Peer-to-peer car-sharing company Turo applied to go public last night. BestFitnessBands’s first look at the S-1 filing is here, in case you missed it.
That Turo has filed to go public is no surprise. After raising nearly $500 million while private, the company has a huge capital base, meaning there is also institutional pressure on the company to pursue an IPO. Turo raised external capital for the first time in 2009. So, data from Crunchbase shows that some investors have been waiting a long time for the company’s S-1 filing.
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The good news is that Turo’s business took a turn for the worse last year. After publishing some mediocre 2020 results, Turo saw its earnings and results recover, at least through the third quarter. We get Q4 data in a subsequent S-1 request.
This morning I want to compare and contrast the company’s results for 2020 and 2021 to show how some fighter jet unicorns will emerge from the pandemic. Honestly, once we cut some non-cash charges that cloud the bottom line, Turo’s income statement impresses me.
Let’s talk about acceleration after the lockdown.
Turo .’s financial recovery
From 2019 to 2020, Turo posted modest sales growth. The company’s revenue grew from $141.7 million to $149.9 million, or about 6%. For a venture-backed company headed for an IPO, that’s an incredibly thin rate of growth.
Worse still, the company’s net losses were pretty much flat over the period, dropping just a little bit from $98.6 million in negative net income in 2019 to $97.1 million in 2020.
But then came 2021. Note the difference in results:
As you can see when we compare the first three quarters of 2020 to the same part of 2021, the company’s revenue growth picked up again and went from biting operating losses to operating gains. It seems that last year was something of a rebirth for Turo – it left slow growth before hypergrowth (207% between 2020 and 2021, for the periods mentioned) and losses before profit (on an operating basis).
Yes but, I hear you say, the company’s net loss has actually gotten worse in the first three quarters of 2021 compared to the previous year. Why do we give it credit for growth when it burned so much money?