DoorDash Inc exceeded revenue expectations and raised its annual core profit forecast on Thursday, despite the ongoing issue of high inflation. The food delivery company benefited from a pandemic-driven trend of consumers ordering food, groceries, and convenience products from home. As a result, DoorDash and its competitors such as UberEats continue to thrive by offering deals and free deliveries with membership passes.
DoorDash now projects annual adjusted EBITDA, a measure of profitability, between $600 million and $900 million, up from its previous outlook range of $500 million to $800 million. Additionally, DoorDash expects gross order value, a key industry metric that reflects total app orders and subscription fees, to be between $63 billion and $64.5 billion for 2023, up from its previous forecast of $60 billion to $63 billion.
Despite the cost-saving initiatives that the company took in November, such as cutting about 1,250 jobs, or 6% of its total workforce, DoorDash’s revenue still rose 40% to $2.04 billion in the quarter ended March 31, surpassing analysts’ estimates of about $1.93 billion. DoorDash’s shares also rose 4% in extended trading after the company raised its profit forecast.
As DoorDash’s CFO Ravi Inukonda noted, “consumer engagement and spending on the platform continues to be very strong,” adding that “(customer) retention this past quarter is higher than the prior quarter.” DoorDash’s strong performance in Q1 2023 also reflects its continued market share gains across categories, according to Northcoast Research analyst Jim Sanderson.