Airbnb has filed documents for its initial public offering showing that unlike other tech unicorns, it has been profitable for several quarters over the past few years. The revelation was included in the short-term rental company's 250-page filing with the US Securities and Exchange Commission on Monday.
In the third quarter of this year, Airbnb posted profits of $ 219 million on sales of $ 1.34 billion. Despite the positive outlook, those numbers are down nearly 19% from the same period last year, when it posted profits of $ 227 million on sales of $ 1.65 billion. The third quarter is the only quarter Airbnb has made profits so far this year.
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The company said the reason for this was largely due to the hit it called The novel coronavirus pandemic has devastated travel destinations and people have adhered to protection mandates.
"Our financial results for the first nine months of 2020 have been significantly affected," Airbnb wrote in its filing. "We anticipate that COVID-19 will continue to have a significant impact on our bookings, revenue and business operations in future periods."
Airbnb said bookings on its platform fell 72% year over year in April. However, from June through September, the company announced that bookings were up around 20% year over year. To mitigate these losses, Airbnb 1,900 employees laid off25% of employees in May. It also took out US $ 2 billion in debt in April.
Airbnb has grown from a website for couch surfers to a massive online presence in just over a decade. It lists millions of rental apartments in almost every country on earth. But it's been a bumpy road for the company as city regulators and struggles with local governments from San Francisco to New York to London are watching closely.
"We are subject to a variety of complex, evolving, and sometimes inconsistent and ambiguous laws and regulations," Airbnb wrote in its filing. "And that could lead to us incurring significant liabilities, including fines and criminal penalties."
Although agreements were made with supervisory authorities in many cities, the offer had to be reduced and adapted to new rules, e.g. For example, the obligation for hosts to register with the cities and the limit on the number of nights per year that people can rent a house.
That said, Airbnb had to Rethink your business to stay competitive with hotels and similar sites like VRBO Vacation Rentals. In its submission, the company listed Bookings Holdings, Expedia Group, Google, TripAdvisor, Craigslist and various hotel chains as competitors.
In recent years, the offer of homes for short term rentals has expanded to allow travelers to book day trips and restaurant reservations. It has also partnered with major rental companies in California, Florida, and New York to enable Airbnb rentals through their buildings - though some of those deals have failed.
One of the risks Airbnb listed in its submission is dangerous activity. The company admitted there had been shootings, deaths, incidents of sexual violence and unknown hidden cameras on its platform. It was also recognized that racial discrimination was a problem. The company said it has taken several steps to counter this, including creating the "Airbnb Non-Discrimination Policy" that every host and guest must sign in order to use the service.
"If a host or guest does not agree to the policy, they will be removed from our platform," Airbnb said. "As of 2016, approximately 1.4 million people have been removed from Airbnb for refusing to agree to this policy."
Airbnb is the youngest private company, valued at more than $ 1 billion, aka the unicorn to go to Wall Street. Hail shipping company Uber and Lyft went public in 2019 and grocery delivery DoorDash only submitted its IPO documents on Friday. None of these three other companies have proven to be profitable so far.
Along with the third quarter of this year, Airbnb reported profits in the second and third quarters of 2018, as well as the third quarter of 2019. Although its filing warned that full profitability is not guaranteed.
"We have made net losses since the beginning of each year and may not be able to achieve profitability," Airbnb said. "Our sales growth has slowed and we expect it will continue to slow down in the future."
The company plans to trade on the Nasdaq under the symbol ABNB.
