In first earnings report, Airbnb posts quarterly loss of $3.9B

Airbnb co-founder and CEO Brian Chesky says he believes the COVID-19 pandemic has shown that his business is “inherently adaptable” as the home-share giant reports financial results for the first time since its IPO in December.

Adaptable as Airbnb may seem – it’s been widely reported that vacation rentals across the board have proven a bright spot amid the coronavirus crisis – the company posted a net loss of $3.9 billion in Q4 2020.

Airbnb says the Q4 net loss was impacted by charges related to its IPO, including $2.8 billion of stock-based compensation expense.

For the full year 2020, the company posted a net loss of $4.6 billion.

Revenue for the fourth quarter of 2020 was down 22% from $1.1 billion in Q4 2019 to $859 million in 2020, a percentage that Airbnb says demonstrates its “resilience.”

For the full year 2020, total revenue decreased 30% from $4.8 billion in 2019 to $3.4 billion in 2020.

Even though the brand is mainstream, the idea of hosting is not yet.
Brian Chesky – Airbnb

Meanwhile, Q4 2020 adjusted EBITDA was a loss of $21 million, compared with a loss of $276 million in Q4 2019, despite revenue being $248 million lower.

For the full year, adjusted EBITDA was a loss of $251 million, compared with a loss of $253 million in 2019, despite revenue being $1.4 billion lower.

Gross booking value for Q4 2020 dropped 31% year-on-year to $5.9 billion. For the full year 2020, gross booking value decreased 37% to $23.9 billion compared to 2019.

Nights and Experiences booked on Airbnb for the fourth quarter of 2020 totaled 46.3 million – a decrease of 39% compared to Q4 2019. For the full year 2020, nights and Experiences booked on the platform dropped 41% year-on-year to 193.2 million.

Looking back and ahead

Airbnb says “strong financial discipline” in 2020 allowed it to decrease all operating expense line items – excluding stock-based compensation and stock-settlement obligations – from one year ago.

Indeed, Airbnb has faced a mountain of tough decisions as the coronavirus has wreaked havoc on the entire travel industry.

The company’s early handling of the pandemic angered both hosts and guests, causing the platform to make adjustments around policies like cancellations.

It also laid off 1,900 employees last year, though Chesky has said that Airbnb has rehired some of those affected.

In 2020, the company announced a funding round and secured a $1 billion syndicated loan to shore up its financial defenses amid the coronavirus crisis.

“We spent 12 years building Airbnb’s business and lost almost all of it in the matter of four to six weeks,” Chesky said over the summer.

In 2021, Airbnb says it’s preparing for a “significant travel rebound.”

“Our single priority in 2021 is to prepare for this travel rebound, perfecting our existing product by improving the entire end-to-end experience of our core service for both hosts and guests,” Chesky says.

The CEO has noted multiple times over the past year that the COVID-19 pandemic has allowed the company to go back to its “roots” – in other words, its core home-share business – while other areas of the business have been put on pause.

Speaking at a Bloomberg event earlier this month, he said the company would resume investment for business units such as transportation and hotels “down the road.”

In a call with analysts, Chesky emphasized repeatedly the focus Airbnb is putting on hosts in the year ahead – specifically educating and recruiting hosts to “set them up for success.”

This week, Airbnb launched its first large-scale marketing campaign in five years, centered on the idea of hosting. “Even though the brand is mainstream, the idea of hosting is not yet,” Chesky said.

“Our goal with the campaign is to make a long-term investment in educating the world about what makes Airbnb unique – our hosts.”

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