Tuesday 17 November 2020 9:55 am

Airbnb reveals deeper loss ahead of stock market float

Airbnb today revealed it has suffered deeper losses this year as a result of the Covid-19 pandemic, as it unveiled the prospectus for its eagerly-awaited stock market listing.

The holiday rental company posted a loss of $697m (£527m) on revenue of $2.5bn in the nine months to the end of September, a widening of the $323m loss recorded in the same period last year.

The outbreak of coronavirus sparked a sharp downturn in Airbnb’s business in the first half of the year, with the firm posting a $576m loss at the height of the crisis in the second quarter.

Airbnb was forced to cut a quarter of its workforce in May, suspend marketing activities for the year and seek $2bn in emergency funding from investors.

In the third quarter revenue was down 18 per cent at $1.3bn, but the company swung to a net profit of $219m after taking steps to slash 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.

The filing comes as Airbnb looks to woo investors ahead of a blockbuster initial public offering, which is expected to go ahead before the end of the year despite the impact of the pandemic.

The company is reportedly looking to raise $3bn through a listing on the Nasdaq, which could value it at more than $30bn.

Airbnb has not turned a profit since its inception in 2008 and warned this would likely also be the case this year. Despite the upbeat third-quarter figures, the firm warned of a decline in bookings and rise in cancellations in the fourth quarter amid continued lockdown restrictions.

Airbnb also revealed it is facing a hefty tax bill, as the US Internal Revenue Service was seeking $1.4bn over the sale of international intellectual property to a subsidiary in 2013. The company said it would “vigorously defend” the tax adjustment.

The San Francisco-based company said co-founder and chief executive Brian Chesky would retain control following the IPO.

He has agreed to cut his base salary from $110,000 to $1, but will be granted share awards over the next 10 years that could be worth $120m. Chesky said he intends to donate the proceeds from this award to charity.