Vision changes

Four shifts from corporate earnings so far. You don’t have to squint to see them.

Remember when restaurants were tech companies? That’s no longer the flex it once was, but luckily for this beat reporter, tech is still changing the way restaurants work.

Here’s what first-quarter financial results from companies that include McDonald’s, Shake Shack, DoorDash, Starbucks tell us about the way the industry is evolving:

Photo by DoorDash on Unsplash

Delivery is an ads business. 

Increasing ad revenue gave DoorDash’s bottom line a boost in the first three months of the year. The company is still chasing profitability (which might happen later this year, according to an analyst poll), and it needs its ad business to help it get there. 

DoorDash started selling ads inside its app in 2021. It doesn’t break out the ad revenue as a line item in its financial reporting, but when an analyst on this week’s earnings call seemingly estimated it at $100 million run rate, DoorDash CEO Tony Xu told them that the ads business was “substantially larger” than that figure. 

Xu agreed the ads business is going well, citing “extreme adoption” from independent restaurants to large national chains. DoorDash is still building out the platform, with plans to include more self-serve and reporting capabilities. 

DoorDash isn’t alone in its pursuit of ad dollars. When Instacart filed its IPO late last summer, it attributed growing revenue to its ads business. Per a report from The Information at the time, Instacart’s sales volume had barely budged; ads made up the difference. 

DoorDash says it set new records this quarter for total orders on the platform (620 million) and marketplace gross order value ($19.2 billion). Its digital platform might give it an advantage in tricky economic times, too. 

“I understand there are headwinds merchants face when it comes to in-store traffic,” Xu said on the call. “When it comes to digital we’re not seeing the same signs of strain.” 

Fast casual is a fulfillment business.