DoorDash sees record orders and users, but losses grow

By DEE-ANN DURBIN
AP Business Writer

DoorDash said Thursday that it saw a record number of orders and active users in the fourth quarter as it expanded overseas and gained market share at home.

The San Francisco-based delivery company said its monthly active users grew 28% to a record 34 million during the October-December period. DashPass members __ who pay $9.99 per month for free delivery on most orders __ grew 50% to 15 million.

DoorDash’s gross order value __ or the total of all orders on its platform __ rose 29% to an all-time high of $14.4 billion. That beat Wall Street’s forecast of $14 billion, according to analysts polled by FactSet.

Some of that growth came from Wolt Enterprises, the Finnish delivery service DoorDash acquired last year for $8.1 billion. Wolt operates in 22 countries where DoorDash previously had no presence, including Germany, Sweden, Hungary and Israel.

But Ravi Inukonda, DoorDash’s vice president of finance __ who will become DoorDash’s chief financial officer on March 1 __ said DoorDash is also growing in the U.S., where its market share has climbed to near 60%. Excluding Wolt, DoorDash’s gross order value rose 20% to $13.4 billion.

The company said new partnerships __ like recently announced delivery agreements with the beauty product chain Sephora and Dick’s Sporting Goods __ are drawing new customers and increasing orders from existing ones. DoorDash said its U.S. grocery business doubled in the fourth quarter.

Prabir Adarkar, who is currently chief financial officer but will become DoorDash’s president and chief operating officer on March 1, said DoorDash has continued to grow and gain market share in the first quarter of this year, but the company has a little less certainty about its trajectory as the year progresses because of the wobbly economy.

“It’s not about a lack of confidence in the fundamentals. It’s about uncertainty on the macro conditions,” Adarkar said Thursday on a conference call with investors.

DoorDash expects gross order value between $60 billion and $63 billion this year, up from $53.4 billion in 2022. Analysts had forecast gross order value at the high end of that range, according to FactSet.

DoorDash Chairman and CEO Tony Xu said the company is trying to lower costs for consumers by improving delivery times and accuracy. But delivery could get more expensive in the coming year in markets like New York, which is considering proposing a new minimum hourly pay rate for delivery drivers.

DoorDash’s total orders grew 27% to 467 million in the fourth quarter. That beat Wall Street’s forecast of 459 million, according to analysts polled by FactSet. Fourth quarter revenue jumped 40% to $1.82 billion, also ahead of analysts’ forecast of $1.77 billion.

But profits remain elusive for the 10-year-old company. DoorDash said its net loss widened to $640 million, or $1.65 per share, in the fourth quarter as it expanded into new categories and integrated Wolt into its operations.

Wall Street had expected a loss of 67 cents per share.

DoorDash’s stock-based compensation costs rose and its research and development costs nearly doubled in the fourth quarter. Its net income was also impacted by restructuring charges. The company announced in December that it was laying off 1,250 workers __ or 6% of its workforce __ because it hired too many people when sales surged during the pandemic.

Xu said the cuts were painful, but removing some management layers helped the company focus.

“We have many things we have to figure out. We’re still building many things as we continue to innovate beyond restaurants and as we expand internationally,” he said.

DoorDash shares rose 5% in after-hours trading Thursday.