Airbnb Shows Off Terrible Losses in First Earnings Report After IPO
Posted on 02/26/2021
Airbnb, Inc. had US$ 3.9 billion loss in the fourth quarter of 2020, which includes US$ 2.8 billion in stock-based compensation expense. For the whole of 2020, Airbnb lost US$ 4.6 billion in net income on US$ 3.4 billion of annual revenue. Airbnb’s revenue fell to US$ 859 million in the fourth quarter, down 22% year over year from US$ 1.11 billion.
In the shareholder letter it read, “Q4 2020 net income was impacted by charges related to our IPO. Charges associated with our IPO and our subsequent stock price increase contributed to our net loss in Q4 2020 and fiscal year 2020. Upon our IPO in December 2020, we recognized a non-cash stock-based compensation expense of $2.8 billion. This is much larger than a typical quarter because at the completion of the IPO (similar to many other companies) we were required to recognize a significant portion of all stock-based compensation provided to Airbnb employees over the last several years. The increase in our stock price also increased the value of warrants issued in connection with a term loan agreement entered into in April 2020. We recorded a non-cash mark-to-market adjustment of $827 million related to the warrants in Q4 2020. As a result, GAAP net loss was $3.9 billion in Q4 2020 and $4.6 billion in 2020, compared with GAAP net loss of $352 million in Q4 2019 and $674 million in 2019. GAAP net loss in the second half of 2020 was $3.7 billion, compared with $85 million in the second half of 2019.”
Airbnb started in 2007 when Brian Chesky and Joe Gebbia were trying to figure out a way to pay rent. A design conference was coming to San Francisco and hotels were sold out, so they inflated three airbeds and turned their apartment into an Airbed & Breakfast.
