Montréal-founded, San Francisco-headquartered Sonder, which leases and manages a portfolio of short-term rental units, has announced that it is delaying the release of its fourth quarter and full year 2023 financial results.
In a March 15 statement, Sonder said it recently identified “accounting errors related to the valuation and impairment of operating lease right of use assets and related items for the fiscal years 2022 and 2023.”
Sonder said it plans to refile its 2022 and 2023 financial statements “as soon as practicable.”
Sonder said the errors identified do not relate to cash and will not impact its reported cash balances or statements of cash flows during those periods. However, the company said it expects that correcting the errors will increase its overall net loss and loss per share during these timeframes.
The firm said it plans to refile its 2022 and 2023 financial statements “as soon as practicable.”
Following the news that it would delay filing, Sonder, which trades on the Nasdaq, saw its stock fall from $4.55 USD at market open to $3.65 at press time, a decrease of almost 20 percent.
After Sonder’s announcement, shareholder rights law firm Johnson Fistel, LLP released its own statement today announcing it was commencing a class action investigation into whether Sonder or any of its executive officers or others violated securities laws by “misrepresenting or failing to timely disclose material, adverse information to investors.”
Sonder did release some estimated and unaudited results for the fourth quarter and full year 2023. The startup said it achieved approximately $164 million in revenue in Q4 2023 and approximately $603 million for the full year, which would represent a 30 percent increase in revenue from 2022.
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The company estimated an operating cash flow shortfall of about $34 million in the fourth quarter, and approximately $108 million for the entirety of 2023. Sonder said these figures include the impact of restructuring and layoffs, plus charges related to lease terminations. Sonder projected its occupancy rate was 82 percent for both Q4 and the full year, and it had 12,200 live units at year-end.
While now based in San Francisco, Sonder’s Canadian roots go deep. The company was founded in Montréal in 2012 by Martin Pecard, Lucas Pellan, and Francis Davidson under the name Flatbook, and later moved its headquarters to San Francisco and incorporated in the US.
Sonder has secured substantial funding throughout its history, and went public via a special purpose acquisition company in 2022. However, Sonder has never reached profitability, and has more recently focused on becoming cash flow positive. This effort has included layoffs—Sonder reduced its workforce by over 20 percent in 2022, and cut an additional 100 employees in the spring of 2023.
Last September, Sonder announced it would perform a reverse stock split, which occurs when a firm consolidates its outstanding shares into fewer and more valuable shares, without changing its market capitalization.
Feature image courtesy Sonder.
