DoorDash stock falls after company drops first earnings report since going public


Tony Xu, co-founder and chief executive officer of DoorDash Inc., smiles during the Wall Street Journal Tech Live conference in Laguna Beach, California, U.S., on Tuesday, Oct. 22, 2019.

Martina Albertazzi | Bloomberg | Getty Images

DoorDash reported Q4 2020 earnings after the bell on Thursday. It beat analyst revenue estimates but included a large net loss in its first release as a public company.

The stock fell as much as 13% during after-hours trading following the report.

Here are the key numbers:

  • Revenue: $970 million, vs. $938 million expected, according to a Refinitiv survey of analysts
  • Loss per share: $2.67, unadjusted

CNBC does not compare reported earnings to analyst estimates for a company’s first report after going public because uncertain share counts can skew expectations.

The company reported a net GAAP, or generally accepted accounting principles, loss of $312 million, which it said was mostly due to IPO-related costs and stock-based compensation. That’s still more than double its $123 million GAAP net loss in Q4 2019.

Its revenue for the quarter represented 226% year-over-year growth.

DoorDash’s initial public offering occurred as Americans continued to rely heavily on food delivery services while taking precautions to minimize the spread of Covid-19. DoorDash saw booming demand, with total orders in Q4 up 233% year over year at 273 million.

But DoorDash told shareholders it expects some of the tailwinds it experienced from stay-at-home orders across the U.S. will turn around once the country gets the virus under control.

“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,” the company wrote. “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 warned that outlook for the year “remains highly uncertain” but provided some guidance based on its assumption of a “successful rollout of COVID-19 vaccines.”

The company predicts first-quarter adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, will fall between $0 and $45 million and range from $0 to $200 million for the full year 2021. It expects gross order value on its marketplace to fall between $8.6 billion and $9.1 billion for the first quarter and between $30 billion and $33 billion for the full year.

On a call with analysts, DoorDash CFO Prabir Adarkar said the platform has continued to see growth in weekly order volumes in markets that have loosened Covid-related restrictions. Still, while DoorDash reported 227% growth in marketplace gross order value in Q4, the midpoint of its guidance puts marketplace GOV at 27.7% growth for 2021.

DoorDash started trading on the New York Stock Exchange in December, ending its first trading day up more than 85% with a market cap of $60.2 billion. The stock has since dipped below that valuation, currently sitting around $53 billion.

The company revealed $149 million in losses on revenue of $1.9 billion through September 2020 in its IPO prospectus, showing large growth and narrowing losses from the year before. In 2019, DoorDash had a net loss of $533 million on revenue of $587 million during those same nine months.

The pandemic has shined a brighter spotlight on gig workers for apps such as DoorDash, Lyft and Uber, which rely on a workforce of independent contractors. The health crisis renewed calls from progressives to give gig workers the protections of employees, including health-care benefits and paid sick leave.

But California voters handed the gig companies a major victory in November when they voted to support their ballot measure, Proposition 22. The measure said that app-based food delivery and rideshare workers could remain independent but could be entitled to additional protections, such as guaranteed minimum earnings and portable benefits.

DoorDash noted in its earnings release that the next quarter will be its first full quarter operating under Prop 22 “and ongoing price controls.” The company said these will likely negatively impact its take rate and adjusted EBITDA.

Adarkar told analysts that DoorDash will absorb the vast majority of costs related to Prop 22, like minimum earnings for drivers and additional benefits, so that it can continue to prioritize scale. He said keeping costs low for consumers will help merchants because customers will want to order more.

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