Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
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Airbnb Inc. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2020
- Analysis of Debt
- Aggregate Accruals
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Return on Invested Capital (ROIC)
Airbnb Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The analysis reveals a significant fluctuation in Return on Invested Capital (ROIC) over the five-year period. Net operating profit after taxes (NOPAT) and invested capital both demonstrate changes, contributing to the observed ROIC trends.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT increased substantially from US$465 million in 2021 to US$2,070 million in 2022. A decrease followed in 2023, with NOPAT reported at US$1,681 million. Subsequent recovery is evident in 2024 and 2025, reaching US$2,644 million and US$2,486 million respectively. While 2025 NOPAT is slightly lower than 2024, it remains considerably higher than the 2021 and 2023 levels.
- Invested Capital
- Invested capital increased from US$5,866 million in 2021 to US$6,894 million in 2022. A slight decrease was recorded in 2023, falling to US$5,911 million. Invested capital then increased to US$6,133 million in 2024 before decreasing to US$5,761 million in 2025. The fluctuations in invested capital are less pronounced than those observed in NOPAT.
- Return on Invested Capital (ROIC)
- ROIC began at 7.92% in 2021. A dramatic increase occurred in 2022, reaching 30.02%. ROIC remained high in 2023 at 28.43%, before experiencing a substantial rise to 43.11% in 2024. ROIC remained stable in 2025, at 43.16%. The trend indicates a significant improvement in the efficiency with which capital is deployed to generate profits, particularly from 2021 to 2024, followed by stabilization at a high level.
The substantial increase in ROIC from 2021 to 2022 is primarily driven by the significant growth in NOPAT, while the increase in invested capital was more moderate. The continued high ROIC in 2024 and 2025, despite a slight decrease in NOPAT in 2025, suggests improved capital efficiency or a more favorable relationship between profits and capital employed. The decrease in invested capital in 2025 may also contribute to the sustained high ROIC.
Decomposition of ROIC
Airbnb Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2025 | = | × | × | ||||
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period demonstrates a significant evolution in financial performance, particularly concerning return on invested capital. This performance is driven by changes in operating profitability, capital efficiency, and tax effects. A decomposition of return on invested capital reveals key trends in these underlying components.
- Operating Profit Margin (OPM)
- The operating profit margin experienced substantial volatility. It increased markedly from 9.31% in 2021 to 24.64% in 2022, before declining to 17.09% in 2023. A subsequent recovery to 24.19% occurred in 2024, followed by a slight decrease to 20.97% in 2025. This suggests fluctuating operational efficiency or pricing power over the analyzed timeframe.
- Turnover of Capital (TO)
- The turnover of capital exhibits a consistent upward trend. Starting at 1.11 in 2021, it rose to 1.26 in 2022, then accelerated to 1.72 in 2023. This growth continued with values of 1.84 in 2024 and 2.15 in 2025, indicating increasing efficiency in utilizing capital to generate revenue.
- Effective Cash Tax Rate Adjustment (1 – CTR)
- The adjustment for the effective cash tax rate remained consistently high throughout the period, ranging between 76.96% and 96.81%. A slight decline is observed in 2025 to 95.88%, but the overall impact of taxes on net operating profit after tax remains minimal.
- Return on Invested Capital (ROIC)
- Return on invested capital shows a dramatic increase over the period. From 7.92% in 2021, it surged to 30.02% in 2022, and then to 28.43% in 2023. Further growth occurred in 2024, reaching 43.11%, with a slight increase to 43.16% in 2025. This substantial improvement in ROIC is attributable to the combined effects of increasing operating profit margin and, more significantly, the accelerating turnover of capital. The relatively stable tax adjustment factor contributes to the overall positive trend.
In summary, the observed increase in return on invested capital is primarily driven by improvements in how efficiently capital is deployed, as evidenced by the rising turnover ratio. While the operating profit margin experienced fluctuations, its contribution, alongside the consistent tax factor, supports the overall positive trajectory of ROIC.
Operating Profit Margin (OPM)
Airbnb Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in unearned fees | ||||||
| Adjusted revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited significant fluctuation over the five-year period. Initial values increased substantially before stabilizing and then decreasing slightly. Net operating profit before taxes generally increased, though with a notable decline between 2022 and 2023, followed by subsequent recovery.
- Operating Profit Margin (OPM)
- The operating profit margin began at 9.31% in 2021. A marked increase was observed in 2022, reaching 24.64%. This represents a substantial improvement in profitability. However, the OPM decreased to 17.09% in 2023, indicating a loss of some profitability efficiency. A recovery occurred in 2024, with the OPM rising to 24.19%, nearly matching the prior year’s high. The most recent year, 2025, shows a slight decrease to 20.97%, suggesting a potential stabilization at a level below the 2022 and 2024 peaks.
- Net Operating Profit Before Taxes (NOPBT) and Adjusted Revenue Relationship
- Adjusted revenue demonstrated consistent growth throughout the period, increasing from US$6,488 million in 2021 to US$12,368 million in 2025. While NOPBT generally followed an upward trend, the rate of increase did not consistently align with revenue growth. The decline in NOPBT from 2022 to 2023, despite continued revenue growth, contributed to the decrease in OPM during that year. The subsequent increase in NOPBT from 2023 to 2024, coupled with further revenue growth, drove the OPM back up. The slower growth in NOPBT in 2025, relative to revenue, resulted in a slight decrease in OPM.
Overall, the company experienced a period of rapid profitability improvement followed by some volatility. While revenue consistently increased, the operating profit margin’s performance suggests potential sensitivity to factors impacting cost control or pricing power. The recent trend indicates a possible stabilization of profitability, but at a level somewhat below the highest achieved values.
Turnover of Capital (TO)
Airbnb Inc., TO calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in unearned fees | ||||||
| Adjusted revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Invested capital. See details »
2 2025 Calculation
TO = Adjusted revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The analysis reveals a consistent upward trend in the turnover of capital over the five-year period. This indicates increasing efficiency in generating revenue from the company’s invested capital. Adjusted revenue demonstrates a steady increase annually, while invested capital fluctuates, contributing to the observed trend in capital turnover.
- Turnover of Capital (TO)
- The turnover of capital exhibits a clear increasing trajectory, rising from 1.11 in 2021 to 2.15 in 2025. This represents a substantial improvement in the company’s ability to generate sales for each dollar of capital employed. The most significant increase occurred between 2022 and 2023, jumping from 1.26 to 1.72, and continued at a strong pace through 2025.
- Revenue Trend
- Adjusted revenue increased consistently throughout the period, moving from US$6,488 million in 2021 to US$12,368 million in 2025. This growth in revenue is a primary driver of the increasing turnover of capital. The rate of revenue growth appears relatively stable year-over-year.
- Invested Capital Trend
- Invested capital experienced an initial increase from US$5,866 million in 2021 to US$6,894 million in 2022. However, it subsequently decreased in 2023 to US$5,911 million, and experienced further fluctuations, reaching US$5,761 million in 2025. This relative stability, and eventual decrease, in invested capital, coupled with rising revenue, significantly contributes to the observed improvement in capital turnover.
In summary, the increasing turnover of capital suggests improved operational efficiency and a more effective utilization of capital resources. The combination of growing revenue and relatively stable invested capital is a positive indicator of financial performance.
Effective Cash Tax Rate (CTR)
Airbnb Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited considerable fluctuation over the five-year period. Cash operating taxes demonstrated an initial decrease followed by a gradual increase, while net operating profit before taxes (NOPBT) showed a more substantial increase initially, then a slight decline, and a subsequent recovery.
- Effective Cash Tax Rate (CTR)
- The CTR began at 23.04% in 2021. A significant decrease was observed in 2022, falling to 3.19%. This downward trend continued marginally into 2023, reaching 3.21%. The rate remained relatively stable in 2024 at 3.22%, before increasing to 4.12% in 2025. This suggests a period of tax efficiency followed by a return towards a higher tax burden.
- Cash Operating Taxes
- Cash operating taxes were 139 US$ millions in 2021. These taxes decreased substantially to 68 US$ millions in 2022, coinciding with the drop in the CTR. A further decrease to 56 US$ millions occurred in 2023. Subsequently, cash operating taxes increased to 88 US$ millions in 2024 and continued to rise to 107 US$ millions in 2025. This increase aligns with the rising CTR in the final year of the period.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT experienced a significant increase from 604 US$ millions in 2021 to 2,138 US$ millions in 2022. A slight decrease was noted in 2023, with NOPBT falling to 1,737 US$ millions. The value then recovered to 2,732 US$ millions in 2024 and remained relatively stable at 2,593 US$ millions in 2025. The fluctuations in NOPBT, combined with the changes in cash operating taxes, directly influenced the observed CTR trends.
The relationship between NOPBT and cash operating taxes indicates that changes in the CTR are not solely driven by tax rate adjustments, but also by the company’s profitability. The low CTR in 2022 and 2023 appears to be a result of lower taxes relative to significantly increased profits, while the increase in 2025 suggests a higher tax liability on a relatively stable profit base.