Airbnb files to be made public – TechCrunch

Airbnb filed for public release today, bringing the famous unicorn closer to a public company.

Financial results show a company on the rebound, but smaller than it was. Its more granular financial results also show just how tough the pandemic has been on the travel-addicted unicorn. When it comes to Airbnb’s value, investors will need to balance how they assess the recent recovery and earnings against the company’s disrupted historic growth arc.

How did we get here?

The roommate start-up has had a tumultuous year, with the COVID-19 pandemic hampering its business in the first and second quarters of the year, and Airbnb then recovered thanks to more local bookings.

Its filing comes just days after unicorns DoorDash and C3.ai themselves applied to go public in what could be a public procurement rush by well-regarded startups.

Airbnb’s S-1 dossier was due to arrive last week, but was delayed due to alleged electoral concerns, a concept that TechCrunch staff did not find entirely convincing.

We’ve gathered a lot about Airbnb’s recent financial performance, but its S-1 is the real treasure. What follows is a dive into the company’s top-level numbers. From there, TechCrunch will dig into the financial nuances and ownership issues of the business.

Airbnb’s financial performance

What we want to know is how the pandemic affected Airbnb’s business; its annual results and what we can infer from its quarterly trends.

At the top of Airbnb’s S-1 is a graph that shows monthly bookings on its platform. The implication is somewhat straightforward; namely that Airbnb knows what we want to know and want to share. Here are those numbers:

Image credits: Airbnb S-1

As expected, Airbnb took a huge hit in March. But by May, things had returned to year-over-year growth, where they stayed.

Today, the company has seen very little growth in bookings since June – indeed, it has seen bookings plummet in the months since. And, even worse, the company’s gross bookings after removing cancellations are down year over year. (Update: We misread this table at first and have updated our notes on this.)

So what does all of this look like in more traditional accounting figures? Here is the income statement published by Airbnb:

Image credits: Airbnb S-1

As expected, Airbnb’s year has not been great. Indeed, the company is on track to equal its 2018 size, if our calculations are correct.

What has changed between the first three quarters of 2019 and the first three quarters of 2020? The most important thing, aside from the expected lower revenue costs – less revenue costs less – is the huge drop in the company’s sales and marketing expenses. Airbnb reduced S&M spending from $ 1.18 billion in the first three quarters of 2019 to just $ 545.5 million in the same period of 2020.

So where will Airbnb end up in 2020 once this is all over? We’ll have to take a look at its quarterly results for that. Here they are:

Image credits: Airbnb S-1

Airbnb’s growth continues in year-over-year terms until the March 31, 2020 quarter, where it was actually stable from the first quarter of 2019. Or, the company would have grown without COVID-19. In the June 30, 2020 quarter, we see the actual damage, with Airbnb revenue dropping from $ 1.2 billion in the last year’s quarter to just $ 334.8 million. It’s a shocking drop.

But, looking ahead to the third quarter of 2020, we are seeing a big comeback. Yes, Airbnb’s third quarter was smaller than its third quarter of 2019, with revenue of $ 1.34 billion instead of $ 1.65 billion in 2019, but the company has effectively quadrupled from that. in the previous quarter. If the company managed another third-quarter revenue to the fourth quarter, it would be a few hundred million more than in 2018.

Critically, Airbnb managed to go from a number of unprofitable quarters to profit in the third quarter, similar to its third quarter of 2019 where it was also in the dark. Of course, Airbnb’s GAAP net income of $ 219.3 million in the third quarter is paltry compared to its losses recorded earlier in the year. The company will not reach the breakeven point in 2020.

Airbnb has also released adjusted earnings metrics. Its adjusted EBITDA results are based on the following definition:

Adjusted EBITDA is defined as the adjusted net profit or loss for (i) the provision for income taxes; (ii) interest income, interest expense and other net income (expenses); (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) net changes in reservations for accommodation taxes for which we may be held jointly responsible with the hosts for the collection and remittance of such taxes; and (vi) restructuring charges.

The decision to eliminate restructuring costs raised eyebrows, with Amy Cheetham, investor at Costanoa Ventures, say that “Sounds like leaving restructuring costs aside is a bit aggressive?” We agree, as this gives the company too much flexibility to count the good in its results, such as lower operating costs, while discounting what it took to achieve those results, such as restructuring. of its business operations.

It’s having your cake and eating it too and not counting calories.

Yet who are we to hide numbers from you? here is very Adjusted EBITDA claimed by Airbnb:

Image credits: Airbnb S-1

The numbers are still not good even after ripping off so many costs. Perhaps the worst part is the company’s cash consumption during the year. This shortfall helps explain why Airbnb took on more capital when it did earlier this year.

It’s hard to give a firm rating to this S-1. It contains what we expected, but how investors assess the company’s declining year-over-year revenue in Q3 2020 versus its rapid comeback in Q2 2020 should help decide its value. possible. Overall, Airbnb has done something incredibly impressive – rebounding from such a low.

But, now that it’s made public, we can’t just say “good job”; he wants to set a good price and trade hard. So, all eyes are on its first lineup of IPOs as it should tell us what investors might be willing to pay for the famous company’s equity.



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