DoorDash projects core profit above estimates on steady demand

By Granth Vanaik

(Reuters) - DoorDash forecast fourth-quarter core profit above estimates after topping quarterly revenue expectations on Wednesday, boosted by an uptick in customer orders for food, convenience items, and groceries.

Shares of the company rose about 10% to $83.17 in extended trading.

People are using the option of ordering food and grocery items from the comfort of their homes, a habit stimulated by the pandemic that has helped boost revenue for delivery firms, which are now looking to stabilize their profits.

DoorDash expects fourth-quarter adjusted EBITDA, a key measure of profitability, of between $320 million and $380 million, compared with analysts' estimates of $253.3 million.

The company's efforts to invest more in improving its products and services as well as partnerships with brands such as Sephora and ALDI have also helped it grow faster and increase its market share in the United States.

"We are on track to generate over $1 billion in adjusted EBITDA and more than 2 billion orders this year," CFO Ravi Inukonda told Reuters.

DoorDash had in August projected adjusted EBITDA of between $750 million and $1.05 billion.

In the quarter, total orders rose 24% to 543 million from a year earlier.

The company expects gross order value - the total value of all app orders and subscription fees - to be between $17 billion and $17.4 billion for the fourth quarter, compared with $14.4 billion a year ago.

Its revenue rose 27% to $2.16 billion, compared with analysts expectations of $2.09 billion, according to LSEG data.

Net loss narrowed to $73 million, or 19 cents per share, in the third quarter, compared with $295 million, or 77 cents per share, a year earlier.

Rivals Uber and Instacart will be reporting their third-quarter results next week.

(Reporting by Granth Vanaik in Bengaluru; Editing by Anil D'Silva)