DoorDash (NYSE:DASH) faced a challenging morning on May 6, 2025, as its stock fell 5% following the announcement of its first-quarter earnings and major acquisition deals. Investors were met with mixed results as the online food delivery service reported revenue that fell short of expectations, despite a significant increase in orders.
In its latest earnings report, DoorDash revealed a revenue of $3.03 billion, which was below analysts' expectations of $3.09 billion. However, this figure still represented a 21% increase compared to the same quarter last year. The company's earnings per share (EPS) came in at 44 cents, surpassing the expected 39 cents. This marked a notable recovery from a net loss of 6 cents per share in the same quarter a year prior, with DoorDash reporting a net income of $193 million for Q1 2025.
Despite the positive year-over-year growth, the company disclosed that it had 732 million total orders during the quarter, an 18% increase from the previous year. This was slightly below Wall Street's expectations of 732.7 million orders. The company attributed the growth to strong consumer demand across its marketplace, stating, "Consumer demand has remained strong, with engagement across different consumer cohorts and types that we believe is consistent with typical seasonal patterns."
In a significant move, DoorDash announced the acquisition of restaurant booking platform SevenRooms for $1.2 billion, which is expected to close in the second half of 2025. This all-cash deal aims to enhance DoorDash's capabilities in providing tools for restaurants to manage bookings and improve customer experiences. The company stated, "We believe both SevenRooms and Deliveroo will expand our ability to build world-class services that increase our potential to grow local commerce and support our financial goals."
Additionally, DoorDash confirmed a formal offer to acquire U.K.-based food delivery service Deliveroo for $3.9 billion. This acquisition is seen as a strategic move to expand DoorDash's presence in the international market, particularly in the U.K. and other regions where Deliveroo operates. DoorDash CEO Tony Xu expressed optimism about the merger, stating, "The Enlarged Group will bring together DoorDash's strong operating playbook with Deliveroo's local expertise to invest in innovation and execution at an even higher level."
Looking ahead, DoorDash projected its gross order value (GOV) for the second quarter to fall between $23.5 billion, which is above previous Wall Street forecasts of $23.3 billion. However, the company also revised its adjusted EBITDA forecast down to $625 million at the midpoint of its range, below earlier estimates of $639 million. This has raised concerns among investors about potential challenges in maintaining profitability.
Analysts have noted that DoorDash's stock has been on an upward trajectory, gaining 22% so far this year and 80.5% over the past 12 months. However, the recent earnings report and acquisition announcements have led to a cautious outlook among investors. The average analyst price target for DoorDash stands at $216.67, suggesting a potential upside from the current share price of around $195.41.
As the company continues to navigate the complexities of the food delivery market and expand its services, DoorDash remains focused on adapting to changing consumer preferences and enhancing its operational capabilities. With increasing competition in the sector, the success of its acquisitions and the ability to meet financial expectations will be critical in shaping the company's future.
In summary, while DoorDash's first-quarter earnings showcased significant growth in revenue and orders, the missed expectations and acquisition strategies have raised questions about the company's ability to sustain its momentum. As it embarks on these new ventures, investors will be closely monitoring DoorDash's performance in the coming quarters.
