Airbnb, Inc.

What does it do?

Airbnb is an online marketplace where people can rent out their spare room, apartment, or entire home to travelers — and where travelers can find and book those stays. Think of it like eBay, but for places to sleep. Instead of hotels, you might stay in a cozy apartment in Paris booked directly from a local who listed it on the app. Airbnb also lets people book 'experiences,' like a cooking class or a guided hike led by locals in the city you're visiting.

How does it make money?

Airbnb makes money by taking a cut from every booking made on its platform — typically around 3% from the host who lists the property and around 14% from the guest who books it. So on a $1,000 stay, Airbnb pockets roughly $170 in total fees without owning a single property. In its latest financial year, that model generated $12.2 billion in revenue, up from $11.1 billion the year before — roughly 10% growth. Crucially, $2.5 billion of that revenue turned into net profit, meaning Airbnb keeps about 20 cents of every dollar it earns.

Why do investors care?

The growth story here is about expanding beyond nightly stays into a broader travel platform. Airbnb has been quietly building out 'Experiences' and has signaled interest in co-hosting services and longer-term rentals — trends that accelerated post-pandemic as remote workers started booking month-long stays instead of one-week holidays. The company is also still underpenetrated in many international markets, especially in Asia, where travel is bouncing back strongly. For this thesis to work, Airbnb needs to keep adding supply from hosts, hold off growing competition, and successfully launch new revenue streams beyond the core booking fee.