DoorDash expects adjusted earnings before interest, tax, depreciation and amortisation for the current quarter of US$325mil to US$425mil. — Bloomberg
NEW YORK: DoorDash Inc, the largest food delivery service in the United States, has offered a disappointing profit forecast for the current quarter as the company invests in expanding its list of non-restaurant partners and improving efficiency.
DoorDash expects adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) for the current quarter of US$325mil to US$425mil, the midpoint of which falls well below the average estimate.
In the first quarter, DoorDash reported Ebitda of US$371mil, higher than analysts’ expectations.
The shares slid about 15% in extended trading after the results. They had more than doubled over the past 12 months.
DoorDash has been adding more items onto the platform as well as making technical improvements to reduce delivery times and errors.
While it’s by far the delivery leader in the United States, with a 67% market share according to Bloomberg Second Measure, rivals have already become profitable, after years of heavy losses.
Uber Technologies Inc reported its first year as a public company in 2023 and Instacart, which went public last fall, has also reported profitable quarters.
DoorDash hasn’t given a timeline to become profitable on an operating basis, but analysts expect it to reach this milestone by the third quarter of this year, for the first time since it was founded in 2013.
Chief financial officer Ravi Inukonda said he expects adjusted Ebitda to ramp up in the second half of the year as the company’s various investments begin to pay off.
Margin contributions from its nascent advertising business, which sells sponsored placements to brands within the app, would also increase as the company increases the selection of items, he added.
DoorDash’s soft forecast overshadowed an otherwise rosy report for the most recent period. Total orders for the first quarter ended March 31 increased 21% to 620 million, the company said in a statement, exceeding the average analyst estimate of 607.7 million. — Bloomberg
