- CEO Tony Xu said Deliveroo was growing much faster while maintaining the same profit expectations as before the acquisition.
- Xu said that consolidating the three applications onto one is “a massive and expensive undertaking.”
- DoorDash’s forecast for the first-quarter marketplace GOV is in the range of $31 billion to $31.8 billion.
DoorDash stock is heading for another day in green, with the stock jumping 14% in premarket trading on Thursday, driven by a better-than-expected marketplace gross order value forecast for the first quarter.
According to LSEG data cited by Reuters, DoorDash’s first-quarter marketplace GOV forecast of $31 billion to $31.8 billion, topped expectations of $29.61 billion.
Investor and retail interest was also spurred by CEO Tony Xu noting that the company is also set to incur increasing costs tied to the plan to consolidate its three platforms, DoorDash, Deliveroo and Wolt, into one single entity.
“We currently operate our systems across three different tech platforms at DoorDash, Deliveroo and Wolt. This slows us down. Consequently, one of the systems we’re building is for ourselves as the customer, a single technology platform,” Xu said in a shareholders' letter. “This is a massive and expensive undertaking and honestly one you shouldn’t do if you thought your best days were behind you.”
Deliveroo And Wolt’s Growth
Xu said that Deliveroo was growing much faster while maintaining the same profit expectations as before the acquisition. “We're gaining share in its largest markets. We're doing the same on the Wolt side,” he said.
“And so when I overall look at our business outside of the U.S., what I see is faster growth than what we see in the U.S.,” Xu said during a post-earnings call. He added that operating on three different tech platform has slowed down the company.
“In order to ship one feature, you have to ship that three times in slightly different tools and kind of processes that make no sense. And so what we're doing is we're making this, pretty big investment to both improve the velocity in which we ship to clear out some of the inefficiencies that I described, and also just be more efficient with our global footprint,” Xu said.
How Are Retail Users Reacting?
Retail sentiment on DoorDash jumped to ‘extremely bullish’ from ‘bullish’ territory a week ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
A bullish user on Stocktwits noted that DoorDash was a “money printing machine.”
Shares of DoorDash have declined by over 14% in the last 12 months.
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Also See: Fiverr Stock Slides Again As Wall Street Questions AI Pivot Timeline