting from higher overall nights.

Operations and support expense increased $96 million, or 8%, in 2024 compared to 2023, primarily due to a $38 million increase in payroll-related expenses, an increase in customer relations costs of $25 million, mainly due to higher nights booked, and an increase in insurance costs of $25 million, due to higher premiums as a result of higher nights booked.

Product Development

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Percentage of revenue 17 % 19 %

Product development expense increased $220 million, or 15%, in 2023, compared to 2022, primarily due to a $217 million increase in payroll-related expenses due to growth in headcount and increased compensation costs.

Product development expense increased $334 million, or 19%, in 2024, compared to 2023, primarily due to a $288 million increase in payroll-related expenses.

Sales and Marketing

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Percentage of revenue 18 % 19 %

Sales and marketing expense increased $247 million, or 16%, in 2023, compared to 2022, primarily due to a $177 million increase in marketing activities associated with our marketing campaigns and launches and our search engine marketing and advertising spend, and a $54 million increase in payroll-related expenses due to growth in headcount and increased compensation costs.

Sales and marketing expense increased $385 million, or 22%, in 2024, compared to 2023, primarily due to a $294 million increase in marketing activities associated with ongoing marketing campaigns and search engine marketing, a $58 million increase in payroll-related expenses, and a $26 million increase in consultant and other service provider costs.

General and Administrative

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Percentage of revenue 20 % 11 %

General and administrative expense increased $1.1 billion, or 113%, in 2023, compared to 2022, primarily due to an increase of $991 million related to business and operational taxes, the majority of which is non-recurring, and a $93 million increase in payroll related expenses partially offset by a reduction in insurance expense of $18 million driven by reduced directors and officers insurance premiums.

Restructuring Charges

(in millions, except percentages)

2022 2023 % Change

Restructuring charges $ 89 $ — (100) %

In the second quarter of 2022, we shifted to a remote work model, allowing our employees to work from anywhere in the country.

The shift to a remote work model was in direct response to the change in how employees work due to the impact of COVID-19.

As a result, we recorded restructuring charges of $89 million during 2022, which included $81 million relating to an impairment of both domestic and international operating lease right-of-use assets, and $8 million of related leasehold improvements.

There were no restructuring charges in 2023.

Interest Income and Expense

General and administrative expense decreased $840 million, or 41%, in 2024, compared to 2023, primarily due to decreased non-income taxes and related fees and penalties, partially offset by an increase in payroll-related expenses.

Non-income taxes and related fees and penalties decreased $656 million and $194 million, respectively, primarily due to a withholding tax settlement related to Italy, partially off-set by an increase in payroll-related expenses of $22 million.

Interest Income

Interest income consists primarily of interest earned on our cash, cash equivalents, marketable securities, and amounts held on behalf of customers.

Interest expense consists primarily of interest associated with various indirect tax reserves, amortization of debt issuance and debt discount costs.

(in millions, except percentages)

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Interest income $ 721 $ 818 13 %

Interest expense $ (24) $ (83) 246 %

Interest income increased $535 million, or 288%, in 2023 compared to 2022, primarily due to higher cash and investment balances and higher interest rates.

Our investment portfolio was largely invested in money market funds and short-term, high-quality bonds.

Interest expense increased $59 million or 246%, in 2023 compared to 2022, primarily due to non-recurring interest paid relating to withholding tax payments on behalf of Hosts.

Other Income (Expense), Net

Other income (expense), net consists primarily of realized and unrealized gains and losses on foreign currency transactions and balances, unrealized gains and losses on derivatives, the change in fair value of investments and financial instruments, including our share of income or loss from our equity method investments.

Interest income increased $97 million, or 13%, in 2024 compared to 2023, primarily due to higher cash and investment balances.

Other Expense, Net

Other expense, net consists primarily of realized and unrealized gains and losses on foreign currency transactions and balances, unrealized gains and losses on derivatives, the change in fair value of investments and financial instruments, including our share of income or loss from our equity method investments, and interest expense, which consists primarily of interest associated with various indirect tax reserves, amortization of debt issuance and debt discount costs.

(in millions, except percentages)

2023 2024 % Change

Other income (expense), net $ 25 $ (54) (316) %

Other income (expense), net decreased $79 million in 2023 compared to 2022, primarily due to foreign exchange losses.

Provision for Income Taxes

Other expense, net

$ (137) $ (40) 71 %

The change in other expense, net of $177 million in 2024 compared to 2023 was primarily due to increased foreign exchange gains of $77 million and a decrease in interest expense of $58 million related to interest on withholding taxes recorded in 2023, partially offset by an impairment charge of $45 million on an investment in a privately-held company in 2024.

Provision for (benefit from) Income Taxes

We are subject to income taxes in the United States and foreign jurisdictions in which we do business.

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Additionally, certain of our foreign earnings may also be taxable in the United States.

Accordingly, our effective tax rate is subject to significant variation due to several factors, including variability in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in how we do business, acquisitions, investments, tax audit developments, changes in our deferred tax assets and liabilities and their valuation, foreign currency gains and losses, changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized.

Additionally, our effective tax rate can vary based on the amount of pre-tax income or loss.

For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

We expect our effective tax rate in the future to depend upon the proportion between the following items and income before income taxes:

tax benefits from foreign-derived intangible income, U.S.

tax on foreign income net of allowable credits, tax effects from share-based compensation, research tax credits, tax effects from capital losses not expected to be utilized, restructurings, settlement of tax contingency items, tax effects of changes in our business, and the effects of changes in tax law.

(in millions, except percentages)

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Effective tax rate (128) % 21 %

* Not meaningful

The income tax benefit in 2023, was primarily due to the release of $2.9 billion of our valuation allowance related to our U.S.

deferred tax assets (see Note 14, Income Taxes, to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details).

The provision for income taxes during 2024 was driven by current tax on U.S.

and foreign earnings and deferred tax expense resulting from prior year’s valuation allowance release on our U.S.

federal and state deferred tax assets and the utilization of some of those assets in 2024.

The income tax benefit for 2023, was primarily due to the release of $2.9 billion of our valuation allowance related to certain of our U.S.

federal and state deferred tax assets, as a discrete tax benefit.

In 2021, the Organization for Economic Co-operation and Development (“OECD”) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution to global taxation, focusing on global profit allocation, known to as Pillar One and a 15% global minimum effective tax rate, known as Pillar Two.

In December of 2022, the EU member states agreed to implement the OECD’s global minimum tax rate of 15%.

The OECD issued Pillar Two model rules and continues to release guidance on these rules.

The inclusive framework calls for tax law changes by participating countries to take effect in 2024 and 2025.

Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax.

We considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and concluded there was no material impact to our tax provision for 2024.

We will continue to evaluate the impact of these tax law changes on future reporting periods.

Liquidity and Capital Resources

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As of December 31, 2024, no amounts were drawn under the 2022 Credit Facility and outstanding letters of credit totaled $19 million.

See Note 10, Debt , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for a description of the 2022 Credit Facility entered into on October 31, 2022.

See Note 10, Debt , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for a description of the 2022 Credit Facility.

Material Cash Requirements

As of December 31, 2023, we had outstanding $2.0 billion in aggregate principal amount of indebtedness of our 0% convertible senior notes due in 2026.

As of December 31, 2024, we had outstanding $2.0 billion in aggregate principal amount of indebtedness of our 0% convertible senior notes due on March 15, 2026.

On March 3, 2021, in connection with the pricing of the 2026 Notes, we entered into privately negotiated capped call transactions (the “Capped Calls”) with certain of the initial purchasers and other financial institutions (the "option counterparties") at a cost of approximately $100 million.

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During 2024, we repurchased an aggregate of 24.5 million shares of Class A common stock for $3.4 billion through two share repurchase programs.

As of December 31, 2023, we had $750 million available to repurchase shares of Class A common stock under our share repurchase program.

In February 2024, our board of directors approved an additional share repurchase program to purchase up to $6.0 billion of our Class A common stock.

As of December 31, 2024, we had $3.3 billion available to repurchase shares of Class A common stock under our share repurchase program.

The following table summarizes our cash flows for the periods indicated (in millions):

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Effect of exchange rate changes on cash, cash equivalents, and restricted cash 152 (237)

Net increase in cash, cash equivalents, and restricted cash $ 2,376 $ 564

Net Cash Provided by Operating Activities

Net cash provided by operating activities in 2023 was $3.9 billion, which was primarily due to income from operations of $1.5 billion and interest income of $721 million from our investment portfolio, adjusted for non-cash items including stock-based compensation expense of $1.1 billion.

Net cash provided by operating activities in 2022 was $3.4 billion, which was primarily due to income from operations of $1.8 billion, adjusted for non-cash items, primarily consisting of $930 million of stock-based compensation expense, impairment of long-lived assets of $91 million, and $62 million of foreign exchange losses due to the strengthening of the U.S.

dollar against the Euro and British Pound.

Net cash provided by operating activities in 2024 was $4.5 billion, which was primarily due to income from operations of $2.6 billion and interest income of $818 million, adjusted for non-cash items including stock-based compensation expense of $1.4 billion.

Net Cash Used in Investing Activities

Net cash used in investing activities in 2023 was $1.0 billion, which was primarily due to purchases of short-term investments, partially offset by proceeds resulting from sales and maturities of short-term investments.

Net cash used in investing activities in 2022 was $28 million, which was primarily due to purchases of short-term investments and property and equipment of $4.1 billion and $25 million, respectively, partially offset by proceeds from sales and maturities of short-term investments of $4.1 billion.

Net cash used in investing activities in 2024 was $616 million, which was primarily due to purchases of short-term investments, partially offset by proceeds resulting from sales and maturities of short-term investments.

Net Cash Used in Financing Activities

Net cash used in financing activities in 2023 was $2.4 billion, primarily due to share repurchases of $2.3 billion, and an increase in taxes paid related to net share settlement of equity awards of $1.2 billion, primarily driven from the taxes paid related to the cashless exercise of stock options, partially offset by the decrease in funds payable and amounts payable to customers of $936 million.

Net cash used in financing activities in 2022 was $689 million, primarily due to share repurchases of $1.5 billion under our share repurchase programs, and an increase in the taxes paid related to net share settlement of equity awards of $607 million, partially offset by an increase in funds payable and amounts payable to customers of $1.3 billion resulting from significantly higher bookings.

Net cash used in financing activities in 2024 was $3.6 billion, primarily due to share repurchases of $3.4 billion, and an increase in taxes paid related to net share settlement of equity awards of $630 million, partially offset by the increase in funds payable and amounts payable to customers of $320 million.

Effect of Exchange Rates

The effect of exchange rate changes on cash, cash equivalents, and restricted cash on our consolidated statements of cash flows relates to certain of our assets, principally cash balances held on behalf of customers, that are denominated in currencies other than the functional currency of certain of our subsidiaries.

During 2024, we recorded a reduction of $237 million in cash, cash equivalents, and restricted cash, primarily due to the strengthening of the U.S.

During 2023, we recorded an increase of $152 million in cash, cash equivalents, and restricted cash, primarily due to the weakening of the U.S.

The impact of exchange rate changes on cash balances can serve as a natural hedge for the effect of exchange rates on our liabilities to our hosts and guests.

We assess our liquidity in terms of our ability to generate cash to fund our short and long-term cash requirements.

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Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses, and related disclosures.

On an ongoing basis, we evaluate our estimates and assumptions.

Our actual results may differ from these estimates under different assumptions or conditions.

We believe that of our significant accounting policies, which are described in Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.

Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition, results of operations, and cash flows.

Lodging Tax Obligations

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.

On an ongoing basis, we reconsider and evaluate our estimates and assumptions.

We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results could materially differ from any of our estimates under different assumptions or conditions.

Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.

We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

Lodging Tax Obligations and Other Non-Income Tax Matters

In jurisdictions where we do not collect and remit lodging taxes, the responsibility for collecting and remitting these taxes, if applicable, generally rests with hosts.

We estimate liabilities for a certain number of jurisdictions with respect to state, city, and local taxes related to lodging where we believe it is probable that Airbnb could be held jointly liable with Hosts for collecting and remitting such taxes and the related amounts can be reasonably estimated.

Airbnb is also subject to other non-income taxes primarily arising from transactions with our customers such as transactional taxes (sales, value-added, business, digital service, and similar taxes) where there may be significant uncertainty as to how the taxes apply to our platform, as well as uncertainty on the applicability of withholding taxes on certain payments made to hosts.

We estimate liabilities for a certain number of jurisdictions with respect to federal, state, city, and local taxes related to lodging and other non-income taxes where we believe it is probable that Airbnb could be held liable, or, in the case of lodging taxes, jointly and severally liable with hosts for collecting and remitting such taxes, and the related amounts can be reasonably estimated.

Changes to these liabilities are recorded in general and administrative expense in our consolidated statements of operations.

Evaluating potential outcomes for lodging taxes is inherently uncertain and requires us to utilize various judgments, assumptions, and estimates in determining our reserves.

A variety of factors could affect our potential obligation for collecting and remitting such taxes, which include, but are not limited to, whether we determine, or any tax authority asserts, that we have a responsibility to collect lodging and related taxes on either historic or future transactions;

Evaluating potential outcomes for lodging and other non-income taxes is inherently uncertain and requires us to utilize various judgments, assumptions, and estimates in determining our liability reserves.

A variety of factors could affect our potential obligation for collecting and remitting such taxes, which include, but are not limited to, whether we determine, or any tax authority asserts, that we have a responsibility to collect lodging or other non-income and related taxes on either historic or future transactions;

the introduction of new ordinances and taxes which subject our operations to such taxes;

or the ultimate resolution of any historic claims that may be settled through negotiation.

Accordingly, the ultimate resolution of lodging taxes may be greater or less than reserve amounts we have established.

See Note 13, Commitments and Contingencies , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for additional information.

or the ultimate resolution of any historic claims that may be settled.

Accordingly, the ultimate resolution of lodging and other non-income taxes may be greater or less than reserve amounts we have established.

Commitments and Contingencies , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for additional information.

We are subject to income taxes in the United States and foreign jurisdictions.

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Evaluating our uncertain tax positions, determining our provision for (benefit from) income taxes, and evaluating the impact of tax law changes, are inherently uncertain and require making judgments, assumptions, and estimates.

In determining the need for a valuation allowance, we weigh both positive and negative evidence in the various jurisdictions in which we operate related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized.

As of December 31, 2023, based on all available positive and negative evidence, having demonstrated sustained profitability which is objective and verifiable, and taking into account anticipated future earnings, we have concluded that it is more likely than not that our U.S.

federal and state deferred tax assets will be realizable, with the exception of California research and development credits, capital loss carryovers, and certain losses subject to the dual consolidated loss rules.

We continue to maintain a valuation allowance against our California research and development credit deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met the “more likely than not” realization criteria, particularly as we expect research and development tax credit generation to exceed our ability to use the credits in future years.

When a change in valuation allowance is recognized during an interim period, the change in valuation allowance resulting from current year income is included in the annual effective tax rate and the release of valuation allowance supported by projections of future taxable income is recorded as a discrete tax benefit in the interim period.

We released $2.9 billion of our valuation allowance in 2023 and will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.

In assessing the need for a valuation allowance, we consider both positive and negative evidence regarding the realizability of deferred tax assets across our operating jurisdictions.

Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

Our actual and forecasted income (loss) before provision is subject to change due to economic, political and other conditions and significant judgment is required in determining our ability to recognize our net deferred tax assets.

As of December 31, 2024, we have determined that it is more likely than not that our U.S.

federal and state deferred tax assets are realizable, except for California research and development credits, capital loss carryovers, and certain losses subject to dual consolidated loss rules.

We maintain a valuation allowance for California research and development credits due to uncertainty about their realizability, as they have not met the “more likely than not” criteria.

Changes in valuation allowance during interim periods are reflected in the annual effective tax rate, with any releases based on future taxable income recorded as discrete tax benefits.

In 2023, we released $2.9 billion of our valuation allowance and will continue to review the need for such allowances quarterly.

While we believe that we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis