Shares of DoorDash (DASH 3.12%) were climbing the charts today after the delivery marketplace posted better-than-expected results in its third-quarter earnings on strong revenue growth and improving unit economics.
As a result, the stock was up 16.5% as of 12:18 p.m. ET.
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DoorDash isn't slowing down
Total orders jumped 24% to 543 million, while Marketplace gross order value was also up 24% to $16.8 billion. That translated into revenue growth of 27% to $2.16, which topped expectations at $2.09 billion, and its take rate, or what it calls net revenue margin, rose from 12.6% to 12.9%.
What also pleased investors was that the company made progress on the bottom line, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly quadrupled to $344 million. On a generally accepted accounting principles (GAAP) basis, its loss narrowed from $296 million in the quarter a year ago to $75 million, or $0.19 per share, which was much better than the consensus at a loss of $0.40 per share.
In addition to the impressive financial numbers, the company saw strong user growth, with monthly active users up by double digits and continued growth in its membership programs DashPass and Wolt+, its European business.
The company saw growth in both its core restaurant platform and its emerging grocery business, where sales doubled as it teams up with supermarkets and drugstores.
Discussing the flywheel effect of the business, CEO Tony Xu said, "When we execute well, we are able to consistently improve the experiences we provide, which delights more consumers, generates more sales for our merchant partners and more earnings for Dashers, and we believe, makes our business more durable."
What's next for the delivery leader?
Looking ahead, DoorDash expects marketplace gross order value of $17 billion-$17.4 billion in the fourth quarter, representing 19% growth from the quarter a year ago, and it expects adjusted EBITDA of $320 million-$380 million, up roughly 200% at the midpoint from a year ago.
The results show that DoorDash is clearly building momentum toward a GAAP profit, proving that it does have a viable business model. With solid user growth and a promising expansion outside of restaurants, DoorDash still has a lot of growth in front of it.
