DoorDash Revenue Climbs as Restaurants Raise Prices, Consumers Continue Spending

DoorDash’s revenue in the three months through June grew 30% to $1.6 billion from a year earlier. That compared with the average revenue estimate of $1.52 billion from analysts polled by FactSet.

Revenue was helped in part by restaurants raising menu prices on delivery and the company’s acquisition of Europe’s Wolt Enterprises Oy, which closed during the quarter.

Total orders grew 23% to $426 million, also beating Wall Street’s forecast of $419 million. DoorDash said that its order volume would have been even stronger “in a healthier discretionary spending environment.”

The company’s shares climbed more than 16% in after-hours trading.

While DoorDash benefited from restaurants raising prices, the company said consumers responded by ordering fewer items per order on average.

“It’s a pretty tough macroeconomic environment,” said

Ravi Inukonda,

DoorDash’s vice president of finance. He said the company expects to grow in the second half of the year despite the uncertain state of the economy.

DoorDash has been one of the biggest winners of the pandemic. It now commands 57% of the U.S. food-delivery market, according to market research firm YipitData.

Analysts say the company outflanked its rivals thanks to a strong delivery network in the suburbs, a wide selection of restaurants and greater efficiency in delivering the food itself.

DoorDash expanded its options during the health crisis to include grocery chains and convenience stores, pinging consumers as they paid for food to ask them if they also wanted household items from a nearby store.

That has helped raise consumer spending and lower delivery costs because drivers can carry multiple orders together. DoorDash said its driver cost per order declined 9% year over year, and it raised the full-year outlook on the value of orders expected on the app.

The company said it expects 2022 order value to range from $51 billion to $53 billion, up from its previous guidance of $49 billion to $51 billion. The new guidance is in line with Wall Street’s forecast of $52.37 billion.

Making money off food delivery has been tough despite record sales. DoorDash and Uber Eats have trimmed their operating losses during the pandemic. DoorDash is the only major food-delivery company that turned a quarterly net profit during the health crisis—in the second quarter of 2020.

The company’s second-quarter loss widened to $263 million from a loss of $102 million a year earlier; analysts on average were expecting a loss of $149 million.

“We’re still in investment mode across the board,” Mr. Inukonda said, adding that DoorDash plans to continue investing overseas and in building categories beyond its core food-delivery offering.

One reason that DoorDash can invest in growth is because the company has been profitable on an adjusted basis before interest, taxes, depreciation and amortization for more than a year, including in the latest June quarter.

Companies point to this metric to signal the strength of their underlying operations. These adjustments entail stripping out expenses such as asset write-downs that many executives and investors consider to be outside a company’s core business.

DoorDash raised the low end of its previous range for adjusted Ebitda in 2022. It now expects full-year adjusted Ebitda to be from $200 million to $500 million, compared with a previous forecast of breakeven to $500 million. Wall Street expects 2022 adjusted Ebitda of $229 million.

Write to Preetika Rana at [email protected]