DoorDash Inc., the online delivery company, released its third-quarter results on Wednesday, surpassing expectations. Its expansion beyond the restaurant sector contributed to increased order volumes. However, the company anticipates significant ongoing investments as it strives to diversify its service offerings.
In after-hours trading, DoorDash's shares surged by 8%.
For the third quarter, the company reported a net loss of $75 million, equivalent to 19 cents per share, in contrast to $296 million, or 77 cents per share, during the same period the previous year. Sales saw a 27% increase, reaching $2.16 billion.
According to analysts surveyed by FactSet, DoorDash was expected to incur a loss of 40 cents per share on revenue of $2.09 billion.
The total number of orders rose by 24% to 543 million, reflecting DoorDash's efforts to expand its reach. Gross order value, which represents the total dollar value of completed orders on the platform, increased by 24% to $16.8 billion. Both figures exceeded the expectations of Wall Street.
DoorDash's Chief Financial Officer, Ravi Inukonda, stated, "Our continued investment in categories like grocery and retail, along with the consistent growth in restaurants, has driven strong consumer engagement and demand, resulting in higher earnings for Dashers and increased sales for various merchants."
For the fourth quarter, DoorDash anticipates a gross order value ranging from $17 billion to $17.4 billion, surpassing FactSet analysts' expectations of $16.66 billion. However, the company emphasized that this outlook considers significant ongoing investments in new service categories and international markets.
DoorDash's expansion efforts include venturing into grocery stores and other retail sectors, broadening its services beyond restaurant delivery. Nevertheless, it faces stiff competition, regulatory changes, and evolving consumer spending patterns amid inflation concerns.
Despite potential challenges, some analysts believe that DoorDash's size and consumers' consistent spending habits could help it navigate fluctuations in demand. However, concerns have been raised about the impact of resumed student loan payments, following a pause during the pandemic, and their potential effect on the demand for food delivery.
In September, MoffettNathanson analysts described food delivery as a discretionary luxury that consumers could quickly sacrifice if student loan repayments started depleting their savings. They questioned whether the resumption of loan repayments might pose a risk to food delivery bookings.
Year-to-date, DoorDash's shares have seen a 54.4% increase.
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