DoorDash Q4 earnings: Sales soared 226% with ongoing in-person dining restrictions

Emily McCormick
·4 min read


DoorDash (DASH) reported its first-ever quarterly results as a public company on Thursday, offering an updated snapshot of the food delivery business's performance before more restaurants and bars begin to reopen in person later this year.

Sales grew far more than expected in the final three months of 2020, jumping 226% over last year. However, the company said the outlook for 2021 "remains highly uncertain," and shares fell more than 6% in late trading.

Here were the main metrics from DoorDash's fourth-quarter report, compared to consensus estimates compiled by Bloomberg:

  • Revenue: $970 million vs. $926.71 million expected and $298 million year-over-year

  • Adjusted EBITDA: $94 million vs. $92.97 million expected and a loss of $103 million year-over-year

DoorDash's growth was impressive over the course of 2020, as consumer sheltering in place turned in droves to the food delivery app in lieu of going out to eat. Total orders in the final three months of the year more than tripled to 273 million. And on the bottom line, DoorDash extended a streak of adjusted EBITDA profit, aided by soaring delivery volume. However, net losses more than doubled over last year to $314 million.

BRAZIL - 2020/07/07: In this photo illustration the DoorDash logo seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
BRAZIL - 2020/07/07: In this photo illustration the DoorDash logo seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

But the pandemic-related boosts to DoorDash's business are set to wane later this year, calling into question the pace of growth for the company specifically and food delivery space as a whole going forward.

DoorDash underscored these concerns in its report Thursday. While DoorDash's gross order value (GOV), or the total value of sales placed on the platform, grew by 227% over last year in the fourth quarter, the company said it expects "average order values to decline as markets recover from the COVID-19 pandemic."

"We expect 2021 Marketplace GOV to be in a range of $30.0 billion to $33.0 billion, with 2021 Adjusted EBITDA in a range of $0 million to $200 million. Our outlook anticipates the successful rollout of COVID-19 vaccines, among other things," DoorDash said. "Though we cannot predict the short or long-term effects this will have on consumer behavior, our guidance assumes it creates headwinds to growth in total orders and average order values."

"We caution investors that the outlook for 2021 remains highly uncertain, and consumer behavior could deviate from the expectations included in our guidance," it added.

Shares of the company have risen since its IPO, with the stock jumping 61% since its public debut in December, far outperforming both the S&P 500 and Russell 2000. However, shares have fallen by nearly 15% for February to date, as investors increasingly turned away from both high-growth tech companies and from stocks in the "stay-at-home" trade in anticipation of a broader economic reopening.

"I think consensus is expecting that momentum slows. It’s just a matter of what degree you expect it to slow to," Steven Fox, Fox Advisors Founder & CEO, told Yahoo Finance ahead of Thursday's report.

But the more important factor is "going to be how they manage that growth," he added. "So for example, are they going to invest more, and what are the unit economics going to look like? I think one of the biggest surprises out of the box for DoorDash is how profitable they’ve been able to be while growing so fast. So as growth slows, what does that mean for EBITDA margins, conversion margins, et cetera."

Plus, DoorDash has had to contend with an inundation of competition in the food delivery space, which has impacted the companies' pricing power and future profit-making potential. JPMorgan analyst Doug Anmuth estimated in a recent note that DoorDash has about 50% market share in the U.S., or 17 percentage points greater than Uber Eats' (UBER) business even including its recent acquisition of Postmates. However, with consolidation an increasing trend in the food delivery space, the opportunities for competitors to quickly gain share still remains on the table.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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