DoorDash forecasts strong fourth quarter, bets on demand for online delivery

By Ananya Mariam Rajesh

(Reuters) – DoorDash (NASDAQ:) forecast fourth-quarter core profit above estimates on Wednesday, as the online delivery firm bets on more consumers using the platform to order groceries to beauty products during the holiday period.

The company also posted a profit for the first time since going public in late 2020 and beat quarterly revenue estimates.

With the online delivery space seeing a surge in competition from UberEats and Instacart (NASDAQ:), DoorDash has widened the offerings on its platforms by partnering with companies such as Sephora and grocer Wakefern to maintain its market share.

DoorDash delivered category share gains across the business in the third quarter, CFO Ravi Inukonda told Reuters.

Total orders of DoorDash jumped 18% to 643 million in the quarter.

The company also announced a partnership with Lyft (NASDAQ:) to offer the ride-share app’s members three months of free trial of its DashPass membership that gives them an up to 50% off on one order. The food delivery firm’s customers in return get up to 50% discount on four scheduled rides to the airport and 5% discount on scheduled on-demand Lyft rides.

DoorDash expects fourth-quarter adjusted earnings before tax, interest, depreciation and amortization (EBITDA) between $525 million and $575 million, with midpoint of the range above estimates of $544.8 million.

It expects fourth-quarter gross order value – a key industry metric that shows total value of all app orders and subscription fees – to be between $20.6 billion and $21 billion, compared with estimates of $20.64 billion.

DoorDash’s revenue for the third quarter rose 25% to $2.71 billion beating analysts’ expectations of $2.66 billion, according to data compiled by LSEG.

Net income attributable to DoorDash shareholders came in at $162 million, or 38 cents per share, compared with a loss of $73 million, or 19 cents, a year earlier.