Airbnb Inc. and DoorDash Inc. they were made public near the end of 2020 and then moved into the earnings per couple phase on Thursday to report similar gigantic quarterly losses.
But this is where the similarities between the two end. DoorDash shares rose more than 11% in off-hours trading on Thursday, while Airbnb shares rose slightly after the pair reported gains that looked much worse than they were really due to the heavy share compensation costs associated with mutual funds. And the prospects of Airbnb ABNB,
is much brighter than DoorDash DASH,
that it may be just a pure pandemic work that was made public at the earliest.
DoorDash, which receives food from restaurants, grocery stores and small markets through independent contractors, gave a bleak outlook for 2021. The company reported a significant $ 312 million loss in the fourth quarter, primarily due to its 322 $ million in share compensation expenses associated with its public offering last year, although its revenue rose 200% to $ 970 million and was better than Wall Street expected.
Read more about DoorDash and Airbnb IPOs
Although as the number of vaccinations increases and blockages end in the United States, consumers can choose to walk or drive to their favorite restaurants to pick up takeaway food or dine out. as time improves or, if they can, within. DoorDash acknowledged this reality, but still predicted that gross order volume would grow strongly in 2021, to a range of $ 30.0 billion to $ 33 billion, from less than $ 25 billion by 2020.
“Behind our focus for 2021 is a case of accelerated market reopening and a return to food in the store,” Prabir Adarkar, chief financial officer of DoorDash, told analysts of the company’s profit call. “While we have seen many positive signs of consumers and markets that have temporarily reopened during the pandemic, we recognize that vaccination and full reopening could lead to sharper changes in consumer behavior than current data would predict.”
DoorDash also faces two extremes of its business model: for restaurants that consider themselves paying too much and for drivers who consider that they don’t receive enough pay and profits. DoorDash executives said they do not expect the commission limits set by 73 jurisdictions to be maintained when meals are picked up “in the store,” noting that they were tied to “emergency orders.” Executives said that even with the meager labor protections established 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 also “transmitting” them. cases “.
DoorDash also intends 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 posted a loss of nearly $ 4 billion in the fourth quarter, but its revenue for 2020 did not fall as much as the company’s executives had projected earlier this year. At the worst of the pandemic, Airbnb had predicted to investors that its 2020 revenue would likely reach half of its 2019 revenue.
But as it turned out, many people got stuck working at home due to the pandemic and were able to change scenery staying on an Airbnb rental, often just by car in a nearby city.
“In the face of the biggest crisis in the travel industry ever seen, our business proved resilient and our model was able to adapt,” Brian Chesky, co-founder and CEO of Airbnb, told analysts. He said that over the past year, many people have been living more nomads because of their job flexibility.
“Even though borders were closed and international travel was reduced, many people found long-term stays on Airbnb,” Chesky said. “Because they worked from home, they were flexible. A lot of people want to get in cars to travel around, staying in a local community. “
Airbnb also had good news for Wall Street in terms of spending, noting that its sales and marketing spending, as a percentage of revenue in 2021, will be lower than in 2019, when it had high levels of marketing. Airbnb is better than other travel-focused companies. Expedia Group Inc. EXPE,
which has rival VRBO said in its earnings call earlier this month that it saw a global upward trend in its fourth quarter, driven by VRBO, but that it did not want to give any specific results for analysts . The online travel company recorded a fourth-quarter net loss and revenue that fell by about 64%.
Airbnb is set to win if the pandemic continues and also (or when) it ends. But DoorDash may have seen years of growth compressed in a few months, and what comes next is uncertain, no matter how confident its executives sounded on Thursday.
It is clear that the effect of the pandemic on certain companies is not as predictable as many had thought. With the gradual release of vaccines expected to help increase travel and restaurant catering, it looks like Airbnb is emerging as another winner, while DoorDash may have experienced its high point.