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DoorDash Soars as Robust Delivery Demand Drives Sales Beat
(Bloomberg) — DoorDash Inc. soared after the company reported revenue that beat analysts’ expectations, boosted by a record number of orders, showing customers’ appetite for takeout isn’t waning despite rising inflation.
Shares rose as much as 13% in premarket trading.
Revenue rose 30% in the second quarter to $1.6 billion, the San Francisco-based company said Thursday in a statement. That was better than analysts’ average projection of $1.52 billion, according to data compiled by Bloomberg.
“Our results speak to the strength in our business and resilience in our platform,” Vice President Ravi Inukonda said in an interview.
Customers placed 426 million orders in the three months ending June 30, jumping 23% from a year earlier. The value of those orders grew 25% to $13.1 billion, beating Wall Street’s expectations for $12.7 billion. The results are the first to combine financials from Helsinki-based Wolt since its acquisition by DoorDash in November. The all-stock deal, which was worth about $8 billion at the time of its announcement, closed in June.
The positive results defied concerns that rising inflation would discourage consumers from discretionary services like food-delivery. Inukonda said DoorDash was not seeing an impact to consumer spending on the platform citing “healthy” order frequency from a record number of users.
Helped by pandemic lockdowns and an early foothold in the suburbs, DoorDash quickly established itself as the dominant meal-delivery service in the US at the height of Covid-19. Since then, its market share has continued to grow, now comprising 59% of US food delivery sales as of May, according to Bloomberg Second Measure. DoorDash has parlayed that success to expand into other services like convenience-store items, groceries and alcohol.
DoorDash reported adjusted earnings before interest, tax, depreciation and amortization of $103 million, exceeding analyst expectations of $55.1 million. While figures for each category aren’t disclosed, DoorDash said it expects convenience deliveries to become profitable by the end of the year.
Competition to deliver everything from food to prescriptions and pet supplies has intensified with DoorDash and rivals like Uber Technologies Inc., Instacart Inc. and Grubhub launching subscription services as a way to keep customers ordering from their apps longer and in larger quantities. DoorDash’s DashPass subscriptions reached an all-time high with more than 10 million members, representing nearly half of its roughly 25 million monthly active users.
Unlike its gig economy peers including Uber, Lyft Inc. and Instacart, DoorDash has said it’s not considering layoffs and has no plans to slow hiring. That approach has proved costly. DoorDash reported a net loss of $263 million, or 72 cents share, more than double its loss from a year ago. DoorDash said the increase is attributed to a stock-based compensation for retention as well as from absorbing employees from Wolt.
The company projected gross order value of $13 billion to $13.5 billion in the current quarter and adjusted earnings before interest, tax, depreciation and amortization of $25 million to $75 million.
DoorDash also forecast full-year adjusted Ebitda of $200 million to $500 million. The company said its outlook “anticipates a softer consumer spending environment in the second half of 2022 than what we experienced in the first half.”