Sonder revenue slips due to omicron in Q1

Home Business probe It says it felt the effects of the omicron variant in the first quarter of 2022, noting in its earnings report that “the financial results we reported from March 2020 through March 2022 are not representative of the power and full potential of our business”.

Founded in 2014, Sonder entered the public markets through a special purpose acquisition company (SPAC) created by a combination with Gores Metropoulos II in January this year.

For the first quarter of 2022, Sonder revenue was $80.5 million, an increase of 155% over the first quarter of 2021, driven by year-over-year RevPAR and the growth of live units. However, the figure is down from revenue of $87 million in the prior quarter. The company says Q1 2022 revenue was impacted by RevPAR compression “beyond our typical seasonality patterns due to the emergence of the omicron variant.”

The revenue impact also impacted its profitability metrics in Q1 2022 – Adjusted EBITDA for the period was negative $83.5 million – but the company “continued to demonstrate year-over-year in our profitability margins,” with property-level profit margin improving by 3,300 bps and Adjusted EBITA margin improving by 6,400 bps year-over-year. ‘other.

RevPAR for the period was $117, a 52% improvement from Q1 2021.

Net income was $22.4 million, with net profit margin improving to 28% in Q1 2022 from minus 249% in Q1 2021. Adjusted EBITDA margin improved to minus 104% in the first quarter of 2022, compared to minus 167% in the first quarter of 2021.

Operating cash margin improved to 66% in Q2 2022 from 128% in Q1 2021 Free cash margin improved to 81% for the quarter from 136% for the same period last year.

“Our path to cash flow positivity depends on: 1. Our ability to increase operating cash flow margins as the travel market recovers and we improve our RevPAR and direct cost efficiencies; 2. Our ability to open our signed properties and continue to add more high quality signings; and 3. Our disciplined growth on other operating expenses and net investments,” Sonder co-founder and CEO Francis Davidson said in a letter to shareholders.

“With visibility into attractive operating cash flow margins as the market recovers and we build more capacity, with a large pipeline of units under contract and a larger pipeline of potential deals than ever before, and with our focus on prudent expense growth, we are confident in our ability to seize this unique market opportunity in a financially disciplined manner.

Sunder’s total portfolio of live and contract units grew to approximately 19,300 units in the first quarter of 2022, a 48% year-over-year increase. Live units grew 54% year over year to over 7,700 units in 39 live markets in 10 countries.

The company more than doubled business travel accounts to nearly 250 in Q1 2022 from 100 accounts in Q4 2021. Drivers include transient business growth with travel management companies as well as traction with group and corporate accommodation bookings, according to the company.

Sales and marketing expenses for the quarter increased 277% year-over-year to $9.5 million, driven by higher channel transaction fees due to an increase in total number of reservations.

Looking ahead, the company says, “Given the latest increase we’ve seen in booking trends heading into the second quarter, we continue to believe that now is the time to responsibly pursue our strategy of growth.”