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Economic Times
07-05-2025
- Business
- Economic Times
DoorDash is on a $5 billion buying spree after earnings beat
In a matter of five hours, the US delivery firm DoorDash Inc. announced two multibillion-dollar acquisitions that stand to turn what is already the largest food-delivery service in the US into a formidable global player. It agreed to buy London-based delivery Deliveroo Plc for 180 pence per share, or about £2.9 billion ($3.9 billion), and it's acquiring hospitality tech company SevenRooms Inc. for $1.2 billion. Alongside the deals, DoorDash also issued a strong orders outlook for the current quarter and posted better-than-expected gross order value for the first three months of the year in a statement on Tuesday. The company's buying spree highlights DoorDash's ambitions outside of the US, where it already commands about two-thirds of the food-delivery market. A takeover of Deliveroo will expand its reach to more than 40 countries, DoorDash said. The two companies combined had a gross order value of about $90 billion last year and have 50 million monthly active users. The delivery industry has been consolidating after a slowdown from pandemic-level highs, leaving room for a dominant player like DoorDash to grow even larger. Also on Tuesday, Uber Technologies Inc. said it's buying an 85% controlling stake in the Turkish delivery app Trendyol Go. In February, Prosus NV agreed to buy Amsterdam's Just Eat NV, while billionaire Marc Lore's Wonder Group Inc. closed its acquisition of Chicago-based Grubhub earlier this year. 'Our focus has always been build a great product, not just for consumers, but merchants as well as dashers and couriers,' said DoorDash Chief Financial Officer Ravi Inukonda. The deals provide 'an opportunity to invest across a broader set of countries and bring our product experience that got us to number one in the US as well as number one in all these countries into the delivery geographies as well.' DoorDash shares dropped 9.8% to $185.35 at 10:10 a.m. in New York, the biggest intraday decline in a year. The stock has gained 11% this year. Deliveroo rose 2% to 175.50 pence in London. High bar DoorDash's acquisition of SevenRooms will give it a reservation platform and customer-management tool similar to OpenTable or Resy that works with more than 13,000 restaurant groups. Its clients include Marriott International Inc., MGM Resorts International and Wolfgang 2022, DoorDash worked with SevenRooms to pilot restaurant reservations within the DoorDash app in New York, Los Angeles and Chicago. In addition to restaurant delivery, DoorDash also offers white-label services to build ordering interfaces for restaurants' websites and phone answering Executive Officer Tony Xu said DoorDash's philosophy on deals hasn't changed. 'The bar continues to remain high for M&A,' he said in a call with analysts on Tuesday. 'Sometimes, the timing of some of these announcements aren't or can't be perfectly forecasted. But what I would say is it really is business as usual.'The Deliveroo deal is expected to close in the fourth quarter of 2025 while the all-cash SevenRooms purchase is expected to close in the second half of this year. Both transactions will require regulatory approvals, and in the case of Deliveroo, at least 75% of the company's shareholders will need to give their blessing. So far, investors representing 15.4% of Deliveroo's stock have agreed to sell their shares, including Chief Executive Officer Will Shu. What Bloomberg intelligence says: DoorDash's acquisitions of Deliveroo and SevenRooms suggest the company is focused on boosting user growth in the UK and layering AI capabilities for its fragmented merchant base. Though delivery margins will likely remain lower for Deliveroo vs. DoorDash's existing markets, we believe the latter's technology and customer-relationship management capabilities could spur merchant supply growth and help it gain share in the splintered UK online delivery market.— Mandeep Singh, BI senior industry analyst To facilitate the Deliveroo deal, DoorDash is taking a $2.85 billion bridge loan from JPMorgan. It had about $4.5 billion in cash and cash equivalents at the end of the last quarter, according to earnings results that the company also issued Tuesday. Earnings results For the current period, DoorDash sees gross order value of $23.3 billion to $23.7 billion, it said in the statement, surpassing Wall Street projections. The company said the results show consumer demand 'remained strong' and that engagement has been 'consistent' across different cohorts so far this year. Total order value and the number of orders for the first quarter surpassed expectations, reaching record quarterly highs. DoorDash credited the beat to its continued push into non-restaurant deliveries. Specifically, it cited 'strong signs of increasing consumer trust' in the grocery category, with 'accelerating average spend per grocery consumer and increasing average spend on perishables' in the period. Total revenue for the quarter was $3 billion, just missing the average analyst estimate, while net income came in at $193 million, ahead of the investments to enter new categories and international markets, however, weighed on DoorDash's earnings forecast. Adjusted earnings before interest, taxes, depreciation and amortization will be $600 million to $650 million, with the midpoint missing the average estimate of $637.7 million.
Time of India
07-05-2025
- Business
- Time of India
DoorDash is on a $5 billion buying spree after earnings beat
Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Live Events In a matter of five hours, the US delivery firm DoorDash Inc. announced two multibillion-dollar acquisitions that stand to turn what is already the largest food-delivery service in the US into a formidable global player. It agreed to buy London-based delivery Deliveroo Plc for 180 pence per share, or about £2.9 billion ($3.9 billion), and it's acquiring hospitality tech company SevenRooms Inc. for $1.2 the deals, DoorDash also issued a strong orders outlook for the current quarter and posted better-than-expected gross order value for the first three months of the year in a statement on company's buying spree highlights DoorDash's ambitions outside of the US, where it already commands about two-thirds of the food-delivery market. A takeover of Deliveroo will expand its reach to more than 40 countries, DoorDash said. The two companies combined had a gross order value of about $90 billion last year and have 50 million monthly active delivery industry has been consolidating after a slowdown from pandemic-level highs, leaving room for a dominant player like DoorDash to grow even larger. Also on Tuesday, Uber Technologies Inc. said it's buying an 85% controlling stake in the Turkish delivery app Trendyol Go. In February, Prosus NV agreed to buy Amsterdam's Just Eat NV, while billionaire Marc Lore's Wonder Group Inc. closed its acquisition of Chicago-based Grubhub earlier this year.'Our focus has always been build a great product, not just for consumers, but merchants as well as dashers and couriers,' said DoorDash Chief Financial Officer Ravi Inukonda. The deals provide 'an opportunity to invest across a broader set of countries and bring our product experience that got us to number one in the US as well as number one in all these countries into the delivery geographies as well.'DoorDash shares dropped 9.8% to $185.35 at 10:10 a.m. in New York, the biggest intraday decline in a year. The stock has gained 11% this year. Deliveroo rose 2% to 175.50 pence in acquisition of SevenRooms will give it a reservation platform and customer-management tool similar to OpenTable or Resy that works with more than 13,000 restaurant groups. Its clients include Marriott International Inc., MGM Resorts International and Wolfgang 2022, DoorDash worked with SevenRooms to pilot restaurant reservations within the DoorDash app in New York, Los Angeles and Chicago. In addition to restaurant delivery, DoorDash also offers white-label services to build ordering interfaces for restaurants' websites and phone answering Executive Officer Tony Xu said DoorDash's philosophy on deals hasn't changed. 'The bar continues to remain high for M&A,' he said in a call with analysts on Tuesday. 'Sometimes, the timing of some of these announcements aren't or can't be perfectly forecasted. But what I would say is it really is business as usual.'The Deliveroo deal is expected to close in the fourth quarter of 2025 while the all-cash SevenRooms purchase is expected to close in the second half of this year. Both transactions will require regulatory approvals, and in the case of Deliveroo, at least 75% of the company's shareholders will need to give their blessing. So far, investors representing 15.4% of Deliveroo's stock have agreed to sell their shares, including Chief Executive Officer Will acquisitions of Deliveroo and SevenRooms suggest the company is focused on boosting user growth in the UK and layering AI capabilities for its fragmented merchant base. Though delivery margins will likely remain lower for Deliveroo vs. DoorDash's existing markets, we believe the latter's technology and customer-relationship management capabilities could spur merchant supply growth and help it gain share in the splintered UK online delivery market.— Mandeep Singh, BI senior industry analystTo facilitate the Deliveroo deal, DoorDash is taking a $2.85 billion bridge loan from JPMorgan . It had about $4.5 billion in cash and cash equivalents at the end of the last quarter, according to earnings results that the company also issued the current period, DoorDash sees gross order value of $23.3 billion to $23.7 billion, it said in the statement, surpassing Wall Street projections. The company said the results show consumer demand 'remained strong' and that engagement has been 'consistent' across different cohorts so far this order value and the number of orders for the first quarter surpassed expectations, reaching record quarterly highs. DoorDash credited the beat to its continued push into non-restaurant deliveries. Specifically, it cited 'strong signs of increasing consumer trust' in the grocery category, with 'accelerating average spend per grocery consumer and increasing average spend on perishables' in the revenue for the quarter was $3 billion, just missing the average analyst estimate, while net income came in at $193 million, ahead of the investments to enter new categories and international markets, however, weighed on DoorDash's earnings forecast. Adjusted earnings before interest, taxes, depreciation and amortization will be $600 million to $650 million, with the midpoint missing the average estimate of $637.7 million.
The Hill
06-05-2025
- Business
- The Hill
DoorDash rings up record first-quarter revenue and expands delivery reach through acquisitions
DoorDash said Tuesday that demand for deliveries remained strong in the first quarter even as more Americans feel increasingly uneasy about the U.S. economy. 'We haven't seen any changes in consumer behavior even if there are changes in consumer sentiment,' co-founder and CEO Tony Xu said in a call with investors. 'Food really is the most resilient category.' Total orders climbed 18% to 732 million, a quarterly record. DoorDash said demand for grocery delivery surpassed prior quarters, with more than 25% of active users ordering groceries. DoorDash said it also added U.S. restaurants to its platform and broadened its geographic reach. Customers who use the company's DashPass and Wolt+ subscription services, which charge a monthly fee, feel delivery is more affordable, said Chief Financial Officer Ravi Inukonda. The San Francisco company said 22 million people subscribe to those services. DoorDash confirmed that it will acquire Britain's Deliveroo for 2.9 billion pounds ($3.9 billion) in cash, expanding its business in Europe, Asia and the Middle East. Deliveroo first announced it had received a bid from DoorDash just over a week ago. It also said Tuesday that it had purchased SevenRooms, a New York company that makes hospitality management software, for $1.2 billion in cash. DoorDash said the deal will expand its offerings to merchants and help them grow in-store sales and customer marketing. DoorDash expects the SevenRooms deal to close in the second half of this year, while the Deliveroo deal is expected to close in the fourth quarter. The acquisitions are the biggest for DoorDash since 2022, when it bought Finnish rival Wolt Enterprises for $8.1 billion. That deal brought DoorDash into 22 countries where it didn't already operate, including Germany and Israel. With the addition of Deliveroo, Xu said DoorDash will operate in 45 countries, 30 of them in Europe. Deliveroo, which was founded in 2013, served 7 million monthly active users last year. DoorDash, founded the same year, has 42 million monthly active users. Investors expressed some concern about DoorDash's ability to generate profits as it integrates Deliveroo. DoorDash shares dropped nearly 9% Tuesday. Inukonda said the increasing scale will help drive profitability. 'Our goal is to improve unit economics. Take that and continue to drive improvements in retention and order frequency, which ultimately drive scale. And that scale drives profitability in the business,' he said. Revenue at DoorDash rose 21% to a quarterly record of $3.03 billion. That was short of Wall Street's forecast of $3.09 billion, according to analysts polled by FactSet. Net income was $193 million, a year after the company reported a $23 million loss for the January-March period. Adjusted for one-time items, the company earned 44 cents per share, topping Wall Street expectations by a nickel.
Yahoo
12-02-2025
- Business
- Yahoo
DoorDash Inc (DASH) Q4 2024 Earnings Call Highlights: Strong Growth Amidst Challenges
Release Date: February 11, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. DoorDash Inc (NASDAQ:DASH) reported strong growth in Q4 2024, with both US and international markets showing substantial gains. The company continues to expand its penetration in new verticals such as grocery and retail, with these areas growing faster than the restaurant business. DoorDash Inc (NASDAQ:DASH) has a large addressable market with significant room for growth in both penetration and frequency of use. The international business is gross profit positive, and the company is gaining market share in virtually every country it operates in. DashPass and Wolt Plus subscription services are experiencing strong growth, with DashPass growing faster than in previous years. DoorDash Inc (NASDAQ:DASH) faces challenges in improving product quality and affordability, particularly in the grocery delivery sector. The company is not yet operating at a specific margin percentage, focusing instead on increasing EBITDA and profit dollars, which may concern some investors. There are uncertainties in the broader economic environment that could impact future performance. The cost structure of autonomous vehicles currently does not make delivery a primary use case, posing a potential long-term challenge. The take rate was sequentially flat, impacted by seasonal factors such as Dasher pay, which could affect profitability. Warning! GuruFocus has detected 5 Warning Sign with DASH. Q: What's the bigger opportunity for DoorDash: increasing order frequency or market penetration? A: Tony Xu, CEO, emphasized that both penetration and frequency are key opportunities. He noted that DoorDash is still a small player in the US restaurant industry and even smaller globally. The focus is on expanding into more geographies, improving product quality, and enhancing customer support to drive both penetration and frequency. Q: Can you discuss contribution profit margins, especially in international markets, and your goals for 2025 and 2026? A: Ravi Inukonda, CFO, stated that DoorDash focuses on increasing EBITDA dollars rather than specific margin percentages. The international business is growing faster than peers and is gross profit positive. Tony Xu added that investment decisions are based on signs of product-market fit and potential for strong cash generation. Q: How is DoorDash preparing for the potential impact of autonomous vehicles on delivery? A: Tony Xu expressed excitement about autonomy as a mega trend. He noted that autonomous delivery differs from robotaxis and emphasized the importance of integrating technology with operations to achieve cost efficiency. DoorDash is exploring this area but has no announcements yet. Q: What are the key learnings from the grocery side of the business, and what are the strategic priorities for 2025? A: Tony Xu highlighted the need for product improvements in grocery delivery, such as increasing SKU availability and delivery accuracy. He noted that customers are transitioning from small to larger basket orders, and partnerships with grocers are proving incremental. The focus remains on enhancing the product. Q: What is the roadmap for DoorDash's advertising business over the next 12-24 months? A: Tony Xu explained that the advertising business focuses on balancing advertiser needs with consumer experience. The goal is to ensure ads are relevant and integrate well with existing platforms. The emphasis is on maintaining a healthy marketplace to support the advertising business. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
