Earnings season: Airbnb’s 300% revenue jump
Airbnb is the latest big tech firm to record a Wall Street-beating quarter but see its share price drop.
Airbnb’s headline stats
With revenues totalling $1.34bn in Q2 2021, Airbnb notched up a 300% year-on-year increase. This flew over Wall Street expectations.
Sales were up 175% y-o-y this quarter for a total of $175m. Gross booking value, the key metric Airbnb uses to track host earnings, incorporating taxes and cleaning and service fees, clocked in at $13.4bn. In year-on-year terms, that’s a 320% increase.
83.1 million nights were booked using Airbnb in Q2 2021, measuring 29% growth against the first quarter, and 197% over Q2 2020 when the world entered lockdown. Analysts expected 79.2m nights booked, so again this was another beat.
The key takeaways from Airbnb’s latest earnings report are:
- Revenues – $1.34bn against $1.26bn estimated
- Earnings – -$0.11 per share
While a lot of the main measuring metrics were smashing Wall Street estimates, Airbnb shareholders would have lost money, according to these statistics.
That’s fairly odd, given the fact that Airbnb’s net loss has narrowed, falling from $575.6m to $68m. Everything suggests Airbnb is moving in the right direction – but there is still a huge, COVID-19 shaped shadow looming over the rest of the holiday app’s year.
Airbnb stock price
Airbnb shares slid 4% upon publishing its earnings reports. EPS is down too as seen above.
That means it joins other tech stocks like Apple and Tesla posting bumper quarterly results but seeing their share prices dip.
In a letter to investors, the app’s executives stated Airbnb is bracing for Delta variant volatility. Cases continue to rise in the US and around the wider world, meaning travel restrictions and limits on overnight stays could very well make a return.
If that was the case, then stays and revenues may slide in Q3 and Q4.
The company said that although it expects the third quarter to deliver its strongest quarterly revenue on record, it expects Q3 nights and experiences booked to be below that of Q2 and Q3 2019.
“As we exit Q2 and come into Q3, we have a combination of fewer bookings for the fall, just given the nature of some of the seasonality, and any kind of impact potentially on Covid concerns,” Airbnb CFO Dave Stephenson said on a call with analysts.
Vaccination progress and containment of new COVID-19 variants will be key to Airbnb’s sustainability. Summer is also drawing to a close. New bookings in the Autumn and Winter, not the busiest times of the year for holiday-related businesses, have already started to slip as Dave Stephenson points out.
It’s going to be a long six months for Airbnb.
Stocks nudge higher, Fed remains relaxed about inflation
Stocks are higher, recovering some ground lost during a choppy week. Fed officials have been out in force to calm inflation nerves. Governor Christopher Waller said rates will not rise until policymakers see inflation above target for a long time or there is excessively high inflation, saying the Fed will need to see several more months of data. He also stressed that there is only a temporary ‘mismatch’ between surging demand for workers and people’s willingness/ability to get a job. Meanwhile businesses across the US are struggling to find labour: McDonald’s is the latest company to increase pay, raising wages by 10% at its US company-owned restaurants as it seeks to take 10,000 new staff over the next three months. Wage push inflation is of greater concern than short-term supply chain pressures and rising commodity prices. The labour market is far tighter than it looks – the Fed will hope that things change quickly once Federal assistance rolls off later in the year. That could see us endure a rough summer of hot inflation readings, with the Fed looking on and hoping it comes to an end in the autumn.
Another inflation gauge delivered a hot reading. US produce price index inflation rose 6.2% year-on-year, the biggest hike in prices over a 12-month period since the Bureau of Labor Statistics began measurements in 2010. Markets were a good deal calmer despite the figures, with Treasury yields easing of the 1.7% area, the highest in a month. The Dow Jones and S&P 500 both rallied more than 1%, whilst NDX rose over 100pts to make a decent fist of recovering the 100-day SMA, though it fell short and closed off the highs of the day.
European stock markets are broadly higher this morning, taking the positive cue from the US and a strong session in Asia. The FTSE 100 has recovered 7,000 following yesterday’s firm rejection of the area under 6,900. The UK blue chips closed a full 140pts off the lows on Thursday. This morning miners are notably weaker as iron ore prices fell in China, leaving basic materials the only sector in the red, while tech, utilities and consumer cyclicals lead the way higher. BT rallied 3% whilst Sage advanced by the same margin as it reported strong half-year results and said full-year revenues would be at the top end of guidance.
Airbnb shares fell 3% and extended the decline in after-hours trade as the company reported a net loss of $1.95 per share in the first quarter. But revenues were up 5%, beating analyst expectations, and gross booking value was up over 52% year-on-year to more than $10.3bn. Cancellation rates are still higher than in 2019. Chief executive Brian Chesky was bullish on the outlook and a change in the way people approach travel. Shares are down about 37% from the February peaks. Meanwhile shares in Disney declined 4% in the after-hours market as it missed on subscriber growth to its streaming service. Disney+ now has 103.6m subscribers; analysts had estimated 109m. The streaming service has been the big plus point over the last year as parks and cruises have been shuttered, so investors are disappointed that growth in this area is not as strong as they expected.
The dollar is a little on the defensive as the cooling in Treasury yields cools the heels of the bulls. Gold is higher, reclaiming the 38.2% retracement area. Higher interest rates tend to be bad for gold, but rising inflation is good, so the market is in a bit of a tussle to see where real rates are going. With the Fed still seen keeping its thumb firmly pressed on shorter-dated yields, rising inflation expectations would tend to support the bull case for gold. Looking ahead to today’s data, watch for US retail sales at 13:30 BST, expected at +1% on the headline reading and +0.5% for the core.
La settimana che ci aspetta: La fiducia dei consumatori USA vacilla, mentre l’aumento dei rendimenti influisce sui mercati
In attesa della prossima settimana, osserviamo la fiducia dei consumatori statunitensi muoversi su un terreno instabile, nonostante l’arrivo di ulteriori stimoli. Inoltre, anche l’aumento dei rendimenti avrà probabilmente grandi implicazioni per i mercati. Altrove, l’economia della Nuova Zelanda sembra rafforzarsi in vista delle dichiarazioni sui tassi di interesse della Reserve Bank of New Zealand, mentre Airbnb è in cima ai rapporti delle aziende a grande capitalizzazione la prossima settimana con la sua prima rendicontazione degli utili come società quotata in borsa.
La fiducia dei consumatori statunitensi non sembra così alta
In vista dei dati ufficiali sulla fiducia dei consumatori statunitensi che saranno pubblicati la prossima settimana, sembra che finora la fiducia dei consumatori a febbraio sia in calo.
I dati preliminari hanno rivelato una contrazione della fiducia dei consumatori stilato dall’Università del Michigan: da una lettura di 79,0 per il mese di gennaio il valore è sceso a 76,2 a febbraio, mentre le previsioni stimavano un valore attorno a 80,5-80,8.
Le famiglie a basso reddito, cioè quelle con un reddito annuo pari o inferiore a 75.000 USD, sembrano guidare il sentiment al ribasso. Solo il 23% delle famiglie in questo gruppo ha dichiarato che le proprie finanze sono migliorate dal 2014, e il 71% ha affermato di aver guadagnato con il proprio reddito.
La cosa interessante, secondo il direttore del sondaggio Richard Curtain, è che la fiducia dei consumatori è calata rispetto al mese precedente, nonostante Joe Biden abbia lavorato al più importante tra tutti i pacchetti di stimolo. Sono infatti in arrivo 1,9 bilioni di USD di aiuti, che metteranno almeno 1.400 USD nelle tasche dei consumatori statunitensi, oltre ad altri pacchetti di aiuti per le piccole imprese. Nel dicembre 2020 sono stati inoltre erogati 900 miliardi di USD a favore delle famiglie a basso reddito.
Gli aiuti sono in arrivo, ma al momento il sentiment dei consumatori sembra essere in una fase di stallo.
I tassi e le azioni reagiscono all’incremento dei rendimenti
Con il calo dei tassi, i rendimenti sono aumentati, il che potrebbe avere conseguenze per classi di attività come i futures, le azioni e forse anche le criptovalute.
Martedì scorso, i rendimenti del Tesoro hanno segnato il maggiore rialzo da 3 mesi a questa parte. I titoli a 10 anni sono cresciuti di 9 punti base, raggiungendo il massimo da febbraio sopra l’1,3%.
Come il nostro Analista Capo di Mercato Neil Wilson ha commentato in precedenza, in questo caso ci sono alcuni fattori importanti che determinano impulsi inflazionistici, in particolare:
- Un volume importante di stimoli fiscali prociclici
- Una politica monetaria estremamente accomodante
- Una compressione della domanda
- Una sovrabbondanza di risparmi
Le borse europee stanno perdendo terreno, con le preoccupazioni sui tassi di interesse che alimentano il pensiero degli investitori colti alla sprovvista dalla rapidità con cui i rendimenti assoluti cambiano. L’inflazione nel Regno Unito è passata dallo 0,6% di dicembre allo 0,7% di gennaio, a causa dell’aumento dei prezzi quelli dei mobili e dei prodotti per la casa, dei ristoranti e degli hotel, del cibo e dei trasporti.
Anche l’oro si è indebolito a causa dei rendimenti più elevati.
In sostanza, anche questo è un elemento di cui tenere traccia, oltre all’aumento dei rendimenti e alle implicazioni nel mondo degli investimenti e della finanza.
L’annuncio della Reserve Bank of New Zealand sui tassi di interesse: nessun cambio di rotta sul fronte neozelandese
La Reserve Bank of New Zealand (RBNZ) presenterà la sua dichiarazione sui tassi di interesse la prossima settimana, e ci si aspetta che non siano in arrivo importanti cambiamenti.
L’economia neozelandese è stata una di quelle più resilienti nell’anno della pandemia. Le misure lockdown decise e rigorose, assieme al controllo delle frontiere, hanno limitato i danni causati dal Covid-19, e la Nuova Zelanda si è trovata così in una posizione economica migliore del previsto.
Il dollaro neozelandese (NZD) ha vissuto un eccellente 2020, facendo passi da gigante rispetto alla sterlina, all’euro e al dollaro USA, reagendo bene ad una prima metà dell’anno turbolenta e che aveva visto una forte svendita.
Ora ci si aspetta che in Nuova Zelanda non ci sia bisogno di ulteriori stimoli all’economia. I commentatori ritengono inoltre che non saranno adottati tassi negativi nemmeno dalla banca centrale della Nuova Zelanda.
Australia New Zealand Banking Group, uno dei principali istituti di credito del paese, non prevede una variazione dei tassi da parte della RBNZ, in parte a causa della forza dell’NZD, ma anche perché anche il mercato del lavoro del paese è in una buona salute.
Il tasso di occupazione in Nuova Zelanda è sceso al 4,9% nell’ultimo trimestre, in modo piuttosto inaspettato, con la sottoutilizzazione del lavoro in alcuni settori chiave anch’essa in calo. Gli stimoli del governo in alcune aree dell’economia stanno aiutando a coprire le carenze in altre, il che rappresenta un vantaggio sia per i datori di lavoro, che per i lavoratori, ma anche per l’economia nel suo insieme. Anche le esportazioni si sono mantenute su livelli soddisfacenti.
Sostanzialmente, le prospettive a breve termine sono ancora buone per la Nuova Zelanda. Alcuni prevedono che i tassi di interesse di riferimento inizieranno a salire nel 2024. L’inflazione dovrebbe salire al 2,5% entro giugno, ma potrebbe ridursi allo 0,8% l’anno prossimo. Pur tenendo d’occhio la Nuova Zelanda, sarebbe poco saggio aspettarsi una massiccia revisione della politica monetaria nelle dichiarazioni della prossima settimana.
I primi guadagni di Airbnb come società quotata in borsa
Airbnb ha iniziato ad essere quotata a dicembre 2020 e farà la sua prima rendicontazione degli utili agli investitori come azienda quotata in borsa il 25 febbraio.
Ovviamente, gli eventuali guadagni dovranno essere filtrati sotto la lente della pandemia. Secondo la sua dichiarazione S1, i volumi di prenotazione lordi di Airbnb sono calati del 39% su base annua nel 2020, per un totale di 18 miliardi di USD, mentre i ricavi sono diminuiti del 32% per un totale di 2,5 miliardi di USD nei primi 9 mesi del 2020. I lockdown obbligatori hanno avuto luogo in economie chiave come gli Stati Uniti, l’Unione Europea e il Regno Unito ad aprile 2020, con un blocco dei viaggi dei cittadini.
Tuttavia, Airbnb gode di un riconoscimento del marchio notevole, che potrebbe aiutare le sue azioni e le sue attività a fare meglio dei competitor. La sua capitalizzazione di mercato di circa 120 miliardi di USD supera i suoi rivali per le vacanze online come Expedia (22 miliardi di USD), Tripadvisor (5 miliardi di USD) e persino Booking.com (91 miliardi di USD). Le quotazioni sono rimaste relativamente stabili, e sono scese solo del 2% durante la pandemia con 5,6 milioni registrati a settembre 2020 contro i 5,7 milioni di dicembre 2019.
I soggiorni a lungo termine (cioè le prenotazioni di più di 28 giorni) sono scesi solo del 13% su base annua ad aprile 2020, che tradizionalmente è il mese peggiore per le prenotazioni alberghiere, ma hanno mostrato una crescita annuale tra maggio e settembre.
Un’opportunità di mercato prevista da 3,2 bilioni di USD potrebbe far sì che gli investitori continuino a contare su Airbnb. Stando ai commentatori, Airbnb ha un fortissimo potenziale nelle sue tre offerte chiave:
- 1,8 bilioni di USD – Soggiorni a breve termine
- 210 miliardi di USD – Soggiorni a lungo termine
- 1,4 bilioni di USD – Esperienze
Inoltre, Airbnb ha avuto 247 milioni di ospiti nel 2019, pari al 3,8% dei 6,5 miliardi stimati di viaggi con soggiorno pagati in tutto il mondo quell’anno. Se riuscisse a catturare solo il 10% del mercato potenziale, Airbnb potrebbe guadagnare 340 miliardi di dollari in vendite all’anno.
Questa sarà una sessione di comunicazione degli utili a dir poco interessante. Saremo in grado di registrare l’impatto della pandemia su Airbnb e di capire se ha delle basi abbastanza solide per resistere alla tempesta in corso.
Le prospettive potrebbero essere già buone. La fiducia degli investitori sembra essere elevata. Le azioni di Airbnb sono cresciute del 200% dopo essere state quotate in borsa, e il 15 febbraio sono state scambiate attorno ai loro valori massimi.
I principali dati economici di questa settimana
|Tue Feb 23||3.00pm||USD||CB Consumer Confidence|
|Wed Feb 24||1.00am||NZD||Official Cash Rate|
|1.00am||NZD||RBNZ Monetary Policy Statement|
|1.00am||NZD||RBNZ Rate Statement|
|1.00am||NZD||RBNZ Press Conference|
|3.30pm||USD||US Crude Oil Inventories|
|Thu Feb 25||1.30pm||USD||Prelim GDP Q/Q|
|3.30pm||USD||US Natural Gas Inventories|
I principali rapporti sugli utili di questa settimana
|Mon 22 Feb||Berkshire Hathaway||Q4 2020 Earnings|
|Palo Alto Networks||Q2 2021 Earnings|
|Tue 23 Feb||Home Depot||Q4 2020 Earnings|
|Square||Q4 2020 Earnings|
|HSBC||Q4 2020 Earnings|
|Thomson Reuters||Q4 2020 Earnings|
|Wed 24 Feb||NVIDIA||Q4 2021 Earnings|
|Lowe’s||Q4 2020 Earnings|
|Royal Bank of Canada||Q1 2021 Earnings|
|Budweiser||Q4 2020 Earnings|
|National Bank of Canada||Q1 2021 Earnings|
|Puma||Q4 2020 Earnings|
|Thu 25 Feb||Salesforce||Q4 2021 Earnings|
|Airbnb||Q4 2020 Earnings|
|Vale||Q4 2020 Earnings|
|Toronto-Dominion Bank||Q1 2021 Earnings|
|Moderna||Q4 2020 Earnings|
|Bayer||Q4 2020 Earnings|
|Dell||Q4 2021 Earnings|
|HP||Q1 2021 Earnings|
|Etsy||Q4 2020 Earnings|
|Telefonica||Q4 2020 Earnings|
|Fri 26 Feb||Deutsche Telekon||Q4 2020 Earnings|
|BASF||Q4 2020 Earnings|
IPO frenzy stateside, no-deal Brexit preparations ramp
Shares in Airbnb surged on debut, closing above $144 on their first day of trading after listing at $68. The more-than-doubling in the share price reflects huge investor interest, particularly in the retail space, as well as significant excess liquidity that is finding a home wherever it can. There is a strong fear of missing out on these mega IPOs, and investors seem very willing to discard usual valuation sensibilities to get on board. DoorDash only slipped by 1.8% on its second day of trading after soaring on its debut the day before. With a market cap of $68bn for Airbnb let’s just not talk about valuation and earnings multiples.
Preparedness for a no-deal Brexit is now the order of the day as both the EU and UK are talking impasse. Sunday’s deadline may be like all the rest (and be pointless) but there are only 3 weeks until January 1st so time really is running out. Sterling has been relatively unscathed so far but this morning GBPUSD broke down at the week lows at 1.32250 this morning to hit its weakest in almost a month. No deal risks are rising so the market is trying to price it – the problem is the binary nature of the outcome which leave the market only able to guess at fair value.
Yesterday, the European Central Bank (ECB) conformed to expectations by expanding its emergency asset purchase programme by an additional €500bn and extended the duration of the scheme to March 2022. Christine Lagarde suggested that the €1.85bn package would not be used fully used, which brought the ceiling vs target debate back into play. At the same time, EU leaders passed the €1.8tn budget after Hungary and Poland dropped their objections, paving the way for payments to be made next year. Meanwhile, US CPI inflation rose a little faster than expected in November and initial jobless claims were worse than expected, hitting 853k vs the 725k forecast. It points to weakness in the economy as cases have risen in recent weeks, eroding confidence in the recovery without a stimulus plan on hand to bridge the gap until vaccines are rolled out en masse.
European markets traded a little weaker early on Friday, with the major bourses down around 1% following on from a softer session on Wall Street that left the S&P 500 and Dow Jones lower but the Nasdaq rose a touch. No-deal Brexit fears are probably taking the shine off European equities, whilst there has been any significant catalyst from the US as lawmakers continue to discuss stimulus without getting a deal over the line.
Chart: FTSE 100 lower, 6520 is the key support level
Airbnb IPO date set for Dec 9th
Airbnb looks set to go ahead with its long-awaited IPO on Dec 9th, with the shares to begin trading on Dec 10th. The shares are expected to price at $44-$50 with the listing to raise around $2.5bn. Some 55m shares will be sold with a greenshoe option for 5m more if demand is high. The pricing would indicate a valuation of almost $30bn at the top of the range.
It comes as DoorDash estimates that its IPO will price shares at $90-95, above the $75-$85 range set out only last week. The shares are expected to trade on the New York Stock Exchange under the symbol “DASH.”
November was a particularly strong month for US equities, with the Dow Jones notching its best month since 1987 and the Russell 2000 recording its best-ever month. Demand for equities remains strong but these IPOs will be an important gauge of exactly where investor sentiment lies heading into the Christmas period and the New Year. Big November rallies often leaves December a little soft, with the Santa Rally essentially being pulled forward. If Airbnb or DoorDash fail to fly it might signal some trouble under equity market bonnet.
The company generate a profit of $219 million in the third quarter of 2020, on $1.34 billion in revenue. This was down fractionally from the $227 million in profit during the same quarter last year, which was its only profitable quarter in 2019, coming on $1.65 billion in revenue.
However, the onset of lockdowns due to the pandemic made for a very challenging first half of 2020 for Airbnb as it chalked up net losses of $916 million on revenue of $1.18 billion. The company, which plans to list on the Nasdaq under the ticker ABNB, provided detailed customer and revenue figures.
Airbnb IPO coming this year: what you need to know
Airbnb is pressing ahead with its stock market listing with the company filing its S-1 form at the US Securities and Exchange Commission and a planned IPO date before the end of 2020. Will it be another unprofitable dog of a tech unicorn or a GOAT (Go Out And Travel) favourite in 2021?
The company reports it made a profit of $219 million in the third quarter, on $1.34 billion in revenue. In a filing on Monday, November 16th, management explained this was down fractionally from the $227 million in profit during the same quarter last year, which was its only profitable quarter in 2019, coming on $1.65 billion in revenue.
However, the onset of lockdowns due to the pandemic made for a very challenging first half of 2020 for Airbnb as it chalked up net losses of $916 million on revenue of $1.18 billion.
The company, which plans to list on the Nasdaq under the ticker ABNB, provided detailed customer and revenue figures. Here’s a snapshot of the key metrics and financials.
Pandemic booking trends
Gross nights and experiences booked
- Material contraction on a year-over-year basis, with a low in April 2020, down 72% year over year.
- From April through June 2020, the company saw a steady rebound in gross nights and experiences booked before cancellations and alterations, which were down 21% in June relative to the same period in the prior year.
- From July through September 2020, gross nights and experiences booked have been stable, down approximately 20% relative to the same period in the prior year.
Cancellations and alterations
- Dramatic increase after the COVID-19 outbreak, as guests were either unable to travel or uncomfortable doing so.
- While the number of nights and experiences cancelled in January 2020 was 13% of the gross nights and experiences booked that month, the number of nights and experiences cancelled in March and April 2020 exceeded the number of gross nights and experiences booked during those months.
- From April to September 2020, cancellations and alterations as a percentage of gross nights and experiences booked initially declined significantly and then have remained relatively stable for the past several months.
Nights and Experiences Booked
- Negative in March and April 2020.
- By May 2020, gross nights and experiences booked had begun to recover, while cancellations and alterations began to fall, resulting in a return to positive Nights and Experiences Booked from May to September 2020.
- From July through September 2020, Nights and Experiences Booked have been stable, down 28% relative to the same period in the prior year.
|Monthly Nights & Experiences Booked Trends|
|In millions (except percentages)|
|Gross nights and experiences booked||30.5||28.3||28.4||38.3||32.8||19||8.7||16.4||26||28.3||26||23.9|
|% YoY Change||31%||30%||35%||25%||17%||-42%||-72%||-50%||-21%||-19%||-21%||-23%|
|(-) Cancellations and alterations||3.9||3.6||3.9||5||4.9||23.1||9.4||7.2||6.5||6.6||5.4||4.4|
|Cancellations and alterations as a % of gross nights and experiences booked||13%||13%||14%||13%||15%||122%||108%||44%||25%||23%||21%||18%|
|Nights and Experiences Booked*||26.6||24.7||24.5||33.9||27.9||-4.1||-0.7||9.2||19.5||21.7||20.6||19.5|
|% YoY Change||31%||30%||35%||22%||12%||-114%||-103%||-68%||-31%||-28%||-28%||-28%|
Airbnb define Nights and Experiences Booked as net of cancellations and alterations.
Gross daily rate
- Represents GBV per Night and Experiences Booked, all before cancellations and alterations. This measure is a useful proxy for the average daily rate (ADR) trend over this period; because the net metrics reflect elevated cancellations and were negative in March and April 2020, the net daily rate was not meaningful for those periods.
- The year-over-year increase in gross daily rate from May to September 2020 was driven by faster recovery in North America and Europe, the Middle East, and Africa (EMEA) during this period, which have historically higher daily rates than Latin America and Asia Pacific.
- The gross daily rate was also impacted by a mix shift toward entire home listings in non-urban destinations, which have higher daily rates.
Gross Booking Value before cancellations and alterations
- Followed a similar trend to gross nights and experiences booked, materially declining on a year-over-year basis between March and May 2020.
- GBV before cancellations and alterations recovered in June 2020, growing 1% year-over-year driven by the increase in gross daily rate.
- From July through September 2020, GBV before cancellations and alterations has been stable, down less than 10% compared to the same periods in the prior year.
Gross Booking Value
- Declined and rebounded as a result of the trends described above.
- In September 2020, GBV was down 17% on a year-over-year basis, less than the 28% decline in Nights and Experiences Booked due to the growth in gross daily rate.
- GBV reflects bookings made in a period for future nights or experiences and is a leading indicator for revenue, which is recognized during the period that stays and experiences occur.
|Monthly Nights & Experiences Booked Trends|
|$ in billions (except percentages & gross daily rate)|
|Gross daily rate||$110.20||$110.23||$110.36||$122.51||$122.63||$104.35||$91.69||$135.73||$145.72||$133.84||$132.24||$127.84|
|% YoY Change||-1%||-1%||0%||0%||1%||-12%||-21%||18%||27%||19%||21%||18%|
|Gross Booking Value before cancellations and alterations||3.9||3.6||3.9||4.7||4||2||0.8||2.2||3.8||3.8||3.4||3.1|
|% YoY Change||13%||13%||14%||26%||19%||-49%||-78%||-41%||1%||-4%||-4%||-9%|
|Gross booking Value||26.6||24.7||24.5||4.2||3.5||-0.9||-0.6||1.1||2.7||2.8||2.7||2.5|
|% YoY Change||31%||30%||35%||24%||15%||-127%||-119%||-69%||-17%||-19%||-14%||-17%|
Airbnb define Gross Booking Value as net cancellations and alterations.
|Year Ended December 31st||Nine Months Ended September 30|
|In thousands (except share amounts)|
|Consolidated Statements of Operations Data|
|Costs & expenses|
|Cost of Revenue||647,690||864,032||1,196,313||902,695||666,295|
|Operations & Support||395,739||609,202||815,074||600,788||548,369|
|Sales & marketing||871,749||1,101,327||1,621,519||1,184,506||545,510|
|General & administrative||327,156||479,487||597,181||490,262||421,082|
|Total costs & expenses||2,643,083||3,633,241||5,306,782||3,872,047||3,008,902|
|Income (loss) from operations||-81,362||18,744||-501,181||-173,604||-489,967|
|Other income (expense), net||6,564||-12,361||13,906||42,130||-115,751|
|Income (loss) before income taxes||-59,099||47,033||-411,703||-69,614||-689,436|
|Provision for income tax||10,947||53,893||262,636||253,187||7,429|
|Net less per share attributable to Class A and Class B common stockholders, basic & diluted||$||-0.27||-0.07||-2.59||-1.24||-2.64|
What we have learned from the filing
- Revenue growth was declining before the pandemic – from around 80% in 2016 to just 32% in 2019.
Management conceded: “Our revenue growth has slowed in recent periods and there is no assurance that historic growth rates will return. Our year-over-year growth rate in revenue decreased in 2019 as compared to 2018 and also decreased in 2018 as compared to 2017.”
- Regulation is becoming more of a headache as cities clamp down on short-term lets.
Management say: “Laws, regulations, and rules that affect the short-term rental and home sharing business may limit the ability or willingness of hosts to share their spaces over our platform and expose our hosts or us to significant penalties, which could have a material adverse effect on our business, results of operations, and financial condition.
“We are subject to a wide variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations that may adversely impact our operations and discourage hosts and guests from using our platform.”
- It’s never been profitable
“We have incurred net losses in each year since inception, and we may not be able to achieve profitability. We incurred net losses of $70.0 million, $16.9 million, $674.3 million, and $696.9 million for the years ended December 31, 2017, 2018, and 2019, and nine months ended September 30, 2020, respectively. Our accumulated deficit was $1.4 billion and $2.1 billion as of December 31, 2019 and September 30, 2020,” the filing states.
- It’s not doing as badly as peers – other booking sites have fared worse – the pandemic has made the Airbnb private getaway more appealing than staying in a hotel/resort. However, Experiences have not done as well as hoped – there is no breakout of the figures for this despite launching four years ago.
But…the outlook is much stronger for 2021 now that vaccines are coming. Airbnb could benefit from the GOAT trade.
For more information on how to trade IPOs, please see our guide.
Airbnb IPO: when can you buy and sell Airbnb shares?
Accommodation website Airbnb is set to be one of the largest stock market listings of the year, after the group filed a draft S-1 registration document with the US Securities and Exchange Commission.
In a statement, Airbnb said the number of shares to be offered and the price range for the proposed offering have not yet been determined. The date of the initial public offering (IPO) is not known, but is expected to take place after the SEC completes its review process. A lot will no doubt depend on market conditions.
We noted earlier in the year that the run-up in stocks after the March trough was offering companies a window of opportunity to get their stock listings out the door.
How much is Airbnb worth?
The company raised $2 billion in two separate tranches in April of this year, whilst it cut staff numbers by 25% to help it survive the enormous impact of the pandemic. This valued the company at $18bn but this was about half what it notionally worth in 2017. In May, chief executive Brian Chesky said the company expects to deliver revenues in 2020 of about half the $4.8bn generated last year.
Part of this is down to the pandemic – it has been a terrible time for the travel sector in particular and about $330bn of revenues has been lost globally, according to the US Travel Association. But Airbnb has enjoyed a surge in bookings as lockdown restrictions ended, particularly in rural areas, where bookings rose 25%.
The fact that Airbnb has not decided to shelve its anticipated IPO this year is a sign of renewed confidence, or it’s a sign the company needs to raise capital fast.
What is Airbnb?
Airbnb launched in 2008 and now has over 150 million users who offer private rentals of apartments and rooms in over 65,000 locations across the globe. It includes Amazon founder Jeff Bezos amongst its early investors. By the end of 2019 analysts were expecting the Airbnb IPO to see the company achieve a valuation of $42 billion.
How to trade Airbnb
Markets.com will be offering a grey market on Airbnb ahead of the IPO, which will let you speculate on the share price before it debuts on the stock market. The grey market price is based on the market capitalisation of the company after its first day of trading. As ever once it has completed the listing you will be able trade the shares by CFD trading or Spread Betting, or invest via share dealing.
Another way to take advantage of the Airbnb IPO is to trade the Renaissance Capital ETF (IPO), which is an index-like basket of companies that went public in the last years.