DoorDash revenue beats as food-delivery boom continues, shares soar 24%

[BENGALURU] DoorDash reported quarterly revenue on Wednesday (Feb 16) that beat estimates as food delivery demand showed no sign of slowing, indicating ordering habits have changed permanently, sending the company’s shares up 24 per cent after the bell.

Analysts have said people have grown accustomed to having food delivered to their doorsteps after frequently ordering in during the peak of the pandemic. They expect DoorDash and rivals Uber Eats and Grubhub to show strong growth for several years even as people venture out more.

Uber’s shares rose 1 per cent, while the US-listed shares of Grubhub parent Just Eat Takeaway.com gained 2 per cent.

“It’s very possible to eat at a restaurant and get delivery because we eat 3 times or more maybe per day, and that’s over 100 shopping moments per month,” chief executive officer Tony Xu said on an earnings call.

In the fourth quarter ended Dec 31, higher-than-expected consumer retention and new customer growth helped DoorDash’s revenue jump 34 per cent to US$1.30 billion and beat estimates of $1.28 billion, according to IBES data from Refinitiv.

“To the extent that pent-up demand for dining in would eat into revenue, it would only serve to dampen some growth temporarily, not reverse it for long periods,” Guru Hariharan, CEO of e-commerce management platform CommerceIQ, said.

San Francisco-based DoorDash also forecast first-quarter marketplace gross order value, the total value of all app orders and subscription fees, between US$11.4 billion and US$11.8 billion, versus US$11.2 billion in the reported quarter.

Even in the face of inflation, consumers’ persistent willingness to pay for the convenience of delivery should support demand, M Science analyst Matthew Goodman said.

DoorDash has also doubled down on non-restaurant offerings, including grocery, pet food and alcohol to attract more users.

It has tied up with a number of retailers, including Ulta Beauty, Bed Bath & Beyond and PetSmart.

DoorDash also forecast core earnings in a range of break-even to US$500 million for fiscal 2022, compared with estimates of US$455.1 million

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