By Ananya Mariam Rajesh (Reuters) -DoorDash topped analysts’ estimate for quarterly revenue and total orders on Tuesday, as customers turned to its online platform to buy everything from food and groceries to alcohol during the holiday season. Shares of the company rose nearly 7% in extended trading, after it also decided to buy back shares […]
Business
DoorDash tops quarterly revenue estimates on strong online orders during holidays
Audio By Carbonatix
By Ananya Mariam Rajesh
(Reuters) -DoorDash topped analysts’ estimate for quarterly revenue and total orders on Tuesday, as customers turned to its online platform to buy everything from food and groceries to alcohol during the holiday season.
Shares of the company rose nearly 7% in extended trading, after it also decided to buy back shares worth up to $5 billion during fiscal 2025. That is a boost from the $1.1 billion it announced for 2024.
Americans have increasingly grown fond of the convenience of ordering food online and shopping on smartphones and tablets for even the smallest items, buoying the bottom line for delivery platforms such as DoorDash and Instacart.
DoorDash posted a profit of $141 million compared with a loss of $154 million a year ago.
The company’s fourth-quarter revenue rose 25% to $2.87 billion, compared with analysts’ average estimate of $2.84 billion, according to data compiled by LSEG.
Total orders rose 19% to 685 million, surpassing the estimate of 673.04 million.
“DoorDash needs to raise awareness and promote the value of same-day delivery. This will require a significant marketing push to let consumers know they can rely on the service for everything from beauty products to home improvement,” said Emarketer analyst Blake Droesch.
The company’s efforts to advertise more to attract customers have led to an 18% surge in sales and marketing expenses to $541 million during the fourth quarter.
It expects first-quarter adjusted earnings before tax, interest, depreciation and amortization to be between $550 million and $600 million, with its midpoint below analysts’ expectation of $584.9 million.
The company said its outlook anticipates significant levels of ongoing investment in new category expansion, such as in beauty and convenience, and international markets.
DoorDash expects its first-quarter gross order value — a key industry metric that shows total value of all app orders and subscription fees — to be between $22.6 billion and $23 billion, compared with the estimate of $22.42 billion.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shilpi Majumdar)