DoorDash CEO: Grocery helping to drive growth, but still has a long way to goDoorDash CEO: Grocery helping to drive growth, but still has a long way to go

Last-mile delivery service DoorDash got a stock boost on Tuesday, following the release of its Q4 and full-year financial results showing a whopping 24% year-over-year revenue growth. 

And it wasn’t just restaurant orders driving the growth. 

“In new verticals, we added thousands of new grocery stores to our U.S. marketplace in 2024, while also expanding selection in our other new verticals categories,” the company said in its earnings report. “At the same time, we continued to improve a number of key quality metrics in our new verticals categories in the U.S.; in 2024, these improvements helped attract more new users to our new verticals categories, increased order frequency within the categories, and drove average basket sizes higher.” 

DoorDash CEO Tony Xu said in an earnings call on Tuesday that the company’s grocery business is just getting started. 

“When I think about grocery or retail, when I think about our commerce platform, I think all of these things are even in … [the] earlier days of exploration in terms of building a product that we are proud of, and building a product that we believe will actually just change behavior,” Xu said, calling grocery and other new verticals “a great area of growth.”

The San Francisco tech company stock jumped almost 7% in after hours trading, despite missing the mark on analyst expectations, reporting $0.33 per share on revenue of $2.87 billion in Q4. 

That beat Q4 2023 revenue of $2.3 billion but came in slightly below consensus earnings estimates of $0.34 per share on revenue of $2.83 billion, according to earningswhipsers.com. 

The company reported its first full year of positive GAAP net income, generating almost $60 billion in sales for merchants in over 30 countries. 

Total order volume was up 19% year over year in Q4 to $685 million, while marketplace GOV jumped 21% to $21.3 billion. 

DoorDash reported that it had improved efficiency over the past year, enabling the company to “increase investments across our business to build new and better products, expand our selection, improve our quality, and reach more consumers in more places.”

That also helped grow their loyalty programs DashPass and Wolt+ from 18 million at the end of 2023 to 22 million by the end of 2024. 

Despite the positive returns, the company’s grocery business still faces headwinds, according to Xu. 

“If you look at the penetration levels of where it is compared to other categories of ecommerce and delivery, it is still quite lagging, and I think there are several reasons,” he said. “But the short version of this is that, customers today are asked to pay a premium, but they don't always receive the items that they order. That's not a great proposition.”

Those issues have DoorDash focused on a variety of solutions, including “adding more SKUs through our catalog, understanding exactly where items are and how do we make sure that we deliver with perfect accuracy, making sure that we can increase the affordability of the products, making sure we are matching the right type of Dashers who want to do grocery deliveries with actual grocery orders.”