(Bloomberg) -- DoorDash Inc. shares climbed on Thursday after the delivery service beat Wall Street’s expectations on virtually every key earnings metric, allowing it to post the first operating profit since the start of the pandemic.
The San Francisco-based company generated $107 million in operating income, it said in a statement Wednesday, more than double the outlook from analysts and representing the first quarterly profit since the second quarter of 2020. The firm also beat on third-quarter total orders and adjusted earnings as it worked to expand non-restaurant offerings to attract new customers.
The shares rose as much as 6.3% on Thursday, reaching a nearly three-year high before paring back most of those gains.
DoorDash controls two-thirds of the US meal-delivery market — far eclipsing rivals Uber Technologies Inc. and Grubhub — making its performance a strong gauge of discretionary spending. The earnings beat works to reinforce a report out Tuesday showing US consumer confidence has strengthened, jumping in October by the most since March 2021.
The company’s fourth-quarter outlook for adjusted earnings before interest, taxes, depreciation and amortization was roughly in line with analysts’ expectations, ranging from $525 million to $575 million. DoorDash expects the value of its overall orders to total as much as $21 billion, surpassing estimates.
The delivery firm has recently been expanding its offerings to include a wider range of products from supermarkets, pet stores and even mattress retailers. On Wednesday, DoorDash announced a partnership with Lyft Inc. to offer rideshare discounts to users who have DashPass, a $10-a-month subscription that waives most delivery fees.
“We still only represent a single-digit fraction of the restaurant industry and a much smaller fraction outside of that, so I think there’s a long runway ahead,” DoorDash Chief Executive Officer Tony Xu said in a call with investors on Wednesday.
Key to DoorDash’s growth has been its entry into international markets, where “growth has been substantially faster than peers,” Chief Financial Officer Ravi Inukonda said in an interview with Bloomberg TV on Thursday. Domestically, a slower-than-expected recovery in restaurant spending has worried some analysts, while a reported slowdown in US rideshares caused Uber’s stock to slump on Thursday.
Asked about the company’s plans to deliver items using autonomous vehicles, Xu said it’s a harder problem than using AVs for ride sharing because “you have to actually load and unload the vehicle when it comes to item delivery, and that last 10 feet is actually quite tricky.”
Uber is partnering with Alphabet Inc.’s autonomous driving subsidiary Waymo LLC to offer driverless ride sharing, but the companies didn’t announce plans to automate food delivery on Uber Eats.
DoorDash said in a statement Wednesday that it will likely continue to focus on improving “day-to-day execution” and spend “the majority of our investment capital expanding the scale and scope of our new verticals and international markets.”
(Updates with share move in the third paragraph and adds CFO comment in the eighth paragraph.)
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