(Bloomberg) -- DoorDash Inc., the largest food delivery service in the US, issued an outlook for orders in the first quarter that surpassed Wall Street’s expectations, serving as yet another sign that consumer demand remains resilient.
The company reported fourth-quarter gross order value of $21.3 billion, far surpassing analyst estimates of $20.9 billion. That metric is expected to total $22.6 billion to $23 billion in the current period, also beating expectations, the San Francisco-based firm said in a statement Tuesday.
The acceleration in DoorDash’s order growth highlights an overall strength in US consumer demand, as evidenced by results from Uber Technologies Inc.’s delivery segment last week that also beat expectations. DoorDash, which controls two-thirds of the US meal delivery market — nearly triple the share of Uber Eats — has also been working to expand its offerings beyond restaurants.
Shares of DoorDash were up 7.5% in after-hours trading after the results were announced.
“Significant” investments in new types of deliveries and overseas markets, however, weighed on DoorDash’s outlook for the current period: The company projected adjusted earnings before interest, taxes, depreciation, and amortization of $550 million to $600 million, with the midpoint falling shy of the $585.4 million analysts were projecting.
It reported adjusted Ebitda of $566 million in the fourth quarter, beating Wall Street’s estimates.
The board separately authorized the repurchase of as much as $5 billion of the company shares, inclusive of the remaining $876 million under its previous buyback program, the company said in the same statement.
In the July-to-September quarter, DoorDash hit its first operating profit since 2020, and investors are likely to be eyeing the company’s profitability closely.
“Entering 2025, we plan to continue to focus on creating incremental improvements in operational efficiency and reinvesting back into the business to increase our scale and expand our long-term profit potential,” the company said in the statement. “We believe we have clear pathways for investment in several areas of our business that we believe will allow us to generate strong returns and compound our value and impact.”
In recent months, DoorDash has included more regional grocers, a wider range of products such as CBD beverages and gummies, and additional retailers including Home Depot Inc. on its platform.
These improvements have helped drive its monthly active users to an all-time high of more than 42 million in December, the company said in the press release. A bigger proportion of its active users have also ordered from at least one of its new product categories compared to a year ago, it said.
The company has introduced new initiatives to boost sales and user loyalty. During the holiday season, it offered Black Friday and Cyber Monday discounts to users who place delivery orders from big-box retailers such as Best Buy Co. Inc. and Lowe’s Cos Inc., allowing them to stack savings on top of in-store deals. That’s helped the platform notch record electronics sales in the period and an “unprecedented spike” in home improvement sales during Thanksgiving weekend, according to President and Chief Operating Officer Prabir Adarkar in a LinkedIn post in December.
Last October, the company also struck a partnership with Lyft Inc., offering DashPass program members free Lyft rides every month and providing Lyft users a free trial of the membership program. Including subscribers of its European-based delivery app Wolt, DoorDash now has more than 22 million paid members as of late December, up about 22% from the prior year, it said in the statement.
(Updates with share gains in fifth paragraph)
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