Despite the fact its stock continues to struggle – closing at
$.50 on Wednesday – Sonder CEO Francis Davidson says the company remains “focused
on driving improvement in fundamentals and [is] optimistic that the tide will
turn in due time.”
In late April the hospitality company received word
from the SEC that it is at risk of delisting from the Nasdaq Stock Market
if its shares don’t improve to at least $1.
In a note to shareholders accompanying the company’s financial
results for the first quarter of this year, Davidson said the priority
continues to be accelerating Sonder’s timeline to become cash-flow positive – a
strategy initiated last June.
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In Q1, Sonder improved free cash flow by $21 million year-over-year,
reporting a loss of $41 million in the quarter. Davidson said he expects the figure
to continue improving in coming quarters, in part because Q1 is a slow travel
period.
Revenue in the first quarter came in at $121 million, up 50%
compared to Q1 2022.
Sonder reports its RevPAR improved 15% year-over-year to
$134 and average daily rate improved 4% to $167.
Founded in 2014, Sonder had 10,400 units at the close of
March, up 35% compared to Q1 2022.
The company is expecting accelerated growth in the coming
months, with a guidance for revenue of $155-165 million in Q2 and $345-375
million for the final six months of this year.
“Our strategy contains few secrets: we’ll keep delivering on
initiatives to improve RevPAR, reduce direct costs, open new capital light
properties and reduce our overhead costs,” Davidson wrote.
“Even though our growth remains elevated, dollars spent on
overhead, capex and pre-opening costs have gone down meaningfully in the last
year, a reflection of our efforts to streamline expenses.”