DoorDash Expects Strong Q3 Growth Fueled by Consistent Delivery Demand
DoorDash’s Q3 Outlook and Recent Performance
Strong Q3 Forecast Surpasses Expectations
Aug 5 (Reuters) - DoorDash on Wednesday forecast third-quarter gross order value and core profit above Wall Street estimates after topping results for the prior three months on sustained demand for food, grocery and convenience deliveries.
Consumer Demand Drives Growth
Consumers prioritizing convenience, including for groceries and everyday essentials, have boosted demand for firms such as DoorDash, which has been diversifying beyond restaurant deliveries.
Marketplace Gross Order Value Projections
The company expects third-quarter marketplace gross order value (GOV), the total dollar value of orders placed on its platform, of $33 billion to $34 billion, above analysts' expectations of $32.64 billion, according to data compiled by LSEG.
Strategic Initiatives and Expansion
Drone Delivery and Logistics Expansion
Last month, DoorDash, which partners with food and grocery chains including Domino's and Kroger, launched its in-house drone delivery program, DoorDash Air, as part of efforts to reduce reliance on human couriers and expand its logistics network.
Membership and Grocery Delivery Investments
DashPass and International Partnerships
DoorDash has also stepped up investments in membership offerings such as DashPass and expanded grocery delivery coverage in the U.S. and international markets, including Canada, through partnerships with retailers such as Sobeys and Safeway.
Financial Performance and Guidance
Q3 Adjusted Earnings Outlook
The company's third-quarter adjusted earnings before interest, taxes, depreciation and amortization are expected to be between $950 million and $1.10 billion, largely above expectations of $979.6 million.
Seasonal Trends and Cost Considerations
DoorDash said adjusted EBITDA as a percentage of marketplace GOV would decline sequentially in the fourth quarter, broadly in line with trends seen last year, due to seasonally higher Dasher and insurance costs, along with increased investment in technology and autonomous-delivery initiatives.
Q2 Results Exceed Estimates
For the second quarter ended June 30, marketplace GOV rose 36% to $33.08 billion, topping estimates of $32.08 billion. Adjusted EBITDA increased 40% to $914 million, compared with expectations of $841.8 million.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Sriraj Kalluvila)
