DoorDash projects strong demand for food, grocery orders; shares jump
By Granth Vanaik
(Reuters) – DoorDash Inc said on Thursday it would buy back $750 million worth of stock and projected a key profit measure above Wall Street estimates, following strong fourth-quarter growth thanks to a surge in orders for food, groceries, and petcare items.
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Shares in the San Francisco-based company soared 12% after hours, before paring gains to trade up 6%.
DoorDash and its rivals such as UberEats benefited from the pandemic-led trend of people ordering in, a habit that has lingered as these companies offer deals and free deliveries with subscription passes.
DoorDash expects gross order value – the total value of all app orders and subscription fees – to rise to $60 billion to $63 billion in 2023, from $53.4 billion in 2022. It expects adjusted EBITDA, a measure of profitability, between $500 million and $800 million, well ahead of analysts’ expectations of $591.8 million.
The company is gaining market share in the United States, “driven by increasing scale in non-restaurant categories,” said Angelo Zino, senior equity analyst at CFRA Research.
“DASH is seeing sustained elevated orders in its core food delivery business, showing the stickiness of that business and the value consumers place on that service despite more challenging macro trends.”
The top U.S. food delivery company said orders in the fourth quarter surged 27% to 467 million from the prior year.
Revenue in the fourth quarter jumped 40% to $1.82 billion in the quarter ended Dec. 31, beating estimates of $1.77 billion, according to Refinitiv.
However, net loss widened to $642 million, or $1.65 per share, from $155 million, or 45 cents a year earlier, due to costs related to stock-based compensation and staff cuts announced earlier in November.
The company named Ravi Inukonda as its new chief financial officer, effective March 1. Current finance chief Prabir Adarkar will take over as chief operating officer from Christopher Payne, who is retiring.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shailesh Kuber)