DoorDash stock surges on 'best quarter ever,' despite holiday losses more than doubling expectations
By Levi Sumagaysay
Delivery platform lost more than half a billion dollars in the fourth quarter, as impairment charge and layoffs weigh on bottom line
DoorDash Inc. on Thursday reported a much wider fourth-quarter net loss than expected, though the company beat most other Wall Street estimates, including for revenue, orders and its first-quarter forecast.
DoorDash (DASH) shares climbed nearly 14% after hours before giving back some of their gains, and were about 5% higher after the company's earnings call with analysts. They fell 1.9% in the regular session to close at $66.87, breaking a three-day positive streak.
Despite the wider-than-expected loss, Ravi Inukonda, DoorDash's vice president of finance who was just announced as the company's new chief financial officer effective March 1, told MarketWatch in an interview Thursday that the company came out of 2022 a "stronger and more profitable company." He pointed to what he said was DoorDash's 11th consecutive quarter of "Ebitda profitability," though the company lost more than $1 billion for the year.
The company's adjusted fourth-quarter 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 DoorDash had its "best quarter ever," with users of the platform continuing to order food as well as try other offerings in grocery and convenience. Fourth-quarter revenue rose 40% year over year; the company had a record 467 million orders; and its gross order value rose to $14.4 billion. Analysts had expected 459.5 million orders and $14.1 billion in gross order value.
The company ended the year with 32 million monthly active users, an increase of 7 million from the end of 2021. DoorDash gained 5 million DashPass members year over year, bringing its total membership to 15 million, which the company said leads the industry. Inukonda also touted the company's U.S. market share, which he said rose to 60%.
The delivery-platform company reported a fourth-quarter loss of $642 million, or $1.65 a share, on $1.8 billion in revenue. Analysts had expected a net loss of $265 million, or 67 cents a share, on revenue of $1.77 billion. The company attributed the loss to factors including impairment charges related to its acquisition of Europe-based delivery company Wolt, and stock-based compensation related to the layoffs of 1,250 employees DoorDash announced in November.
For the full year, DoorDash reported a net loss of $1.37 billion, or $3.68 a share, on revenue of $6.58 billion. Analysts had expected a full-year loss of $989 million, or $2.65 a share, on revenue of $6.55 billion.
The losses affected cash flow, and the company ended the year with free cash flow of $21 million, way short of the $229 million expected by analysts. The DoorDash board has announced a $750 million stock buyback, which follows a $400 million buyback announced last May.
DoorDash expects first-quarter adjusted Ebitda of $120 million to $170 million, and gross order value of $15.1 billion to $15.5 billion. Analysts had forecast a loss of 68 cents a share on revenue of $1.88 billion, Ebitda of $128 million, and gross order value of $15 billion.
For the full year, the company expects adjusted Ebitda to grow sharply from 2022, in the range of $500 million to $800 million. It also expects gross order value of $60 billion to $63 billion. Analysts expect $62.8 billion in gross order value and Ebitda of $582 million.
As for the executive changes, Inukonda is replacing CFO Prabir Adarkar, who will become president and chief operating officer of the company. Christopher Payne, president and COO of DoorDash for more than seven years, is retiring but will remain with the company as an advisor through May.
"Christopher has made an indelible mark on DoorDash, shaping our culture, co-creating our systems and processes, and mentoring and coaching our future leaders," Chief Executive Tony Xu said in a letter to shareholders.
On the call, Xu said Adarkar and Inukonda have both been with the company for more than four years, and that "we're lucky we have two people who we've been grooming for a while."
DoorDash shares have risen about 37% year to date, while the S&P 500 index has increased about 7% so far this year.
-Levi Sumagaysay
(END) Dow Jones Newswires
February 17, 2023 07:40 ET (12:40 GMT)
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