DoorDash revenue beats as food-delivery boom continues, shares soar 24%
DoorDash has also doubled down on non-restaurant offerings, including grocery, pet food and alcohol to attract more users.
DoorDash Inc reported quarterly revenue on Wednesday 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% 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 UBER.N and Grubhub to show strong growth for several years even as people venture out more.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Uber's shares rose 1%, while the U.S.-listed shares of Grubhub parent Just Eat Takeaway.com NV gained 2%.
"It's very possible to eat at a restaurant and get delivery because we eat three 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.
FILE - The DoorDash app is shown on a smartphone on Feb. 27, 2020, in New York. DoorDash is capping a year of explosive growth with an initial public offering, hoping to keep the momentum going even if demand for food delivery eases in a post-pandemi
In the fourth quarter ended Dec. 31, higher-than-expected consumer retention and new customer growth helped DoorDash's revenue jump 34% to $1.30 billion and beat estimates of $1.28 billion, according to IBES data from Refinitiv.
DOORDASH TO BUMP UP ITS FEES ON SLOW MCDONALD’S RESTAURANTS
"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.
DoorDash app logo is displayed on a mobile phone screen photographed for illustration on a plate and with cutlery.(Photo illustration by Beata Zawrzel/NurPhoto via Getty Images) (Photo illustration by Beata Zawrzel/NurPhoto via Getty Images / Getty Images)
San Francisco-based DoorDash also forecast first-quarter marketplace gross order value, the total value of all app orders and subscription fees, between $11.4 billion and $11.8 billion, versus $11.2 billion in the reported quarter.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DASH | DOORDASH INC. | 180.41 | +1.31 | +0.73% |
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 ULTA.O, Bed Bath & Beyond BBBY.O and PetSmart.
CLICK HERE TO READ MORE ON FOX BUSINESS
DoorDash also forecast core earnings in a range of break-even to $500 million for fiscal 2022, compared with estimates of $455.1 million.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shounak Dasgupta)