DASH Q4 Earnings Miss Estimates, Stock Rises on Upbeat Outlook

Core Insights - DoorDash (DASH) reported earnings of 33 cents per share in Q4 2024, a significant improvement from a loss of 39 cents in the same quarter last year, although it missed the Zacks Consensus Estimate by 2.94% [1] - Revenue increased by 24.8% year over year to $2.87 billion, surpassing the consensus mark by 1.34%, driven by higher Marketplace Gross Order Value (GOV) and growth in advertising revenues [2] - Following the earnings report, DoorDash shares rose by 5.75% in after-hours trading to $204.20, likely due to strong revenue growth and performance in total orders and Marketplace GOV [2] Financial Performance - Total orders in Q4 increased by 19% year over year to 685 million, beating the Zacks Consensus Estimate by 1.50% [3] - Marketplace GOV rose by 21% year over year to $21.3 billion, exceeding the consensus estimate by 1.67% [3] - Adjusted gross profit reached $1,472 million, up 31.8% from the previous year, with an adjusted gross margin expanding by 270 basis points to 51.2% [3] - The contribution margin improved to 33.7% compared to 29.9% in the year-ago quarter [3] Expenses and Profitability - Adjusted sales and marketing expenses increased by 17.8% year over year to $504 million [4] - Adjusted research and development expenses rose by 25.8% year over year to $166 million [4] - Adjusted general and administrative expenses increased by 21.6% from the previous year to $236 million [4] - Adjusted EBITDA was $566 million, compared to $363 million in the year-ago quarter, with an adjusted EBITDA margin expanding by 390 basis points to 19.7% [4] Balance Sheet and Cash Flow - As of December 31, 2024, DoorDash had $5.34 billion in cash and cash equivalents, an increase from $4.96 billion as of September 30, 2024 [5] - Cash flow from operations was $518 million in Q4, slightly down from $531 million in the previous quarter [5] - Free cash flow was $420 million, lower than the previous quarter's $444 million [5] Future Guidance - For Q1 2025, DoorDash anticipates Marketplace GOV to be between $22.6 billion and $23 billion [6] - Adjusted EBITDA is expected to be in the range of $550 million to $600 million [6] Market Position - DoorDash currently holds a Zacks Rank 2 (Buy) [7] - Other notable stocks in the sector include KT (Rank 1), BWX Technologies, and Innodata (both Rank 2) [7][8]