DOORDASH forecast earnings that beat analyst expectations as cost-cutting efforts meet resilient consumer demand for pricey takeout. The company also said its president would be stepping down as part of a slate of executive changes.

DoorDash is anticipating adjusted earnings before interest, tax, depreciation and amortisation of US$120 million to US$170 million in the first quarter, the San Francisco-based company said on Thursday (Feb 16) in a statement. The midpoint of that range exceeds the US$129.7 million Wall Street estimated. The company sees order values of US$15.1 billion to US$15.5 billion, beating expectations for US$14.6 billion.

Consumers are spending on food delivery even though inflation is squeezing budgets and the economic outlook has soured — Uber Technologies last week reported delivery bookings that beat analysts’ estimates. The prospect for improving profit at DoorDash may be a bright spot for investors who have pared their earnings outlook for tech companies while revenue growth slows. The company also announced a US$750 million stock buyback programme, a step other technology companies like Meta Platforms have taken to boost share prices.

“Our results are evidence of our strong execution and proof that customers continue to return to the platform despite the macroeconomic challenges we’re seeing with inflation,” chief financial officer Prabir Adarkar said in an interview.

The shares jumped about 11 per cent in extended trading. DoorDash shares have risen almost 40 per cent this year after tumbling 67 per cent in 2022.

Adarkar will replace president and chief operating officer Christopher Payne when he departs the company on Mar 1. A former Amazon.com veteran, Payne spent seven years at DoorDash and had most recently been responsible for expansion into new delivery services. The reins of CFO will be handed to Ravi Inukonda, vice president of finance and strategy.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

DoorDash commands 65 per cent of food-delivery sales in the US, according to Bloomberg Second Measure. Sales have slowed since the pandemic-era boom and the company has expanded into new services like grocery, alcohol and retail delivery to retain customers and attract new ones. In these newer delivery categories, Adarkar said DoorDash is “seeing robust signs of progress”, while revenue broadly rose 40 per cent in the fourth quarter to US$1.8 billion, in line with what analysts had projected.

The expansion efforts have come at a cost. DoorDash’s net losses have ballooned over the past year and reached US$642 million at the end of December. The company slashed 6 per cent of its workforce in an acknowledgement it ramped up headcount too quickly during the pandemic.

Expansion outside of the US will be a key driver of growth, said CFRA analyst Angelo Zino. DoorDash acquired Finnish food-delivery startup Wolt in 2021 to grow its global footprint, and so far this seems to be paying off. Orders at Wolt rose 50 per cent in the fourth quarter, though the revenue figures weren’t specified. Order growth was 20 per cent at DoorDash excluding the division, and across the whole platform the value of orders grew 29 per cent to US$14.4 billion, higher than the US$13.8 billion Wall Street expected.

“We are hard pressed to think the company will substantially ease up on investments given the growth opportunities that lie ahead, especially internationally,” Zino said.

Adjusted Ebitda was US$117 million in the fourth quarter, the highest in the company’s history, beating estimates for US$108.6 million. BLOOMBERG