Airbnb Inc (ABNB)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Gross profit margin | 83.08% | 82.83% | 82.02% | 79.28% |
| Operating profit margin | 23.00% | 15.31% | 21.61% | 7.69% |
| Pretax margin | 30.00% | 21.20% | 23.86% | -5.38% |
| Net profit margin | 23.85% | 48.32% | 22.71% | -6.31% |
Airbnb Inc's profitability ratios have shown a positive trend over the years based on the provided data. The gross profit margin, a key indicator of a company's efficiency in generating profit from its core operations, has steadily increased from 79.28% in December 31, 2021, to 83.08% by December 31, 2024. This suggests that Airbnb has been able to improve its pricing strategies, streamline operations, or reduce costs effectively.
Similarly, the operating profit margin, indicating the proportion of revenue that translates into profit after accounting for operating expenses, has shown significant improvement, rising from 7.69% in December 31, 2021, to 23.00% by December 31, 2024. This signifies Airbnb's success in managing its operating costs and enhancing operational efficiency.
The pretax margin, reflecting the percentage of revenue that remains as profit after accounting for all expenses but before taxes, has also exhibited a positive trend, increasing from -5.38% in December 31, 2021, to 30.00% by December 31, 2024. This sharp improvement indicates Airbnb's ability to control non-operating expenses and generate higher profits before tax implications.
Finally, the net profit margin, representing the percentage of revenue that translates into net income, has fluctuated but generally improved, reaching 23.85% by December 31, 2024, compared to -6.31% in December 31, 2021. This indicates that Airbnb has effectively managed its tax obligations and other non-operating expenses to boost its bottom line profitability.
In conclusion, Airbnb Inc's profitability ratios have shown a positive trajectory over the years, indicating improved operational efficiency, cost management, and overall financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.18% | 7.35% | 11.24% | 3.13% |
| Return on assets (ROA) | 12.63% | 23.21% | 11.80% | -2.57% |
| Return on total capital | 24.53% | 14.95% | 23.88% | 6.35% |
| Return on equity (ROE) | 31.48% | 58.69% | 34.05% | -7.37% |
Based on the provided data, let's analyze Airbnb Inc's profitability ratios for the years ending December 31, 2021, 2022, 2023, and 2024:
1. Operating Return on Assets (Operating ROA):
- In 2021, the Operating ROA was 3.13%, indicating that Airbnb generated a return of 3.13 cents for every dollar of assets from its core operations.
- In 2022, the Operating ROA significantly improved to 11.24%, reflecting enhanced operational efficiency in generating profit from its assets.
- In 2023, the Operating ROA decreased to 7.35%, possibly due to changes in the business environment or operational factors.
- By 2024, the Operating ROA rebounded to 12.18%, showcasing a positive trend in asset utilization and operational performance.
2. Return on Assets (ROA):
- The ROA in 2021 was -2.57%, indicating a loss attributed to the assets employed by Airbnb.
- In 2022, the ROA turned positive at 11.80%, suggesting a turnaround in utilizing assets to generate profit.
- By 2023, the ROA improved significantly to 23.21%, indicating efficient asset management and profitability.
- In 2024, the ROA slightly decreased to 12.63%, but still remained positive, reflecting Airbnb's ability to generate profit relative to its total assets.
3. Return on Total Capital:
- The Return on Total Capital in 2021 stood at 6.35%, representing the return generated on the total capital invested in the company.
- By 2022, the Return on Total Capital surged to 23.88%, reflecting higher returns on the total capital employed.
- In 2023, the Return on Total Capital decreased to 14.95%, possibly due to changes in the capital structure or investment decisions.
- In 2024, the Return on Total Capital improved to 24.53%, indicating effective utilization of total invested capital to generate returns.
4. Return on Equity (ROE):
- In 2021, the Return on Equity was -7.37%, indicating a negative return for equity holders.
- By 2022, the ROE significantly improved to 34.05%, suggesting a positive return on equity investments.
- In 2023, the ROE further increased to 58.69%, reflecting Airbnb's ability to generate higher returns for its equity holders.
- By 2024, the ROE decreased to 31.48%, but still demonstrated a healthy return for equity investors compared to the previous year.
Overall, the profitability ratios show a mixed performance for Airbnb Inc over the years, with improvements in operational efficiency, asset management, and returns to investors. It is essential for investors and stakeholders to monitor these ratios to assess the company's profitability and performance effectively.