Kayak now pegs its chances of proceeding with an initial public offering at 85%, which is up from a 60% likelihood articulated two months ago.
And, in the fifth admendment to its S1 filing, Kayak puts its chances of being part of a strategic sale at 10% or remaining a private company at a mere 5%.
Kayak ties its increased IPO chances to all the preparations its done for an IPO since the previous estimate calculated in October 2010. The estimates were made in connection with valuations of Kayak’s common stock related to the granting of options.
One can argue that Kayak’s IPO chances may indeed be enhanced now that the Google-ITA Software transaction has been finalized and much of the uncertainty has been diminished.
In fact, in its latest S1/A filing, Kayak deleted language from its March 9 Securities and Exchange Commission disclosure, which indicated that the company might not be able to renew its license with ITA or might have to renew on less favorable terms.
As Kayak notes in the Securities and Exchange Commission document filed today, the consent decree mandates that Google renew Kayak’s existing licensing licensing agreement with ITA “on the same terms…”
Kayak still, however, expresses concerns about the possibility of not being able to get its hands on improvements to ITA’s solution.
So as Kayak’s IPO probability heats up, the travel metasearch company — which also now takes direct hotel bookings on its website and mobile apps — released its first quarter of 2011 results.
On a GAAP basis, Kayak posted a $6.9 million loss, but this was largely due to a $15 million impairment charge related to its decision to drop the SideStep brand.
In January 2011, Kayak decided to eliminate its SideStep brand and to redirect SideStep’s traffic to Kayak.com. The shutting down of the SideStep brand led to a $15 million impairment charge during the quarter and impacted Kayak’s net income.
By comparison, in the ¬†first quarter of 2010, Kayak posted a GAAP loss of $854,000, but recorded an $8 million profit for the year.
When you look at Kayak’s first quarter of 2011 performance on a non-GAAP (generally accepted accounting principles) basis, the company’s financial exploits are placed in a more positive light.
Kayak produced adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $8.2 million, a 266% increase over the first quarter of 2010. Revenue increased 43% to $53 million.
If Kayak expects to get a substantial lift from its Bing partnership, it’s not heavily reflected in the first quarter results. That’s because the partnership went into effect in the very latter part of the quarter on March 11.