DoorDash projects decline in European acquisition’s delivery business, stock falls

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The shares of DoorDash Inc. fell on Wednesday after the company closed the acquisition of a European food delivery service and executives updated their guidelines to anticipate a sequential decline in sales of their new property.

In a presentation to the Securities and Exchange Commission made public on Wednesday, DoorDash DASH,
executives updated their second-quarter forecast to include Wolt, which the company acquired for more than $ 8 billion in stock. DoorDash increased its forecast for the second quarter of gross order volume, which reflects the total number of delivery orders on its platform, as a result of the inclusion of Wolt, but guided the volume on the Wolt platform to decrease from the first quarter.

DoorDash executives now expect a second-quarter volume of $ 12.8 billion to $ 13 billion, after previously declaring between $ 12.1 billion and $ 12.5 billion. But most of the gain came from increased optimism in DoorDash’s business, not Wolt’s: executives raised their forecast for DoorDash’s stand-alone business to $ 12.5 billion to $ 12.7 billion. dollars compared to the previous forecast, while they projected between 800 and 850 million dollars in volume of orders of Wolt, only a part. of which will feature DoorDash books for this quarter.

Wolt reported a gross order volume of $ 888 million in the first quarter, suggesting a sequential decline and year-on-year growth of 30% or less. Executives also led to an adjusted Ebitda loss of $ 70 million to $ 80 million for Wolt, while maintaining the overall focus for adjusted Ebitda profits of up to $ 100 million.

When they announced the acquisition last November, DoorDash executives observed growth rates of more than 100% for Wolt.

“The business has grown to $ 2.5 million in gross annual order value. It is growing by three digits. It has done so while increasing its end result at the same time,” said DoorDash CEO. Tony Xu, in a conference call after the announcement of the agreement.

Reuters reported that Wolt CEO Miki Kuusi said in an email exchange with the news organization that “the macroeconomic and geopolitical situation in Europe has changed significantly in recent months.”

“With inflation, rising gas prices and general uncertainty, there is some pressure to raise prices. We continue to monitor the situation very closely,” he wrote.

DoorDash spokesman Ali Musa confirmed Kuusi’s exchange with Reuters and reiterated that DoorDash executives “revised our independent guidance for the second quarter thanks to stronger order frequency and average order prices. higher “. In a later email, Musa noted that the second quarter is “typically smooth due to seasonality” and that Wolt’s guide calls for a roughly flat volume per quarter when judged in euros instead of dollars.

Shares of DoorDash fell 9.4% on Wednesday before closing with a 6.5% drop to $ 71.95. Shares have lost 51.7% so far this year as the S&P 500 SPX Index
has fallen by 13.3%.

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