US meal delivery platform DoorDash saw a jump in its share price Wednesday after it published higher-than-expected earnings and said it expects strong demand in 2022, despite easing pandemic restrictions.
DoorDash stock rocketed 27% higher to 120.80 during after-hours trading on the stock market today. In February, DoorDash stock hit an all-time low of 91.96.
“Demand on our Marketplace grew substantially in 2021, exceeding our expectations and the expectations of many who questioned the sustainability of demand as restaurants reopened,” the company said in its letter to shareholders.
Fourth Quarter 2021 Financial and Operational Highlights
In Q4 2021, we grew Total Orders by 35% Y/Y to 369 million. On a Y/Y basis, order growth was driven by increased average order frequency, MAU growth, and growth in orders through Drive.
International orders grew substantially faster than domestic orders on a Y/Y basis in Q4.
Despite the increase in Dasher costs, Net Revenue Margin in our US Restaurant Marketplace increased on a Y/Y basis. This was offset by growth in orders from new verticals and international markets, which carry lower Net Revenue Margins on average compared to orders in our US restaurant business.
Adjusted Cost of Revenue as a percentage of Marketplace GOV increased on a Y/Y basis, due primarily to growth in costs associated with our first-party DashMart business. Adjusted Gross Profit increased 28% Y/Y to $686 million in Q4 2021.
Q4 2021 Contribution Profit increased 27% Y/Y to $291 million or 2.6% of Marketplace GOV. On a Y/Y basis. Contribution Profit as a percentage of Marketplace GOV declined by 20bps. Adjusted sales and marketing as a percentage of Marketplace GOV was 3.5% in Q4 2021, down from 3.7% in Q4 2020, driven by a decrease in consumer acquisition costs as a percentage of Marketplace GOV, partially offset by an increase in Dasher acquisition costs as a percentage of Marketplace GOV.
Adjusted EBITDA was $47 million in Q4 2021 or 0.4% of Marketplace GOV, a decrease from $94 million in Q4 2020 or 1.1% of Marketplace GOV. We continue to manage our business with the goal of maximizing long-term profit dollar production. In Q4 2021, we invested aggressively in international markets and new verticals.
In Q4 2021, operating cash flow was $167 million and free cash flow was $97 million. We ended the quarter with $4.4 billion of cash, cash equivalents, investments, and no debt.
DoorDash Stock: In A Competitive Market
The stock went public in December 2020 at $102 a share and only recently slipped below that level. It’s the largest food-delivery company in the U.S.
The meal delivery market is consolidating and highly competitive. In November, DoorDash announced it would acquire Wolt Enterprises, a European provider of food delivery services, in an all-stock deal valued at $8.1 billion. DoorDash stock surged 11.6% on the announcement.
In 2020, European food delivery company Just Eat Takeaway (GRUB) acquired GrubHub in an all-stock deal valued at $7.3 billion. In addition, Uber Technologies (UBER) acquired Postmates for $2.65 billion.
