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DoorDash beats revenue estimates amid year-end pandemic surge

The homepage for DoorDash shown on a smartphone in the Brooklyn borough of New York City.
The homepage for DoorDash shown on a smartphone in the Brooklyn borough of New York City.Gabby Jones/Bloomberg News/File 2020

DoorDash reported fourth-quarter revenue that beat analysts’ estimates, reflecting a surge in COVID-19 cases and restrictions that fueled demand for food delivery at the end of last year. But its losses also more than doubled from a year earlier.

Sales increased 225 percent in the three months ended Dec. 31 from a year earlier, totaling $970 million, the company said in its first financial report since becoming a public company in December. Analysts had projected $926.7 million according to data compiled by Bloomberg. Customers placed 273 million orders in the period, a 233 percent increase, with the gross value of those orders at $8.2 billion. DoorDash reported a net loss of $312 million, widening from $134 million a year earlier. The net loss per share was $2.67.

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San Francisco-based DoorDash has benefited from the coronavirus pandemic as lockdowns have shuttered restaurants and left more people ordering their meals to be delivered. A resurgence of cases and tightened restrictions at the end of last year only continued to feed the boom in demand. DoorDash expanded its market share to surpass 50 percent of the United States last month, up from 35 percent in January 2020, according to data from Edison Trends. A strong presence in the suburbs helped the company weather the lockdowns better than some of its rivals, as many Americans fled from cities.

DoorDash ended last year with a high-profile initial public offering, raising $3.4 billion. Its shares have gained 66 percent since then, valuing the company at $53 million. They slid 7 percent in extended trading after the results were published.

The big question for investors is whether desire for food delivery will continue in a post-pandemic world, said Ronald Josey, an analyst at JMP Securities. Josey said he anticipates a “big slowdown” in growth in 2021, but is optimistic about long-term prospects.

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“We’ve been ordering out now for the better part of a year. I don’t think that goes away,” Josey said.

DoorDash may have a better revenue stream than some of its competitors as COVID-19 restrictions fade in the United States, due to 5 million subscribers to its DashPass delivery subscription service, said Bloomberg Intelligence analyst Matthew Martino. Analysts at Truist Financial called the DashPass a “critical piece of differentiation” from other services.

Uber Technologies Inc., whose Uber Eats is the second-biggest meal delivery service in the United States, has been heavily investing in its delivery segment. The company recently acquired alcohol-focused Drizly Inc. for $1.1 billion and grocery-focused Cornershop. That came on top of the June 2020 acquisition of food-delivery company Postmates Inc. for $2.6 billion. In October, DoorDash teamed up with Sam’s Club to offer same-day prescription delivery.

DoorDash reported adjusted earnings before interest, taxes, depreciation, and amortization of $94 million.