Airbnb doubles its losses, a bad indicator before the 2020 IPO?

by bold-lichterman

All eyes are on Airbnb. In the context of WeWork’s aborted IPO and those of Uber and Lyft’s disappointing, can the peer-to-peer vacation rental specialist, which is due to go public in 2020, do well?

Difficult to form a definitive opinion. The company of Brian Chesky saw his operating losses double in the first quarter from a year ago – to $ 306 million – according to The Information who was able to consult the figures kept confidential by the company.

3.5 billion dollars in cash

In question? The significant increase in sales and marketing expenses. These thus experienced an increase of 58% over one year to reach $ 367 million. In 2019, they should therefore exceed the total amount spent in 2018, i.e. $ 1.1 billion. The company is boosting its customer acquisition efforts before going public. Revenue rose 31% to $ 839 million.

However, it looks like the company can afford to increase its marketing spend. The latter had $ 3.5 billion in cash as of March 31 and an unused line of credit of $ 1 billion. It can also boast of having seen a significant increase in its number of users after having notably passed the threshold of 500 million travelers last March since its creation.

Another positive point is that Airbnb has managed to be profitable on an EBITDA basis, ie earnings before interest, taxes and depreciation, for two consecutive years. The platform could create a surprise in 2020.