DoorDash announces record Q2 sales

DoorDash Inc (NYSE: DASH) announced its 2Q sales and earnings. In the backdrop of enormous demand for delivery, despite restaurant dining options resumed, the company has hinted at a slowdown in orders in the coming quarter.

Spike in gross order volumes and increase in revenue

The company recorded a 70% year-over-year rise in order volume. While analysts’ expected the gross order volume to close at $9.78 billion, the company reported a $10.5 billion gross order volume. Simultaneously, in comparison to last year’s quarterly revenue, the corporate house performed better this year during the same quarter. From $675 million in the same quarter last year, DoorDash’s revenue climbed 83% to $1.2 billion.

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In conversation with MarketWatch, Chief Financial Officer of DoorDash, Prabir Adarkar, said:

“Consumers ordered more than they ever have in the history of the company. We generated more sales than ever in our history.”

However, the company recorded a net loss of $102 million, primarily after its employees were given the option to sell their respective shares after the company went public in December. About a year ago, the corporate house recorded a $23 million profit during the same period. EBITDA, when adjusted, stood at $113 million, in comparison with $79 million, during the same quarter last year.

Loss of $75 million, which equals to 6 cents a share, on revenue of $1.1 billion was predicted by analysts surveyed by FactSet. Meanwhile, in a letter to its shareholders, the company mentioned that it anticipates a decline in order rates in Q3.

The two factors impacting the Company’s forecast

Despite performing well at the beginning of the year, two factors influence the company’s forecast. One is the summer season, a time people prefer to dine out, and the second being the uncertainty about the long-term impact of the pandemic.

The expected adjusted EBITDA is of $150 million to $350 million. The company’s raised its full-year guidance, though, from between $35 billion and $38 billion in GOV to between $39 billion and $40.5 billion.

Chief Executive Tony Xu from the company stated that the delivery chain of food and goods from convenience stores and groceries had grown faster than the company’s restaurant business. On commission-fee caps, DoorDash and competitor GrubHub plan to sue San Francisco regarding its decision to be in a permanent cap fee of 15%. DoorDash stock rose 33% year to date.