Wednesday, June 29, 2011

HomeAway (AWAY) - Today's Hot IPO

HomeAway (AWAY) is an interesting little medium sized company, that IPO'd today.  I've actually used the site quite often for comparison sake, although never booked through them - but I love the concept.  Essentially, it's a very fancy craigslist of sorts but focusing solely on vacation rentals.  When perusing the site the past few years, I always wondered what the revenue stream was, and more important how profitable it was.   Judging from the financials, it was significantly larger in revenues than I assumed (but it has far more than the flagship site), but less profitable than I thought.

Either way, the stock is up nearly 50% so this $2 billion+ market cap is now roughly $3 billion.  If they only had a social network arm, we could instantly add a 1 in front of the $3 billion....

Like Linkedin, the company only floated 10% of the shares, which seems to be the fashionable thing to do, to get that big first day pop.

Via WSJ:

  • Online vacation rental website HomeAway Inc.....shares opened at $36.10 a share on the Nasdaq, up around 34% from its initial public offering price of $27. A total of eight million shares were sold at the high end of its expected $24 to $27 range. 
  • Based in Austin, Texas, HomeAway says it operates the world's largest online marketplace for vacation rentals, with more than 9.5 million unique monthly visitors on average, according to comScore Media Metrix, and more than 560,000 paid rental listings.
  • Since its launch in 2005, it has grown both internally and through 17 acquisitions, and in 2010 almost 38% of its revenue came from outside of the U.S., primarily from Europe. It operates 31 websites in 11 languages with rentals located in more than 145 countries.
  • Vacationers can browse the site's listings for free, while property owners and managers pay annual listing fees to put their rental properties on the site. Property owners can also use an array of paid and free software tools to manage their listings.
  • Annual revenue and net income have been on a steady increase in recent years, with the company reporting total revenue of $52 million in the first quarter, up 44% from the same period a year ago, as it increased the number of new listings and increased revenue per listing. Net income during that time was $1.5 million compared to a net loss of $803,000 in the first quarter of 2010. 
  • In full-year 2010, total revenue increased 40% to $168 million on more listings and higher per-listing revenue, and net income more than doubled to $16.9 million compared to 2009 results.
  • The company says it has historically generated strong cash flow and predictable revenue because it operates on an advance-payment, subscription-based model, with annual listing renewal rates of about 76%. But its quarterly results can fluctuate due to the seasonal nature of its business and variable expenses such as advertising, acquisitions and technology licensing. has a relatively in depth piece on the company here, if interested.

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