Business

DoorDash eliminates inflation fears with record delivery orders

Leading U.S. food delivery app DoorDash dismissed inflation concerns as it posted a record-high number of orders for the second quarter and raised its growth target for the rest of the year.

The company’s shares jumped as much as 20% in after-hours trading after its earnings beat Wall Street expectations and it provided a positive outlook.

Strong one-week capped results for the US gig economy, with Uber and Lyft stock also rose.

DoorDash told investors it expected to have total order value – the total cost of all orders – between $51 billion and $53 billion this year, up from guidance previously $49 billion to $51 billion.

Total revenue for the April-June period rose 30% year-over-year to $1.6 billion, up from the $1.5 billion analysts expected, according to data from S&P. Capital IQ.

DoorDash says the strong adoption of its $9.99-a-month DashPass membership program, which reduces some ordering fees, has offset customers’ worries about inflation.

The first time revenue includes income from WoltFinnish delivery company that it acquired late last year in a deal worth 7 billion euros.

DoorDash has suffered more damage than Wall Street had hoped. It lost $263 million in the quarter, compared with analysts’ estimates of $150 million. It blamed the cost of stock-based compensation due to the increased headcount.

Uber on Thursday traded up more than 37% since the start of the week with a similarly upbeat outlook offered to its investors in earnings on Tuesday. The company said it has entered a “new phase” after posting positive first-quarter free cash flow.

Uber and DoorDash tell investors that food delivery demand remains strong, alleviating fears of a sharp drop after the easing of coronavirus pandemic restrictions as people start going to casual restaurants. more often or cut spending.

DoorDash’s total order value for the quarter was at an all-time high, up 25% year over year to $13.1 billion. Total bookings for Uber Eats are $13.9 billion, up 7% in 2021.

On Thursday, shares of car-sharing group Lyft jumped 3% hours after better-than-expected adjusted profit. They said cost-cutting, including a hiring freeze, helped them achieve adjusted earnings before interest, taxes, depreciation and amortization of $79.1 million, compared with 17. $.3 million that analysts expected. The amount, which also discounts the cost of claims and stock-based insurance, is the highest ever. Lyft’s net loss for the quarter was $377.2 million, compared with $251.9 million a year ago.

Lyft says average earnings per rider — $49.89 — is the second-highest, due to an increase in travel and longer trips. There were 19.9 million riders in the quarter, up 16% year-on-year. It said it expected to accelerate trips in the current quarter, in part due to the start of the school year.

“It is clear that consumer transportation is a good long-term business with a large, addressable market,” said Logan Green, co-founder and chief executive officer of Lyft. However, the company forecast slower revenue growth this year than 2021 and warned of rising insurance costs.

All three companies reported strong growth in their workforces. In contrast to earlier in the year, when attractive drivers returned to the contract economy requiring heavy investment in additional incentives, they benefited from pressure on household incomes.

Lyft says it has 25% more drivers on its platform compared to a year ago, and the average pick-up time is within 1-2 minutes of pre-Covid levels.

Uber says it now has 5 million drivers on its sharing and delivery platforms, up more than 30% from last year.

DoorDash does not disclose its active driver count, but says it has seen a “high acquisition of organic Dashers”.

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