Orders on DoorDash increased by 24% in the third quarter, resulting in a reduction of losses for the delivery platform.

During the third quarter, DoorDash exceeded predictions for sales and earnings, attributing this success to a higher proportion of partnering stores and improved delivery speed, which has attracted customers both domestically and internationally.

On Wednesday, the San Francisco-based delivery company announced that its overall orders increased by 24% to 543 million during the July-September quarter, in comparison to the same time frame last year. This surpassed the expected 521 million orders predicted by analysts surveyed by FactSet.

DoorDash reported a 27% increase in revenue to $2.16 billion, surpassing analysts’ expectations of $2.09 billion.

After the market closed, DoorDash’s stock rose by over 7.5%.

The company reported a growth in monthly active users, which are customers who made at least one order in the previous month. The increase was in the double digits and was driven by strong demand from both domestic and international markets. Additionally, there was a boost in order frequency compared to the second quarter.

During a recent call with investors, DoorDash’s CEO Tony Xu recognized the perception that delivery services may be considered a non-essential expense during periods of economic instability. However, Xu also emphasized the ongoing trend towards increased convenience among consumers.

According to him, when someone has money to spend, they typically prioritize the category with the most frequent use and convenience. He also mentioned that individuals eat around 20 to 25 times a week, and DoorDash fulfills that demand.

Currently, Xu stated that DoorDash has not noticed any change in food demand due to the use of appetite-suppressing medications such as Ozempic.

“I have faith that they will be effective,” he stated. “I believe they are addressing a problem for the individual.”

DoorDash has expanded its non-restaurant services, providing customers with additional incentives to utilize its platform for shopping. In recent years, the company has introduced grocery delivery in 2020 and convenience store delivery in 2021, resulting in a total of 100,000 non-restaurant stores now available for delivery in the U.S., a significant increase from only 40,000 two years prior.

According to Xu, DoorDash is still a small part of the food and retail industry as a whole, especially in the 27 international markets where it is a newer competitor. In order to increase its presence in countries such as Germany, Sweden, and Israel, DoorDash acquired the Finnish delivery company Wolt Enterprises in 2021.

Xu stated that we are closer to the third phase rather than the final phase. There is still a significant amount of work to be done in order to enhance the product.

Xu expressed disapproval of a New York initiative to establish a minimum hourly wage of approximately $18 for delivery drivers. This plan has faced legal challenges from companies like DoorDash and Uber, resulting in a postponement. Xu argued that the implementation of this law will result in increased prices and decreased demand, ultimately having a negative impact on restaurants and other enterprises. He also pointed out that the majority of DoorDash drivers work less than 10 hours per week and view it as a supplementary source of income.

The organization reported a decrease in net loss, from $295 million to $73 million, in the third quarter compared to the same time period last year. This improvement was due to increased efficiency and careful cost control. In addition, approximately 1,250 employees were let go by DoorDash towards the end of last year.

The loss of 19 cents per share was actually an improvement compared to the expected 40-cent loss by Wall Street.

Source: wral.com