Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2020
- Return on Equity (ROE) since 2020
- Current Ratio since 2020
- Price to Book Value (P/BV) since 2020
- Analysis of Debt
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Profitability Ratios (Summary)
Airbnb Inc., profitability ratios
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).
- Gross profit margin
- The gross profit margin shows a consistent upward trend over the five-year period, rising from 74.07% in 2020 to 83.08% in 2024. This steady increase indicates improving efficiency in managing the cost of goods sold relative to revenue, reflecting stronger profitability at the gross level.
- Operating profit margin
- The operating profit margin improved markedly from a negative margin of -106.27% in 2020 to a positive 7.17% in 2021. It continued to increase to 21.45% in 2022, then experienced a decline to 15.31% in 2023 before rising again to 23% in 2024. Overall, this suggests a significant turnaround in operating profitability, though with some fluctuations after initial recovery.
- Net profit margin
- The net profit margin mirrors the trend seen in operating profitability but with sharper changes. From a substantial loss of -135.71% in 2020, it recovered to a marginally negative figure of -5.88% in 2021, then achieved positive net margins of 22.54% in 2022 and peaked at 48.32% in 2023, before declining to 23.85% in 2024. The sharp increase followed by a decrease suggests volatility in bottom-line profitability despite overall improvement compared to the initial period.
- Return on equity (ROE)
- ROE improved dramatically, moving from a negative -158% in 2020 to -7.37% in 2021, then turning strongly positive at 34.05% in 2022 and reaching a high of 58.69% in 2023 before dropping to 31.48% in 2024. This reflects enhanced effectiveness in generating returns for shareholders, although the decline in 2024 indicates some loss of momentum.
- Return on assets (ROA)
- ROA shows a similar pattern to ROE but with lower magnitude changes. It moved from -43.7% in 2020 to -2.57% in 2021, then improved significantly to 11.8% in 2022 and 23.21% in 2023, followed by a reduction to 12.63% in 2024. This indicates increasing efficiency in asset utilization to generate profits, albeit with a decrease in the most recent year.
Return on Sales
Return on Investment
Gross Profit Margin
Airbnb Inc., gross 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) | ||||||
| Gross profit | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| 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 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue demonstrates a consistent upward trajectory over the five-year period. Starting at $3,378 million at the end of 2020, revenue increased substantially each subsequent year, reaching $11,102 million by the end of 2024. This reflects a strong and sustained growth rate, indicating expanding business operations and market demand.
- Gross Profit Evolution
- Gross profit has also shown significant growth, progressing from $2,502 million in 2020 to $9,224 million in 2024. The increase mirrors the expansion in revenue, with gross profit more than tripling over the period. This suggests effective cost management and operational efficiency improvements alongside increasing sales volumes.
- Gross Profit Margin Analysis
- The gross profit margin has improved steadily, moving from 74.07% in 2020 to 83.08% in 2024. This upward trend in margin percentage indicates enhanced profitability at the gross level, implying either improved pricing power, reductions in cost of goods sold, or a combination of both.
- Overall Financial Performance
- Overall, the data depicts robust financial performance with consistent revenue growth, expanding gross profit, and improving gross profit margins over the analyzed five-year span. This suggests a positive operational and strategic position, with increasing efficiency and margin enhancement contributing to stronger financial health.
Operating Profit Margin
Airbnb Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income (loss) from operations | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Consumer Services | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Discretionary | ||||||
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 2024 Calculation
Operating profit margin = 100 × Income (loss) from operations ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited a significant and positive trend over the observed period. Initially, the company experienced a substantial operating loss, but subsequently demonstrated considerable improvement in profitability.
- Operating Profit Margin Trend
- In 2020, the operating profit margin was significantly negative, registering at -106.27%. This indicates substantial operational losses relative to revenue. A dramatic shift occurred in 2021, with the operating profit margin turning positive at 7.17%, signaling a recovery in operational performance. The margin continued to improve substantially in 2022, reaching 21.45%, demonstrating a strong increase in profitability. A slight decrease was observed in 2023, with the margin settling at 15.31%. However, the trend reversed in 2024, with the operating profit margin increasing to 23.00%, representing the highest value within the analyzed timeframe.
The progression from a large negative margin to a consistently positive and increasing margin suggests successful implementation of strategies to control costs and/or increase revenue. The fluctuation between 2022 and 2023, followed by a rebound in 2024, warrants further investigation to understand the underlying drivers of these changes. The overall trend indicates strengthening operational efficiency and profitability.
- Relationship to Revenue
- The increase in operating profit margin coincides with a consistent increase in revenue throughout the period. Revenue grew from US$3,378 million in 2020 to US$11,102 million in 2024. This revenue growth likely contributed to the improved operating profit margin, potentially through economies of scale or increased pricing power.
The company’s ability to translate revenue growth into improved operating profitability is a positive indicator of its financial health and operational effectiveness.
Net Profit Margin
Airbnb Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Consumer Services | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Discretionary | ||||||
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 2024 Calculation
Net profit margin = 100 × Net income (loss) ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited significant fluctuations over the observed period. Initially negative, it demonstrated substantial improvement before stabilizing. A detailed examination of the trend reveals a clear progression from substantial losses to robust profitability, followed by a moderate decline in the most recent year.
- Net Profit Margin Trend (2020-2024)
- In 2020, the net profit margin was significantly negative, registering at -135.71%. This indicates substantial losses relative to revenue. A marked improvement occurred in 2021, with the net profit margin increasing to -5.88%, suggesting a reduction in losses.
- The year 2022 witnessed a substantial positive shift, with the net profit margin rising to 22.54%. This signifies the company achieved profitability, generating a considerable profit for each dollar of revenue.
- Further improvement was observed in 2023, as the net profit margin reached a peak of 48.32%. This represents a period of exceptionally strong profitability.
- However, in 2024, the net profit margin decreased to 23.85%. While still positive and indicative of profitability, this represents a decline from the previous year’s high, suggesting a potential moderation in earnings performance.
The progression from a large negative margin to a high positive margin, and then a slight decrease, suggests a company that successfully navigated initial challenges, achieved significant growth and profitability, and is now potentially entering a phase of more moderate, but still positive, earnings.
- Relationship to Revenue
- The improvement in net profit margin correlates with increasing revenue. Revenue grew consistently from US$3,378 million in 2020 to US$11,102 million in 2024. The ability to translate revenue growth into improved profitability, particularly between 2020 and 2023, is a positive indicator.
- The slight decrease in net profit margin in 2024, despite continued revenue growth, suggests that expenses may have increased at a faster rate than revenue, or that other factors impacted earnings.
Overall, the net profit margin trend demonstrates a significant turnaround and subsequent stabilization. Continued monitoring will be necessary to determine if the 2024 decline is a temporary fluctuation or the beginning of a new trend.
Return on Equity (ROE)
Airbnb Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| ROE, Sector | ||||||
| Consumer Services | ||||||
| ROE, Industry | ||||||
| Consumer Discretionary | ||||||
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 2024 Calculation
ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited significant fluctuations over the observed period. Initially, the company experienced substantial negative ROE, followed by a period of improvement and subsequent moderation.
- Net Income Trend
- Net income demonstrated a dramatic shift from significant losses in 2020 and 2021 to profitability in 2022 and 2023. While remaining profitable in 2024, net income decreased compared to the prior year.
- Stockholders’ Equity Trend
- Stockholders’ equity consistently increased throughout the period, indicating growing investment and retained earnings. The rate of increase was most pronounced between 2020 and 2023, with a more modest increase observed between 2023 and 2024.
- ROE Analysis
- In 2020, the ROE was significantly negative, at -158.00%, reflecting substantial net losses against the equity base. A considerable improvement was seen in 2021, with the ROE moving to -7.37%, indicating a reduction in losses. The ROE turned positive in 2022, reaching 34.05%, driven by the return to profitability. Further improvement occurred in 2023, with the ROE reaching a peak of 58.69%, suggesting efficient utilization of equity to generate profits. However, the ROE decreased to 31.48% in 2024, coinciding with the decline in net income, despite continued growth in stockholders’ equity. This suggests that while the company remains profitable and is effectively leveraging equity, the rate of return is diminishing.
The observed trend in ROE suggests a recovery and growth phase followed by a stabilization. The decrease in ROE in the most recent year warrants further investigation to determine the underlying causes and potential implications for future performance.
Return on Assets (ROA)
Airbnb Inc., ROA 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) | ||||||
| Net income (loss) | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| ROA, Sector | ||||||
| Consumer Services | ||||||
| ROA, Industry | ||||||
| Consumer Discretionary | ||||||
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 2024 Calculation
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited a significant improvement over the observed period. Initially negative, the ROA trended positively, peaking in 2023 before experiencing a moderate decline in the most recent year.
- Net Income Impact
- Net income demonstrated a substantial shift from significant losses in 2020 and 2021 to profitability beginning in 2022. This positive trajectory in net income is a primary driver of the ROA improvement. While net income increased from US$1,893 million in 2022 to US$4,792 million in 2023, it decreased to US$2,648 million in 2024, contributing to the ROA decline in that year.
- Asset Base Evolution
- Total assets increased consistently throughout the period, growing from US$10,491 million in 2020 to US$20,959 million in 2024. The rate of asset growth slowed between 2023 and 2024. This asset expansion, coupled with improving net income, contributed to the overall ROA increase, although the slower asset growth in the final year partially offset the impact of the net income decrease.
- ROA Trend Analysis
- The ROA began at -43.70% in 2020, reflecting substantial losses relative to the asset base. It improved to -2.57% in 2021, indicating a reduction in losses. A significant positive shift occurred in 2022, with the ROA reaching 11.80%. The ROA peaked at 23.21% in 2023, demonstrating strong profitability relative to assets. In 2024, the ROA decreased to 12.63%, suggesting a moderation in profitability despite continued asset growth.
The observed fluctuations in ROA are closely linked to the interplay between net income and the size of the asset base. The company’s ability to generate profits from its assets improved considerably, but the most recent year indicates a potential stabilization or slight weakening of this relationship.