What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-16 · 304 added, 399 removed, 979 unchanged (42% of the section changed)

5 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss) 69

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders’ Equity

1 unchanged sentence

Notes to Consolidated Financial Statements

Financial Statement Schedule

Schedule II—Valuation and Qualifying Accounts

Schedule II—Valuation and Qualifying Account

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

We have audited the accompanying consolidated balance sheets of Airbnb, Inc.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity, and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the accompanying index for each of the three years in the period ended December 31, 2023 (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and schedule of valuation and qualifying account for each of the three years in the period ended December 31, 2024 listed in the accompanying index (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

28 unchanged sentences

Recognition, step one, occurs when management concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination.

Measurement, step two, determines the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

Measurement, step two, determines the largest amount of benefit that is

greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

The Company is in various stages of examination in connection with its ongoing tax audits globally and management believes that an adequate provision has been recorded for any adjustments that may result from tax audits.

20 unchanged sentences

Cash and cash equivalents $ 6,874 $ 6,864

Short-term investments (including assets reported at fair value of $ 2,224 and $ 2,507 , respectively)

Short-term investments

Funds receivable and amounts held on behalf of customers 5,869 5,931

Prepaids and other current assets (including customer receivables of $ 200 and $ 249 and allowances of $ 39 and $ 44 , respectively)

Prepaids and other current assets

Total current assets 16,509 17,180

Deferred tax assets

Deferred income tax assets

Goodwill and intangible assets, net 792 777

8 unchanged sentences

Long-term debt 1,991 1,995

Operating lease liabilities, noncurrent 295 252

Other liabilities, noncurrent 539 391

12 unchanged sentences

Additional paid-in capital 11,639 12,602

Accumulated other comprehensive loss ( 32 ) ( 49 )

Accumulated other comprehensive income (loss)

Accumulated deficit ( 3,425 ) ( 4,225 )

18 unchanged sentences

Interest income 186 721 818

Interest expense ( 438 ) ( 24 ) ( 83 )

Other income (expense), net 1 ( 137 ) ( 40 )

Income (loss) before income taxes ( 300 ) 1,989 2,102

Income before income taxes

1,989 2,102 3,331

Provision for (benefit from) income taxes 96 ( 2,690 ) 683

Net income (loss) $ ( 352 ) $ 1,893 $ 4,792

Net income (loss) per share attributable to Class A and Class B common stockholders:

$ 1,893 $ 4,792 $ 2,648

Net income per share attributable to Class A and Class B common stockholders:

Basic $ 2.97 $ 7.52 $ 4.19

Diluted $ 2.79 $ 7.24 $ 4.11

Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders:

Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:

Basic 637 637 632

1 unchanged sentence

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(in millions)

1 unchanged sentence

2022 2023 2024

Net income (loss) $ ( 352 ) $ 1,893 $ 4,792

Other comprehensive loss:

$ 1,893 $ 4,792 $ 2,648

Other comprehensive income (loss):

Net unrealized gain (loss) on available-for-sale marketable securities, net of tax ( 15 ) 6 —

Net unrealized loss on cash flow hedges, net of tax

Net unrealized gain (loss) on cash flow hedges, net of tax — ( 31 ) 111

Foreign currency translation adjustments ( 10 ) 8 ( 27 )

Other comprehensive loss

Other comprehensive income (loss)

( 25 ) ( 17 ) 84

Comprehensive income (loss) $ ( 362 ) $ 1,868 $ 4,775

Comprehensive income

$ 1,868 $ 4,775 $ 2,732

The accompanying notes are an integral part of these consolidated financial statements.

8 unchanged sentences

Balances as of December 31, 2021 634 $ — $ 11,140 $ ( 7 ) $ ( 6,358 ) $ 4,775

Net loss — — — — ( 352 ) ( 352 )

Net income — — — — 1,893 1,893

Other comprehensive loss — — — ( 25 ) — ( 25 )

Exercise of common stock options, net of shares withheld for taxes

18 — * 138 — — 138

Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes 16 — * ( 44 ) — — ( 44 )

Reclassification of derivative warrant liability to equity — — 1,277 — — 1,277

Purchase of capped calls — — ( 100 ) — — ( 100 )

Issuance of common stock under employee stock purchase plan, net of shares withheld 1 — * 51 — — 51

Equity awards issued, net of shares withheld for employee taxes 11 — ( 524 ) — — ( 524 )

Stock-based compensation — — 941 — — 941

Share repurchases

( 14 ) — — — ( 1,500 ) ( 1,500 )

Balances as of December 31, 2022 631 — 11,557 ( 32 ) ( 5,965 ) 5,560

1 unchanged sentence

Other comprehensive loss — — — ( 17 ) — ( 17 )

Exercise of common stock options, net of shares withheld for taxes

Shares issued upon net settlement of warrants exercised 6 — — — — —

Equity awards issued, net of shares withheld for employee taxes

18 — ( 1,117 ) — — ( 1,117 )

Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes 8 — * ( 612 ) — — ( 612 )

Issuance of common stock under employee stock purchase plan, net of shares withheld for taxes — — * 48 — — 48

Issuance of common stock for acquisition of businesses 1 — 53 — — 53

Stock-based compensation — — 1,146 — — 1,146

Repurchases of common stock ( 14 ) — — — ( 1,500 ) ( 1,500 )

Share repurchases ( 18 ) — — — ( 2,252 ) ( 2,252 )

Balances as of December 31, 2023 638 — 11,639 ( 49 ) ( 3,425 ) 8,165

Net income — — — — 2,648 2,648

Other comprehensive loss — — — ( 17 ) — ( 17 )

Exercise of common stock options, net of shares withheld for taxes

Other comprehensive income

— — — 84 — 84

Shares issued upon net settlement of warrants exercised 1 — — — — —

Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes 8 — * ( 660 ) — — ( 660 )

Issuance of common stock under employee stock purchase plan, net of shares withheld for taxes 1 — * 64 — — 64

Equity awards issued, net of shares withheld for employee taxes 9 — ( 461 ) — — ( 461 )

Stock-based compensation — — 1,424 — — 1,424

Repurchases of common stock ( 18 ) — * — — ( 2,252 ) ( 2,252 )

Issuance of common stock for acquisition of business 1 — * 53 — — 53

Share repurchases ( 25 ) — — — ( 3,448 ) ( 3,448 )

Balances as of December 31, 2024 623 $ — $ 12,602 $ 35 $ ( 4,225 ) $ 8,412

* Amounts round to zero and do not change rounded totals.

The accompanying notes are an integral part of these consolidated financial statements.

4 unchanged sentences

Cash flows from operating activities:

Net income (loss) $ ( 352 ) $ 1,893 $ 4,792

Adjustments to reconcile net income (loss) to cash provided by operating activities:

$ 1,893 $ 4,792 $ 2,648

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization 81 44 65

1 unchanged sentence

Deferred income taxes ( 1 ) ( 2,875 ) 433

Loss on warrants, net

Impairment of long-lived assets 91 — —

Loss from extinguishment of debt 377 — —

Other, net 117 83 32

2 unchanged sentences

Accrued expenses and other liabilities

224 580 ( 104 )

Unearned fees 280 242 200

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Cash flows from financing activities:

Taxes paid related to net share settlement of equity awards ( 177 ) ( 607 ) ( 1,224 )

Principal repayment of long-term debt ( 1,995 ) — —

Prepayment penalty on long-term debt ( 213 ) — —

Proceeds from issuance of convertible senior notes, net of issuance costs 1,979 — —

Purchases of capped calls related to convertible senior notes ( 100 ) — —

Taxes paid related to tax on equity awards

( 607 ) ( 1,224 ) ( 630 )

Proceeds from exercise of equity awards and employee stock purchase plan 88 110 168

Repurchase of common stock — ( 1,500 ) ( 2,252 )

Share repurchases

( 1,500 ) ( 2,252 ) ( 3,430 )

Change in funds payable and amounts payable to customers 1,330 936 320

Net cash provided by (used in) financing activities 1,308 ( 689 ) ( 2,430 )

Net cash used in financing activities

( 689 ) ( 2,430 ) ( 3,572 )

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 337 ) 152 ( 237 )

Net increase in cash, cash equivalents, and restricted cash

2,059 2,376 564

Cash, cash equivalents, and restricted cash, beginning of year

13 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

Certain immaterial amounts in prior periods have been reclassified to conform with current period presentation.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and variable interest entities (“VIE”) in which the Company is the primary beneficiary in accordance with consolidation accounting guidance.

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries in accordance with consolidation accounting guidance.

All intercompany transactions have been eliminated in consolidation

The Company determines, at the inception of each arrangement, whether an entity in which it has made an investment or in which it has other variable interest in is considered a VIE.

The Company consolidates a VIE when it is deemed to be the primary beneficiary.

The primary beneficiary of a VIE is the party that meets both of the following criteria:

(i) has the power to direct the activities that most significantly affect the economic performance of the VIE;

and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE.

Periodically, the Company determines whether any changes in its interest or relationship with the entity impact the determination of whether the entity is still a VIE and, if so, whether the Company is the primary beneficiary.

If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interest in a VIE in accordance with applicable U.S.

As of December 31, 2022 and 2023, the Company’s consolidated VIEs were not material to the consolidated financial statements.

Use of Estimates

1 unchanged sentence

GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

The Company regularly evaluates its estimates, including those related to bad debt reserves, fair value of investments, useful lives of long-lived assets and intangible assets, valuation of goodwill and intangible assets from acquisitions, contingent liabilities, insurance reserves, revenue recognition, valuation of common stock, stock-based compensation, income taxes, and reserves for transient occupancy taxes and tax withholding obligations, among others.

Actual results could differ materially from these estimates.

As the impact of the uncertain macroeconomic conditions, including inflation and rising interest rates, continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment.

As the impact of the uncertain macroeconomic conditions, including inflation, tariffs, and wars and other geopolitical conflicts continue to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment.

These estimates and assumptions may change in future periods and will be recognized in the consolidated financial statements as new events occur and additional information becomes known.

To the extent the Company’s actual results differ materially from those estimates and assumptions, the Company’s future consolidated financial statements could be affected.

Segment Information

Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment.

The Company’s CODM is its Chief Executive Officer.

The Company has determined it has one operating and reportable segment as the CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Cash and Cash Equivalents

7 unchanged sentences

Unrealized gains and non-credit related losses on available-for-sale debt securities are reported as a component of accumulated other comprehensive income (loss) (“AOCI”) in stockholders’ equity.

Realized gains and losses and impairments are reported within other income

Notes to Consolidated Financial Statements

(expense), net on the consolidated statements of operations.

Realized gains and losses and impairments are reported within other income (expense), net on the consolidated statements of operations.

The assessment for impairment takes into account the severity and duration of the decline in value, adverse changes in the market or industry of the investee, the Company’s intent to sell the security, and whether it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis.

5 unchanged sentences

Improvements in expected cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss.

Notes to Consolidated Financial Statements

Non-Marketable Investments

4 unchanged sentences

The Company uses the equity method if it has the ability to exercise significant influence, but not control, over the operating and financial policies of the investee.

For investments accounted for using the equity method, the Company’s proportionate share of its equity interest in the net income (loss) and other comprehensive income (loss) of these companies is recorded in the consolidated statements of operations within other income (expense), net.

The carrying amount of the investment in equity interests is adjusted to reflect the Company’s interest in the investee’s net income or loss and any impairments and is classified in other assets, noncurrent on the consolidated balance sheets.

For investments accounted for using the equity method, the Company’s proportionate share of its equity interest in net income and other comprehensive income (loss) of these companies is recorded in the consolidated statements of operations within other income (expense), net.

The carrying amount of the investment in equity interests is adjusted to reflect the Company’s interest in the investee’s net income and any impairments, and is classified in other assets, noncurrent on the consolidated balance sheets.

Equity investments for which the Company is not able to exercise significant influence over the investee and for which fair value is not readily determinable are accounted for using the measurement alternative.

15 unchanged sentences

The carrying amount of the Company’s financial instruments, including cash equivalents, funds receivable and amounts held on behalf of customers, accounts payable, accrued liabilities, funds payable and amounts payable to customers, and unearned fees approximate their respective fair values because of their short maturities.

Notes to Consolidated Financial Statements

Level 2 Valuation Techniques

3 unchanged sentences

The Company’s foreign exchange derivative instruments are valued using pricing models that take into account the contract terms, as well as multiple inputs where applicable, such as interest rate yield curves and currency rates.

Level 3 Valuation Techniques

Financial instruments classified as Level 3 within the Company’s fair value hierarchy consist primarily of a derivative warrant liability relating to the warrants issued in conjunction with the second lien loan discussed in Note 10, Debt .

Valuation techniques for the derivative warrant liability include the Black-Scholes option-pricing model with key assumptions such as stock price volatility, expected term, and risk-free interest rates.

Foreign Currency

6 unchanged sentences

Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity.

No material amounts were reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2021, 2022 and 2023.

No amounts were reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2023 and 2024.

Notes to Consolidated Financial Statements

Remeasurement gains and losses are included in other income (expense), net on the consolidated statements of operations.

Monetary assets and liabilities are remeasured at the exchange rate on the balance sheet date and nonmonetary assets and liabilities are measured at historical exchange rates.

As of December 31, 2022 and 2023, the Company had a cumulative translation gain of $ 13 million and $ 5 million , respectively.

As of December 31, 2023 and 2024, the Company had a cumulative translation loss of $ 5 million and $ 32 million, respectively.

Total net realized and unrealized gains (losses) on foreign currency transactions and balances totaled $ 29 million, $( 48 ) million and $ 29 million for the years ended December 31, 2022, 2023 and 2024, respectively.

4 unchanged sentences

The accounting treatment for derivative gains and losses is based on intended use and hedge designation.

Gains and losses arising from amounts that are included in the assessment of cash flow hedge effectiveness are initially deferred in AOCI and subsequently reclassified into earnings when the hedged transaction affects earnings and in the same line item within the consolidated statement of operations.

The Company does not exclude any components in the assessment of hedge effectiveness for forwards and options.

2 unchanged sentences

In rare circumstances, the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecasted transaction that are outside the control or influence of the Company.

Gains and losses arising from changes in the fair value of derivative instruments that are not designated as accounting hedges are recognized in the consolidated statement of operations in other income (expense), net.

Gains and losses arising from changes in the fair value of derivative instruments that are not designated as accounting hedges are recognized in the consolidated statements of operations in other income (expense), net.

The Company presents derivative assets and liabilities at their gross fair values in the consolidated balance sheets, even if they are subject to master netting arrangements with the counterparties.

6 unchanged sentences

Property and equipment are stated at cost, less accumulated depreciation and amortization.

Notes to Consolidated Financial Statements

Depreciation and amortization on property and equipment is calculated using the straight-line method over the estimated useful lives indicated below:

12 unchanged sentences

Operating lease ROU assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Notes to Consolidated Financial Statements

The Company has real estate and equipment lease agreements that contain lease and non-lease components, which are accounted for as a single lease component.

25 unchanged sentences

The determination of the recoverability of long-lived assets is based on an estimate of the undiscounted cash flows resulting from the use of the asset and its eventual disposition.

If the carrying value of the long-

Notes to Consolidated Financial Statements

lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value.

If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value.

Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as necessary.

2 unchanged sentences

For ROU assets, such circumstances may include subleases that do not fully recover the costs of the associated leases or a decision to abandon the use of all or part of an asset.

For the year ended December 31, 2021, the Company recorded $ 113 million of long-lived asset impairment charges within restructuring charges on the consolidated statement of operations.

For the year ended December 31, 2022, the Company recorded $ 91 million of long-lived asset impairment , of which $ 89 million was recorded within restructuring charges and the remainder within general and administrative, on the consolidated statements of operations.

For the year ended December 31, 2023, the Company did not record any restructuring charges.

For the years ended December 31, 2023 and 2024, the Company did not record any restructuring charges.

Revenue Recognition

8 unchanged sentences

The Company recognizes revenue upon check-in as its performance obligation is satisfied upon check-in and the Company has the right to receive payment for the fulfillment of the performance obligation.

Notes to Consolidated Financial Statements

The Company charges service fees to its customers as a percentage of the value of the booking, excluding taxes.

13 unchanged sentences

The Company recognizes revenue for the first month upon check-in, similar to short-term stays, and recognizes revenue for any subsequent months upon each month’s anniversary from initial check-in date.

The Company evaluates the presentation of revenue on a gross versus net basis based on whether or not it is the principal (gross) or the agent (net) in the transaction.

As part of the evaluation, the Company considers whether it controls the right to use the property before control is transferred.

Indicators of control that the Company considers include whether the Company is primarily responsible for fulfilling the promise associated with the rental of the property, whether it has inventory risk associated with the property, and whether it has discretion in establishing the prices for the property.

The Company determined that it does not control the right to use the properties either before or after completion of its service.

Accordingly, the Company has concluded that it is acting in an agent capacity and revenue is presented net reflecting the service fees received from customers to facilitate a stay.

The Company has elected to recognize the incremental costs of obtaining a contract, including the costs of certain referrer fees, as an expense when incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less.

The Company has no significant financing components in its contracts with customers.

The Company has elected to exclude from revenue, taxes assessed by a governmental authority that are both imposed on and are concurrent with specific revenue producing transactions.

The Company presents revenue net, as an agent, because it does not control the right to use the properties either before or after completion of its service.

It does not fulfill rental promises, bear inventory risk, or set prices.

Accordingly, the Company has concluded that it is acting in an agent capacity and therefore revenue is presented net reflecting the service fees received from customers to facilitate a stay.

The Company excludes from revenue, taxes assessed by a governmental authority that are both imposed on and are concurrent with specific revenue producing transactions.

Accordingly, such amounts are not included as a component of revenue or cost of revenue.

4 unchanged sentences

The Company encourages the use of its platform and attracts new customers through its incentive programs.

Under the Company’s referral program, the referring party (the “referrer”) earns a coupon when the new guest or Host (the “referee”) completes their first stay on the

Notes to Consolidated Financial Statements

Company’s platform.

Under the Company’s referral program, the referring party (the “referrer”) earns a coupon when the new guest or host (the “referee”) completes their first stay on the Company’s platform.

Incentives earned by customers for referring new customers are paid in exchange for a distinct service and are accounted for as customer acquisition costs.

3 unchanged sentences

Customer referral coupon credits generally expire within one year from issuance and the Company estimates the redemption rates using its historical experience.

As of December 31, 2022 and 2023, the referral coupon liability was not material.

As of December 31, 2023 and 2024, the referral coupon liability was immaterial.

Through marketing promotions, the Company issues customer coupon credits to encourage the use of its platform.

4 unchanged sentences

The Company reduces the transaction price by the estimated amount of the payments by applying the most likely outcome method based on known facts and circumstances and historical experience.

The estimate for variable consideration was not material as of December 31, 2022 and 2023.

The estimate for variable consideration was immaterial as of December 31, 2023 and 2024.

The Company evaluates whether the cumulative amount of payments made to customers that are not in exchange for a distinct good or service received from customers exceeds the cumulative revenue earned since inception of the customer relationships.

5 unchanged sentences

Host and guest fees are recorded as cash with a corresponding amount in unearned fees.

For certain bookings, a guest may opt to pay a percentage of the total amount due when the booking is confirmed, with the remaining balance due prior to the stay occurring (the “Pay Less Upfront Program”).

For certain bookings, a guest may opt to pay a percentage of the

Notes to Consolidated Financial Statements

total amount due when the booking is confirmed, with the remaining balance due prior to the stay occurring (the “Pay Less Upfront Program”).

Under the Pay Less Upfront Program, when the Company receives the first installment payment from the guest upon confirmation of the booking, the Company records the first installment payment as funds receivable and amounts held on behalf of customers with a corresponding amount in funds payable and amounts payable to customers, net of the host and guest fees.

3 unchanged sentences

The Company generally collects funds related to bookings from guests on behalf of hosts prior to check-in.

However, in limited circumstances the Company disburses funds to a Host or a guest on behalf of a counterparty guest or Host prior to collecting such amounts from the counterparty.

Such uncollected balances generally arise from the timing of payments and collections related to a dispute resolution between the guest and Host or certain alterations to stays and are included in prepaids and other current assets on the consolidated balance sheets.

The Company records a customer receivable allowance for credit losses for funds that may never be collected.

The Company estimated its exposure to balances deemed to be uncollectible based on factors including known facts and circumstances, historical experience, reasonable and supportable forecasts of economic conditions, and the age of the uncollected balances.

The Company writes off the asset when it is determined to be uncollectible.

Bad debt expense was $ 27 million, $ 49 million and $ 60 million for the years ended December 31, 2021, 2022 and 2023, respectively.

In limited circumstances, the Company disburses funds to a host or a guest on behalf of a counterparty guest or host prior to collecting such amounts from the counterparty.

These customer receivables, reflected in prepaids and other current assets on the consolidated balance sheets, are subject to a customer receivable allowance for potential credit losses.

The Company estimates uncollectible amounts based on historical data, economic forecasts, and the age of the debt, writing off assets deemed uncollectible.

Cost of Revenue

3 unchanged sentences

These costs are expensed as incurred.

Notes to Consolidated Financial Statements

Product Development

4 unchanged sentences

These costs are expensed as incurred.

Advertising expenses were $ 542 million, $ 786 million and $ 953 million for the years ended December 31, 2021, 2022 and 2023, respectively.

Advertising expenses were $ 786 million, $ 953 million and $ 1.1 billion for the years ended December 31, 2022, 2023 and 2024, respectively.

General and Administrative

General and administrative costs primarily consist of personnel-related expenses for executive management and administrative functions, including finance and accounting, legal, and human resources, as well as general corporate and director and officer insurance.

General and administrative costs also include certain professional services fees, allocated costs for facilities and information technology expenses, indirect taxes including lodging taxes where the Company may be held jointly liable with Hosts for collecting and remitting such taxes, withholding taxes, and bad debt expense.

General and administrative costs also include certain professional services fees, allocated costs for facilities and information technology expenses, indirect taxes including lodging taxes where the Company may be held jointly liable with hosts for collecting and remitting such taxes, withholding taxes, other transactional taxes, and bad debt expense.

These costs are expensed as incurred.

10 unchanged sentences

Accrued interest and penalties related to unrecognized tax benefits are recognized in the provision for (benefit from) income taxes.

Notes to Consolidated Financial Statements

A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

9 unchanged sentences

When shares are retired, the value of repurchased shares is deducted from stockholders’ equity through capital with the excess over par value recorded to accumulated deficit.

Notes to Consolidated Financial Statements

Stock-Based Compensation

Stock-based compensation expense primarily relates to restricted stock units (“RSUs”), restricted stock awards (“RSAs”), stock options, and the Employee Stock Purchase Plan (“ESPP”).

RSUs, RSAs, stock options and warrants are measured at the fair market value of the underlying stock at the grant date and the expense is recognized over the requisite service period.

Stock-based compensation expense relates to restricted stock units (“RSUs”), stock options, and the Employee Stock Purchase Plan (“ESPP”) (collectively referred to as “equity awards”).

RSUs, stock options and warrants are measured at the fair market value of the underlying stock at the grant date and the expense is recognized over the requisite service period.

The fair value of stock options and ESPP shares are estimated on the date of grant using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant.

4 unchanged sentences

The Company accounts for forfeitures as they occur.

The benefits of tax deductions in excess of recognized compensation costs are recognized in the income statement as a discrete item when an option exercise or a vesting and release of shares occurs.

Net Income (Loss) Per Share Attributable to Common Stockholders

The Company applies the two-class method when computing net income (loss) per share attributable to common stockholders when shares are issued that meet the definition of a participating security.

The two-class method determines net income (loss) per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

The benefits of tax deductions in excess of recognized stock-based compensation costs are recognized in the income statement as a discrete item when an option exercise or a vesting and release of shares occurs.

Net Income Per Share Attributable to Common Stockholders

The Company applies the two-class method when computing net income per share attributable to common stockholders when shares are issued that meet the definition of a participating security.

The two-class method determines net income per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

The two-class method requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed.

The Company’s previously outstanding redeemable convertible preferred stock was a participating security as the holders of such shares participated in dividends but did not contractually participate in the Company’s losses.

Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period, less weighted-average shares subject to repurchase.

The diluted net income (loss) per share is computed by giving effect to all potentially dilutive securities outstanding for the period, including RSUs, RSAs, stock options, and warrants using the treasury stock method, and convertible notes, using the if-converted method.

For periods in which the Company reports net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive common shares are anti-dilutive.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss).

Other comprehensive income (loss) reflects gains and losses that are recorded as a component of stockholders’ equity and are excluded from net income (loss).

Other comprehensive income (loss) consists of unrealized gains (losses) on derivative instruments designated as cash flow hedges, net of tax, foreign currency translation adjustments related to consolidation of foreign entities and unrealized gains (losses), net of tax, on securities classified as available-for-sale.

Basic net income per share attributable to common stockholders is computed by dividing the net income by the weighted-average number of shares of common stock outstanding during the period, less weighted-average shares subject to repurchase.

The diluted net income per share is computed by giving effect to all potentially dilutive securities outstanding for the period, including RSUs, stock options, and warrants using the treasury stock method, and convertible notes, using the if-converted method.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income.

Other comprehensive income reflects gains and losses that are recorded as a component of stockholders’ equity and are excluded from net income.

Other comprehensive income consists of unrealized gains (losses) on derivative instruments designated as cash flow hedges, net of tax, foreign currency translation adjustments related to consolidation of foreign entities and unrealized gains (losses), net of tax, on securities classified as available-for-sale.

Contingencies

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Recently Adopted Accounting Standards

In March 2022, the Financial Accounting Standards (“FASB”) issued Accounting Standards Update (“ASU”) 2022-01, Derivatives and Hedging (Topic 815) , which clarifies the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets.

The standard is effective for public entities in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted on any date on or after the issuance of ASU 2017-12.

The Company adopted the standard during the first quarter of 2023, which did not have an impact on the Company's consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued an update to improve disclosure of reportable segments on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses.

The update is effective for public companies in fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, on a retrospective basis.

The Company adopted the guidance effective December 31, 2024 (refer to Note 16.

Segment and Geographic Information) .

Notes to Consolidated Financial Statements

In June 2022, the FASB issued guidance related to the fair value measurement of an equity security subject to contractual sale restrictions that prohibit the sale of the equity security.

The new guidance also introduced new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value.

The Company adopted the guidance effective January 1, 2024.

There was no impact to the Company’s consolidated financial statements or disclosures upon adoption.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which expands income tax disclosure requirements to include disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The standard is effective for public companies in fiscal years beginning after December 15, 2024, and will be applied prospectively with the option to apply the standard retrospectively.

In November 2024, the FASB issued an update to improve the disclosures about an entity’s expenses, for both annual and interim periods in a tabular format in the footnotes to the financial statements, to include disaggregated information about specific categories underlying certain income statement expense line items.

The update is effective for public companies on a prospective basis, with the option for retrospective application in fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company does not expect the adoption of the new guidance to have a material impact on its consolidated financial statements other than the expanded footnote disclosure.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of segment expenses.

The standard is effective for public entities in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the consolidated financial statements.

The standard is effective for public companies in fiscal years beginning after December 15, 2024, and will be applied prospectively with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company does not expect the adoption of the new guidance to have a material impact on its consolidated financial statements other than the expanded footnote disclosure.

Notes to Consolidated Financial Statements

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance of equity securities that are subject to a contractual sale restriction as well as includes specific disclosure requirements for such equity securities.

The standard is effective for public entities in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and will be applied prospectively.

Early adoption is permitted.

The Company does not expect the adoption of the new guidance to have a material impact on its consolidated financial statements.

There are other new accounting pronouncements issued by the FASB that the Company has adopted or will adopt, as applicable, and the Company does not believe any of these accounting pronouncements have had, or will have, a material impact on its consolidated financial statements or disclosures.

Prior Period Reclassifications

Certain immaterial amounts in prior periods have been reclassified to conform with current period presentation.

Revision of Previously Issued Consolidated Financial Statements

The consolidated statements of cash flows for year ended December 31, 2021, has been revised to correct for errors identified by management during the preparation of the consolidated financial statements for the three months ended March 31, 2022.

The errors understated cash flows from operating activities by $ 123 million and overstated the cash flows from financing activities by $ 123 million for the year ended December 31, 2021.

Management has determined that these errors did not result in the previously issued consolidated financial statements being materially misstated.

These errors primarily related to the timing of tax payments from the net settlement of equity awards at the initial public offering in December 2020.

In particular, in 2020, the Company reported $ 1.7 billion of cash used in financing activities to cover taxes paid related to the net share settlement of its equity awards that vested upon the initial public offering.

However, approximately $ 123 million of this amount was actually remitted to taxing authorities in foreign jurisdictions during 2021.

This had no impact on the Company’s consolidated financial statements outside of the presentation in the consolidated statements of cash flow and did not affect the consolidated balance sheets, consolidated statements of operations, or consolidated statements of stockholders’ equity.

Supplemental Financial Statement Information

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Supplemental balance sheet information consisted of the following (in millions):

Prepaids and other current assets:

Customer receivables

Customer receivables reserve

( 44 ) ( 28 )

Prepaids and other current assets

Other assets, noncurrent:

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Accrued expenses, accounts payable, and other current liabilities:

Indirect taxes payable and withholding tax reserves

Non-income taxes payable and withholding tax reserves

$ 1,119 $ 1,055

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Operating lease liabilities, current 61 63

Other 813 897

Other includes gift card and foreign exchange derivative contract liabilities

Accrued expenses, accounts payable, and other current liabilities $ 2,654 $ 2,614

$ 2,013 $ 2,654

Payments to Customers

Other liabilities, noncurrent:

Operating lease liabilities, noncurrent

Other liabilities, noncurrent

Payments to Customers and Bad Debt Expense

The Company makes payments to customers as part of its incentive programs (composed of referral programs and marketing promotions) and refund activities.

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$ 432 $ 517 $ 627

Bad debt expense

$ 49 $ 60 $ 49

Notes to Consolidated Financial Statements

Revenue Disaggregated by Geographic Region

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Total revenue disaggregated by geographic region $ 8,399 $ 9,917 $ 11,102

Notes to Consolidated Financial Statements

The following tables summarize the Company’s investments by major security type (in millions):

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Debt securities:

Certificates of deposit $ 573 $ — $ — $ 573

Government bonds 83 — — 83

Commercial paper 574 — — 574

Corporate debt securities $ 1,490 $ 4 $ ( 3 ) $ 1,491

Commercial paper 366 — — 366

Government bonds 332 1 — 333

Certificates of deposit 172 — — 172

Mortgage-backed and asset-backed securities

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Time deposits 690 — — 690

Equity investments (1)

Total short-term investments

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Corporate debt securities $ 13 $ — $ ( 9 ) $ 4

Notes to Consolidated Financial Statements

December 31, 2024

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Debt securities:

Certificates of deposit

$ 172 $ — $ — $ 172

Government bonds

Commercial paper

Corporate debt securities

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381 1 ( 4 ) 378

Government bonds

Commercial paper

Certificates of deposit

Total debt securities 3,047 5 ( 7 ) 3,045

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Corporate debt securities $ 13 $ — $ ( 9 ) $ 4

(1) Unrealized gains (losses) on equity investments were not material for the years ended December 31, 2022 and 2023.

(1) Classified within other assets, noncurrent on the consolidated balance sheets.

As of December 31, 2023 and December 31, 2024, the Company did no t have any available-for-sale debt securities for which the Company recorded credit-related losses.

Unrealized gains and losses, net of tax before reclassifications from AOCI to other income (expense), net were not material for the years ended December 31, 2021, 2022 and 2023.

Realized gains and losses reclassified from AOCI to other income (expense), net were not material for the years ended December 31, 2021, 2022 and 2023.

Debt securities in an unrealized loss position had an estimated fair value of $ 748 million and $ 777 million , and unrealized losses of $ 19 million and $ 16 million as of December 31, 2022 and 2023, respectively.

A total of $ 92 million and $ 283 million of these securities, with unrealized losses of $ 13 million and $ 14 million , were in a continuous unrealized loss position for more than twelve months as of December 31, 2022 and December 31, 2023, respectively.

Notes to Consolidated Financial Statements

Unrealized gains and losses, net of tax before reclassifications from AOCI to other income (expense), net were immaterial for the years ended December 31, 2022, 2023 and 2024.

Realized gains and losses reclassified from AOCI to other income (expense), net were immaterial for the years ended December 31, 2022, 2023 and 2024.

Debt securities in an unrealized loss position had an estimated fair value of $ 777 million and $ 1.1 billion, and unrealized losses were immaterial as of December 31, 2023 and 2024, respectively.

A total of $ 283 million and $ 269 million of these securities were in a continuous unrealized loss position for more than twelve months as of December 31, 2023 and December 31, 2024, respectively.

The following table summarizes the contractual maturities of the Company’s available-for-sale debt securities (in millions):

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Due within one year $ 1,790 $ 1,792

Due within one to five years

Due beyond five years

Due after one year through five years 1,172 1,162

Due after five years 98 95

Total $ 3,060 $ 3,049

Equity Investments

Gains and Losses on Marketable Equity Investments

During the year ended December 31, 2021, the Company sold all of its marketable equity investments and recognized a realized net loss of $ 13 million.

The realized and unrealized gains and losses on marketable equity investments were recorded in other income (expense), net on the consolidated statements of operations.

Equity Investments Without Readily Determinable Fair Values

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These investments had a net carrying value of $ 83 million and $ 38 million as of December 31, 2023 and December 31, 2024, respectively, and are classified within other assets, noncurrent on the consolidated balance sheets.

The Company recorded impairment charges of $ 3 million for the year ended December 31, 2021, and did not have any impairment charges nor downward adjustments for observable price changes during the years ended December 31, 2022 and 2023.

The Company recorded upward adjustments of $ 4 million during the year ended December 31, 2023 , and did not have any upward adjustments for observable price changes during the years ended December 31, 2021 and 2022.

The Company recorded an impairment charge of $ 45 million for the year ended December 31, 2024, and did not have any impairment charges nor downward adjustments for observable price changes during the years ended December 31, 2022 and 2023.

The Company recorded an immaterial upward adjustment during the year ended December 31, 2023, and did not have any upward adjustments for observable price changes during the years ended December 31, 2022 and 2024.

As of December 31, 2024, the cumulative impairment and downward adjustments for observable price changes were $ 101 million.

Investments Accounted for Under the Equity Method

As of December 31, 2022 and December 31, 2023, the carrying values of the Company’s equity method investments were $ 14 million and $ 8 million , respectively.

For the years ended December 31, 2021, 2022 and 2023, the Company recorded losses of $ 4 million, $ 5 million and $ 6 million , respectively, within other income (expense), net on the consolidated statements of operations, representing its proportionate share of net income or loss based on the investee’s financial results.

There were no impairment charges for the years ended December 31, 2021, 2022 and 2023.

As of December 31, 2023 and 2024, the carrying values of the Company’s equity method investments were $ 8 million and $ 47 million, respectively.

For the years ended December 31, 2022, 2023 and 2024, the Company recorded immaterial losses within other income

Notes to Consolidated Financial Statements

(expense), net on the consolidated statements of operations, representing its proportionate share of net income or loss based on the investee’s financial results.

There were no impairment charges for the years ended December 31, 2022, 2023 and 2024.

Fair Value Measurements and Financial Instruments

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis (in millions):

The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis (in millions):

December 31, 2023

2 unchanged sentences

Money market funds $ 2,018 $ — $ — $ 2,018

Certificates of deposit 26 — — 26

Government bonds — 32 — 32

Commercial paper — 223 — 223

Government bonds — 115 — 115

Corporate debt securities — 12 — 12

Certificates of deposit — 1 — 1

Total cash equivalents at fair value 2,018 351 — 2,369

2,352 427 — 2,779

Short-term investments:

Certificates of deposit 573 — — 573

Government bonds — 83 — 83

Commercial paper — 574 — 574

Corporate debt securities — 1,491 — 1,491

Commercial paper — 366 — 366

Government bonds — 333 — 333

Certificates of deposit — 172 — 172

Mortgage-backed and asset-backed securities — 145 — 145

Equity investments 1 — — 1

Total short-term investments at fair value — 2,507 — 2,507

574 1,650 — 2,224

Funds receivable and amounts held on behalf of customers:

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Foreign exchange derivative liabilities $ — $ 55 $ — $ 55

Other liabilities, noncurrent:

Foreign exchange derivative liabilities — 5 — 5

Total liabilities at fair value $ — $ 60 $ — $ 60

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Money market funds $ 1,635 $ — $ — $ 1,635

Certificates of deposit — 1 — 1

Government bonds — 115 — 115

Commercial paper — 152 — 152

Government bonds — 33 — 33

Corporate debt securities — 2 — 2

Total cash equivalents at fair value 1,635 187 — 1,822

2,018 351 — 2,369

Short-term investments:

Certificates of deposit — 172 — 172

Government bonds — 333 — 333

Commercial paper — 366 — 366

Corporate debt securities — 2,177 — 2,177

Mortgage-backed and asset-backed securities — 378 — 378

Government bonds — 224 — 224

Commercial paper — 214 — 214

Certificates of deposit — 52 — 52

Total short-term investments at fair value — 3,045 — 3,045

— 2,507 — 2,507

Funds receivable and amounts held on behalf of customers:

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Other assets, noncurrent:

Foreign exchange derivative assets — 6 — 6

Corporate debt securities — — 4 4

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Foreign exchange derivative liabilities $ — $ 20 $ — $ 20

Other liabilities, noncurrent:

Foreign exchange derivative liabilities — 5 — 5

Total liabilities at fair value $ — $ 60 $ — $ 60

There were no transfers of financial instruments between valuation levels during the years ended December 31, 2023 and 2024.

There were no material changes in unrealized losses included in other comprehensive income relating to investments measured at fair value for which the Company has utilized Level 3 inputs to determine fair value during the years ended December 31, 2021, 2022 and 2023.

There were no material changes in unrealized losses included in other comprehensive income (loss) relating to investments measured at fair value for which the Company has utilized Level 3 inputs to determine fair value during the years ended December 31, 2022, 2023 and 2024.

Derivative Instruments and Hedging

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Foreign exchange contracts (current) Prepaids and other current assets $ 4 $ 90

Foreign exchange contracts (noncurrent) Other assets, noncurrent — 7

Total derivatives designated as hedging instruments $ 4 $ 97

Derivatives not designated as hedging instruments:

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To limit credit risk, the Company generally enters into master netting arrangements with the respective counterparties to the Company’s derivative contracts, under which the Company is allowed to settle transactions with a single net amount payable by one party to the other.

As of December 31, 2023, the potential effect of these rights of off-set associated with the Company’s derivative contracts would be a reduction to both derivative assets and liabilities of $ 26 million, resulting in net derivative assets of $ 1 million and net derivative liabilities of $ 34 million.

The effect of derivative instruments designated as hedging instruments on the consolidated statements of operations was not material for the year ended December 31, 2023.

As of December 31, 2024, the potential effect of these rights of offset associated with the Company’s derivative contracts would be a reduction to both derivative assets and liabilities of $ 20 million, resulting in net derivative assets of $ 100 million.

Realized gains on derivative instruments designated as hedging instruments reclassified from AOCI to revenue in the consolidated statements of operations were immaterial for the years ended December 31, 2023 and 2024.

Effect of Derivative Instruments Designated as Hedging Instruments on AOCI

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Foreign exchange contracts (1)

(1) Loss recognized in other comprehensive income (loss).

As of December 31, 2023, cumulative unrealized losses recorded in AOCI, net of tax, related to derivative instruments designated as hedging instruments were $ 31 million.

$ ( 30 ) $ 125

(1) Gain (loss) recognized in other comprehensive income (loss).

As of December 31, 2023 and December 31, 2024, cumulative unrealized gains (losses) recorded in AOCI, net of tax, related to derivative instruments designated as hedging instruments were $( 31 ) million and $ 80 million, respectively.

Notes to Consolidated Financial Statements

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Foreign exchange contracts $ 92 $ ( 43 ) $ ( 59 ) $ ( 33 ) $ 10 $ 11

The total notional amount of outstanding derivatives not designated as hedging instruments was $ 2.4 billion and $ 2.1 billion as of December 31, 2023 and December 31, 2024, respectively.

Cash Flow Hedges

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was $ 2.0 billion as of December 31, 2023.

As of December 31, 2023, approximately $ 11 million of deferred net losses on both outstanding and matured derivatives in AOCI are expected to be reclassified to revenue during the next 12 months concurrent with the underlying hedged transactions which will be recorded in revenue.

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was $ 2.0 billion and $ 2.5 billion as of December 31, 2023 and December 31, 2024, respectively.

As of December 31, 2024, approximately $ 68 million of deferred net gains on both outstanding and matured derivatives in AOCI are expected to be reclassified to revenue during the next 12 months concurrent with the underlying hedged transactions which will be recorded in revenue.

Actual amounts ultimately reclassified to revenue are dependent on the exchange rates in effect when derivative contracts currently outstanding mature.

Derivatives not Designated as Hedging Instruments

As of both December 31, 2022 and December 31, 2023, the total notional amount of outstanding derivatives not designated as hedging instruments was $ 2.4 billion.

Goodwill and Intangible Assets

In November 2023, the Company completed an acquisition, which increased goodwill and intangible assets.

The acquisition was not material to the Company’s financial results.

The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2024 were as follows (in millions):

Balance as of December 31, 2022 $ 650

Additions related to acquisitions 101

Foreign currency translation adjustments 1

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Intangible Assets

As of December 31, 2022 and 2023, intangible assets, net was $ 34 million and $ 40 million, respectively, and primarily consisted of listing relationships, technology and trade names.

Amortization expense related to intangible assets for the years ended December 31, 2021, 2022 and 2023 was $ 24 million, $ 19 million and $ 13 million, respectively.

The accumulated amortization related to intangible assets as of December 31, 2022 and 2023, was $ 43 million and $ 55 million, respectively.

As of December 31, 2023 and 2024, intangible assets, net were $ 40 million and $ 27 million, respectively, net of accumulated amortization of $ 55 million and $ 67 million, respectively.

The estimated future amortization expense of $ 27 million will be amortized through 2029.

Amortization expense related to intangible assets was immaterial for the years ended December 31, 2022, 2023 and 2024 .

Notes to Consolidated Financial Statements

Estimated future amortization expense for intangible assets as of December 31, 2023 was as follows (in millions):

Year Ending December 31, Amount

Total future amortization expense $ 40

Property and Equipment, Net

Property and equipment, net, consisted of the following (in millions):

Leasehold improvements $ 152 $ 90

Computer software and capitalized internal-use software

Leasehold improvements

Computer equipment 22 15

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Depreciation expense related to property and equipment for the years ended December 31, 2022, 2023 and 2024 was $ 43 million, $ 18 million and $ 16 million , respectively.

During the years ended December 31, 2021, 2022 and 2023, amortization of capitalized internal-use software costs was $ 66 million, $ 28 million and $ 13 million , respectively.

For the years ended December 31, 2022, 2023 and 2024, amortization of capitalized internal-use software costs was $ 28 million, $ 13 million and $ 34 million , respectively.

The net carrying value of capitalized internal-use software as of December 31, 2023 and 2024 was $ 27 million and $ 69 million , respectively.

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Generally, the lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal periods.

The components of lease cost were as follows (in millions):

The components of lease cost, excluding the immaterial impact from sublease income, were as follows (in millions):

Year Ended December 31,

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$ 96 $ 80 $ 74

(1) Classified within operations and support, product development, sales and marketing, and general and administrative expenses on the consolidated statements of operations.

(2) Lease costs do not include lease impairments due to restructuring.

Refer to Note 18, Restructuring , for additional information.

Lease term and discount rate were as follows:

Lease costs are classified within operations and support, product development, sales and marketing, and general and administrative expenses on the consolidated statements of operations.

Lease costs, net do not include lease impairments due to restructuring.

Refer to Note 17.

Restructuring for additional information.

Weighted-average lease term and discount rate were as follows:

Weighted-average remaining lease term (years) 5.3 7.2

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Total long-term lease liabilities $ 236

(1) Amounts are net of tenant improvement allowances.

Convertible Senior Notes

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Debt issuance costs related to the 2026 Notes totaled $ 21 million and were comprised of commissions payable to the initial purchasers and third-party offering costs and are amortized to interest expense using the effective interest method over the contractual term.

The Company recorded interest expense of $ 3 million for the year ended December 31, 2021 and $ 4 million for both the years ended December 31, 2022 and 2023, representing amortization of debt discount and debt issuance costs.

The 2026 Notes are senior unsecured obligations of the Company and will not bear regular interest.

For the years ended December 31, 2022, 2023 and 2024, interest expense, which includes the amortization of debt discount and issuance costs, was immaterial.

The 2026 Notes are senior unsecured obligations of the Company and do not bear interest.

The 2026 Notes mature on March 15, 2026, unless earlier converted, redeemed, or repurchased.

The proceeds received in 2021, net of debt issuance costs, were $ 1,979 million.

The initial conversion rate for the 2026 Notes is 3.4645 shares of the Company's Class A common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $ 288.64 per share of the Class A common stock.

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Notes to Consolidated Financial Statements

In 2020, the Company entered into a $ 1.0 billion First Lien Credit and Guaranty Agreement (the “First Lien Credit Agreement,” and the loans thereunder, the “First Lien Loan”), resulting in proceeds of $ 961 million, net of debt discount and debt issuance costs of $ 39 million.

In 2020, the Company entered into a $ 1.0 billion Second Lien Credit and Guaranty Agreement (the “Second Lien Credit Agreement,” and the loans thereunder, the “Second Lien Loan”), resulting in net proceeds of $ 968 million, net of debt discount and debt issuance costs of $ 33 million.

In 2021, the Company repaid the principal amount outstanding of $ 2.0 billion under the First Lien Loan and Second Lien Loan, which resulted in a loss of extinguishment of debt of $ 377 million, including early redemption premiums of $ 213 million and a write-off of $ 164 million of unamortized debt discount and debt issuance costs.

The loss on extinguishment of debt was included in interest expense on the consolidated statements of operations.

In 2021, the Company fully amortized the debt discount and debt issuance costs of $ 41 million to interest expense using the effective interest rate method.

In connection with the Second Lien Loan, the Company issued warrants to purchase 7.9 million shares of Class A common stock with an initial exercise price of $ 28.355 per share, subject to adjustment upon the occurrence of certain specified events, to the Second Lien Loan lenders.

The warrants expire on April 17, 2030 and the exercise price can be paid in cash or in net shares at the holder’s option.

The fair value of the warrants at issuance was $ 117 million and was recorded as a liability in accrued expenses, accounts payable, and other current liabilities on the consolidated balance sheets with a corresponding debt discount recorded against the Second Lien Loan.

The warrant liability was remeasured to fair value at each reporting date for as long as the warrants remained outstanding and unexercised with changes in fair value recorded in other income (expense), net on the consolidated statements of operations.

As of December 31, 2020, the fair value of the warrant totaled $ 985 million.

On March 30, 2021, the Company amended the anti-dilution feature in the warrant agreements, which resulted in a change in classification from liability to equity.

Accordingly, during the first quarter of 2021, the Company recorded $ 292 million in other income (expense), net on the consolidated statements of operations.

The liability balance of $ 1.3 billion was then reclassified to equity as the amended warrants met the requirements for equity classification.

2022 Credit Facility

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Class A Common Stock Warrants

As of December 31, 2022 and 2023, the Company had 7.9 million and 0.8 million warrants outstanding, respectively, with an exercise price of $ 28.355 per share, subject to adjustment upon the occurrence of certain specified events.

During the year ended December 31, 2023, warrant holders exercised warrants to purchase 7.1 million shares of Class A common stock.

The warrants were exercised on a cashless basis resulting in the issuance of 5.6 million shares of Class A common stock.

Notes to Consolidated Financial Statements

As of December 31, 2023, the Company had warrants outstanding to purchase 0.8 million shares of Class A common stock with an exercise price of $ 28.355 per share, subject to adjustment upon the occurrence of certain specified events.

During the year ended December 31, 2024, the warrants were exercised, on a cashless basis, to purchase 0.8 million shares of Class A common stock, resulting in the issuance of 0.7 million shares of the Company’s Class A common stock.

As of December 31, 2024, there were no outstanding warrants.

Share Repurchase Programs

On August 2, 2022 and May 9, 2023, the Company announced that its board of directors had approved share repurchase programs to purchase up to $ 2.0 billion and $ 2.5 billion of the Company's Class A common stock, respectively.

In May 2023 and February 2024, the Company announced that its board of directors had approved share repurchase programs to purchase up to $ 2.5 billion and $ 6.0 billion of the Company's Class A common stock, respectively.

Share repurchases under these share repurchase programs may be made through a variety of methods, such as open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions or by any combination of such methods.

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During the year ended December 31, 2024, the Company repurchased and subsequently retired 24.5 million shares of Class A common stock for $ 3.4 billion.

As of December 31, 2023, the Company completed the repurchases under the August 2, 2022 share repurchase program and had $ 750 million available for repurchase of Class A common stock under the May 9, 2023 share repurchase program.

As of December 31, 2024, the Company completed the repurchases under the May 2023 share repurchase program and had $ 3.3 billion available for repurchase of Class A common stock under the February 2024 share repurchase program.

The Inflation Reduction Act imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

For the year ended December 31, 2023, the excise tax on share repurchases was not material.

Stock-Based Compensation

Stock-Based Compensation Expense

The following table summarizes total stock-based compensation expense (in millions):

Year Ended December 31,

2021 2022 2023

Operations and support $ 49 $ 63 $ 68

Product development 545 548 694

Sales and marketing 100 114 130

General and administrative 205 205 228

For the years ended December 31, 2023 and 2024, the excise tax on share repurchases was immaterial.

Stock-Based Compensation and Employee Benefit Plan

Stock-Based Compensation Expense

The Company recognized an income tax benefit of $ 36 million, $ 19 million and $ 435 million in the consolidated statements of operations for stock-based compensation arrangements in the years ended December 31, 2021, 2022 and 2023, respectively.

The income tax benefit related to stock-based compensation expense was $ 227 million for the year ended December 31, 2023.

There were no income tax benefits related to stock-based compensation expense for the years ended December 31, 2021 and 2022.

Stock-based compensation expense was $ 930 million, $ 1.1 billion and $ 1.4 billion for the years ended December 31, 2022, 2023 and 2024, respectively.

Notes to Consolidated Financial Statements

There was no income tax benefit related to stock-based compensation expense recognized for the year ended December 31, 2022.

The income tax benefit recognized in the consolidated statement of operations on stock-based compensation expense was $ 227 million and $ 273 million for the years ended December 31, 2023 and 2024, respectively.

The Company realized an income tax benefit of $ 19 million, $ 435 million and $ 39 million in the consolidated statements of operations related to awards vested or exercised during the years ended December 31, 2022, 2023 and 2024, respectively.

These amounts do not include the indirect effects of stock-based awards, which primarily relate to the research and development tax credit.

Equity Incentive Plans

2018 Equity Incentive Plan

In 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) to replace the 2008 Equity Incentive Plan (the “2008 Plan”).

A total of 50.0 million shares of Class B common stock were reserved for issuance under the 2018 Plan and the 13.2 million shares remaining for issuance under the 2008 Plan were added to the number of shares available under the 2018 Plan.

The expiration of the 2008 Plan had no impact on the terms of outstanding awards under that plan.

All unvested equity canceled under the 2008 Plan was added to the 2018 Plan and made available for future issuance.

Assumed Equity Incentive Plan

In connection with the acquisition of HotelTonight the Company assumed stock options and RSUs under HotelTonight’s equity incentive plan (the “Assumed Equity Incentive Plan”).

As of December 31, 2021, a total of 98,093 shares of the Company’s Class A common stock were issuable upon exercise of outstanding options under the Assumed Equity Incentive Plan, with weighted-average exercise price of $ 22.67 per share.

In addition, as of December 31, 2021, a total of 3,512 RSUs were issued and outstanding under the Assumed Equity Incentive Plan.

No additional stock options or RSUs may be granted under the Assumed Equity Incentive Plan.

In 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”).

A total of 50.0 million shares of Class B common stock were reserved for issuance under the 2018 Plan and the 13.2 million shares remaining for issuance under a prior plan were added to the number of shares available under the 2018 Plan.

2020 Incentive Award Plan

In 2020, the Company adopted the 2020 Incentive Award Plan (the “2020 Plan,” and together with the 2008 Plan, 2018 Plan, and the Assumed Equity Incentive Plan, the “Plans”).

In 2020, the Company adopted the 2020 Incentive Award Plan (the “2020 Plan,” and together with the 2018 Plan, and a plan assumed in connection with a 2019 acquisition, the “Plans”).

Under the 2020 Plan, 62.1 million shares of Class A common stock were initially reserved for issuance.

The number of shares initially reserved for issuance pursuant to awards under the 2020 Plan will be increased by (i) the number of shares subject to awards outstanding under the 2008 Plan, Assumed Equity Incentive Plan, and 2018 Plan as of the effective date of the 2020 Plan that subsequently terminate, are exchanged for cash, surrendered or repurchased, or are tendered or withheld to satisfy any exercise price or tax withholding obligations and (ii) an annual increase on the first day of each year beginning in 2022 and ending in 2030, equal to the lesser of (a) 5 % of the shares of all series of the Company’s common stock outstanding on the last day of the immediately preceding year and (b) such smaller number of shares of stock as determined by the Company’s board of directors;

The number of shares initially reserved for issuance pursuant to awards under the 2020 Plan will be increased by (i) the number of shares subject to awards outstanding under the 2018 Plan and the Assumed Equity Incentive Plan, as of the effective date of the 2020 Plan that subsequently terminate, are exchanged for cash, surrendered or repurchased, or are tendered or withheld to satisfy any exercise price or tax withholding obligations and (ii) an annual increase on the first day of each year beginning in 2022 and ending in 2030, equal to the lesser of (a) 5 % of the shares of all series of the Company’s common stock outstanding on the last day of the immediately preceding year and (b) such smaller number of shares of stock as determined by the Company’s board of directors;

provided, however, that no more than 371.2 million shares of stock may be issued upon the exercise of incentive stock options.

Notes to Consolidated Financial Statements

Stock Option and Restricted Stock Unit Activity

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model using the range of assumptions in the following table:

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the following table:

Year Ended December 31,

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Restricted Stock Units

Available for

Grant Number of

Shares Weighted-

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Balances as of December 31, 2022 22 $ 23.41 34 $ 77.07

( 13 ) 1 161.70 12 135.09

Granted 1 115.15 12 122.84

Increase in shares available for grant — — — —

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Balances as of December 31, 2023 7 71.76 30 85.35

( 13 ) 1 115.15 12 122.84

Granted 1 168.18 13 153.36

Increase in shares available for grant — — — —

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Balances as of December 31, 2024 5 $ 93.53 30 $ 97.93

Notes to Consolidated Financial Statements

Shares Weighted-

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During the years ended December 31, 2022, 2023 and 2024, the weighted-average fair value of stock options granted under the Plans was $ 79.75 , $ 65.22 and $ 93.29 per share, respectively.

During the years ended December 31, 2021, 2022 and 2023, the aggregate intrinsic value of stock options exercised was $ 2,825 million, $ 326 million and $ 1,620 million, respectively, and the total grant-date fair value of stock options that vested was $ 46 million, $ 45 million and $ 44 million, respectively.

During the years ended December 31, 2022, 2023 and 2024, the aggregate intrinsic value of stock options exercised was $ 326 million, $ 1.6 billion and $ 254 million, respectively, and the total grant-date fair value of stock options that vested was $ 45 million, $ 44 million and $ 51 million, respectively.

As of December 31, 2024, there was $ 80 million of total unrecognized compensation cost related to stock option awards granted under the Plans.

The unrecognized cost as of December 31, 2024 is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Awards

The Company has granted RSAs to certain continuing employees, primarily in connection with acquisitions.

Vesting of this stock is primarily dependent on a service-based vesting condition that generally becomes satisfied over a period of four years .

The Company has the right to repurchase or cancel shares for which the vesting condition is not satisfied.

Notes to Consolidated Financial Statements

Unvested RSAs as of December 31, 2021, 2022 and 2023 was 0.6 million, 0.4 million and 0.8 million shares, respectively, with weighted-average grant-date fair value of $ 62.32 , $ 62.33 and $ 100.04 per share, respectively.

Activities related to the Company’s RSAs were not material for the years ended December 31, 2021, 2022 and 2023.

Restricted Stock Units

RSUs are measured at the fair market value of the underlying stock at the grant date and the expense is recognized over the requisite service period.

The service-based vesting condition for these awards is generally satisfied over four years .

Employee Stock Purchase Plan

In December 2020, the Company’s board of directors adopted the ESPP.

The maximum number of shares of Class A common stock authorized for sale under the ESPP is equal to the sum of (i) 4.0 million shares of Class A common stock and (ii) an annual increase on the first day of each year beginning in 2022 and ending in 2030, equal to the lesser of (a) 1 % of shares of common stock on the last day immediately preceding year and (b) such number of shares of common stock as determined by the board of directors;

provided, however, that no more than 89.8 million shares may be issued under the ESPP.

As of December 31, 2022 and 2023, the Company had reserved 8.9 million and 14.0 million shares for future issuance under the ESPP.

The Company estimates the fair value of shares to be issued under the ESPP based on a combination of options valued using the Black-Scholes option-pricing model.

The Company recorded stock-based compensation expense related to the ESPP of $ 33 million and $ 29 million for the years ended December 31, 2022, and 2023, respectively.

The following table summarizes transactions under the Company’s ESPP (in millions except per share amounts):

Year Ended December 31,

Shares issued

Weighted-average price per share

$ 95.90 $ 88.81

Cash proceeds

Employee Benefit Plan

The Company maintains a 401(k) defined contribution benefit plan that covers substantially all of its domestic employees.

The plan allows U.S.

employees to make voluntary pre-tax contributions in certain investments at the discretion of the employee, up to maximum annual contribution subject to Internal Revenue Code limitations.

The Company’s contributions to the plan were immaterial for the years ended December 31, 2022, 2023 and 2024.

Commitments and Contingencies

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Lodging Tax Obligations and Other Non-Income Tax Matters

Platform Related Taxes and Collection Obligations

Lodging Tax Obligations

Some states and localities in the United States and elsewhere in the world impose transient occupancy or lodging accommodations taxes (“Lodging Taxes”) on the use or occupancy of lodging accommodations or other traveler services.

As of December 31, 2023, the Company collects and remits Lodging Taxes in approximately 32,000 jurisdictions on behalf of its Hosts.

As of December 31, 2024, the Company collects and remits Lodging Taxes in approximately 33,000 jurisdictions around the world on behalf of its hosts.

Such Lodging Taxes are generally remitted to tax jurisdictions within a 30 to 90 -day period following the end of each month.

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The Company has estimated Lodging Tax liabilities in a certain number of jurisdictions with respect to state, city, and local taxes where management believes it is probable that the Company can be held jointly liable with hosts for taxes and the related amounts can be reasonably estimated.

As of December 31, 2022 and December 31, 2023, accrued obligations related to these estimated taxes, including estimated penalties and interest, totaled $ 71 million and $ 114 million, respectively.

As of December 31, 2023 and December 31, 2024, accrued obligations related to these estimated taxes, including estimated penalties and

Notes to Consolidated Financial Statements

interest, totaled $ 114 million and $ 83 million, respectively.

As of December 31, 2024, the Company estimates that the reasonably possible loss related to certain Lodging Taxes that can be determined in excess of the amounts accrued is between $ 47 million to $ 56 million;

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With respect to all other jurisdictions’ Lodging Taxes for which a loss is probable or reasonably possible, the Company is unable to determine an estimate of the possible loss or range of loss beyond the amounts already accrued.

Notes to Consolidated Financial Statements

The Company’s potential obligations with respect to Lodging Taxes could be affected by various factors, which include, but are not limited to, whether the Company determines or any tax authority asserts that the Company has a responsibility to collect lodging and related taxes on either historical or future transactions, or by the introduction of new ordinances and taxes that subject the Company’s operations to such taxes.

Accordingly, the ultimate resolution of Lodging Taxes may be greater or less than the reserve amounts that the Company has recorded.

Accordingly, the ultimate resolution of Lodging Taxes may be greater or less than the liabilities that the Company has recorded.

The Company is currently involved in disputes brought by certain domestic and international states and localities involving the payment of Lodging Taxes.

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The Company will continue to monitor the application and interpretation of lodging and related taxes and ordinances and will adjust accruals based on any new information or further developments.

Other Non-Income Taxes

The Company is under audit and inquiry by various domestic and foreign tax authorities with regard to non-income tax matters.

The subject matter of these contingent liabilities primarily arises from the Company’s transactions with its customers, as well as the tax treatment of certain employee benefits and related employment taxes.

In jurisdictions with disputes connected to transactions with customers, disputes involve the applicability of transactional taxes (such as sales, value-added, and similar taxes) to services provided, as well as the applicability of withholding tax on payments made to such Hosts.

As of December 31, 2022 and 2023, the Company accrued a total of $ 135 million and $ 521 million of estimated tax liabilities, including interest and penalties, related to Hosts’ withholding tax obligations, respectively.

In the year ended December 31, 2023, based upon new information, and interest expense connected to historic Host withholding reserves, the Company accrued $ 384 million of expense related to foreign and domestic Hosts’ withholding tax obligations.

The subject matter of these contingent liabilities primarily arises from the Company’s transactions with its customers.

Such disputes involve the applicability of transactional taxes (such as sales, value-added, business, digital service, and similar taxes) to services provided, as well as the applicability of withholding tax on payments made to hosts.

The Company has estimated transactional taxes where there is significant ambiguity as to how the taxes apply to our platform, management believes it is probable that the Company can be held liable for such taxes, and the related amounts can be reasonably estimated.

As of December 31, 2024, accrued obligations related to these estimated taxes, including estimated penalties and interest, totaled $ 55 million.

In addition, the Company has identified reasonably possible exposures related to transactional taxes and has not accrued for these amounts since the likelihood of the contingent liability is less than probable.

As of December 31, 2024, the Company estimates that the reasonably possible loss related to these matters in excess of the amounts accrued is between $ 210 million and $ 240 million;

however, no assurance can be given as to the outcomes and the Company could be subject to significant additional tax liabilities.

As of December 31, 2023 and December 31, 2024, the Company accrued a total of $ 521 million and $ 227 million of estimated tax liabilities, including interest and penalties, related to withholding taxes on payments made to hosts, respectively.

As of December 31, 2024, the Company estimates that the reasonably possible loss related to withholding income taxes that can be determined in excess of the amounts accrued is between $ 125 million to $ 135 million;

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Due to the inherent complexity and uncertainty of these matters and judicial processes in certain jurisdictions, the final outcomes may exceed the estimated liabilities recorded.

The Company has identified reasonably possible exposures related to transactional taxes and business taxes and has not accrued for these amounts since the likelihood of the contingent liability is less than probable.

As of December 31, 2023, the Company estimates that the reasonably possible loss related to these matters in excess of the amounts accrued is between $ 290 million and $ 310 million;

however, no assurance can be given as to the outcomes and the Company could be subject to significant additional tax liabilities.

In 2017, Italy passed a law purporting to require short-term rental platforms that process payments to withhold and remit host income tax and collect and remit tourist tax, amongst other obligations (“2017 Law”).

The Company has challenged this law before the Italian courts and the Court of Justice of the European Union (“CJEU”).

The Company challenged this law before the Italian courts and the Court of Justice of the European Union (“CJEU”).

In December 2022, the CJEU found that European law does not prohibit member states from passing legislation requiring short-term rental platforms to withhold income taxes from their hosts, however a requirement to appoint a tax representative, on which the 2017 Law and the withholding obligations are based, is contrary to European Union (“EU”) law.

In October 2023, the Italian national court upheld the ruling of the CJEU.

The Company’s subsidiary in Italy and subsidiary in Ireland continue to be, or could be in the future be, subject to tax audits in Italy, including in relation to permanent establishment, transfer pricing, and withholding obligations.

In May 2023, the Guardia di Finanza de Milano issued a Tax Audit Report recommending to the Italian tax authorities a formal tax assessment of 779 million Euro on Airbnb’s subsidiary in Ireland relating to the 2017 Law and associated withholding tax obligations.

On December 13, 2023, without admitting any liability, Airbnb Ireland signed an agreement with the Italian Revenue Agency in settlement of the 2017-2021 audit period for an aggregate payment of 576 million Euro ($ 621 million).

Such agreement settles a dispute about Airbnb Ireland’s obligations to withhold and remit Host income tax, including taxes, interest, and penalties, for those relevant periods.

The 2022-2023 tax periods remain open.

With respect to all other withholding tax on payments made to Hosts and transactional taxes for which a loss is probable or reasonably possible, the Company is unable to determine an estimate of the possible loss or range of loss beyond the amounts already accrued.

The subsidiary in Ireland continues to be subject to tax audits in Italy.

It and other group subsidiaries, including the Italian subsidiary, could in the future be subject to further tax audits in Italy, including in relation to permanent establishment, transfer pricing, and withholding obligations.

In May 2023, the Guardia di Finanza de Milano (“GdF”) issued a Tax Audit Report recommending to the Italian tax authorities a formal tax assessment of 779 million Euro on Airbnb’s subsidiary in Ireland relating to the 2017 Law and associated withholding tax obligations.

On December 13, 2023, without admitting any liability, Airbnb Ireland signed an agreement with the Italian Revenue Agency (“ITA”) in settlement of the 2017-2021 audit period for an aggregate payment of 576 million Euro ($ 621 million).

Such agreement settled a dispute about Airbnb Ireland’s obligations to withhold and remit host income tax, including taxes, interest, and penalties, for those relevant periods.

The GdF conducted a withholding tax audit of Airbnb Ireland for the 2022 and 2023 tax years and issued a report to the ITA in March 2024.

In December 2024, Airbnb Ireland signed a similar agreement in settlement of the 2022 audit period for an aggregate payment of 139 million Euro ($ 150 million).

In January 2025, Airbnb Ireland entered into an agreement with the Italian Revenue Agency to close the 2023 audit period for an aggregate payment of 179 million Euro ($ 186 million);

123 million Euro was paid in December of 2024 and 56 million Euro was paid in January of 2025.

In 2024, Airbnb Ireland started withholding on host payments related to Italian listings.

With respect to all other transactional taxes and withholding tax on payments made to hosts for which a loss is probable or reasonably possible, the Company is unable to determine an estimate of the possible loss or range of loss beyond the amounts already accrued.

Notes to Consolidated Financial Statements

Payroll Taxes

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Although management believes its tax withholding remittance practices are appropriate, the Company may be subject to additional tax liabilities, including interest and penalties, if any tax authority disagrees with the Company’s withholding and remittance practices, or if there are changes in laws, regulations, administrative practices, principles or interpretations related to payroll tax withholding in the various international, state and local jurisdictions.

In addition, as of December 31, 2022 and 2023, the Company accrued a total of $ 33 million and $ 43 million of estimated tax liabilities related to employment taxes on certain employee benefits, respectively.

Refer to Note 14, Income Taxes, for further discussion on other tax matters.

Legal and Regulatory Matters

The Company has been and is currently a party to various legal and regulatory matters arising in the normal course of business.

Notes to Consolidated Financial Statements

proceedings and claims, even if not meritorious, can require significant financial and operational resources, including the diversion of management’s attention from the Company’s business objectives.

Such proceedings and claims, even if not meritorious, can require significant financial and operational resources, including the diversion of management’s attention from the Company’s business objectives.

Regulatory Matters

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These accruals represent management’s best estimate of probable losses.

Such currently accrued amounts are not material to the Company’s consolidated financial statements.

Such currently accrued amounts are immaterial to the Company’s consolidated financial statements.

However, management’s views and estimates related to these matters may change in the future, as new events and circumstances arise and the matters continue to develop.

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In addition, through third-party insurers and self-insurance mechanisms, including a wholly-owned captive insurance subsidiary, the Company provides insurance coverage for third-party bodily injury or property damage liability claims that occur during a stay.

The Company’s Host Liability Insurance and Experiences Liability Insurance consists of a commercial general liability policy, with Hosts and the Company as named insureds and landlords of Hosts as additional insureds.

The Company’s Host Liability Insurance and Experiences Liability Insurance consists of a commercial general liability policy, with hosts and the Company as named insureds and landlords of hosts as

Notes to Consolidated Financial Statements

additional insureds.

The Host Liability Insurance and Experiences Liability Insurance provides primary coverage for up to $ 1 million per occurrence, subject to a $ 1 million cap per listing location, and includes various market standard conditions, limitations, and exclusions.

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Subject to certain limitations, the indemnification agreements and Bylaws also require the Company to advance expenses incurred by its directors and officers and those employees who have entered into indemnification agreements.

No demands have been made upon the Company to provide indemnification or advancement under the indemnification agreements or the Bylaws, and thus, there are no indemnification or

Notes to Consolidated Financial Statements

advancement claims that the Company is aware of that could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

No demands have been made upon the Company to provide indemnification or advancement under the indemnification agreements or the Bylaws, and thus, there are no indemnification or advancement claims that the Company is aware of that could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

In the ordinary course of business, the Company has included limited indemnification provisions in certain agreements with parties with whom the Company has commercial relations, which provisions are of varying scope and terms with respect to indemnification of certain matters, which may include losses arising out of the Company’s breach of such agreements or out of intellectual property infringement claims made by third parties.

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To date, no significant costs have been incurred, either individually or collectively, in connection with the Company’s indemnification provisions.

The domestic and foreign components of income (loss) before income taxes were as follows (in millions):

The domestic and foreign components of Income before income taxes were as follows (in millions):

Year Ended December 31,

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Foreign 169 189 284

Income (loss) before income taxes $ ( 300 ) $ 1,989 $ 2,102

Income before income taxes $ 1,989 $ 2,102 $ 3,331

The components of the provision for (benefit from) income taxes were as follows (in millions):

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Federal $ 19 $ 19 $ 103

State 10 8 23

Foreign 68 158 124

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Total provision for (benefit from) income taxes $ 96 $ ( 2,690 ) $ 683

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate:

Notes to Consolidated Financial Statements

The following is a reconciliation of the U.S.

federal statutory federal income tax rate to the Company’s effective tax rate:

Year Ended December 31,

2022 2023 2024

Expected income tax expense at federal statutory rate 21.0 % 21.0 % 21.0 %

Expected income tax expense at U.S.

federal statutory rate

21.0 % 21.0 % 21.0 %

State taxes, net of federal benefits 0.4 0.3 1.3

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Stock-based compensation ( 6.9 ) ( 16.7 ) ( 0.2 )

Deferred tax impacts of restructuring ( 9.7 ) — —

Other statutorily non-deductible expenses 0.3 0.1 0.1

Non-deductible warrant revaluations ( 20.4 ) ( 0.1 ) —

Research and development credits ( 4.7 ) ( 5.5 ) ( 2.2 )

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Foreign-derived intangible income deduction ( 1.9 ) ( 1.0 ) ( 2.0 )

Other 1.3 0.1 0.1

Change in valuation allowance

( 6.0 ) ( 136.6 ) 0.3

Effective tax rate 4.8 % ( 128.0 ) % 20.5 %

For the year ended December 31, 2021, the difference in the Company’s effective tax rate and the U.S.

federal statutory tax rate was primarily due to the jurisdictional mix of earnings, excess tax benefits related to stock-based compensation, and the Company’s full valuation allowance on its U.S.

deferred tax assets.

Notes to Consolidated Financial Statements

For the year ended December 31, 2022, the difference in the Company’s effective tax rate and the U.S.

federal statutory tax rate was primarily due to excess tax benefits related to stock-based compensation, research and development credits, and the Company’s full valuation allowance on its U.S.

deferred tax assets.

For the year ended December 31, 2023, the difference in the Company’s effective tax rate and the U.S.

federal statutory tax rate was primarily due to the release of $ 2.9 billion of the Company’s valuation allowance related to its U.S.

deferred tax assets, excess tax benefits related to stock-based compensation, and research and development tax credits.

The components of deferred tax assets and liabilities consisted of the following (in millions):

Deferred tax assets:

Net operating loss carryforwards $ 1,539 $ 1,232

Loss carryforwards

$ 1,232 $ 462

Tax credit carryforwards 844 999

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Operating lease assets ( 18 ) ( 25 )

Other ( 2 ) ( 2 )

Total deferred tax liabilities ( 38 ) ( 52 )

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In making that assessment, the Company considers both positive and negative evidence in the various jurisdictions in which it operates 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, the Company has concluded that it is more likely than not that its U.S.

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, the Company concluded that it is more likely than not that its 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.

The Company continues to maintain a valuation allowance against its 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 the Company expects research and development tax credit generation to exceed its 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.

The Company released $ 2.9 billion of its valuation allowance during 2023.

The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis.

There is no valuation allowance in certain foreign jurisdictions in which it is more likely than not that deferred tax assets will be realized.

The Company’s policy with respect to its undistributed foreign subsidiaries’ earnings is to consider those earnings to be indefinitely reinvested.

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The determination of the future tax consequences of the remittance of these earnings is not practicable.

Notes to Consolidated Financial Statements

As of December 31, 2023 and 2024, the Company had net operating loss carryforwards for federal income tax purposes of $ 5.3 billion and $ 1.8 billion, respectively.

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The research and development tax credits will expire beginning in 2041 if not utilized.

As of December 31, 2024, the Company had alternative minimum tax credit carryforwards of $ 311 million, which do not have an expiration date and may be claimed against regular tax in future years.

As of December 31, 2023 and 2024, the Company had net operating loss carryforwards for state income tax purposes of $ 4.6 billion and $ 3.8 billion, respectively.

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The research and development tax credits do not have an expiration date.

Notes to Consolidated Financial Statements

The Tax Reform Act of 1986 and similar California legislation impose substantial restrictions on the utilization of net operating losses and tax credit carryforwards in the event that there is a change in ownership as provided by Section 382 of the Internal Revenue Code and similar state provisions.

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In January 2022, the Company entered into an administrative dispute process with IRS Appeals.

The Company will continue to pursue all available remedies to resolve this dispute, including petitioning the U.S.

Tax Court (“Tax Court”) for redetermination if an acceptable outcome cannot be reached with IRS Appeals, and if necessary, appealing the Tax Court’s decision to the appropriate appellate court.

An acceptable outcome was not reached with IRS Appeals, and in May 2024, the Company received a Statutory Notice of Deficiency (“Notice”) from the IRS related to the aforementioned valuation of its international intellectual property.

The Notice claims that the Company owes $ 1.3 billion in tax, plus penalties and interest.

The Company will continue to pursue all available remedies to resolve this dispute.

In July 2024, the Company petitioned the U.S.

Tax Court (“Tax Court”) for redetermination, and if necessary, the Company will appeal the Tax Court’s decision to the appropriate appellate court.

The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations.

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The Company’s 2008 to 2024 tax years remain subject to examination in the United States and California due to tax attributes and statutes of limitations, and its 2020 to 2024 tax years remain subject to examination in Ireland.

There are other ongoing audits in various other jurisdictions that are not material to the Company’s consolidated financial statements.

There are other ongoing audits in various other

Notes to Consolidated Financial Statements

jurisdictions that are immaterial to the Company’s consolidated financial statements.

The Company remains subject to possible examination in various other jurisdictions that are not expected to result in material tax adjustments.

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The Inflation Reduction Act became effective beginning in fiscal year 2023 and did not have a material impact on the year ended December 31, 2023.

We may be subject to a material amount of CAMT in the next several years but expect to fully utilize the corresponding tax credits generated from the CAMT in the subsequent following years.

Notes to Consolidated Financial Statements

Net Income (Loss) per Share

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the years indicated (in millions, except per share amounts):

The Company accrued $ 95 million of CAMT liability during the year ended December 31, 2024, and may be subject to a material amount of CAMT in the next year but expect to fully utilize the corresponding tax credits generated from the CAMT in the subsequent following years.

Net Income per Share

The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders for the years indicated (in millions, except per share amounts):

Year Ended December 31,

2022 2023 2024

Net income (loss) $ ( 352 ) $ 1,893 $ 4,792

$ 1,893 $ 4,792 $ 2,648

convertible notes interest expense, net of tax 4 3 4

Net income (loss) - diluted $ ( 352 ) $ 1,897 $ 4,795

Weighted-average shares in computing net income (loss) per share attributable to Class A and Class B common stockholders:

Net income - diluted

$ 1,897 $ 4,795 $ 2,652

Weighted-average shares in computing net income per share attributable to Class A and Class B common stockholders:

Basic 637 637 632

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Diluted 680 662 645

Net income (loss) per share attributable to Class A and Class B common stockholders:

Net income per share attributable to Class A and Class B common stockholders:

Basic $ 2.97 $ 7.52 $ 4.19

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The Class A common stock has no conversion rights.

As the liquidation and dividend rights are identical for Class A and Class B common stock, the undistributed earnings are allocated on a proportional basis and the resulting net loss per share attributable to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

As the liquidation and dividend rights are identical for Class A and Class B common stock, the undistributed earnings are allocated on a proportional basis and the resulting net income per share attributable to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

There were no preferred dividends declared or accumulated for the years ended December 31, 2022, 2023 and 2024.

As of each December 31, 2022, 2023 and 2024, RSUs to be settled in 9.6 million shares of Class A common stock were excluded from the table below because they are subject to market conditions that were not achieved as of such date.

As of December 31, 2021, 0.5 million shares of RSAs were excluded from the table below because they are subject to performance conditions that were not achieved as of such date.

As of December 31, 2022 and 2023, 0.3 million shares of RSAs were excluded from the table below because they are subject to performance conditions that were not achieved as of such date.

As of December 31, 2024, 0.2 million shares of RSAs were excluded from the table below because they were subject to performance conditions that were not achieved as of such date.

Additionally, the following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive (in millions):

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2022 2023 2024

2026 Notes (1)

Warrants 8 — —

Stock options 1 2 2

Total 70 10 7

(1) Holders of the 2026 Notes who convert their 2026 Notes in connection with certain corporate events that constitute a make-whole fundamental change are entitled to an increase in the conversion rate.

The 11.1 million shares represent the maximum number of shares that could have been issued upon conversion after considering the make-whole fundamental change adjustment on an unweighted basis.

Employee Benefit Plan

The Company maintains a 401(k) defined contribution benefit plan that covers substantially all of its domestic employees.

The plan allows U.S.

employees to make voluntary pre-tax contributions in certain investments at the discretion of the employee, up to maximum annual contribution subject to Internal Revenue Code limitations.

The Company matched a portion of employee contributions totaling $ 19 million, $ 23 million and $ 27 million for the years ended December 31, 2021, 2022 and 2023, respectively.

Both employee contributions and the Company’s matching contributions are fully vested upon contribution.

Segment and Geographic Information

Segment Information

The Company’s CODM is its Chief Executive Officer.

The Company has one operating segment and one reportable segment.

Notes to Consolidated Financial Statements

assesses financial performance and decides how to allocate resources based on consolidated net income.

Segment assets are reported on the Company’s consolidated balance sheets.

The following table sets forth the Company’s significant segment expenses (in millions):

Year Ended December 31,

2022 2023 2024

Revenue $ 8,399 $ 9,917 $ 11,102

Merchant fees and chargebacks

1,195 1,369 1,508

Stock-based compensation expense

930 1,120 1,407

Salaries and benefits 1,359 1,558 1,686

Marketing 1,001 1,189 1,484

Professional and third-party services (1)

956 1,078 1,083

Non-income taxes 113 894 237

Other items (2)

1,043 1,191 1,144

Total cost and expense 6,597 8,399 8,549

Income from operations 1,802 1,518 2,553

Interest income 186 721 818

Other income (expense), net 1 ( 137 ) ( 40 )

Income before income taxes 1,989 2,102 3,331

Provision for (benefit from) income taxes 96 ( 2,690 ) 683

Net income $ 1,893 $ 4,792 $ 2,648

(1) Professional and third-party services primarily include expenses related to customer support partners, consultants and third-party service providers, contingent workforce, legal, audit and tax.

(2) Other items primarily include expenses and costs related to data hosting services, insurance, customer relations, and software and equipment.

Geographic Information

3 unchanged sentences

United States

$ 3,890 $ 4,290 $ 4,640

International 1

10 unchanged sentences

Restructuring

In 2020, the Company experienced significant economic challenges associated with a severe decline in bookings, resulting primarily from COVID-19 and overall global travel restrictions.

To address these impacts the Company’s management approved a restructuring plan to realign the Company’s business and strategic priorities based on the current market and economic conditions as a result of COVID-19.

For the year ended December 31, 2021, the Company incurred $ 113 million in restructuring charges, including $ 75 million related to impairments of operating lease ROU assets and $ 37 million related to impairments of leasehold improvements.

For the year ended December 31, 2022, the Company recorded restructuring charges of $ 89 million, which include $ 81 million relating to an impairment of operating lease ROU assets, and $ 8 million of related leasehold improvements.

There were no restructuring charges recorded during 2023.

Subsequent Event

In February 2024, the Company’s board of directors approved a share repurchase program (“2024 Share Repurchase Program”) with authorization to purchase up to $ 6.0 billion of the Company's Class A common stock at management’s discretion.

Share repurchases under the 2024 Share Repurchase Program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions or by any combination of such methods.

Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements and other relevant factors.

The 2024 Share Repurchase Program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended or terminated at any time at the Company’s discretion.

Schedule II—Valuation and Qualifying Accounts

The tables below detail the activity of the customer receivable reserve, insurance liability, and the valuation allowance on deferred tax assets for the years ended December 31, 2021, 2022 and 2023 (in millions):

Year Charged to

Expenses Charges

Write-Offs Balance at

Customer Receivable Reserve

Year Ended December 31, 2021 $ 91 $ 27 $ ( 87 ) $ 31

Year Ended December 31, 2022 $ 31 $ 49 $ ( 41 ) $ 39

Year Ended December 31, 2023 $ 39 $ 61 $ ( 56 ) $ 44

Year Additions for

Current Period Changes in

Estimates for

Prior Periods Net Payments Balance at

Insurance Liability

Year Ended December 31, 2021 $ 51 $ 85 $ 1 $ ( 90 ) $ 47

Year Ended December 31, 2022 $ 47 $ 140 $ ( 5 ) $ ( 121 ) $ 61

Year Ended December 31, 2023 $ 61 $ 206 $ 2 $ ( 185 ) $ 84

In 2022, as part of the Company’s evaluation of its real estate needs and strategy, the Company recorded restructuring charges of $ 89 million, which include $ 81 million relating to an impairment of operating lease ROU assets, and $ 8 million of related leasehold improvements.

There were no restructuring charges recorded during 2023 or 2024.

Schedule II—Valuation and Qualifying Account

The table below details the activity of the valuation allowance on deferred tax assets for the years ended December 31, 2022, 2023 and 2024 (in millions):

Year Charged to

Credited to Expenses

Expenses Credited to Expenses Balance at

Valuation Allowance on Deferred Tax Assets

4 unchanged sentences

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 8. Financial Statements and Supplementary Data