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Airbnb and DoorDash record losses in their first public financial reports

SAN FRANCISCO: Airbnb and DoorDash on Thursday announced their first financial results as publicly traded companies, and every tech maker is recording losses as it skips the pandemic.

Home-sharing platform Airbnb lost less money than financial analysts had expected, and was optimistic that the travel industry was showing signs of recovery after being crushed by the spread of Covid-19.

However, DoorDash restaurant meal delivery has seen a problem in the future, as an increasing number of jurisdictions limit commissions and fees that can be charged while dining at restaurants remains unavailable.

DoorDash estimated that such price controls reduced its revenues and profits by $ 36 million in the fourth quarter of last year, and could cost it twice that amount in the current quarter.

“So far, all the price controls under which we operate are temporary and specifically linked to the emergency or food intake rates,” DoorDash said in a earnings letter.

To counter some of these pressures, we have started implementing additional consumer fees in many markets with price controls.

DoorDash shares sank more than 12% in after-market trading that followed the announcement of its earnings numbers.

But the service said it had gained market share in the United States and set new order numbers in the quarter.

Revenue jumped to $ 970 million, an increase of 226% on the same quarter last year, before the pandemic disrupted lifestyles.

However, DoorDash’s losses have more than doubled to $ 312 million in a similar comparison.

DoorDash’s competitors include UberEats, and the increase in demand for restaurants or grocery delivery is likely to subside as the pandemic-related restrictions on movement ease.

Focus on ‘travel recovery’

On the one hand, Airbnb expects its business to pick up when people feel more confident in travel.

“Our performance in 2020 demonstrated that Airbnb is flexible and adaptive in nature,” Airbnb CEO Brian Chesky said in the earnings statement.

“Travel is back and we focus on preparing for the travel recovery.”

Airbnb said last year’s revenue had not decreased as deeply as the company had expected due to the epidemic, and said that its revenue in the fourth quarter of last year had decreased “only” by 22% to $ 859 million.

The platform posted a loss of $ 3.9 billion in the quarter, but it was lower than financial analysts had expected. A large part of that loss was attributed to the costs associated with its first appearance in the stock market during the quarter.

“With the introduction of the vaccine and the lifting of restrictions, we expect a major recovery in travel,” Airbnb said in a speech to investors.

“Our only priority in 2021 is to prepare for that.”

Airbnb shares rose slightly in after-market trade.

“Today’s results beat expectations and speak of the resilience of the vacation rental category during the pandemic, and add to expectations that full-fledged home rents will fuel any broader housing recovery in 2021,” said Dan Thomas, senior analyst at Third Bridge for Airbnb.

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