TikTok parent sees 2021 losses triple, but maybe turning around in 2022 - WSJ
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TikTok (BDNCE) is paying for its hot growth with heavy investment, the WSJ
reports, noting operating losses at parent ByteDance more than tripled to $7B-plus last year.
The company may be turning the corner, though, as it posted an operating profit in the first quarter of 2022, the report says citing a financial report shared with ByteDance employees.
Financial details of TikTok operations have been hard to come by as it's a private Chinese company, but the report sent to employees covers full-year 2020 and 2021 results along with the first quarter of this year, according to the report.
It showed ByteDance's net loss widened by more than 87% to $84.9B in 2021, even as revenues continue sharp expansion (up by nearly 80% to $61.7B). Operating losses in 2021 rose to $7.15B from a 2020 loss of $2.14B.
That's due to expenses rising just as quickly as the company keeps investing in growth: Cost of sales jumped 79% in 2021 to $27.4B; R&D spending came to $14.6B; selling and marketing expenses hit $19.2B; and notably, ByteDance saw $75.6B in market-value changes on convertible securities, according to the report.
As for the apparent 2022 turnaround: Revenues hit nearly $18.3B for the first three months of the year (up almost 54% year-over-year), and net loss narrowed by some 84% to $4.7B from a prior-year loss of $29.1B.
While U.S. investors can't publicly trade ByteDance stock, TikTok's explosive growth has resulted in sea changes at many of their favorite tech investments: Meta Platforms (META) has focused nearly all parts of its Facebook and Instagram operations on its short-video Reels feature, and Google (GOOG) (GOOGL) is giving heavy attention to its YouTube Shorts. Twitter (TWTR), Snap (SNAP) and Pinterest (PINS) also have aimed features at competing with (or integrating with) TikTok.
ByteDance reportedly continues to have no plans to go public anytime soon.