> We have experienced rapid growth in the three months ended June 30, 2020, September 30, 2020 and for a portion of the three months ended March 31, 2020, due in part to the COVID-19 pandemic given our users have been online more as a result of global COVID-19 shelter-in-place policies. For example, our bookings increased 171% from the nine-months ended September 30, 2019 to the nine months ended September 30, 2020. We do not expect these activity levels to be sustained, and in future periods we expect growth rates for our revenue to decline, and we may not experience any growth in bookings or our user base during periods where we are comparing against COVID-19 impacted periods (i.e. the three months ended March 31, 2020, June 30, 2020, and September 30, 2020). Our historical revenue, bookings and user base growth should not be considered indicative of our future performance. We believe our overall acceptance, revenue growth and increases in bookings depend on a number of factors, including, but not limited to, our ability to:
> We have a history of net losses and we may not be able to achieve or maintain profitability in the future.
We have incurred net losses since our inception, and we expect to continue to incur net losses in the near future. We incurred net losses of $97.2 million, $86.0 million, and $203.2 million for the years ended December 31, 2018 and 2019, and the nine months ended September 30, 2020, respectively. As of September 30, 2020, we had an accumulated deficit of $484.0 million.
It's boilerplate for companies that lose money! Most IPOing companies outside of the tech sector certainly don't have this in their S-1.
It's only not notable because if you've even skimmed the rest of the S-1, you already know whether they make money or not. If you haven't, it's possibly the most notable thing there. It's the single bit of information that tells you most about the company's historical financial performance.
If you're spending more than you're making, then you're almost certainly projecting LTV.
The big, falsifiable assumption here is that your acquisition sources will keep sending you users of the same quality. Because of the way that ML systems work, this tends to not be true, and if you are using long windows it will both take you a long time to realise this, and cost you a bunch of money.
This is normally how companies go bust/stop growing as a result of LTV models.
While in a vacuum larger losses aren't painting the full picture, but then if you take their revenue growth only increasing by 70% into context it looks even worse!
They probably have investors who would rather they have net losses and grow top line growth as fast as possible. This is software, not a service provided by people or involving physical goods. So its hard to believe they can't tweak profitability when they want to. It could be bad for their growth, particularly if they have to monetize the game more. But that's a reasonable proposition for an investment.
> We have experienced rapid growth in the three months ended June 30, 2020, September 30, 2020 and for a portion of the three months ended March 31, 2020, due in part to the COVID-19 pandemic given our users have been online more as a result of global COVID-19 shelter-in-place policies. For example, our bookings increased 171% from the nine-months ended September 30, 2019 to the nine months ended September 30, 2020. We do not expect these activity levels to be sustained, and in future periods we expect growth rates for our revenue to decline, and we may not experience any growth in bookings or our user base during periods where we are comparing against COVID-19 impacted periods (i.e. the three months ended March 31, 2020, June 30, 2020, and September 30, 2020). Our historical revenue, bookings and user base growth should not be considered indicative of our future performance. We believe our overall acceptance, revenue growth and increases in bookings depend on a number of factors, including, but not limited to, our ability to:
> We have a history of net losses and we may not be able to achieve or maintain profitability in the future.
We have incurred net losses since our inception, and we expect to continue to incur net losses in the near future. We incurred net losses of $97.2 million, $86.0 million, and $203.2 million for the years ended December 31, 2018 and 2019, and the nine months ended September 30, 2020, respectively. As of September 30, 2020, we had an accumulated deficit of $484.0 million.