DoorDash reported a significant revenue increase of 38% in the fourth quarter, driven by an influx of new U.S. customers and the expansion of services, including restaurant reservations. The San Francisco-based delivery company generated $3.96 billion in revenue during the October-December period, although this figure slightly missed analysts’ expectations of $3.99 billion.
Despite the rise in revenue, DoorDash faces scrutiny from investors regarding its spending on various initiatives, including the development of autonomous delivery robots and testing of drone delivery services. The company anticipates adjusted pretax earnings between $675 million and $775 million for the first quarter, falling short of the Wall Street expectation of $800.6 million, according to FactSet. This outlook led to a 3% dip in DoorDash’s stock during after-hours trading.
The number of total orders surged by 32% to 903 million, surpassing forecasts of 884.8 million. DoorDash reported having over 56 million active users in the quarter, with 35 million subscribers enrolled in its DashPass, Wolt+, and Deliveroo Plus programs, showcasing its growing customer base and service adoption.
However, heightened spending has raised concerns, with research and development costs climbing by 41% and sales and marketing expenses increasing by 31%. DoorDash CEO Tony Xu emphasized that the company is committed to creating a unified technology platform to integrate its various international operations, particularly following its acquisitions of Wolt and Deliveroo. “This is a massive and expensive undertaking and honestly one you shouldn’t do if you thought your best days were behind you,” Xu mentioned in his letter to investors.
On a positive note, DoorDash’s net income surged by 51% to $213 million, or 49 cents per share, although this was below the expected 59 cents forecasted by analysts. The strong revenue growth combined with an expanding user base indicates that DoorDash is actively investing in its future, positioning itself for potential long-term success despite short-term financial challenges.