Revenues in 2017-2019
Invest in IPO Airbnb
Airbnb operates a global platform for unique stays and experiences. The company’s marketplace model connects hosts and guests online or through mobile devices to book spaces and experiences around the world. Airbnb was founded in 2008 in San Francisco, California.
More than 4 million hosts now offer everything from a private room in their home to luxury villas, from one night to several months at a time. In more than 220 countries and regions around the world, Airbnb hosts have welcomed over 825 million guest arrivals and have cumulatively earned over $110 billion.
Airbnb has enabled home sharing at a global scale and created a new category of travel. Instead of traveling like tourists and feeling like outsiders, guests on Airbnb can stay in neighborhoods where people live, have authentic experiences, live like locals, and spend time with locals in approximately 100,000 cities around the world.
In early 2020, as COVID-19 disrupted travel across the world, Airbnb’s business declined significantly. But within two months, Airbnb's business model started to rebound even with limited international travel, demonstrating its resilience. People wanted to get out of their homes and yearned to travel, but they did not want to go far or to be in crowded hotel lobbies. Domestic travel quickly rebounded on Airbnb around the world as millions of guests took trips closer to home. Stays of longer than a few days started increasing as work-from-home became work-from-any-home on Airbnb.
Airbnb has a substantial market opportunity in the growing travel market and experience economy. The company estimates its total addressable market to be $3.4 trillion, including $1.8 trillion for short-term stays, $210 billion for long-term stays, and $1.4 trillion for experiences. Airbnb is still early in the global shift in consumer preferences toward one-of-a-kind stays and experiences, which provides an opportunity to further grow the community and business.
The COVID-19 pandemic and the impact of actions to mitigate the COVID-19 pandemic have materially adversely impacted and will continue to materially adversely impact Airbnb business, results of operations, and financial condition. This can negatively impact shareholder value.
Airbnb has incurred net losses in each year since inception, and may not be able to achieve profitability. Adjusted EBITDA and Free Cash Flow have been declining, and this trend could continue.
Revenue growth rate has slowed, and Airbnb expects it to continue to slow in the future. This may negatively impact share price.
Airbnb (ABNB) booked $3,6B in revenue for the last 12 months. Gross margin is around 74%. In 2019, Airbnb generated revenue of $4.8 billion, representing growth of 32% from $3.7 billion in 2018. During the nine months ended September 30, 2020, Airbnb’s business was materially impacted by the global COVID-19 pandemic, with revenue of $2.5 billion, which is down 32% year over year.
Airbnb generated $1.0 billion of net cash provided by operating activities and incurred $507.0 million of purchases of property and equipment cumulatively from 2011 through 2019, resulting in cumulative positive Free Cash Flow of $520.1 million during the same period.
Similar public company is Booking.com (BKNG), which is trading at 9.3x sales with revenue decline of 48% in the last quarter YoY. The expected market capitalization of Airbnb after the IPO is $60B.
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