Mohit Oberoi
DoorDash (NYSE: DASH) stock is trading higher in US premarkets today after the company posted better-than-expected revenues for the fourth quarter of 2022. Its losses meanwhile also surged due to impairment and layoff-related expenses.
DoorDash reported revenues of $1.82 billion in the quarter which was almost 40% higher YoY and ahead of the $1.77 billion that analysts were expecting. In the full year, the company generated sales of $6.58 billion as compared to $4.89 billion in 2021.
During the quarter, it reported marketplace GOV (gross order value) of $14.4 billion which was 29% higher than the corresponding quarter in the previous year. It had 32 million MAUs (monthly active users) in December which was 7 million higher than the same month in 2021.
DoorDash reported an adjusted EBITDA of $117 million, which was ahead of the $109 million that analysts were expecting, and a new record high. The company however posted a net loss of $640 million on account of impairment and layoff-related charges.
Last year, the company announced mass layoffs in order to rein in costs. Most major US tech companies have announced mass layoffs. However, the overall job market is still tight and the US economy added 517,000 new jobs in January.
DoorDash Stock Rises on Revenue Beat
DoorDash stock is trading higher today after the revenue beat. The company reported free cash flows of $21 million which was significantly below the $455 million in 2021. The company said that growth investments took a toll on its cash flows in the year. In addition, it said that since the year ended on a Saturday, $170 million of its cash was held with payment processors.
Also, it had a $100 million legal settlement in the year and spent $74 million in acquiring Wolt which dragged down its cash flows. The company said that it expects 2023 free cash flows to “increase substantially compared to 2022.” It however said that since the year ends on a Sunday, it would have two extra days of cash held at payment processors.
It added, “In 2023, we believe margins will improve in our U.S. restaurant marketplace and in many of our investment areas. We expect this combination to contribute to 2023 Adjusted EBITDA increasing on both a dollar basis and as a percentage of Marketplace GOV.”
Online Food Ordering is Still Growing
Online food ordering grew rapidly during the COVID-19 lockdowns. However, while the economy has reopened, online food ordering is still growing at a brisk pace.
During Q4 2022, Uber’s delivery revenues rose 21% to $2.93 billion. While the growth rates are below what we saw during the lockdowns, it is nonetheless a healthy growth.
Uber posted an EPS of 29 cents in the quarter while analysts were expecting it to post a per-share loss of 18 cents. Uber stock also rose after its Q4 2022 earnings release. Bank of America is bullish on the company and advises buying Uber stock.
Meanwhile, DoorDash stock trades below its 2020 IPO price. Uber and Lyft also trade below their 2019 IPO price. Lyft stock plunged after it provided dismal Q1 2023 guidance during its earnings call.
While the US IPO market was dead last year, there are signs that the market might some traction this year. There is a list of some of the upcoming IPOs.
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This article was written for Business 2 Community by Mohit Oberoi.
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