Airbnb, which has faced towering expectations since its initial public offering in December, announced a drop in revenue and a massive $ 3.9 billion loss on Thursday. in the first income as a publicly traded company.
The rental company brought in $ 859 million in revenue in the last three months of the year, down 22% from a year earlier. Its losses were fueled by the $ 2.8 billion in costs associated with its IPO-related stock-based compensation, as well as a $ 827 million accounting adjustment to an emergency loan for which it did it last year to fight the pandemic.
Airbnb’s losses were higher than even the ride-hailing company Uber in the first quarter as a public company and raises new questions about whether unprofitable tech startups can make a profit. or not. While most of the losing tech firms say they are spending money to drive rapid growth, Airbnb’s shrinking revenue makes that argument harder to sell.
Airbnb showed its declining revenue as a demonstration of its ability to recover in a year when tourism was delayed by the pandemic. Last spring, Airbnb lost $ 1 billion in bookings, laid off employees, and mobilized emergency funding to deal with door locks and other restrictions. By the summer, pre-orders were back up again, though not enough to make up for the sales loss.
In December, the company listed shares and raised $ 3.5 billion, valuing more than $ 100 billion. Since then, its valuation has risen to almost $ 120 billion as investors expect that rapid vaccine rollout will fuel a new boom in tourism.
Even with tourism rebounding later this year, Airbnb still faces challenges. Its owners, who provide its inventory as asset listings, are becoming increasingly frustrated with the company and are looking to list their rents independently. Its problems with the “house party” got worse during the pandemic and the company was rushing to come up with new rules. And regulators around the world continue to scrutinize the “Airbnb effect” of turning residential warehouses into hotels.