DoorDash Shares Surge on Stronger-Than-Expected Earnings

The company also forecast higher-than-expected bookings value on the app and adjusted earnings for the current quarter.

Consumers continue to pay more for delivery despite inflation, Chief Financial Officer

Prabir Adarkar

said in an interview. Some consumers are responding to inflation by ordering fewer items while others are switching from expensive restaurants to fast-food chains, he said.

“They have just adjusted their behavior given how much of a daily part of their lives we have become,” he said.

DoorDash’s revenue was lifted by higher menu prices as well as its acquisition of European food-delivery company Wolt Enterprises Oy, which was completed earlier this year.

While DoorDash reported a wider net loss, investors were encouraged by its growth trajectory and outlook. Its shares rose around 10% in after-hours trading Thursday.

DoorDash reported a loss of $296 million compared with $101 million a year earlier. Analysts on average expected a loss of $247 million. Total orders on the app grew 27% to 439 million, beating Wall Street’s forecast of 419 million orders.

DoorDash said its core U.S. restaurants business was profitable on an adjusted basis and that it was investing in building businesses overseas and expanding into new categories like grocery delivery.

DoorDash shares have underperformed the broader market over the last 12 months. Through Thursday’s close, its stock was down 77% from a year ago while the tech-heavy Nasdaq Composite Index was down 35%.

“By most metrics, we now have a business that is larger and more durable than at any point in our history. Our stock price, unfortunately, has not been one of those metrics,” the company said in a letter to investors announcing results Thursday.

Orders for delivery companies DoorDash,

Uber Technologies Inc.’s

Uber Eats and others skyrocketed during the pandemic as people avoided going out to restaurants. While the two largest food-delivery apps in the U.S. are still growing, the pace of growth has cooled in recent months. The companies are contending with soaring inflation that is crimping consumer spending power.

DoorDash’s revenue growth last quarter was down from 45% in the same quarter last year. Uber Eats’ revenue grew 24% in the September quarter after nearly doubling in the same period last year.

DoorDash cautioned Thursday that “consumer spending could deteriorate faster or to a greater degree than we anticipate, which could drive results below our expectations.”

DoorDash and Uber Eats are offering discounted deals to new subscribers, tweaking their apps to try to trigger more spending and moving beyond food to give people more reasons to return. They are also trying to keep restaurants from ratcheting up delivery prices while offering them new services.

DoorDash has been one of the biggest winners of the pandemic. It commanded 56% of the U.S. food-delivery market so far this year, according to market research firm YipitData. Analysts say the company outflanked its rivals thanks to a strong delivery network in the suburbs, a wide selection of restaurants and greater efficiency in delivering the food itself.

DoorDash expanded its options during the health crisis to include grocery chains and convenience stores, pinging consumers as they paid for food to ask them if they also wanted household items from a nearby store. That has helped raise consumer spending and lower delivery costs because drivers can carry multiple orders together.

The company said it expects fourth-quarter bookings value on the app to range from $13.9 billion to $14.2 billion. The new guidance is above Wall Street’s forecast of $13.72 billion. The latest outlook marginally raised DoorDash’s previous full-year bookings guidance.

Making money off food delivery has been tough despite strong sales. While DoorDash remains unprofitable, the company has pointed to solid performance in its adjusted earnings before interest, taxes, depreciation and amortization. That metric strips out certain expenses such as stock-based compensation that executives consider to be outside core operations. DoorDash has had positive earnings on that basis for more than a year, including in the last quarter.

DoorDash said its adjusted earnings for the fourth quarter would come in between $85 million to $120 million. Wall Street had expected fourth-quarter adjusted earnings of $91 million.

Write to Preetika Rana at preetika.rana@wsj.com

The company also forecast higher-than-expected bookings value on the app and adjusted earnings for the current quarter.

Consumers continue to pay more for delivery despite inflation, Chief Financial Officer

Prabir Adarkar

said in an interview. Some consumers are responding to inflation by ordering fewer items while others are switching from expensive restaurants to fast-food chains, he said.

“They have just adjusted their behavior given how much of a daily part of their lives we have become,” he said.

DoorDash’s revenue was lifted by higher menu prices as well as its acquisition of European food-delivery company Wolt Enterprises Oy, which was completed earlier this year.

While DoorDash reported a wider net loss, investors were encouraged by its growth trajectory and outlook. Its shares rose around 10% in after-hours trading Thursday.

DoorDash reported a loss of $296 million compared with $101 million a year earlier. Analysts on average expected a loss of $247 million. Total orders on the app grew 27% to 439 million, beating Wall Street’s forecast of 419 million orders.

DoorDash said its core U.S. restaurants business was profitable on an adjusted basis and that it was investing in building businesses overseas and expanding into new categories like grocery delivery.

DoorDash shares have underperformed the broader market over the last 12 months. Through Thursday’s close, its stock was down 77% from a year ago while the tech-heavy Nasdaq Composite Index was down 35%.

“By most metrics, we now have a business that is larger and more durable than at any point in our history. Our stock price, unfortunately, has not been one of those metrics,” the company said in a letter to investors announcing results Thursday.

Orders for delivery companies DoorDash,

Uber Technologies Inc.’s

Uber Eats and others skyrocketed during the pandemic as people avoided going out to restaurants. While the two largest food-delivery apps in the U.S. are still growing, the pace of growth has cooled in recent months. The companies are contending with soaring inflation that is crimping consumer spending power.

DoorDash’s revenue growth last quarter was down from 45% in the same quarter last year. Uber Eats’ revenue grew 24% in the September quarter after nearly doubling in the same period last year.

DoorDash cautioned Thursday that “consumer spending could deteriorate faster or to a greater degree than we anticipate, which could drive results below our expectations.”

DoorDash and Uber Eats are offering discounted deals to new subscribers, tweaking their apps to try to trigger more spending and moving beyond food to give people more reasons to return. They are also trying to keep restaurants from ratcheting up delivery prices while offering them new services.

DoorDash has been one of the biggest winners of the pandemic. It commanded 56% of the U.S. food-delivery market so far this year, according to market research firm YipitData. Analysts say the company outflanked its rivals thanks to a strong delivery network in the suburbs, a wide selection of restaurants and greater efficiency in delivering the food itself.

DoorDash expanded its options during the health crisis to include grocery chains and convenience stores, pinging consumers as they paid for food to ask them if they also wanted household items from a nearby store. That has helped raise consumer spending and lower delivery costs because drivers can carry multiple orders together.

The company said it expects fourth-quarter bookings value on the app to range from $13.9 billion to $14.2 billion. The new guidance is above Wall Street’s forecast of $13.72 billion. The latest outlook marginally raised DoorDash’s previous full-year bookings guidance.

Making money off food delivery has been tough despite strong sales. While DoorDash remains unprofitable, the company has pointed to solid performance in its adjusted earnings before interest, taxes, depreciation and amortization. That metric strips out certain expenses such as stock-based compensation that executives consider to be outside core operations. DoorDash has had positive earnings on that basis for more than a year, including in the last quarter.

DoorDash said its adjusted earnings for the fourth quarter would come in between $85 million to $120 million. Wall Street had expected fourth-quarter adjusted earnings of $91 million.

Write to Preetika Rana at preetika.rana@wsj.com