DoorDash projects strong growth as delivery demand holds firm

DoorDash on Wednesday forecast third-quarter gross order value and core profit above Wall Street estimates after topping results for the prior three months on sustained demand for food, grocery and convenience deliveries.

Consumers prioritizing convenience, including for groceries and everyday essentials, have boosted demand for firms such as DoorDash, which has been diversifying beyond restaurant deliveries.

The company expects third-quarter marketplace gross order value (GOV), the total dollar value of orders placed on its platform, of $33 billion to $34 billion, above analysts' expectations of $32.64 billion, according to data compiled by LSEG.

Last month, DoorDash, which partners with food and grocery chains including Domino's and Kroger, launched its in-house drone delivery program, DoorDash Air, as part of efforts to reduce reliance on human couriers and expand its logistics network.

The company has also stepped up investments in membership offerings such as DashPass and expanded grocery delivery coverage in the U.S. and international markets.

"DoorDash's efforts to expand its influence beyond restaurant delivery are beginning to bear fruit," EMarketer analyst Rachel Wolff said, adding that DashPass has been growing interest in the platform's grocery and retail offerings, aside from driving order frequency and customer retention.

Shares of the company rose about 1% in after-hours trading.

DoorDash's third-quarter adjusted earnings before interest, taxes, depreciation and amortization are expected to be between $950 million and $1.10 billion, largely above expectations of $979.6 million.

DoorDash said adjusted EBITDA as a percentage of marketplace GOV would decline sequentially in the fourth quarter, broadly in line with trends seen last year, due to seasonally higher Dasher and insurance costs, along with increased investment in technology and autonomous-delivery initiatives.