What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-12 compared with 2025-02-13 · 134 added, 129 removed, 263 unchanged (50% of the section changed)

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Glossary of Terms

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

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

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

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

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

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

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

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

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

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

Every day, hosts offer unique stays and experiences that make it possible for guests to connect with communities in a more authentic way.

We have five stakeholders and we have designed our Company with all of them in mind.

Along with employees and shareholders, we serve hosts, guests, and the communities in which they live.

We intend to make long-term decisions considering all of our stakeholders because their collective success is key for our business to thrive.

Airbnb was founded in 2007 when two hosts welcomed three guests to their San Francisco home, and has since grown into a global community of over 5 million hosts who have welcomed over 2.5 billion guest arrivals in almost every country and region across the globe.

Every day, hosts offer unique stays, experiences, and services that enable guests to connect with communities in a more authentic way.

We operate a global marketplace connecting guests with stays, experiences, and services, collectively in over 220 countries and regions.

Our offerings have expanded to include services and redesigned experiences, which launched in May 2025.

We operate with five key stakeholders in mind:

our employees, shareholders, hosts, guests, and the communities we serve.

Our commitment to making long-term decisions that benefit all these stakeholders is fundamental to our sustained success.

2025 Financial Highlights

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

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

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

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

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

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

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

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

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

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

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

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

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

In 2025, revenue increased by 10% to $12.2 billion compared to the prior year, primarily due to an increase in the number of check-ins relating to Nights and Seats Booked and a modest increase in Average Daily Rate (“ADR”).

In 2025, net income decreased by 5% to $2.5 billion, compared to the prior year, primarily due to an increase in compensation expense and marketing spend, as well as lower interest income, which was partially offset by the increase in revenue of $1.1 billion.

Cash provided by operating activities was $4.6 billion in 2025, compared to $4.5 billion in the prior year.

Free Cash Flow 1 (“FCF”) was $4.6 billion in 2025, compared to $4.5 billion in the prior year.

In 2025, we repurchased 29.7 million shares of Class A common stock for $3.8 billion, leaving $5.6 billion available to repurchase under our share repurchase program.

Macroeconomic and Geopolitical Conditions on our Business

As we look forward, we recognize the potential impact of challenging macroeconomic and geopolitical conditions on our business, including inflation, interest rates, foreign currency fluctuations, tariffs and trade controls, and potential decreased consumer spending.

To date, these conditions have not had a material impact on our business, results of operations, cash flows, and financial condition;

however, the impact in the future of these macroeconomic and geopolitical conditions on our business, results of operations, cash flows, and financial condition is uncertain and will depend on future developments that we may not be able to accurately predict.

Key Business Metrics and Non-GAAP Financial Measures

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GAAP results.

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

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

These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with U.S.

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

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

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

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

2024 2025 % Change

Nights and Experiences Booked 448 492 10 %

Nights and Seats Booked

Gross Booking Value $ 81,784 $ 91,273 12 %

Nights and Experiences Booked

Nights and Experiences Booked is a key measure of the scale of our platform, which in turn drives our financial performance.

Nights and Experiences Booked on our platform in a period represents the sum of the total number of nights booked for stays and the total number of seats booked for experiences, net of cancellations and alterations that occurred in that period.

For example, a booking made on February 15 would be reflected in Nights and Experiences Booked for our quarter ended March 31.

If, in the example, the booking was canceled on May 15, Nights and Experiences Booked would be reduced by the cancellation for our quarter ended June 30.

Nights and Seats Booked

Nights and Seats Booked is a key measure of the scale of our platform, which in turn drives our financial performance.

Nights and Seats Booked on our platform in a period represents the sum of the total number of nights booked for stays and the total number of seats booked for experiences and services, net of cancellations and alterations that occurred in that period.

For example, a booking made on February 15 would be reflected in Nights and Seats Booked for our quarter ended March 31.

If, in the example, the booking were canceled on May 15, Nights and Seats Booked would be reduced by the cancellation for our quarter ended June 30.

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

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

A seat is booked for each participant in an experience.

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

A seat is booked for each participant in an experience or service.

Substantially all of the bookings on our platform to date have come from nights.

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

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

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

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

Gross Booking Value

GBV represents the dollar value of bookings on our platform in a period and is inclusive of host earnings, service fees, cleaning fees, and taxes, net of cancellations and alterations that occurred during that period.

The timing of recording GBV and any related cancellations is similar to that described in the subsection titled “— Key Business Metrics and Non-GAAP Financial Measures — Nights and Experiences Booked” above.

Revenue from the booking is recognized upon check-in;

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The entire amount of a booking is reflected in GBV during the quarter in which booking occurs, whether the guest pays the entire amount of the booking upfront or elects to use our Pay Less Upfront program.

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

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

Similar to Nights and Experiences Booked, our GBV improvement was driven by growth in bookings in all regions.

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

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

Similar to Nights and Seats Booked, our GBV improvement was driven by growth in bookings in all regions.

Non-GAAP Financial Measures

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

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

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

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

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

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

GAAP results.

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

FCF and FCF Margin have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of other U.S.

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

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

FCF and FCF Margin do not reflect our ability to meet future contractual commitments and may be calculated differently by other companies in our industry, limiting their usefulness as comparative measures.

Non-GAAP Measure Definition Purpose of Non-GAAP Measure

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Net income adjusted for:

• provision for (benefit from) income taxes;

• other income (expense), net;

• provision for income taxes;

• other expense, net;

• interest income;

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• stock-based compensation expense;

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

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

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

• settlements and reserves for lodging, withholding, transactional and other non-income taxes where significant uncertainty exists as to how these taxes apply to users of our platform and Airbnb;

• stock-settlement obligations, which represent employer and related taxes related to our Initial Public Offering (“IPO”).

Adjusted EBITDA Margin :

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

Free Cash Flow & Free Cash Flow Margin

Free Cash Flow:

FCF & FCF Margin

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

Free Cash Flow Margin :

Free Cash Flow divided by revenue.

FCF divided by revenue.

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

Constant currency revenue growth rate

The change in the current period revenue over the prior comparable period where current period foreign currency revenue is translated using the exchange rates of the comparative period.

• Enhances comparability and provides investors with useful insight into the operational changes in revenue.

• Used by management for financial and operational decision-making and as a means to evaluate performance by excluding the effects of foreign currency volatility which is not indicative of our core operating results.

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

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

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

Net income $ 2,648 $ 2,511

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Net cash provided by operating activities margin

Free Cash Flow $ 3,837 $ 4,484

Free Cash Flow Margin

$ 4,484 $ 4,613

Adjusted EBITDA Reconciliation

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Adjusted to exclude the following:

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

Provision for income taxes

Other expense, net 40 112

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

Stock-settlement obligations related to IPO

Adjusted EBITDA $ 4,041 $ 4,297

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

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

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

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

The increase in Adjusted EBITDA in 2025, compared to the prior year, was primarily due to revenue growth from an increase in the number of check-ins for Nights and Seats Booked and a modest increase in ADR.

Free Cash Flow Reconciliation

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

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

Revenue $ 11,102 $ 12,241

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Purchases of property and equipment (34) (33)

Free Cash Flow $ 3,837 $ 4,484

Free Cash Flow Margin

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

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

$ 4,484 $ 4,613

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

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

Constant Currency

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

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

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

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

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

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

Geographic Mix

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

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

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

The following table summarizes by region our Nights and Seats Booked, GBV, and revenue, determined based on the location of the host’s listing (in millions, except percentages):

2024 % of Total 2025 % of Total % Change

(in millions, except percentages)

Nights and Experiences Booked

Nights and Seats Booked

North America 154 31 % 158 30 % 3 %

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We saw a 3% increase in ADR in 2025 compared to the prior year, primarily due to higher ADR in EMEA, which increased by 8%.

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

Our total Company average nights per booking, excluding experiences and services, was 3.7 in 2025 compared to 3.8 in 2024.

Average nights per booking in 2025 was 4.1 for North America, 3.8 for EMEA, 3.6 for Latin America, and 3.3 for Asia Pacific.

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

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

In 2024 and 2025, no single city represented more than 2% of our revenue before adjustments for incentives and refunds, or more than 1% of our active listings as of December 31, 2024 and 2025.

Results of Operations

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

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

Amount % of Revenue Amount % of Revenue % Change

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Income before income taxes 3,331 30 3,137 26 (6)

Provision for (benefit from) income taxes

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

Provision for income taxes 683 6 626 5 (8)

Net income $ 2,648 24 % $ 2,511 21 % (5) %

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For stays, service fees, which are charged to customers as a percentage of the value of the booking, excluding taxes, vary based on factors specific to the booking, such as booking value, the duration of the booking, geography, and host type.

For experiences, we only earn a host fee.

For experiences and services, we only earn a host fee.

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

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Revenue $ 11,102 $ 12,241 10 %

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

Revenue increased $1.1 billion, or 10%, in 2025, primarily due to an increase in the number of check-ins relating to Nights and Seats Booked.

On a constant-currency basis, revenue increased 10% compared to the same period in the prior year.

Cost of Revenue

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

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

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

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

As the merchant of record, we bear all payment processing costs for our bookings, including those from chargebacks due to both fraud and non-fraud activities.

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

(in millions, except percentages)

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Percentage of revenue 16 % 17 %

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

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

Cost of revenue increased $208 million, or 11%, primarily due to a $188 million increase in merchant fees, due to higher pay-in volumes, a $28 million increase in amortization costs related to capitalized internal-use software projects, and a $27 million increase in data hosting services.

These increases were partially offset by a reduction in chargebacks of $29 million and a reduction in other service costs of $12 million, which includes authentication, translation, and SMS services.

Operations and Support

Operations and support expense primarily consists of personnel-related expenses and third-party service provider fees associated with community support provided via phone, email, and chat to customers;

Operations and support expense primarily consists of personnel-related expenses and third-party service provider charges associated with community support provided via phone, email, and chat to customers;

customer relations costs, which include refunds and credits related to customer satisfaction and expenses associated with our host protection programs;

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Percentage of revenue 12 % 11 %

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

Operations and support expense increased $45 million, or 4%, in 2025, primarily due to a $33 million increase in payroll-related expenses, an increase in insurance costs of $14 million, due to higher premiums as a result of higher nights booked, an $11 million increase in allocated costs for facilities and information technology, and an increase in expensed software and equipment of $10 million.

These increases were partially offset by an $18 million decrease in customer relations costs resulting from lower refunds and credits.

Product Development

Product development expense primarily consists of personnel-related expenses and third-party service provider fees incurred in connection with the development of our platform, and allocated costs for facilities and information technology.

Product development expense primarily consists of personnel-related expenses and third-party service provider expenditures incurred in connection with the development of our platform, and allocated costs for facilities and information technology.

(in millions, except percentages)

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Percentage of revenue 19 % 19 %

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

Product development expense increased $298 million, or 14%, in 2025, primarily due to a $293 million increase in payroll-related expenses driven by an increase in headcount.

Sales and Marketing

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Percentage of revenue 19 % 21 %

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

Sales and marketing expense increased $440 million, or 20%, in 2025, primarily due to a $163 million increase in marketing activities, a $121 million increase in payroll-related expense driven by an increase in headcount, and a $102 million increase in in third-party service provider expenses.

General and Administrative

General and administrative expense primarily consists of personnel-related expenses for management and administrative functions, including finance and accounting, legal, and human resources.

General and administrative expense also includes certain professional services fees, general corporate and director and officer insurance, allocated costs for facilities and information technology, indirect taxes,

including lodging tax reserves for which we may be held jointly liable with hosts for collecting and remitting such taxes, and bad debt expense.

General and administrative expense primarily consists of personnel costs for management and administrative functions (finance, accounting, legal, human resources), professional services fees, corporate and director and officer insurance, allocated costs for facilities and information technology, and indirect taxes, including lodging tax reserves.

(in millions, except percentages)

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Percentage of revenue 11 % 11 %

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

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

General and administrative expense increased $157 million, or 13%, in 2025, primarily due to a $74 million increase from non-income taxes and related fees and penalties, a $51 million increase in payroll-related expenses driven by an increase in headcount, and an increase in professional service fees of $37 million.

Interest Income

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Interest income $ 818 $ 705 (14) %

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

Interest income decreased $113 million, or 14%, in 2025, due to lower interest rates, partially offset by higher investment balances.

Other Expense, Net

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

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

(in millions, except percentages)

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$ (40) $ (112) 180 %

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

Provision for (benefit from) Income Taxes

The change in other expense, net of $72 million in 2025, was primarily due to net foreign exchange losses of $64 million, partially offset by lower impairment charges on investments in privately-held companies compared to the prior year.

Provision for income taxes

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

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

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

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

(in millions, except percentages)

2024 2025 % Change

Provision for (benefit from) income taxes $ (2,690) $ 683 125 %

Provision for income taxes $ 683 $ 626 (8) %

Effective tax rate 21 % 20 %

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

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

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

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

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

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

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

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

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

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

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

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

The provision for income taxes decreased by $57 million, or 8%, due to reduced taxes accrued driven by a larger foreign derived intangible income benefit and a $105 million reduction in uncertain tax positions relating to prior years, partially offset by the recognition of a $213 million valuation allowance against the corporate alternative minimum tax (“CAMT”) credit deferred tax asset.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law.

Included in this legislation are provisions that allow for the immediate expensing of domestic U.S.

research and development expenses and changes to the U.S.

taxation of foreign derived intangible income.

Following the enactment of the OBBBA, management concluded it is no longer more-likely-than-not that we are able to utilize our historic CAMT credits.

Management further concluded that no prudent and feasible tax-planning strategies are currently available to utilize the existing CAMT credits.

Our policy is to not consider the impact of future years’ CAMT in our valuation allowance assessment for deferred tax assets other than CAMT credits.

The amount of the valuation allowance may be adjusted in future quarters if estimates of future taxable income change.

We will continue to evaluate the full impact of legislative changes as more guidance becomes available.

Liquidity and Capital Resources

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As of December 31, 2025, cash and cash equivalents totaled $6.6 billion, which included $2.3 billion held by our foreign subsidiaries.

Cash and cash equivalents consist of checking and interest-bearing accounts and highly-liquid securities with an original maturity of 90 days or less.

Cash and cash equivalents consist of cash on deposit with banks and interest-bearing accounts and highly-liquid securities with an original maturity of 90 days or less.

As of December 31, 2025, short-term investments totaled $4.5 billion.

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government and government agency debt securities (“government bonds”), and mortgage-backed and asset-backed securities.

These amounts do not include funds of $5.9 billion as of December 31, 2024, that we held for bookings in advance of guests completing check-ins that we record separately on our consolidated balance sheet in funds receivable and amounts held on behalf of customers with a corresponding liability in funds payable and amounts payable to customers.

Our cash and cash equivalents are generally held at large global systemically important banks (or G-SIBs), which are subject to high capital requirements and are required to regularly perform stringent stress tests related to their ability to absorb capital losses.

Our cash, cash equivalents, and short-term investments held outside of the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations.

These short-term investments do not include funds of $7.0 billion as of December 31, 2025, that were held for bookings in advance of guests completing check-ins, which are recorded separately on our consolidated balance sheets in funds receivable and amounts held on behalf of customers with a corresponding liability in funds payable and amounts payable to customers.

Our cash and cash equivalents are generally held at large global systemically important banks (“G-SIBs”) which are subject to high capital requirements and are required to regularly perform stringent stress tests related to their ability to absorb capital losses.

Our cash, cash equivalents, and short-term investments held outside the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations.

However, repatriation of such funds may result in additional tax liabilities.

We believe that our existing cash, cash equivalents, and short-term investments balances in the United States are sufficient to fund our working capital needs in the United States.

We believe that our existing cash, cash equivalents, and short-term investments balances in the United States are sufficient to fund our working capital needs.

We have access to $1.0 billion of commitments and a $200 million sub-limit for the issuance of letters of credit under the 2022 Credit Facility.

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As of December 31, 2025, we had outstanding $2.0 billion in aggregate principal amount of indebtedness of our 0% convertible senior notes due on March 15, 2026.

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

The cap price of the Capped Calls was $360.80 per share of Class A common stock, which represented a premium of 100% over the last reported sale price of the Class A common stock of $180.40 per share on March 3, 2021, subject to certain customary adjustments under the terms of the Capped Call Transactions.

As of December 31, 2024, our total minimum lease payments were $299 million, of which $83 million is due in the succeeding 12 months.

We have a commercial agreement with a data hosting services provider to spend or incur an aggregate of at least $672 million for vendor services through 2027.

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

As of December 31, 2025, our total minimum lease payments were $272 million, of which $86 million is due in 2026.

We have a commercial agreement with a data hosting services provider to spend or incur an aggregate of at least $1.7 billion for vendor services through 2031.

See Note 9, Leases , Note 10, Debt , and Note 13, Commitments and Contingencies, to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for further information regarding these commitments.

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

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

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

In August 2025, our board of directors approved a new share repurchase program with an authorization to purchase up to an additional $6.0 billion of our Class A common stock.

Share repurchases under the share repurchase programs 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 share repurchase programs do not obligate us to repurchase any specific number of shares and may be modified, suspended, or terminated at any time at our discretion.

In 2025, we repurchased an aggregate of 29.7 million shares of Class A common stock for $3.8 billion through two share repurchase programs.

As of December 31, 2025, we completed the repurchases under the February 2024 share repurchase program and had $5.6 billion available to repurchase shares of Class A common stock under our August 2025 share repurchase program.

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

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Net Cash Provided by Operating Activities

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

Net cash provided by operating activities in 2025 was $4.6 billion, which was primarily due to net income of $2.5 billion, and $122 million provided by unearned fees, resulting from growth in bookings, partially offset by a decrease in prepaids and other assets of $346 million.

Additionally, we had adjustments for non-cash charges primarily consisting of $1.6 billion of stock-based compensation expense.

Net Cash Used in Investing Activities

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

Net cash used in investing activities in 2025 was $748 million, which was primarily due to purchases of short-term investments, partially offset by proceeds from sales and maturities of short-term investments.

Net Cash Used in Financing Activities

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

Net cash used in financing activities in 2025 was $3.8 billion, primarily due to share repurchases of $3.8 billion and taxes paid related to net share settlement of equity awards of $561 million, partially offset by an increase in funds payable and amounts payable to customers of $401 million.

Effect of Exchange Rates

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

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

In 2025, we recorded an increase of $655 million in cash, cash equivalents, and restricted cash, primarily due to the weakening of the U.S.

dollar against major currencies, mainly the Euro and British Pound.

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

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

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

As such, we believe that the cash flows generated from operating activities will meet our anticipated cash requirements in the short-term.

As such, we believe that the cash flows generated from operating activities will meet our anticipated cash requirements in the short-term, which include the repayment of our 2026 Notes.

In addition to normal working capital requirements, we anticipate that our short- and long-term cash requirements will include share repurchases, introduction of new products and offerings, timing and extent of spending to support our efforts to develop our platform, debt repayments, and expansion of sales and marketing activities.

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Additionally, we may in the future raise additional capital or incur additional indebtedness to continue to fund our strategic initiatives.

On a long-term basis, we would rely on either our access to the capital markets or our credit facility for any long-term funding not provided by operating cash flows and cash on hand.

On a long-term basis, we plan to rely on either our access to the capital markets or our credit facility for any long-term funding not provided by operating cash flows and cash on hand.

In the event that additional financing is required from outside sources, we may seek to raise additional funds at any time through equity, equity-linked arrangements, and/or debt, which may not be available on favorable terms, or at all.

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

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

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

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

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

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

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

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

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As of December 31, 2025, we have determined that it is more likely than not that our U.S.

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

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

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

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

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

In 2025, we recorded a $213 million valuation allowance against deferred tax assets related to CAMT credits.

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

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Recent Accounting Pronouncements

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

See Note 2, Significant Accounting Policies , to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis