DoorDash stock surges on ‘best quarter ever,’ despite holiday losses more than doubling expectations
DoorDash Inc. on Thursday reported a much larger-than-expected net loss for the fourth quarter, even though the company beat most other Wall Street estimates, including for revenue, orders and its guidance for the first quarter.
Shares were up nearly 14% after hours before giving back some of their gains and were about 5% higher after the company’s conference call with analysts. They fell 1.9% in the regular session to close at $66.87, breaking a three-day positive streak.
Despite the bigger-than-expected loss, DoorDash’s vice president of finance Ravi Inukonda, who has just been appointed as the company’s new chief financial officer effective March 1, told MarketWatch in an interview Thursday that the company’s 2022 ” stronger and more” emerged a profitable company.” He pointed to DoorDash’s 11th consecutive quarter of “Ebitda profitability,” even though the company lost more than $1 billion that year.
The company’s fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, rose to an all-time high of $117 million, beating analyst estimates of $109 million. Full-year Ebitda was $361 million, beating expectations of $354 million.
Inukonda also said that DoorDash had its “best quarter ever” as the platform’s users continue to order groceries and explore other grocery and convenience offerings. Fourth-quarter revenue increased 40% year over year; the company had a record 467 million orders; and its gross order value increased to $14.4 billion. Analysts had expected 459.5 million orders and a gross order value of $14.1 billion.
The company ended the year with 32 million monthly active users, up 7 million from the end of 2021. DoorDash added 5 million DashPass members year over year, increasing its total membership to 15 million, which the company says is an industry leader. Inukonda also praised the company’s US market share, which he says has risen to 60%.
The delivery platform company reported a loss of $642 million, or $1.65 per share, on revenue of $1.8 billion in the fourth quarter. Analysts had expected a net loss of $265 million, or 67 cents a share, on sales of $1.77 billion. The company attributed the loss to factors including impairments related to its acquisition of Europe-based delivery company Wolt and stock-based compensation related to DoorDash’s announced layoff of 1,250 employees in November.
For the full year, DoorDash reported a net loss of $1.37 billion, or $3.68 per share, on revenue of $6.58 billion. Analysts had expected a full-year loss of $989 million, or $2.65 per share, on sales of $6.55 billion.
The losses impacted cash flow, and the company ended the year with free cash flow of $21 million, well below the $229 million expected by analysts. DoorDash’s board of directors has announced a $750 million share buyback, following a $400 million buyback announced last May.
DoorDash expects Q1 adjusted EBITDA to be in the range of $120 million to $170 million and gross orders to be in the range of $15.1 billion to $15.5 billion. Analysts had forecast a loss of 68 cents a share on sales of $1.88 billion, Ebitda of $128 million and gross orders of $15 billion.
For the full year, the company expects strong Adjusted Ebitda growth in the range of $500 million to $800 million beginning in 2022. It also expects a gross order value of $60 billion to $63 billion. Analysts expect gross orders of $62.8 billion and EBITDA of $582 million.
In terms of senior management changes, Inukonda will replace CFO Prabir Adarkar, who will become the company’s President and Chief Operating Officer. Christopher Payne, President and COO of DoorDash for more than seven years, is retiring but will remain with the company as an advisor until May.
“Christopher made a lasting impact on DoorDash, shaped our culture, helped shape our systems and processes, and mentored and coached our future leaders,” Chief Executive Tony Xu said in a letter to shareholders.
On the call, Xu said that Adarkar and Inukonda have both been with the company for more than four years and that “we’re lucky to have two people that we’ve nurtured for a while.”
DoorDash shares are up about 37% year-to-date, while the S&P 500 index
is up about 7% so far this year.