- Witnessed an increase in revenue to $951 million but at the same time, OYO reports losses as high as $335 million (35% of revenue) for the fiscal year 2019.
OYO reports losses for 2019 and this time the company reported a four-fold increase in revenue for the year ending in March 2019.
Though revenue of OYO Hotels & Home increased to $951 million for the fiscal year 2019 ($211 million in the previous year). OYO reports losses as high as $335 million (35% of revenue).
With deep-pocketed investor SoftBank, OYO began as a way to reserve budget accommodations online with decent quality. With all the money injected by OYO’s investors, the company has expanded internationally and is aiming to become the biggest hotel chain in the world by room count.
Talking About The Numbers:
OYO’s consolidated revenue for FY2019 stood at $951 million with India contributing 63.5% – $604 million while $348 was coming from international markets. China also contributed $307 million.
The overall revenue grew 350% from $211 million in FY 2018.
“As we work towards consistently improving our financial performance, ensuring strong yet sustainable growth, high operational and service excellence and a clear path to profitability will be our key to our approach in 2020 and beyond.” – Abhishek Gupta, Global CFO, OYO Hotels & Homes.
OYO reported over 90% of the revenue coming from the repeated and organic userbase. OYO had reported its unaudited FY19 financials in a valuation report in November last year.
In the report, OYO reports losses as high as 6.6 times to ₹2385 crore while operational revenue shot up 4.5x to ₹6,47 crore. OYO’s expenses increased from ₹1835 crore in FY18 to ₹9027 crores.
OYO Reports Losses as Well as Focuses On Profitability!
“We are on the path to profitability We haven’t set a timeline for profitability, but revenues are growing, losses have halved and margins are looking healthy.” – Aditya Ghosh – a board member comments in a media conference.
Some days before SoftBank bluntly signaled its portfolio to either be profitable or do something to be one by the earliest. But for OYO Hotels and Homes profitability doesn’t seem to be visible in the short run.
After OYO reports lose as high $335 million, there are questions that OYO needs to answer before the team can comment again that they are “going to be profitable.”
“We have pulled out of 200 cities in India, and these account for less than 5% of revenues.” – Rohit Kapoor, chief executive officer for India & South Asia.
Its gross margin rises to 14.7% (10.6% previously). Which comes after mass layoffs done by the budgeted chain of hotels.
Doubt still lingers around the fact that OYO is aiming to be profitable. While there were mass layoffs in India, China, and the US, something had to go up. Things will get back to the path of profitability when the company cuts down losses and expands revenue from its core operations.
There is still a long way for OYO to become profitable and now the way seems to be even long after OYO reports losses 35% of its revenue.