Airbnb has turned a quarterly profit ahead of its estimated US$3bn stock market debut in December despite the COVID-19 hit on its core home rental business.
The online bookings platform posted an IPO registration late on Monday where it reported a net profit of US$219mln despite revenue sliding 18% to US$1.3bn in the three months to September 30.
“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.
Domestic travel, short-distance trips and long-term stays were the most resilient during the period.
Important to note: The profit number here is non-GAAP. Will be important to note (and we will) what net income shows.— Cory Weinberg (@coryweinberg) November 16, 2020
Q3 is always a profitable quarter for Airbnb. 1 question will be: Can they keep it up?
The startup, which has never made an annual profit since its inception in 2008, benefitted from cost-cutting measures implemented during the pandemic.
The firm laid off a quarter of its staff in May and suspended marketing initiatives, while chief executive and co-founder Brian Chesky agreed to cut his base salary to US$1 from US$110,000.
It also issued a US$2bn cash call to its investors, including Silver Lake and Sixth Street Partners, following a rash of cancellations and refunds amid global lockdowns.
The fundraise valued it at US$18bn, although its flotation is expected to push the market capitalisation up to over US$30bn, according to a Reuters reports from last month.
The Monday filing reports an IPO of US$1bn but it is estimated to change since it is a placeholder amount.
The Nasdaq listing is one of the most eagerly awaited after the tech firm gained ‘unicorn’ status in 2011, having expanded to over 180 countries after only three years of operations.
The document also revealed a US$1.3bn tax bill required by the US Internal Revenue Service regarding the sale of international intellectual property to a subsidiary in 2013, which Airbnb said will contest “vigorously”.