DoorDash Surpasses Delivery Estimates, but Shares Fall

DoorDash Inc. outperformed analysts’ predictions for delivery orders in the fourth quarter, driven by a surge in monthly users and expansion into new categories. The company revealed that total orders surged by 23% to 574 million during the three months ending Dec. 31, surpassing analysts’ average estimate of 561.8 million. Moreover, the gross value of these orders soared by 22% to $17.6 billion, exceeding Wall Street’s expectations.

However, despite these positive results, Wall Street didn’t seem entirely impressed. Despite a 28% gain in shares throughout the year, the stock plummeted by as much as 12% in extended trading, settling at $126.27, almost a two-year high.

Analysts from Evercore ISI expressed their reservations, pointing out that adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $363 million didn’t exceed the high-end of DoorDash’s forecast range of $320 million to $380 million. This marked the first time since the fourth quarter of 2022 that DoorDash failed to surpass its own EBITDA guidance.

As the largest restaurant delivery company in the U.S., DoorDash has been aggressively expanding into new categories such as flowers, alcohol, and groceries. Its efforts have paid off, as monthly active users surged to a record high of over 37 million by year-end, accompanied by a year-over-year increase in average order frequency. Additionally, DoorDash witnessed a notable uptick in subscription offers, with memberships on DashPass and Wolt+ increasing by about 20% to over 18 million.

Revenue in the quarter climbed by 27% to $2.3 billion, slightly exceeding estimates of $2.24 billion. Notably, the company managed to significantly narrow its net loss to $156 million from $642 million compared to the previous year.

DoorDash made significant strides in adding new merchants, with over 100,000 joining its marketplace in the past year. These efforts to diversify offerings and expand geographically have resulted in more than 150,000 non-restaurant merchants on the platform.

CEO Tony Xu emphasized the importance of improving consumer awareness of DoorDash’s non-restaurant delivery services and expanding its presence in overseas markets, which currently remains relatively low. He outlined key focus areas for 2024, including adding more merchants, enhancing ordering experiences, improving order-level execution, and making services more affordable.

Looking ahead, DoorDash forecasts gross order value to range between $18.5 billion and $18.9 billion for the current period. Adjusted EBITDA is anticipated to be between $320 million and $380 million.