What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-12 compared with 2025-02-13 · 295 added, 329 removed, 954 unchanged (40% of the section changed)

14 unchanged sentences

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

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").

and its subsidiaries (the "Company") as of December 31, 2025 and 2024, 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, 2025, including the related notes and schedule of valuation and qualifying account for each of the three years in the period ended December 31, 2025 appearing 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, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

38 unchanged sentences

These procedures included testing the effectiveness of controls relating to the recognition and measurement of the liability for uncertain tax positions and controls addressing completeness of the uncertain tax positions.

These procedures also included, among others, (i) testing the completeness of management's assessment of the identification of uncertain tax positions;

(ii) testing the recognition and measurement of the liability for uncertain tax positions, including management's assessment of the technical merits of the tax positions and the amount of tax benefit expected to be sustained;

(iii) testing the information used in the calculation of the liability for uncertain tax positions, including intercompany agreements, international, federal, and state filing positions, and the related final tax returns;

(iv) evaluating the status and results of income tax audits with the relevant tax authorities;

and (v) evaluating third party income tax documentation obtained by the Company.

These procedures also included, among others, (i) testing the recognition and measurement of the liability for certain uncertain tax positions, including management's assessment of the technical merits of the tax positions and the amount of tax benefit expected to be sustained;

(ii) testing the information used in the calculation of the liability for uncertain tax positions, including intercompany agreements, international, federal, and state filing positions, and the related final tax returns;

(iii) evaluating the status and results of income tax audits with the relevant tax authorities;

and (iv) evaluating third party income tax documentation obtained by the Company.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the completeness and measurement of the Company's uncertain tax positions, including evaluating the reasonableness of management's assessment of whether tax positions are more-likely-than-not of being sustained and the amount of potential benefit to be realized, the application of relevant tax laws, and estimated interest and penalties.

19 unchanged sentences

Funds payable and amounts payable to customers 5,931 6,959

Current portion of long-term debt

Unearned fees 1,616 1,743

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Class C - authorized 2,000 shares;

zero shares issued & outstanding, respectively

zero shares issued & outstanding, respectively, and

Class H - authorized 26 shares;

17 unchanged sentences

General and administrative 2,025 1,185 1,342

Restructuring charges 89 — —

Total costs and expenses 8,399 8,549 9,697

2 unchanged sentences

Interest income 721 818 705

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

Other expense, net

( 137 ) ( 40 ) ( 112 )

Income before income taxes

15 unchanged sentences

Other comprehensive income (loss):

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

Net unrealized gain on available-for-sale marketable securities, net of tax

Net unrealized gain (loss) on cash flow hedges, net of tax ( 31 ) 111 ( 139 )

16 unchanged sentences

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

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

Net income — — — — 4,792 4,792

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

Common stock and stock-based awards issued, net of shares withheld for employee taxes 18 — ( 1,117 ) — — ( 1,117 )

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 for acquisition of businesses 1 — 53 — — 53

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

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

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

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

1 unchanged sentence

Other comprehensive income — — — 84 — 84

— — — 84 — 84

Common stock and stock-based awards issued, net of shares withheld for employee taxes 9 — ( 461 ) — — ( 461 )

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

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

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

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

Repurchases of common stock ( 25 ) — — — ( 3,448 ) ( 3,448 )

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

Net income — — — — 2,511 2,511

Other comprehensive loss — — — ( 97 ) — ( 97 )

Common stock and stock-based awards issued, net of shares withheld for employee taxes 9 — ( 439 ) — — ( 439 )

Stock-based compensation — — 1,600 — — 1,600

Repurchases of common stock ( 30 ) — — — ( 3,788 ) ( 3,788 )

Balances as of December 31, 2025 602 $ — $ 13,763 $ ( 62 ) $ ( 5,502 ) $ 8,199

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

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

Depreciation and amortization 81 44 65

Stock-based compensation expense 1,120 1,407 1,592

Deferred income taxes ( 2,875 ) 433 376

Impairment of long-lived assets 91 — —

Other, net 127 97 273

16 unchanged sentences

Cash flows from financing activities:

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

Share repurchases ( 2,252 ) ( 3,430 ) ( 3,789 )

Taxes paid related to tax on equity awards

( 1,224 ) ( 630 ) ( 561 )

Change in funds payable and amounts payable to customers 936 320 401

Proceeds from exercise of equity awards and employee stock purchase plan

Net cash used in financing activities

10 unchanged sentences

(the “Company” or “Airbnb”) was incorporated in Delaware in June 2008 and is headquartered in San Francisco, California.

The Company operates a global platform for unique stays and experiences.

The Company’s marketplace model connects hosts and guests (collectively referred to as “customers”) online or through mobile devices to book spaces and experiences around the world.

Summary of Significant Accounting Policies

The Company operates a global platform for unique stays, experiences, and services.

The Company’s marketplace model connects hosts and guests (collectively referred to as “customers”) online or through mobile devices to book spaces, experiences, and services around the world.

Significant Accounting Policies

Basis of Presentation

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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, and income and non-income taxes, among others.

The Company regularly evaluates its estimates, including those related to 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, stock-based compensation, and income and non-income taxes, among others.

Actual results could differ materially from these estimates.

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.

As the impact of the macroeconomic and geopolitical conditions, including inflation, interest rates, foreign currency fluctuations, tariffs, and trade controls 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.

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

Short-term Investments

The Company considers all highly-liquid investments with original maturities of greater than 90 days to be short-term investments.

Short-term investments include time deposits, which are accounted for at amortized cost, and available-for-sale debt securities that consist of corporate debt securities, commercial paper, certificates of deposit, U.S.

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

The Company determines the appropriate classification of its investments at the time of purchase.

The Company determines realized gains or losses on the sale of equity and debt securities on a specific identification method.

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 (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.

The Company’s equity investments with readily determinable fair values are measured at fair value on a recurring basis with changes in fair value recognized within other income (expense), net on the consolidated statements of operations.

The Company records an impairment of its available-for-sale debt securities if the amortized cost basis exceeds its fair value and if the Company has the intention to sell the security or if it is more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis.

If the Company does not have the intention to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis and the Company determines that the unrealized loss is entirely or partially due to credit-related factors, the credit loss is measured and recognized as an allowance in the consolidated balance sheets with a corresponding charge in the consolidated statements of operations.

The allowance is measured as the amount by which the debt security’s amortized cost basis exceeds the Company’s best estimate of the present value of cash flows expected to be collected.

Any remaining decline in fair value that is non-credit related is recognized in other comprehensive income (loss).

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.

The Company’s investments consist of time deposits, available-for-sale (“AFS”) debt securities, and held-to-maturity (“HTM”) debt securities.

Management determines the appropriate classification of investments at the time of purchase based on its intent and ability to hold the securities.

Time deposits are accounted for at amortized cost within short term investments in the consolidated balance sheets.

AFS debt securities include corporate debt securities, commercial paper, certificates of deposit, U.S.

government and government agency securities, and mortgage-backed and asset-backed securities.

AFS debt securities are recorded at fair value within short-term investments in the consolidated balance sheets with unrealized gains and non-credit-related losses reported as a component of accumulated other comprehensive income (loss) (“AOCI”).

HTM debt securities include investments the Company has the positive intent and ability to hold to maturity and are recorded at amortized cost, net of any allowance for credit losses.

The Company classifies these investments as short-term investments or other assets, noncurrent in the consolidated balance sheets based on their remaining contractual maturities as of the reporting date.

Realized gains and losses on the sale of investment securities are determined using the specific identification method and are recorded within other expense, net, on the consolidated statements of operations.

Impairment and Credit Losses

For AFS debt securities in an unrealized loss position, the Company first evaluates whether it intends to sell, or whether it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis.

If either condition is met, the difference between amortized cost and fair value is recognized in earnings.

If the Company does not intend to sell and is not required to sell the security before recovery, the Company evaluates whether the decline is due to credit-related factors.

Credit-related losses, if any, are recognized through

Notes to Consolidated Financial Statements

an allowance for credit losses with a corresponding charge to earnings, and any remaining unrealized loss is recognized in other comprehensive income (loss).

For HTM debt securities, expected credit losses are measured through an allowance for credit losses, representing the amount by which the amortized cost basis exceeds the Company’s estimate of the present value of cash flows expected to be collected.

Improvements in expected cash flows are recognized through a reversal of previously recorded credit losses.

Non-Marketable Investments

Non-marketable investments consist of debt and equity investments in privately-held companies, which are classified as other assets, noncurrent on the consolidated balance sheets.

The Company classifies its non-marketable investments that meet the definition of a debt security as available-for-sale.

The accounting policy for debt securities classified as available-for-sale is described above.

The Company’s non-marketable equity investments are accounted for using either the equity method of accounting or as equity investments without readily determinable fair values under the measurement alternative.

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 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.

Such investments are carried at cost, less any impairments, and are adjusted for subsequent observable price changes obtained from orderly transactions for identical or similar investments issued by the same investee.

This election is reassessed each reporting period to determine whether non-marketable equity securities have a readily determinable fair value, in which case they would no longer be eligible for this election.

Changes in the basis of the equity investment are recognized in other income (expense), net on the consolidated statements of operations.

The Company reviews its non-marketable debt and equity investments for impairment at the end of each reporting period or whenever events or circumstances indicate that the carrying value may not be fully recoverable.

Impairment indicators might include negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors.

Upon determining that an impairment exists, the Company recognizes as an impairment in other income (expense), net on the consolidated statements of operations the amount by which the carrying value exceeds the fair value of the investment.

Equity investments are accounted for using either the equity method or the measurement alternative, depending on the level of influence and availability of fair value information.

The equity method is applied when the Company has significant influence over the investee’s operating and financial policies.

Under this method, the Company recognizes its proportionate share of the investee’s net income or loss, and the carrying amount is adjusted for the Company’s share of the investee’s earnings, losses, and any impairments.

These amounts are reflected in other expense, net on the consolidated statements of operations.

For equity investments in which the Company does not have significant influence and fair value is not readily determinable, the measurement alternative is used.

These investments are carried at cost, less any impairments, and are adjusted for observable price changes from orderly transactions for the same or similar investments.

The measurement alternative is reassessed each reporting period to determine eligibility.

Changes in investment basis, including impairments, are recognized in other expense, net on the consolidated statements of operations.

The Company reviews non-marketable debt and equity investments for impairment each reporting period or whenever events or circumstances indicate the carrying value may not be fully recoverable.

Impairments are recognized in other expense, net to the extent that the carrying value exceeds fair value.

Fair Value of Financial Instruments

7 unchanged sentences

Unobservable inputs in which there is little or no market data that are significant to the fair value of the assets or liabilities.

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.

Level 2 Valuation Techniques

10 unchanged sentences

Statements of operations amounts are translated at average exchange rates for the period.

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

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

No amounts were reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2023, 2024, and 2025.

2 unchanged sentences

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

As of December 31, 2024 and 2025, the Company had a cumulative translation gain (loss) of $( 32 ) million and $ 1 million, respectively.

Total net realized and unrealized gains (losses) on foreign currency transactions and balances totaled $( 48 ) million, $ 29 million, and $( 35 ) million for the years ended December 31, 2023, 2024, and 2025, respectively.

2 unchanged sentences

The Company enters into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty.

All derivative instruments are recorded in the consolidated balance sheets at fair value.

All derivative instruments are recorded on the consolidated balance sheets at fair value.

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 statements of operations.

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

If it is no longer probable that a forecasted hedged transaction will occur in the initially identified time period, hedge accounting is discontinued and the Company accounts for the associated derivatives as undesignated derivative instruments.

Gains and losses associated with derivatives no longer designated as hedging instruments in AOCI are recognized immediately in other income (expense), net, if it is probable that the forecasted hedged transaction will not occur by the end of the initially identified time period or within an additional two month period thereafter.

Gains and losses associated with derivatives no longer designated as hedging instruments in AOCI are recognized immediately in other expense, net, on the consolidated statements of operations if it is probable that the forecasted hedged transaction will not occur by the end of the initially identified time period or within an additional two month period thereafter.

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 statements 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 on the consolidated statements of operations in other 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.

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Leasehold improvements

Lesser of estimated useful life or remaining lease term

Lesser of lease life or 5 years

Costs of maintenance and repairs that do not improve or extend the useful lives of assets are expensed as incurred.

Upon retirement or sale, the cost and related accumulated depreciation are removed from the consolidated balance sheets and the resulting gain or loss is reflected in the consolidated statements of operations.

Upon retirement or sale, the cost and related accumulated depreciation are removed from the consolidated balance sheets and the resulting gain or loss is reflected on the consolidated statements of operations.

The Company determines whether an arrangement is or contains a lease at inception.

10 unchanged sentences

The Company’s lease agreements may contain variable costs such as common area maintenance, operating expenses, or other costs.

Variable lease costs are expensed as incurred in the consolidated statements of operations.

Variable lease costs are expensed as incurred on the consolidated statements of operations.

The Company’s lease agreements generally do not contain any residual value guarantees or restrictive covenants.

20 unchanged sentences

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

Any impairments to ROU assets, leasehold improvements, or other assets as a result of a sublease, abandonment, or other similar factors are recorded as an operating expense.

Any impairments to ROU assets, leasehold improvements, or other assets as a result of a sublease, abandonment, or other similar factors are recorded as an operating expense on the consolidated statements of operations.

Similar to other long-lived assets, management tests ROU assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

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

For the years ended December 31, 2023, 2024, and 2025, the Company did not record any impairment charges.

Revenue Recognition

The Company generates substantially all of its revenue from facilitating guest stays at accommodations offered by hosts on the Company’s platform.

The Company considers both hosts and guests to be its customers.

The customers agree to the Company’s Terms of Service (“ToS”) to use the Company’s platform.

Upon confirmation of a booking made by a guest, the host agrees to provide the use of the property.

At such time, the host and guest also agree upon the applicable booking value as well as host fees and guest fees (collectively “service fees”).

The Company charges service fees in exchange for certain activities, including the use of the Company’s platform, customer support, and payment processing activities.

These activities are not distinct from each other and are not separate performance obligations.

As a result, the Company’s single performance obligation is to facilitate a stay, which occurs upon the completion of a check-in event (a “check-in”).

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.

The Company generates substantially all of its revenue from facilitating guest stays at accommodations offered by hosts on its platform.

The Company’s customers are both hosts and guests.

Customers must agree to the Company’s Terms of Service (“ToS”) to use the platform.

Upon a booking made by a guest, the host agrees to provide use of the property and both parties agree to the booking amount which excludes taxes and the Company’s service fees.

The Company’s service fees are charged in exchange for activities, including platform use, customer support, and payment processing activities, which are not distinct and collectively constitute a single performance obligation.

The performance obligation, governed by the acceptance of the Company’s ToS, is satisfied at the point of check-in when the guest begins their stay and the Company obtains an enforceable right to payment.

Accordingly, revenue is recognized on the consolidated statements of operations, at the point of check-in.

For all bookings, the guest pays the booking amount to the Company, which disburses the booking amount to the host after check-in, net of the host’s service fees.

Historically, the Company operated only under a split-fee structure, charging service fees as a percentage of the booking amount to both hosts and guests.

In October 2025, the Company began transitioning to a single-fee structure, charging only the host a service fee.

For bookings that remain under the split-fee model, the Company continues to charge service fees separately to both hosts and guests.

Notes to Consolidated Financial Statements

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

The Company collects both the booking value from the guest on behalf of the host and the applicable guest fees owed to the Company using the guest’s pre-authorized payment method.

After check-in, the Company disburses the booking value to the host, less the fees due from the host to the Company.

The Company’s ToS stipulates that a host may cancel a confirmed booking at any time up to check-in.

Therefore, the Company determined that for accounting purposes, each booking is a separate contract with the host and guest, and the contracts are not enforceable until check-in.

Since an enforceable contract for accounting purposes is not established until check-in, there were no partially satisfied or unsatisfied performance obligations as of December 31, 2023 and 2024.

The service fees collected from customers prior to check-in are recorded as unearned fees.

Unearned fees are not considered contract balances because they are subject to refund in the event of a cancellation.

The Company’s ToS stipulates that a host may cancel a confirmed booking up to the point of check-in.

As such, for accounting purposes, each booking represents a separate contract between the host and guest, which is not enforceable until check-in.

As a result, at December 31, 2024 and 2025, there were no partially satisfied or unsatisfied performance obligations.

Service fees collected from customers prior to check-in are recorded as unearned fees on the consolidated balance sheets.

The unearned fees are not considered contract balances, as they are subject to refund in the event of a cancellation.

Guest stays of at least 28 nights are considered long-term stays.

The Company charges service fees to facilitate long-term stays on a monthly basis.

Such stays are generally cancelable with 30 days advance notice for no significant penalty.

The Company charges service fees for long-term stays on a monthly basis, consistent with the applicable fee structure for the booking.

Long-term stays are generally cancelable within 30 days before check-in, permitting guests to avoid cancellation fees or paying for unused nights beyond the notice period.

Accordingly, long-term stays are treated as month-to-month contracts;

each month is a separate contract with the host and guest, and the contracts are not enforceable until check-in for the initial month as well as subsequent monthly extensions.

each month is a separate contract with the host and guest that becomes enforceable at check-in for the initial month or subsequent monthly extensions.

The Company’s performance obligation for long-term stays is the same as that for short-term stays.

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.

Revenue is recognized for the first month upon check-in and for subsequent months upon each month’s anniversary from the initial check-in date.

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.

Therefore, revenue is presented on a net basis, reflecting the service fees received from customers under either the single-fee or split-fee structures to facilitate a stay.

Amounts assessed by governmental authorities, such as taxes that are both imposed on and are concurrent with specific revenue producing transactions, cleaning and pet fees are excluded from revenue and cost of revenue.

Payments to Customers

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Funds receivable and amounts held on behalf of customers represent cash received or in-transit from guests via third-party credit card processors and other payment methods, which the Company remits for payment to the hosts following check-in.

This cash and related receivable represent the total amount due to hosts, and as such, a liability for the same amount is recorded to funds payable and amounts payable to customers.

This cash and related receivable represent the total amount due to hosts, and as such, a liability for the same amount is recorded to funds payable and amounts payable to customers on the consolidated balance sheets.

The Company records guest payments, net of service fees, as funds receivable and amounts held on behalf of customers with a corresponding amount in funds payable and amounts payable to customers when cash is received in advance of check-in.

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

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”).

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.

The full value of the service fees is recorded as cash and cash equivalents and unearned fees upon receipt of the first installment payment to represent what the Company expects to be recognized as revenue if the underlying booking is not canceled.

customers with a corresponding amount in funds payable and amounts payable to customers, net of the host and guest fees.

The full value of the service fees is recorded as cash and cash equivalents and unearned fees on the consolidated balance sheets upon receipt of the first installment payment to represent what the Company expects to be recognized as revenue if the underlying booking is not canceled.

Upon receipt of the second installment, such payment amounts are also recorded as funds receivable and amounts held on behalf of customers with a corresponding amount in funds payable and amounts payable to customers.

Following check-in, the Company remits funds due to hosts and recognizes unearned fees as revenue as its performance obligation is satisfied.

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

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

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Operations and support costs primarily consist of personnel-related expenses and third-party service provider fees associated with customer 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 the Company’s host protection programs, and allocated costs for facilities and information technology.

These costs are expensed as incurred.

These costs are expensed as incurred on the consolidated statements of operations.

Product Development

Product development costs primarily consist of personnel-related expenses and third-party service provider fees incurred in connection with the development of the Company’s platform and new products as well as the improvement of existing products, and allocated costs for facilities and information technology.

These costs are expensed as incurred.

Product development costs primarily consist of personnel-related expenses and third-party service provider expenditures incurred in connection with the development of the Company’s platform and new products as well as the improvement of existing products, and allocated costs for facilities and information technology.

These costs are expensed as incurred on the consolidated statements of operations.

Sales and Marketing

Sales and marketing costs primarily consist of performance and brand marketing, personnel-related expenses, including those related to field operations, portions of referral incentives and coupons, policy and communications, and allocated costs for facilities and information technology.

These costs are expensed as incurred.

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

These costs are expensed as incurred on the consolidated statements of operations.

Advertising expenses on the consolidated statements of operations were $ 953 million, $ 1.1 billion, and $ 843 million for the years ended December 31, 2023, 2024, and 2025, 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, other transactional taxes, and bad debt expense.

These costs are expensed as incurred.

Restructuring Charges

Costs and liabilities associated with management-approved restructuring activities are recognized when they are incurred.

One-time employee termination costs are recognized at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period.

Ongoing employee termination benefits are recognized as a liability when it is probable that a liability exists and the amount is reasonably estimable.

Restructuring charges are recognized as an operating expense within the consolidated statements of operations and related liabilities are recorded within accrued expenses, accounts payable, and other liabilities on the consolidated balance sheets.

The Company periodically evaluates and, if necessary, adjusts its estimates based on currently available information.

General and administrative costs also include professional services fees, allocated costs for facilities and information technology, 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 on the consolidated statements of operations.

Income taxes are accounted for under the asset and liability method.

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Deferred tax assets and liabilities are measured using enacted tax law in effect for the years in which the temporary differences are expected to be recovered or settled.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

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

Notes to Consolidated Financial Statements

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date on the consolidated statements of operations.

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

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.

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Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained.

Notes to Consolidated Financial Statements

Share Repurchase

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Share repurchases are recorded at settlement date.

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.

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

Stock-Based Compensation

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.

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

RSUs, stock options 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 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.

The Company estimates the expected term of stock options granted based on the simplified method and estimates the volatility of its common stock on the date of grant based on the average historical stock price volatility of comparable publicly-traded companies.

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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 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 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.

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) 2023-09, which is an update to standardize income tax disclosures that primarily relates to the presentation of the effective tax rate reconciliation and income taxes paid information in the footnote disclosures.

The Company adopted the guidance prospectively effective December 31, 2025 (refer to Note 3, Supplemental Financial Statement Information and Note 14 Income Taxes) .

Recently Issued Accounting Standards Not Yet Adopted

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.

In November 2024, the FASB issued ASU 2024-03, which is 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.

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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 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 July 2025, the FASB issued ASU 2025-05, which is an update that allows companies to apply a practical expedient when estimating credit losses on current accounts receivable and contract assets.

The update is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years.

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.

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

In September 2025, the FASB issued ASU 2025-06, which is an update to simplify the criteria required to capitalize internally developed software.

The update simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods.

The update is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

Early adoption is permitted.

The Company anticipates no material impact on its consolidated financial statements upon adoption of this guidance and intends to early adopt it prospectively effective January 1, 2026.

In November 2025, the FASB issued ASU 2025-09, which refines the scope of derivatives and clarifies the scope for noncash share-based consideration from a customer in a revenue contract.

The update is effective for fiscal years beginning after December 15, 2026, and interim

Notes to Consolidated Financial Statements

periods within those fiscal years.

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.

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Cash paid for:

Income taxes, net of refunds $ 68 $ 132 $ 350

Interest $ 8 $ 55 $ 2

Operating leases $ 84 $ 89 $ 87

Interest expense

Income taxes, net of refunds:

Cash paid for income taxes, net of refunds

Cash paid for income taxes, net of refunds (prior to ASU 2023-09) was $ 132 million and $ 350 million in 2023 and 2024, respectively.

Year Ended December 31,

2023 2024 2025

Noncash investing and financing activities:

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( 28 ) ( 39 )

Other (web hosting prepayments, payment processor receivables, and other)

Prepaids and other current assets

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Operating lease right-of-use assets 144 150

Other 184 272

Other (web hosting prepayments and other)

Other assets, noncurrent $ 563 $ 539

Accrued expenses, accounts payable, and other current liabilities:

Non-income taxes payable and withholding tax reserves

Indirect taxes payable and estimated lodging and withholding tax liabilities

$ 1,055 $ 1,132

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Operating lease liabilities, current 63 68

Other includes gift card and foreign exchange derivative contract liabilities

Other (insurance, advertising costs, and other)

Accrued expenses, accounts payable, and other current liabilities $ 2,614 $ 2,948

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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.

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

Payments to Customers

The following table summarizes total payments made to customers (in millions):

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$ 517 $ 627 $ 662

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 $ 9,917 $ 11,102 $ 12,241

Notes to Consolidated Financial Statements

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

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Corporate debt securities $ 2,176 $ 4 $ ( 3 ) $ 2,177

Commercial paper 366 — — 366

Government bonds 332 1 — 333

Certificates of deposit 172 — — 172

Mortgage-backed and asset-backed securities

381 1 ( 4 ) 378

Government bonds 224 — — 224

Commercial paper 214 — — 214

Certificates of deposit 52 — — 52

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

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$ 3,749 $ 5 $ ( 7 ) $ 3,747

Long-term investments (1)

Debt securities:

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

Notes to Consolidated Financial Statements

December 31, 2025

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Total short-term investments $ 4,443 $ 13 $ ( 2 ) $ 4,454

$ 3,749 $ 5 $ ( 7 ) $ 3,747

Long-term investments (1)

Debt securities:

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

(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 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.

Long-term investments were immaterial as of December 31, 2024 and 2025.

As of December 31, 2024 and 2025, 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 expense, net were immaterial in 2023 , 2024, and 2025.

Realized gains and losses reclassified from AOCI to other expense, net were immaterial in 2023 , 2024, and 2025.

Debt securities in an unrealized loss position had an estimated fair value of $ 1.1 billion and $ 161 million as of December 31, 2024 and 2025, respectively.

A total of $ 269 million and $ 36 million of these securities were in a continuous unrealized loss position for more than twelve months as of December 31, 2024 and 2025, respectively.

Unrealized losses were immaterial as of December 31, 2024 and 2025.

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

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Total $ 3,324 $ 3,326

Notes to Consolidated Financial Statements

Investments Accounted for Under the Equity Method

As of both December 31, 2024 and 2025, the carrying values of the Company’s equity method investments were $ 47 million.

In 2023, 2024, and 2025, the Company recorded immaterial losses within other 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 in 2023 and 2024.

The Company recorded an immaterial impairment charge in 2025.

Equity Investments Without Readily Determinable Fair Values

The Company holds investments in privately-held companies in the form of equity securities without readily determinable fair values and in which the Company does not have a controlling interest or significant influence.

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 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.

The Company holds equity investments in privately-held companies where fair values are not readily determinable and in which it lacks a controlling interest or significant influence.

These investments had a net carrying value of $ 38 million and $ 11 million as of December 31, 2024 and 2025, respectively, and are classified within other assets, noncurrent on the consolidated balance sheets.

The Company recorded an impairment charge of $ 45 million and $ 30 million in 2024 and 2025, respectively, and did not have any impairment charges or downward adjustments for observable price changes in 2023.

The Company recorded immaterial upward adjustments in 2023 and 2025, and did not have any upward adjustments for observable price changes in 2024.

As of December 31, 2025, the cumulative impairment and downward adjustments for observable price changes were $ 108 million.

Investments Accounted for Under the Equity Method

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

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Level 1 Level 2 Level 3 Total

Cash equivalents:

Cash and cash equivalents:

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

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Corporate debt securities — 2 — 2

Certificates of deposit — 1 — 1

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

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

Short-term investments:

Corporate debt securities — 2,177 — 2,177

Commercial paper — 366 — 366

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

Government bonds — 224 — 224

Commercial paper — 214 — 214

Certificates of deposit — 52 — 52

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

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

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Other assets, noncurrent:

Corporate debt securities — — 4 4

Foreign exchange derivative assets

Total assets at fair value $ 2,975 $ 3,352 $ — $ 6,327

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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

Notes to Consolidated Financial Statements

December 31, 2025

Level 1 Level 2 Level 3 Total

Cash equivalents:

Cash and cash equivalents:

Money market funds $ 901 $ — $ — $ 901

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Corporate debt securities — 7 — 7

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

Total cash and cash equivalents at fair value 901 162 — 1,063

Short-term investments:

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Foreign exchange derivative assets — 20 — 20

Other assets, noncurrent:

Foreign exchange derivative assets — 6 — 6

Corporate debt securities — — 4 4

Total assets at fair value $ 3,065 $ 3,504 $ — $ 6,569

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Foreign exchange derivative liabilities $ — $ 68 $ — $ 68

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 (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.

Long-term investments were immaterial as of December 31, 2024 and 2025.

There were no transfers of financial instruments into or out of Level 3 in 2024 and 2025.

Notes to Consolidated Financial Statements

Derivative Instruments and Hedging

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The Company may elect to designate certain derivatives to partially offset its business exposure to foreign exchange risk.

However, the Company may choose not to hedge certain exposures for a variety of reasons including accounting considerations or the prohibitive economic cost of hedging particular exposures.

However, the Company may choose not to hedge certain exposures for a variety of reasons including instances where the cost of hedging is determined to outweigh the potential benefit of mitigating the exposure.

There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates.

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To protect revenue from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, option contracts, or other instruments, and may designate these instruments as cash flow hedges.

The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue, typically for up to 18 months.

In the first quarter of 2023, the Company initiated a foreign exchange cash flow hedging program to minimize the effects of foreign currency fluctuations on future revenue.

The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue, typically for up to 18 months.

The Company may also enter into derivative instruments that are not designated as accounting hedges to offset a portion of the foreign currency exchange gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.

Notes to Consolidated Financial Statements

The following table summarizes the effect of derivative instruments on the Company’s consolidated balance sheets (in millions):

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

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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Foreign exchange contracts (current) Accrued expenses, accounts payable, and other current liabilities

Foreign exchange contracts (noncurrent) Other liabilities, noncurrent 5 —

Total derivatives designated as hedging instruments $ 30 $ —

Derivatives not designated as hedging instruments:

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(1) Derivative assets and derivatives liabilities are measured using Level 2 inputs.

(2) The noncurrent derivative assets and liabilities were immaterial.

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, 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.

As of December 31, 2025, 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 $ 18 million, resulting in net derivative assets of $ 2 million and net derivative liabilities of $ 52 million.

Notes to Consolidated Financial Statements

Effect of Derivative Instruments Designated as Hedging Instruments on AOCI

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Year Ended December 31,

2023 2024 2025

Derivatives designated as cash flow hedges:

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(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

Effect of Derivative Instruments not Designated as Hedging Instruments on the Consolidated Statements of Operations

The following table presents the activity of derivative instruments not designated as hedging instruments and the impact of these derivative contracts on the consolidated statements of operations (in millions):

Realized gains (losses) on derivative instruments designated as hedging instruments reclassified from AOCI to revenue in the consolidated statements of operations were immaterial in 2023 and 2024, and $( 64 ) million in 2025.

As of December 31, 2024 and 2025, cumulative unrealized gains (losses) recorded in AOCI, net of tax, related to derivative instruments designated as hedging instruments were $ 80 million and $( 59 ) million, respectively.

Derivative Instruments Not Designated as Hedging Instruments

The following table presents the activity of derivative instruments not designated as hedging instruments on the consolidated statements of operations (in millions):

Realized Gain (Loss) on Derivatives Unrealized Gain (Loss) on Derivatives

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Foreign exchange contracts $ ( 43 ) $ ( 59 ) $ 44 $ 10 $ 11 $ 6

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.

The total notional amount of outstanding derivatives not designated as hedging instruments was $ 2.1 billion and $ 2.7 billion as of December 31, 2024 and 2025, respectively.

Cash Flow Hedges

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.

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was $ 2.5 billion and $ 3.1 billion as of December 31, 2024 and 2025, respectively.

As of December 31, 2025, approximately $ 63 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.

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

Goodwill and Intangible Assets

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

The changes in the carrying amount of goodwill in 2024 and 2025 were as follows (in millions):

Balance as of December 31, 2023 $ 752

Additions related to acquisitions 101

Foreign currency translation adjustments ( 2 )

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The estimated future amortization expense of $ 16 million will be amortized through 2029.

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

Amortization expense related to intangible assets was immaterial in 2023, 2024, and 2025.

Notes to Consolidated Financial Statements

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Leasehold improvements

Computer equipment 22 15

Buildings and land 17 17

Office furniture and equipment 8 8

Construction in progress 82 16

Total property and equipment, gross 288 310

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Total property and equipment, net $ 147 $ 107

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.

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.

(1) Other includes building and land, computer equipment, construction in process, and office furniture and equipment.

Depreciation expense related to property and equipment in 2023, 2024, and 2025 was $ 18 million, $ 16 million, and $ 17 million , respectively.

In 2023, 2024, and 2025, amortization of capitalized internal-use software costs was $ 13 million, $ 34 million, and $ 61 million , respectively.

The net carrying value of capitalized internal-use software as of December 31, 2024 and 2025 was $ 69 million and $ 33 million , respectively.

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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:

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Convertible Senior Notes

On March 8, 2021, the Company issued $ 2.0 billion aggregate principal amount of 0 % convertible senior notes due 2026 (the "2026 Notes") pursuant to an indenture, dated March 8, 2021 (the "Indenture"), between the Company and U.S.

On March 8, 2021, the Company issued $ 2.0 billion aggregate principal amount of 0 % convertible senior unsecured notes due March 15, 2026 (the "2026 Notes"), unless earlier converted, redeemed, or repurchased, pursuant to an indenture, dated March 8, 2021 (the "Indenture"), between the Company and U.S.

Bank National Association, as trustee.

The 2026 Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

As of both December 31, 2023 and December 31, 2024, total outstanding debt, net of unamortized debt discount and debt issuance costs, was $ 2.0 billion and the effective interest rate was 0.2 %.

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.

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 2026 Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and do not bear interest.

As of both December 31, 2024 and 2025, total outstanding debt, net of unamortized debt discount and debt issuance costs, was $ 2.0 billion and the effective interest rate was 0.2 %.

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.

These costs are amortized to interest expense using the effective interest method over the contractual term.

In 2023, 2024, and 2025, interest expense was immaterial.

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.

The conversion rate and conversion price are subject to customary adjustments under certain circumstances in accordance with the terms of the Indenture.

The 2026 Notes will be convertible at the option of the holders before December 15, 2025 only upon the occurrence of certain events, and from and after December 15, 2025, at any time at their election until the close of business on the second scheduled trading day immediately preceding March 15, 2026, only under certain circumstances.

The 2026 Notes were convertible at the option of the holders before December 15, 2025 only upon the occurrence of certain events, and from and after December 15, 2025, at any time at their election until the close of business on the second scheduled trading day immediately preceding March 15, 2026, only under certain circumstances.

Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as applicable, cash, shares of the Company’s Class A common stock, or a combination of cash and shares of the Company’s Class A common stock, at the Company’s election, based on the applicable conversion rate.

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Class A Common Stock Warrants

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.

In 2024, the Company had warrants outstanding to purchase shares of Class A common stock with an exercise price of $ 28.355 per share.

During 2024, all the outstanding warrants were exercised to purchase 0.8 million shares of Class A common stock.

The warrants were exercised on a cashless basis, resulting in the issuance of 0.7 million shares of the Class A common stock.

Preferred Stock

The Company's board of directors has the authority to issue up to 10,000,000 shares of preferred stock in one or more series, without stockholder approval.

The board of directors has the authority to determine the rights, preferences, privileges, and restrictions for each series, which may include dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences, and sinking fund provisions.

These rights could be superior to those of the Company’s common stock.

The preferred stock has a par value of $ 0.0001 per share, and no shares of preferred stock are currently issued, or outstanding.

Share Repurchase Programs

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.

In February 2024, the Company's board of directors approved a share repurchase program to purchase up to $ 6.0 billion of the Company’s Class A common stock.

In August 2025, the Company’s board of directors approved a new share repurchase program with authorization to purchase up to an additional $ 6.0 billion of the Company's 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.

These share repurchase programs do 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.

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

The share repurchase programs do 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.

In 2025, the Company repurchased and subsequently retired 29.7 million shares of Class A common stock for $ 3.8 billion.

In 2024, the Company repurchased and subsequently retired 24.5 million shares of Class A common stock for $ 3.4 billion.

As of December 31, 2025, the Company 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 the August 2025 share repurchase program.

Notes to Consolidated Financial Statements

Stock-Based Compensation and Employee Benefit Plan

Stock-Based Compensation Expense

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.

Stock-based compensation expense was $ 1.1 billion, $ 1.4 billion, and $ 1.6 billion in 2023, 2024, and 2025, respectively.

The income tax benefit recognized on the consolidated statement of operations on stock-based compensation expense was $ 227 million, $ 273 million, and $ 317 million, in 2023, 2024, and 2025, respectively.

In 2023 and 2024, the Company recorded income tax benefits of $ 435 million and $ 39 million, respectively, related to vested or exercised awards.

In 2025, the Company recorded an immaterial amount of income tax expense for these awards.

These amounts do not reflect indirect impacts, primarily from the research and development tax credit.

Equity Incentive Plans

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Expected dividend yield — — —

A summary of stock option and RSU activity under the Plans was as follows (in millions, except per share amounts):

A summary of stock option and RSU activity under the Company’s equity incentive plans was as follows (in millions, except per share amounts):

Stock Options

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Granted 1 168.18 13 153.36

Increase in shares available for grant — — — —

Exercised/Vested ( 3 ) 41.55 ( 11 ) 119.00

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Granted 1 139.80 16 136.11

Increase in shares available for grant — — — —

Exercised/Vested ( 1 ) 53.34 ( 11 ) 138.98

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In May 2023, 11.2 million stock options were exercised in cashless transactions pursuant to which the Company withheld and retired 5.7 million shares of common stock, valued at their fair market value on the exercise date, to cover the related $ 567 million of employee withholding tax and $ 36 million of exercise cost.

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, 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.

In 2023, 2024, and 2025, the weighted-average fair value of stock options granted under the Plans was $ 65.22 , $ 93.29 , and $ 69.08 per share, respectively.

In 2023, 2024, and 2025, the aggregate intrinsic value of stock options exercised was $ 1.6 billion, $ 254 million, and $ 82 million, respectively, and the total grant-date fair value of stock options that vested was $ 44 million, $ 51 million, and $ 46 million, respectively.

As of December 31, 2025, there was $ 114 million of total unrecognized compensation cost related to stock option awards granted under the Plans.

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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.

The Company’s contributions to the plan was $ 27 million, $ 30 million, and $ 35 million in 2023, 2024, and 2025, respectively.

Commitments and Contingencies

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Total $ 1,918 $ 285 $ 1,010 $ 605 $ 18

Purchase commitments include amounts related to the Company’s commercial agreement with a data hosting services provider, pursuant to which the Company committed to spend an aggregate of at least $ 672 million for vendor services through 2027.

Lodging Tax Obligations and Other Non-Income Tax Matters

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

As of December 31, 2023 and December 31, 2024, the Company had an obligation to remit Lodging Taxes collected from guests on bookings in these jurisdictions totaling $ 274 million and $ 312 million, respectively.

As of December 31, 2024 and 2025, the Company had an obligation to remit Lodging Taxes collected from guests on bookings in these jurisdictions totaling $ 312 million and $ 387 million, respectively.

These payables were recorded in accrued expenses, accounts payable, and other current liabilities on the consolidated balance sheets.

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

As of December 31, 2024 and 2025, accrued obligations related to these estimated taxes, including estimated penalties and interest, totaled $ 83 million and $ 114 million, respectively.

As of December 31, 2025, the Company estimates that the reasonably possible loss related to

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;

certain Lodging Taxes that can be determined in excess of the amounts accrued is between $ 25 million to $ 35 million;

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

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The imposition of such taxes on the Company could increase the cost of a guest booking and potentially cause a reduction in the volume of bookings on the Company’s platform, which would adversely impact the Company’s results of operations.

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.

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

Other Non-Income Taxes

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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.

The Company has estimated transactional tax liabilities where 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.

As of December 31, 2025, there were no accrued obligations related to these tax liabilities.

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.

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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 and 2025, the Company accrued a total of $ 227 million and $ 199 million of estimated tax liabilities, including interest and penalties, related to hosts’ withholding tax obligations, respectively.

As of December 31, 2025, 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 $ 150 million to $ 160 million;

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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 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.

Of this amount, 123 million Euro ($ 148 million) was paid in December of 2024, while 56 million Euro ($ 66 million), which was recognized as a liability as of December 31, 2024, was paid in January 2025.

In 2024, Airbnb Ireland commenced 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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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.

Notes to Consolidated Financial Statements

Regulatory Matters

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In addition, the nature of the Company’s business exposes it to inquiries and potential claims related to the compliance of the business with applicable law and regulations.

In some instances, applicable laws and regulations do not yet exist or are being applied, interpreted or implemented to address aspects of the Company’s business, and such adoption or interpretation could further alter or impact the Company’s business.

In some instances, applicable laws and regulations do not yet exist or are being applied, interpreted or implemented to address aspects of the Company’s business, and such adoption or interpretation, or implementation could further alter or impact the Company’s business.

In certain instances, the Company has been party to litigation with municipalities relating to or arising out of certain regulations.

In addition, the implementation and enforcement of regulation can have an impact on the Company’s business.

In July 2025, Airbnb received a letter from the Spanish Ministry of Consumer Affairs proposing to assess a fine of approximately 110 million Euro ($ 129 million) in connection with alleged non-compliance with short-term rental listing regulations in Spain.

In September 2025, the Spanish Ministry of Consumer Affairs subsequently reduced the fine to approximately 65 million Euro ($ 76 million).

Airbnb has disputed the fine and the applicability of these rules to short-term listings, and any potential loss is neither probable or estimable at this time.

Global regulatory requirements and challenges affecting our business continue to increase.

These challenges may have a material impact on our business, results of operations, and financial condition.

Intellectual Property

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Until the final resolution of legal matters, there may be an exposure to losses in excess of the amounts accrued.

With respect to outstanding legal matters, based on current knowledge, the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

With respect to outstanding legal matters, the Company believes based on its current knowledge that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

Legal fees are expensed as incurred.

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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

Notes to Consolidated Financial Statements

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 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.

Notes to Consolidated Financial Statements

Indemnifications

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Total provision for (benefit from) income taxes $ ( 2,690 ) $ 683 $ 626

As further described in Note 2.

Significant Accounting Policies , the Company has elected to prospectively adopt ASU 2023-09.

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:

The following table is a reconciliation of the U.S.

federal statutory rate to the Company’s effective rate for the year ended December 31, 2025 (in millions, except percentages) in accordance with ASU 2023-09:

Year Ended December 31, 2025

Provision for income taxes at U.S.

federal statutory rate $ 659 21.0 %

State and local income taxes, net of federal benefit (1)

Foreign tax effects

Effect of cross-border tax laws:

Foreign derived intangible income

( 166 ) ( 5.3 )

Other ( 49 ) ( 1.6 )

Research and development (“R&D”) credits ( 121 ) ( 3.9 )

Valuation allowance 221 7.0

Non-taxable or non-deductible items:

Stock-based compensation

Uncertain tax positions

( 42 ) ( 1.3 )

Provision for income taxes effective tax rate $ 626 20.0 %

(1) The jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include New York, New York City, and Illinois.

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 the Company will be able to utilize its federal corporate alternative minimum tax (“CAMT”) credits.

No prudent and feasible tax-planning strategies are currently available that would allow the Company to utilize its historic CAMT credits, and consequently recorded a $ 213 million valuation allowance.

The Company's policy is to not consider the impact of future years’ CAMT in its valuation allowance assessment for regular deferred tax assets.

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

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

The following table is a reconciliation of the U.S.

federal statutory rate to the Company’s effective rate for the years ended December 31, 2024 and 2023, as previously disclosed, prior to the adoption of ASU 2023-09:

Year Ended December 31,

Expected income tax expense at U.S.

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Effective tax rate ( 128.0 ) % 20.5 %

Notes to Consolidated Financial Statements

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

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Loss carryforwards

$ 1,232 $ 462

Tax credit carryforwards 999 806

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As of December 31, 2025, 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 released $ 2.9 billion of its valuation allowance during 2023.

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.

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

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

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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.

The Company’s federal net operating loss carryforwards do not have an expiration date.

As of December 31, 2023 and 2024, the Company had federal research and development tax credit carryforwards of $ 720 million and $ 554 million, respectively.

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.

As of December 31, 2025, the Company had no remaining net operating loss carryforwards for federal income tax purposes.

As of December 31, 2025, the Company had federal research and development tax credit carryforwards of $ 489 million, which will begin to expire in 2042 if not utilized.

As of December 31, 2025, the Company had CAMT credit carryforwards of $ 400 million, which do not have an expiration date and may be claimed against regular tax in future years.

As of December 31, 2025, the Company had net operating loss carryforwards for state income tax purposes of $ 3.4 billion.

Some of the Company’s state net operating loss carryforwards will expire, if not utilized, beginning in 2035.

As of December 31, 2023 and 2024, the Company had state research and development tax credit carryforwards of $ 464 million and $ 501 million, respectively.

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

As of December 31, 2025, the Company had state research and development tax credit carryforwards of $ 526 million, which do not have an expiration date.

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.

Such a limitation could result in the expiration of the net operating loss carryforwards and tax credits before utilization, which could result in increased future tax liabilities.

Notes to Consolidated Financial Statements

A reconciliation of the beginning and ending amount of the Company’s total gross unrecognized tax benefits was as follows (in millions):

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However, the outcome of tax audits cannot be predicted with certainty.

If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company may be required to record an adjustment to the provision for (benefit from) income taxes in the period such resolution occurs.

Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact the Company’s tax contingencies.

The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued.

It is reasonably possible that within the next twelve months the Company may experience an increase or decrease in its unrecognized tax benefits as a result of additional assessments by various tax authorities, possibly reach resolution of income tax examinations in one or more jurisdictions, or lapses of the statute of limitations.

However, an estimate of the range of the reasonably possible change in the next twelve months cannot be made.

As of December 31, 2024, $ 740 million of unrecognized tax benefits represents the amount that would, if recognized, impact the Company’s effective income tax rate.

The Company’s accrual for interest and penalties was $ 90 million and $ 100 million as of December 31, 2023 and 2024, respectively.

As of December 31, 2025, unrecognized tax benefits totaled $ 693 million, which, if recognized, would impact the Company’s effective income tax rate.

The Company’s accrual for interest and penalties was $ 100 million as of both December 31, 2024 and 2025, as presented on the consolidated balance sheets.

The Company’s significant tax jurisdictions include the United States, California, and Ireland.

The Company’s 2008 to 2025 tax years remain subject to examination in the United States and various states due to tax attributes and statutes of limitations, and its 2021 to 2025 tax years remain subject to examination in Ireland.

There are other ongoing audits in various other 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.

The Company is currently under examination for income taxes by the Internal Revenue Service (“IRS”) for the 2013, 2016, 2017, and 2018 tax years.

The primary issue under examination in the 2013 audit is the valuation of the Company’s international intellectual property which was sold to a subsidiary in 2013.

In the year ended December 31, 2019, new information became available which required the Company to remeasure its reserve for unrecognized tax benefits.

The Company recorded additional tax expense of $ 196 million during the year ended December 31, 2019.

In December 2020, the Company received a Notice of Proposed Adjustment (“NOPA”) from the IRS which proposed an increase to the Company’s U.S.

taxable income that could result in additional income tax expense and cash liability of $ 1.3 billion plus penalties and interest, which exceeds its current reserve recorded in its consolidated financial statements by more than $ 1.0 billion.

The Company disagrees with the proposed adjustment and continues to vigorously contest it.

In February 2021, the Company submitted a protest to the IRS describing its disagreement with the proposed adjustment and requesting the case be transferred to the IRS Independent Office of Appeals (“IRS Appeals”).

In December 2021, the Company received a rebuttal from the IRS with the same proposed adjustments that were in the NOPA.

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

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.

taxable income that could result in additional income tax expense and cash liability of $ 1.3 billion plus penalties and interest, which exceeds the current reserve recorded in its consolidated financial statements by more than $ 1.0 billion.

The Company strongly disagrees with the proposed adjustment and continues to vigorously contest it.

The Company entered into an administrative dispute process with IRS Appeals, however an acceptable outcome was not reached.

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 claimed 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.

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

If the IRS prevails in the assessment of additional tax due based on its position and such tax and related interest and penalties, if any, exceeds the Company’s current reserves, such outcome could have a material adverse impact on the Company’s financial position and results of operations, and any assessment of additional tax could require a significant cash payment and have a material adverse impact on the Company’s consolidated statements of cash flow.

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

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.

On August 16, 2022, the Inflation Reduction Act was signed into law, with tax provisions primarily focused on implementing a 15% minimum tax (CAMT) on global adjusted financial statement income and a 1% excise tax on net share repurchases.

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.

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

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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, 2023, 2024, and 2025, 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, 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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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.

The CODM 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.

Notes to Consolidated Financial Statements

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

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Salaries and benefits 1,558 1,686 2,009

Marketing 1,001 1,189 1,484

1,215 1,514 1,704

Professional and third-party services (1)

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Interest income 721 818 705

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

Other expense, net ( 137 ) ( 40 ) ( 112 )

Income before income taxes 2,102 3,331 3,137

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Net income $ 4,792 $ 2,648 $ 2,511

(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.

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

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

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Total revenue $ 9,917 $ 11,102 $ 12,241

(1) No individual international country represented 10% or more of the Company’s total revenue for years ended December 31, 2022 , 2023 , and 2024 .

(1) No individual international country represented 10% or more of the Company’s total revenue in 2023 , 2024 , or 2025 .

The following table sets forth the breakdown of long-lived assets based on geography (in millions):

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Long-lived assets attributed to the United States, Ireland, and other international geographies are based upon the country in which the asset is located.

Restructuring

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

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data