• Airbnb was unprofitable during the first nine months of 2019,  The Wall Street Journal reported on Tuesday.
  • The report said Airbnb lost $322 million (about R4 billion), compared with a $200 million (R2.9 billion) profit during the same period a year prior, and that costs climbed faster than revenue in its third quarter.
  • Sources also told The Journal that the coronavirus outbreak, which forced Airbnb to suspend bookings in China, could affect the timing of its expected initial public offering in 2020.
  • Visit Business Insider SA's homepage for more stories.

Airbnb may have additional challenges to navigate as it looks to go public in 2020.

The multibillion-dollar travel company lost money during the first nine months of last year, according to a report published by The Wall Street Journal on Tuesday.

The report said Airbnb posted a net loss of $322 million (about R4 billion) through September after making a profit of $200 million (about R2.9 billion) the previous year. It also said that while the company's revenue increased to $1.65 billion (R24 billion) in the third quarter, up $400 million (R5.9 billion) from the year prior, costs grew faster.

That could give pause to investors, many of whom have become wary of businesses without a clear path to profitability after a crop of money-losing companies went public last year with mixed results and WeWork canceled its initial public offering.

Airbnb appears to be facing rising costs as it continues to grow, including a $150 million (R2.2 billion) investment in improving the safety of its platform, as well as increased overhead expenses and sales and marketing costs.

The company has about $3 billion (R44 billion) in cash on hand, and some investors think it has a stronger business model than companies like Uber and WeWork, but Tuesday's report could mean the company will face increased pressure to prove that its financials add up.

Airbnb said last year that it expected to become a public company sometime in 2020, but sources told The Wall Street Journal that could likely mean the third quarter at the earliest and the timing could be affected by the Wuhan coronavirus outbreak.

Airbnb has worked hard to gain a foothold in China, but according to Tuesday's report, those numbers may have taken as much as an 80% hit this year. The company has suspended bookings within Beijing and allowed customers to cancel trips free of charge, but it's unclear how significantly the outbreak has affected its business.

Airbnb declined to comment on The Wall Street Journal's report.

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