Airbnb, DoorDash Report Profits As COVID Threatens To Slow IRL Economy (Again)
Home stay giant Airbnb and on-demand delivery company DoorDash released their quarterly results today after the bell.
The two companies have been strongly impacted by the appearance of COVID-19. Airbnb saw its revenue plummet in 2020 during the first lockdowns, leading the company to raise expensive capital and close its hatches. The company recovered over the year, leading to its eventual IPO.
DoorDash, on the other hand, had a simply amazing 2020 as people stayed home and ordered. Since we received both reports on the same day, let’s digest them and see how COVID has – and can – impact their results.
In the second trimester, Airbnb reported revenue of $ 1.3 billion, which compares favorably to its second quarter 2020 profit of $ 335 million and its total second quarter 2019 revenue of 1.21. billion dollars. In percentage terms, Airbnb’s revenue increased 299% from its Q2 2020 level and 10% from what the company managed in the same period of 2019.
Analysts were forecasting revenue of $ 1.23 billion for the period.
Airbnb lost $ 68 million in the quarter including all costs. The company’s adjusted EBITDA, a heavily modified earnings measure, was $ 217 million in the quarter. Cash flow from operations in the second quarter of 2021 was $ 791 million. Looking ahead, here’s what Airbnb had to say about its revenue outlook:
[We] Expect third quarter 2021 revenue to be our highest quarterly revenue on record and deliver the highest adjusted EBITDA dollars and margin on record.
How did the market digest Airbnb’s above-expectation growth, higher adjusted earnings, lower net losses, massive cash generation, and record third quarter revenue expectations? By offering his actions lower. Airbnb is down about 4.5% in after-hours trading.
Confused? Investors may be concerned about the following note from the company, also taken from the guidance section of its earnings letter:
In the near term, we predict that the impact of COVID-19 and the introduction and spread of new variants of the virus, including the Delta variant, will continue to affect overall travel behavior, including frequency and timing. where customers book and cancel. As a result, year-over-year comparisons for Nights and Reserved Experiences and GBV will continue to be more volatile and non-linear.
While the third quarter of 2021 is looking good for Airbnb, it looks like its future growth could be erratic or delayed due to the ongoing pandemic. There are public indicators indicating a drop in travel fares, which could impact Airbnb.
The company’s second quarter results and third quarter expectations are impressive compared to Airbnb a year ago. But that doesn’t mean it’s entirely out of the COVID woods.
Despite generally lower COVID frictions in its market in Q2 2021, DoorDash managed to set records for orders and the value of those orders. In the three-month period ending June 30, 2021, the on-demand food delivery company turned the order value of $ 10.46 billion (market GOV) into total revenue of $ 1.24 billion. The number of GOVs in the market was 70% higher than the Q2 2020 result, while DoorDash’s revenue grew 83%.
Investors expected the company to have total revenue of $ 1.08 billion, so DoorDash far exceeded expectations.
How profitable was DoorDash during the quarter? DoorDash was not profitable overall, with a net loss of $ 102 million. In terms of Adjusted EBITDA, DoorDash made a profit of $ 113 million in the second quarter of 2021. That’s not so bad, given that Uber can’t achieve the same feat with its own food delivery business. . DoorDash’s net profit was worse than it managed in the second quarter of 2020, while its Adjusted EBITDA improved.
DoorDash shares are down around 3.5% in after-hours trading.
Why? It is not entirely clear. DoorDash said it expects “T3 Marketplace GOV to be in the $ 9.3 billion to $ 9.8 billion range, with third quarter adjusted EBITDA of $ 0 to $ 100 million. “. Sure, that’s down a bit from its Q2 GOV count, but investors expected DoorDash to show less revenue in Q3 than Q2, so you might think GOV’s expectations were also lower.
Is COVID the answer? References to COVID-19 in the company’s earnings document tend to address leaked results and historic efforts to provide relief to restaurants that use DoorDash for orders or delivery. So, there isn’t a lot of juice to squeeze out there. However, the company said the following near the end of its report:
We believe that the large, secular movement towards local omnichannel commerce is still emerging. However, the scale and fragmentation of local commerce suggests that the issues to be addressed will become more difficult, coordination between internal and external stakeholders will become more complex, and the vectors of competitive threats will increase. At the same time, we expect the pace of changes in consumer behavior to slow down from the extraordinary pace of change in recent quarters.
Simplify this for us: DoorDash expects slower growth going forward, a more complex business environment, and increasing competition as it enters new markets. This is not a mix that would make any investor Following excited, we don’t think so.