Airbnb Inc (ABNB)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,553,000	1,627,000	1,598,000	1,624,000	1,518,000	2,249,000	1,956,000	1,802,000	1,802,000	1,642,250	1,291,223	870,945	429,000
Interest expense (ttm)	US$ in thousands	0	71,000	77,000	79,000	83,000	17,071	16,071	22,071	24,071	21,519	23,168	21,688	437,599
Interest coverage		—	22.92	20.75	20.56	18.29	131.74	121.71	81.65	74.86	76.32	55.73	40.16	0.98

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,553,000K ÷ $0K
= —

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.

Looking at Airbnb Inc's interest coverage over the past few quarters:

- In December 2021, the interest coverage ratio was quite low at 0.98, suggesting that the company's earnings were just enough to cover its interest expenses.
- However, this ratio improved significantly in the subsequent quarters, reaching 40.16 in March 2022, 55.73 in June 2022, and further increasing to 76.32 by September 2022.
- The interest coverage ratio remained relatively stable around the 70s and 80s range for the rest of 2022 and into 2023, indicating strong earnings relative to interest expenses.
- In December 2023, the interest coverage ratio dropped to 18.29, suggesting a potential decline in earnings compared to interest payments, which may raise concerns about the company's ability to meet debt obligations.
- The ratio improved slightly in the quarters following December 2023, reaching 22.92 in September 2024, indicating some recovery in earnings relative to interest expenses.

Overall, while Airbnb showed a strong ability to cover its interest payments in most quarters, there was a significant drop in the ratio in December 2023, which may require further analysis to understand the reasons behind this decline and its potential implications for the company's financial health.