Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

Airbnb, Inc.

Condensed Consolidated Balance Sheets

(in millions, except par value)

(unaudited)

December 31, 2023June 30, 2024
Assets
Current assets:
Cash and cash equivalents$6,874$7,882
Short-term investments (including assets reported at fair value of $2,507 and $2,629, respectively)3,1973,369
Funds receivable and amounts held on behalf of customers5,86910,342
Prepaids and other current assets (including customer receivables of $249 and $207 and allowances of $44 and $32, respectively)569659
Total current assets16,50922,252
Deferred tax assets, net2,8812,825
Goodwill and intangible assets, net792783
Other assets, noncurrent463460
Total assets$20,645$26,320
Liabilities and Stockholders’ Equity
Current liabilities:
Accrued expenses, accounts payable, and other current liabilities$2,654$2,865
Funds payable and amounts payable to customers5,86910,342
Unearned fees1,4272,621
Total current liabilities9,95015,828
Long-term debt1,9911,993
Other liabilities, noncurrent539497
Total liabilities12,48018,318
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.0001 par value: Class A - authorized 2,000 shares; 438 and 442 shares issued & outstanding, respectively; Class B - authorized 710 shares; 200 and 192 shares issued & outstanding, respectively; Class C - authorized 2,000 shares; zero shares issued & outstanding, respectively; and Class H - authorized 26 shares; 9 shares issued and zero shares outstanding, respectively——
Additional paid-in capital11,63912,116
Accumulated other comprehensive loss(49)(5)
Accumulated deficit(3,425)(4,109)
Total stockholders’ equity8,1658,002
Total liabilities and stockholders’ equity$20,645$26,320

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

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Airbnb, Inc.

Condensed Consolidated Statements of Operations

(in millions, except per share amounts)

(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
Revenue$2,484$2,748$4,302$4,890
Costs and expenses:
Cost of revenue432506860986
Operations and support317338599623
Product development451519871994
Sales and marketing4865739361,087
General and administrative275315518602
Total costs and expenses1,9612,2513,7844,292
Income from operations523497518598
Interest income191226337428
Other expense, net(38)(42)(49)(52)
Income before income taxes676681806974
Provision for income taxes2612639155
Net income$650$555$767$819
Net income per share attributable to Class A and Class B common stockholders:
Basic$1.02$0.87$1.21$1.29
Diluted$0.98$0.86$1.15$1.26
Weighted-average shares used in computing net income per share attributable to Class A and Class B common stockholders:
Basic635635634636
Diluted665649667651

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

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Airbnb, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in millions)

(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
Net income$650$555$767$819
Other comprehensive income (loss):
Net unrealized loss on available-for-sale marketable securities, net of tax(6)(2)(4)(5)
Net unrealized gain (loss) on cash flow hedges, net of tax214(2)62
Foreign currency translation adjustments1(8)5(13)
Other comprehensive income (loss)(3)4(1)44
Comprehensive income$647$559$766$863

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

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Airbnb, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in millions)

(unaudited)

Three and Six Months Ended June 30, 2023
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
SharesAmount
Balances as of December 31, 2022631$—$11,557$(32)$(5,965)$5,560
Net income————117117
Other comprehensive income———2—2
Exercise of common stock options2—*17——17
Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes1—*(155)——(155)
Stock-based compensation——243——243
Repurchases of common stock(4)—*——(493)(493)
Balances as of March 31, 2023630—11,662(30)(6,341)5,291
Net income————650650
Other comprehensive loss———(3)—(3)
Exercise of common stock options, net of shares withheld for taxes6—*(561)——(561)
Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes2—*(153)——(153)
Issuance of common stock under employee stock purchase plan——*31——31
Stock-based compensation——311——311
Repurchases of common stock(4)—*——(507)(507)
Balances as of June 30, 2023634$—$11,290$(33)$(6,198)$5,059

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

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Airbnb, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in millions)

(unaudited)

Three and Six Months Ended June 30, 2024
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
SharesAmount
Balances as of December 31, 2023638$—$11,639$(49)$(3,425)$8,165
Net income————264264
Other comprehensive income———40—40
Exercise of common stock options1—*46——46
Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes2—*(168)——(168)
Stock-based compensation——302——302
Repurchases of common stock(5)—*——(753)(753)
Balances as of March 31, 2024636—11,819(9)(3,914)7,896
Net income————555555
Other comprehensive income———4—4
Exercise of common stock options1—*16——16
Shares issued upon net settlement of warrants exercised1—*————
Issuance of common stock upon settlement of RSUs, net of shares withheld for taxes1—*(141)——(141)
Issuance of common stock under employee stock purchase plan——*37——37
Stock-based compensation——385——385
Repurchases of common stock(5)—*——(750)(750)
Balances as of June 30, 2024634$—$12,116$(5)$(4,109)$8,002

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

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

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Airbnb, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

Six Months Ended June 30,
20232024
Cash flows from operating activities:
Net income$767$819
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization2028
Stock-based compensation expense544677
Deferred income taxes—65
Other, net(17)61
Changes in operating assets and liabilities:
Prepaids and other assets(76)(105)
Accrued expenses and other liabilities95230
Unearned fees1,1631,199
Net cash provided by operating activities2,4962,974
Cash flows from investing activities:
Purchases of short-term investments(1,691)(1,520)
Sales and maturities of short-term investments1,5031,348
Other investing activities, net(15)(22)
Net cash used in investing activities(203)(194)
Cash flows from financing activities:
Taxes paid related to net share settlement of equity awards(872)(309)
Proceeds from exercise of equity awards and employee stock purchase plan5499
Repurchases of common stock(1,000)(1,499)
Change in funds payable and amounts payable to customers4,2714,654
Net cash provided by financing activities2,4532,945
Effect of exchange rate changes on cash, cash equivalents, and restricted cash132(202)
Net increase in cash, cash equivalents, and restricted cash4,8785,523
Cash, cash equivalents, and restricted cash, beginning of period12,10312,667
Cash, cash equivalents, and restricted cash, end of period$16,981$18,190

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

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1. Description of Business

Airbnb, Inc. (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.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial information. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 16, 2024. The results for the interim periods are not necessarily indicative of results for the full year. Certain immaterial amounts in prior periods have been reclassified to conform with current period presentation.

In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the unaudited condensed consolidated financial position, results of operations and cash flows for these interim periods.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries in accordance with consolidation accounting guidance. All intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the unaudited condensed 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. Actual results could differ materially from these estimates.

As the impact of the uncertain macroeconomic conditions, including inflation and rising interest rates, continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. These estimates and assumptions may change in future periods and will be recognized in the unaudited condensed consolidated financial statements as new events occur and additional information becomes known. To the extent the Company’s actual results differ materially from those estimates and assumptions, the Company’s future unaudited condensed consolidated financial statements could be affected.

Recently Adopted Accounting Standards

In June 2022, the Financial Accounting Standards Board (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 unaudited condensed consolidated financial statements or disclosures upon adoption.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued an update which expands income tax disclosure in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update is effective for public companies in fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the update retrospectively. Early adoption is permitted. The Company does not expect the adoption of the new guidance to have a material impact on its unaudited condensed consolidated financial statements other than the expanded footnote disclosure.

In November 2023, 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 with early adoption permitted. The Company does not expect the adoption of the new guidance to have a material impact on its unaudited condensed consolidated financial statements other than the expanded footnote disclosure.

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 unaudited condensed consolidated financial statements or disclosures.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 3. Supplemental Financial Statement Information

Cash, Cash Equivalents, and Restricted Cash

The following table reconciles cash, cash equivalents, and restricted cash reported on the Company’s unaudited condensed consolidated balance sheets to the total amount presented in the unaudited condensed consolidated statements of cash flows (in millions):

December 31, 2023June 30, 2024
Cash and cash equivalents$6,874$7,882
Cash and cash equivalents included in funds receivable and amounts held on behalf of customers5,76910,273
Restricted cash included in prepaids and other current assets2435
Total cash, cash equivalents, and restricted cash presented in the unaudited condensed consolidated statements of cash flows$12,667$18,190

Supplemental Disclosures of Cash Flow Information

Supplemental cash flow information consisted of the following (in millions):

Six Months Ended June 30,
20232024
Cash paid for income taxes, net of refunds$50$127
Non-cash financing activities:
Net settlement of cashless stock options exercised$36$—
Net settlement of cashless warrants exercised$—$22

Supplemental disclosures of balance sheet information

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

December 31, 2023June 30, 2024
Other assets, noncurrent:
Property and equipment, net$160$170
Operating lease right-of-use assets119103
Other184187
Other assets, noncurrent$463$460
Accrued expenses, accounts payable, and other current liabilities:
Indirect taxes payable and withholding tax reserves$1,119$1,400
Compensation and employee benefits436353
Accounts payable141163
Operating lease liabilities, current6159
Other897890
Accrued expenses, accounts payable, and other current liabilities$2,654$2,865
Other liabilities, noncurrent:
Operating lease liabilities, noncurrent$252$222
Other liabilities, noncurrent287275
Other liabilities, noncurrent$539$497

Payments to CustomersThe 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.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

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

Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
Reductions to revenue$78$118$155$205
Charges to operations and support24304650
Charges to sales and marketing expense16102919
Total payments made to customers$118$158$230$274

Revenue Disaggregated by Geographic Region

The following table presents revenue disaggregated by listing location (in millions):

Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
North America$1,192$1,308$2,117$2,323
Europe, the Middle East, and Africa9411,0481,3991,615
Latin America163185398492
Asia Pacific188207388460
Total revenue disaggregated by geographic region$2,484$2,748$4,302$4,890

Note 4. Investments

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

December 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesTotal Estimated Fair Value
Short-term investments
Debt securities:
Certificates of deposit$172$—$—$172
Government bonds3321—333
Commercial paper366——366
Corporate debt securities1,4904(3)1,491
Mortgage-backed and asset-backed securities1481(4)145
Total debt securities2,5086(7)2,507
Time deposits690——690
Total short-term investments$3,198$6$(7)$3,197
Long-term investments (1)
Debt securities:
Corporate debt securities$13$—$(9)$4

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

June 30, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesTotal Estimated Fair Value
Short-term investments
Debt securities:
Certificates of deposit$11$—$—$11
Government bonds353—(1)352
Commercial paper364——364
Corporate debt securities1,6881(4)1,685
Mortgage-backed and asset-backed securities221—(4)217
Total debt securities2,6371(9)2,629
Time deposits740——740
Total short-term investments$3,377$1$(9)$3,369
Long-term investments (1)
Debt securities:
Corporate debt securities$13$—$(9)$4

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

As of December 31, 2023 and June 30, 2024, the Company did not 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 accumulated other comprehensive loss (“AOCI”) to other expense, net, were not material for the three and six months ended June 30, 2023 and 2024. Realized gains and losses reclassified from AOCI to other expense, net, were not material for the three and six months ended June 30, 2023 and 2024.

Debt securities in an unrealized loss position had an estimated fair value of $777 million and $1.6 billion, and unrealized losses of $16 million and $19 million as of December 31, 2023 and June 30, 2024, respectively. A total of $283 million and $475 million of these securities, with unrealized losses of $14 million and $17 million, were in a continuous unrealized loss position for more than twelve months as of December 31, 2023 and June 30, 2024, respectively.

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

June 30, 2024
Amortized CostEstimated Fair Value
Due within one year$1,813$1,811
Due after one year through five years740729
Due after five years9793
Total$2,650$2,633

Equity Investments Without Readily Determinable Fair Value

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 June 30, 2024, respectively, and are classified within other assets, noncurrent on the unaudited condensed consolidated balance sheets.

For the three and six months ended June 30, 2024, the Company recorded a non-cash impairment charge of $45 million due to a downward adjustment for an observable price change. There were no upward or downward adjustments for observable price changes or impairment charges recorded for the three and six months ended June 30, 2023 in the comparative period. As of June 30, 2024, the cumulative impairment and downward adjustments for observable price changes were $101 million.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 5. Fair Value Measurements and Financial Instruments

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

December 31, 2023
Level 1Level 2Level 3Total
Assets
Cash and cash equivalents:
Money market funds$2,018$—$—$2,018
Certificates of deposit—1—1
Government bonds—115—115
Commercial paper—223—223
Corporate debt securities—12—12
2,018351—2,369
Short-term investments:
Certificates of deposit—172—172
Government bonds—333—333
Commercial paper—366—366
Corporate debt securities—1,491—1,491
Mortgage-backed and asset-backed securities—145—145
—2,507—2,507
Funds receivable and amounts held on behalf of customers:
Money market funds1,360——1,360
Prepaids and other current assets:
Foreign exchange derivative assets—27—27
Other assets, noncurrent:
Corporate debt securities——44
Total assets at fair value$3,378$2,885$4$6,267
Liabilities
Accrued expenses, accounts payable, and other current liabilities:
Foreign exchange derivative liabilities$—$55$—$55
Other liabilities, noncurrent:
Foreign exchange derivative liabilities—5—5
Total liabilities at fair value$—$60$—$60

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

June 30, 2024
Level 1Level 2Level 3Total
Assets
Cash and cash equivalents:
Money market funds$1,446$—$—$1,446
Government bonds—102—102
Commercial paper—144—144
Corporate debt securities—54—54
1,446300—1,746
Short-term investments:
Certificates of deposit—11—11
Government bonds—352—352
Commercial paper—364—364
Corporate debt securities—1,685—1,685
Mortgage-backed and asset-backed securities—217—217
—2,629—2,629
Funds receivable and amounts held on behalf of customers:
Money market funds2,701——2,701
Prepaids and other current assets:
Foreign exchange derivative assets—63—63
Other assets, noncurrent:
Foreign exchange derivative assets—1—1
Corporate debt securities——44
Total assets at fair value$4,147$2,993$4$7,144
Liabilities
Accrued expenses, accounts payable and other current liabilities:
Foreign exchange derivative liabilities$—$13$—$13
Total liabilities at fair value$—$13$—$13

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 six months ended June 30, 2023 and 2024.

There were no transfers of financial instruments into or out of Level 3 during the six months ended June 30, 2023 and 2024.

Note 6. Derivative Instruments and Hedging

The Company has a portion of its business denominated and transacted in foreign currencies, which subjects the Company to foreign exchange risk, and uses derivative instruments to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading or speculative purposes.

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

Foreign Exchange Risk

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, 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.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

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

Derivative Assets**(1)**
LocationDecember 31, 2023June 30, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts (current)Prepaids and other current assets$4$26
Foreign exchange contracts (noncurrent)Other assets, noncurrent—1
Total derivatives designated as hedging instruments$4$27
Derivatives not designated as hedging instruments:
Foreign exchange contracts (current)Prepaids and other current assets$23$37
Derivative Liabilities**(1)**
LocationDecember 31, 2023June 30, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts (current)Accrued expenses, accounts payable, and other current liabilities$25$3
Foreign exchange contracts (noncurrent)Other liabilities, noncurrent5—
Total derivatives designated as hedging instruments$30$3
Derivatives not designated as hedging instruments:
Foreign exchange contracts (current)Accrued expenses, accounts payable, and other current liabilities$30$10

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

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 June 30, 2024, the potential effect of these rights of off-set associated with the Company’s derivative contracts would be a reduction to both derivative assets and liabilities of $13 million, resulting in net derivative assets of $51 million.

The effect of derivative instruments designated as hedging instruments on the unaudited condensed consolidated statements of operations was not material for the three and six months ended June 30, 2024.

Derivative instruments designated as hedging instruments on AOCI

The following table presents the impact of derivative instruments designated as cash flow hedges on AOCI, net of tax (in millions):

Gain (Loss) Recognized in Other Comprehensive Income (Loss)Gain Reclassified from AOCI into Revenue
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
20232024202320242023202420232024
Derivatives designated as cash flow hedges:
Foreign exchange contracts$2$21$(2)$71$—$7$—$9

As of June 30, 2024, cumulative unrealized gains recorded in AOCI, net of tax related to derivative instruments designated as hedging instruments were $62 million.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Derivative instruments not designated as hedging instruments

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

Realized Gain (Loss) on DerivativesUnrealized Gain on Derivatives
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
20232024202320242023202420232024
Derivatives not designated as hedging instruments:
Foreign exchange contracts$(64)$2$(84)$(19)$13$23$12$34

The total notional amount of outstanding derivatives not designated as hedging instruments was $2.4 billion and $2.2 billion as of December 31, 2023 and June 30, 2024, respectively.

Cash flow hedges

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was $2.0 billion and $2.2 billion as of December 31, 2023 and June 30, 2024, respectively.

As of June 30, 2024, approximately $25 million of deferred net gains on both outstanding and matured derivatives in AOCI are expected to be reclassified to revenue during the next 12 months concurrent with the underlying hedged transactions which will be recorded in revenue. Actual amounts ultimately reclassified to revenue are dependent on the exchange rates in effect when derivative contracts currently outstanding mature.

Note 7. Debt

Convertible Senior Notes

In 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. Bank National Association, as trustee.

As of both December 31, 2023 and June 30, 2024, total outstanding debt, net of unamortized debt discount and debit issuance costs, was $2.0 billion. Interest expense was immaterial for both the three and six months ended June 30, 2023 and 2024.

As of June 30, 2024, the if-converted value of the 2026 Notes did not exceed the outstanding principal amount.

As of June 30, 2024, the total estimated fair value of the 2026 Notes was $1.8 billion and was determined based on a market approach using actual bids and offers of the 2026 Notes in an over-the-counter market on the last trading day of the period, or Level 2 inputs.

2022 Credit Facility

In 2022, the Company entered into a five-year unsecured Revolving Credit Agreement, which provides for initial commitments by a group of lenders led by Morgan Stanley Senior Funding, Inc. of $1.0 billion (“2022 Credit Facility”). The 2022 Credit Facility provides a $200 million sub-limit for the issuance of letters of credit.

The 2022 Credit Facility contains customary events of default, affirmative and negative covenants, including restrictions on the Company’s and certain of its subsidiaries’ ability to incur debt and liens, undergo fundamental changes, as well as certain financial covenants. The Company was in compliance with all financial covenants as of June 30, 2024.

As of June 30, 2024, no amounts were drawn under the 2022 Credit Facility and outstanding letters of credit totaled $25 million.

Note 8. Stock-Based Compensation

Stock-Based Compensation Expense

Total stock-based compensation expense was $304 million and $382 million for the three months ended June 30, 2023 and 2024, and $544 million and $677 million for the six months ended June 30, 2023 and 2024, respectively.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Stock Option and Restricted Stock Unit Activity

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

Outstanding Stock OptionsOutstanding RSUs
Shares Available for GrantNumber of SharesWeighted- Average Exercise PriceNumber of SharesWeighted- Average Grant Date Fair Value
As of December 31, 20231347$71.7630$85.35
Granted(9)—*168.189164.41
Increase in shares available for grant13——
Options exercised/RSUs vested(1)2(1)40.96(5)122.39
Canceled1—*(1)141.81
As of June 30, 20241416$87.6133$98.58

(1)RSUs vested are net of shares withheld for taxes.

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

The Company recorded stock-based compensation expense related to RSUs of $286 million and $358 million for the three months ended June 30, 2023 and 2024, and $509 million and $629 million for the six months ended June 30, 2023 and 2024, respectively.

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.

The following table summarizes options outstanding and exercisable as of June 30, 2024 (in millions):

Number of SharesWeighted- Average Exercise PriceWeighted- Average Remaining Contractual Life (Years)Aggregate Intrinsic Value
Options outstanding6$87.615.85$425
Options exercisable5$71.114.95$391

The Company recorded stock-based compensation expense related to stock options of $11 million and $14 million for the three months ended June 30, 2023 and 2024, and $21 million and $27 million for the six months ended June 30, 2023 and 2024, respectively.

Employee Stock Purchase Plan (“ESPP”)

Activities related to the Company’s ESPP were not material for the three and six months ended June 30, 2023 and 2024.

Restricted Stock Awards (“RSAs”)

Activities related to the Company’s RSAs were not material for the three and six months ended June 30, 2023 and 2024.

Note 9. Commitments and Contingencies

Commitments

The Company has commitments including purchase obligations for web-hosting services and other commitments for brand marketing. As of June 30, 2024, there were no material changes outside the ordinary course of business to the Company’s commitments, as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023.

Lodging Tax Obligations and Other Non-Income Tax Matters****Platform Related Taxes and Collection Obligations

Some states and localities in the United States and elsewhere in the world impose transient occupancy or lodging accommodations taxes (“Lodging Taxes”) on the use or occupancy of lodging accommodations or other traveler services. As of June 30, 2024, the Company collects and remits Lodging Taxes in approximately 33,000 jurisdictions around the world on behalf of its hosts. Such Lodging Taxes are generally remitted to tax jurisdictions within a 30 to 90-day period following the end of each month.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

As of December 31, 2023 and June 30, 2024, the Company had an obligation to remit Lodging Taxes collected from guests on bookings in these jurisdictions totaling $274 million and $400 million, respectively. These payables were recorded in accrued expenses, accounts payable, and other current liabilities on the unaudited condensed consolidated balance sheets.

In jurisdictions where the Company does not collect and remit Lodging Taxes, hosts are primarily responsible for such taxes. 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 June 30, 2024, accrued obligations related to these estimated taxes, including estimated penalties and interest, totaled $114 million and $160 million, respectively. As of June 30, 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 $41 million to $51 million; however, no assurance can be given as to the outcomes and the Company could be subject to significant additional tax liabilities. With respect to all other jurisdictions’ Lodging Taxes for which a loss is probable or reasonably possible, the Company is unable to determine an estimate of the possible loss or range of loss beyond the amounts already accrued.

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

The Company is currently involved in disputes brought by certain domestic and international states and localities involving the payment of Lodging Taxes. These jurisdictions are asserting that the Company is liable or jointly liable with hosts to collect and remit Lodging Taxes. These disputes are in various stages and the Company continues to vigorously defend these claims. The Company believes that the statutes at issue impose a Lodging Tax obligation on the person exercising the taxable privilege of providing accommodations, or the Company’s hosts.

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 is under audit and inquiry by various domestic and foreign tax authorities with regard to non-income tax matters. The subject matter of these contingent liabilities primarily arises from the Company’s transactions with its customers. Such disputes involve the applicability of transactional taxes (such as sales, value-added, business, and similar taxes) to services provided, as well as the applicability of withholding tax on payments made to such hosts.

As of June 30, 2024, the Company accrued $23 million related to the Canada Digital Services Tax that was enacted on June 28, 2024, which was retroactive to January 1, 2022. The amount accrued related to years 2022 and 2023 was $20 million. In addition, the Company has identified reasonably possible exposures related to transactional taxes and business taxes and has not accrued for these amounts since the likelihood of the contingent liability is less than probable. As of June 30, 2024, the Company estimates that the reasonably possible loss related to these matters in excess of the amounts accrued is between $355 million and $375 million; however, no assurance can be given as to the outcomes and the Company could be subject to significant additional tax liabilities.

As of December 31, 2023 and June 30, 2024, the Company accrued a total of $521 million and $445 million of estimated tax liabilities, including interest and penalties, related to hosts’ withholding tax obligations, respectively. As of June 30, 2024, the Company estimates that the reasonably possible loss related to withholding income taxes that can be determined in excess of the amounts accrued is between $145 million to $155 million; however, no assurance can be given as to the outcomes and the Company could be subject to significant additional tax liabilities. Due to the inherent complexity and uncertainty of these matters and judicial processes in certain jurisdictions, the final outcomes may exceed the estimated liabilities recorded.

In 2017, Italy passed a law purporting to require short-term rental platforms that process payments to withhold and remit host income tax and collect and remit tourist tax, amongst other obligations (“2017 Law”). The Company challenged this law before the Italian courts and the Court of Justice of the European Union (“CJEU”). In December 2022, the CJEU found that European law does not prohibit member states from passing legislation requiring short-term rental platforms to withhold income taxes from their hosts, however a requirement to appoint a tax representative, on which the 2017 Law and the withholding obligations are based, is contrary to European Union (“EU”) law. In October 2023, the Italian national court upheld the ruling of the CJEU. The Company’s subsidiary in Italy and subsidiary in Ireland continue to be, or could be in the future, subject to tax audits in Italy, including in relation to permanent establishment, transfer pricing, and withholding obligations.

In May 2023, the Guardia di Finanza de Milano (“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 settles a dispute about Airbnb Ireland’s obligations to withhold and remit host income tax, including taxes, interest, and penalties, for those relevant periods. The GdF conducted a withholding tax audit of Airbnb Ireland UC for the 2022 and 2023 tax years and issued a report to the ITA in March 2024. The Company began settlement discussions with the ITA in June 2024 and expects to reconvene with the ITA in the third quarter of 2024.

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.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Payroll Taxes

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

In addition, as of December 31, 2023 and June 30, 2024, the Company accrued a total of $43 million and $63 million of estimated tax liabilities related to employment taxes on certain employee benefits, respectively.

Legal and Regulatory Matters

The Company has been and is currently a party to various legal and regulatory matters arising in the normal course of business. Such proceedings and claims, even if not meritorious, can require significant financial and operational resources, including the diversion of management’s attention from the Company’s business objectives.

Regulatory Matters

The Company operates in a complex legal and regulatory environment and its operations are subject to various U.S. and foreign laws, rules, and regulations, including those related to: Internet activities; short-term rentals, long-term rentals and home sharing; real estate, property rights, housing and land use; travel and hospitality; privacy and data protection; intellectual property; competition; health and safety; protection of minors; consumer protection; employment; payments, money transmission, economic and trade sanctions, anti-corruption and anti-bribery; taxation; and others. 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 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.

Intellectual Property

The Company has been and is currently subject to claims relating to intellectual property, including alleged patent infringement. Adverse results in such lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing the Company from offering certain features, functionalities, products, or services, and may also cause the Company to change its business practices or require development of non-infringing products or technologies, which could result in a loss of revenue or otherwise harm its business. To date, the Company has not incurred any material costs as a result of such cases and has not recorded any material liabilities in its consolidated financial statements related to such matters.

Litigation and Other Legal Proceedings

The Company is currently involved in, and may in the future be involved in, legal proceedings, claims, and government investigations in the ordinary course of business. These include proceedings, claims, and investigations relating to, among other things, regulatory matters, commercial matters, intellectual property, competition, tax, employment, pricing, discrimination, consumer rights, personal injury, and property rights.

Depending on the nature of the proceeding, claim, or investigation, the Company may be subject to monetary damage awards, fines, penalties, and/or injunctive orders. Furthermore, the outcome of these matters could materially adversely affect the Company’s business, results of operations, and financial condition. The outcomes of legal proceedings, claims, and government investigations are inherently unpredictable and subject to significant judgment to determine the likelihood and amount of loss related to such matters. While it is not possible to determine the outcomes, the Company believes based on its current knowledge that the resolution of all such pending matters 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.

The Company establishes an accrued liability for loss contingencies related to legal matters when a loss is both probable and reasonably estimable. These accruals represent management’s best estimate of probable losses. Such currently accrued amounts are not material to the Company’s unaudited condensed consolidated financial statements. However, management’s views and estimates related to these matters may change in the future, as new events and circumstances arise and the matters continue to develop. 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. Legal fees are expensed as incurred.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Host Protections

The Company offers AirCover coverage, which includes but is not limited to, the Company’s Host Damage Protection program that provides protection of up to $3 million for direct physical loss or damage to a host’s covered property caused by guests during a confirmed booking and when the host and guest are unable to resolve the dispute. The Company retains risk and also maintains insurance from third parties on a per claim basis to protect the Company’s financial exposure under this program. In addition, through third-party insurers and self-insurance mechanisms, including a wholly-owned captive insurance subsidiary, the Company provides insurance coverage for third-party bodily injury or property damage liability claims that occur during a stay. The Company’s Host Liability Insurance and Experiences Liability Insurance consists of a commercial general liability policy, with hosts and the Company as named insureds and landlords of hosts as additional insureds. The 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.

IndemnificationsThe Company has entered into indemnification agreements with certain of its employees, officers and directors. The indemnification agreements and the Company’s Amended and Restated Bylaws (the “Bylaws”) require the Company to indemnify its directors and officers and those employees who have entered into indemnification agreements to the fullest extent not prohibited by Delaware law. Subject to certain limitations, the indemnification agreements and Bylaws also require the Company to advance expenses incurred by its directors and officers and those employees who have entered into indemnification agreements. No demands have been made upon the Company to provide indemnification or advancement under the indemnification agreements or the Bylaws, and thus, there are no indemnification or advancement claims that the Company is aware of that could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

In the ordinary course of business, the Company has included limited indemnification provisions in certain agreements with parties with whom the Company has commercial relations, which provisions are of varying scope and terms with respect to indemnification of certain matters, which may include losses arising out of the Company’s breach of such agreements or out of intellectual property infringement claims made by third parties. It is not possible to determine the maximum potential loss under these indemnification provisions due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, no significant costs have been incurred, either individually or collectively, in connection with the Company’s indemnification provisions.

Note 10. Income Taxes

The Company’s tax provision for interim periods is determined by using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the provision. The estimated annual effective tax rate is subject to significant volatility due to several factors, including accurately predicting the Company’s pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, audit-related developments, and changes in statutes, regulations, case law, and administrative actions.

The Company recorded income tax expense of $26 million and $126 million for the three months ended June 30, 2023 and 2024, and $39 million and $155 million for the six months ended June 30, 2023 and 2024, respectively, which primarily related to current and deferred tax on U.S. and foreign earnings, the accrual of interest on certain uncertain tax positions, and the income tax benefit from excess tax benefits on stock-based compensation arising during the quarter. The increase in tax expense was driven by deferred tax expense on the utilization of U.S. deferred tax assets due to the lack of a valuation allowance in the current period.

The Company’s significant tax jurisdictions include the United States, California, and Ireland. 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. The Company will continue to pursue all available remedies to resolve this dispute. In July 2024, the Company petitioned the U.S. Tax Court (“Tax Court”) for redetermination, and if necessary, the Company will appeal the Tax Court’s decision to the appropriate appellate court. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations. 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 unaudited condensed consolidated statements of cash flow.

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Airbnb, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

On August 16, 2022, the Inflation Reduction Act was signed into law, with tax provisions primarily focused on implementing a 15% minimum tax known as the Corporate Alternative 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. The Company anticipates paying a material amount of additional federal taxes in 2024 due to the CAMT. The additional CAMT will result in tax credits that are expected to offset the Company’s federal tax in subsequent years, thus there is no impact to the overall tax provision.

Note 11. Net Income per Share

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

Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
Net income$650$555$767$819
Add: convertible notes interest expense, net of tax1122
Net income - diluted$651$556$769$821
Weighted-average shares in computing net income per share attributable to Class A and Class B common stockholders:
Basic635635634636
Effect of dilutive securities30143315
Diluted665649667651
Net income per share attributable to Class A and Class B common stockholders:
Basic$1.02$0.87$1.21$1.29
Diluted$0.98$0.86$1.15$1.26

As of both June 30, 2023 and 2024, 9.6 million shares of RSUs were excluded from the table below because they are 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):

Three Months Ended June 30,Six Months Ended June 30,
2023202420232024
Stock options2222
RSUs7979
Total911911

Share Repurchase Program

In May 2023 and February 2024, the Company announced that its board of directors 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. 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 three and six months ended June 30, 2024, the Company repurchased and subsequently retired 4.9 million and 9.6 million shares of Class A common stock for $749 million and $1.5 billion, respectively. The Company completed the repurchases authorized under the share repurchase program announced in May 2023 during the first quarter of 2024. As of June 30, 2024, the Company had $5.3 billion available to repurchase shares of Class A common stock under its share repurchase program.

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 three months ended June 30, 2024, the 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. As of June 30, 2024, there were no outstanding warrants.

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