DOORDASH raised its annual core profit forecast after beating quarterly revenue expectations on Thursday (May 4), benefiting from an increase in orders for food, groceries and convenience products despite stubbornly high inflation.

The food delivery company’s shares rose 4 per cent in extended trading.

DoorDash and its competitors such as UberEats have gained from a pandemic-driven trend of consumers ordering from the comfort of their homes that has continued to thrive as the companies offer deals and free deliveries with membership passes.

DoorDash now projects annual adjusted Ebitda, a measure of profitability, between US$600 million and US$900 million, compared to its previous outlook range of US$500 million to US$800 million.

As part of its cost-saving initiatives, the firm in November decided to cut about 1,250 jobs, or 6 per cent of its total workforce.

“Consumer engagement and spending on the platform continues to be very strong,” said finance chief Ravi Inukonda, adding “(customer) retention this past quarter is higher than the prior quarter”.

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

In the first quarter, total orders surged 27 per cent to 512 million from the prior year.

“We believe (total order volumes in Q1 2023) reflects continued market share gains by DoorDash across categories,” Northcoast Research analyst Jim Sanderson said.

DoorDash now expects gross order value, a key industry metric which is a total value of all app orders and subscription fees, to be between US$63 billion and US$64.5 billion for 2023, compared to previous forecast of US$60 billion to US$63 billion.

On Tuesday, Uber Technologies said it expected “strong growth” in its food delivery unit over the next few quarters.

DoorDash’s revenue rose 40 per cent to US$2.04 billion in the quarter ended Mar 31, compared to analysts’ estimate of about US$1.93 billion.

Net loss attributable to DoorDash narrowed to US$161 million, or 41 cents per share, from US$167 million, or 48 US cents, a year earlier. REUTERS