DoorDash Inc. reported a record number of delivery orders in the second quarter, showing consumers’ commitment to takeout despite rising prices.
The shares jumped about 4% during premarket trading in New York on Thursday. The stock has advanced more than 75% for the year to date, closing at $85.98 a share on Wednesday.
Customers placed 532 million orders in the quarter and the gross value of those orders rose 26% to $16.5 billion, the company said in a statement. The increase was driven by strength in DoorDash’s core restaurant business and traction in newer categories, like convenience and groceries. The company boosted its outlook for gross order value for the full year to $64.2 billion to $65.2 billion.
San Francisco-based DoorDash enjoyed a boom in demand during the pandemic when indoor dining shuttered and people stayed home. Its share of the market for US food-delivery sales rose to 65% as of June, according to research from Bloomberg Second Measure. Since then, DoorDash has parlayed its popularity to deliver more than just meals in an effort to generate new sources of growth.
DoorDash has tried to blunt the impact of rising restaurant prices by offering incentives. The company, which launched an advertising business last year, has leveraged ads and sponsored promotions to offer customers better deals. It has also attracted more users to the app, and kept current customers spending more, through subscription service DashPass. For a monthly fee, members have access to special deals and perks like reduced delivery fees.
While DoorDash’s restaurant and convenience delivery units are profitable, its other verticals still lose money. DoorDash, which laid off about 6% of its workforce last year, said it expects to be “disciplined” with operating expenses for the remainder of the year. The US’s biggest food delivery company reported a net loss of $172 million, driven by higher stock-based compensation expenses as well as spending to expand outside of meal-delivery. Revenue rose 33% to $2.13 billion, slightly beating analysts forecasts for $2.05 billion.
“We have begun investing significant capital to build businesses in new verticals, international markets and advertising, and we have a number of newer projects that are in various stages of testing,” Chief Executive Officer Tony Xu and Chief Financial Officer Ravi Inukonda said in a letter to shareholders.
The acquisition of Finnish food-delivery startup Wolt Enterprises Oy, which closed last year, helped DoorDash establish an international footprint. Absorbing those employees into DoorDash’s overall headcount has come at a cost, however, and contributed to the spike in stock-based compensation expenses. Inukonda didn’t specify whether DoorDash would consider additional layoffs, saying the company is “happy with where we are.”
DoorDash said adjusted earnings before interest, tax, depreciation and amortization reached $279 million during the period, beating Wall Street’s estimate of $214.5 million.
(Updates with shares in 2nd paragraph.)
