filings.toolsItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“2025 Annual Report”). This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” of our 2025 Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
Airbnb was founded in 2007 when two hosts welcomed three guests to their San Francisco home, and has since grown into a global community of over 5.5 million hosts who have welcomed over 2.5 billion guest arrivals in almost every country and region across the globe. Every day, hosts offer unique stays, experiences, and services that enable guests to connect with communities in a more authentic way. We operate a global marketplace connecting guests with these offerings, collectively in over 220 countries and regions.
We operate with five key stakeholders in mind: our employees, shareholders, hosts, guests, and the communities we serve. Our commitment to making long-term decisions that benefit all these stakeholders is fundamental to our sustained success.
First Quarter Financial Highlights
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Strong Top-Line Growth**: Revenue grew by 18% to $2.7 billion for the three months ended March 31, 2026, compared to the same period in the prior year. This growth was primarily driven by an increase in the number of check-ins relating to Nights and Seats Booked, and an increase in our Average Daily Rate (“ADR”).
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Increased Profitability:** Net income grew by $6 million to $160 million for the three months ended March 31, 2026, compared to the same period in the prior year. This improvement was primarily driven by strong revenue growth of 18%, which outpaced a 16% increase in operating expenses, alongside a $70 million realized gain from the sale of a privately-held equity investment. These increases were offset by continued investment in sales and marketing, and a $69 million one-time adjustment of certain deferred tax assets resulting from changes to the U.S. Corporate Alternative Minimum Tax (“CAMT”).
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Cash Generation:** Cash provided by operating activities and Free Cash Flow1 (“FCF”) were both $1.7 billion for the three months ended March 31, 2026, compared to $1.8 billion for both metrics during the same period in 2025.
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Share Repurchases**: During the three months ended March 31, 2026, we repurchased 8.1 million shares of Class A common stock for $1.1 billion, leaving $4.5 billion available to repurchase under our share repurchase program.
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Debt Refinancing**: In March 2026, we issued $2.5 billion aggregate principal amount of unsecured senior notes ("Senior Notes"). We utilized approximately $2.0 billion of the net proceeds to fully repay our 0% convertible senior notes due in 2026 (“2026 Notes”), and retained the remaining net proceeds of approximately $500 million for general corporate purposes.
Macroeconomic and Geopolitical Conditions on our Business
As we look forward, we recognize the potential impact of challenging macroeconomic and geopolitical conditions on our business, including inflation, interest rates, foreign currency fluctuations, tariffs and trade controls, wars and other geopolitical conflicts, and potential decreased consumer spending. The conflict in the Middle East has had and is expected to continue to have a slight impact on near-term booking trends, including increased cancellations in Europe, the Middle East, and Africa (“EMEA”) and Asia Pacific. To date, these conditions have not had a material impact on our business, results of operations, cash flows, and financial condition; however, the impact in the future of these macroeconomic and geopolitical conditions on our business, results of operations, cash flows, and financial condition is uncertain and will depend on future developments that we may not be able to accurately predict.
Key Business Metrics and Non-GAAP Financial Measures
We track the following key business metrics and financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) (“non-GAAP financial measures”) to evaluate our operating performance, identify trends, formulate financial projections, and make strategic decisions. Accordingly, we believe that these key business metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance, and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their U.S. GAAP results.
These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with U.S. GAAP, and may be different from similarly titled metrics or measures presented by other companies. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP is provided under the subsection titled “— Adjusted EBITDA Reconciliation” and “— Free Cash
1 A reconciliation of non-GAAP financial measures to the most comparable U.S. GAAP financial measures is provided under the subsection titled “Key Business Metrics and Non-GAAP Financial Measures— Free Cash Flow Reconciliation” below.
Flow Reconciliation” below. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures.
Key Business Metrics
We review the following key business metrics to measure our performance, identify trends, formulate financial projections, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies that may calculate similarly titled metrics in a different way.
The following table summarizes our key business metrics, for each period presented below (in millions, except percentages):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| Nights and Seats Booked | 143 | 156 | 9 | % | |||||||||||||||||||
| Gross Booking Value | $ | 24,515 | $ | 29,187 | 19 | % |
Nights and Seats Booked
Nights and Seats Booked is a key measure of the scale of our platform, which in turn drives our financial performance. Nights and Seats Booked on our platform in a period represents the sum of the total number of nights booked for stays and the total number of seats booked for experiences and services, net of cancellations and alterations that occurred in that period. For example, a booking made on February 15 would be reflected in Nights and Seats Booked for our quarter ended March 31. If, in the example, the booking were canceled on May 15, Nights and Seats Booked would be reduced by the cancellation for our quarter ended June 30. A night can include one or more guests and can be for a listing with one or more bedrooms. Nights and Seats Booked grows as we attract new customers to our platform and as repeat guests increase their activity on our platform. A seat is booked for each participant in an experience or service. Substantially all of the bookings on our platform to date have come from nights. We believe Nights and Seats Booked is a key business metric to help investors and others understand and evaluate our results of operations in the same manner as our management team, as it represents a single unit of transaction on our platform.
During the three months ended March 31, 2026, the increase in Nights and Seats Booked, compared to the same period in the prior year, was driven by growth across all regions despite increased cancellations in EMEA and Asia Pacific from the Middle East conflict, with the strongest growth percentages in Latin America and Asia Pacific, as we continue to focus on international expansion. In addition, we observed a lengthening of lead times across all regions, driven in part by the continued expansion of our deferred payment programs.
Gross Booking Value
Gross Booking Value (“GBV”) represents the dollar value of bookings on our platform in a period and is inclusive of host earnings, service fees, cleaning fees, and taxes, net of cancellations and alterations that occurred during that period. The timing of recording GBV and any related cancellations is similar to that described in the subsection titled “— Key Business Metrics and Non-GAAP Financial Measures — Nights and Seats Booked” above. Revenue from the booking is recognized upon check-in; accordingly, GBV is a leading indicator of revenue. The entire amount of a booking is reflected in GBV during the quarter in which booking occurs, whether the guest pays the entire amount of the booking upfront or elects to use our deferred payment programs. Growth in GBV reflects our ability to attract and retain customers and reflects growth in Nights and Seats Booked.
During the three months ended March 31, 2026, the increase in GBV, compared to the same period in the prior year, was primarily due to an increase in Nights and Seats Booked and ADR. We saw GBV growth across all regions, with the strongest growth percentages in Latin America and Asia Pacific.
Non-GAAP Financial Measures
Our non-GAAP financial measures include Adjusted EBITDA, Adjusted EBITDA Margin, FCF, and FCF Margin, which are described below. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP is provided below. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures. Adjusted EBITDA and Adjusted EBITDA Margin have limitations as a financial measure, should be considered as supplemental in nature, and are not meant as a substitute for the related financial information prepared in accordance with U.S. GAAP. Because of these limitations, Adjusted EBITDA and Adjusted EBITDA Margin should be considered alongside other financial performance measures, including net income and net income margin as well as our other U.S. GAAP results. FCF and FCF Margin have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of other U.S. GAAP financial measures, such as net cash provided by operating activities and net cash provided by operating activities margin. FCF and FCF Margin do not reflect our ability to meet future contractual commitments and may be calculated differently by other companies in our industry, limiting their usefulness as comparative measures.
| Non-GAAP Measure | Definition | Purpose of Non-GAAP Measure | ||||||
| Adjusted EBITDA & Adjusted EBITDA Margin | Adjusted EBITDA: Net income adjusted for: •provision for income taxes, •other income (expense), net, •interest income, •depreciation and amortization, •stock-based compensation expense, •acquisition-related impacts consisting of gains (losses) recognized on changes in the fair value of contingent consideration arrangements, and •settlements and reserves for lodging, withholding, transactional and other non-income taxes where significant uncertainty exists as to how these taxes apply to users of our platform and Airbnb. Adjusted EBITDA Margin: Adjusted EBITDA divided by revenue. | •Enhances comparability on a consistent basis and provides investors with useful insight into the underlying trends of the business. •Used by management to make operating decisions such as evaluating performance, performing strategic planning, and budgeting. | ||||||
| FCF & FCF Margin | FCF: Net cash provided by operating activities less purchases of property and equipment. FCF Margin: FCF divided by revenue. | •Indicator of liquidity that provides information to our management and investors about the amount of cash generated from operations, after purchases of property and equipment, that can be used for strategic initiatives. •Used by management to measure operational performance to assess our ability to generate cash from ongoing business operations, and to make decisions about capital allocation. | ||||||
| Constant currency revenue growth rate | The change in the current period revenue over the prior comparable period where current period foreign currency revenue is translated using the exchange rates of the comparative period. | •Enhances comparability and provides investors with useful insight into the operational changes in revenue. •Used by management for financial and operational decision-making and as a means to evaluate performance by excluding the effects of foreign currency volatility which is not indicative of our core operating results. |
The following table summarizes our non-GAAP financial measures, along with the most directly comparable U.S. GAAP measure (in millions, except percentages):
| Three Months Ended March 31, | |||||||||||||||||
| 2025 | 2026 | ||||||||||||||||
| Net income | $ | 154 | $ | 160 | |||||||||||||
| Net income margin | 7 | % | 6 | % | |||||||||||||
| Adjusted EBITDA | $ | 417 | $ | 519 | |||||||||||||
| Adjusted EBITDA Margin | 18 | % | 19 | % | |||||||||||||
| Net cash provided by operating activities | $ | 1,789 | $ | 1,708 | |||||||||||||
| Net cash provided by operating activities margin | 79 | % | 64 | % | |||||||||||||
| FCF | $ | 1,781 | $ | 1,704 | |||||||||||||
| FCF Margin | 78 | % | 64 | % |
Adjusted EBITDA Reconciliation
The following is a reconciliation of net income to Adjusted EBITDA (in millions, except percentages):
| Three Months Ended March 31, | |||||||||||||||||
| 2025 | 2026 | ||||||||||||||||
| Revenue | $ | 2,272 | $ | 2,678 | |||||||||||||
| Net income | $ | 154 | $ | 160 | |||||||||||||
| Adjusted to exclude the following: | |||||||||||||||||
| Provision for income taxes | 19 | 121 | |||||||||||||||
| Other (income) expense, net | 38 | (40) | |||||||||||||||
| Interest income | (173) | (155) | |||||||||||||||
| Depreciation and amortization | 25 | 22 | |||||||||||||||
| Stock-based compensation expense | 358 | 410 | |||||||||||||||
| Acquisition-related impacts | — | (2) | |||||||||||||||
| Lodging taxes, host withholding taxes, and transactional taxes, net | (4) | 3 | |||||||||||||||
| Adjusted EBITDA | $ | 417 | $ | 519 | |||||||||||||
| Adjusted EBITDA Margin | 18 | % | 19 | % |
The above items are excluded from our Adjusted EBITDA measure because they are non-cash in nature, or because the amount and timing of these items are unpredictable, not driven by core results of operations, and renders comparisons with prior periods and competitors less meaningful.
The increase in Adjusted EBITDA for the three months ended March 31, 2026, compared to the same period in the prior year, was primarily due to revenue growth from an increase in the number of check-ins for Nights and Seats Booked and an increase in ADR.
Free Cash Flow Reconciliation
The following is a reconciliation of net cash provided by operating activities to FCF (in millions, except percentages):
| Three Months Ended March 31, | |||||||||||||||||
| 2025 | 2026 | ||||||||||||||||
| Revenue | $ | 2,272 | $ | 2,678 | |||||||||||||
| Net cash provided by operating activities | $ | 1,789 | $ | 1,708 | |||||||||||||
| Purchases of property and equipment | (8) | (4) | |||||||||||||||
| FCF | $ | 1,781 | $ | 1,704 | |||||||||||||
| FCF Margin | 78 | % | 64 | % | |||||||||||||
Our FCF is impacted by the timing of GBV because we collect our service fees at the time of booking, which is generally before a stay, experience, or service occurs. Funds held on behalf of our customers and amounts payable to our customers do not impact FCF, except interest earned on these funds.
Constant Currency
In addition to revenue growth rates derived from revenue presented in accordance with U.S. GAAP, we disclose the percentage change in our current period revenue from the corresponding prior period by comparing the change in revenue using constant currencies. We present constant currency revenue growth rate information to provide a framework for assessing how our underlying revenue performed excluding the effect of changes in exchange rates. We use the percentage change in constant currency revenues for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe the presentation of revenue on a constant currency basis in addition to the U.S. GAAP presentation helps improve the ability to understand our performance because it excludes the effects of foreign currency volatility that are not indicative of our core operating results.
Seasonality
Our business is seasonal, reflecting typical global travel patterns. In a typical year, Nights and Seats Booked are highest in the first, second, and third quarters and lowest in the fourth quarter, with the peak travel season occurring in the third quarter across North America and EMEA.
GBV generally follows the same seasonal trends as Nights and Seats Booked. Because revenue is recognized when guest check-ins occur, revenue and Adjusted EBITDA have historically been highest in the third quarter and lowest in the first quarter. Holiday timing, such as Easter, and other events can also shift quarterly performance.
Seasonality in GBV also affects FCF. Higher GBV in the first half of the year typically results in increased unearned fees and higher FCF. During the third quarter, GBV is typically lower and check-ins reach their peak, resulting in decreased unearned fees. GBV and FCF are generally the lowest in the fourth quarter.
Results of Operations
The following table sets forth our results of operations (in millions, except percentages):
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2025 | % of Revenue | 2026 | % of Revenue | % Change | ||||||||||||||||||||||||||||
| Revenue | $ | 2,272 | 100 | % | $ | 2,678 | 100 | % | 18 | % | ||||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||||||
| Cost of revenue | 506 | 22 | 581 | 22 | 15 | |||||||||||||||||||||||||||
| Operations and support(1) | 303 | 13 | 326 | 12 | 8 | |||||||||||||||||||||||||||
| Product development(1) | 568 | 25 | 638 | 24 | 12 | |||||||||||||||||||||||||||
| Sales and marketing(1) | 563 | 25 | 751 | 28 | 33 | |||||||||||||||||||||||||||
| General and administrative(1) | 294 | 13 | 296 | 11 | 1 | |||||||||||||||||||||||||||
| Total costs and expenses | 2,234 | 98 | 2,592 | 97 | 16 | |||||||||||||||||||||||||||
| Income from operations | 38 | 2 | 86 | 3 | 126 | |||||||||||||||||||||||||||
| Interest income | 173 | 8 | 155 | 6 | (10) | |||||||||||||||||||||||||||
| Other income (expense), net | (38) | (2) | 40 | 2 | 205 | |||||||||||||||||||||||||||
| Income before income taxes | 173 | 8 | 281 | 11 | 62 | |||||||||||||||||||||||||||
| Provision for income taxes | 19 | 1 | 121 | 5 | 537 | |||||||||||||||||||||||||||
| Net income | $ | 154 | 7 | % | $ | 160 | 6 | % | 4 | % |
(1)Includes stock-based compensation expense as follows (in millions, except percentages):
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2025 | % of Total | 2026 | % of Total | % Change | ||||||||||||||||||||||||||||
| Operations and support | $ | 21 | 6 | % | $ | 25 | 6 | % | 19 | % | ||||||||||||||||||||||
| Product development | 230 | 64 | 263 | 65 | 14 | |||||||||||||||||||||||||||
| Sales and marketing | 44 | 12 | 55 | 13 | 25 | |||||||||||||||||||||||||||
| General and administrative | 63 | 18 | 67 | 16 | 6 | |||||||||||||||||||||||||||
| Stock-based compensation expense | $ | 358 | 100 | % | $ | 410 | 100 | % | 15 | % |
Comparison of the Three Months Ended March 31, 2026 with the Same Period in 2025
Revenue
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Revenue | $ | 2,272 | $ | 2,678 | 18 | % |
Revenue increased $406 million, or 18%, primarily due to an increase in the number of check-ins relating to Nights and Seats Booked and an increase in ADR. On a constant currency basis, revenue increased 15% compared to the same period in the prior year.
Cost of Revenue
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Cost of revenue | $ | 506 | $ | 581 | 15 | % | |||||||||||||||||
| Percentage of revenue | 22 | % | 22 | % |
Cost of revenue increased $75 million, or 15%, primarily due to a $64 million increase in merchant fees and a $12 million increase in chargebacks. The increase in merchant fees was driven by higher net pay-in volumes, which were partially offset by higher payment processor rebates and incentives. The increase in chargebacks was driven by overall growth in GBV and a slight increase in our chargeback rate. These increases were partially offset by a reduction in amortization expenses related to capitalized internal-use software projects.
Operations and Support
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Operations and support | $ | 303 | $ | 326 | 8 | % | |||||||||||||||||
| Percentage of revenue | 13 | % | 12 | % |
Operations and support expense increased $23 million, or 8%, primarily due to a $14 million increase in payroll-related expenses driven by an increase in average headcount and a $3 million increase in customer relations costs related to higher refunds and credits.
Product Development
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Product development | $ | 568 | $ | 638 | 12 | % | |||||||||||||||||
| Percentage of revenue | 25 | % | 24 | % |
Product development expense increased $70 million, or 12%, primarily due to a $69 million increase in payroll-related expenses. This increase was driven by an increase in average headcount and annual compensation costs.
Sales and Marketing
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Brand and performance marketing | $ | 378 | $ | 512 | 35 | % | |||||||||||||||||
| Field operations and policy | 185 | 239 | 29 | % | |||||||||||||||||||
| Total sales and marketing | $ | 563 | $ | 751 | 33 | % | |||||||||||||||||
| Percentage of revenue | 25 | % | 28 | % |
Sales and marketing expense increased $188 million, or 33%, primarily due to a $126 million increase in marketing activities driven by paid growth initiatives in emerging markets and partnerships, a $42 million increase in payroll-related expenses driven by increased average headcount, and a $14 million increase in third-party service provider expenses incurred to support the expansion and optimization of Airbnb Experiences and Services supply.
General and Administrative
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| General and administrative | $ | 294 | $ | 296 | 1 | % | |||||||||||||||||
| Percentage of revenue | 13 | % | 11 | % |
General and administrative expense remained relatively flat, increasing by $2 million, or 1%. This slight change was primarily due to a $7 million increase in professional services expenses, primarily related to legal and tax consulting fees, and a $6 million increase in payroll related expenses driven by increased average headcount, which were largely offset by a $10 million decrease in non-income taxes.
Interest Income
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Interest income | $ | 173 | $ | 155 | (10) | % | |||||||||||||||||
Interest income decreased by $18 million, or 10%, for the three months ended March 31, 2026, primarily due to lower interest rates.
Other Income (Expense), Net
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Other income (expense), net | $ | (38) | $ | 40 | 205 | % | |||||||||||||||||
Other income (expense), net changed $78 million, or 205%, primarily resulting from $70 million in proceeds received following a third-party acquisition of a privately-held company investment with a carrying value of zero, and $32 million net change in impairment charges to privately-held company investments, partially offset by increased interest expense and net foreign exchange losses.
Provision for Income Taxes
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2026 | % Change | |||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Provision for income taxes | $ | 19 | $ | 121 | 537 | % | |||||||||||||||||
| Effective tax rate | 11 | % | 43 | % |
The provision for income taxes increased by $102 million, or 537%, primarily due to a $69 million one-time adjustment of certain deferred tax assets as a result of changes to the CAMT and decreased stock-based compensation deductions. See Note 10, Income Taxes, to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information.
Liquidity and Capital Resources
Sources and Conditions of Liquidity
As of March 31, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term investments totaling $12.0 billion. As of March 31, 2026, cash and cash equivalents totaled $7.0 billion, which included $2.8 billion held by our foreign subsidiaries. Cash and cash equivalents consist of cash on deposit with banks and interest-bearing accounts and highly-liquid securities with an original maturity of 90 days or less. As of March 31, 2026, short-term investments totaled $5.0 billion. Short-term investments primarily consist of highly-liquid investment grade corporate debt securities, time deposits, commercial paper, certificates of deposit, U.S. government and government agency debt securities (“government bonds”), and mortgage-backed and asset-backed securities. These short-term investments do not include funds of $10.6 billion as of March 31, 2026, that were held for bookings in advance of guests completing check-ins, which are recorded separately on our unaudited condensed consolidated balance sheets in funds receivable and amounts held on behalf of customers with a corresponding liability in funds payable and amounts payable to customers.
In March 2026, we issued $2.5 billion aggregate principal amount of Senior Notes, consisting of $850 million of 4.40% senior notes due March 2029, $850 million of 4.65% senior notes due March 2031, and $800 million of 5.25% senior notes due March 2036. We utilized $2.0 billion of the net proceeds to fully repay our outstanding 2026 Notes upon their maturity. The remaining net proceeds of approximately $500 million (less underwriting discounts and offering expenses) were retained for general corporate purposes. See Note 7, Debt, to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information.
We have access to $1.0 billion of commitments and a $200 million sub-limit for the issuance of letters of credit under the 2022 Credit Facility. As of March 31, 2026, no amounts were drawn under our 2022 Credit Facility and outstanding letters of credit totaled $20 million. See Note 7, Debt, to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information.
Our cash and cash equivalents are generally held at large global systemically important banks which are subject to high capital requirements and are required to regularly perform stringent stress tests related to their ability to absorb capital losses. Our cash, cash equivalents, and short-term investments held outside the U.S. may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. However, repatriation of such funds may result in additional tax liabilities. We believe that our existing cash, cash equivalents, and short-term investments balances in the U.S. are sufficient to fund our working capital needs.
Material Cash Requirements
Our principal contractual obligations and commitments consist primarily of our long-term debt and the associated ongoing semi-annual interest payments. During the three months ended March 31, 2026, our long-term material cash requirements changed due to the issuance of $2.5 billion in Senior Notes and the concurrent retirement of $2.0 billion principal amount of our 2026 Notes. The Senior Notes bear fixed interest rates that will materially increase our ongoing semi-annual cash interest obligations. See Note 7, Debt, to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information.
In August 2025, our board of directors approved a new share repurchase program with an authorization to purchase up to an additional $6.0 billion of our Class A common stock. Share repurchases under the share repurchase programs may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, or accelerated share repurchase transactions, or by any combination of such methods. Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements, and other relevant factors. The share repurchase programs do not obligate us to repurchase any specific number of shares and may be modified, suspended, or terminated at any time at our discretion. During the three months ended March 31, 2026, we repurchased 8.1 million shares of Class A common stock for $1.1 billion, through our share repurchase program. As of March 31, 2026, we had $4.5 billion available to repurchase shares of Class A common stock under our share repurchase program.
Cash Flows
The following table summarizes our cash flows (in millions):
| Three Months Ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Net cash provided by operating activities | $ | 1,789 | $ | 1,708 | ||||
| Net cash used in investing activities | (151) | (461) | ||||||
| Net cash provided by financing activities | 2,145 | 2,970 | ||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 207 | (118) | ||||||
| Net increase in cash, cash equivalents, and restricted cash | $ | 3,990 | $ | 4,099 |
Net cash provided by operating activities for the three months ended March 31, 2026 was $1.7 billion. This was primarily due to $1.0 billion provided by net working capital items, including unearned fees, resulting from growth in bookings, and net income of $160 million. Additionally, we had adjustments for non-cash operating expenses primarily consisting of $410 million of stock-based compensation.
While we experienced strong growth in bookings during the three months ended March 31, 2026, net cash provided by operating activities was consistent with the $1.8 billion generated during the same period in the prior year. The growth in GBV was driven in part by increased guest adoption of our deferred payment programs, which allows guests to pay closer to check-in dates rather than at time of booking, which shifts the timing of when net cash provided by operating activities is recognized. For example, while our GBV increased during the three months ended March 31, 2026 compared to the same period in the prior year, our unearned fees remained relatively flat primarily, reflecting the shift in payment timing associated with the increased adoption of these programs.
Net cash used in investing activities for the three months ended March 31, 2026 was $461 million. This was primarily driven by purchases of short-term investments, partially offset by proceeds from the sale and maturity of our short-term and equity investments.
Net cash provided by financing activities for the three months ended March 31, 2026 was $3.0 billion. This was primarily driven by $2.5 billion in net proceeds from the issuance of our new Senior Notes and a $3.7 billion increase in funds payable and amounts payable to customers, which were partially offset by repayment of $2.0 billion of our 2026 Notes, share repurchases of $1.1 billion, and taxes paid related to net share settlement of equity awards of $140 million.
The effect of exchange rate changes on cash, cash equivalents, and restricted cash on our unaudited condensed consolidated statements of cash flows relates to certain assets, principally cash balances held on behalf of customers, that are denominated in currencies other than the functional currency of certain of our subsidiaries. For the three months ended March 31, 2026, we recorded a reduction of $118 million in cash, cash equivalents, and restricted cash, primarily due to the strengthening of the U.S. dollar against major currencies, mainly the Euro and British Pound. The impact of exchange rate changes on cash balances can serve as a natural hedge for the effect of exchange rates on our liabilities to our hosts and guests.
We assess our liquidity in terms of our ability to generate cash to fund our short- and long-term cash requirements. As such, we believe that the cash flows generated from operating activities will meet our anticipated cash requirements in the short-term. In addition to normal working capital requirements, we anticipate that our short- and long-term cash requirements will include share repurchases, introduction of new products and offerings, timing and extent of spending to support our efforts to develop our platform, debt repayments, and expansion of sales and marketing activities. Our future capital requirements, however, will depend on many factors, including, but not limited to our growth, headcount, and ability to attract and retain customers on our platform. Additionally, we may in the future raise additional capital or incur additional indebtedness to continue to fund our strategic initiatives. On a long-term basis, we plan to rely on either our access to the capital markets or our credit facility for any long-term funding not provided by operating cash flows and cash on hand. In the event that additional financing is required from outside sources, we may seek to raise additional funds at any time through equity, equity-linked arrangements, and/or debt, which may not be available on favorable terms, or at all. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be materially adversely affected. Our liquidity is subject to various risks including the risks identified in Item 3. "Quantitative and Qualitative Disclosures about Market Risk" of Part I of this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. See Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Annual Report for a discussion of the assumptions and judgments involved in our critical accounting estimates. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
Recent Accounting Pronouncements
See Note 2, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
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