The Airbnb IPO's S-1 prospectus revealed slowing growth dating back to 2016, well before the pandemic. The company’s 2019 revenue increase was only 32%, compared with 2016’s 80%. 2019 also saw the company dip into the red for the first time in two years.
- Pulling in $4.8B in revenue in 2019 cost the company $5.3B in spending on growth initiatives and technical infrastructure. It has subsequently cut 25% of its workforce and placed a freeze on discretionary spending.
- This resulted in a profit in Q3 2020. The first nine months of 2020 saw revenue dip to $2.5B from $3.7B, while net losses jumped to $696.9M in the same period. Its free-cash-flow metric also went red, to negative $520.1M from a positive $319.8M.
- Its side projects, such as Airbnb Experiences, have not taken off, despite having a potential $1.4B market size.
- The company has paid $204M out of a $250M fund to reimburse hosts, who have also been offered equity in the company. The total number of listings fell to 7.4 million as of the end of September, of which 5.6 million were so-called active listings.
- The company plans to pivot to an emphasis on U.S. domestic listings but could be blindsided by increased government interest in regulation.