DoorDash Reports Strong Q4 Performance, Faces Investor Concerns
Despite exceeding expectations in its fourth-quarter performance, DoorDash saw its shares decline late Thursday. Investors were anticipating a more significant increase in the company's first-quarter outlook and future prospects.
Financial Highlights
Recent stock trading recorded a 6.7% decrease, settling at $117.89.
Revenue for the December quarter reached $2.3 billion, a 23% year-over-year increase, slightly surpassing the Wall Street consensus forecast of $2.25 billion.
Adjusted earnings before interest, taxes, depreciation, and amortization amounted to $363 million, exceeding expectations at $356 million.
The company reported a loss of 39 cents per share, while analysts had anticipated a loss of 16 cents.
Gross order volume surpassed expectations at $17.6 billion, reflecting a 22% increase from the previous year. Analysts tracked by FactSet had forecasted $17.29 billion in gross order volume.
Total orders for the quarter amounted to 574 million, up 23% from the previous year and surpassing the consensus expectation of 561 million.
Management had previously informed investors to anticipate gross order volume between $17 billion and $17.4 billion, with adjusted Ebitda ranging from $320 million to $340 million.
Outlook for Q1: Optimistic Projections
DoorDash projects robust performance for the first quarter, with anticipated gross order volume ranging from $18.5 billion to $18.9 billion. Furthermore, adjusted Ebitda is expected to fall within the range of $320 million to $380 million. The street consensus initially projected gross orders of $18.6 billion and adjusted Ebitda of $362 million for the same period.
DoorDash's fourth-quarter success paves the way for an optimistic outlook for the first quarter. However, investors had more ambitious expectations, resulting in a decline in stock value.
DoorDash Forecasts Strong Performance for 2024
Estimated gross order volume to range between $74 billion and $78 billion, with adjusted Ebitda of $1.5 billion to $1.9 billion.
DoorDash has projected a highly optimistic outlook for its performance in 2024. According to the company, it anticipates a gross order volume between $74 billion and $78 billion, accompanied by an adjusted Ebitda forecast ranging from $1.5 billion to $1.9 billion. This projection differs slightly from the consensus view on the Street, which had estimated gross orders at $76.8 billion and adjusted Ebitda at $1.63 billion.
Despite the upcoming year's financial goals, DoorDash maintains that its primary focus remains unchanged. The company plans to invest heavily in developing tools that effectively address consumer, merchant, and Dasher (delivery driver) concerns, all while expanding the reach and profit potential of its business. DoorDash expresses enthusiasm for what lies ahead and is eager to embark on this endeavor.
In a shareholder letter, DoorDash openly criticizes legislative initiatives aimed at implementing stricter rules for gig workers in the industry. While the company acknowledges the importance of collaborating with policymakers to enforce regulations that safeguard worker choice, access, and security, it vehemently opposes recent laws that fail to recognize the unique nature of independent contractor work, particularly that of delivery drivers. These laws attempt to impose traditional work structures on gig workers, undermining the flexibility and incremental nature of their roles.
DoorDash warns that the further regulations move in this direction, the more detrimental the financial consequences will be for individuals and local economies. Recent regulations in New York City and Seattle are cited as examples, with the company highlighting the resulting loss of revenue for merchants, governments, and reduced opportunities for delivery workers. By restricting the innovative gig economy model, these laws remove valuable opportunities and create empty spaces in local markets.
In conclusion, DoorDash remains committed to its long-term vision. Despite potential regulatory challenges, the company is determined to overcome obstacles and continue its mission of providing efficient and profitable solutions for all stakeholders involved.
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