Sonder Holdings Inc. (NASDAQ: SOND, “Sonder” or the “Company”),
a leading next-generation hospitality company that is redefining
the guest experience through technology and design, today announced
that it will delay the announcement of its fourth quarter and full
year 2023 financial results.
The Company recently identified accounting errors related to the
valuation and impairment of operating lease right of use assets and
related items for the fiscal years 2022 and 2023. The Company
requires additional time to restate 2022 and 2023 financial
statements (“Affected Financial Statements”) for certain previously
disclosed periods (“Non-Reliance Periods”) as described in the
Company’s Current Report on Form 8-K filed on March 15, 2024. The
foregoing operating lease right of use assets and related item
errors are non-cash in nature and will not impact the Company’s
reported cash balances or statements of cash flows for the
Non-Reliance Periods. The Company expects that the restatements
will increase the Company’s overall net loss and loss per share in
the impacted periods.
The Company intends to file its restated Affected Financial
Statements as soon as practicable.
Today, Sonder also announced the following estimated and
unaudited fourth quarter and full year 2023 highlights:
- Revenue was approximately $164 million for the fourth
quarter and approximately $603 million for the full year 2023
- RevPAR was approximately $150 for the fourth quarter and
approximately $151 for the full year 2023
- Occupancy Rate was 82% for the fourth quarter and 82%
for the full year 2023
- Bookable Nights were 1,092,000 for the fourth quarter
and 3,995,000 for the full year 2023
- Operating Cash Flow1 was approximately $(34) million for
the fourth quarter and approximately $(108) million for the full
year 2023
- Free Cash Flow (excluding restructuring costs and lease
termination costs)2 was approximately $(35) million for the
fourth quarter and approximately $(119) million for the full year
2023
- Total Cash, Cash Equivalents and Restricted Cash was
approximately $136.5 million, which included approximately $40.7
million of restricted cash as of December 31, 2023
- Live Units were 12,200 as of December 31, 2023
- Total Portfolio was 16,000 as of December 31, 2023
The Company currently expects that its final results of
operations and other data will be consistent with the estimates set
forth above, but such estimates are preliminary and its actual
results of operations and other data could differ materially from
these estimates due to the completion of its financial closing
procedures, final adjustments, the restatement, and other
developments that may arise between now and the time its audited
consolidated financial statements are issued.
The Company will issue a further press release when a date and
time for its fourth quarter and full year 2023 earnings release and
investor conference call has been determined.
1 Operating Cash Flow includes the impact of restructuring and
other charges related to reductions in force as well as the impact
of charges related to lease terminations. Operating Cash Flow is
equivalent to cash used in operating activities. 2 This is a
Non-GAAP Financial Measure. Refer to section titled Reconciliation
of Non-GAAP Financial Measure for the reconciliation of our
Non-GAAP Financial Measures to the most directly comparable GAAP
Financial Measure.
About Sonder
Sonder (NASDAQ: SOND) is revolutionizing hospitality through
innovative, tech-enabled service and inspiring, thoughtfully
designed accommodations combined into one seamless experience.
Launched in 2014, Sonder provides a variety of accommodation
options — from spacious rooms to fully-equipped suites and
apartments — found in over 40 markets spanning ten countries and
three continents. The Sonder app gives guests full control over
their stay. Complete with self-service features, simple check-in
and 24/7 on-the-ground support, amenities and services at Sonder
are just a tap away, making a world of better stays open to
all.
To learn more, visit www.sonder.com or follow Sonder on
Instagram, Linkedin or X.
Download the Sonder app on Apple or Google Play.
Reconciliation of Non-GAAP Financial
Measure: Reconciliation of Cash Used in Operating Activities to
Free Cash Flow (“FCF”)
(in thousands)
Quarter ended December 31,
2023
Year ended December 31,
2023
Cash used in operating activities
$
(33,610
)
$
(107,648
)
Cash used in investing activities
(2,381
)
(14,486
)
FCF, including restructuring costs and
lease termination costs
(35,991
)
(122,134
)
Cash paid for restructuring costs
-
2,150
Cash paid for lease termination costs
1,026
1,026
FCF, excluding restructuring costs and
lease termination costs
$
(34,965
)
$
(118,958
)
Definitions
Free Cash Flow Free Cash
Flow (“FCF”) is defined as cash used in operating activities
plus cash used in investing activities adjusted to exclude
restructuring costs and lease termination costs. Free Cash Flow is
a supplemental measure that is not in accordance with U.S.
generally accepted accounting principles (“GAAP”). The most
directly comparable GAAP financial measures are cash used in
operating activities when combined with cash used in investing
activities. The Company believes FCF, which as presented excludes
restructuring costs and lease termination costs, is meaningful to
investors as it is a primary liquidity measure that the Company
focuses on internally to evaluate its progress towards delivering
sustainable positive free cash flow. Sonder’s FCF may differ from
similarly titled measures used by other companies due to different
methods of calculation. Presentation of these measures is not
intended to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP. In addition, this measure may not provide a
complete understanding of the Company’s cash flow as a whole. As
such, these measures should be reviewed in conjunction with the
Company’s GAAP cash flow.
RevPAR Revenue Per Available
Room (“RevPAR”) represents the average revenue earned per
available night, and is calculated either by dividing revenue by
Bookable Nights, or by multiplying Average Daily Rate by Occupancy
Rate. Average Daily Rate (“ADR”) represents the average
revenue earned per night occupied and is calculated as revenue
divided by Occupied Nights. Occupancy Rate is defined as
Occupied Nights divided by Bookable Nights, expressed as a
percentage. Bookable Nights represent the total number of
nights available for stays across all Live Units. This excludes
nights lost to full building closures of greater than 30 nights.
Occupied Nights represent the total number of nights
occupied across all Live Units.
Live Units & Total Portfolio
Total Portfolio represents Live Units plus Contracted Units.
This includes any unit that has a signed real estate contract,
regardless of whether or not the unit is available for guests to
book. This excludes any units that have been exited (i.e., the
lease was terminated or allowed to expire). Live Units are
defined as units which are available for guest bookings on
Sonder.com, the Sonder app and other channels. Sonder pays rent (or
utilizes pre-negotiated abatement) and is able to generate revenue
from these units. Contracted Units are units for which
Sonder has signed real estate contracts, but are not yet available
for guests to book. Sonder is not yet able to generate revenue from
these units. Certain signed leases have contingencies or conditions
that must be satisfied before Sonder takes over the units, and from
time to time, the Company excludes some of these leases from its
Contracted Units total based on its judgment about the likelihood
that the contingencies or conditions will be satisfied.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based upon current expectations or beliefs, as well as
assumptions about future events. Forward-looking statements include
all statements that are not historical facts and can generally be
identified by terms such as “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “potentially,” or “will” or similar
expressions and the negatives of those terms. These statements
include, but are not limited to, statements regarding the Company’s
expectations related to the restatement of its financial
statements, including the expected impact on the Company’s
financial statements, anticipated material weaknesses, and the
timing and nature of the related SEC filings; the preliminary
estimated financial and operating information presented herein,
which is subject to adjustment in connection with the Company’s
financial closing procedures and the preparation and audit of its
final fourth quarter and full year 2023 results; and the Company’s
anticipated liquidity, cash flow, and cash balances. These
forward-looking statements are based on management’s current
expectations, estimates, and beliefs, as well as a number of
assumptions concerning future events. Actual results could differ
materially from those expressed in or implied by the
forward-looking statements due to a number of risks and
uncertainties, including but not limited to: uncertainties
concerning the results of the review of the Affected Financial
Statements and the Company’s controls and procedures, including the
possibility that additional accounting errors or corrections will
be identified with respect to the Non-Reliance Periods or any other
period; the possibility of additional delays in the Company’s SEC
filings; potential changes in the preliminary estimated financial
information and operating data presented herein; uncertainties
associated with the Company’s liquidity, debt, and capital
resources, including the risk that the Company’s efforts to
conserve cash will be unsuccessful and that additional funding or
other sources of liquidity will not be available on acceptable
terms or at all; the risk that the Company will be unsuccessful in
achieving positive Free Cash Flow; risks and uncertainties
associated with the Company’s restructuring initiatives and
portfolio optimization program, including uncertainties related to
the timing and extent of changes to the Company’s leases; and the
other risks and uncertainties described in the Company’s SEC
reports, including its Current Report on Form 8-K dated as of the
date hereof, and under the heading “Risk Factors” in its most
recent annual report on Form 10-K and quarterly reports on Form
10-Q. The forward-looking statements contained herein speak only as
of the date of this press release. Except as required by law, the
Company does not undertake any obligation to update or revise its
forward-looking statements to reflect events or circumstances after
the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240315915416/en/
Media: press@sonder.com
Investor: ir@sonder.com
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