Sonder Delays 2023 Earnings Report, Needs to Restate Financials for Past 2 Years

It’s another setback for short-term rental firm Sonder: The company delayed the release of its fourth-quarter earnings report and said it will have to restate earnings for 2022 and 2023 because of accounting errors.

“The Company expects that the restatements will increase the Company’s overall net loss and loss per share in the impacted periods,” Sonder announced Friday after the close of financial markets.

The issue, Sonder stated, is that it found accounting errors in 2022 and 2023 in the way it calculated “the valuation and impairment of operating lease right of use assets and related items.”

Sonder said their restatements would not impact cash balances and cash flows for those years.

Another Setback for Sonder

Still, the looming restatement of earnings is another setback for Sonder, which appointed a new chief financial officer in March 2023.

Sonder is predominantly in the short-term rental business, often saddled with long-term leases of apartment buildings, and it also operates hotels.

Disappointing SPAC Merger, No Profits in Sight

Sonder went public through a SPAC merger in January 2022 and has never been profitable. In July 2022, it said it expected to be cash flow positive in 2023, but abandoned that pledge early that year. In recent months, Sonder has been working with an advisor to pare its portfolio.

Sonder executed a reverse stock split in September 2023 as its share price had dipped below $1 per share and it flirted with a Nasdaq delisting. It has undergone several restructurings, reducing staff in several rounds of layoffs.

In a preliminary update to its fourth-quarter and full-year 2023 earnings announced Friday, Sonder stated it expects fourth-quarter revenue of $164 million, a 21% jump, and free cash flow — excluding restructuring and lease termination costs — of negative $35 million.

Following the announcement Friday, the company’s share price was down 2% to $5.39 in after-hours trading.