The company outperformed quarterly profit estimates and projected Q2 order values well above average analyst expectations. And the firm is now spending more than $50 million to support its drivers hit by surging fuel prices due to the Iran war.
Key Highlights
- DoorDash sees Q2 marketplace gross order value (GOV) from $32.4 billion to $33.4 billion.
- Revenue in the first quarter was $4.04 billion, more than double last year’s figure but below the $4.14 billion forecast.
- Growth in grocery and retail, along with the expansion of apparel and auto parts drove record new customer activity.
DoorDash Reported Strong First Quarter and Raised Q2 Guidance
DoorDash delivered $0.42 per share in adjusted Q1 earnings, beating the 36-cent consensus estimate, as well as affirmed a guidance of $32.4 billion to $33.4 billion for its Q2 marketplace gross order value vs. a consensus analyst estimate of $31.8 billion. The quarter’s revenue was $4.04 billion, below an estimate of $4.14 billion.
The marketplace gross order value, which is the dollar amount of all orders placed on it, beat its estimates for the quarter as well. The shares surged by around 13%.Â
Now Even As Costs Rise, Convenience Is Winning
The demand from consumers for delivery remains strong against the backdrop of rising prices and pressure on household budgets through a growing preference for convenience across virtually all food, grocery and retail categories. DoorDash has expanded from a restaurant food delivery platform into grocery and retail markets, and is growing internationally, strengthening order volume.
The Iran war has created a new expense for the business. DoorDash started an emergency gas relief program last month to help US gig workers facing skyrocketing fuel expenses and now thinks that program will be more than $50 million on a gross basis. For Q2, it guides adjusted EBITDA at $770-$870 million, right near the analyst estimate of $822.5 million.
Concerning the delivery sector, analysts say it is holding its ground
Yelp was another bright spot that gave DoorDash a helpfully timed surprise on the day when rivals Instacart and Uber Eats also outperformed delivery estimates, highlighting a trend over pure company-specific victory for the same day. According to eMarketer analyst Rachel Wolff, the trend of consumers prioritising perceived convenience remains a strength for DoorDash’s business within the delivery industry as a whole.
FAQs
- How did DoorDash perform in Q1?
Its adjusted EPS came in at 42 cents, ahead of the consensus forecast of 36 cents. Revenue of $4.04 billion was below the estimate of $4.14 billion.
- What does the DoorDash guide for Q2 order value
The same goes for revenues, coming in at $32.4-$33.4 billion, above analyst estimates of 31.8 billion
- Do other delivery companies also perform well?
Indeed, both Instacart and Uber Eats said demand for delivery remained robust through the period, suggesting sector-wide resilience.
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