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In first earnings as public company, DoorDash beats revenue forecasts

Soaring revenue, orders among highlights, but food delivery company misses EPS estimates

After going public in December 2020, DoorDash released its first earnings report on Thursday. (Photo: DoorDash)

In its first official earnings announcement since it went public in December, DoorDash (NYSE: DASH) reported new quarterly records for total orders, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), and market share. But its quarterly loss more than doubled over Q4 2019.

The food delivery company reported 226% growth in revenue to $970 million in Q4 over 2019’s Q4 results, and 233% growth year-over-year in total orders to $273 million. Its Marketplace gross order volume (GOV) grew 227% year-over-year to $8.2 billion.

Analysts polled by FactSet expected revenue to be $938 million in Q4.

DoorDash also reported a GAAP gross profit of $477 million, up 311% year-over-year from $116 million in Q4 2019, a GAAP net loss of $312 million, compared to $134 million in Q4 2019, and adjusted EBITDA of $94 million, compared to an adjusted EBITDA loss of $103 million in Q4 2019. Non-GAAP adjusted gross profit was $536 million.

Earnings per share was $2.67, missing analysts’ expectations by $2, Seeking Alpha noted.

Operating cash flow in Q4 was negative $63 million, and free cash flow was negative $100 million. DoorDash ended the quarter with $4.9 billion in cash, cash equivalents and marketable securities.

The results were announced after market close on Thursday.

For the full year, DoorDash reported revenue of $2.88 billion, up from $885 million in 2019, and a net loss of $461 million. FactSet expected full-year revenue of $2.85 billion and a full-year loss of $318 million.

DoorDash shares have grown 73% since their IPO on Dec. 9 through Wednesday’s market close, but they dropped nearly 12% in after-hours trading following the earnings release.

The COVID-19 pandemic led to restrictions on in-person dining across the country, and that helped DoorDash.

“We saw strong growth in both restaurant and nonrestaurant merchants on our Marketplace in Q4 2020,” the company said in the earnings release. “We believe our large and highly engaged consumer base, our merchant-first approach, our broad portfolio of products, and our brand remain strong selling points to merchants. Although we experienced rapid growth in restaurants on our Marketplace in 2020, we believe we still have substantial room to increase penetration in the restaurant vertical in the coming years.”

However, the company advised of the uncertainty moving ahead and the impact that may have on the business.

“We hope markets will begin to open up soon. As that happens, we expect declines in consumer engagement and average order values, though the precise amount remains unclear,” it said. “In any scenario, we will remain focused on reducing friction on our Marketplace and executing against the factors that will drive long-term consumer adoption: selection, experience, and value.”

The company reported 87% year-over-year growth in Marketplace partner stores and a 158% increase in Drive partner stores, which offer nonrestaurant delivery, including grocery and convenience verticals. The company said it hopes to expand its Storefront capabilities to allow smaller merchants that don’t have online ordering capabilities to benefit from DoorDash’s services.

Dashers, the drivers on the DoorDash platform, earned over $2 billion in 2020, the company said, with more than 1 million Dashers participating. Earnings per hour increased 20% in 2020 over 2019 rates for Dashers, the company said.

“As we make further efficiency improvements in our business, our goal is to pass a portion of these gains on to Dashers in the form of higher earnings, consumers in the form of lower fees and higher quality, and merchants in the form of better services and greater value,” the company said.

The average Dasher worked less than 10 hours per week in 2020.

While total orders increased significantly, average order value in Marketplace is only “moderately” above pre-COVID levels, the company said, and growth is under 10% year-over-year in Q4. The company said it expected average order value to decline as markets recover from the pandemic.

Take rate, defined as revenue as a percentage of Marketplace GOV, was 11.9% in Q4, down slightly from 12.1% in Q3 2020 and identical to Q4 2019. Take rate benefited from lower Dasher costs as a percentage of Marketplace GOV related to increased Dasher efficiency, lower credits and refunds as a percentage of Marketplace GOV, and higher Drive revenue, the company said. This was offset by a 44-basis-points net negative impact from price controls, as well as headwinds from the implementation of California’s Proposition 22 late in the quarter. Take rate was also reduced by a higher mix of orders from DashPass subscribers, which carry below-average consumer fees, and $7 million of Dasher bonus pay associated with the December IPO.

The average DashPass subscriber orders more frequently and stays on the platform longer than the average nonsubscriber, the company noted.

Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]