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Summary
- Airbnb Inc has released its prospectus to debut on stock exchanges
- The company is planning to list its shares under the ticker symbol ABNB on the NASDAQ Global Select Market
- The company has made an operating profit of $418 million in the third quarter of this year
While most of the companies in the travel and leisure sector are facing financial losses due to the Covid-19 pandemic, Airbnb Inc. has outshined its competitors by reporting profit in the Q3 2020.
On 16 November, Airbnb Inc. had submitted its IPO filing, becoming the latest company to go public despite the coronavirus crisis. The company is planning to list its shares under the ticker symbol ABNB on the NASDAQ Global Select Market. Airbnb finally made its initial public offering documents available for all after months of projection. Of the 35 underwriters listed in the prospectus, Morgan Stanley and Goldman Sachs will lead the listing of $1 billion target for the IPO.
Established by CEO Brian Chesky, Joe Gebbia and Nathan Blecharczyk in August 2008, Airbnb Inc. is an online marketplace for rental vacation. Headquartered in San Francisco, Airbnb is known for offering lodging, primarily homestays, or tourism arrangements.
The prospectus stated that CEO and co-founder Brian Chesky would remain in control of the company following the IPO. Chesky would be getting restricted stock units of the company for over the next 10 years subject to its stocks hitting some milestones, which could be worth $120 million.
The company has also come up with a detailed look of its inner financial workings
Airbnb managed to post an operating profit of $418 million in Q3 2020, despite facing challenges due to the pandemic. A rapid cost cut, effectively putting off all marketing expenses and laying off one-fourth of its workforce were the factors which partly led to profit earned this year. Profits were also assisted by a sharp recovery in the revenue of the company. The revenue for Q3 2020 increased four times, hitting $1.3 billion, in comparison with Q2 2020 revenue which was reported as $334 million.
However, it was below 19 per cent on year-on-year (YOY) basis of Q3 2019 revenue of $1.65 billion. The peak summer season witnessed resumption of domestic travel which resulted in the increase in revenue. The net income on revenues recorded by the company was $219 million.
For the nine months ending 30 September, the gross booking value of the company declined 39 per cent YOY, reporting at $18 billion. Last year, Airbnb’s gross booking value was $38 billion, witnessing an increase of 29 per cent from $29.4 billion in 2018. The prospectus of Airbnb also disclosed a 32 per cent decrease in revenue to $2.5 billion, in comparison with $3.7 billion during the same period in the previous year. A net loss of $697 million was recorded by the company, decreasing from $323 million YOY. The adjusted EBITDA also decreased to $230 million from $253 million in the same period in the previous year.
Since the company was launched in 2008, Airbnb has not reported an annual profit. The company recorded an operating profit in Q3 2020, however, it forecasted a greater decline in gross booking volumes YOY in Q4 2020 in comparison with the third quarter and greater increase in cancellations and alterations year-on-year. A massive tax bill has also been disclosed by the company. It owes $1.35 billion to the US Internal Revenue Service. Though it said that it would be strongly opposing the tax adjustment.
