Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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Economic Profit
Airbnb Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial performance, as measured by economic profit, demonstrates a significant improvement over the observed period. Initially, the company experienced substantial economic losses, which have progressively diminished and transitioned into positive economic profit.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT began at a substantial loss in 2020, then exhibited strong growth, becoming positive in 2021 and continuing to increase through 2024. The largest year-over-year increase occurred between 2022 and 2024, suggesting accelerating operational profitability. While NOPAT decreased slightly from 2022 to 2023, it recovered strongly in the following year.
- Cost of Capital
- The cost of capital remained relatively stable throughout the period, fluctuating within a narrow range between 16.22% and 16.43%. This consistency suggests that the company’s risk profile, as perceived by investors, did not undergo substantial changes during these years.
- Invested Capital
- Invested capital increased from 2020 to 2022, indicating expansion of the company’s asset base. A decrease was observed from 2022 to 2023, followed by a modest increase in 2024. This suggests potential optimization of capital allocation or divestitures in the short term, followed by renewed investment.
- Economic Profit
- Economic profit mirrored the trend in NOPAT. A large negative value in 2020 represented a significant shortfall in returns relative to the cost of capital. This deficit narrowed considerably in 2021 and became positive in 2022, indicating that the company generated returns exceeding its cost of capital. Economic profit continued to grow through 2024, demonstrating sustained value creation.
The progression from substantial economic losses to consistent economic profit highlights a positive shift in the company’s ability to generate returns that exceed its cost of capital. The increasing NOPAT, coupled with a stable cost of capital, drove this improvement. Fluctuations in invested capital warrant further investigation to understand the underlying capital allocation strategies.
Net Operating Profit after Taxes (NOPAT)
Airbnb Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in customer receivable reserve.
3 Addition of increase (decrease) in unearned fees.
4 Addition of increase (decrease) in equity equivalents to net income (loss).
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income (loss).
8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
- Net Income (Loss)
- The net income shows a significant improvement over the five-year period. In 2020, there was a substantial loss of $4,585 million, which decreased markedly to a loss of $352 million in 2021. By 2022, the company achieved positive net income of $1,893 million. This positive trend continued with a peak net income of $4,792 million in 2023, followed by a decline to $2,648 million in 2024. Overall, the data reflect a recovery from heavy losses to profitability, although with some reduction in earnings in the final year.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT also demonstrates a strong turnaround, starting with a negative figure of $4,675 million in 2020, indicating operating challenges. In 2021, the company reversed to a positive NOPAT of $465 million, which increased significantly to $2,070 million in 2022. There was a slight decrease in 2023 to $1,681 million, followed by an increase to $2,644 million in 2024. This suggests the company improved its core operating profitability substantially, though with some variability in the middle years. The upward trend in NOPAT aligns broadly with improvements in net income, affirming enhanced operational efficiency and tax management over the period.
Cash Operating Taxes
Airbnb Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Provision for (benefit from) income taxes
- The provision for income taxes exhibits significant volatility over the analyzed period. Initially, there was a tax benefit of US$ 97 million at the end of 2020. This shifted to a positive provision of US$ 52 million in 2021, followed by an increase to US$ 96 million in 2022. A remarkable change occurred in 2023, with a substantial tax benefit of US$ 2,690 million, indicating a large reversal or credit. However, this was followed by a reversion to a positive income tax provision of US$ 683 million in 2024. The fluctuation suggests irregularities or extraordinary items impacting the tax expenses during these years.
- Cash operating taxes
- Cash operating taxes show an overall upward trend though with some irregularities in magnitude. Starting from a negative figure of US$ 36 million in 2020, which may reflect tax refunds or credits, the amount increased sharply to US$ 139 million in 2021. Thereafter, it declined to US$ 68 million in 2022 and decreased further to US$ 56 million in 2023. In 2024, the figure reversed the downward trend and increased to US$ 88 million. The pattern in cash taxes paid is less volatile than the provision for taxes but demonstrates variability that may be influenced by the company's operational profitability and tax planning strategies.
Invested Capital
Airbnb Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of unearned fees.
5 Addition of equity equivalents to stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of short-term investments.
The data reflects the financial position over five consecutive years. Several key trends emerge from the analysis of debt, equity, and invested capital figures.
- Total Reported Debt & Leases
- Debt and lease obligations remain relatively stable, fluctuating slightly but generally around the range of US$2.3 billion to US$2.4 billion. The peak is observed in 2021 at US$2.418 billion, followed by a gradual decline through the subsequent years, ending at US$2.294 billion in 2024. This suggests a consistent management of debt levels with no significant increase in financial leverage.
- Stockholders’ Equity
- Equity shows a strong upward trend over the five years, moving from US$2.902 billion in 2020 to US$8.412 billion in 2024. The growth is particularly notable between 2022 and 2023, where equity increased substantially from US$5.560 billion to US$8.165 billion, indicating capital infusion, retained earnings accumulation, or valuation gains strengthening the company's net worth.
- Invested Capital
- Invested capital demonstrates variability with growth from US$4.764 billion in 2020 to US$6.849 billion in 2022, then a decline to US$5.829 billion in 2023, followed by a slight recovery to US$6.117 billion in 2024. This pattern suggests fluctuations possibly due to changes in working capital, asset acquisitions, or disposals impacting the capital invested in business operations.
Overall, the financial structure shows an increase in shareholder equity reinforcing the balance sheet strength, while debt levels remain managed and stable. Invested capital experiences some volatility but maintains a generally upward trajectory over the entire period, reflecting ongoing investment activities.
Cost of Capital
Airbnb Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Airbnb Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The economic spread ratio demonstrates a significant improvement over the observed period. Initially negative, the ratio transitions to positive values and exhibits increasing strength. This suggests a growing ability to generate returns exceeding the cost of capital.
- Economic Spread Ratio
- In 2020, the economic spread ratio is reported at -114.58%, indicating that returns were substantially below the cost of invested capital. A considerable improvement is seen in 2021, with the ratio increasing to -8.27%, suggesting a narrowing gap between returns and capital costs.
- The year 2022 marks a turning point, as the economic spread ratio becomes positive at 13.99%, signifying that returns are now exceeding the cost of capital. This positive trend continues into 2023, with the ratio reaching 12.56%.
- Further growth is observed in 2024, with the economic spread ratio increasing to 27.00%. This represents the largest value within the observed period and indicates a substantial improvement in the company’s ability to generate value for investors.
The economic spread ratio’s progression closely mirrors the trend in economic profit. The shift from negative economic profit in 2020 and 2021 to positive economic profit in 2022, 2023, and 2024 is directly reflected in the increasing economic spread ratio. This correlation suggests that improvements in operational efficiency and profitability are driving the enhanced value creation.
Invested capital generally increased from 2020 to 2022, then decreased in 2023 before increasing slightly in 2024. Despite the fluctuations in invested capital, the economic spread ratio consistently improved, indicating that the company is becoming more efficient in utilizing its capital to generate returns.
Economic Profit Margin
Airbnb Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in unearned fees | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The economic profit margin demonstrates a significant improvement over the observed period. Initially negative, the metric transitions to positive values, indicating increasing value creation for stakeholders. This progression is closely linked to the evolution of economic profit and adjusted revenue.
- Economic Profit Margin Trend
- In 2020, the economic profit margin is substantially negative, registering at -175.42%. This reflects a considerable shortfall in returns relative to the cost of capital. A marked improvement is evident in 2021, with the margin narrowing to -7.44%, suggesting a reduction in the gap between returns and capital costs. The year 2022 marks a turning point, as the economic profit margin becomes positive at 11.04%, indicating that the company is generating returns exceeding its cost of capital. This positive trend continues into 2023, with a margin of 7.21%, although it represents a slight decrease from the prior year. The most recent year, 2024, shows further strengthening, with the economic profit margin reaching 14.63%, the highest value observed within the period.
The economic profit margin’s positive trajectory aligns with the growth in both economic profit and adjusted revenue. The substantial increase in adjusted revenue from US$3,111 million in 2020 to US$11,291 million in 2024 is a key driver of this improvement. Simultaneously, the shift from a negative economic profit of -US$5,458 million in 2020 to a positive US$1,652 million in 2024 demonstrates a successful turnaround in profitability relative to the capital employed.
- Relationship to Economic Profit and Adjusted Revenue
- The economic profit margin is calculated as economic profit divided by adjusted revenue. The observed increase in the margin is attributable to both the increasing economic profit and the growing adjusted revenue. While the margin experienced a slight dip between 2022 and 2023, the overall trend indicates a strengthening ability to generate economic profit from each dollar of adjusted revenue.
The consistent growth in the economic profit margin over the latter part of the period suggests improved operational efficiency, effective capital allocation, or a combination of both. Continued monitoring of this metric will be crucial to assess the sustainability of this positive trend.