Airbnb Inc. and DoorDash Inc. went public next to each other in late 2020, and then went up to the earnings stage for the first time as a pair on Thursday to report similar huge quarterly losses.
But this is where the similarities between the two end. DoorDash’s shares plunged more than 11% in Thursday’s after-hours trading, while Airbnb’s shares rose slightly after the pair reported gains that looked much worse than they really were due to the high stock compensation costs associated with IPOs. And the prospects for Airbnb ABNB,
is much brighter than DoorDash DASH,
which may just be a piece of pure pandemic that went public at the height.
DoorDash, which delivers food to restaurants, supermarkets and small markets using independent contractors, gave a bleak outlook for 2021. The company reported a substantial loss of $ 312 million in the fourth quarter, mainly due to its $ 322 million in compensation costs for shares associated with its public offering last year, although its revenue rose more than 200%, to $ 970 million, and was better than Wall Street expected.
Read more about DoorDash and Airbnb IPOs
As vaccination counts increase and blockages end in the United States, consumers can choose to walk or drive to their favorite restaurants to pick up takeout orders or dine out when the weather improves – or indoors, if they can. . DoorDash acknowledged this reality, but still predicted that the gross order volume would rise sharply in 2021, to a range of $ 30.0 billion to $ 33.0 billion, from less than $ 25 billion in 2020.
“Underlying our 2021 orientation is an assumption of accelerated market reopenings and a return to in-store dinners,” Prabir Adarkar, DoorDash’s chief financial officer, told analysts on the company’s earnings conference call. “While we have seen many positive signs from consumers and markets that reopened temporarily during the pandemic, we recognize that vaccination and complete reopenings can lead to more marked changes in consumer behavior than current data could predict.”
DoorDash also faces difficulties at both ends of its business model: for restaurants that think they are paying too much and drivers who think they are not getting enough pay and benefits. DoorDash executives said they did not expect the commission limits set by 73 jurisdictions to remain when “in-store” dining resumes, noting that they were linked to “emergency orders”. The executives said that even with the scarce worker protections implemented by California’s Proposition 22, the vast majority of the costs associated with the new law will be “absorbed” into the company’s balance sheet, while they will also “pass them through in some ways.”
DoorDash also plans to run more expensive campaigns for similar laws elsewhere.
On the other side of the spectrum is the Airbnb report. In Thursday’s results, Airbnb reported a loss of nearly $ 4 billion in the fourth quarter, but its revenue in 2020 did not fall as much as company executives had projected earlier this year. In the worst part of the pandemic, Airbnb predicted investors that its 2020 revenue would likely reach half of 2019’s revenue.
But, in the end, many people were stuck working from home because of the pandemic and managed to change their scenario by staying in an Airbnb rental, usually just driving to a nearby city.
“In the face of the biggest crisis ever seen in the travel industry, our business has proven to be resilient and our model has been able to adapt,” Airbnb co-founder and CEO Brian Chesky told analysts. He said that last year, many people are living more nomadically, because of their flexibility at work.
“Although borders have been closed and international travel reduced, many people have found longer stays on Airbnb,” said Chesky. “As they worked at home, they were flexible. Many people want to get in cars to travel nearby, staying in a local community. “
Airbnb also brought good news to Wall Street regarding spending, noting that its sales and marketing expenses, as a percentage of revenue in 2021, will be below 2019, a year in which it had high levels of marketing. Airbnb is doing better than other travel-focused businesses. Expedia Group Inc. EXPE,
who owns rival VRBO, said in its earnings release earlier this month that it saw an overall upward trend in its fourth quarter, driven by VRBO, but declined to release any specific results to analysts. The online travel company reported net loss and revenue in the fourth quarter, which fell by 64%.
Airbnb is set to win if the pandemic continues and also if (or when) it ends. But DoorDash may have seen years of compressed growth in a few months, and what comes next is uncertain, no matter how confident its executives looked on Thursday.
The effect of the pandemic on certain companies is clearly not as predictable as many thought. With the gradual rollout of the vaccine expected to help boost some travel and restaurants in restaurants again, it appears that Airbnb is emerging as another winner, while DoorDash may have experienced its peak.