door dash After the bell Wednesday, the food delivery giant announced strong first-quarter results and forecast for increased orders as it pumps more money into new technology to attract customers.
The stock price soared 12% on the news.
Here’s how the company performed against LSEG’s estimates:
Earnings per share: 42 cents vs. 36 cents expected Earnings: $4.04 billion vs. $4.14 billion expected
DoorDash expects Marketplace Total Order Value, which tracks the total value of orders on its platform, to be in the range of $32.4 billion to $33.4 billion this quarter. This exceeded the government’s $32.43 billion estimate by analysts.
The food delivery company also said it expects EBITDA to be between $770 million and $870 million. The midpoint fell short of analysts’ expectations of $830 million.
Sales rose 33% from $3.03 billion a year earlier, and total orders rose 27% to $933 million, but fell short of analysts’ expectations of $954 million. Net income fell to $184 million, or 42 cents per share, from $193 million, or 44 cents per share, a year earlier.
DoorDash is spending heavily on new features and services as it builds a single-platform technology stack that integrates recent global acquisitions. The company is also investing billions of dollars to expand its global footprint, enhance its artificial intelligence capabilities and stay competitive against rivals such as: Uber eat.
“We expect these efforts will allow us to invest more efficiently, operate more effectively, and foster higher levels of growth in the communities we serve,” DoorDash said in a press release Wednesday.
DoorDash’s recent big-ticket acquisitions include restaurant reservations platform Seven Rooms and British delivery company Deliveroo. Last year, DoorDash also launched autonomous robots to expand its delivery options.
Investors had previously objected to the company’s aggressive spending plans, worrying that new technology investments would take time to pay off. CEO Tony Xu fiercely defended these efforts, and Wall Street gave them a stamp of approval last quarter.
Finance chief Ravi Inukonda told analysts on Wednesday’s earnings call that DoorDash has completed the design elements of its redesign plan and is beginning to see early results.
“Not only are we already seeing improvements in speed and quality across all our brands, but we think we’ll see even more as we roll this out in the wild,” Xu said.
Amid the recent Iran war, DoorDash joins several delivery companies that have launched relief programs for drivers feeling pressured by rising gas prices.
DoorDash said it expects the program to cost more than $50 million in the second quarter and plans to fund it by reinvesting in other segments. Inukonda said the company is already pushing some investments into the second half of the year.
“If we decide to extend our gasoline benefit program, we will offset it in other parts of our business to make sure that not only our bottom line but also our sales continue to be strong,” he said.
DoorDash’s GOV increased 37% year over year to $31.6 billion, beating analysts’ expectations of $31.5 billion. The company’s gross profit margin was 51.9%, exceeding expectations of 51.6%.
DoorDash’s daily stock price chart.
