Airbnb Inc. and DoorDash Inc. became close to each other late in public and then went over to the earnings stage for the first time as a few Thursdays to report similarly large quarterly losses.
But this is where the similarities between the two end. Shares of DoorDash fell more than 11% on Thursday, while Airbnb shares are up slightly after the pair reported earnings that looked much worse than they actually were due to the hefty share fee costs associated with the IPOs. And the prospects for Airbnb ABNB,
is much brighter than DoorDash DASH,
which may just be a pure pandemic play that has peaked in public.
DoorDash, which delivers food from restaurants, grocery stores and small markets to independent contractors, has delivered a bleak outlook for 2021. The company reported a solid loss of $ 312 million in the fourth quarter, mostly due to its $ 322 million share compensation cost related to its public offering last year, although its revenue rose more than 200% to $ 970 million and it was better than Wall Street expected.
Read more about DoorDash and Airbnb deals
However, as vaccinations increase and closures end in the United States, consumers can choose to walk to or pick up their favorite restaurants to pick up orders, or eat outside if the weather improves – or inside, if they can. DoorDash acknowledges the reality, but still predicts that gross order volume will grow strongly in 2021, to $ 30.0 billion to $ 33.0 billion, from less than $ 25 billion in 2020.
“Underlying our 2021 guidelines is an assumption of accelerated reopening of the market and a return to in-store dining,” DoorDash chief financial officer Prabir Adarkar told analysts. “Although we have seen many positive signals from consumers and markets that were temporarily reopened during the pandemic, we recognize that vaccination and full reopening could cause sharper changes in consumer behavior than current data would predict.”
DoorDash is also hampered on both sides of its business model: by restaurants that feel they are paying too much and managers who feel they are not getting enough pay and benefits. Managers of DoorDash said they did not expect commission restrictions imposed by 73 jurisdictions to stand when a dining room in the store resumed, noting that they were linked to ’emergency orders’. Executives said that even the slight protection of the workers provided by Prop. 22 instituted in California, the vast majority of the costs associated with the new law in the company’s balance sheet will be “included” while they are also ‘cases. ”
DoorDash also intends to conduct more expensive campaigns for similar laws elsewhere.
At the other end of the spectrum is the Airbnb report. In Thursday’s results, Airbnb reported a nearly $ 4 billion loss in the fourth quarter, but revenue from 2020 did not fall as much as the company’s executives had predicted earlier in the year. In the worst part of the pandemic, Airbnb investors predicted that its 2020 revenue would likely be half of 2019 revenue.
But it turned out that many people were sitting at home because of the pandemic, and they could change the scenery by staying in an Airbnb rental, often just by driving to a nearby city.
“In light of the biggest crisis in the travel industry ever seen, our business was resilient and was able to adapt our model,” Brian Chesky, co-founder and CEO of Airbnb, told analysts. He said that in recent years, many people are living more nomadically because of their flexibility at work.
“Although the borders have been closed and international travel is being reduced, many people have found longer accommodation in Airbnb,” Chesky said. ‘Because they worked from home, they were flexible. Many people want to get in cars to travel in the area and stay in a local community. ”
Airbnb also had good news for Wall Street on the spending front, pointing out that its sales and marketing costs as a percentage of revenue in 2021 will be below 2019, a year in which marketing levels have been raised. Airbnb outperforms other travel-oriented businesses. Expedia Group Inc. EXPE,
which rival VRBO owns, said earlier this month on its earnings call that it saw an overall improving trend in the fourth quarter, driven by VRBO, but it did not want to break out any specific results for analysts. The online travel company reported a net loss and revenue in the fourth quarter that fell by about 64%.
Airbnb is set to win if the pandemic continues, and also if (or when) it ends. But through Dash, years of growth can be squeezed in a matter of months, and what comes next is uncertain, no matter how confident the drivers sounded on Thursday.
The impact of the pandemic on certain businesses is clearly not as predictable as many thought. With the gradual deployment of vaccines that are expected to help a bit of travel and a diner in the restaurant again, Airbnb looks set to emerge as another winner, while DoorDash may have experienced a highlight.