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Comment by airstrike | Hacker News Reader

To add to that list of factors: it's also the end of the decades-long ride in Technology stocks which drove a lot of FOMO sentiment that made that money so easily available... nobody wanted to miss out on the next Facebook, the next Uber, the next Airbnb, the next Theranos--wait

The quality of the assets for these moonshot unicorns declined over time (IMHO partially because they were increasingly moving away from pure-bits to bits-and-atoms, making business cases much harder to execute and expensive to fund) and then the macro backdrop soured and here we are

Bonus: here's what StableDiffusion drew for "A dream of moonshot unicorns, 4k trending artstation" because why not... https://i.stack.imgur.com/sFxIw.png

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Uber and Airbnb have made money?

Airbnb had an adjusted EBITDA of ~$230m in Q1, so Airbnb has turned a profit once. Not sure about Uber

Adjusted means you made a profit if you ignore the fact that you made a loss.

Especially when servicing interest on debt (the I) isn't nearly as cheap as it used to be, unless the debt is locked in at a lower interest rate. Even if it is, but the term ends, a rosy-sounding EBITDA can turn ugly.

Uber has been adjusted EBITDA profitable since 2021 and is close to GAAP profitability (might reach it this year or 2024).

"Adjusted" EBITDA is frankly a sign that the company is making "magic" (read: misrepresentations) on its balance sheets. It's not surprising that Airbnb, Lyft and Uber are the only prominent companies using them.

They did for the early investors >:^P

my understanding is that Uber has a knob they can turn to just be profitable, and have chosen not to because they keep on wanting to grow and have access to more money.

Many firms have been saying this for a long time… it’s unclear how easy it is to turn this knob.

Investors seem to be demanding cash returns from mega caps now. At a minimum - if Uber has to raise money again, we’d expect it to be in worse terms.

Folks who have spent time working in SV tech companies know that for many companies (AirBnB is absolutely one) there is a knob which can be turned. The cost structures have a lot... fat. The spending in many of these places is beyond belief.

Sure, but twitter is somewhat of a litmus test for this. When twitter started trying to cut fat they also crashed their revenue.

Organizations love to accumulate fat, I don’t think anyone really has a clear idea of what is necessary fat and what isn’t. Your best bet would be getting consultants in to figure it out… who probably don’t know a heck of a lot about running a tech company.

Additional tests will be Salesforce, Twilio, Docusign, Facebook - all have promised efficiency from here on out. My guess is they'll all start putting up very good numbers.

Somewhat fair point. But there are entire areas (like product initiatives) that are extremely speculative and just pet projects which can be cut at many places. Google for example wasted a billion here or a billion there like it was nothing, on things that made little sense, years ago.

Salesforce has >30% EBITDA margins and annual revenue growth of 10-15%. They're massively profitable... if anything they are the aspirational benchmark nearly everyone else is trying to reach

No, they don't have those EBITDA margins.

They report an "adjusted" (ie, fake) EBITDA number in the 20's. It's bs and investors know it's bs. It doesn't include stock based comp.

I think we shouldn't oversubscribe twitter's failures here. If "normal" vultures had come in and done layoffs Twitter would be in a very good situation. The problem with Twitter's financials now is that it was a leveraged buyout (so now their debt obligations are much higher than they were 12 months ago), and on top of that everything is happening in order to make it toxic to advertisers.

Even before the purchase Twitter was getting to profitability quite comfortably!

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