How ABNB (Airbnb) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a global travel marketplace like ABNB (Airbnb) makes money is essential for investors and anyone interested in the business of online travel and hospitality. In this post, we break down Airbnb's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick ABNB Overview

Airbnb operates a leading online marketplace that connects hosts offering accommodations and experiences with guests seeking unique stays and travel activities worldwide. Revenue comes primarily from service fees charged to both guests and hosts on bookings. The business is geographically diversified, with major segments in EMEA (Europe, Middle East & Africa), North America, Asia Pacific, and Latin America.

Revenue Breakdown

• Total Revenue (Q3 2025): $4.10B (+9.7% YoY)
  • EMEA Revenue: $1.97B (48.1% of total, +14.1% YoY)
  • North America Revenue: $1.62B (39.5% of total, +3.0% YoY)
  • Asia Pacific Revenue: $272M (6.6% of total, +15.7% YoY)
  • Latin America Revenue: $235M (5.7% of total, +18.1% YoY)
  • Growth is powered by robust demand in EMEA and Latin America, as well as continued expansion in Asia Pacific.

Gross Profit and Margins

• Gross Profit: $3.55B (86.6% gross margin)
  • Cost of Revenue: $549M (+18.1% YoY)
  • Airbnb maintains robust margins due to its scalable digital platform, asset-light model, and efficient cost structure.
• Most costs come from payment processing, customer support, and platform infrastructure.

Operating Income and Expenses

• Operating Income: $1.63B (+6.6% YoY, 39.7% margin)
• Operating Expenses: $1.92B (+10.3% YoY)
  • R&D: $587M (+12.0% YoY, 14.3% of revenue) — Focused on platform innovation, AI-driven personalization, and new product features.
  • SG&A: $969M (+14.1% YoY, 23.7% of revenue) — Includes global sales, marketing, administrative, and customer service costs.
  • Airbnb continues to prioritize innovation and invest in growth while maintaining operational efficiency.

Net Income

• Pre-Tax Income: $1.79B (+3.3% YoY, 43.8% margin)
• Income Tax: $418M (23.3% effective tax rate)
• Net Income: $1.37B (+0.4% YoY, 33.6% net margin)
• Airbnb converts a significant portion of sales into profit due to its scalable business model and strong pricing power.

What Drives Airbnb's Money Machine?

• Service Fees on Bookings: Over 95% of revenue comes from guest and host service fees on accommodation and experience bookings.
• Nights and Experiences Booked: Continued growth in nights booked, especially in EMEA and Latin America, drove revenue higher.
• Platform Investment: Strategic investments in AI, trust & safety, and new product features to enhance guest and host experience.
• Future Growth Areas: Expansion in experiences, long-term stays, and new travel verticals, though these segments are not yet major profit contributors.

Visualizing Airbnb's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and R&D) taking the largest chunk.
• Even after significant investments in innovation and global expansion, 33.6% of revenue drops to the bottom line.

Key Takeaways

• Airbnb's money comes overwhelmingly from service fees on bookings across its global marketplace.
• High gross and net margins illustrate the power of Airbnb's asset-light, digital platform model.
• Heavy investment in R&D and platform innovation, balanced by efficiency in operating costs.
• Ongoing growth is driven by international expansion, product innovation, and increased travel demand.

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FAQ About Airbnb's Income Statement

1. What is the main source of Airbnb's revenue in 2025?

Airbnb generates over 95% of its revenue from service fees on accommodation and experience bookings. Additional revenue comes from interest income and other minor sources.

2. How profitable is Airbnb in Q3 2025?

Airbnb reported net income of $1.37B in Q3 2025, with a net margin of approximately 33.6%, reflecting strong profitability driven by high gross margins and efficient cost management.

3. What are the largest expense categories for Airbnb?

The biggest expenses on Airbnb's income statement are operating expenses, particularly Research & Development (R&D) at $587M and Sales, General & Administrative (SG&A) at $969M in Q3 2025, as Airbnb prioritizes platform innovation and global operations.

4. Why does Asia Pacific operate at a loss?

Asia Pacific, despite generating $272M in revenue, posted an operating loss in Q3 2025. This is because Airbnb aggressively invests in market expansion, local partnerships, and regulatory compliance in the region, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does Airbnb's effective tax rate compare to previous years?

Airbnb's effective tax rate in Q3 2025 was 23.3%, consistent with previous years. This moderate rate is primarily due to international structuring and tax benefits from share-based compensation.