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DoorDash shares sink as revenue more than triples but loss more than doubles

DoorDash Inc., the food-delivery app whose pandemic-fueled boom helped it pull off one of 2020’s biggest IPOs, said in its first earnings report since going public that its revenue more than tripled in the fourth quarter, but its net loss more than doubled.

DoorDash
DASH,
-5.36%

shares sank more than 10% after hours Thursday after falling 5.7% in the regular session to close at $166.35.

The San Francisco-based company reported a fourth-quarter loss of $312 million, or $2.67 a share, compared with $134 million, or $3.05 a share, in the year-ago period. It said it had $322 million in stock-based compensation expense connected to its initial public offering. Revenue rose 226% to $970 million from $298 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast a loss of 35 cents a share on revenue of $936.9 million.

For the full year, DoorDash posted a loss of $461 million, or $7.39 a share, on $2.89 billion in revenue. That’s down from its loss of $667 million in 2019. Analysts had expected a loss of 33 cents a share on $2.85 billion in revenue.

DoorDash said it had gross orders of $8.2 billion in the fourth quarter, beating analysts’ expectations of $7.82 billion.

What will happen to delivery services when the pandemic gets under control is a big question for the company. DoorDash, which started off delivering takeout from restaurants but has since branched out into grocery and convenience-store delivery, could see a drop in business when most restaurants reopen for in-person dining.

“The main unknown is what exactly does [the] competitive environment look like post-pandemic, when you don’t have customers just coming directly to you and volumes going through the roof?” said Tom White, analyst with D.A. Davidson.

DoorDash said in a letter to shareholders that it expects first-quarter gross orders of $8.6 billion to $9.1 billion, with adjusted EBITDA of $0 million to $45 million, which it said will be negatively affected by its first full quarter of “operating under Proposition 22 and ongoing price controls.”

Proposition 22, a ballot measure backed by DoorDash and other gig companies, was approved by California voters in November. Under Prop. 22, the companies continue to treat their drivers and delivery workers as independent contractors while promising them a new earnings guarantee and some benefits that fall short of full employee protections.

Shares of the company have fallen 6% since they made their public debut in December, but are up nearly 25% year to date.

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