DoorDash Breaks Records with Q1 Revenue, Expands Global Reach Through Major Acquisitions
DoorDash reported strong performance for the first quarter, with record-breaking revenue and continued growth in customer demand despite economic concerns in the U.S.
Steady Demand Amid Economic Uncertainty
Despite growing unease about the economy, DoorDash’s co-founder and CEO, Tony Xu, shared that consumer behavior has remained largely unchanged. “Food really is the most resilient category,” Xu noted during an investor call. Total orders surged 18% to a record 732 million, and grocery deliveries exceeded past performance, with over 25% of active users ordering groceries. The company also expanded its restaurant base and extended its geographic reach.
Subscription Services Boost Customer Loyalty
A key driver of growth is DoorDash’s subscription services, DashPass and Wolt+, which offer affordable delivery options for a monthly fee. With 22 million subscribers, DoorDash has seen customers opt for these services to make regular deliveries more cost-effective, according to Chief Financial Officer Ravi Inukonda.
Strategic Acquisitions to Expand Global Footprint
DoorDash also announced two major acquisitions on Tuesday. The company confirmed it will acquire Britain’s Deliveroo for £2.9 billion ($3.9 billion), a move that will expand its presence across Europe, Asia, and the Middle East. Deliveroo, which has 7 million monthly active users, will help DoorDash reach 45 countries by the end of the year, with a particularly strong foothold in Europe.
Additionally, DoorDash is purchasing SevenRooms, a New York-based hospitality management software company, for $1.2 billion. This acquisition is expected to enhance DoorDash’s service offerings for merchants, helping them improve in-store sales and customer marketing efforts.
Challenges and Investor Concerns
While the acquisitions are seen as a strong step forward, DoorDash’s stock took a hit on Tuesday, dropping nearly 9%. Investors raised concerns about the company’s ability to achieve profitability while integrating Deliveroo into its operations. Inukonda, however, remains optimistic, stating that scaling up operations will drive profitability. “Our goal is to improve unit economics and drive retention and order frequency, which ultimately lead to scale and profitability,” he said.
Strong Financials with Room for Improvement
DoorDash’s quarterly revenue rose by 21%, hitting a new high of $3.03 billion, though it fell short of Wall Street’s expectations of $3.09 billion. On a positive note, net income reached $193 million, a sharp turnaround from a $23 million loss during the same period last year. Adjusted earnings per share of 44 cents exceeded analyst expectations by 5 cents.
DoorDash’s expansion, both through acquisitions and strong domestic performance, positions the company for continued growth in the competitive food delivery industry.
Source: AP News – DoorDash rings up record first-quarter revenue and expands delivery reach through acquisitions
