DoorDash Inc. reported revenue that beat analysts’ estimates, showing that higher prices and a cloudy economic outlook aren’t dissuading customers from spending on takeout and other convenience deliveries.
(Bloomberg) — DoorDash Inc. reported revenue that beat analysts’ estimates, showing that higher prices and a cloudy economic outlook aren’t dissuading customers from spending on takeout and other convenience deliveries.
Revenue rose 40% in the first quarter to $2.04 billion, the San Francisco-based company said Thursday in a statement. That was better than analysts’ average projection of $1.93 billion, according to data compiled by Bloomberg.
“Consumer demand on the platform continues to be very strong,” said Chief Financial Officer Ravi Inukonda, adding that order frequency reached “an all time high.”
Customers placed 27% more orders in the three months ended March 31 and the value of those orders increased 29% to $15.9 billion. Both metrics surpassed Wall Street’s expectations. In the current quarter DoorDash said it anticipates gross order value of as much as $16.2 billion.
San Francisco-based DoorDash commands 65% of food-delivery sales in the US, according to Bloomberg Second Measure. But it’s also been expanding into non-restaurant categories and international markets, including the acquisition of Finnish food-delivery startup Wolt Enterprises Oy, which closed last year. In fact, orders from newer delivery services like groceries, alcohol and retail are growing faster than sales from restaurants.
“Investments we have made in our core product in selection, quality, new categories and new markets are paying off,” Inukonda said.
Despite a high rate of inflation, people have proven a willingness to spend on services and experiences even if they’re paring back on physical goods. DoorDash rival Uber Technologies Inc. earlier this week showed resilience in its Uber Eats unit, where delivery bookings rose 8%. Airbnb Inc. Chief Executive Officer Brian Chesky has said he expects a busy summer travel season as people prioritize vacations despite higher prices.
The pandemic was a boon for food-delivery as millions of home-bound people ordered food in instead of venturing out. Even as restaurants and bars have reopened, DoorDash has seen users ordering more frequently with larger basket sizes. Earlier this week, Uber CEO Dara Khosrowshahi assured investors that inflation was not impacting consumer spending.
DoorDash has been able to bring costs down by batching orders more efficiently. The company generated adjusted earnings before interest, tax, depreciation and amortization of $204 million, beating estimates. It’s anticipating adjusted Ebitda of $180 million to $230 million in the current quarter. Inukonda said he expects a “material increase” in adjusted Ebitda for the year, to as much as $900 million.
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