DoorDash (DASH, $81.36) reported larger than expected revenue growth and marketplace gross order value in its second quarter, indicating that, even in a rocky economy, customers are still turning to food delivery. Despite posting wider than expected losses shares of the food delivery favourite was up 15% in extended trading.
Its losses came in at $263 million versus the year before which stood at $102 million. However, DoorDash said the total number of orders it delivered grew 23% year over year to 426 million, an all-time high.Revenue grew 30% year over year to $1.6 billion, which the company attributed to increased order frequency and more monthly active users. In the first quarter of 2022, the company reported 404 million total orders, which also came in at 23% growth from Q1 2021. DoorDash said it anticipates a “softer consumer spending environment” in the second half of the year.
Why it matters
DoorDash’s growth could come as a massive relief to investors, many of whom were concerned that consumer belt-tightening in the face of a recession would spell bad news for nonessential services like take-out meals. However it seems like discretionary spending on food items and eating out is still a key priority for consumers - especially after Ubers (UBER, $31.90) earnings earlier in the week echoed similar sentiments, after it also announced higher than expected numbers.
