SAN FRANCISCO (REUTERS) - Airbnb's initial public offering paperwork showed on Monday (Nov 16) the home rental start-up turned a profit in the third quarter due to aggressive cost cuts, as it prepares for one of the most anticipated stock market debuts in recent years.
Its quarterly numbers were helped by a pick up in local travel, even though the overall revenue growth for the first nine months of 2020 was hurt by the fallout of the Covid-19 pandemic. The IPO plans mark a turnaround of sorts for a company that was crippled at the outset of the health crisis.
Airbnb's revenue fell 18 per cent to US$1.34 billion (S$1.8 billion) from a year earlier, but it reported net profit of about US$219 million (S$294.6 million) in the quarter, helped mainly by a clampdown on costs.
"The recovery in the second and third quarters of 2020 is attributable to the renewed ability and willingness for guests to travel, the resilience of our hosts, and relative strength of our business model," Airbnb said.
Airbnb had in May decided to lay off 25 per cent of its workforce, suspend marketing activities for the year and seek emergency funding from investors, including Silver Lake and Sixth Street Partners, at a valuation of US$18 billion.
It has since rebounded by focusing on listing homes away from cities that people want to rent during the pandemic.
The listing is expected in December and would cap a blockbuster year for IPOs as companies capitalize on a stock market rally in the second half of the year, fueled by monetary as well as fiscal stimulus in a bid to blunt the fallout of the pandemic.
Airbnb warned that revenue growth will continue to slow in the future, although it recorded a pickup in business in the second and third quarters of 2020 as lockdown restrictions began to ease.
The start-up reported revenue of US$2.52 billion for the nine months ended Sept. 30 compared with US$3.7 billion a year earlier, according to its S-1 filing. Net losses widened to US$697 million, from US$323 million a year earlier.
Airbnb plans to list on the Nasdaq under the symbol ABNB. It filed for an IPO of up to US$1 billion on Monday, but that is a placeholder amount and is expected to change before its debut.
Reuters was the first to report in October that Airbnb is aiming to raise around US$3 billion in its IPO that could value it at over US$30 billion.
The company was founded in 2008 by Brian Chesky and Joe Gebbia as a website to take bookings for rooms during conferences, including the Democratic National Convention that year in Denver.
It expanded its listings to include apartments, houses, and vacation rentals in the following year after taking seed funding from investors, including Sequoia Capital.
Airbnb achieved "unicorn" status in 2011, with listed properties in 13,000 cities across over 180 countries at the time, after being valued at more than US$1 billion in a funding round led by Andreessen Horowitz.