DoorDash reports record customer orders, shares soar
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 increased by as much as 24% in extended trading.
The San Francisco-based company said Thursday that revenue rose 30% to $1.6 billion in the second quarter. According to Bloomberg, that was better than analysts average projections of $1.52 billion.
Vice President Ravi Inukonda said in an interview that our results speak to strength in our business and resilience in our platform.
In the three months ending June 30, customers placed 426 million orders, a jump of 23% from a year ago. The value of those orders grew 25% to $13.1 billion, beating Wall Street's expectations of $12.7 billion. The results are the first to combine financials from Helsinki-based Wolt since its acquisition by DoorDash in November. The deal, which was worth about $8 billion at the time of its announcement, was closed in June.
The positive results didn't agree with the rising inflation fears that it would discourage consumers from discretionary services like food delivery. Inukonda said DoorDash was not seeing an impact on consumer spending on the platform, citing healthy order frequency from a record number of users.
DoorDash quickly established itself as the dominant meal delivery service in the US at the height of Covid-19, helped by Pandemic lockdowns and an early foothold in the suburbs. According to Bloomberg Second Measure, the market share has gone up by 59% of US food delivery sales as of May. DoorDash has expanded its business 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. DoorDash believes convenience deliveries will become profitable by the end of the year, despite the fact that the figures for each category aren't disclosed.
The competition to deliver everything from food to 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 have reached a new all-time high with more than 10 million members, representing nearly half of its roughly 25 million monthly active users.
DoorDash has not considered layoffs and has no plans to slow down hiring, unlike its peers in the gig economy, including Uber, Lyft Inc. and Instacart. That approach has proved costly. DoorDash reported a net loss of $263 million, or 72 cents, more than double its loss from a year ago. DoorDash said that the increase is due to stock-based compensation for retention and absorbing employees from Wolt.
The gross order value was projected to be $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 predicted full-year adjusted Ebitda of $200 million to $500 million. The company said it anticipates a softer consumer spending environment in the second half of 2022 than what we experienced in the first half. A Very Dangerous Place to be Pregnant is getting Even Scarier, None A Very Dangerous Place To Be Pregnant Is