DoorDash's sales soar in Q1 but its costs also grow
DoorDash sales soared in the first quarter as it added new customers, putting to rest any question of whether delivery demand will continue as the pandemic wanes.
The San Francisco company said its revenue jumped 35% to $1.46 billion in the January-March period. That was well ahead of Wall Street's forecast of $1.38 billion, according to analysts polled by FactSet.
DoorDash said its total orders grew 23% to 404 million, also topping analysts' expectations. It said average order frequency per customer reached a record high as the company added more DashPass members, who pay a $9.99 monthly fee for unlimited free deliveries.
DoorDash sales more than tripled in 2020 as the pandemic fueled demand. Last year, however, the company said it was unsure what would happen to demand after vaccines rolled out and consumers could visit dining rooms again.
But DoorDash CEO Tony Xu said it turns out that dining out and ordering delivery are complementary, and Americans are doing a lot of both.
'Å“People are not substituting eating in with eating out," Xu said.
Still, it was a costly quarter for the company. DoorDash's net loss widened to $167 million, from $110 million in the same period a year ago. DoorDash spent more on stock-based compensation and marketing costs.
The company is also trying to ease the burden of high gas prices for its drivers. DoorDash is offering drivers 10% cash back on their gas purchases through August.
Chief Financial Officer Prabir Adarkar said DoorDash could have chosen to pass those costs on to consumers but decided to absorb them. The cash-back program helped DoorDash ensure it has enough drivers to meet demand, he said.
DoorDash said it lost 48 cents per share in the quarter, more than double the 21 cent loss Wall Street forecast.
DoorDash said it expects its acquisition of Finnish delivery service Wolt Enterprises to close in the second quarter. The $8.1 billion deal, announced last November, will bring DoorDash into 22 countries where it doesn't currently operate, including Germany, Sweden, Hungary and Israel.
DoorDash shares jumped more than 8% in after-hours trading.