There's No Going Back

Capitalize On New Trends

Mr. Chesky outlined how the health crisis had reshaped the business, pointing to a significant uptick in long-term stays as people around the world work from home. Some large employers have said they would offer that flexibility even when things return to normal, a trend that Airbnb can capitalize on.

Dealing With The Pandemic

Although hotel chains with a significant footprint in big cities suffered, Airbnb redesigned the company's website and app to show prospective travelers everything from lavish beach houses to rustic cabins nearby. Combined with cost-cutting efforts, it managed to weather the storm that paralyzed the whole world.

Figures

Fourth-quarter revenue fell 22% YoY to $859 million with full-year revenue dropping 30% to $3.3 billion. Fact Set analysts expected a fourth-quarter revenue drop of 33% and a drop of 32% for the full year.

Airbnb's full-year expenses rose 31% to $6.97 billion on the back of IPO-related stock compensation in the fourth quarter. However, before accounting for stock compensation, expenses in each category, from product development to operations and support services were lower. In this case, sales and marketing expenses declined 66% in 2020 compared to 2019, whereas when those costs are accounted for the same expenses rose 44%.

Like other companies, Airbnb offered an adjusted metric that excludes such costs so the negative EBITDA shrank to $251 million compared to $253 million in the previous year. On the same basis, its Q4 loss narrowed significantly to $21 million from 2019's Q4 loss of $276 million.

Outlook

Airbnb declined to give any formal guidance for the year ahead due to the uncertainty of the undergoing health crisis. While the third quarter is the busiest for Airbnb, the company has turned a profit in that period since 2018. But it expects bookings in the three months through March to be better than in the same period last year, when the health crisis first struck, but still below 2019 levels.

The home-sharing company plans to invest in marketing and product development during the first half of this year, so it is positioned to benefit from an expected rebound in the second half that the whole travel industry is hoping for. Management assured investors that costs will be controlled from soaring to pre-pandemic levels.

Airbnb's valuation plummeted to $18 billion nearly a year ago, as it raced to secure funds to weather the crisis. Its rapid growth also came with its share of challenges as homeowners from Arizona to Florida and Massachusetts are campaigning for laws to govern short-term rentals as they mind the increased noise, as well as connect it to crime and falling property values.

The bottom line is that remote work helped Airbnb's earnings hold up better than expected amid a crushed travel industry and it could easily be the source of its future revenue. It suffered heavy losses, mostly due to costs related to its long-awaited market debut in December, but it is also confident about its post-Covid-19 prospects as it adapts to new lifestyle trends.

The post Airbnb Delivered a Loss in Its First Post-IPO Earnings Report appeared first on IAM Newswire.

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