In this weekly feature, we highlight a company that reported earnings outside of analysts’ expectations, with a focus on what the beat or miss says about consumer demand and economic activity.
Key Takeaways
- DoorDash earnings beat expectations, as orders rose at a double-digit pace and the company drew more users onto its platform.
- DoorDash posted a net loss of just $75 million, or 19 cents per share, which was less than half the 40 cents a share analysts had expected.
- The robust revenue gains reflect the healthy state of consumer spending in the U.S., as DoorDash users continued to spend on delivery and takeout despite persistently high inflation.
- DoorDash earnings also saw a boost from its non-restaurant—grocery and alcohol—delivery business.
Food delivery company DoorDash (DASH) posted earnings that handily beat analysts’ expectations, as orders rose at a double-digit pace and the company drew more users onto its platform, reflecting strong consumer spending and willingness to pay for convenience.
DoorDash posted a net loss of just $75 million, or 19 cents a share, which was less than half the loss of 40 cents per share analysts were expecting. By comparison, DoorDash posted a net loss of almost $296 million in the same period last year.
DoorDash shares rose roughly 22% since it reported earnings after markets closed on Wednesday. They’ve surged about 90% so far this year, though they’re still down over 55% from their all-time highs they hit in Aug. 2021—about nine months after DoorDash’s initial public offering (IPO).
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What’s Driving DoorDash?
The short answer: American consumers.
The robust revenue gains reflect the healthy state of U.S. consumer spending, as DoorDash users continued to spend on delivery and takeout despite persistently high inflation. While DoorDash has expanded abroad to countries including Canada, Australia, and New Zealand, roughly 93% of its revenue still comes from the U.S., as of the latest quarter.
Roughly 543 million orders were placed on the DoorDash app and website in the third quarter, which was up 24% from the same quarter last year. And that’s not just people ordering food from restaurants.
“We have over 100,000 stores on the platform that are outside of restaurants. And when you look outside of restaurants and into the convenience or grocery or alcohol segments, almost half of new customers that come into the industry in the U.S. come to DoorDash first,” said DoorDash CEO Tony Xu on the earnings call.
Instacart (CART) works with 1,400 retailers at more than 80,000 locations. With 65% marketshare, DoorDash is the largest restaurant food delivery company as of Sept. 2023, according to an analysis by Bloomberg Second Measure. UberEats (UBER) accounts for 23% of the meal delivery market, while Grubhub’s share is just 9%.
Not only are more people ordering from DoorDash, they’re also spending more money. Marketplace gross order value (GOV), or the dollar value of all purchases on the platform, also rose 24% from a year ago. That contributed to a 27% annual gain in revenue, totaling $2.16 billion.
While one could argue that a higher gross order value could be a function of businesses passing higher costs to customers, according to DoorDash’s own estimates, 80% of diners in the U.S. are ordering more or the same compared to 2022.