Airbnb Inc. and DoorDash Inc. went public close to each other in late 2020 and entered the earnings stage as a pair for the first time on Thursday to report similarly massive quarterly losses.
But that’s where the similarities between the two end. DoorDash shares fell more than 11% during Thursday’s trading after closing time, while Airbnb shares moved up a bit after the pair reported earnings that looked much worse than they actually were due to the high stock compensation costs associated with the IPOs. And the outlook for Airbnb ABNB,
is much brighter than DoorDash DASH,
which is perhaps just a purely pandemic play that went public at its height.
DoorDash, which delivers food to restaurants, grocery stores and small markets with the help of independent contractors, gave a cloudy outlook for 2021. The company reported a hefty loss of $ 312 million in the fourth quarter, mainly due to $ 322 million in equity compensation costs related to with its public offering last year, although sales were up more than 200% to $ 970 million and better than Wall Street expected.
Read more about DoorDash and Airbnb IPOs
As vaccinations increase and lockdowns end in the United States, consumers can choose to walk or drive to their favorite restaurants to pick up takeout orders, or dine outdoors when the weather improves – or indoors, if they can. DoorDash recognized that reality, but still predicted gross order volume to grow strongly in 2021, reaching a range of $ 30.0 billion to $ 33.0 billion, from less than $ 25 billion by 2020.
“Underlying our outlook for 2021 is an assumption of accelerated market reopening and a return to in-store dining,” Prabir Adarkar, DoorDash’s chief financial officer, told analysts of the company’s earnings call. “While we’ve seen many positive signs from consumers and markets temporarily reopening during the pandemic, we recognize that vaccination and full reopening could lead to sharper changes in consumer behavior than current data would predict.”
DoorDash is also under pressure on both sides of the business model: from restaurants who feel they are paying too much and drivers who feel they are not receiving enough pay and benefits. DoorDash executives said they do not expect commission limits set by 73 jurisdictions to persist when food in-store resumes, noting they were bound by “ emergency orders. ” Executives said that even with the meager employee protections offered by Prop. 22 of California, the vast majority of the costs associated with the new law will be “absorbed” in the company’s balance sheet, while also being “absorbed” in certain agencies. “
DoorDash also plans to run 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 loss of nearly $ 4 billion in the fourth quarter, but revenue for 2020 did not drop as sharply as business leaders had predicted earlier this year. In the worst part of the pandemic, Airbnb had predicted to investors that revenues for 2020 would likely be half of 2019’s revenues.
But it turned out that a lot of people were working from home because of the pandemic, and they were able to change their environment by staying in an Airbnb rental, often simply by driving to a nearby town.
“In the face of the greatest crisis the travel industry has ever experienced, our business has proven resilient and our model has been able to adapt,” Brian Chesky, Airbnb co-founder and CEO, told analysts. He said many people have been living more nomadically in the past year, due to their flexibility at work.
“Even though the borders were closed and international travel was restricted, many people found longer stays at Airbnb,” Chesky said. “They were flexible because they worked from home. Many people want to get in a car to travel in the area and stay in a local community. “
Airbnb also had good news for Wall Street in terms of spending, noting that sales and marketing costs, as a percentage of revenue in 2021, will be lower than 2019, a year in which marketing levels had increased. Airbnb is outperforming other travel-focused companies. Expedia Group Inc. EXPE,
which owns rival VRBO, said during its earnings call earlier this month that it saw an overall improvement trend in its fourth quarter, driven by VRBO, but declined to disclose specific results for analysts. The online travel company reported a net loss in the fourth quarter and sales declining by about 64%.
Airbnb is set to win if the pandemic continues, and also if (or when) it ends. But DoorDash may have compressed years of growth into a few months, and what comes next is uncertain, no matter how confident the executives sounded Thursday.
The impact of the pandemic on certain businesses is clearly not as predictable as many thought. With the gradual rollout of vaccines expected to boost some travel and some restaurants again, it looks like Airbnb is emerging as another winner, while DoorDash may have hit its peak.