Airbnb Inc. today offered a very red first earnings report following its initial public offering in December, thanks less to the impact of the ongoing COVID-19 pandemic than stock compensation costs associated with that very IPO.

For its fourth quarter, Airbnb reported a net loss of $3.89 billion, way up from a loss of $352 million in the year prior. Revenue fell 22%, to $859 million.

“Charges associated with our IPO and our subsequent stock price increase contributed to our net loss in Q4 2020 and fiscal year 2020,” Airbnb said in a statement. “Upon our IPO in December 2020, we recognized a non-cash stock-based compensation expense of $2.8 billion. This is much larger than a typical quarter because at the completion of the IPO (similar to many other companies) we were required to recognize a significant portion of all stock-based compensation provided to Airbnb employees over the last several years.”

The spin on the loss is sound, but its core business is still not doing that well either. Although its fourth-quarter revenue may have fallen only 22% from the year before, its revenue was down 39% from the third quarter. Lockdowns and other restrictions are still in play when it comes to COVID-19, but coming into its IPO Airbnb had been claiming that the worst of that was behind them. It’s clearly not.

Loss per share came in at $11.24. Analysts had been predicting a loss of $8.81 per share on revenue of $745.5 million, meaning that Airbnb had a higher loss than expected but also higher revenue.

Gross booking value in the quarter fell 31%, to $5.9 billion, while average daily rates averaged $128, up 13%, according to Investing.com.

Airbnb declined to give formal guidance on its earnings, saying only that “looking forward to 2021 we are preparing for the travel rebound.” It also noted that due to their financial discipline in 2020 they are set up well to thrive in the year ahead. That’s presuming that the COVID-19 pandemic finally comes to an end with the rollout of vaccines.

Some countries such as Thailand are looking to open their doors to vaccinated tourists this year without the need for quarantine, while others, such as Australia, appear to be determined to keep their borders closed.

Airbnb’s stock dropped 9% in regular trading, to $182.06, then barely moved in after-hours trading.

Photo: Pixabay