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DoorDash lifts core profit target for second time on higher orders

DoorDash lifts core profit target for second time on higher orders
© Reuters. A DoorDash delivery person is pictured on the day they hold their IPO in the Manhattan borough of New York City, New York, U.S., December 9, 2020. REUTERS/Carlo Allegri

By Granth Vanaik

(Reuters) -DoorDash raised its annual core profit forecast for a second time and posted an upbeat quarterly revenue as groceries and food orders jumped, sending its shares up more than 4% after the bell on Wednesday.

The delivery firm posted its highest revenue since its IPO in Dec. 2020 as people stick to the pandemic trend of buying from their homes, thanks to promotions, deals and free deliveries with subscription passes by DoorDash and its rivals.

DoorDash expects a key measure of profitability, adjusted EBITDA, between $750 million and $1.05 billion, compared to the prior outlook of $600 million to $900 million.

“In Q2, we continued to see strong consumer demand, thanks to our continued focus on selection and affordability,” finance chief Ravi Inukonda said.

Total orders rose 25% to 532 million from a year earlier.

CEO Tony Xu said DoorDash was growing faster than every other platform and gaining share in all categories.

In contrast, growth in the delivery business for rival Uber Technologies (NYSE:) slowed to nearly 14% in the second quarter from 37% a year ago, indicating weakness in consumer spending.

“DoorDash’s impressive quarterly results show… consumers continue to prize convenience over price,” said Insider Intelligence analyst Rachel Wolff.

DoorDash said it expects gross order value – total value of all app orders and subscription fees – to be between $64.2 billion and $65.2 billion for 2023, compared with the prior forecast of $63 billion-$64.5 billion.

The firm’s revenue rose 33% to $2.13 billion, beating expectations of $2.06 billion, according to Refinitiv data. It posted a bigger-than-expected loss of 44 cents compared to expectations of 41 cents.

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